UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 10-Q 

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2014March 31, 2015
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                to
Commission File Number: 1-13199 (SL Green Realty Corp.)
Commission File Number: 33-167793-02 (SL Green Operating Partnership, L.P.)


SL GREEN REALTY CORP.
SL GREEN OPERATING PARTNERSHIP, L.P.
(Exact name of registrant as specified in its charter)

SL Green Realty Corp.Maryland 13-3956775
SL Green Operating Partnership, L.P.Delaware 13-3960938
 
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
420 Lexington Avenue, New York, New York 10170
(Address of principal executive offices) (Zip Code)
 
(212) 594-2700
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 
SL Green Realty Corp. YES x  NO o SL Green Operating Partnership, L.P. YES x  NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
SL Green Realty Corp. YES x  NO o SL Green Operating Partnership, L.P. YES x  NO o


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
SL Green Realty Corp.
Large accelerated filer x
Accelerated filer o
Non-accelerated filer o
Smaller Reporting Company o
  
(Do not check if a
smaller reporting company)
 
SL Green Operating Partnership, L.P.
Large accelerated filer o
Accelerated filer o
Non-accelerated filer x
Smaller Reporting Company o
  
(Do not check if a
smaller reporting company)
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
SL Green Realty Corp. YES o NO x SL Green Operating Partnership, L.P. YES o  NO x
The number of shares outstanding of SL Green Realty Corp.'s common stock, $0.01 par value, was 95,599,48299,582,364 as of July 31, 2014.May 4, 2015. As of July 31, 2014, 876,199May 4, 2015, 1,005,426 common units of limited partnership interest of SL Green Operating Partnership, L.P. were held by non-affiliates. There is no established trading market for such units.
 



EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended June 30, 2014March 31, 2015 of SL Green Realty Corp. and SL Green Operating Partnership, L.P. Unless stated otherwise or the context otherwise requires, references to "SL Green Realty Corp.," the "Company" or "SL Green" mean SL Green Realty Corp. and its consolidated subsidiaries; and references to "SL Green Operating Partnership, L.P.," the "Operating Partnership" or "SLGOP" mean SL Green Operating Partnership, L.P. and its consolidated subsidiaries. The terms "we," "our" and "us" mean the Company and all the entities owned or controlled by the Company, including the Operating Partnership.
The Company is a Maryland corporation which operates as a self-administered and self-managed real estate investment trust, or REIT, and is the sole managing general partner of the Operating Partnership. As a general partner of the Operating Partnership, the Company has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Operating Partnership.
The Company owns 96.47%96.22% of the outstanding general and limited partnership interest in the Operating Partnership. The Company also owns 9,200,000 Series I Preferred Units of the Operating Partnership. As of June 30, 2014,March 31, 2015, noncontrolling investors held, in aggregate, a 3.53%3.78% limited partnership interest in the Operating Partnership. We refer to these interests as the noncontrolling interests in the Operating Partnership.
The Company and the Operating Partnership are managed and operated as one entity. The financial results of the Operating Partnership are consolidated into the financial statements of the Company. The Company has no significant assets other than its investment in the Operating Partnership. Substantially all of our assets are held by, and our operations are conducted through, the Operating Partnership. Therefore, the assets and liabilities of the Company and the Operating Partnership are substantially the same.
Noncontrolling interests in the Operating Partnership, stockholders' equity of the Company and partners' capital of the Operating Partnership are the main areas of difference between the consolidated financial statements of the Company and those of the Operating Partnership. The common limited partnership interests in the Operating Partnership not owned by the Company are accounted for as partners' capital in the Operating Partnership’s consolidated financial statements and as noncontrolling interests, within mezzanine equity, in the Company's consolidated financial statements.
We believe combining the quarterly reports on Form 10-Q of the Company and the Operating Partnership into this single report results in the following benefits:
Combined reports enhance investors' understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
Combined reports eliminate duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the Company's disclosure applies to both the Company and the Operating Partnership; and
Combined reports create time and cost efficiencies through the preparation of one combined report instead of two separate reports.
To help investors understand the significant differences between the Company and the Operating Partnership, this report presents the following separate sections for each of the Company and the Operating Partnership:
consolidated financial statements;
the following notes to the consolidated financial statements:
◦Note 11, Noncontrolling InterestInterests on the Company’s Consolidated Financial Statements;
◦Note 12, Stockholders' Equity of the Company;
◦Note 13, Partners' Capital of the Operating Partnership;
◦Note 15, Accumulated Other Comprehensive Loss of the Company; and
◦Note 16, Accumulated Other Comprehensive Loss of the Operating Partnership.

This report also includes separate Part I, Item 4. Controls and Procedures sections and separate Exhibit 31 and 32 certifications for each of the Company and the Operating Partnership, respectively, in order to establish that the Chief Executive Officer and the Chief Financial Officer of the Company, in both their capacity as the principal executive officer and principal financial officer of the Company and the principal executive officer and principal financial officer of the general partner of the Operating Partnership, have made the requisite certifications and that the Company and the Operating Partnership are compliant with Rule 13a-15 and Rule 15d-15 of the Securities Exchange Act of 1934, as amended.

(i)

SL GREEN REALTY CORP. AND SL GREEN OPERATING PARTNERSHIP, L.P.
TABLE OF CONTENTS

PART I.FINANCIAL INFORMATION 
Item 1.
FINANCIAL STATEMENTS
4
 FINANCIAL STATEMENTS OF SL GREEN REALTY CORP. 
 
Consolidated Balance Sheets as of June 30, 2014March 31, 2015 (unaudited) and December 31, 20132014
54
 
Consolidated Statements of Income for the three and six months ended June 30,March 31, 2015 and 2014 and 2013 (unaudited)
76
 
Consolidated Statements of Comprehensive Income for the three and six months ended June 30,March 31, 2015 and 2014 and 2013 (unaudited)
98
 
Consolidated Statement of Equity for the sixthree months ended June 30, 2014March 31, 2015 (unaudited)
109
 
Consolidated Statements of Cash Flows for the sixthree months ended June 30,March 31, 2015 and 2014 and 2013 (unaudited)
1110
 FINANCIAL STATEMENTS OF SL GREEN OPERATING PARTNERSHIP, L.P. 
 
Consolidated Balance Sheets as of June 30, 2014March 31, 2015 (unaudited) and December 31, 20132014
1312
 
Consolidated Statements of Income for the three and six months ended June 30,March 31, 2015 and 2014 and 2013 (unaudited)
1514
 
Consolidated Statements of Comprehensive Income for the three and six months ended June 30,March 31, 2015 and 2014 and 2013 (unaudited)
1716
 
Consolidated Statement of Capital for the sixthree months ended June 30, 2014March 31, 2015 (unaudited)
1817
 
Consolidated Statements of Cash Flows for the sixthree months ended June 30,March 31, 2015 and 2014 and 2013 (unaudited)
1918
 
Notes to Consolidated Financial Statements (unaudited)
2120
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
5652
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
7968
Item 4.
Controls and Procedures (SL Green Realty Corp. and SL Green Operating Partnership, L.P.)
7968
PART IIII. OTHER INFORMATION 
Item 1.
Legal Proceedings
8170
Item 1A.
Risk Factors
8170
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
8170
Item 3.
Defaults Upon Senior Securities
8170
Item 4.
Mine Safety Disclosures
8170
Item 5.
Other Information
8170
Item 6.
Exhibits
8271
 
Signatures
8372

Table of Contents


PART I. FINANCIAL INFORMATION
ITEM 1.    Financial Statements

SL Green Realty Corp.
Consolidated Balance Sheets
(in thousands, except per share data)
June 30, 2014 December 31, 2013March 31, 2015 December 31, 2014
(unaudited)  (unaudited)  
Assets      
Commercial real estate properties, at cost:      
Land and land interests$3,466,587
 $3,032,526
$3,830,787
 $3,844,518
Building and improvements8,843,315
 7,884,663
8,697,145
 8,778,593
Building leasehold and improvements1,390,004
 1,366,281
1,423,087
 1,418,585
Properties under capital lease27,445
 50,310
Property under capital lease27,445
 27,445
13,727,351
 12,333,780
13,978,464
 14,069,141
Less: accumulated depreciation(1,769,428) (1,646,240)(1,973,674) (1,905,165)
11,957,923
 10,687,540
12,004,790
 12,163,976
Assets held for sale339,809
 —
—
 462,430
Cash and cash equivalents308,103
 206,692
330,770
 281,409
Restricted cash157,225
 142,051
128,834
 149,176
Investment in marketable securities39,912
 32,049
47,716
 39,429
Tenant and other receivables, net of allowance of $20,026 and $17,325 in 2014 and 2013, respectively51,844
 60,393
Tenant and other receivables, net of allowance of $18,047 and $18,068 in 2015 and 2014, respectively50,156
 57,369
Related party receivables8,915
 8,530
12,088
 11,735
Deferred rents receivable, net of allowance of $27,616 and $30,333 in 2014 and 2013, respectively354,388
 386,508
Debt and preferred equity investments, net of discounts and deferred origination fees of $14,633 and $18,593 in 2014 and 2013, respectively, and allowance of $1,000 in 20131,547,808
 1,304,839
Deferred rents receivable, net of allowance of $26,480 and $27,411 in 2015 and 2014, respectively408,229
 374,944
Debt and preferred equity investments, net of discounts and deferred origination fees of $18,797 and $19,172 in 2015 and 2014, respectively1,548,739
 1,408,804
Investments in unconsolidated joint ventures971,926
 1,113,218
1,244,185
 1,172,020
Deferred costs, net300,043
 267,058
326,555
 327,962
Other assets679,840
 750,123
978,670
 647,333
Total assets$16,717,736
 $14,959,001
$17,080,732
 $17,096,587
Liabilities      
Mortgages and other loans payable$5,939,176
 $4,860,578
$5,359,043
 $5,586,709
Revolving credit facility—
 220,000
520,000
 385,000
Term loan and senior unsecured notes2,127,206
 1,739,330
2,110,041
 2,107,078
Accrued interest payable and other liabilities128,730
 114,622
162,910
 137,634
Accounts payable and accrued expenses164,215
 145,889
151,427
 173,246
Deferred revenue223,394
 263,261
369,626
 187,148
Capitalized lease obligations20,635
 47,671
20,917
 20,822
Deferred land leases payable1,044
 22,185
1,301
 1,215
Dividend and distributions payable53,193
 52,255
65,868
 64,393
Security deposits65,166
 61,308
66,427
 66,614
Liabilities related to assets held for sale193,375
 —
—
 266,873
Junior subordinated deferrable interest debentures held by trusts that issued trust preferred securities100,000
 100,000
100,000
 100,000
Total liabilities9,016,134
 7,627,099
8,927,560
 9,096,732
Commitments and contingencies—
 —
—
 —
Noncontrolling interests in the Operating Partnership379,805
 265,476
Preferred Units49,550
 49,550
Noncontrolling interests in Operating Partnership498,881
 469,524
Preferred units110,915
 71,115

54
Table of Contents

SL Green Realty Corp.
Consolidated Balance Sheets (cont.)
(in thousands, except per share data)


June 30, 2014 December 31, 2013March 31, 2015 December 31, 2014
(unaudited)  (unaudited)  
Equity      
SL Green stockholders' equity:      
Series I Preferred Stock, $0.01 par value, $25.00 liquidation preference, 9,200 issued and outstanding at both June 30, 2014 and December 31, 2013221,932
 221,932
Common stock, $0.01 par value, 160,000 shares authorized and 99,188 and 98,563 issued and outstanding at June 30, 2014 and December 31, 2013, respectively (including 3,601 and 3,570 shares held in Treasury at June 30, 2014 and December 31, 2013, respectively)993
 986
Series I Preferred Stock, $0.01 par value, $25.00 liquidation preference, 9,200 issued and outstanding at both March 31, 2015 and December 31, 2014221,932
 221,932
Common stock, $0.01 par value, 160,000 shares authorized and 103,176 and 100,928 issued and outstanding at March 31, 2015 and December 31, 2014, respectively (including 3,643 and 3,603 shares held in Treasury at March 31, 2015 and December 31, 2014, respectively)
1,032
 1,010
Additional paid-in-capital5,085,965
 5,015,904
5,572,410
 5,289,479
Treasury stock at cost(320,152) (317,356)(325,207) (320,471)
Accumulated other comprehensive loss(6,196) (15,211)(11,810) (6,980)
Retained earnings1,797,580
 1,619,150
1,690,578
 1,752,404
Total SL Green stockholders' equity6,780,122
 6,525,405
7,148,935
 6,937,374
Noncontrolling interests in other partnerships492,125
 491,471
394,441
 521,842
Total equity7,272,247
 7,016,876
7,543,376
 7,459,216
Total liabilities and equity$16,717,736
 $14,959,001
$17,080,732
 $17,096,587


The accompanying notes are an integral part of these financial statements.

65
Table of Contents


SL Green Realty Corp.
Consolidated Statements of Income
(unaudited, in thousands, except per share data)



 Three Months Ended June 30, Six Months Ended June 30, Three Months Ended March 31,
 2014 2013 2014 2013 2015 2014
Revenues            
Rental revenue, net $285,234
 $262,743
 $551,755
 $518,560
 $303,329
 $255,976
Escalation and reimbursement 39,529
 38,747
 79,912
 78,551
 40,969
 37,807
Investment income 39,714
 46,731
 93,798
 99,439
 42,069
 54,084
Other income 22,750
 5,723
 37,331
 11,015
 9,932
 14,578
Total revenues 387,227
 353,944
 762,796
 707,565
 396,299
 362,445
Expenses            
Operating expenses, including $4,450 and $7,861 (2014) and $3,953 and $7,842 (2013) of related party expenses 70,675
 68,611
 144,160
 139,780
Operating expenses, including related party expenses of $3,808 and $3,513 in 2015 and 2014, respectively 76,777
 69,909
Real estate taxes 53,267
 51,749
 108,583
 104,203
 55,723
 52,350
Ground rent 8,040
 7,930
 16,073
 16,058
 8,188
 8,033
Interest expense, net of interest income 78,611
 79,551
 156,330
 157,860
 75,807
 76,178
Amortization of deferred financing costs 5,500
 4,229
 9,357
 8,681
 6,615
 3,657
Depreciation and amortization 94,838
 81,577
 184,217
 160,200
 108,337
 86,515
Transaction related costs, net of recoveries 1,697
 1,706
 4,171
 3,085
Transaction related costs 1,143
 2,474
Marketing, general and administrative 23,872
 21,514
 47,128
 42,582
 25,464
 23,257
Total expenses 336,500
 316,867
 670,019
 632,449
 358,054
 322,373
Income from continuing operations before equity in net income (loss) from unconsolidated joint ventures, equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate, purchase price fair value adjustment, loss on sale of investment in marketable securities and loss on early extinguishment of debt 50,727
 37,077
 92,777
 75,116
Equity in net income (loss) from unconsolidated joint ventures 8,619
 (3,761) 14,748
 1,313
Equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate 1,444
 (3,583) 106,084
 (3,583)
Purchase price fair value adjustment 71,446
 (2,305) 71,446
 (2,305)
Loss on sale of investment in marketable securities —
 (8) —
 (65)
Loss on early extinguishment of debt (1,028) (10) (1,025) (18,523)
Income from continuing operations before equity in net income from unconsolidated joint ventures, equity in net gain on sale of interest in unconsolidated joint venture/real estate and (loss) gain on early extinguishment of debt 38,245
 40,072
Equity in net income from unconsolidated joint ventures 4,030
 6,128
Equity in net gain on sale of interest in unconsolidated joint venture/real estate —
 104,640
(Loss) gain on early extinguishment of debt (49) 3
Income from continuing operations 131,208
 27,410
 284,030
 51,953
 42,226
 150,843
Net income from discontinued operations 4,389
 3,838
 8,178
 8,519
 427
 5,769
Gain on sale of discontinued operations 114,735
 —
 114,735
 1,113
 12,983
 —
Net income 250,332
 31,248
 406,943
 61,585
 55,636
 156,612
Net income attributable to noncontrolling interests:            
Noncontrolling interests in the Operating Partnership (8,645) (244) (13,374) (799) (1,743) (4,729)
Noncontrolling interests in other partnerships (1,843) (3,004) (3,333) (5,905) (5,927) (1,490)
Preferred units distribution (565) (565) (1,130) (1,130)
Preferred units distributions (951) (565)
Net income attributable to SL Green 239,279
 27,435
 389,106
 53,751
 47,015
 149,828
Preferred stock redemption costs —
 (12,160) —
 (12,160)
Perpetual preferred stock dividends (3,738) (6,999) (7,475) (14,406) (3,738) (3,738)
Net income attributable to SL Green common stockholders $235,541
 $8,276
 $381,631
 $27,185
 $43,277
 $146,090
Amounts attributable to SL Green common stockholders:            
Income from continuing operations $50,346
 $10,268
 $91,361
 $23,549
Purchase price fair value adjustment 68,909
 (2,240) 69,027
 (2,239)
Equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate 1,393
 (3,482) 102,492
 (3,481)
Income from continuing operations before gains on sale and discontinued operations $30,387
 $39,143
Equity in net gain on sale of interest in unconsolidated joint venture/real estate —
 101,359
Net income from discontinued operations 4,233
 3,730
 7,901
 8,275
 410
 5,588
Gain on sale of discontinued operations 110,660
 —
 110,850
 1,081
 12,480
 —
Net income attributable to SL Green common stockholders $235,541
 $8,276
 $381,631
 $27,185
 $43,277
 $146,090
            

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SL Green Realty Corp.
Consolidated Statements of Income (cont.)
(unaudited, in thousands, except per share data)


 Three Months Ended June 30, Six Months Ended June 30, Three Months Ended March 31,
 2014 2013 2014 2013 2015 2014
Basic earnings per share:            
Income from continuing operations before gains (loss) on sale and discontinued operations $1.25
 $0.09
 $1.69
 $0.23
Equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate 0.02
 (0.04) 1.08
 (0.03)
Income from continuing operations before gains on sale and discontinued operations $0.31
 $0.41
Equity in net gain on sale of interest in unconsolidated joint venture/real estate —
 1.07
Net income from discontinued operations 0.04
 0.04
 0.08
 0.09
 —
 0.06
Gain on sale of discontinued operations 1.16
 —
 1.16
 0.01
 0.13
 —
Net income attributable to SL Green common stockholders $2.47
 $0.09
 $4.01
 $0.30
 $0.44
 $1.54
Diluted earnings per share:            
Income from continuing operations before gains (loss) on sale and discontinued operations $1.24
 $0.09
 $1.68
 $0.23
Equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate 0.02
 (0.04) 1.07
 (0.03)
Income from continuing operations before gains on sale and discontinued operations $0.31
 $0.41
Equity in net gain on sale of interest in unconsolidated joint venture/real estate —
 1.06
Net income from discontinued operations 0.05
 0.04
 0.08
 0.09
 —
 0.06
Gain on sale of discontinued operations 1.15
 —
 1.16
 0.01
 0.13
 —
Net income attributable to SL Green common stockholders $2.46
 $0.09
 $3.99
 $0.30
 $0.44
 $1.53
Dividends per share $0.50
 $0.33
 $1.00
 $0.66
 $0.60
 $0.50
Basic weighted average common shares outstanding 95,455
 91,660
 95,288
 91,530
 98,402
 95,117
Diluted weighted average common shares and common share equivalents outstanding 99,484
 94,536
 99,128
 94,452
 103,019
 98,716


The accompanying notes are an integral part of these financial statements.

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Table of Contents


SL Green Realty Corp.
Consolidated Statements of Comprehensive Income
(unaudited, in thousands)
  Three Months Ended June 30, Six Months Ended June 30,
  2014 2013 2014 2013
Net income $250,332
 $31,248
 $406,943
 $61,585
Other comprehensive income: 
 
    
Change in net unrealized gain on derivative instruments, including SL Green's share of joint venture net unrealized gain on derivative instruments 7,293
 9,799
 7,461
 11,687
Change in unrealized gain (loss) on marketable securities 1,659
 (1,848) 1,788
 (207)
Other comprehensive income 8,952
 7,951
 9,249
 11,480
Comprehensive income 259,284
 39,199
 416,192
 73,065
Net income attributable to noncontrolling interests (11,053) (3,813) (17,837) (7,834)
Other comprehensive income attributable to noncontrolling interests (276) (456) (234) (515)
Comprehensive income attributable to SL Green $247,955
 $34,930
 $398,121
 $64,716
 Three Months Ended March 31,
 2015 2014
Net income$55,636
 $156,612
Other comprehensive (loss) income:   
Change in net unrealized (loss) gain on derivative instruments, including SL Green's share of joint venture net unrealized (loss) gain on derivative instruments(5,680) 168
Change in unrealized gain on marketable securities650
 129
Other comprehensive (loss) income(5,030) 297
Comprehensive income50,606
 156,909
Net income attributable to noncontrolling interests and preferred units distributions(8,621) (6,784)
Other comprehensive loss attributable to noncontrolling interests200
 42
Comprehensive income attributable to SL Green$42,185
 $150,167


The accompanying notes are an integral part of these financial statements.


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Table of Contents


SL Green Realty Corp.
Consolidated Statement of Equity
(unaudited, in thousands, except per share data)
 SL Green Realty Corp. Stockholders  SL Green Realty Corp. Stockholders  
  Common Stock               Common Stock         


Series I
Preferred
Stock
 Number of Shares 
Par
Value
 
Additional
Paid-In Capital
 
Treasury
Stock
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Retained
Earnings
 
Noncontrolling
Interests
 Total
Series I
Preferred
Stock
 Shares 
Par
Value
 
Additional
Paid-
In-Capital
 
Treasury
Stock
 
Accumulated
Other
Comprehensive
Loss
 
Retained
Earnings
 
Noncontrolling
Interests
 Total
Balance at December 31, 2013 $221,932
 94,993
 $986
 $5,015,904
 $(317,356) $(15,211) $1,619,150
 $491,471
 $7,016,876
Balance at December 31, 2014 $221,932
 97,325
 $1,010
 $5,289,479
 $(320,471) $(6,980) $1,752,404
 $521,842
 $7,459,216
Net income            
 389,106
 3,333
 392,439
 

 

 

 

 

 

 47,015
 5,927
 52,942
Other comprehensive income           9,015
  
   9,015
Acquisition of subsidiary interest from noncontrolling interest       7,564
       (11,084) (3,520)
Other comprehensive loss 

 

 

 

 

 (4,830) 

 

 (4,830)
Preferred dividends             (7,475)   (7,475) 

 

 

 

 

 

 (3,738) 

 (3,738)
DRIP proceeds   

 

 26
         26
DRSPP proceeds 

 775
 8
 99,488
 

 

 

 

 99,496
Conversion of units of the Operating Partnership to common stock   233
 2
 23,064
         23,066
 

 317
 3
 37,404
 

 

 

 

 37,407
Reallocation of noncontrolling interest in the Operating Partnership             (107,925)   (107,925) 

 

 

 

 

 

 (45,456) 

 (45,456)
Reallocation of capital account relating to sale               (10,144) (10,144)
Deferred compensation plan and stock award, net   2
 —
 1,406
 (2,796)       (1,390) 

 26
 

 1,306
 (4,736) 

 

 

 (3,430)
Amortization of deferred compensation plan       17,069
         17,069
 

 

 

 6,239
 

 

 

 

 6,239
Issuance of common stock   82
 1
 8,749
         8,750
 

 953
 10
 120,587
 

 

 

 

 120,597
Proceeds from stock options exercised   277
 4
 19,747
         19,751
 

 137
 1
 10,343
 

 

 

 

 10,344
Contributions to consolidated joint venture interest               1,673
 1,673
Contributions to consolidated joint venture interests 

 

 

 

 

 

 

 

 —
Cash distributions to noncontrolling interests               (4,352) (4,352) 

 

 

 

 

 

 

 (112,100) (112,100)
Cash distributions declared ($1.00 per common share, none of which represented a return of capital for federal income tax purposes)             (95,276)   (95,276)
Balance at June 30, 2014 $221,932
 95,587
 $993
 $5,085,965
 $(320,152) $(6,196) $1,797,580
 $492,125
 $7,272,247
Cash distributions declared ($0.60 per common share, none of which represented a return of capital for federal income tax purposes) 

 

 

 

 

 

 (59,647) 

 (59,647)
Balance at March 31, 2015 $221,932
 99,533
 $1,032
 $5,572,410
 $(325,207) $(11,810) $1,690,578
 $394,441
 $7,543,376


The accompanying notes are an integral part of these financial statements.

109
Table of Contents


SL Green Realty Corp.
Consolidated Statements of Cash Flows
(unaudited, in thousands, except per share data)thousands)


Six Months Ended June 30,Three Months Ended March 31,
2014 20132015 2014
Operating Activities      
Net income$406,943
 $61,585
$55,636
 $156,612
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization194,029
 173,029
114,955
 93,680
Equity in net income from unconsolidated joint ventures(14,748) (1,313)(4,030) (6,128)
Distributions of cumulative earnings from unconsolidated joint ventures14,645
 13,467
15,489
 7,669
Equity in net (gain) loss on sale of interest in unconsolidated joint venture interest/real estate(106,084) 3,583
Purchase price fair value adjustment(71,446) 2,305
Depreciable real estate reserves—
 2,150
Equity in net gain on sale of interest in unconsolidated joint venture interest/real estate—
 (104,640)
Gain on sale of discontinued operations(114,735) (1,113)(12,983) —
Loss on early extinguishment of debt1,025
 10,968
Loss (gain) on early extinguishment of debt49
 (3)
Deferred rents receivable(26,727) (29,452)(32,367) (11,133)
Other non-cash adjustments(11,162) (28,675)4,590
 (12,792)
Changes in operating assets and liabilities:      
Restricted cash—operations(4,850) 6,127
(1,652) (10,520)
Tenant and other receivables5,890
 4,896
7,096
 11,899
Related party receivables(853) 768
(353) (11,885)
Deferred lease costs(10,688) (19,106)(11,017) (4,476)
Other assets(438) 4,075
(38,280) (32,949)
Accounts payable, accrued expenses and other liabilities and security deposits12,973
 1,793
(20,230) (1,821)
Deferred revenue and deferred land leases payable2,788
 4,601
Deferred revenue and land leases payable14,056
 14,635
Net cash provided by operating activities276,562
 209,688
90,959
 88,148
Investing Activities      
Acquisitions of real estate property(208,614) (52,534)(6,290) —
Additions to land, buildings and improvements(134,249) (61,531)(47,117) (48,213)
Escrowed cash—capital improvements/acquisition deposits(38,227) (394)(3,084) (34,861)
Investments in unconsolidated joint ventures(170,532) (81,913)(83,772) (18,966)
Distributions in excess of cumulative earnings from unconsolidated joint ventures157,699
 11,117
45,546
 72,558
Net proceeds from disposition of real estate/joint venture interest258,076
 5,852
Proceeds from disposition of real estate/joint venture interest485,540
 109,196
Proceeds from sale of marketable securities3,555
 190
133
 —
Purchase of marketable securities(10,025) (5,305)
Purchases of marketable securities(7,769) —
Other investments20,594
 (12,994)(5,424) (1,573)
Origination of debt and preferred equity investments(256,730) (277,877)(174,420) (150,464)
Repayments or redemption of debt and preferred equity investments60,412
 432,667
26,954
 522
Net cash used in investing activities(318,041) (42,722)
Net cash provided by (used in) investing activities230,297
 (71,801)
      

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SL Green Realty Corp.
Consolidated Statements of Cash Flows (cont.)
(unaudited, in thousands, except per share data)thousands)

Six Months Ended June 30,Three Months Ended March 31,
2014 20132015 2014
Financing Activities      
Proceeds from mortgages and other loans payable1,601,603
 980,333
$—
 $121,216
Repayments of mortgages and other loans payable(1,496,224) (833,728)(481,608) (10,772)
Proceeds from revolving credit facility, term loan and senior unsecured notes683,000
 370,000
Repayments of revolving credit facility, term loan and senior unsecured notes(520,690) (404,970)
Proceeds from stock options exercised and DRIP issuance19,777
 8,995
Proceeds from revolving credit facility and senior unsecured notes665,000
 603,000
Repayments of revolving credit facility and senior unsecured notes(530,000) (440,690)
Proceeds from stock options exercised and DRSSP issuance109,840
 8,992
Net proceeds from sale of common stock8,750
 8,487
120,597
 24
Net proceeds from sale of preferred stock—
 (9)
Redemption of preferred stock—
 (192,500)
Redemption of preferred unit(200) —
Distributions to noncontrolling interests in other partnerships(4,352) (8,152)(110,867) (1,586)
Contributions from noncontrolling interests in other partnerships1,548
 3,364
—
 517
Distributions to noncontrolling interests in the Operating Partnership(3,598) (1,775)(2,349) (1,500)
Dividends paid on common and preferred stock(102,943) (79,534)(62,903) (51,652)
Other obligations related to mortgage loan participations25,000
 —
Deferred loan costs and capitalized lease obligation(43,981) (8,492)(4,405) (3,426)
Net cash provided by (used in) financing activities142,890
 (157,981)
Net cash (used in) provided by financing activities(271,895) 224,123
Net increase in cash and cash equivalents101,411
 8,985
49,361
 240,470
Cash and cash equivalents at beginning of period206,692
 189,984
Cash and cash equivalents at end of period$308,103
 $198,969
Cash and cash equivalents at beginning of year281,409
 206,692
Cash and cash equivalents at end of year$330,770
 $447,162
      
Supplemental Disclosure of Non-Cash Investing and Financing Activities:      
Issuance of common stock as deferred compensation$1,406
 $—
$1,306
 $1,295
Issuance of units in the Operating Partnership19,460
 12,675
22,114
 17,314
Redemption of units in the Operating Partnership23,066
 17,287
37,407
 16,583
Issuance of preferred units of limited partnership interest in the Operating Partnership4,000
 —
Derivative instruments at fair value4,426
 110
Exchange of debt investment for equity in joint venture10,151
 —
Transfer of restricted cash to operating cash and cash equivalents as a result of sale21,578
 —
Acquisition of subsidiary interest from noncontrolling interest3,500
 —
Tenant improvements and capital expenditures payable17,664
 9,898
Fair value adjustment to noncontrolling interest in the Operating Partnership107,925
 36,091
45,456
 29,464
Derivative instruments at fair value17,088
 479
Tenant improvements and capital expenditures payable7,192
 9,665
Capital leased asset—
 9,992
Transfer to net assets held for sale339,809
 207,665
—
 63,925
Transfer to liabilities related to net assets held for sale193,375
 11,894
—
 49,704
Transfer of financing receivable to debt investment19,675
 —
—
 19,675
Deferred leasing payable659
 4,872
2,372
 —
Consolidation of real estate1,316,591
 90,934
Assumption of mortgage loan—
 84,642
Issuance of preferred units40,000
 —


The accompanying notes are an integral part of these financial statements.

1211
Table of Contents



SL Green Operating Partnership, L.P.
Consolidated Balance Sheets
(in thousands, except per unit data)
  March 31, 2015 December 31, 2014
  (unaudited)  
Assets    
Commercial real estate properties, at cost:    
Land and land interests $3,830,787
 $3,844,518
Building and improvements 8,697,145
 8,778,593
Building leasehold and improvements 1,423,087
 1,418,585
Property under capital lease 27,445
 27,445
  13,978,464
 14,069,141
Less: accumulated depreciation (1,973,674) (1,905,165)
  12,004,790
 12,163,976
Assets held for sale —
 462,430
Cash and cash equivalents 330,770
 281,409
Restricted cash 128,834
 149,176
Investment in marketable securities 47,716
 39,429
Tenant and other receivables, net of allowance of $18,047 and $18,068 in 2015 and 2014, respectively 50,156
 57,369
Related party receivables 12,088
 11,735
Deferred rents receivable, net of allowance of $26,480 and $27,411 in 2015 and 2014, respectively 408,229
 374,944
Debt and preferred equity investments, net of discounts and deferred origination fees of $18,797 and $19,172 in 2015 and 2014, respectively 1,548,739
 1,408,804
Investments in unconsolidated joint ventures 1,244,185
 1,172,020
Deferred costs, net 326,555
 327,962
Other assets 978,670
 647,333
Total assets $17,080,732
 $17,096,587
Liabilities    
Mortgages and other loans payable $5,359,043
 $5,586,709
Revolving credit facility 520,000
 385,000
Term loan and senior unsecured notes 2,110,041
 2,107,078
Accrued interest payable and other liabilities 162,910
 137,634
Accounts payable and accrued expenses 151,427
 173,246
Deferred revenue 369,626
 187,148
Capitalized lease obligations 20,917
 20,822
Deferred land leases payable 1,301
 1,215
Dividend and distributions payable 65,868
 64,393
Security deposits 66,427
 66,614
Liabilities related to assets held for sale —
 266,873
Junior subordinated deferrable interest debentures held by trusts that issued trust preferred securities 100,000
 100,000
Total liabilities 8,927,560
 9,096,732
Commitments and contingencies —
 —
Preferred units 110,915
 71,115

12
Table of Contents

SL Green Operating Partnership, L.P.
Consolidated Balance Sheets
(in thousands, except per unit data)
  June 30, 2014 December 31, 2013
  (unaudited)  
Assets    
Commercial real estate properties, at cost:    
Land and land interests $3,466,587
 $3,032,526
Building and improvements 8,843,315
 7,884,663
Building leasehold and improvements 1,390,004
 1,366,281
Properties under capital lease 27,445
 50,310
  13,727,351
 12,333,780
Less: accumulated depreciation (1,769,428) (1,646,240)
  11,957,923
 10,687,540
Assets held for sale 339,809
 —
Cash and cash equivalents 308,103
 206,692
Restricted cash 157,225
 142,051
Investment in marketable securities 39,912
 32,049
Tenant and other receivables, net of allowance of $20,026 and $17,325 in 2014 and 2013, respectively 51,844
 60,393
Related party receivables 8,915
 8,530
Deferred rents receivable, net of allowance of $27,616 and $30,333 in 2014 and 2013, respectively 354,388
 386,508
Debt and preferred equity investments, net of discounts and deferred origination fees of $14,633 and $18,593 in 2014 and 2013, respectively, and allowance of $1,000 in 2013 1,547,808
 1,304,839
Investments in unconsolidated joint ventures 971,926
 1,113,218
Deferred costs, net 300,043
 267,058
Other assets 679,840
 750,123
Total assets $16,717,736
 $14,959,001
Liabilities    
Mortgages and other loans payable $5,939,176
 $4,860,578
Revolving credit facility —
 220,000
Term loan and senior unsecured notes 2,127,206
 1,739,330
Accrued interest payable and other liabilities 128,730
 114,622
Accounts payable and accrued expenses 164,215
 145,889
Deferred revenue 223,394
 263,261
Capitalized lease obligations 20,635
 47,671
Deferred land leases payable 1,044
 22,185
Dividend and distributions payable 53,193
 52,255
Security deposits 65,166
 61,308
Liabilities related to assets held for sale 193,375
 —
Junior subordinate deferrable interest debentures held by trusts that issued trust preferred securities 100,000
 100,000
Total liabilities 9,016,134
 7,627,099
Commitments and contingencies —
 —
Preferred Units 49,550
 49,550

13
Table of Contents
SL Green Operating Partnership, L.P.
Consolidated Balance Sheets (cont.)
(in thousands, except per share data)


 June 30, 2014 December 31, 2013 March 31, 2015 December 31, 2014
 (unaudited)   (unaudited)  
Capital        
SLGOP partners' capital:        
Series I Preferred Units, $25.00 liquidation preference, 9,200 outstanding at both June 30, 2014 and December 31, 2013 221,932
 221,932
SL Green partners' capital 991 and 979 general partner common units and 94,596 and 94,014 limited partner common units outstanding at June 30, 2014 and December 31, 2013, respectively) 6,860,374
 6,506,747
Limited partner interests in SLGOP (3,500 and 2,902 limited partner common units outstanding at June 30, 2014 and December 31, 2013, respectively) 84,034
 77,864
Series I Preferred Units, $25.00 liquidation preference, 9,200 issued and outstanding at both March 31, 2015 and December 31, 2014 221,932
 221,932
SL Green partners' capital (1,034 and 1,013 general partner common units and 98,499 and 96,312 limited partner common units outstanding at March 31, 2015 and December 31, 2014, respectively) 7,340,771
 7,078,924
Limited partner interests in SLGOP (3,913 and 3,973 limited partner common units outstanding at March 31, 2015 and December 31, 2014, respectively)
 97,399
 113,298
Accumulated other comprehensive loss (6,413) (15,662) (12,286) (7,256)
Total SLGOP partners' capital 7,159,927
 6,790,881
 7,647,816
 7,406,898
Noncontrolling interests in other partnerships 492,125
 491,471
 394,441
 521,842
Total capital 7,652,052
 7,282,352
 8,042,257
 7,928,740
Total liabilities and capital $16,717,736
 $14,959,001
 $17,080,732
 $17,096,587


The accompanying notes are an integral part of these financial statements.


1413
Table of Contents

SL Green Operating Partnership, L.P.
Consolidated Statements of Income
(unaudited, in thousands except per unit amounts)
  Three Months Ended June 30, Six Months Ended June 30,
  2014 2013 2014 2013
Revenues        
Rental revenue, net $285,234
 $262,743
 $551,755
 $518,560
Escalation and reimbursement 39,529
 38,747
 79,912
 78,551
Investment income 39,714
 46,731
 93,798
 99,439
Other income 22,750
 5,723
 37,331
 11,015
Total revenues 387,227
 353,944
 762,796
 707,565
Expenses        
Operating expenses, including $4,450 and $7,861 (2014) and $3,953 and $7,842 (2013) of related party expenses 70,675
 68,611
 144,160
 139,780
Real estate taxes 53,267
 51,749
 108,583
 104,203
Ground rent 8,040
 7,930
 16,073
 16,058
Interest expense, net of interest income 78,611
 79,551
 156,330
 157,860
Amortization of deferred financing costs 5,500
 4,229
 9,357
 8,681
Depreciation and amortization 94,838
 81,577
 184,217
 160,200
Transaction related costs, net of recoveries 1,697
 1,706
 4,171
 3,085
Marketing, general and administrative 23,872
 21,514
 47,128
 42,582
Total expenses 336,500
 316,867
 670,019
 632,449
Income from continuing operations before equity in net income (loss) from unconsolidated joint ventures, equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate, purchase price fair value adjustment, loss on sale of investment in marketable securities and loss on early extinguishment of debt 50,727
 37,077
 92,777
 75,116
Equity in net income (loss) from unconsolidated joint ventures 8,619
 (3,761) 14,748
 1,313
Equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate 1,444
 (3,583) 106,084
 (3,583)
Purchase price fair value adjustment 71,446
 (2,305) 71,446
 (2,305)
Loss on sale of investment in marketable securities —
 (8) —
 (65)
Loss on early extinguishment of debt (1,028) (10) (1,025) (18,523)
Income from continuing operations 131,208
 27,410
 284,030
 51,953
Net income from discontinued operations 4,389
 3,838
 8,178
 8,519
Gain on sale of discontinued operations 114,735
 —
 114,735
 1,113
Net income 250,332
 31,248
 406,943
 61,585
Net income attributable to noncontrolling interests in other partnerships (1,843) (3,004) (3,333) (5,905)
Preferred unit distributions (565) (565) (1,130) (1,130)
Net income attributable to SLGOP 247,924
 27,679
 402,480
 54,550
Preferred unit redemption costs —
 (12,160) —
 (12,160)
Perpetual preferred unit distributions (3,738) (6,999) (7,475) (14,406)
Net income attributable to SLGOP common unitholders $244,186
 $8,520
 $395,005
 $27,984
Amounts attributable to SLGOP common unitholders:        
Income from continuing operations $52,172
 $10,570
 $94,562
 $24,240
Purchase price fair value adjustment 71,446
 (2,305) 71,446
 (2,305)
Equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate 1,444
 (3,583) 106,084
 (3,583)
Net income from discontinued operations 4,389
 3,838
 8,178
 8,519
Gain on sale of discontinued operations 114,735
 —
 114,735
 1,113
Net income attributable to SLGOP common unitholders $244,186
 $8,520
 $395,005
 $27,984
         

15
Table of Contents
SL Green Operating Partnership, L.P.
Consolidated Statements of Income
(unaudited, in thousands, except per unit amounts)data)



  Three Months Ended March 31,
  2015 2014
Revenues    
Rental revenue, net $303,329
 $255,976
Escalation and reimbursement 40,969
 37,807
Investment income 42,069
 54,084
Other income 9,932
 14,578
Total revenues 396,299
 362,445
Expenses    
Operating expenses, including related party expenses of $3,808 and $3,513 in 2015 and 2014, respectively 76,777
 69,909
Real estate taxes 55,723
 52,350
Ground rent 8,188
 8,033
Interest expense, net of interest income 75,807
 76,178
Amortization of deferred financing costs 6,615
 3,657
Depreciation and amortization 108,337
 86,515
Transaction related costs 1,143
 2,474
Marketing, general and administrative 25,464
 23,257
Total expenses 358,054
 322,373
Income from continuing operations before equity in net income from unconsolidated joint ventures, equity in net gain on sale of interest in unconsolidated joint venture/real estate and (loss) gain on early extinguishment of debt 38,245
 40,072
Equity in net income from unconsolidated joint ventures 4,030
 6,128
Equity in net gain on sale of interest in unconsolidated joint venture/real estate —
 104,640
(Loss) gain on early extinguishment of debt (49) 3
Income from continuing operations 42,226
 150,843
Net income from discontinued operations 427
 5,769
Gain on sale of discontinued operations 12,983
 —
Net income 55,636
 156,612
Net income attributable to noncontrolling interests in other partnerships (5,927) (1,490)
Preferred unit distributions (951) (565)
Net income attributable to SLGOP 48,758
 154,557
Perpetual preferred unit distributions (3,738) (3,738)
Net income attributable to SLGOP common unitholders $45,020
 $150,819
Amounts attributable to SLGOP common unitholders:    
Income from continuing operations before gains on sale and discontinued operations $31,610
 $40,410
Equity in net gain on sale of interest in unconsolidated joint venture/real estate —
 104,640
Net income from discontinued operations 427
 5,769
Gain on sale of discontinued operations 12,983
 —
Net income attributable to SLGOP common unitholders
 $45,020
 $150,819
     

14
Table of Contents

SL Green Operating Partnership, L.P.
Consolidated Statements of Income
(unaudited, in thousands, except per unit data)


 Three Months Ended June 30, Six Months Ended June 30, Three Months Ended March 31,
 2014 2013 2014 2013 2015 2014
Basic earnings per unit:            
Income from continuing operations before gains (loss) on sale and discontinued operations $1.25
 $0.09
 $1.69
 $0.23
Equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate 0.02
 (0.04) 1.08
 (0.03)
Income from continuing operations before gains on sale and discontinued operations $0.31
 $0.41
Equity in net gain on sale of interest in unconsolidated joint venture/real estate —
 1.07
Net income from discontinued operations 0.04
 0.04
 0.08
 0.09
 —
 0.06
Gain on sale of discontinued operations 1.16
 —
 1.16
 0.01
 0.13
 —
Net income attributable to SLGOP common unitholders $2.47
 $0.09
 $4.01
 $0.30
 $0.44
 $1.54
    
Diluted earnings per unit:            
Income from continuing operations before gains (loss) on sale and discontinued operations $1.24
 $0.09
 $1.68
 $0.23
Equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate 0.02
 (0.04) 1.07
 (0.03)
Income from continuing operations before gains on sale and discontinued operations $0.31
 $0.41
Equity in net gain on sale of interest in unconsolidated joint venture/real estate —
 1.06
Net income from discontinued operations 0.05
 0.04
 0.08
 0.09
 —
 0.06
Gain on sale of discontinued operations 1.15
 —
 1.16
 0.01
 0.13
 —
Net income attributable to SLGOP common unitholders $2.46
 $0.09
 $3.99
 $0.30
 $0.44
 $1.53
Dividends per unit $0.50
 $0.33
 $1.00
 $0.66
 $0.60
 $0.50
Basic weighted average common units outstanding 98,970
 94,312
 98,627
 94,224
 102,366
 98,196
Diluted weighted average common units and common unit equivalents outstanding 99,484
 94,536
 99,128
 94,452
 103,019
 98,716


The accompanying notes are an integral part of these financial statements.


1615
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SL Green Operating Partnership, L.P.
Consolidated Statements of Comprehensive Income
(unaudited, in thousands)
 Three Months Ended June 30, Six Months Ended June 30, Three Months Ended March 31,
 2014 2013 2014
2013 2015 2014
Net income $250,332
 $31,248
 $406,943
 $61,585
 $55,636
 $156,612
Other comprehensive income:        
Change in net unrealized gain on derivative instruments, including SLGOP's share of joint venture net unrealized gain on derivative instruments 7,293
 9,799
 7,461
 11,687
Change in unrealized gain (loss) on marketable securities 1,659
 (1,848) 1,788
 (207)
Other comprehensive income 8,952
 7,951
 9,249
 11,480
Other comprehensive (loss) income:    
Change in net unrealized (loss) gain on derivative instruments, including SLGOP's share of joint venture net unrealized (loss) gain on derivative instruments (5,680) 168
Change in unrealized gain on marketable securities 650
 129
Other comprehensive (loss) income (5,030) 297
Comprehensive income 259,284
 39,199
 416,192
 73,065
 50,606
 156,909
Net income attributable to noncontrolling interests (1,843) (3,004) (3,333) (5,905) (5,927) (1,490)
Comprehensive income attributable to SLGOP $257,441
 $36,195
 $412,859
 $67,160
 $44,679
 $155,419


The accompanying notes are an integral part of these financial statements.


16
Table of Contents


SL Green Operating Partnership, L.P.
Consolidated Statement of Capital
(unaudited, in thousands, except per unit data)
  SL Green Operating Partnership Unitholders    
    General Partner Limited Partners      
  
Series I
Preferred
Units
 
Common
Units
 
Common
Unitholders
 
Common
Units
 
Common
Unitholders
 Accumulated
Other
Comprehensive Loss		 
Noncontrolling
Interests
 Total
Balance at December 31, 2014 $221,932
 97,325
 $7,078,924
 3,973
 $113,298
 $(7,256) $521,842
 $7,928,740
Net income 3,738
   43,277
   1,743
   5,927
 54,685
Acquisition of subsidiary interest from noncontrolling interest     7,564
       (11,084) (3,520)
Other comprehensive loss           (5,030)   (5,030)
Preferred distributions (3,738)             (3,738)
Issuance of common units   

   257
 22,114
     22,114
DRSPP proceeds   775
 99,496
         99,496
Conversion of units of the Operating Partnership to common stock   317
 37,407
 (317) (37,407)     —
Reallocation of capital account relating to sale             (10,144) (10,144)
Deferred compensation plan and stock award, net   26
 (3,430)         (3,430)
Amortization of deferred compensation plan     6,239
         6,239
Contribution to consolidated joint venture interest             —
 —
Contributions - net proceeds from common stock offering   953
 120,597
         120,597
Contributions - proceeds from stock options exercised   137
 10,344
         10,344
Cash distributions to noncontrolling interests             (112,100) (112,100)
Cash distributions declared ($0.60 per common unit, none of which represented a return of capital for federal income tax purposes)     (59,647)   (2,349)     (61,996)
Balance at March 31, 2015 $221,932
 99,533
 $7,340,771
 3,913
 $97,399
 $(12,286) $394,441
 $8,042,257

The accompanying notes are an integral part of these financial statements.


17
Table of Contents


SL Green Operating Partnership, L.P.
Consolidated Statement of Capital
(unaudited, in thousands, except per unit data)
  SL Green Operating Partnership Unitholders    
    General Partner Limited Partners      
  
Series I
Preferred
Units
 
Common
Units
 
Common
Unitholders
 
Common
Units
 
Common
Unitholders
 Accumulated
Other
Comprehensive
Income (Loss)		 
Noncontrolling
Interests
 Total
Balance at December 31, 2013 $221,932
 94,993
 $6,506,747
 2,902
 $77,864
 $(15,662) $491,471
 7,282,352
Net income 7,475
  
 381,631
  
 13,374
  
 3,333
 405,813
Other comprehensive income  
  
  
  
  
 9,249
  
 9,249
Preferred distributions (7,475)  
  
  
  
  
  
 (7,475)
Issuance of common units  
  
  
 833
 19,460
  
  
 19,460
DRIP proceeds  
 —
 26
  
  
  
  
 26
Redemption of units  
 233
 23,066
 (235) (23,066)  
  
 —
Deferred compensation plan and stock award, net  
 2
 (1,390) 

  
  
  
 (1,390)
Amortization of deferred compensation plan  
  
 17,069
  
  
  
  
 17,069
Contribution to consolidated joint venture interest  
  
  
  
  
  
 1,673
 1,673
Contributions—net proceeds from common stock offering  
 82
 8,750
  
  
  
  
 8,750
Contributions—proceeds from stock options exercised  
 277
 19,751
  
  
  
  
 19,751
Cash distributions to noncontrolling interests  
  
  
  
  
  
 (4,352) (4,352)
Cash distribution declared ($1.00 per common unit, none of which represented a return of capital for federal income tax purposes)  
  
 (95,276)  
 (3,598)  
  
 (98,874)
Balance at June 30, 2014 $221,932
 95,587
 $6,860,374
 3,500
 $84,034
 $(6,413) $492,125
 $7,652,052
The accompanying notes are an integral part of these financial statements.

18
Table of Contents

SL Green Operating Partnership, L.P.
Consolidated Statements of Cash Flows
(unaudited, in thousands)



 Six Months Ended June 30,Three Months Ended March 31,
 2014 20132015 2014
Operating Activities       
Net income $406,943
 $61,585
$55,636
 $156,612
Adjustments to reconcile net income to net cash provided by operating activities:       
Depreciation and amortization 194,029
 173,029
114,955
 93,680
Equity in net income from unconsolidated joint ventures (14,748) (1,313)(4,030) (6,128)
Distributions of cumulative earnings from unconsolidated joint ventures 14,645
 13,467
15,489
 7,669
Equity in net (gain) loss on sale of interest in unconsolidated joint venture interest/real estate (106,084) 3,583
Purchase price fair value adjustment (71,446) 2,305
Depreciable real estate reserves —
 2,150
Equity in net gain on sale of interest in unconsolidated joint venture interest/real estate—
 (104,640)
Gain on sale of discontinued operations (114,735) (1,113)(12,983) —
Loss on early extinguishment of debt 1,025
 10,968
Loss (gain) on early extinguishment of debt49
 (3)
Deferred rents receivable (26,727) (29,452)(32,367) (11,133)
Other non-cash adjustments (11,162) (28,675)4,590
 (12,792)
Changes in operating assets and liabilities:       
Restricted cash—operations (4,850) 6,127
(1,652) (10,520)
Tenant and other receivables 5,890
 4,896
7,096
 11,899
Related party receivables (853) 768
(353) (11,885)
Deferred lease costs (10,688) (19,106)(11,017) (4,476)
Other assets (438) 4,075
(38,280) (32,949)
Accounts payable, accrued expenses and other liabilities and security deposits 12,973
 1,793
(20,230) (1,821)
Deferred revenue and deferred land leases payable 2,788
 4,601
Deferred revenue and land leases payable14,056
 14,635
Net cash provided by operating activities 276,562
 209,688
90,959
 88,148
Investing Activities       
Acquisitions of real estate property (208,614) (52,534)(6,290) —
Additions to land, buildings and improvements (134,249) (61,531)(47,117) (48,213)
Escrowed cash—capital improvements/acquisition deposits (38,227) (394)(3,084) (34,861)
Investments in unconsolidated joint ventures (170,532) (81,913)(83,772) (18,966)
Distributions in excess of cumulative earnings from unconsolidated joint ventures 157,699
 11,117
45,546
 72,558
Net proceeds from disposition of real estate/joint venture interest 258,076
 5,852
485,540
 109,196
Proceeds from sale of marketable securities 3,555
 190
133
 —
Purchase of marketable securities (10,025) (5,305)
Purchases of marketable securities(7,769) —
Other investments 20,594
 (12,994)(5,424) (1,573)
Origination of debt and preferred equity investments (256,730) (277,877)(174,420) (150,464)
Repayments or redemption of debt and preferred equity investments 60,412
 432,667
26,954
 522
Net cash used in investing activities (318,041) (42,722)
Net cash provided by (used in) investing activities230,297
 (71,801)
       

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SL Green Operating Partnership, L.P.
Consolidated Statements of Cash Flows (cont.)
(unaudited, in thousands)


 Six Months Ended June 30,Three Months Ended March 31,
 2014 20132015 2014
Financing Activities       
Proceeds from mortgages and other loans payable 1,601,603
 980,333
$—
 $121,216
Repayments of mortgages and other loans payable (1,496,224) (833,728)(481,608) (10,772)
Proceeds from revolving credit facility, term loan and senior unsecured notes 683,000
 370,000
665,000
 603,000
Repayments of revolving credit facility, term loan and senior unsecured notes (520,690) (404,970)(530,000) (440,690)
Contributions of proceeds from stock options exercised and DRIP issuance 19,777
 8,995
Contributions of proceeds from stock options exercised and DRSSP issuance109,840
 8,992
Contributions of net proceeds from sale of common stock 8,750
 8,487
120,597
 24
Contributions of net proceeds from sale of preferred stock —
 (9)
Redemption of preferred stock —
 (192,500)
Redemption of preferred units(200) —
Distributions to noncontrolling interests in other partnerships (4,352) (8,152)(110,867) (1,586)
Contributions from noncontrolling interests in other partnerships 1,548
 3,364
—
 517
Distributions paid on common and preferred units (106,541) (81,309)(65,252) (53,152)
Other obligations related to mortgage loan participations25,000
 —
Deferred loan costs and capitalized lease obligation (43,981) (8,492)(4,405) (3,426)
Net cash provided by (used in) financing activities 142,890
 (157,981)
Net cash (used in) provided by financing activities(271,895) 224,123
Net increase in cash and cash equivalents 101,411
 8,985
49,361
 240,470
Cash and cash equivalents at beginning of period 206,692
 189,984
Cash and cash equivalents at end of period $308,103
 $198,969
Cash and cash equivalents at beginning of year281,409
 206,692
Cash and cash equivalents at end of year$330,770
 $447,162
       
Supplemental Disclosure of Non-Cash Investing and Financing Activities:       
Issuance of common stock as deferred compensation $1,406
 $—
$1,306
 $1,295
Issuance of units in the Operating Partnership 19,460
 12,675
22,114
 17,314
Redemption of units in the Operating Partnership 23,066
 17,287
37,407
 16,583
Issuance of preferred units of limited partnership interest in the Operating Partnership 4,000
 —
Derivative instruments at fair value 17,088
 479
4,426
 110
Exchange of debt investment for equity in joint venture10,151
 —
Transfer of restricted cash to operating cash and cash equivalents as a result of sale21,578
 —
Acquisition of subsidiary interest from noncontrolling interest
3,500
 —
Tenant improvements and capital expenditures payable 7,192
 9,665
17,664
 9,898
Capital leased asset —
 9,992
Transfer to net assets held for sale 339,809
 207,665
—
 63,925
Transfer to liabilities related to net assets held for sale 193,375
 11,894
—
 49,704
Transfer of financing receivable to debt investment 19,675

—
—
 19,675
Deferred leasing payable 659
 4,872
2,372
 —
Consolidation of real estate 1,316,591
 90,934
Assumption of mortgage loan —
 84,642
Issuance of preferred units40,000
 —


The accompanying notes are an integral part of these financial statements.


2019
Table of Contents


SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements
June 30, 2014March 31, 2015
(unaudited)

1. Organization and Basis of Presentation
SL Green Realty Corp., which is referred to as the Company or SL Green, a Maryland corporation, and SL Green Operating Partnership, L.P., which is referred to as SLGOP or the Operating Partnership, a Delaware limited partnership, were formed in June 1997 for the purpose of combining the commercial real estate business of S.L. Green Properties, Inc. and its affiliated partnerships and entities. The Operating Partnership received a contribution of interest in the real estate properties, as well as 95% of the economic interest in the management, leasing and construction companies which are referred to as the Service Corporation, a consolidated variable interest entity. All of the management, leasing and construction services with respect to the properties that are wholly-owned by us are conducted through SL Green Management LLC which is 100% owned by the Operating Partnership. The Company has qualified, and expects to qualify in the current fiscal year, as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, or the Code, and operates as a self-administered, self-managed REIT. A REIT is a legal entity that holds real estate interests and, through payments of dividends to stockholders, is permitted to minimize the payment of Federal income taxes at the corporate level. Unless the context requires otherwise, all references to "we," "our" and "us" means the Company and all entities owned or controlled by the Company, including the Operating Partnership.
Substantially all of our assets are held by, and all of our operations are conducted through the Operating Partnership. The Company is the sole managing general partner of the Operating Partnership. As of June 30, 2014,March 31, 2015, noncontrolling investors held, in the aggregate, a 3.53%3.78% limited partnership interest in the Operating Partnership. We refer to these interests as the noncontrolling interests in the Operating Partnership. See Note 11, "Noncontrolling Interests on the Company's Consolidated Financial Statements."
Reckson Associates Realty Corp., or Reckson, and Reckson Operating Partnership, L.P., or ROP, are wholly-owned subsidiaries of the Operating Partnership.
As of June 30, 2014March 31, 2015, we owned the following interests in commercial and residential properties in the New York Metropolitan area, primarily in midtown Manhattan, a borough of New York City.Manhattan. Our investments in the New York Metropolitan area also include investments in Brooklyn, Long Island, Westchester County, Connecticut and Northern New Jersey, which are collectively known as the Suburban properties:
 Consolidated Unconsolidated Total Consolidated Unconsolidated Total  
Location Type Number of Properties Square Feet Number of Properties Square Feet Number of Properties Square Feet 
Weighted Average Occupancy(1)
 Type Number of Properties Approximate Square Feet Number of Properties Approximate Square Feet Number of Properties Approximate Square Feet 
Weighted Average Occupancy(1)
Commercial:Commercial:              Commercial:              
Manhattan Office 23
 18,429,045
 7
 3,476,115
 30
 21,905,160
 94.4% Office 23
 18,429,045
 7
 3,476,115
 30
 21,905,160
 96.0%
 Retail 7
(2) 389,317
 8
 432,250
 15
 821,567
 93.2% Retail 9
(2)403,735
 7
 279,628
 16
 683,363
 90.7%
 Development/Redevelopment 11
 2,063,790
 4
 1,605,782
 15
 3,669,572
 44.2% Development/Redevelopment 8
 883,862
 5
 1,952,782
 13
 2,836,644
 38.0%
 Fee Interest 2
 961,400
 —
 —
 2
 961,400
 100.0% Fee Interest 2
 783,530
 —
 —
 2
 783,530
 100.0%
 43
 21,843,552
 19
 5,514,147
 62
 27,357,699
 87.8% 42
 20,500,172
 19
 5,708,525
 61
 26,208,697
 89.7%
Suburban Office 27
 4,365,400
 4
 1,222,100
 31
 5,587,500
 81.7% Office 27
 4,365,400
 4
 1,222,100
 31
 5,587,500
 80.8%
 Retail 1
 52,000
 —
 —
 1
 52,000
 100.0% Retail 1
 52,000
 —
 —
 1
 52,000
 100.0%
 Development/Redevelopment 1
 85,000
 1
 65,641
 2
 150,641
 42.7% Development/Redevelopment 2
 86,000
 2
 65,641
 4
 151,641
 57.5%
 29
 4,502,400
 5
 1,287,741
 34
 5,790,141
 80.9% 30
 4,503,400
 6
 1,287,741
 36
 5,791,141
 80.3%
Total commercial propertiesTotal commercial properties 72
 26,345,952
 24
 6,801,888
 96
 33,147,840
 86.6%Total commercial properties 72
 25,003,572
 25
 6,996,266
 97
 31,999,838
 88.0%
Residential:                           
Manhattan Residential 2
(2) 653,337
 —
 —
 2
 653,337
 93.2% Residential 3
(2)735,587
 17
 2,046,733
 20
 2,782,320
 96.8%
Suburban Residential 1
 66,611
 —
 —
 1
 66,611
 84.4% Residential 1
 66,611
 —
 —
 1
 66,611
 84.4%
Total residential propertiesTotal residential properties 3
 719,948
 —
 —
 3
 719,948
 91.9%Total residential properties 4
 802,198
 17
 2,046,733
 21
 2,848,931
 96.4%
Total portfolioTotal portfolio 75
 27,065,900
 24
 6,801,888
 99
 33,867,788
 86.7%Total portfolio 76
 25,805,770
 42
 9,042,999
 118
 34,848,769
 88.7%

(1)The weighted average occupancy for commercial properties represents the total occupied square feet divided by total available rentable square feet.  The weighted average occupancy for residential properties represents the total occupied units divided by total available units.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014March 31, 2015
(unaudited)



(2)
As of June 30, 2014,March 31, 2015, we owned a building that was comprised of approximately 270,132 square feet of retail space and approximately 222,855 square feet of residential space. For the purpose of this report, we have included the building as part ofin the retail properties count and have shownbifurcated the square footage under its respective classifications.
into the retail and residential components.

As of June 30, 2014,March 31, 2015, we also managed a 336,200an approximately 336,201 square foot office building owned by a third party. As of June 30, 2014, we alsoparty and held debt and preferred equity investments with a book value of $1.5 billion.$1.5 billion.
Partnership Agreement
In accordance with the partnership agreement of the Operating Partnership, or the Operating Partnership Agreement, the Operating Partnership allocateswe allocate all distributions and profits and losses in proportion to the percentage of ownership interests of the respective partners. As the managing general partner of the Operating Partnership, we are required to take such reasonable efforts, as determined by us in our sole discretion, to cause the Operating Partnership to distribute sufficient amounts to enable the payment of sufficient dividends by us to minimize any Federal income or excise tax at the Company level. Under the Operating Partnership Agreement, each limited partner has the right to redeem units of limited partnership interests for cash, or if we so elect, for shares of SL Green's common stock on a one-for-one basis.
Basis of Quarterly Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for the fair presentation of the financial position of the Company and the Operating Partnership at June 30, 2014March 31, 2015 and the results of operations for the periods presented have been included. The operating results for the period presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2014.2015. These financial statements should be read in conjunction with the financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 20132014 of the Company and the Operating Partnership.
The consolidated balance sheets at December 31, 20132014 have been derived from the audited financial statements as of that date but do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.
2. Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include our accounts and those of our subsidiaries, which are wholly-owned or controlled by us. Entities which we do not control through our voting interest and entities which are variable interest entities, but where we are not the primary beneficiary, are accounted for under the equity method or as debt and preferred equity investments. See Note 5, "Debt and Preferred Equity Investments" and Note 6, "Investments in Unconsolidated Joint Ventures." All significant intercompany balances and transactions have been eliminated.
We consolidate a variable interest entity, or VIE, in which we are considered the primary beneficiary. The primary beneficiary is the entity that has (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. Included in commercial real estate properties on our consolidated balance sheets as of June 30, 2014March 31, 2015 and December 31, 20132014 are $609.4$198.5 million and $605.9$198.4 million,, respectively, related to our consolidated VIEs. Included in mortgages and other loans payable on our consolidated balance sheets as of June 30, 2014March 31, 2015 and December 31, 20132014 are $365.8$106.0 million and $370.9$106.5 million,, respectively, related to our consolidated VIEs. Also, included in assets held for sale and liabilities related to assets held for sale on our consolidated balance sheets as of December 31, 2014 are $445.0 million of commercial real estate and $253.9 million of mortgage related to our consolidated VIEs.
A noncontrolling interest in a consolidated subsidiary is defined as the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to us. Noncontrolling interests are required to be presented as a separate component of equity in the consolidated balance sheet and the presentation of net income wasis modified to present earnings and other comprehensive income attributed to controlling and noncontrolling interests.
We assess the accounting treatment for each joint venture and debt and preferred equity investment. This assessment includes a review of each joint venture or limited liability company agreement to determine which party has what rights and whether those rights are protective or participating. For all VIEs, we review such agreements in order to determine which party has the power to direct the activities that most significantly impact the entity's economic performance. In situations where we and our partner approve, among other things, the annual budget, receive a detailed monthly reporting package from us, meet on a quarterly basis

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014March 31, 2015
(unaudited)



approve, among other things, the annual budget, receive a detailed monthly reporting package from us, meet on a quarterly basis to review the results of the joint venture, review and approve the joint venture's tax return before filing, and approve all leases that cover more than a nominal amount of space relative to the total rentable space at each property, we do not consolidate the joint venture as we consider these to be substantive participation rights that result in shared power of the activities that most significantly impact the performance of ourthe joint venture. Our joint venture agreements typically contain certain protective rights such as the requirement of partner approval to sell, finance or refinance the property and the payment of capital expenditures and operating expenditures outside of the approved budget or operating plan.
Investment in Commercial Real Estate Properties
On a periodic basis, we assess whether there are any indications that the value of our real estate properties may be other than temporarily impaired or that their carrying value may not be recoverable. A property's value is considered impaired if management's estimate of the aggregate future cash flows (undiscounted and without interest charges for consolidated properties) to be generated by the property is less than the carrying value of the property. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the calculated fair value of the property. We do not believe that the values of any of our consolidated properties were other than temporarily impaired at March 31, 2015.
We also evaluate our real estate properties for potential impairment when a real estate property has been classified as held for sale. Real estate assets held for sale are valued at the lower of their carrying value or fair value less costs to sell. We do not believe that the values of any of our consolidated properties or properties held for sale were impaired at June 30, 2014.
We allocate the purchase price of real estate to land and building (inclusive of tenant improvements) and, if determined to be material, intangibles, such as the value of above- and below-market leases and origination costs associated with the in-place leases. We depreciate the amount allocated to building (inclusive of tenant improvements) over their estimated useful lives, which generally range from three to 40 years. We amortize the amount allocated to the above- and below-market leases over the remaining term of the associated lease, which generally range from one to 14 years, and record it as either an increase (in the case of below-market leases) or a decrease (in the case of above-market leases) to rental income. We amortize the amount allocated to the values associated with in-place leases over the expected term of the associated lease, which generally ranges from one to 14 years. If a tenant vacates its space prior to the contractual termination of the lease and no rental payments are being made on the lease, any unamortized balance of the related intangible will be written off. The tenant improvements and origination costs are amortized as an expense over the remaining life of the lease (or charged against earnings if the lease is terminated prior to its contractual expiration date). We assess fair value of the leases based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends, and market/economic conditions that may affect the property. To the extent acquired leases contain fixed rate renewal options that are below marketbelow-market and determined to be material, we amortize such below-market lease value into rental income over the renewal period.
We recognized an increase of $6.2 million, $11.0 million, $6.2$14.3 million and $10.1$6.1 million in rental revenue for the three and six months ended June 30,March 31, 2015 and 2014, and 2013, respectively, for the amortization of aggregate below-market leases in excess of above-market leases and a reduction in lease origination costs, resulting from the allocation of the purchase price of the applicable properties. We recognized a reduction in interest expense for the amortization of the above-market rate mortgages assumed of $1.3 million, $2.8 million, $1.2$0.6 million and $2.4$1.5 million for the three and six months ended June 30,March 31, 2015 and 2014, and 2013, respectively.
The following summarizes our identified intangible assets (acquired above-market leases and in-place leases) and intangible liabilities (acquired below-market leases) as of June 30, 2014March 31, 2015 and December 31, 20132014 (in thousands):
June 30, 2014 December 31, 2013March 31, 2015 December 31, 2014
Identified intangible assets (included in other assets):      
Gross amount$702,189
 $746,704
$968,763
 $664,297
Accumulated amortization(382,231) (343,339)(408,884) (383,236)
Net$319,958
 $403,365
$559,879
 $281,061
Identified intangible liabilities (included in deferred revenue):      
Gross amount$676,075
 $671,380
$847,326
 $655,755
Accumulated amortization(461,952) (429,138)(506,578) (483,948)
Net$214,123
 $242,242
$340,748
 $171,807
Fair Value Measurements
See Note 17, "Fair Value Measurements."

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014March 31, 2015
(unaudited)



Investment in Marketable Securities
We invest in marketable securities. At the time of purchase, we are required to designate a security as held-to-maturity, available-for-sale, or trading depending on ability and intent. We do not have any securities designated as held-to-maturity or trading at this time.March 31, 2015. Securities available-for-sale are reported at fair value pursuant to ASC 820-10, with the net unrealized gains or losses reported as a component of accumulated other comprehensive income or loss. Unrealized losses that are determined to be other-than-temporary are recognized in earnings up to their credit component.
The cost of bonds and marketable securities sold is determined using the specific identification method.
At June 30, 2014March 31, 2015 and December 31, 2013,2014, we held the following marketable securities (in thousands):
 June 30, 2014 December 31, 2013
Equity marketable securities$4,532
 $4,307
Commercial mortgage-backed securities35,380
 24,419
Rake bonds—
 3,323
Total marketable securities available-for-sale$39,912
 $32,049
Our equity marketable securities represent our investment in Gramercy Property Trust Inc. (NYSE: GPT), or Gramercy. Marc Holliday, our chief executive officer, remains a board member of Gramercy. As we do not have any significant influence over Gramercy, we account for our investment as available-for-sale securities.
 March 31, 2015 December 31, 2014
Equity marketable securities$4,287
 $4,332
Mortgage-backed securities43,429
 35,097
Total marketable securities available-for-sale$47,716
 $39,429
The cost basis of the commercial mortgage-backed securities was $32.6$40.0 million and $23.0$32.4 million at June 30, 2014March 31, 2015 and December 31, 2013.2014, respectively. These securities mature at various times through 2039. The cost basis2049.
During the three months ended March 31, 2015, we disposed of marketable securities for aggregate net proceeds of $0.1 million. We did not sell any of our marketable securities during the rake bonds was $3.6 million at Decemberthree months ended March 31, 2013.2014.
Investments in Unconsolidated Joint Ventures
We assess our investments in unconsolidated joint ventures for recoverability, and if it is determined that a loss in value of the investment is other than temporary, we write down the investment to its fair value. We evaluate our equity investments for impairment based on the joint venture's projected discounted cash flows. We do not believe that the values of any of our equity investments were impaired at June 30, 2014March 31, 2015.
We may originate loans for real estate acquisition, development and construction, or ADC arrangements, where we expect to receive some or all of the residual profit.profit from such projects. When the risk and rewards of these ADC arrangements are essentially the same as an investor or joint venture partner, we account for these ADC arrangements as real estate investments under the equity method of accounting for investments. Otherwise, we account for these ADC arrangements consistent with our loan accounting for our debt and preferred equity investments.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the term of the lease. Rental revenue recognition commences when the tenant takes possession or controls the physical use of the leased space. In order for the tenant to take possession, the leased space must be substantially ready for its intended use. To determine whether the leased space is substantially ready for its intended use, management evaluates whether we are or the tenant is the owner of tenant improvements for accounting purposes. When management concludes that we are the owner of tenant improvements, rental revenue recognition begins when the tenant takes possession of the finished space, which is when such tenant improvements are substantially complete. In certain instances, when management concludes that we are not the owner (the tenant is the owner) of tenant improvements, rental revenue recognition begins when the tenant takes possession of or controls the space. When management concludes that we are the owner of tenant improvements for accounting purposes, we record amounts funded to construct the tenant improvements as a capital asset. For these tenant improvements, we record amounts reimbursed by tenants as a reduction of the capital asset. When management concludes that the tenant is the owner of tenant improvements for accounting purposes, we record our contribution towards those improvements as a lease incentive, which is included in deferred costs, net on our consolidated balance sheets and amortized as a reduction to rental revenue on a straight-line basis over the term of the lease. The excess of rents recognized over amounts contractually due pursuant to the underlying leases are included in deferred rents receivable on the consolidated balance sheets. We establish, on a current basis, an allowance for future potential tenant credit losses, which may occur against this account. The balance reflected on the consolidated balance sheets is net of such allowance.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014
(unaudited)


In addition to base rent, our tenants also generally will pay their pro rata share of increases in real estate taxes and operating expenses for the building over a base year. In some leases, in lieu of paying additional rent based upon increases in building operating expenses, the tenant will pay additional rent based upon increases in the wage rate paid to porters over the porters' wage rate in effect during a base year or increases in the consumer price index over the index value in effect during a base year. In addition, many of our leases contain fixed percentage increases over the base rent to cover escalations. Electricity is most often

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Table of Contents
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
March 31, 2015
(unaudited)



supplied by the landlord either on a sub-metered basis, or rent inclusion basis (i.e., a fixed fee is included in the rent for electricity, which amount may increase based upon increases in electricity rates or increases in electrical usage by the tenant). Base building services other than electricity (such as heat, air conditioning and freight elevator service during business hours, and base building cleaning) are typically provided at no additional cost, with the tenant paying additional rent only for services which exceed base building services or for services which are provided outside normal business hours. These escalations are based on actual expenses incurred in the prior calendar year. If the expenses in the current year are different from those in the prior year, then during the current year, the escalations will be adjusted to reflect the actual expenses for the current year.
We record a gain on sale of real estate when title is conveyed to the buyer, subject to the buyer's financial commitment being sufficient to provide economic substance to the sale and we have no substantial economic involvement with the buyer.
Interest income on debt and preferred equity investments is accrued based on the outstanding principal amount and contractual terms of the instruments and when, in the opinion of management, it is deemed collectible. Several of the debt and preferred equity investments provide for accrual of interest at specified rates, which differ from current payment terms. Interest is recognized on such loans at the accrual rate subject to management's determination that accrued interest areis ultimately collectible, based on the underlying collateral and operations of the borrower. If management cannot make this determination, interest income above the current pay rate is recognized only upon actual receipt.
Deferred originationsorigination fees, original issue discounts and loan origination costs, if any, are recognized as a reduction to the interest income over the terms of the related investments using the effective interest method. Fees received in connection with loan commitments are also deferred until the loan is funded and are then recognized over the term of the loan as an adjustment to yield. Discounts or premiums associated with the purchase of loans are amortized or accreted into interest income as a yield adjustment on the effective interest method based on expected cashflows through the expected maturity date of the related investment. If we purchase a debt or preferred equity investment at a discount, intend to hold it until maturity and expect to recover the full value of the investment, we accrete the discount into income as an adjustment to yield over the term of the investment. If we purchase a debt or preferred equity investment at a discount with the intention of foreclosing on the collateral, we do not accrete the discount. For debt investments acquired at a discount for credit quality, the difference between contractual cash flows and expected cash flows at acquisition is not accreted. Anticipated exit fees, whosethe collection of which is expected, are also recognized over the term of the loan as an adjustment to yield.
Debt and preferred equity investments are placed on a non-accrual status at the earlier of the date at which payments become 90 days past due or when, in the opinion of management, a full recovery of interest income becomes doubtful. Interest income recognition on any non-accrual debt or preferred equity investment is resumed when such non-accrual debt or preferred equity investment becomes contractually current and performance is demonstrated to be resumed. Interest is recorded as income on impaired loans only to the extent cash is received.
We may syndicate a portion of the loans that we originate or sell these loans individually. When a transaction meets the criteria of sale accounting, we derecognize the loan sold and recognize gain or loss based on the difference between the sales price and the carrying value of the loan sold. Any related unamortized deferred origination fees, original issue discounts, loan origination costs, discounts or premiums at the time of sale are recognized as an adjustment to the gain or loss on sale, which is included in investment income on the consolidated statement of income. Any fees received at the time of sale or syndication are recognized as part of investment income.
Asset management fees are recognized on a straight-line basis over the term of the asset management agreement.
Reserve for Possible Credit Losses
The expense for possible credit losses in connection with debt and preferred equity investments is the charge to earnings to increase the allowance for possible credit losses to the level that we estimate to be adequate, based on Level 3 data, considering delinquencies, loss experience and collateral quality. Other factors considered relate to geographic trends and product diversification, the size of the portfolio and current economic conditions. Based upon these factors, we establish the provision for possible credit losses on each individual investment. When it is probable that we will be unable to collect all amounts contractually due, the investment is considered impaired.
Where impairment is indicated on an investment that is held to maturity, a valuation allowance is measured based upon the excess of the recorded investment amount over the net fair value of the collateral. Any deficiency between the carrying amount of an asset and the calculated value of the collateral is charged to expense. We continue to assess or adjust our estimates based on circumstances of a loan and the underlying collateral. If the additional information obtained reflects increased recovery of our investment, we will adjust our reserves accordingly. There were no loan reserves recorded during three months ended March 31, 2015 and 2014.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014March 31, 2015
(unaudited)



investment, we will adjust our reserves accordingly. There were no loan reserves recorded during each of the three and six months ended June 30, 2014 and 2013.
Debt and preferred equity investments held for sale are carried at the lower of cost or fair market value using available market information obtained through consultation with dealers or other originators of such investments as well as discounted cash flow models based on Level 3 data pursuant to ASC 820-10. As circumstances change, management may conclude not to sell an investment designated as held for sale. In such situations, the investment will be reclassified at its net carrying value to debt and preferred equity investments held to maturity. For these reclassified investments, the difference between the current carrying value and the expected cash to be collected at maturity will be accreted into income over the remaining term of the investment.
Income Taxes
SL Green is taxed as a REIT under Section 856(c) of the Code. As a REIT, SL Green generally is not subject to Federal income tax. To maintain its qualification as a REIT, SL Green must distribute at least 90% of its REIT taxable income to its stockholders and meet certain other requirements. If SL Green fails to qualify as a REIT in any taxable year, we will be subject to Federal income tax on SL Green's taxable income at regular corporate rates. SL Green may also be subject to certain state, local and franchise taxes. Under certain circumstances, Federal income and excise taxes may be due on SL Green's undistributed taxable income.
The Operating Partnership is a partnership and, as a result, all income and losses of the partnership are allocated to the partners for inclusion in their respective income tax returns. The only provision for income taxes included in the consolidated statements of income relates to the Operating Partnership’s consolidated taxable REIT subsidiaries. The Operating Partnership may also be subject to certain state, local and franchise taxes.
Pursuant to amendments to the Code that became effective January 1, 2001, we have elected, and may elect in the future, to treat certain of our existing or newly created corporate subsidiaries as taxable REIT subsidiaries, or TRSs. In general, a TRSTRSs may perform non-customary services for the tenants of the Company, hold assets that we cannot hold directly and generally may engage in any real estate or non-real estate related business. The TRSs generate income, resulting in Federal and state income tax liability for these entities.
During the three and six months ended June 30, 2014March 31, 2015 and 20132014, we recorded a Federal, state and local tax provisionprovisions of $2.1 million, $5.0 million, $2.3$0.3 million and $3.9$2.9 million, respectively.
We follow a two-step approach for evaluating uncertain tax positions. Recognition (step one) occurs when an enterprise concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustained upon examination. Measurement (step two) determines the amount of benefit that is more-likely-than-not to be realized upon settlement. Derecognition of a tax position that was previously recognized would occur when a company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained. The use of a valuation allowance as a substitute for derecognition of tax positions is prohibited.
Stock-Based Employee Compensation Plans
We have a stock-based employee compensation plan, described more fully in Note 14, "Share-based Compensation."
The Company's stock options are recorded at fair value at the time of issuance. Fair value of the stock options is determined using the Black-Scholes option pricing model. The Black-Scholes model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because our plan has characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in our opinion, the existing models do not necessarily provide a reliable single measure of the fair value of the employee stock options.
Compensation cost for stock options, if any, is recognized ratably over the vesting period of the award. Our policy is to grant options with an exercise price equal to the quoted closing market price of the Company's common stock on the grant date. Awards of stock or restricted stock are expensed as compensation over the benefit period based on the fair value of the stock on the grant date.
For share-based awards with a performance or market measure, we recognize compensation cost over the requisite service period, using the accelerated attribution expense method. The requisite service period begins on the date the compensation committee of SL Green's board of directors authorizes the award, adopts any relevant performance measures and communicates the award to the employees. For programs with performance measures, the total estimated compensation cost isawards that vest based on the fair

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Tableachievement of Contents
SL Green Realty Corp.a performance condition or market condition, we determine whether it is probable that the performance condition will be met, and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014
(unaudited)


estimate compensation cost based on the fair value of the award at the applicable reporting date estimated using a binomial model.model or market quotes. For share-based awards for which there is no pre-established performance measure, we recognize compensation cost over the service vesting period, which represents the requisite service period, on a straight-line basis. In accordance with the provisions of our share-based incentive

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Table of Contents
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
March 31, 2015
(unaudited)



compensation plans, we accept the return of shares of the Company's common stock, at the current quoted market price, from certain key employees to satisfy minimum statutory tax-withholding requirements related to shares that vested during the period.
Awards can also be made in the form of a separate series of units of limited partnership interest in the Operating Partnership called long-term incentive plan units, or LTIP units. LTIP units, which can be granted either as free-standing awards or in tandem with other awards under our stock incentive plan, are valued by reference to the value of the Company's common stock at the time of grant, and are subject to such conditions and restrictions as the compensation committee of the Company's board of directors may determine, including continued employment or service, computation of financial metrics and/or achievement of pre-established performance goals and objectives.
Earnings per Share of the Company
The Company presents both basic and diluted earnings per share, or EPS. Basic EPS excludes dilution and is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding during the period. Basic EPS includes participating securities, consisting of unvested restricted stock that receive nonforfeitable dividends similar to shares of common stock. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower EPS amount. Diluted EPS also includes units of limited partnership interest. The dilutive effect of stock options is reflected in the weighted average diluted outstanding shares calculation by application of the treasury stock method. There is no dilutive effect for the exchangeable senior notes as the conversion premium will be paid in cash.
Earnings per Unit of the Operating Partnership
The Operating Partnership presents both basic and diluted earnings per unit, or EPU.  Basic EPU excludes dilution and is computed by dividing net income attributable to common unitholders by the weighted average number of common units outstanding during the period. Basic EPU includes participating securities, consisting of unvested restricted units that receive nonforfeitable dividends similar to shares of common units. Diluted EPU reflects the potential dilution that could occur if securities or other contracts to issue common units were exercised or converted into common units, where such exercise or conversion would result in a lower EPU amount. The dilutive effect of unit options is reflected in the weighted average diluted outstanding units calculation by application of the treasury stock method. There is no dilutive effect for the exchangeable senior notes as the conversion premium will be paid in cash.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Concentrations of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash investments, debt and preferred equity investments and accounts receivable. We place our cash investments in excess of insured amounts with high quality financial institutions. The collateral securing our debt and preferred equity investments is primarily located in New York City. See Note 5, "Debt and Preferred Equity Investments." We perform ongoing credit evaluations of our tenants and require most tenants to provide security deposits or letters of credit. Though these security deposits and letters of credit are insufficient to meet the total value of a tenant's lease obligation, they are a measure of good faith and a source of funds to offset the economic costs associated with lost rent and the costs associated with re-tenanting a space. Although the properties in our real estate portfolio are primarily located in Manhattan, we also have properties located in Brooklyn, Long Island, Westchester County, Connecticut and Northern New Jersey. The tenants located in our buildings operate in various industries. Other than three tenants who account for 11.2%10.7%, 7.3%7.1% and 5.7%5.4% of our share of annualized cash rent, respectively, no other tenant in our portfolio accounted for more than 2.0%2.1% of our share of annualized cash rent, including our share of joint venture annualized rent, for the three months ended June 30, 2014.at March 31, 2015. For the three months ended June 30, 2014, 9.7%March 31, 2015, 10.1%, 9.6%9.7%, 7.7% and 7.3%7.4% of our annualized cash rent for consolidated properties was attributable to 1515 Broadway, 388-390 Greenwich Street, and 1185 Avenue of the Americas respectively. In addition, one of our preferred equity investments accounted for 13.3% of the income earned on debt and preferred equity investments during the three months ended June 30, 2014.919 Third Avenue, respectively.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014
(unaudited)


Reclassification
Certain prior year balances have been reclassified to conform to our current year presentation primarily in order to eliminate discontinued operations from income from continuing operations. In April 2014, we reclassified one

26
Table of our debtContents
SL Green Realty Corp. and preferred equity investmentsSL Green Operating Partnership, L.P.
Notes to investments in unconsolidated joint ventures as a result of meeting the criteria of a real estate investment under the accounting guidance for ADC arrangements.Consolidated Financial Statements (cont.)
March 31, 2015
(unaudited)



Accounting Standards Updates
In June 2014,April 2015, the Financial Accounting Standards Board, or FASB, issued final guidance to simplify the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability (Accounting Standards Update, or ASU, No, 2015-03). The guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption of the guidance is permitted. Upon adoption, an entity must apply the new guidance retrospectively for all prior periods presented in the financial statements. The Company expects to adopt the guidance effective January 1, 2016 and the guidance is not anticipated to have a material impact on our consolidated financial statements.
In February 2015, the FASB issued new guidance that amends the current consolidation guidance, including introducing a separate consolidation analysis specific to limited partnerships and other similar entities (ASU, No. 2015-02). Under this analysis, limited partnerships and other similar entities will be considered a VIE unless the limited partners hold substantive kick-out rights or participating rights.The guidance is effective for annual and interim periods beginning after December 15, 2015. Early adoption of this guidance is permitted. The Company is currently evaluating the new guidance to determine the impact it may have on our consolidated financial statements.
In June 2014, the FASB issued final guidance that requires repurchase-to-maturity transactions to be accounted for as secured borrowings as if the transferor retains effective control, even though the transferred financial assets are not returned to the transferor at settlement and also eliminates existing guidance for repurchase financings (Accounting Standards Update, or ASU,(ASU, No. 2014-11). New disclosures are required for (1) certain transactions accounted for as secured borrowings and (2) transfers accounted for as sales when the transferor also retains substantially all of the exposure to the economic return on the transferred financial assets throughout the term of the transaction. The guidance is effective for the first interim or annual period beginning after December 15, 2014, except for the disclosures related to transactions accounted for as secured borrowings, which are effective for periods beginning after March 15, 2015. Early adoption of this guidance is prohibited. The Company will adopt thishas adopted the standard beginning in the first quarter of 2015. The adoption of this guidance isdid not anticipated to have a material impact on our consolidated financial statements. The Company will adopt the presentation and disclosures related to transactions accounted for as secured borrowings during the second quarter of 2015.
In May 2014, the FASB issued a new comprehensive revenue recognition guidance which requires us to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services (ASU No. 2014-09). The guidance also requires enhanced disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The guidance is effective for annual and interim periods beginning after December 15, 2016 and early adoption is not permitted. The new guidance can be applied either retrospectively to each prior reporting period presented, or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the new guidance to determine the impact it may have on our consolidated financial statements.
In April 2014, the FASB issued new guidance on reporting discontinued operations which raises the threshold for disposals to qualify as discontinued operations (ASU No. 2014-08). The guidance also allows us to have a significant continuing involvement and continuing cash flows with the discontinued operations. Additionally, the guidance requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. The guidance is effective for calendar year public companies beginning in the first quarter of 2015 and is to be applied on a prospective basis for new disposals. Early adoption of this guidance iswas permitted. The Company will adopt thishas adopted the standard beginning in the first quarter of 2015. The adoption of this guidance will change the presentation of discontinued operations but will not have a material impact on our consolidated financial statements.
3. Property Acquisitions
In May 2014, we acquired Ivanhoe Cambridge, Inc.'s 49.65% economic interest in 388-390 Greenwich Street, thereby consolidating full ownershipfor all properties held for sale and/or disposed of the 2.4 million square foot property. The transaction valued the consolidated interests at $1.585 billion. This valuation was based on a negotiated sales agreement which took into consideration the recent extension of the existing triple net lease. Simultaneous with the closing, we refinanced the existing $1.1 billion mortgage with a four-year $1.5 billion mortgage, which bears interest at 175 basis points over LIBOR. We also assumed the existing derivative instruments, which swapped $504.0 million of the mortgagesubsequent to fixed rate. We recognized a purchase price fair value adjustment of $71.4 million upon closing of this transaction. This property, which we initially acquired in December 2007, was previously accounted for as an investment in unconsolidated joint ventures. We are currently in the process of analyzing the purchase price allocation and, as such, we have not allocated any value to intangible assets.
In November 2013, we acquired a 492,987 square foot mixed-use residential and commercial property located at 315 West 33rd Street, New York, New York for $386.8 million. Based on our preliminary analysis of the purchase price, we had allocated $116.0 million and $270.8 million to land and building, respectively. During the three months ended March 31, 2014, we finalized the purchase price allocation based on third party appraisal and additional facts and circumstances that existed at the acquisition date and reclassified $33.2 million and $7.8 million to values for above-market and in-place leases and below-market leases, respectively. These adjustments did not have a material impact to our consolidated statement of income for the six months ended June 30, 2014.January 1, 2015.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014March 31, 2015
(unaudited)



Pro Forma3. Property Acquisitions
2015 Acquisitions
During the three months ended March 31, 2015, the property listed below was acquired from a third party. The following table summarizes on an unaudited pro forma basis,our preliminary allocation of the resultspurchase price of operationsthe assets acquired and liabilities assumed upon the closing of 388-390 Greenwich Street, which are included in the consolidated statement of income, and our consolidated results of operations for the three and six months ended June 30, 2014 and 2013 as though thethis acquisition of our joint venture partner's interest in 388-390 Greenwich Street was completed on January 1, 2013. The supplemental pro forma data is not necessarily indicative of what the actual results of operations would have been assuming the transactions had been completed as set forth above, nor do they purport to represent our results of operations for future periods.(in thousands):
  Three Months Ended June 30, Six Months Ended June 30,
(In thousands, except per share amounts) 2014 2013 2014 2013
Actual revenues since acquisition $14,897
   $14,897
  
Actual net income since acquisition 76,844
   76,844
  
Pro forma revenues 400,812
 381,397
 804,863
 762,471
Pro forma income from continuing operations 61,930
 27,437
 218,835
 127,081
Pro forma basic earnings per share 1.77
 0.09
 3.34
 1.09
Pro forma diluted earnings per share 1.76
 0.09
 3.33
 1.09
Pro forma basic earnings per unit 1.77
 0.09
 3.34
 1.09
Pro forma diluted earnings per unit 1.76
 0.09
 3.33
 1.09
  
1640 Flatbush Avenue(1)
Acquisition Date March 2015
Ownership Type Fee Interest
Property Type Retail
   
Purchase Price Allocation:  
Land $6,120
Building and building leasehold 680
Above-market lease value —
Acquired in-place leases —
Other assets, net of other liabilities —
Assets acquired 6,800
Mark-to-market assumed debt —
Below-market lease value —
Derivatives —
Liabilities assumed —
Purchase price $6,800
Net consideration funded by us at closing, excluding consideration financed by debt $6,800
Equity and/or debt investment held $—
Debt assumed $—

(1)The pro forma income from continuing operations forWe are currently in the three and six months ended June 30, 2014 and 2013 includes the effectprocess of the new financing necessary to complete the acquisition and the preliminary allocation of purchase price in connection with the changes in depreciation and amortization. In addition, the pro forma income from continuing operations for the six months ended June 30, 2013 was adjusted to includeanalyzing the purchase price fairallocation and, as such, we have not allocated any value adjustment,to intangible assets such as though the acquisition was completed on January 1, 2013. The pro forma income from continuing operations for the threeabove- and six months ended June 30, 2014 excludes this purchase price fair value adjustment.below-market lease or in-place leases.

4. Properties Held for Sale and Dispositions
In June 2014, we entered into a contract to sell our leased fee interest in 2 Herald Square for $365.0 million. This transaction is expected to close during the fourth quarter of 2014, subject to the satisfaction of customary closing conditions.
In April 2014, we entered into a contract to sell our fee interest and development rights in 985-987 Third Avenue for $68.7 million. The sale is being made in conjunction with the sale of an adjacent parcel, which we do not own. This transaction closed in July 2014.
In May 2014, we sold our leasehold interest in 673 First Avenue for $145.0 million and recognized a gain on sale of $117.8 million.
Discontinued operations included the results of operations of real estate assets under contract or sold prior to June 30, 2014. This included 2 Herald Square and 985-987 Third Avenue, which were both held for sale at June 30, 2014, 673 First Avenue, which was sold in May 2014, and 44 West 55th Street, 333 West 34th Street and 300 Main Street, which were sold in February, August, and September of 2013, respectively.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014March 31, 2015
(unaudited)



2014 Acquisitions
During the three months ended March 31, 2015, we finalized the purchase price allocations based on third party appraisal and additional facts and circumstances that existed at the acquisition dates for the following 2014 acquisitions (in thousands):
  
719 Seventh Avenue(1)(2)
 
115 Spring
Street(1)
 
388-390 Greenwich Street(1)(3)
Acquisition Date July 2014 July 2014 May 2014
Ownership Type Fee Interest Fee Interest Fee Interest
Property Type Development Retail Office
       
Purchase Price Allocation:      
Land $41,850
 $11,078
 $516,292
Building and building leasehold —
 44,799
 964,434
Above-market lease value —
 —
 —
Acquired in-place leases —
 2,037
 302,430
Other assets, net of other liabilities —
 —
 6,495
Assets acquired 41,850
 57,914
 1,789,651
Mark-to-market assumed debt —
 —
 —
Below-market lease value —
 4,789
 186,782
Derivatives —
 —
 18,001
Liabilities assumed —
 4,789
 204,783
Purchase price $41,850
 $53,125
 $1,584,868
Net consideration funded by us at closing, excluding consideration financed by debt $41,850
 $53,125
 $208,614
Equity and/or debt investment held $—
 $—
 $148,025
Debt assumed $—
 $—
 $1,162,379

(1)Based on our preliminary analysis of the purchase price, we had allocated $14.4 million and $26.7 million to land and building, respectively, at 719 Seventh Avenue, $15.9 million and $37.2 million to land and building, respectively, at 115 Spring Street and $558.7 million and $1.0 billion to land and building, respectively, at 388-390 Greenwich. The impact to our consolidated statement of income for the three months ended March 31, 2015 was $6.7 million in rental revenue for the amortization of aggregate below-market leases and $10.1 million of depreciation expense.
(2)We, along with our joint venture partner, acquired this property for consideration that included the issuance of $14.1 million aggregate liquidation preference of Series L Preferred Units of limited partnership interest of the Operating Partnership and $9.5 million aggregate liquidation preference of Series K Preferred Units of limited partnership interest of the Operating Partnership. We hold a 75.0% controlling interest in this joint venture.
(3)In May 2014, we acquired Ivanhoe Cambridge, Inc.'s 49.65% economic interest in this property, thereby consolidating full ownership of the property. The transaction valued the consolidated interests at $1.585 billion. Simultaneous with the closing, we refinanced the previous mortgage with a $1.45 billion mortgage. We also assumed the existing derivative instruments, which swapped $504.0 million of the mortgage to fixed rate. We recognized a purchase price fair value adjustment of $71.4 million upon closing of this transaction. This property, which we initially acquired in December 2007, was previously accounted for as an investment in unconsolidated joint ventures.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
March 31, 2015
(unaudited)



For business combinations achieved in stages, the acquisition-date fair value of our equity interest in a property immediately before the acquisition date is determined based on estimated cash flow projections that utilize available market information and discount and capitalization rates that we deem appropriate. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. The acquisition-date fair value of the equity interest in 388-390 Greenwich Street immediately before the acquisition date as well as the purchase price fair value, as determined in accordance with the methodology set out in the prior sentence, is as follows (in thousands):
  388-390 Greenwich Street
Contract purchase price $1,585,000
Net consideration funded by us at closing, excluding consideration financed by debt (208,614)
Debt assumed (1,162,379)
Fair value of retained equity interest 214,007
Equity and/or debt investment held (148,025)
Other(1)
 5,464
Purchase price fair value adjustment $71,446

(1)Includes the acceleration of a deferred leasing commission from the joint venture to the Company.
4. Property Dispositions
The following table summarizes net income from discontinued operations forthe properties sold during the three and six months ended June 30, 2014 and 2013, respectively (in thousands):March 31, 2015:
  Three Months Ended June 30, Six Months Ended June 30,
  2014 2013 2014 2013
Revenues        
Rental revenue $8,366
 $15,494
 $19,000
 $30,155
Escalation and reimbursement revenues 258
 789
 1,080
 1,985
Other income 2
 2
 2
 485
Total revenues 8,626
 16,285
 20,082
 32,625
Operating expenses 291
 2,362
 1,179
 4,832
Real estate taxes 383
 1,245
 1,402
 2,489
Ground rent 805
 719
 3,001
 3,582
Interest expense, net of interest income 2,707
 3,892
 5,827
 6,918
Amortization of deferred financing costs 11
 11
 22
 22
Depreciable real estate reserves —
 2,150
 —
 2,150
Depreciation and amortization —
 2,060
 433
 4,126
Transaction related costs, net of recoveries 40

8

40

(13)
Total expenses 4,237
 12,447
 11,904
 24,106
Net income from discontinued operations $4,389
 $3,838
 $8,178
 $8,519
Property Disposition Date Property Type Approximate Usable Square Feet 
Sales Price
(in millions)
 
Gain on Sale(1)
(in millions)
180 Maiden Lane January 2015 Office 1,090,000
 $470.0
 $17.0
5. Debt and Preferred Equity Investments
During the six months ended June 30, 2014 and 2013, our debt and preferred equity investments, net of discounts and deferred origination fees, increased $303.4 million and $298.8 million, respectively, due to originations, purchases, accretion of reserves, discounts and paid-in-kind interest. We recorded repayments, participations and sales of $60.4 million and $419.8 million during the six months ended June 30, 2014 and 2013, respectively, which offset the increases in debt and preferred equity investments.
Debt Investments
As of June 30, 2014 and December 31, 2013, we held the following debt investments with an aggregate weighted average current yield of 10.69% at June 30, 2014 (in thousands):

(1)The gain on sale for 180 Maiden Lane is net of a $0.8 million employee compensation award accrued in connection with the realization of this investment gain as a bonus to certain employees that were instrumental in realizing the gain on sale. Additionally, amounts do not include adjustments for expense recorded in subsequent periods.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014March 31, 2015
(unaudited)



Discontinued Operations
Discontinued operations included the results of operations of real estate assets sold prior to March 31, 2015. This included 180 Maiden Lane, which was sold in January 2015, 2 Herald Square, 985-987 Third Avenue and 673 First Avenue, which were sold during 2014.
The following table summarizes net income from discontinued operations for the three months ended March 31, 2015 and 2014, respectively (in thousands):
Loan Type June 30, 2014
Funding Obligations		 June 30, 2014
Senior Financing		 
June 30, 2014 Carrying Value(1)
 
December 31, 2013 Carrying Value(1)
 Initial
Maturity
Date
Fixed Rate Investments:          
Jr. Mortgage Participation $—
 $398,500
 $11,893
 $11,856
 March 2015
Jr. Mortgage Participation/Mezzanine Loan —
 205,000
 69,480
 68,319
 February 2016
Jr. Mortgage Participation/Mezzanine Loan —
 165,159
 45,137
 44,742
 May 2016
Mezzanine Loan —
 177,000
 14,519
 15,012
 May 2016
Jr. Mortgage Participation

 —
 133,000
 49,000
 49,000
 June 2016
Mezzanine Loan —
 165,000
 71,430
 71,312
 November 2016
Jr. Mortgage Participation/Mezzanine Loan(2)
 —
 1,109,000
 95,329
 26,884
 March 2017
Other(2)
 —
 —
 65,578
 54,099
 March 2017
Mezzanine Loan(3)
 19,725
 521,750
 21,267
 20,954
 June 2017
Mortgage Loan —
 —
 696
 —
 August 2019
Mezzanine Loan —
 15,000
 3,500
 3,500
 September 2021
Mezzanine Loan(4)
 —
 90,000
 19,928
 19,926
 November 2023
Total fixed rate $19,725
 $2,979,409
 $467,757
 $385,604
  
Floating Rate Investments:          
Jr. Mortgage Participation/Mezzanine Loan(5)
 —
 330,000
 131,987
 131,724
 July 2014
Mezzanine Loan(6)
 —
 180,000
 59,974
 59,892
 August 2014
Jr. Mortgage Participation(7)
 —
 57,750
 10,875
 10,873
 August 2014
Mezzanine Loan(8)
 —
 481,309
 19,487
 —
 September 2014
Mezzanine Loan 9,794
 93,279
 40,125
 38,549
 October 2014
Jr. Mortgage Participation(9)
 —
 84,000
 24,959
 24,046
 February 2015
Mezzanine Loan 22,817
 50,000
 22,002
 —
 April 2015
Mortgage/Mezzanine Loan —
 —
 108,981
 —
 June 2015
Mezzanine Loan —
 110,000
 49,354
 49,110
 September 2015
Mezzanine Loan 9,215
 107,157
 40,662
 27,662
 December 2015
Mezzanine Loan —
 775,000
 73,326
 72,823
 March 2016
Mezzanine Loan(10)
 —
 160,000
 22,549
 22,526
 June 2016
Mezzanine Loan —
 115,000
 24,907
 25,590
 July 2016
Mezzanine Loan 10,584
 168,485
 26,655
 25,725
 November 2016
Mezzanine Loan 333
 33,833
 11,816
 11,798
 December 2016
Jr. Mortgage Participation/Mezzanine Loan —
 55,000
 20,544
 20,553
 July 2018
Mortgage/Mezzanine Loan —
 —
 17,923
 —
 February 2019
Mezzanine Loan —
 38,000
 21,789
 —
 March 2019
Mortgage Loan(11)
 —
 —
 —
 30,000
  
Total floating rate $52,743
 $2,838,813
 $727,915
 $550,871
  
Total $72,468
 $5,818,222
 1,195,672
 936,475
  
Loan loss reserve     —
 (1,000)  
Total   

 $1,195,672
 $935,475
  
 Three Months Ended March 31,
 2015 2014
Revenues   
Rental revenue$236
 $21,180
Escalation and reimbursement revenues(127) 3,397
Other income—
 3
Total revenues109
 24,580
Operating expenses(631) 4,461
Real estate taxes250
 3,985
Ground rent—
 2,196
Interest expense, net of interest income109
 4,661
Transaction related costs(49) —
Depreciation and amortization—
 3,297
Amortization of deferred financing costs3
 211
Total expenses(318) 18,811
Net income from discontinued operations$427
 $5,769
5. Debt and Preferred Equity Investments

During the three months ended March 31, 2015 and 2014, our debt and preferred equity investments (net of discounts and deferred origination fees) increased $166.9 million and $189.4 million, respectively, due to originations, purchases, advances under future funding obligations, accretion of reserves, discount amortization, and paid-in-kind interest, net of premium amortization. We recorded repayments, participations and sales of $27.0 million and $0.5 million during the three months ended March 31, 2015 and 2014, respectively, which offset the increases in debt and preferred equity investments.

Debt Investments
As of March 31, 2015 and December 31, 2014, we held the following debt investments with an aggregate weighted average current yield of 10.27% at March 31, 2015 (in thousands):
31
Loan Type 
March 31, 2015
Future Funding
Obligations
 
March 31, 2015
Senior
Financing
 
March 31, 2015
Carrying Value (1)
 
December 31, 2014
Carrying Value (1)
 
Initial
Maturity
Date
Fixed Rate Investments:          
Jr. Mortgage Participation
/Mezzanine Loan		 $—
 $205,000
 $71,291
 $70,688
 February 2016
Jr. Mortgage Participation/Mezzanine Loan(2)(3)
 —
 —
 45,863
 45,611
 
Various(2)
Jr. Mortgage Participation —
 133,000
 49,000
 49,000
 June 2016
Mezzanine Loan —
 165,000
 71,721
 71,656
 November 2016
Jr. Mortgage Participation/Mezzanine Loan —
 1,109,000
 100,758
 98,934
 March 2017
Mezzanine Loan(3)
 —
 —
 65,868
 65,770
 March 2017
Table of Contents
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Loan Type 
March 31, 2015
Future Funding
Obligations
 
March 31, 2015
Senior
Financing
 
March 31, 2015
Carrying Value (1)
 
December 31, 2014
Carrying Value (1)
 
Initial
Maturity
Date
Mezzanine Loan(4)
 10,787
 502,100
 30,264
 24,608
 June 2017
Mezzanine Loan —
 539,000
 49,622
 49,629
 July 2018
Mortgage Loan(5)
 —
 —
 26,222
 26,209
 February 2019
Mortgage Loan —
 —
 607
 637
 August 2019
Mezzanine Loan —
 15,000
 3,500
 3,500
 September 2021
Mezzanine Loan(6)
 —
 90,000
 19,932
 19,930
 November 2023
Mezzanine Loan —
 95,000
 30,000
 30,000
 January 2025
Mezzanine Loan(7)
 —
 —
 —
 14,068
 
Jr. Mortgage Participation(8)
 —
 —
 —
 11,934
 
Total fixed rate $10,787
 $2,853,100
 $564,648
 $582,174
  
Floating Rate Investments:          
Mezzanine Loan(9)
 611
 50,000
 44,647
 37,322
 April 2015
Mortgage/Mezzanine Loan —
 —
 109,802
 109,527
 June 2015
Mezzanine Loan —
 110,000
 49,745
 49,614
 September 2015
Mezzanine Loan —
 775,000
 73,699
 73,402
 March 2016
Mezzanine Loan(10)
 —
 160,000
 22,586
 22,573
 June 2016
Mezzanine Loan —
 115,000
 24,911
 24,910
 July 2016
Mezzanine Loan(11)
 514
 172,105
 36,917
 33,726
 November 2016
Mezzanine Loan —
 360,000
 99,144
 99,023
 November 2016
Mezzanine Loan(12)
 17,104
 117,202
 43,906
 42,750
 December 2016
Mezzanine Loan 2,120
 33,915
 11,855
 11,835
 December 2016
Mortgage/Mezzanine Loan(13)
 78,975
 —
 111,613
 —
 January 2017
Mezzanine Loan 8,781
 92,294
 20,955
 20,651
 January 2017
Jr. Mortgage Participation/Mezzanine Loan 2,522
 112,393
 38,905
 38,524
 July 2017
Mortgage/Mezzanine Loan —
 —
 22,822
 22,803
 July 2017
Mortgage/Mezzanine Loan —
 —
 16,861
 16,848
 September 2017
Mezzanine Loan —
 60,000
 14,869
 14,859
 November 2017
Mortgage/Mezzanine Loan(14)
 795
 —
 14,868
 14,845
 December 2017
Jr. Mortgage Participation/Mezzanine Loan —
 55,000
 20,528
 20,533
 July 2018
Mortgage/Mezzanine Loan —
 —
 18,159
 18,083
 February 2019
Mezzanine Loan —
 38,000
 21,816
 21,807
 March 2019
Total floating rate $111,422
 $2,250,909
 $818,608
 $693,635
  
Total $122,209
 $5,104,009
 $1,383,256
 $1,275,809
  
Notes to Consolidated Financial Statements (cont.)
June 30, 2014
(unaudited)


(1)Carrying value is net of discounts, premiums, original issue discounts and deferred origination fees.
(2)During the three months ended March 31, 2014, we recognized $10.1The $22.8 million of previously unaccrued interest income as deemed collectible as a result of the subsequent sale of the property, which closed in June 2014. In connection with the sale of the underlying property, our existing $66.7junior mortgage participation and $23.1 million mezzanine loan was defeasedmature in February 2016 and is now shown separately, as it is collateralized by defeasance securities. The buyer assumed our $30.0 million participating interest on the mortgage and we acquired a $67.3 million participating interest on the mezzanine loan.May 2016, respectively.
(3)These loans are collateralized by defeasance securities.
(4)Carrying value is net of $41.3 million that was participated out, which is included in other assets and other liabilities on the consolidated balance sheets as a result of the transfer not meeting the conditions for sale accounting.
(4)(5)In September 2014, we acquired a $26.4 million mortgage loan at a $0.2 million discount and a $5.7 million junior mortgage participation at a $5.7 million discount. The junior mortgage participation was a nonperforming loan at acquisition and is currently on non-accrual status.
(6)Carrying value is net of $5.0 million that was participated out, which is included in other assets and other liabilities on the consolidated balance sheets as a result of the transfer not meeting the conditions for sale accounting.
(5)(7)This loan was repaid in July 2014.
(6)This loan was repaid in August 2014.
(7)In June 2014, the loan maturity date was extended to August 2014 and $10.8 million has been repaid.February 2015.
(8)This loan was previously includedrepaid in other assets on the consolidated balance sheets. Following the sale of our interest in the partnership that is the borrower, the loan was reclassified to debt and preferred equity investments.March 2015.
(9)In March 2014, theThis loan was extended to Februaryrepaid in April 2015.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
March 31, 2015
(unaudited)



(10)Carrying value is net of $7.4 million that was participated out, which is included in other assets and other liabilities on the consolidated balance sheets as a result of the transfer not meeting the conditions for sale accounting.
(11)This loan was repaid in May 2014.April 2015.

(12)In February 2015, the maturity date was extended to December 2016.
(13)Carrying value is net of $25.0 million that was participated out, which is included in other assets and other liabilities on the consolidated balance sheets as a result of the transfer not meeting the conditions for sale accounting.
(14)Carrying value is net of $5.1 million that was participated out, which is included in other assets and other liabilities on the consolidated balance sheets as a result of the transfer not meeting the conditions for sale accounting.
Preferred Equity Investments
As of June 30, 2014March 31, 2015 and December 31, 2013,2014, we held the following preferred equity investments with an aggregate weighted average current yield of 9.75%10.20% at June 30, 2014March 31, 2015 (in thousands):
Type June 30, 2014
Senior Financing		 June 30, 2014
Carrying Value (1)		 December 31, 2013
Carrying Value (1)		 
Initial
Mandatory
Redemption
 
March 31, 2015
Future Funding
Obligations
 
March 31, 2015
Senior
Financing
 
March 31, 2015
Carrying Value (1)
 
December 31, 2014
Carrying Value (1)
 
Initial
Mandatory
Redemption
Preferred equity(2)
 $525,000
 $119,197
 $115,198
 July 2015 $—
 $550,000
 $124,907
 $123,041
 July 2015
Preferred equity(2)(3)
 926,260
 222,992
 218,330
 July 2016 —
 70,000
 9,957
 9,954
 March 2018
Preferred equity 70,000
 9,947
 9,940
 November 2017 7,100
 60,795
 30,619
 —
 November 2018
Preferred equity(3)
 —
 —
 25,896
 
 $1,521,260
 $352,136
 $369,364
   $7,100
 $680,795
 $165,483
 $132,995
  

(1)Carrying value is net of discounts and deferred origination fees.
(2)The difference between the pay and accrual rates is included as an addition to the principal balance outstanding.
(3)This preferred equity investmentIn March 2015, the maturity date was redeemed in April 2014.extended to March 2018.
The following table is a rollforward of our total loan loss reserves atAt June 30, 2014March 31, 2015 and December 31, 2013 (in thousands):
 June 30, 2014 December 31, 2013
Balance at beginning of year$1,000
 $7,000
Expensed—
 —
Recoveries—
 —
Charge-offs and reclassifications(1,000) (6,000)
Balance at end of period$—
 $1,000
At June 30, 2014, and December 31, 2013, all debt and preferred equity investments were performing in accordance with the terms of the loan agreements.relevant investments, with the exception of a junior mortgage participation acquired in September 2014, which has a carrying value of zero.
We have determined that we have one portfolio segment of financing receivables at June 30, 2014March 31, 2015 and December 31, 20132014 comprising commercial real estate which is primarily recorded in debt and preferred equity investments. Included in other assets is an additional amount of financing receivables totaling $134.9$122.3 million and $172.8$133.5 million at June 30, 2014March 31, 2015 and December 31, 2013,2014, respectively. No financing receivables were 90 days past due at June 30,March 31, 2015.
6. Investments in Unconsolidated Joint Ventures
We have investments in several real estate joint ventures with various partners. As of March 31, 2015 and December 31, 2014,. 650 Fifth Avenue, 33 Beekman, and 3 Columbus Circle were VIEs in which we are not the primary beneficiary. Our net equity investment in these VIEs was $97.9 million and $146.2 million at March 31, 2015 and December 31, 2014, respectively. All other investments below are voting interest entities. As we do not control the joint ventures listed below, we account for them under the equity method of accounting.
The table below provides general information on each of our joint ventures as of March 31, 2015:
PropertyPartner
Ownership
Interest
Economic
Interest
Approximate Square FeetAcquisition Date
Acquisition
Price(1)
(in thousands)
100 Park AvenuePrudential Real Estate Investors49.90%49.90%834,000
January 2000$95,800
717 Fifth AvenueJeff Sutton/Private Investor10.92%10.92%119,500
September 2006251,900
800 Third Avenue(2)
Private Investors60.52%60.52%526,000
December 2006285,000
1745 BroadwayIvanhoe Cambridge, Inc.56.88%56.88%674,000
April 2007520,000
Jericho PlazaOnyx Equities/Credit Suisse20.26%20.26%640,000
April 2007210,000
The MeadowsOnyx Equities50.00%50.00%582,100
September 2007111,500
600 Lexington AvenueCanadian Pension Plan Investment Board55.00%55.00%303,515
May 2010193,000

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014March 31, 2015
(unaudited)



6. Investments in Unconsolidated Joint Ventures
We have investments in several real estate joint ventures with various partners, including Ivanhoe Cambridge, Inc., formerly SITQ Immobilier, a subsidiary of Caisse de depot et placement du Quebec, SITQ, Canada Pension Plan Investment Board, or CPPIB, Prudential Real Estate Investors, or Prudential, Onyx Equities, or Onyx, The Witkoff Group, or Witkoff, Credit Suisse Securities (USA) LLC, or Credit Suisse, Jeff Sutton, or Sutton, Harel Insurance and Finance, or Harel, Louis Cappelli, or Cappelli, The Moinian Group, or Moinian, Vornado Realty Trust (NYSE: VNO), or Vornado, Plaza Global Real Estate Partners LP, or Plaza, Lehman Bros., as well as private investors. All the investments below are voting interest entities, except for 650 Fifth Avenue, 33 Beekman, 3 Columbus Circle and 180/182 Broadway which are VIEs in which we are not the primary beneficiary as of June 30, 2014 and December 31, 2013. Prior to the acquisition of our joint venture partner's interest in May 2014, 388-390 Greenwich was also a VIE. Our net equity investment in these VIEs was $185.2 million and $310.7 million at June 30, 2014 and December 31, 2013, respectively. As we do not control the joint ventures listed below, we account for them under the equity method of accounting.
The table below provides general information on each of our joint ventures as of June 30, 2014 (amounts in thousands):
PropertyPartner 
Ownership
Interest
 
Economic
Interest
 
Square
Feet
 Acquisition Date 
Acquisition
Price(1)
Partner
Ownership
Interest
Economic
Interest
Approximate Square FeetAcquisition Date
Acquisition
Price(1)
(in thousands)
100 Park AvenuePrudential 49.90% 49.90% 834
 January 2000 $95,800
717 Fifth AvenueSutton/Private Investor 10.92% 10.92% 120
 September 2006 251,900
800 Third AvenuePrivate Investors 42.95% 42.95% 526
 December 2006 285,000
1745 BroadwayWitkoff/SITQ/Lehman Bros. 32.26% 32.26% 674
 April 2007 520,000
1 and 2 Jericho PlazaOnyx/Credit Suisse 20.26% 20.26% 640
 April 2007 210,000
The MeadowsOnyx 50.00% 50.00% 582
 September 2007 111,500
180/182 Broadway(2)
Harel/Sutton 25.50% 25.50% 71
 February 2008 43,600
600 Lexington AvenueCPPIB 55.00% 55.00% 304
 May 2010 193,000
11 West 34th StreetPrivate Investor/Sutton 30.00% 30.00% 17
 December 2010 10,800
Private Investor/
Jeff Sutton
30.00%17,150
December 201010,800
7 RenaissanceCappelli 50.00% 50.00% 37
 December 2010 4,000
Louis Cappelli50.00%65,641
December 20104,000
3 Columbus Circle(3)
Moinian 48.90% 48.90% 769
 January 2011 500,000
The Moinian Group48.90%741,500
January 2011500,000
280 Park AvenueVornado 50.00% 49.50% 1,237
 March 2011 400,000
Vornado Realty Trust50.00%1,219,158
March 2011400,000
1552-1560 Broadway(4)
Sutton 50.00% 50.00% 49
 August 2011 136,550
Jeff Sutton50.00%35,897
August 2011136,550
724 Fifth AvenueSutton 50.00% 50.00% 65
 January 2012 223,000
Jeff Sutton50.00%65,040
January 2012223,000
10 East 53rd StreetCPPIB 55.00% 55.00% 390
 February 2012 252,500
Canadian Pension Plan Investment Board55.00%354,300
February 2012252,500
33 Beekman(5)
Harel/Naftali 45.90% 45.90% 145
 August 2012 31,000
Harel Insurance and Finance/TNG 33 LLC45.90%—
August 201231,000
521 Fifth AvenuePlaza 50.50% 50.50% 460
 November 2012 315,000
Plaza Global
Real Estate Partners LP
50.50%460,000
November 2012315,000
21 East 66th Street(6)
Private Investors 32.28% 32.28% 17
 December 2012 75,000
Private Investors32.28%16,736
December 201275,000
315 West 36th StreetPrivate Investors 35.50% 35.50% 148
 December 2012 45,000
Private Investors35.50%147,619
December 201245,000
650 Fifth Avenue(7)
Sutton 50.00% 50.00% 32
 November 2013 —
Jeff Sutton50.00%32,324
November 2013—
121 Greene StreetJeff Sutton50.00%7,131
September 201427,400
175-225 Third StreetKCLW 3rd Street LLC/LIVWRK LLC95.00%—
October 201474,600
55 West 46th StreetPrudential Real Estate Investors25.00%347,000
November 2014295,000
Stonehenge Portfolio(8)
VariousVarious2,046,733
February 201536,668

(1)Acquisition price represents the actual or implied gross purchase price for the joint venture.
(2)In June 2014, theMarch 2015, we acquired an additional 17.56% interest in this joint venture entered into a contract to sell the property for $222.5$67.5 million. This transaction is expected to close during the third quarter of 2014, subject to satisfaction of customary closing conditions.
(3)As a result of the sale of a condominium interest in September 2012, Young & Rubicam, Inc., or Y&R, owns a portion of the property, generally floors three through eight referred to as Y&R units. Because the joint venture has an option to repurchase the Y&R units, the gain associated with this sale was deferred.
(4)The purchase price pertainedrepresents only to the purchase of the 1552 Broadway interest which comprised approximately 13,045 square feet. The joint venture also owns a long-term leasehold interest in the retail space and certain other spaces at 1560 Broadway, which is adjacent to 1552 Broadway.
(5)The joint venture ownsproperty is currently being developed into a fee interest in the property and30-story dormitory building, which will develop an approximately 30 story building for student housing. Uponbe conveyed to Pace University upon its completion of the development, the joint venture will conveyunder a long-term ground lease condominium interest in the building to Pace.arrangement.
(6)We hold a 32.28% interest in three retail and two residential units at the property and a 16.14% interest in fourthree residential units at the property.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014
(unaudited)


(7)The joint venture owns a long-term leasehold interest in the retail space at 650 Fifth Avenue. In connection with the ground lease obligation, SLG provided a performance guaranty and Suttonour joint venture partner executed a contribution agreement to reflect its pro rata obligation. In the event the property is converted into a condominium unit and the landlord elects the purchase option, the joint venture shall be obligated to acquire the unit at the then fair value.
(8)In February 2015, we acquired an interest in a portfolio of Manhattan residential and retail properties for $40.2 million, of which $3.5 million represented an increase in ownership interest in six of our existing consolidated joint venture properties.  The $40.2 million of consideration included the issuance of $40.0 million aggregate liquidation preference of 3.75% Series M Preferred Units of limited partnership interest of the Operating Partnership.

In May 2014, we sold our 33.33% partnership interest inAcquisition, Development and Construction Arrangements
Based on the joint venture which owns 100% interest as tenant-in-common in 30 East 65th Street Corporation and the related proprietary lease of five cooperative apartment units in the property located at 747 Madison Avenue at an implied gross valuation of $160.0 million, inclusivecharacteristics of the $33.1 million mortgage encumbering the property. We recognized a promote of $10.3 million and originated a $30.0 million preferred equity investment. Given our continuing involvement as a preferred equity holder, we deferred the gain on sale of $13.1 million as we did not meet the requisites of a sale under the full accrual method. We, along with our joint venture partners, retained one apartment unit at this property.
In March 2014, we sold our 43.74% economic ownership interest in the joint venture which holds the West Coast Office portfolio at an implied gross valuation of $756.0 million, inclusive of the $526.3 million mortgage encumbering the property. We recognized a gain of $85.5 million on the sale of our investment.
In March 2014, we closed on the origination of a $100.0 million acquisition and equity participating financing consisting of a $60.0 million mezzanine loan and a $40.0 million preferred equity,following arrangements, which are both duesimilar to mature in March 2016, subject to three one-year extension options and a two-year option forthose of an investment, combined with the last extension. These loans, which were previouslyexpected residual profit of not greater than 50%, we have accounted for asthese debt and preferred equity investments were reclassified to investments in unconsolidated joint ventures as a result of meeting the criteria of a real estate investment under the guidance for ADC arrangements. We have accounted for this wholly-owned investment under the equity methodmethod. As of accounting.March 31, 2015 and December 31, 2014, the carrying value for acquisition, development and construction arrangements were as follows (in thousands):
In January 2014, we sold our 49.90% partnership interest in the joint venture which holds 21-25 West 34th Street at an implied gross valuation of $114.9 million, inclusive of the $100.0 million mortgage encumbering the property. We recognized a gain of $20.9 million on the sale of our investment. We, along with our joint venture partner, retained 91,311 square feet of development rights at this property.
Loan Type March 31, 2015 December 31, 2014 Initial Maturity Date
Mezzanine loan and preferred equity $99,702
 $99,629
 March 2016
Mezzanine loan(1)
 45,964
 46,246
 February 2022
  $145,666
 $145,875
  

(1)We have an option to convert our loan to equity interest subject to certain conditions. In addition, we have determined that our option to convert the loan to equity is not a derivative financial instrument pursuant to Generally Accepted Accounting Principles, or GAAP. As such, the embedded feature is not required to be bifurcated and the fair value accounting for the embedded feature at each reporting date is not applicable.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014March 31, 2015
(unaudited)



Mortgages and Other Loans Payable
We generally finance our joint ventures with non-recourse debt. However, in certain cases we have provided guarantees or master leases for tenant space. These guarantees and master leases terminate upon the satisfaction of specified circumstances or repayment of the underlying loans. The first mortgage notes and other loans payable collateralized by the respective joint venture properties and assignment of leases at June 30, 2014March 31, 2015 and December 31, 2013,2014, respectively, are as follows (amounts in thousands):
Property Maturity Date 
Interest
Rate(1)
 June 30, 2014 December 31, 2013 Maturity Date 
Interest
Rate(1)
 March 31, 2015 December 31, 2014
Fixed Rate Debt:              
7 Renaissance December 2015
 10.00% $1,461
 $1,276
 December 2015 10.00% $2,147
 $2,147
11 West 34th Street January 2016
 4.82% 17,056
 17,205
 January 2016 4.82% 16,825
 16,905
280 Park Avenue June 2016
 6.57% 703,520
 706,886
 June 2016 6.57% 698,249
 700,171
1745 Broadway January 2017
 5.68% 340,000
 340,000
 January 2017 5.68% 340,000
 340,000
1 and 2 Jericho Plaza May 2017
 5.65% 163,750
 163,750
Jericho Plaza May 2017 5.65% 163,750
 163,750
800 Third Avenue August 2017
 6.00% 20,910
 20,910
 August 2017 6.00% 20,910
 20,910
315 West 36th Street December 2017
 3.16% 25,000
 25,000
 December 2017 3.16% 25,000
 25,000
521 Fifth Avenue November 2019 3.73% 170,000
 170,000
717 Fifth Avenue(2)
 July 2022
 4.45% 300,000
 300,000
 July 2022 4.45% 300,000
 300,000
21 East 66th Street April 2023
 3.60% 12,000
 12,000
 April 2023 3.60% 12,000
 12,000
717 Fifth Avenue(2)
 July 2024
 9.00% 309,074
 304,000
 July 2024 9.00% 317,126
 314,381
388 and 390 Greenwich Street(3)
 —
 —
 —
 996,082
100 Park Avenue(4)
 —
 —
 —
 209,786
21 West 34th Street(5)
 —
 —
 —
 100,000
1604-1610 Broadway(6)
 —
 —
 —
 27,000
3 Columbus Circle(3)
 March 2025 2.83% 350,000
 —
Stonehenge Portfolio(4)
 Various 4.18% 435,416
 —
Total fixed rate debt     $1,892,771
 $3,223,895
   $2,851,423
 $2,065,264
Floating Rate Debt:              
180/182 Broadway December 2014
 2.91% 89,551
 89,893
The Meadows September 2015
 7.75% 67,350
 67,350
 September 2015 7.75% 67,350
 67,350
3 Columbus Circle(7)
 April 2016
 2.33% 235,129
 239,233
1552 Broadway(8)
 April 2016
 4.16% 175,904
 158,690
1552 Broadway(5)
 April 2016 4.29% 188,409
 184,210
Other loan payable June 2016
 1.06% 30,000
 30,000
 June 2016 1.08% 30,000
 30,000
650 Fifth Avenue(6)
 October 2016 3.68% 65,000
 65,000
175-225 Third Street December 2016 4.25% 40,000
 40,000
10 East 53rd Street February 2017
 2.66% 125,000
 125,000
 February 2017 2.68% 125,000
 125,000
724 Fifth Avenue(9)
 April 2017
 2.58% 275,000
 120,000
33 Beekman(10)
 August 2017
 2.91% 34,141
 18,362
724 Fifth Avenue April 2017 2.60% 275,000
 275,000
33 Beekman(7)
 August 2017 2.93% 59,370
 52,283
600 Lexington Avenue October 2017
 2.23% 118,689
 120,616
 October 2017 2.26% 115,758
 116,740
521 Fifth Avenue November 2019
 2.36% 170,000
 170,000
100 Park Avenue(4)
 February 2021
 1.91% 360,000
 —
55 West 46th Street(8)
 October 2017 2.48% 150,000
 150,000
Stonehenge Portfolio December 2017 3.25% 10,500
 —
121 Greene Street November 2019 1.68% 15,000
 15,000
100 Park Avenue February 2021 1.93% 360,000
 360,000
21 East 66th Street June 2033
 2.88% 1,921
 1,959
 June 2033 2.88% 1,864
 1,883
388 and 390 Greenwich Street(3)
 —
 —
 —
 142,297
747 Madison Avenue —
 —
 —
 33,125
West Coast Office portfolio(11)
 —
 —
 —
 526,290
3 Columbus Circle(3)
   —
 230,974
Total floating rate debt     $1,682,685
 $1,842,815
   $1,503,251
 $1,713,440
Total joint venture mortgages and other loans payableTotal joint venture mortgages and other loans payable   $3,575,456
 $5,066,710
   $4,354,674
 $3,778,704

(1)Effective weighted average interest rate for the three months ended June 30, 2014,March 31, 2015, taking into account interest rate hedges in effect during the period.
(2)These loans are comprised of a $300.0 million fixed rate mortgage loan and $290.0 million mezzanine loan. The mezzanine loan is subject to accretion based on the difference between contractual interest rate and contractual pay rate.
(3)In May 2014, we acquiredMarch 2015, the interest of our joint venture thereby consolidating the entity. Simultaneous with the acquisition, we refinanced the previous mortgage and realizedincurred a net loss on early extinguishment of debt of $2.4$0.8 million.
(4)Amount is comprised of $13.5 million, $56.3 million, $35.0 million, $7.4 million, $143.3 million, and $179.9 million in fixed-rate mortgages that mature in July 2016, June 2017, November 2017, February 2018, August 2019, and June 2024, respectively.
(5)These loans are comprised of a $150.0 million mortgage loan and a $41.5 million mezzanine loan. As of March 31, 2015, $1.7 million of the mortgage loan and $1.4 million of the mezzanine loan was unfunded.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014March 31, 2015
(unaudited)



(4)In February 2014, the joint venture replaced the previous fixed rate mortgage with a $360.0 million, seven-year floating rate, mortgage and realized a net loss on early extinguishment of $3.2 million.
(5)In January 2014, we sold our interest in the joint venture, inclusive of our share of the joint venture debt.
(6)This loan was in default since November 2009 due to the non-paymenthas a committed amount of debt service. In January 2014, the joint venture relinquished its ground lease position to the lender. During the six months ended June 30, 2014, we also recognized $7.7$97.0 million, of incentive income, which is included in other income on the consolidated statements$32.0 million was unfunded as of income.March 31, 2015.
(7)The joint venture has the ability to increase the mortgage by $40.0 million based on meeting certain performance hurdles. In connection with this obligation, we executed a master lease agreement and our joint venture partner executed a contribution agreement to reflect its pro rata obligation under the master lease. The lien on the mortgage and the master lease excludes the condominium interest owned by Y&R. See Note 3 of prior table.
(8)
These loans are comprised of a $150.0 million mortgage loan and a $41.5 million mezzanine loan and are subject to two one-year extension options. As of June 30, 2014, $8.4 million of the mortgage loan and $7.2 million of the mezzanine loan remained unfunded.
(9)In April 2014, the joint venture refinanced the previous mortgage with a $235.0 million mortgage and a $40.0 million mezzanine loan and realized a net loss on early extinguishment of debt of $1.2 million. These new floating rate loans mature in April 2017.
(10)This loan has a committed amount of $75.0 million, of which $18.4 million is recourse to us. Our partner has indemnified us for its pro rata share of the recourse guarantee. A portion of the guarantee terminates upon the joint venture reaching certain milestones. We believe it is unlikely that we will be required to perform under this guarantee.
(11)(8)InThis loan has a committed amount of $190.0 million, of which $40.0 million was unfunded as of March 2014, we sold our interest in the joint venture, inclusive of our share in the joint venture debt.31, 2015.
We act as the operating partner and day-to-day manager for all our joint ventures, except for 800 Third Avenue, 1 and 2 Jericho Plaza, 280 Park Avenue, 3 Columbus Circle, The Meadows, 315 West 36th Street, 21 East 66th Street, 175-225 Third Street and The Meadows.the Stonehenge Portfolio. We are entitled to receive fees for providing management, leasing, construction supervision and asset management services to certain of our joint ventures. We earned $4.8 million, $11.2 million, $1.4$2.8 million and $4.0$6.3 million from these services for the three and six months ended June 30,March 31, 2015 and 2014, and 2013, respectively. In addition, we have the ability to earn incentive fees based on the ultimate financial performance of certain of the joint venture properties.
The combined balance sheets for the unconsolidated joint ventures, at June 30, 2014March 31, 2015 and December 31, 2013,2014, are as follows (in thousands):
June 30, 2014 December 31, 2013March 31, 2015 December 31, 2014
Assets      
Commercial real estate property, net$4,925,422
 $6,846,021
$6,104,572
 $5,275,632
Other assets749,571
 827,282
919,848
 810,567
Total assets$5,674,993
 $7,673,303
$7,024,420
 $6,086,199
Liabilities and members' equity      
Mortgages and other loans payable$3,575,456
 $5,066,710
$4,354,674
 $3,778,704
Other liabilities485,753
 596,960
506,768
 485,572
Members' equity1,613,784
 2,009,633
2,162,978
 1,821,923
Total liabilities and members' equity$5,674,993
 $7,673,303
$7,024,420
 $6,086,199
Company's investments in unconsolidated joint ventures$971,926
 $1,113,218
$1,244,185
 $1,172,020
The combined statements of income for the unconsolidated joint ventures, from acquisition date through the three months ended March 31, 2015 and 2014 are as follows (in thousands):
 Three Months Ended March 31,
 2015 2014
Total revenues$128,916
 $161,138
Operating expenses25,486
 26,683
Ground rent2,592
 2,025
Real estate taxes19,376
 16,936
Interest expense, net of interest income44,007
 52,336
Amortization of deferred financing costs3,010
 4,633
Transaction related costs8
 271
Depreciation and amortization32,984
 45,604
Total expenses127,463
 148,488
Loss on early extinguishment of debt(833) (3,197)
Net income (loss) before gain on sale$620
 $9,453
Company's equity in net income from unconsolidated joint ventures$4,030
 $6,128

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014March 31, 2015
(unaudited)



The combined statements of income for the unconsolidated joint ventures, from acquisition date through the three and six months ended June 30, 2014 and 2013 are as follows (in thousands):
 Three Months Ended June 30, Six Months Ended June 30,
 2014 2013 2014 2013
Total revenues$130,495
 $154,974
 $291,633
 $306,205
Operating expenses18,362
 28,205
 45,045
 56,816
Ground rent2,632
 658
 4,657
 1,315
Real estate taxes15,406
 16,958
 32,342
 34,263
Interest expense, net of interest income44,728
 56,561
 97,064
 112,968
Amortization of deferred financing costs2,026
 5,302
 6,659
 9,585
Transaction related costs, net of recoveries(207) —
 64
 —
Depreciation and amortization33,858
 52,539
 79,462
 95,150
Total expenses116,805
 160,223
 265,293
 310,097
Loss on early extinguishment of debt(3,546) —
 (6,743) —
Net income (loss) before gain on sale$10,144
 $(5,249) $19,597
 $(3,892)
Company's equity in net income (loss) from unconsolidated joint ventures$8,619
 $(3,761) $14,748
 $1,313
7. Deferred Costs
Deferred costs at June 30,March 31, 2015 and 2014 and December 31, 2013 consisted of the following (in thousands):
June 30, 2014 December 31, 2013March 31, 2015 December 31, 2014
Deferred leasing$331,716
 $326,379
$389,935
 $385,555
Deferred financing201,148
 157,088
195,474
 193,776
532,864
 483,467
585,409
 579,331
Less accumulated amortization(232,821) (216,409)(258,854) (251,369)
Deferred costs, net$300,043
 $267,058
$326,555
 $327,962

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014
(unaudited)


8. Mortgages and Other Loans Payable
The first mortgages and other loans payable collateralized by the respective properties and assignment of leases at June 30, 2014March 31, 2015 and December 31, 20132014, respectively, were as follows (amounts in thousands):
Property 
Maturity
Date
 
Interest
Rate(1)
 June 30, 2014 December 31, 2013 
Maturity
Date
 
Interest
Rate(1)
 March 31, 2015 December 31, 2014
Fixed Rate Debt:                
125 Park Avenue October 2014
 5.75% $146,250
 $146,250
711 Third Avenue June 2015
 4.99% 120,000
 120,000
625 Madison Avenue November 2015
 7.27% 117,892
 120,830
500 West Putnam Avenue January 2016
 5.52% 23,253
 23,529
 January 2016 5.52% $22,823
 $22,968
420 Lexington Avenue September 2016
 7.15% 181,612
 182,641
Landmark Square December 2016
 4.00% 82,097
 82,909
 December 2016 4.00% 80,848
 81,269
485 Lexington Avenue February 2017
 5.61% 450,000
 450,000
 February 2017 5.61% 450,000
 450,000
120 West 45th Street February 2017
 6.12% 170,000
 170,000
 February 2017 6.12% 170,000
 170,000
762 Madison Avenue February 2017
 3.75% 8,128
 8,211
2 Herald Square(2)
 April 2017
 5.36% 191,250
 191,250
762 Madison Avenue(2)
 February 2017 3.81% 8,001
 8,045
885 Third Avenue July 2017
 6.26% 267,650
 267,650
 July 2017 6.26% 267,650
 267,650
1745 Broadway June 2018 4.81% 16,000
 16,000
388-390 Greenwich Street(3)
 June 2018
 3.80% 504,000
 —
 June 2018 3.25% 1,004,000
 1,004,000
Other loan payable(4)
 September 2019
 8.00% 50,000
 50,000
One Madison Avenue May 2020
 5.91% 576,653
 587,336
 May 2020 5.91% 560,025
 565,742
100 Church July 2022
 4.68% 230,000
 230,000
919 Third Avenue(5)
 June 2023
 5.12% 500,000
 500,000
100 Church Street July 2022 4.68% 227,713
 228,612
919 Third Avenue(4)
 June 2023 5.12% 500,000
 500,000
400 East 57th Street February 2024
 4.13% 69,503
 70,000
 February 2024 4.13% 68,588
 68,896
400 East 58th Street February 2024
 4.13% 29,787
 30,000
 February 2024 4.13% 29,395
 29,527
420 Lexington Avenue October 2024 3.99% 300,000
 300,000
1515 Broadway March 2025
 3.93% 900,000
 900,000
 March 2025 3.93% 900,000
 900,000
Series J Preferred Units(6)
 April 2051
 3.75% 4,000
 —
609 Partners, LLC(7)
 —
 —
 —
 23
Series J Preferred Units(5)
 April 2051 3.75% 4,000
 4,000
711 Third Avenue(6)
   —
 120,000
Total fixed rate debt     $4,622,075
 $4,130,629
   $4,609,043
 $4,736,709
Floating Rate Debt:              
Master repurchase agreement(8)
 December 2014
 3.37% —
 91,000
180 Maiden Lane(9)
 November 2016
 2.34% 258,351
 262,706
Master repurchase agreement(7)
 December 2015 3.43% —
 100,000
388-390 Greenwich Street(3)
 June 2018
 1.91% 946,000
 —
 June 2018 1.93% 446,000
 446,000
248-252 Bedford Avenue(10)
 June 2019
 2.16% 29,000
 22,000
248-252 Bedford Avenue June 2019 1.68% 29,000
 29,000
220 East 42nd Street October 2020
 1.76% 275,000
 275,000
 October 2020 1.78% 275,000
 275,000
16 Court Street(11)
 0
 0
 —
 79,243
180 Maiden Lane(8)
   —
 253,942
Total floating rate debt     $1,508,351
 $729,949
   $750,000
 $1,103,942
Total mortgages and other loans payable     $6,130,426
 $4,860,578
   $5,359,043
 $5,840,651
_________________________________ 

(1)Effective weighted average interest rate for the three months ended June 30, 2014,March 31, 2015, taking into account interest rate hedges in effect during the period.
(2)This property is held for sale at June 30, 2014 andIn February 2015, we entered into a new swap agreement with a fixed interest rate of 3.86% per annum, which replaced the related $191.3 million mortgage is included in liabilities related to assets held for sale.previous swap agreement with a fixed interest rate of 3.75% per annum.
(3)SimultaneousIn connection with the acquisition of our joint venture partnerpartner's interest, we refinancedassumed the $1.1 billion floatingexisting derivative instruments, which swapped $504.0 million of the mortgage to a fixed rate mortgage with a $1.5 billion seven-year floating rate mortgage, and have consolidated the property.which bears interest at 3.80% per annum. In October 2014, we entered into multiple swap agreements to hedge our
interest rate exposure on the additional $500.0 million portion of this mortgage, which was swapped to a fixed rate of 2.69% per annum. Including the as-of right extension option, this loan matures in June 2021.
(4)This loan is secured by a portion of a preferred equity investment.
(5)We own a 51.0% controlling interest in the joint venture that is the borrower on this loan.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014
(unaudited)


(6)(5)In connection with the subsequent acquisition of a commercial real estate property, the Operating Partnership issued $4.0 million, or 4,000, 3.75% Series J Preferred Units of limited partnership interest, ofor the Series J Preferred Units, with a mandatory liquidation preference of $1,000.00 per unit. The Series J Preferred Units can be redeemed in cash by the Operating Partnership on the earlier of (i) the date of the sale of the property or (ii) April 30, 2051 or at the option of the unitholders as further prescribed in the related agreement.
(7)(6)In April 2014,March 2015, we repaid the remaining 22,658 Series E Preferred Units of the Operating Partnership were canceled.mortgage.
(8)(7)The Master Repurchase Agreement, or MRA, has a maximum facility capacity of $300.0 million.
(9)(8)In connection with this consolidated joint venture obligation, we executed a master lease agreement. Our partner has executed a contribution agreement to reflect its pro rata share ofJanuary 2015, the obligation underproperty was sold and the master lease.
(10)In June 2014, we replaced the previous floating rate mortgage with a $29.0 million, five-year floating rate mortgage and incurred a net loss on early extinguishment of debt of $0.5 million.
(11)In April 2014, we repaid the loan and incurred a loss on early extinguishment of debt of $0.5 million.was repaid.

TheAt March 31, 2015 and December 31, 2014, the gross book value of the properties and debt and preferred equity investments collateralizing the mortgages and other loans payable was $9.5approximately $7.9 billion and $8.0$8.2 billion, at June 30, 2014 and December 31, 2013, respectively.

9. Corporate Indebtedness
2012 Credit Facility
In March 2014, we entered into an amendment to the $1.6 billion credit facility entered into by the Company in November 2012, or the 2012 credit facility, which among other things, increased the term loan portion of the 2012 credit facility by $383.0 million to $783.0 million, decreased the interest-rate margin applicable to the term loan portion of the facility by 25 basis points and extended the maturity of the term loan portion of the facility from March 30, 2018 to June 30, 2019. The 2012In November 2014, we increased the term loan portion of the facility by $50.0 million to $833.0 million. In January 2015, we entered into a second amended and restated credit agreement, which decreased the interest-rate margin and facility as amended, consists of a $1.2 billion revolving credit facility, orfee applicable to the revolving credit facility by 20 basis points and a $783.0 million term loan facility, orfive basis points, respectively, and extended the term loan facility. Thematurity date of the revolving credit facility matures into March 2017 and includes two six-month29, 2019 with an as-of-right extension options, subject to the payment of an extension fee of 10 basis points for each such extension.through March 29, 2020. We also have an option, subject to customary conditions, without the consent of existing lenders, to increase the capacity under the revolving credit facility to $1.5 billion at any time prior to the maturity date for the revolving credit facility without the consent of existing lenders, by obtaining additional commitments from our existing lenders and other financial institutions.
TheAs of March 31, 2015, the 2012 credit facility, bearsas amended, consisted of a $1.2 billion revolving credit facility, or the revolving credit facility, and an $833.0 million term loan, or the term loan facility.
As of March 31, 2015, the 2012 credit facility bore interest at a spread over LIBOR ranging from (i) 10087.5 basis points to 175155 basis points for loans under the revolving credit facility and (ii) 95 basis points to 190 basis points for loans under the term loan facility, in each case based on the credit rating assigned to the senior unsecured long term indebtedness of ROP. At June 30, 2014,March 31, 2015, the applicable spread was 145125 basis points for the revolving credit facility and 140 basis points for the term loan facility. At June 30, 2014,March 31, 2015, the effective interest rate was 1.61%1.43% for the revolving credit facility and 1.64%1.65% for the term loan facility. We are required to pay quarterly in arrears a 1512.5 to 3530 basis point facility fee on the total commitments under the revolving credit facility based on the credit rating assigned to the senior unsecured long term indebtedness of ROP. As of June 30, 2014,March 31, 2015, the facility fee was 3025 basis points. At June 30, 2014,As of March 31, 2015, we had $116.3$107.6 million of outstanding letters of credit, $520.0 million drawn under the revolving credit facility and $783.0$833.0 million outstanding under the term loan facility, with total undrawn capacity of $1.1 billion$572.4 million under the revolving credit facility.
In connection with the amendment of the 2012 credit facility, we incurred debt origination and other loan costs of $2.8 million. We evaluated the modification pursuant to ASC 470 and determined that the terms of the amendment were not substantially different from the terms of the previous 2012 credit facility. As a result, these deferred costs and the unamortized balance of the costs previously incurred are amortized through the extended maturity date of the term loan facility.
The Company, the Operating Partnership and ROP are all borrowers jointly and severally obligated under the 2012 credit facility. None of our other subsidiaries are obligors under the 2012 credit facility.
The 2012 credit facility includes certain restrictions and covenants (see Restrictive Covenants below).

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014March 31, 2015
(unaudited)



Senior Unsecured Notes
The following table sets forth our senior unsecured notes and other related disclosures as of June 30, 2014March 31, 2015 and December 31, 20132014, respectively, by scheduled maturity date (amounts(dollars in thousands):
Issuance June 30, 2014 Unpaid Principal Balance June 30, 2014 Accreted Balance December 31, 2013 Accreted Balance 
Coupon
Rate(1)
 
Effective
Rate
 
Term
(in Years)
 Maturity Date 
March 31,
2015
Unpaid
Principal
Balance
 
March 31,
2015
Accreted
Balance
 
December 31,
2014
Accreted
Balance
 
Coupon
Rate(1)
 
Effective
Rate
 
Term
(in Years)
 Maturity Date
August 13, 2004(2)
 $75,898
 $75,898
 $75,898
 5.88% 5.88% 10 August 15, 2014
March 31, 2006(2)
 255,308
 255,227
 255,206
 6.00% 6.00% 10 March 31, 2016 $255,308
 $255,261
 $255,250
 6.00% 6.00% 10 March 31, 2016
October 12, 2010(3)
 345,000
 303,354
 297,837
 3.00% 3.00% 7 October 15, 2017 345,000
 312,005
 309,069
 3.00% 3.00% 7 October 15, 2017
August 5, 2011(4)
 250,000
 249,712
 249,681
 5.00% 5.00% 7 August 15, 2018 250,000
 249,760
 249,744
 5.00% 5.00% 7 August 15, 2018
March 16, 2010(4)
 250,000
 250,000
 250,000
 7.75% 7.75% 10 March 15, 2020 250,000
 250,000
 250,000
 7.75% 7.75% 10 March 15, 2020
November 15, 2012(4)
 200,000
 200,000
 200,000
 4.50% 4.50% 10 December 1, 2022 200,000
 200,000
 200,000
 4.50% 4.50% 10 December 1, 2022
June 27, 2005(2)(5)
 7
 7
 7
 4.00% 4.00% 20 June 15, 2025 7
 7
 7
 4.00% 4.00% 20 June 15, 2025
March 26, 2007(6)
 10,008
 10,008
 10,701
 3.00% 3.00% 20 March 30, 2027 10,008
 10,008
 10,008
 3.00% 3.00% 20 March 30, 2027
 $1,386,221
 $1,344,206
 $1,339,330
      $1,310,323
 $1,277,041
 $1,274,078
     

(1)Interest on the senior unsecured notes is payable semi-annually with principal and unpaid interest due on the scheduled maturity dates.
(2)Issued by ROP.
(3)
Issued by the Operating Partnership. Interest on these exchangeable notes is payable semi-annually on April 15 and October 15. The notes had an initial exchange rate representing an exchange price that was set at a 30.0% premium to the last reported sale price of SL Green's common stock on October 6, 2010, or $85.81.$85.81. The initial exchange rate is subject to adjustment under certain circumstances. The current exchange rate is 11.715312.1632 shares of SL Green's common stock per $1,000 principal amount of these notes. The notes are senior unsecured obligations of the Operating Partnership and are exchangeable upon the occurrence of specified events and during the period beginning on the twenty-second scheduled trading day prior to the maturity date and ending on the second business day prior to the maturity date, into cash or a combination of cash and shares of SL Green's common stock, if any, at our option. As a result of meeting specified events (as defined in the Indenture Agreement), these notes became exchangeable commencing January 1, 2015 and will remain exchangeable through June 30, 2015. The notes are guaranteed by ROP. On the issuance date, $78.3$78.3 million of the debt balance was recorded in equity. As of June 30, 2014, $41.6March 31, 2015, $32.9 million remained to be amortized into the debt balance.
(4)Issued by the Company, the Operating Partnership and ROP, as co-obligors.
(5)
Exchangeable senior debentures which are currently callable at par. In addition, the debentures can be put to ROP, at the option of the holder at par plus accrued and unpaid interest, on June 15, 2015 and 2020 and upon the occurrence of certain change of control transactions. As a result of the acquisition of all outstanding shares of common stock of Reckson, or the Reckson Merger, the adjusted exchange rate for the debentures is 7.7461 shares of SL Green's common stock per $1,000$1,000 of principal amount of debentures and the adjusted reference dividend for the debentures is $1.3491. 
$1.3491. In April 2015, we redeemed the remaining outstanding debentures.
(6)
Issued by the Operating Partnership. Interest on these remaining exchangeable notes is payable semi-annually on March 30 and September 30. The notes have an initial exchange rate representing an exchange price that was set at a 25.0% premium to the last reported sale price of the Company's common stock on March 20, 2007, or $173.30.$173.30. The initial exchange rate is subject to adjustment under certain circumstances. The current exchange rate is 5.7952 shares of SL Green's common stock per $1,000 principal amount of these notes. The notes are senior unsecured obligations of the Operating Partnership and are exchangeable upon the occurrence of specified events and during the period beginning on the twenty-second scheduled trading day prior to the maturity date and ending on the second business day prior to the maturity date, into cash or a combination of cash and shares of SL Green's common stock, if any, at our option. The notes are currently redeemable at the Operating Partnership’s option. The Operating Partnership may be required to repurchase the notes on March 30, 2017 and 2022, and upon the occurrence of certain designated events.

Restrictive Covenants
The terms of the 2012 credit facility, as amended, and certain of our senior unsecured notes include certain restrictions and covenants which may limit, among other things, our ability to pay dividends, make certain types of investments, incur additional indebtedness, incur liens and enter into negative pledge agreements and dispose of assets, and which require compliance with financial ratios relating to the minimum amount of tangible net worth, a maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed charges, a maximum ratio of secured indebtedness to total asset value and a maximum ratio of unsecured indebtedness to unencumbered asset value. The dividend restriction referred to above provides that, we will not during any time when a default is continuing, make distributions with respect to common stock or other equity interests, except to enable the Company to continue to qualify as a REIT for Federal income tax purposes. As of June 30,March 31, 2015 and December 31, 2014,, we were in compliance with all such covenants.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014
(unaudited)


Junior SubordinateSubordinated Deferrable Interest Debentures
In June 2005, the Company and the Operating Partnership issued $100.0 million in unsecured trust preferred securities through a newly formed trust, SL Green Capital Trust I, or the Trust, which is a wholly-owned subsidiary of the Operating Partnership. The securities mature in 2035 and bear interest at a fixed rate of 5.61% for the first ten years ending July 2015.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
March 31, 2015
(unaudited)



Thereafter, the interest rate will float at three-month LIBOR plus 125 basis points.points over the three-month LIBOR. Interest payments may be deferred for a period of up to eight consecutive quarters if the Operating Partnership exercises its right to defer such payments. The Trust preferred securities are redeemable at the option of the Operating Partnership, in whole or in part, with no prepayment premium. We do not consolidate the Trust even though it is a variable interest entity as we are not the primary beneficiary. Because the Trust is not consolidated, we have recorded the debt on our consolidated balance sheets and the related payments are classified as interest expense.
Principal Maturities
Combined aggregate principal maturities of mortgages and other loans payable, the 2012 credit facility, trust preferred securities, senior unsecured notes and our share of joint venture debt as of June 30, 2014March 31, 2015, including as-of-right extension options and put options, were as follows (in thousands):
Scheduled
Amortization
 
Principal
Repayments
 
Trust
Preferred
Securities
 
Term Loan and Senior
Unsecured
Notes
 Total 
Joint
Venture
Debt
Scheduled
Amortization
 
Principal
Repayments
 
Revolving
Credit
Facility
 Unsecured Term Loan 
Trust
Preferred
Securities
 
Senior
Unsecured
Notes
 Total 
Joint
Venture
Debt
Remaining 2014$23,163
 $146,250
 $—
 $75,898
 $245,311
 $27,651
201547,480
 229,537
 —
 7
 277,024
 44,260
Remaining 2015$22,882
 $—
 $—
 $—
 $—
 $7
(1)$22,889
 $39,407
201655,946
 514,311
 —
 255,308
 825,565
 561,736
47,360
 100,311
 —
 —
 —
 255,308
 402,979
 534,026
201761,063
 1,086,579
(1) —
 355,008
 1,502,650
 442,584
61,063
 895,329
 —
 —
 —
 355,008
 1,311,400
 582,755
201864,462
 —
 —
 250,000
 314,462
 28
64,462
 16,000
 —
 —
 —
 250,000
 330,462
 2,196
201970,409
 28,317
 —
 833,000
 —
 —
 931,726
 104,688
Thereafter246,979
 3,654,656
 100,000
 1,233,000
 5,234,635
 353,580
200,403
 3,852,505
 520,000
 —
 100,000
 450,000
 5,122,908
 446,744
$499,093
 $5,631,333
(1) $100,000
 $2,169,221
 $8,399,647
 $1,429,839
$466,579
 $4,892,462
 $520,000
 $833,000
 $100,000
 $1,310,323
 $8,122,364
 $1,709,816

(1)Principal repayments includeIn April 2015, we redeemed the mortgage at 2 Herald Center, which is included in liabilities related to assets held for sale.remaining outstanding 4.00% Exchangeable Senior Debentures due 2025.

Consolidated interest expense, excluding capitalized interest, was comprised of the following (in thousands):
 Three Months Ended June 30, Six Months Ended June 30, Three Months Ended March 31,
 2014 2013 2014 2013 2015 2014
Interest expense $79,163
 $80,009
 $157,414
 $158,758
 $76,459
 $76,708
Interest income (552) (458) (1,084) (898) (652) (530)
Interest expense, net $78,611
 $79,551
 $156,330
 $157,860
 $75,807
 $76,178
Interest capitalized $6,862
 $3,301
 $11,003
 $6,363
 $8,558
 $4,271
10. Related Party Transactions
Cleaning/ Security/ Messenger and Restoration Services
Through Alliance Building Services, or Alliance, First Quality Maintenance, L.P., or First Quality, provides cleaning, extermination and related services, Classic Security LLC provides security services, Bright Star Couriers LLC provides messenger services, and Onyx Restoration Works provides restoration services with respect to certain properties owned by us. Alliance is partially owned by Gary Green, a son of Stephen L. Green, the chairman of SL Green's board of directors. In addition, First Quality has the non-exclusive opportunity to provide cleaning and related services to individual tenants at our properties on a basis separately negotiated with any tenant seeking such additional services. The Service Corporation has entered into an arrangement with Alliance whereby it will receive a profit participation above a certain threshold for services provided by Alliance to certain tenants at certain buildings above the base services specified in their lease agreements. Income earned from profit participation, which is included in other income on the consolidated statements of income, was $1.0 million $1.9 million,and $0.9 million and $1.9 million for the three and six months ended June 30,March 31, 2015 and 2014, and 2013, respectively. We also recorded expenses of $4.7 million, $8.2 million, $4.3

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014
(unaudited)


$4.0 million and $8.4$3.8 million for the three and six months ended June 30,March 31, 2015 and 2014, and 2013, respectively, for these services (excluding services provided directly to tenants).
Marketing Services
A-List Marketing, LLC, or A-List, provides marketing services to us. Deena Wolff, a sister of Marc Holliday, our chief executive officer, is the owner of A-List. We recorded approximately $77,100, $94,900, $104,900 and $107,300 for the three and six months ended June 30, 2014 and 2013, respectively, for these services.
Leases
Nancy Peck and Company leases 1,003 square feet of space at 420 Lexington Avenue under a lease that ends in August 2015. Nancy Peck and Company is owned by Nancy Peck, the wife of Stephen L. Green. The rent due pursuant to the lease was $35,516 per annum for year one increasing to $40,000 in year seven.
Management Fees
S.L. Green Management Corp., a consolidated entity, receives property management fees from an entity in which Stephen L. Green owns an interest. We received management fees from such entity of approximately $111,600, $216,400, $95,500$127,200 and $213,700$104,800 for the three and six months ended June 30,March 31, 2015 and 2014, respectively.

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Table of Contents
SL Green Realty Corp. and 2013, respectively.SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
March 31, 2015
(unaudited)



Other
Amounts due from related parties at June 30, 2014March 31, 2015 and December 31, 20132014 consisted of the following (in thousands):
June 30, 2014 December 31, 2013March 31, 2015 December 31, 2014
Due from joint ventures$1,484
 $2,376
$1,214
 $1,254
Other7,431
 6,154
10,874
 10,481
Related party receivables$8,915
 $8,530
$12,088
 $11,735
11. Noncontrolling Interests on the Company's Consolidated Financial Statements
Noncontrolling interests represent the common and preferred units of limited partnership interest in the Operating Partnership not held by the Company as well as third party equity interests in our other consolidated subsidiaries. Noncontrolling interests in the Operating Partnership are shown in the mezzanine equity while the noncontrolling interests in our other consolidated subsidiaries are shown in the equity section of the Company’s consolidated financial statements.
Common Units of Limited Partnership Interest in the Operating Partnership
As of June 30, 2014March 31, 2015 and December 31, 2013,2014, the noncontrolling interest unit holders owned 3.53%3.78%, or 3,500,0603,912,944 units, and 2.96%3.92%, or 2,902,3173,973,016 units, of the Operating Partnership, respectively. At June 30, 2014, 3,500,060March 31, 2015, 3,912,944 shares of SL Green's common stock were reserved for issuance upon redemption of units of limited partnership interest of the Operating Partnership.
Noncontrolling interests in the Operating Partnership is recorded at the greater of its cost basis or fair market value based on the closing stock price of SL Green's common stock at the end of the reporting period.
Below is the rollforward analysis of the activity relating to the noncontrolling interests in the Operating Partnership as of June 30, 2014,March 31, 2015 and December 31, 20132014 (in thousands):
June 30, 2014 December 31, 2013March 31, 2015 December 31, 2014
Balance at beginning of period$265,476
 $212,907
$469,524
 $265,476
Distributions(3,598) (4,146)(2,349) (7,849)
Issuance of common units19,460
 24,750
22,114
 56,469
Redemption of common units(23,066) (17,287)(37,407) (31,653)
Net income13,374
 3,023
1,743
 18,467
Accumulated other comprehensive income allocation234
 611
(200) 175
Fair value adjustment107,925
 45,618
45,456
 168,439
Balance at end of period$379,805
 $265,476
$498,881
 $469,524

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014
(unaudited)


Preferred Units of Limited Partnership Interest in the Operating Partnership
The Operating Partnership has 1,902,000 4.5% Series G Preferred Units of limited partnership interest, or the Series G Preferred Units outstanding, with a liquidation preference of $25.00 per unit, which were issued in January 2012 in conjunction with an acquisition. The Series G Preferred unitholders receive annual dividends of $1.125 per unit paid on a quarterly basis and dividends are cumulative, subject to certain provisions. The Series G Preferred Units are convertible into a number of common units of limited partnership interest in the Operating Partnership equal to (i) the liquidation preference plus accumulated and unpaid distributions on the conversion date divided by (ii) $88.50. The common units of limited partnership interest in the Operating Partnership may be redeemed in exchange for SL Green's common stock on a 1-to-1 basis. The Series G Preferred Units also provide the holder with the right to require the Operating Partnership to repurchase the Series G Preferred Units for cash before January 31, 2022.
The Operating Partnership has 80,000 6.0%60 Series HF Preferred Units outstanding with a mandatory liquidation preference of $1,000.00 per unit.
The Operating Partnership has authorized up to 700,000 3.5% Series K Preferred Units of limited partnership interest, or the Series HK Preferred Units, with a mandatory liquidation preference of $25.00 per unit, which wereunit. In August 2014, the Company issued in November 2011563,954 Series K Preferred Units in conjunction with an acquisition. The Series HK Preferred unitholders receive annual dividends of $1.50$0.875 per unit paid on a quarterly basis and dividends are cumulative, subject to certain provisions. The Series HK Preferred Units can be redeemed at any time, at the option of the unitholder, either for cash or are convertible into a number of common units of limited partnership

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Table of Contents
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
March 31, 2015
(unaudited)



interest in the Operating Partnership equal to (i) the liquidation preference plus accumulated and unpaid distributions on the conversion date divided by (ii) $134.67.
The Operating Partnership has authorized up to 500,000 4.00% Series L Preferred Units of limited partnership interest, or the Series L Preferred Units, with a liquidation preference of $25.00 per unit. In August 2014, the Company issued 378,634 Series L Preferred Units in conjunction with an acquisition. The Series L Preferred unitholders receive annual dividends of $1.00 per unit paid on a quarterly basis and dividends are cumulative, subject to certain provisions. The Series L Preferred Units can be redeemed at any time at par for cash at the Operating Partnership’s option or the option of the unitholder.
The Operating Partnership has 60authorized up to 1,600,000 3.75% Series FM Preferred Units outstandingof limited partnership interest, or the Series M Preferred Units, with a mandatory liquidation preference of $1,000.00$25.00 per unit. In February 2015, the Company issued 1,600,000 Series M Preferred Units in conjunction with the acquisition of ownership interests in and relating to certain residential and retail real estate properties. The Series M Preferred unitholders receive annual dividends of $0.9375 per unit paid on a quarterly basis and dividends are cumulative, subject to certain provisions. The Series M Preferred Units can be redeemed at any time at par for cash at the option of the unitholder.
Below is the rollforward analysis of the activity relating to the preferred units in the Operating Partnership as of March 31, 2015 and December 31, 2014 (in thousands):
 March 31, 2015 December 31, 2014
Balance at beginning of period$71,115
 $49,550
Issuance of preferred units40,000
 23,565
Redemption of preferred units(200) (2,000)
Balance at end of period$110,915
 $71,115
12. 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 June 30, 2014March 31, 2015, 95,587,30199,532,817 shares of common stock and no shares of excess stock were issued and outstanding.
At-The-Market Equity Offering Program
In July 2011,June 2014, the Company, along with the Operating Partnership, entered into an "at-the-market" equity offering program, or ATM Program, to sell an aggregate of $250.0$300.0 million of SL Green's common stock. During the sixthree months ended June 30, 2014,March 31, 2015, we sold 25,659895,956 shares of our common stock outfor aggregate net proceeds of $113.4 million comprising the remaining balance of this ATM Program for aggregate net proceeds of $2.8 million.Program. The net proceeds from this offeringthese offerings were contributed to the Operating Partnership in exchange for 25,659895,956 units of limited partnership interest of the Operating Partnership.
In June 2014,March 2015, the Company, along with the Operating Partnership, entered into a new ATM Program to sell an aggregate of $300.0 million of SL Green's common stock. During the sixthree months ended June 30, 2014,March 31, 2015, we sold 55,76556,680 shares of our common stock for aggregate net proceeds of $6.1$7.5 million. The net proceeds from this offeringthese offerings were contributed to the Operating Partnership in exchange for 55,76556,680 units of limited partnership interest of the Operating Partnership. As of June 30, 2014, $293.8March 31, 2015, $292.5 million remained available for issuance of common stock under the new ATM Program.program.
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 on or after August 10, 2017. TheIn August 2012, we received $221.9 million in net proceeds from thisthe 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 offor 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
In March 2012, the Company filed a registration statement with the SEC for our dividend reinvestment and stock purchase plan, or DRIP, which automatically became effective upon filing. The Company registered 3,500,000 shares of SL Green's common stock under the DRIP. The DRIP commenced on September 24, 2001.
During the six months ended June 30, 2014, the Company issued 272 shares of SL Green's common stock and received approximately $26,000 of proceeds, respectively, from dividend reinvestments and/or stock purchases under the DRIP. DRIP shares may be issued at a discount to the market price.

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Notes to Consolidated Financial Statements (cont.)
June 30, 2014March 31, 2015
(unaudited)



Dividend Reinvestment and Stock Purchase Plan
In February 2015, 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 SL Green's common stock under the DRSPP. The DRSPP commenced on September 24, 2001.
During the three months ended March 31, 2015, the Company issued 775,161 shares of SL Green's common stock and received net proceeds of $99.5 million of proceeds from dividend reinvestments and/or stock purchases under the DRSPP. DRSPP shares may be issued at a discount to the market price.
Earnings per Share
SL Green's earnings per share for the three and six months ended June 30, 2014March 31, 2015 and 20132014 isare computed as follows (in thousands):
 Three Months Ended June 30, Six Months Ended June 30,Three Months Ended March 31,
Numerator 2014 2013 2014 20132015 2014
Basic Earnings:           
Income attributable to SL Green common stockholders $235,541
 $8,276
 $381,631
 $27,185
$43,277
 $146,090
Effect of Dilutive Securities:           
Redemption of units to common shares 8,645
 244
 13,374
 799
1,743
 4,729
Diluted Earnings:           
Income attributable to SL Green common stockholders $244,186
 $8,520
 $395,005
 $27,984
$45,020
 $150,819
 Three Months Ended June 30, Six Months Ended June 30,Three Months Ended March 31,
Denominator 2014 2013 2014 20132015 2014
Basic Shares:           
Weighted average common stock outstanding 95,455
 91,660
 95,288
 91,530
98,402
 95,117
Effect of Dilutive Securities:           
Redemption of units to common shares 3,515
 2,652
 3,339
 2,694
3,964
 3,079
Stock-based compensation plans 514
 224
 501
 228
653
 520
Diluted weighted average common stock outstanding 99,484
 94,536
 99,128
 94,452
103,019
 98,716
SL Green has excluded 748,000, 797,000, 894,000203,975 and 939,000860,720 common stock equivalents from the diluted shares outstanding for the three and six months ended June 30,March 31, 2015 and 2014, and 2013, respectively, as they were anti-dilutive.

13. Partners' Capital of the Operating Partnership
The Company is the sole general partner of the Operating Partnership and at June 30, 2014March 31, 2015 owned 95,587,30199,532,817 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.

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Notes to Consolidated Financial Statements (cont.)
June 30, 2014March 31, 2015
(unaudited)



Limited Partner Units
As of June 30, 2014,March 31, 2015, limited partners other than SL Green owned 3.53%3.78%, or 3,500,060,3,912,944 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 three and six months ended June 30, 2014March 31, 2015 and 20132014 isare computed as follows (in thousands):
 Three Months Ended June 30, Six Months Ended June 30,Three Months Ended March 31,
Numerator 2014 2013 2014 20132015 2014
Basic and Diluted Earnings:           
Income attributable to SLGOP common unitholders $244,186
 $8,520
 $395,005
 $27,984
$45,020
 $150,819
 Three Months Ended June 30, Six Months Ended June 30,Three Months Ended March 31,
Denominator 2014 2013 2014 20132015 2014
Basic units:           
Weighted average common units outstanding 98,970
 94,312
 98,627
 94,224
102,366
 98,196
Effect of Dilutive Securities:           
Stock-based compensation plans 514
 224
 501
 228
653
 520
Diluted weighted average common units outstanding 99,484
 94,536
 99,128
 94,452
103,019
 98,716

The Operating Partnership has excluded 748,000, 797,000, 894,000203,975 and 939,000860,720 common unit equivalents from the diluted units outstanding for the three and six months ended June 30,March 31, 2015 and 2014, and 2013, respectively, as they were anti-dilutive.
14. Share-based Compensation
We have a stock-based employee and director compensation plans. Our employees are compensated through the Operating Partnership. Under each plan, whenever the Company issues common or preferred stock, the Operating Partnership issues an equivalent number of units of limited partnership interest of a corresponding class to the Company.
Third Amended and Restated 2005 Stock Option and Incentive Plan
The Third Amended and Restated 2005 Stock Option and Incentive Plan, or the 2005 Plan, was approved by the Company's board of directors in April 2013 and its stockholders in June 2013 at the Company's annual meeting of stockholders. The 2005 Plan authorizes the issuance of stock options, stock appreciation rights, unrestricted and restricted stock, phantom shares, dividend equivalent rights and other equity-based awards. Subject to adjustments upon certain corporate transactions or events, awards with respect to up to a maximum of 17,130,000 fungible units may be granted under the 2005 Plan. Currently, different types of awards count against the limit on the number of fungible units differently, with (1) full-value awards (i.e., those that deliver the full value of the award upon vesting, such as restricted stock) counting as 2.76 fungible units per share subject to such award (2) stock options, stock appreciation rights and other awards that do not deliver full value and expire five years from the date of grant counting as 0.77 fungible units per share subject to such award and (3) all other awards (e.g., ten-year stock options) counting as 1.0 fungible units per share subject to such award. Awards granted under the 2005 Plan prior to the approval of the second amendment and restatement in June 2010 and third amendment and restatement in June 2013 continue to count against the fungible unit limit based on the ratios that were in effect at the time such awards were granted, which may be different than the current ratios. As a result, depending on the types of awards issued, the 2005 Plan may result in the issuance of more or less than 17,130,000 shares. If a stock option or other award granted under the 2005 Plan expires or terminates, the common stock subject to any portion of the award that expires or terminates without having been exercised or paid, as the case may be, will again become available for the issuance of additional awards. Shares of SL Green's common stock distributed under the 2005 Plan may be treasury shares or authorized but unissued shares. Currently, unless the 2005 Plan has been previously terminated by the Company's board of directors,

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Notes to Consolidated Financial Statements (cont.)
June 30, 2014
(unaudited)


new awards may be granted under the 2005 Plan until June 13, 2023, which is the tenth anniversary of the date that the 2005 Plan was most recently approved by the Company's stockholders. As of June 30, 2014, 3,200,000March 31, 2015, 1.5 million fungible units were available for

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Notes to Consolidated Financial Statements (cont.)
March 31, 2015
(unaudited)



issuance under the 2005 Plan after reserving for shares underlying outstanding restricted stock units, phantom stock units granted pursuant to our Non-Employee Directors' Deferral Program and LTIP Units, including, among others, outstanding LTIP Units issued under our 2011 Long-Term Outperformance Plan, which remain subject to performance-based vesting.Plan.
Options are granted under the plan at the fair market value on the date of grant and, subject to employment, generally expire five or ten years from the date of grant, are not transferable other than on death, and generally vest in one to five years commencing one year from the date of grant.
The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option pricing model based on historical information with the following weighted average assumptions for grants during the six months ended June 30, 2014 and the year ended December 31, 2013.2014. The Company did not grant any stock options during the three months ended March 31, 2015.
 June 30, 2014 December 31, 2013
Dividend yield1.80% 1.92%
Expected life of option3.7 years
 4.1 years
Risk-free interest rate0.94% 0.96%
Expected stock price volatility35.00% 36.12%
March 31, 2015December 31, 2014
Dividend yieldN/A1.60%
Expected life of optionN/A3.6 years
Risk-free interest rateN/A1.29%
Expected stock price volatilityN/A33.97%
A summary of the status of the Company's stock options as of June 30, 2014March 31, 2015 and December 31, 20132014 and changes during the sixthree months ended June 30, 2014March 31, 2015 and the year ended December 31, 20132014 are as follows:
June 30, 2014 December 31, 2013March 31, 2015 December 31, 2014
Options
Outstanding
 
Weighted
Average
Exercise
Price
 
Options
Outstanding
 
Weighted
Average
Exercise
Price
Options Outstanding 
Weighted Average
Exercise Price
 Options Outstanding 
Weighted Average
Exercise Price
Balance at beginning of year1,765,034
 $83.24
 1,201,000
 $75.05
1,462,726
 $87.98
 1,765,034
 $83.24
Granted3,000
 98.58
 828,100
 87.23
—
 —
 102,050
 119.12
Exercised(277,145) 71.27
 (223,531) 53.93
(136,936) 75.27
 (348,156) 72.76
Lapsed or cancelled(26,984) 83.81
 (40,535) 83.94
(8,767) 103.57
 (56,202) 90.03
Balance at end of period1,463,905
 $85.53
 1,765,034
 $83.24
Options exercisable at end of period456,464
 $88.98
 461,458
 $89.38
Weighted average fair value of options granted during the period$69,805
   $18,041,576
  
Balance at end of year1,317,023
 $89.19
 1,462,726
 $87.98
Options exercisable at end of year624,057
 $87.82
 428,951
 $90.32
Weighted average fair value of options granted during the year$—
   $2,841,678
  

All options were granted with strike prices ranging from $20.67$20.67 to $137.18.$137.18. The remaining weighted average contractual life of the options outstanding was 4.40 years3.97 and the remaining average contractual life of the options exercisable was 3.76 years.3.77.
During the three and six months ended June 30,March 31, 2015 and 2014, and 2013, we recognized $2.0 million $4.1and $2.1 million, $1.3 million and $2.6 million of compensation expense, respectively, for these options. As of June 30, 2014,March 31, 2015, there was $15.8$12.0 million of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of three years.
Stock-based Compensation
Effective January 1, 1999, the Company implemented a deferred compensation plan, or the Deferred Plan, where shares issued under the Deferred Plan were granted to certain employees, including our executives and vesting will occur annually upon the completion of a service period or our meeting established financial performance criteria. Annual vesting occurs at rates ranging from 15% to 35% once performance criteria are reached.

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Notes to Consolidated Financial Statements (cont.)
June 30, 2014March 31, 2015
(unaudited)



A summary of the Company's restricted stock as of June 30, 2014March 31, 2015 and December 31, 20132014 and charges during the sixthree months ended June 30, 2014March 31, 2015 and the year ended December 31, 20132014 are presented below:as follows:
June 30, 2014 December 31, 2013March 31, 2015 December 31, 2014
Balance at beginning of year2,994,197
 2,804,901
Balance at beginning of period3,000,979
 2,994,197
Granted—
 192,563
2,603
 9,550
Cancelled(1,434) (3,267)—
 (2,768)
Balance at end of period2,992,763
 2,994,197
3,003,582
 3,000,979
Vested during the period69,293
 21,074
84,581
 75,043
Compensation expense recorded$4,678,269
 $6,713,155
$1,936,853
 $9,658,019
Weighted average fair value of restricted stock granted during the period$—
 $17,386,949
$333,153
 $1,141,675
The fair value of restricted stock that vested during the sixthree months ended June 30, 2014March 31, 2015 and the year ended December 31, 20132014 was $5.1$7.2 million and $1.6$5.5 million,, respectively. As of June 30, 2014,March 31, 2015, there was $14.2$10.5 million of total unrecognized compensation cost related to unvested restricted stock, which is expected to be recognized over a weighted average period of 2.3 years.1.9 years.
For the three and six months ended June 30,March 31, 2015 and 2014, and 2013, $1.9 million, $3.5 million, $1.0$1.6 million and $2.0$1.6 million,, respectively, was capitalized to assets associated with compensation expense related to our long-term compensation plans, restricted stock and stock options.
We granted LTIP units,Units, which include bonus, time-based and performance based awards, with a fair value of $21.2 $25.4 million and $27.1$33.2 million as of June 30, 2014March 31, 2015and December 31, 2013,2014, respectively. The grant date fair value of the LTIP unitUnit awards was calculated in accordance with ASC 718. A third party consultant determined the fair value of the LTIP unitsUnits to have a discountdiscount from SL Green's common stock price. The discount was calculated by considering the inherent uncertainty that the LTIP unitsUnits will reach parity with other common partnership units and the illiquidity due to transfer restrictions. As of June 30, 2014March 31, 2015, there was $6.7$10.4 million of total unrecognized compensation expense related to the time-based and performance based awards, which is expected to be recognized over a weighted average period of 1.1 years. During the three and six months ended June 30, 2014March 31, 2015 and 20132014, we recorded compensation expense related to bonus, time-based and performance based awards of $2.1 million, $10.3 million, $0.8$13.2 million and $1.6$8.1 million, respectively.
2010 Notional Unit Long-Term Compensation Plan
In December 2009, the compensation committee of the Company's board of directors approved the general terms of the SL Green Realty Corp. 2010 Notional Unit Long-Term Compensation Program, or the 2010 Long-Term Compensation Plan. The 2010 Long-Term Compensation Plan is a long-term incentive compensation plan pursuant to which award recipients could earn, in the aggregate, from approximately $15.0 million up to approximately $75.0 million of LTIP Units in the Operating Partnership based on the Company's stock price appreciation over three years beginning on December 1, 2009; provided that, if maximum performance had been achieved, approximately $25.0 million of awards could be earned at any time after the beginning of the second year and an additional approximately $25.0 million of awards could be earned at any time after the beginning of the third year. In order to achieve maximum performance under the 2010 Long-Term Compensation Plan, the Company's aggregate stock price appreciation during the performance period had to equal or exceed 50%. The compensation committee determined that maximum performance had been achieved at or shortly after the beginning of each of the second and third years of the performance period and for the full performance period and, accordingly, 366,815 LTIP Units, 385,583 LTIP Units and 327,416 LTIP Units were earned under the 2010 Long-Term Compensation Plan in December 2010, 2011 and 2012, respectively. Substantially in accordance with the original terms of the program, 50% of these LTIP Units vested on December 17, 2012 (accelerated from the original January 1, 2013 vesting date), 25% of these LTIP Units vested on December 11, 2013 (accelerated from the original January 1, 2014 vesting date) and the remainder is scheduled to vestvested on January 1, 2015 based on continued employment. In accordance with the terms of the 2010 Long-Term Compensation Plan, distributions were not paid on any LTIP Units until they were earned, at which time we paid all distributions that would have been paid on the earned LTIP Units since the beginning of the performance period.
The cost of the 2010 Long-Term Compensation Plan (approximately $31.7($31.7 million, subject to forfeitures) will bewas amortized into earnings through the final vesting period.period of January 1, 2015. We recorded compensation expense of $1.6$0.3 million$1.9 million, $0.8 million and $2.8 million during the three and six months ended June 30,March 31, 2014 and 2013, respectively, related to the 2010 Long-Term Compensation Plan.

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Notes to Consolidated Financial Statements (cont.)
June 30, 2014
(unaudited)


2011 Outperformance Plan
In August 2011, the compensation committee of the Company's board of directors approved the general terms of the SL Green Realty Corp. 2011 Outperformance Plan, or the 2011 Outperformance Plan. Participants in the 2011 Outperformance Plan may

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Notes to Consolidated Financial Statements (cont.)
March 31, 2015
(unaudited)



could earn, in the aggregate, up to $85.0 million of LTIP Units in the Operating Partnership based on our total return to stockholders for the three-year period beginning September 1, 2011. Under the 2011 Outperformance Plan, participants will bewere entitled to share in a "performance pool" comprised of LTIP Units with a value equal to 10% of the amount if any, by which our total return to stockholders during the three-year period exceedsexceeded a cumulative total return to stockholders of 25%, subject to the maximum of $85.0 million of LTIP Units; provided that if maximum performance has beenwas achieved, approximately one-third of each award maycould be earned at any time after the beginning of the second year and an additional approximately one-third of each award maycould be earned at any time after the beginning of the third year. LTIP Units earned under the 2011 Outperformance Plan will beare subject to continued vesting requirements, with 50% of any awards earned vestingvested on August 31, 2014 and the remaining 50% vesting on August 31, 2015, subject to continued employment with us through such dates. Participants willwere not be entitled to distributions with respect to LTIP Units granted under the 2011 Outperformance Plan unless and until they arewere earned. IfFor LTIP Units arethat were earned, each participant willwas also be entitled to the distributions that would have been paid had the number of earned LTIP Units been issued at the beginning of the performance period, with such distributions being paid in the form of additional LTIP Units. Thereafter, distributions willare to be paid currently with respect to all earned LTIP Units, whether vested or unvested. In June 2014, the compensation committee determined that maximum performance had been achieved during the third year of the performance period and, accordingly, 560,908 LTIP Units, representing two-thirds of each award, were earned, subject to vesting, under the 2011 Outperformance Plan. The remaining one-thirdIn September 2014, the compensation committee determined that maximum performance had been achieved for the full three-year performance period and, accordingly, 280,454 LTIP units, representing the final third of each award, will bewere earned, based on performance through end ofsubject to vesting, under the performance period.2011 Outperformance Plan.
The cost of the 2011 Outperformance Plan (approximately $27.0($26.8 million, subject to forfeitures) will be amortized into earnings through the final vesting period. We recorded compensation expense of $4.3 million, $6.1 million, $1.7$0.7 million and $4.5$1.9 million during the three and six months ended June 30,March 31, 2015 and 2014, and 2013, respectively, related to the 2011 Outperformance Plan.
2014 Outperformance Plan
In August 2014, the compensation committee of the Company's board of directors approved the general terms of the SL Green Realty Corp. 2014 Outperformance Plan, or the 2014 Outperformance Plan. Participants in the 2014 Outperformance Plan may earn, in the aggregate, up to 610,000 LTIP Units in our Operating Partnership based on our total return to stockholders for the three-year period beginning September 1, 2014. For each individual award, two-thirds of the LTIP Units may be earned based on the Company’s absolute total return to stockholders and one-third of the LTIP Units may be earned based on relative total return to stockholders compared to the constituents of the MSCI REIT Index. Awards earned based on absolute total return to stockholders will be determined independently of awards earned based on relative total return to stockholders. In the event the Company’s performance reaches either threshold before the end of the three-year performance period, a pro-rata portion of the maximum award may be earned. For each component, if the Company’s performance reaches the maximum threshold beginning with the 19th month of the performance period, participants will earn one-third of the maximum award that may be earned for that component. If the Company’s performance reaches the maximum threshold during the third year of the performance period for a component, participants will earn two-thirds (or an additional one-third) of the maximum award that may be earned for that component. LTIP Units earned under the 2014 Outperformance Plan will be subject to continued vesting requirements, with 50% of any awards earned vesting on August 31, 2017 and the remaining 50% vesting on August 31, 2018, subject to continued employment with us through such dates. Participants will not be entitled to distributions with respect to LTIP Units granted under the 2014 Outperformance Plan unless and until they are earned. If LTIP Units are earned, each participant will also be entitled to the distributions that would have been paid had the number of earned LTIP Units been issued at the beginning of the performance period, with such distributions being paid in the form of cash or additional LTIP Units. Thereafter, distributions will be paid currently with respect to all earned LTIP Units, whether vested or unvested.
The cost of the 2014 Outperformance Plan ($27.9 million, subject to forfeitures), based on the portion of the 2014 Outperformance Plan granted as of March 31, 2015, will be amortized into earnings through the final vesting period. We recorded compensation expense of $1.4 million during the three months ended March 31, 2015 related to the 2014 Outperformance Plan.
Deferred Compensation Plan for Directors
Under our Non-Employee Director's Deferral Program, which commenced July 2004, the Company's non-employee directors may elect to defer up to 100% of their annual retainer fee, chairman fees, meeting fees and annual stock grant. Unless otherwise elected by a participant, fees deferred under the program shall be credited in the form of phantom stock units. The program provides that a director's phantom stock units generally will be settled in an equal number of shares of common stock upon the earlier of (i) the January 1 coincident with or next following such director's termination of service from the Board of Directors or (ii) a change in control by us, as defined by the program. Phantom stock units are credited to each non-employee director quarterly using the closing price of SL Green's common stock on the first business day of the respective quarter. Each participating non-employeenon-

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Notes to Consolidated Financial Statements (cont.)
March 31, 2015
(unaudited)



employee director is also credited with dividend equivalents or phantom stock units based on the dividend rate for each quarter, which are either paid in cash currently or credited to the director’s account as additional phantom stock units.
During the sixthree months ended June 30, 2014, 5,974March 31, 2015, 5,613 phantom stock units were earned.earned and 5,230 shares of common stock were issued to our board of directors. We recorded compensation expense of $1.3 million during the three months ended March 31, 2015 related to the Deferred Compensation Plan. As of June 30, 2014,March 31, 2015, there were 79,49981,262 phantom stock units outstanding pursuant to our Non-Employee Director's Deferral Program.
Employee Stock Purchase Plan
On September 18,In 2007, the Company's board of directors adopted the 2008 Employee Stock Purchase Plan, or ESPP, to encourage our employees to increase their efforts to make our business more successful by providing equity-based incentives to eligible employees. The ESPP is intended to qualify as an "employee stock purchase plan" under Section 423 of the Code, and has been adopted by the board to enable our eligible employees to purchase the Company's shares of common stock through payroll deductions. The ESPP became effective on January 1, 2008 with a maximum of 500,000 shares of the common stock available for issuance, subject to adjustment upon a merger, reorganization, stock split or other similar corporate change. The Company filed a registration statement on Form S-8 with the SEC with respect to the ESPP. The common stock is offered for purchase through a series of successive offering periods. Each offering period will be three months in duration and will begin on the first day of each calendar quarter, with the first offering period having commenced on January 1, 2008. The ESPP provides for eligible employees to purchase the common stock at a purchase price equal to 85% of the lesser of (1) the market value of the common stock on the first day of the offering period or (2) the market value of the common stock on the last day of the offering period. The ESPP was approved by our stockholders at our 2008 annual meeting of stockholders. As of June 30, 2014, 76,727March 31, 2015, 81,955 shares of SL Green's common stock had been issued under the ESPP.

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Notes to Consolidated Financial Statements (cont.)
June 30, 2014
(unaudited)


15. Accumulated Other Comprehensive Loss of the Company
The following tables set forth the changes in accumulated other comprehensive income (loss) by component as of June 30, 2014:March 31, 2015 (in thousands):
 Net unrealized loss on derivative instruments (1) SL Green’s share of joint venture net unrealized income (loss) on derivative instruments (2) Unrealized gains and loss on marketable securities Total
Balance at December 31, 2013$(15,125) $(4,870) $4,784
 $(15,211)
Other comprehensive income (loss) before reclassifications(420) 4,068
 1,702
 5,350
Amounts reclassified from accumulated other comprehensive income1,898
 1,767
 —
 3,665
Balance at June 30, 2014$(13,647) $965
 $6,486
 $(6,196)
___________________________
 
Net unrealized loss on derivative instruments(1)
 
SL Green’s share of joint venture net unrealized loss on derivative instruments(2)
 Unrealized gain and (loss) on marketable securities Total
Balance at December 31, 2014(9,498) (95) 2,613
 (6,980)
Other comprehensive (loss) income before reclassifications(7,198) (1,188) 597
 (7,789)
Amounts reclassified from accumulated other comprehensive income2,641
 318
 —
 2,959
Balance at March 31, 2015$(14,055) $(965) $3,210
 $(11,810)

(1)
AmountsAmount reclassified from accumulated other comprehensive income (loss) areis included in interest expense in the respective consolidated statements of income. As of June 30, 2014March 31, 2015 and December 31, 2013,2014, the deferred net losses from these terminated hedges, which areis included in accumulated other comprehensive loss relating to net unrealized loss on derivative instrument, were $12.8was $11.3 million and $13.8$11.8 million,, respectively.
(2)
AmountsAmount reclassified from accumulated other comprehensive income are(loss) is included in equity in net income from unconsolidated joint ventures in the respective consolidated statements of income.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
March 31, 2015
(unaudited)



16. Accumulated Other Comprehensive Loss of the Operating Partnership
The following tables set forth the changes in accumulated other comprehensive income (loss) by component as of June 30, 2014:March 31, 2015 (in thousands):
 Net unrealized loss on derivative instruments (1) SLGOP’s share of joint venture net unrealized income (loss) on derivative instruments (2) Unrealized gains and loss on marketable securities Total
Balance at December 31, 2013$(15,573) $(5,015) $4,926
 $(15,662)
Other comprehensive (loss) income before reclassifications(516) 4,184
 1,788
 5,456
Amounts reclassified from accumulated other comprehensive income1,964
 1,829
 —
 3,793
Balance at June 30, 2014$(14,125) $998
 $6,714
 $(6,413)
___________________________
 
Net unrealized loss on derivative instruments(1)
 
SLGOP’s share of joint venture net unrealized loss on derivative instruments(2)
 Unrealized gain and (loss) on marketable securities Total
Balance at December 31, 2014(9,845) (100) 2,689
 (7,256)
Other comprehensive (loss) income before reclassifications(7,521) (1,237) 650
 (8,108)
Amounts reclassified from accumulated other comprehensive income2,747
 331
 —
 3,078
Balance at March 31, 2015$(14,619) $(1,006) $3,339
 $(12,286)

(1)
Amount reclassified from accumulated other comprehensive income (loss) areis included in interest expense in the respective consolidated statements of income. As of June 30, 2014March 31, 2015 and December 31, 2013,2014, the deferred net losses from these terminated hedges, which areis included in accumulated other comprehensive loss relating to net unrealized loss on derivative instrument, were $13.2was $11.7 million and $14.2$12.2 million, respectively.
(2)AmountsAmount reclassified from accumulated other comprehensive income are(loss) is included in equity in net income from unconsolidated joint ventures in the respective consolidated statements of income.

17. Fair Value Measurements
We are required to disclose the fair value information aboutwith regard to our financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practicablepractical to estimate fair value. The FASB guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. We measure and/or disclose the estimated fair value of financial assets and liabilities based on a hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. This hierarchy consist of three broad levels: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date; Level 2 - inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and Level 3 - unobservable inputs for the asset or liability that are used when little or no market data is available. We follow this hierarchy for our assets and liabilities measured at fair value on a recurring and nonrecurring

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014
(unaudited)


basis. In instances in which the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level of input that is significant to the fair value measurement in its entirety. The Company’sOur assessment of the significance of the particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.
The following tables set forth the assets and liabilities that we measure at fair value on a recurring and non-recurring basis by their levels in the fair value hierarchy at June 30, 2014March 31, 2015 and December 31, 2013, respectively2014 (in thousands):
June 30, 2014March 31, 2015
Total Level 1 Level 2 Level 3Total Level 1 Level 2 Level 3
Assets:              
Marketable securities$39,912
 $4,532
 $35,380
 $—
$47,716
 $4,287
 $43,429
 $—
Interest rate swap agreements (included in other assets)$3
 $—
 $3
 $—
Liabilities:              
Interest rate swap agreements (included in accrued interest payable and other liabilities)$18,454
 $—
 $18,454
 $—
$16,983
 $—
 $16,983
 $—

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
March 31, 2015
(unaudited)



December 31, 2013December 31, 2014
Total Level 1 Level 2 Level 3Total Level 1 Level 2 Level 3
Assets:              
Marketable securities$32,049
 $4,307
 $24,419
 $3,323
$39,429
 $4,332
 $35,097
 $—
Interest rate swap agreements (included in other assets)$2,174
 —
 2,174
 —
Liabilities:              
Interest rate swap agreements (included in accrued interest payable and other liabilities)$1,329
 $—
 $1,329
 $—
$14,728
 $—
 $14,728
 $—
We determine other than temporary impairment in real estate investments and debt and preferred equity investments, including intangibles utilizing cash flow projections that apply, among other things, estimated revenue and expense growth rates, discount rates and capitalization rates, which are classified as Level 3 inputs.
The marketable securities classified as Level 1 were derived from quoted prices in active markets. The valuation technique used to measure the fair value of the marketable securities classified as Level 2 were valued based on quoted market prices or model driven valuations using the significant inputs derived from or corroborated by observable market data. Marketable securities in an unrealized loss position are not considered to be other than temporarily impaired. We do not intend to sell these securities and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost bases.
The fair value of derivative instruments is based on current market data received from financial sources that trade such instruments and are based on prevailing market data and derived from third party proprietary models based on well-recognized financial principles and reasonable estimates about relevant future market conditions, which are classified as Level 2 inputs.
The financial assets and liabilities that are not measured at fair value on our consolidated balance sheets include cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses, debt and preferred equity investments, and mortgages and other loans payable and other secured and unsecured debt. The carrying amount of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable and accrued expenses reported in our consolidated balance sheets approximates fair value due to the short term nature of these instruments. The fair value of debt and preferred equity investments, which is classified as Level 3, is estimated by discounting the future cash flows using current interest rates at which similar loans with the same maturities would be made to borrowers with similar credit ratings. The fair value of borrowings, which is classified as Level 3, is estimated by discounting the contractual cash flows of each debt to their present value using adjusted market interest rates, which is provided by a third-party specialist.
The following table provides the carrying value and fair value of these financial instruments as of June 30, 2014March 31, 2015 and December 31, 20132014 (in thousands):
March 31, 2015 December 31, 2014
June 30, 2014 December 31, 2013Carrying Value Fair Value Carrying Value Fair Value
Carrying Value Fair Value Carrying Value Fair Value       
Debt and preferred equity investments$1,547,808
 (1)
 $1,304,839
 (1)
$1,548,739
 (1)
 $1,408,804
 (1)
         

    
Fixed rate debt$6,096,280
 $6,533,273
 $5,599,960
 $5,886,980
$6,016,084
 $6,582,767
 $6,140,786
 $6,565,236
Variable rate debt2,261,352
 2,279,257
 1,319,948
 1,327,422
2,073,000
 2,116,146
 2,291,943
 2,315,952
$8,357,632
 $8,812,530
 $6,919,908
 $7,214,402
$8,089,084
 $8,698,913
 $8,432,729
 $8,881,188


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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014
(unaudited)


(1)
Debt and preferred equity investments had an estimated fair value ranging between $1.5 billion and $1.7 billion at June 30, 2014. At DecemberMarch 31, 2013,2015, debt and preferred equity investments had an estimated fair value ranging between $1.3$1.7 billion and $1.4$1.9 billion.
At December 31, 2014, debt and preferred equity investments had an estimated fair value ranging between $1.5 billion and $1.8 billion.
Disclosure about fair value of financial instruments was based on pertinent information available to us as of June 30, 2014March 31, 2015 and December 31, 2013.2014. Although we are not aware of any factors that would significantly affect the reasonable fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
March 31, 2015
(unaudited)



18. Financial Instruments: Derivatives and Hedging
In the normal course of business, we use a variety of commonly used derivative instruments, such as interest rate swaps, caps, collar and floors, to manage, or hedge interest rate risk. We hedge our exposure to variability in future cash flows for forecasted transactions in addition to anticipated future interest payments on existing debt. We recognize all derivatives on the balance sheetsheets at fair value. Derivatives that are not hedges are adjusted to fair value through earnings. If a derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedgedhedge asset, liability, or firm commitment through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative’sderivative's change in fair value will be immediately recognized in earnings. Reported net income and equity may increase or decrease prospectively, depending on future levels of interest rates and other variables affecting the fair values of derivative instruments and hedged items, but will have no effect on cash flows. Currently, all of our designated derivative instruments are effective hedging instruments.
The following table summarizes the notional and fair value of our consolidated derivative financial instruments at June 30, 2014March 31, 2015 based on Level 2 information pursuant to ASC 810-10.information. The notional value is an indication of the extent of our involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks.risks (amounts in thousands).
 
Notional
Value
(in thousands)
 
Strike
Rate
 
Effective
Date
 
Expiration
Date
 Balance Sheet Location 
Fair Value
(in thousands)
Interest Rate Cap$263,426
 6.000% November 2013 November 2015 Other Assets $4
Interest Rate Cap137,500
 4.000% October 2013 September 2015 Other Assets 3
Interest Rate Cap946,000
 4.750% May 2014 May 2016 Other Assets 36
Interest Rate Swap(1)
144,000
 2.236% December 2012 December 2017 Other Liabilities (5,859)
Interest Rate Swap(1)
72,000
 2.310% December 2012 December 2017 Other Liabilities (3,109)
Interest Rate Swap(1)
72,000
 2.310% December 2012 December 2017 Other Liabilities (3,109)
Interest Rate Swap(1)
57,600
 1.990% December 2012 December 2017 Other Liabilities (1,859)
Interest Rate Swap(1)
86,400
 1.948% December 2012 December 2017 Other Liabilities (2,664)
Interest Rate Swap(1)
72,000
 1.345% December 2012 December 2017 Other Liabilities (747)
Interest Rate Swap30,000
 2.295% July 2010 June 2016 Other Liabilities (1,078)
Interest Rate Swap8,500
 0.740% February 2012 February 2015 Other Liabilities (29)
           $(18,411)
 
Notional
Value
 
Strike
Rate
 
Effective
Date
 
Expiration
Date
 Balance Sheet Location 
Fair
Value
Interest Rate Cap - Sold$504,000
 4.750% May 2014 May 2016 Other Assets $(1)
Interest Rate Cap504,000
 4.750% May 2014 May 2016 Other Liabilities 1
Interest Rate Cap500,000
 4.750% October 2014 May 2016 Other Assets 1
Interest Rate Cap - Sold500,000
 4.750% November 2014 May 2016 Other Liabilities (1)
Interest Rate Cap446,000
 4.750% October 2014 May 2016 Other Assets 1
Interest Rate Cap263,426
 6.000% November 2013 November 2015 Other Assets —
Interest Rate Cap137,500
 4.000% October 2013 September 2015 Other Assets —
Interest Rate Swap200,000
 0.938% October 2014 December 2017 Other Liabilities (326)
Interest Rate Swap150,000
 0.940% October 2014 December 2017 Other Liabilities (251)
Interest Rate Swap150,000
 0.940% October 2014 December 2017 Other Liabilities (251)
Interest Rate Swap144,000
 2.236% December 2012 December 2017 Other Liabilities (5,108)
Interest Rate Swap86,400
 1.948% December 2012 December 2017 Other Liabilities (2,407)
Interest Rate Swap72,000
 2.310% December 2012 December 2017 Other Liabilities (2,696)
Interest Rate Swap72,000
 1.345% December 2012 December 2017 Other Liabilities (862)
Interest Rate Swap72,000
 2.310% December 2012 December 2017 Other Liabilities (2,696)
Interest Rate Swap57,600
 1.990% December 2012 December 2017 Other Liabilities (1,669)
Interest Rate Swap30,000
 2.295% July 2010 June 2016 Other Liabilities (682)
Interest Rate Swap8,018
 0.852% February 2015 February 2017 Other Liabilities (33)
           $(16,980)
__________________________During the three months ended March 31, 2015 and 2014, we recorded a loss on the changes in the fair value of less than $1,000 and $11,000, respectively, which is included in interest expense on the consolidated statements of income.
(1)As a result of the acquisition and consolidation of 388-390 Greenwich Street, we have assumed these derivative instruments and have designated them as hedges.

The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. As of March 31, 2015, the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $18.1 million. As of March 31, 2015, the Company has not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value of $18.1 million at March 31, 2015.
Gains and losses on terminated hedges are included in the accumulated other comprehensive loss, and are recognized into earnings over the term of the related mortgage obligation. Over time, the realized and unrealized gains and losses held in accumulated other comprehensive loss will be reclassified into earnings as an adjustment to interest expense in the same periods in which the hedged interest payments affect earnings. We estimate that approximately $7.1$9.3 million of the current balance held in accumulated other comprehensive loss will be reclassified into interest expense and $0.8$1.1 million of the portion related to our share of joint venture

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
March 31, 2015
(unaudited)



accumulated other comprehensive loss will be reclassified into equity in net income from unconsolidated joint ventures within the next 12 months.

51

The following table presents the effect of our derivative financial instruments and our share of our joint ventures' derivative financial instruments that are designated and qualify as hedging instruments on the consolidated statements of income for the three months ended June 30,March 31, 2015 and 2014, and 2013, respectively (in thousands):
  
Amount of Gain or (Loss)
Recognized in
Other Comprehensive
Loss
(Effective Portion)
 Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income 
Amount of Loss
 Reclassified from
Accumulated Other
Comprehensive Loss  into Income
(Effective Portion)
 Location of Gain (Loss) Recognized in Income on Derivative 
Amount of Gain 
Recognized
into Income
(Ineffective Portion)
  Three Months Ended June 30,  Three Months Ended June 30,  Three Months Ended June 30,
Derivative 2014 2013  2014 2013  2014 2013
Interest Rate Swaps/Caps $(465) $181
 Interest expense $1,272
 $470
 Interest expense $1
 $—
Share of unconsolidated joint ventures' derivative instruments 5,930
 7,888
 Equity in net income from unconsolidated joint ventures 556
 1,260
 Equity in net income from unconsolidated joint ventures —
 5
  $5,465
 $8,069
   $1,828
 $1,730
   $1
 $5

The following table presents the effect of our derivative financial instruments and our share of our joint ventures' derivative financial instruments that are designated and qualify as hedging instruments on the consolidated statements of income for the six months ended June 30, 2014 and 2013, respectively (in thousands):
 
Amount of Gain or (Loss)
Recognized in
Other Comprehensive
Loss
(Effective Portion)
 Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income 
Amount of Loss
 Reclassified from
Accumulated Other
Comprehensive Loss  into Income
(Effective Portion)
 Location of Gain (Loss) Recognized in Income on Derivative 
Amount of Gain
Recognized
into Income
(Ineffective Portion)
 
Amount of Loss
Recognized in
Other Comprehensive
Loss
(Effective Portion)
 Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income 
Amount of Loss
 Reclassified from
Accumulated Other
Comprehensive Loss  into Income
(Effective Portion)
 Location of Gain Recognized in Income on Derivative 
Amount of (Loss) or Gain 
Recognized into Income
(Ineffective Portion)
 Six Months Ended
June 30,		 Six Months Ended
June 30,		 Six Months Ended
June 30,		 Three Months Ended March 31, Three Months Ended March 31, Three Months Ended March 31,
Derivative 2014 2013 2014 2013 2014 2013 2015 2014 2015 2014 2015 2014
Interest Rate Swaps/Caps $(516) $140
 Interest expense $1,964
 $938
 Interest expense $2
 $—
 $(7,521) $(51) Interest expense $2,747
 $692
 Interest expense $(410) $1
Share of unconsolidated joint ventures' derivative instruments 4,184
 8,109
 Equity in net income from unconsolidated joint ventures 1,829
 2,500
 Equity in net income from unconsolidated joint ventures —
 5
 (1,237) (1,746) Equity in net income from unconsolidated joint ventures 331
 1,273
 Equity in net income from unconsolidated joint ventures (16) —
 $3,668
 $8,249
 $3,793
 $3,438
 $2
 $5
 $(8,758) $(1,797) $3,078
 $1,965
 $(426) $1
19. Commitments and Contingencies
Legal Proceedings
WeAs of March 31, 2015, the Company and the Operating Partnership arewere not presently involved in any material litigation nor, to ourmanagement's knowledge, iswas any material litigation threatened against us or our properties,portfolio which if adversely determined could have a material adverse impact on us other than routine litigation arising in the ordinary course of business. Management believes the costs, if any, incurredbusiness or litigation that is adequately covered by us related to this litigation will not materially affect our financial position, operating results or liquidity.insurance.
Environmental Matters
Our management believes that the properties are in compliance in all material respects with applicable Federal, state and local ordinances and regulations regarding environmental issues. Management is not aware of any environmental liability that it believes would have a materially adverse impact on our financial position, results of operations or cash flows. Management is unaware of any instances in which it would incur significant environmental cost if any of our properties were sold.
Capital and Ground Leases Arrangements
The following is a schedule of future minimum lease payments under capital leases and non-cancellable operating leases with initial terms in excess of one year as of March 31, 2015 (in thousands):
  Capital lease 
Non-cancellable
operating leases
Remaining 2015 $109
 $22,869
2016 170
 30,612
2017 291
 30,845
2018 291
 30,845
2019 315
 30,862
Thereafter 56,568
 720,698
Total minimum lease payments 57,744
 $866,731
Less amount representing interest (36,827)  
Capital lease obligations $20,917
  

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014March 31, 2015
(unaudited)


Capital and Ground Leases Arrangements
The following is a schedule of future minimum lease payments under capital leases and noncancellable operating leases with initial terms in excess of one year as of June 30, 2014 (in thousands):
 Capital lease 
Non-cancellable
operating leases
Remaining 2014$73
 $15,351
2015145
 30,703
2016170
 30,824
2017291
 31,057
2018291
 31,057
Thereafter56,884
 766,187
Total minimum lease payments57,854
 $905,179
Less amount representing interest(37,219)  
Capitalized lease obligations$20,635
  


20. Segment Information
The Company is a REIT engaged in all aspects of property ownership and management including investment, leasing operations, capital improvements, development and redevelopment, financing, construction and maintenance 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.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014
(unaudited)


Selected results of operations for the three and six months ended June 30,March 31, 2015 and 2014, and 2013, and selected asset information as of June 30, 2014March 31, 2015 and December 31, 2013,2014, 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, 2014 $347,513
 $39,714
 $387,227
June 30, 2013 307,213
 46,731
 353,944
Six months ended:      
June 30, 2014 $668,998
 $93,798
 $762,796
June 30, 2013 608,126
 99,439
 707,565
Income (loss) from continuing operations before equity in net gain on sale of interest in unconsolidated joint venture/real estate      
Three months ended:      
June 30, 2014 $24,318
 $34,000
 $58,318
June 30, 2013 (4,742) 38,040
 33,298
Six months ended:      
June 30, 2014 $26,918
 $79,582
 $106,500
June 30, 2013 (23,548) 81,389
 57,841
Total assets      
As of:      
June 30, 2014 $15,155,384
 $1,562,352
 $16,717,736
December 31, 2013 13,641,727
 1,317,274
 14,959,001
  Real Estate Segment Debt and Preferred Equity Segment Total Company
Total revenues      
Three months ended:      
March 31, 2015 $354,230
 $42,069
 $396,299
March 31, 2014 308,361
 54,084
 362,445
Income from continuing operations before equity in net gain on sale of interest in unconsolidated joint venture/real estate      
Three months ended:      
March 31, 2015 $6,759
 $35,467
 $42,226
March 31, 2014 620
 45,583
 46,203
Total assets      
As of:      
March 31, 2015 $15,514,089
 $1,566,643
 $17,080,732
December 31, 2014 15,671,662
 1,424,925
 17,096,587
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 the portfolio is 100% leverage atleveraged by our MRA facility and 2012 revolving credit facility borrowing cost. We also allocate loan loss reserves, net of recoveries, and transaction related costs to the debt and preferred equity segment. We do not allocate marketing, general and administrative expenses (totaling $23.9 million, $47.1 million, $21.5$25.5 million and $42.6$23.3 million for the three and six months ended June 30, 2014March 31, 2015 and 20132014, 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.


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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
June 30, 2014
(unaudited)


The table below reconciles income from continuing operations to net income for the three and six months ended June 30,March 31, 2015 and 2014 and 2013 (in thousands):
 Three Months Ended June 30, Six Months Ended June 30, Three Months Ended March 31,
 2014 2013 2014 2013 2015 2014
Income from continuing operations before purchase price fair value adjustment and equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate $58,318
 $33,298
 $106,500
 $57,841
Purchase price fair value adjustment 71,446
 (2,305) 71,446
 (2,305)
Equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate 1,444
 (3,583) 106,084
 (3,583)
Income from continuing operations before equity in net gain on sale of interest in unconsolidated joint venture/real estate $42,226
 $46,203
Equity in net gain on sale of interest in unconsolidated joint venture/real estate —
 104,640
Income from continuing operations 131,208
 27,410
 284,030
 51,953
 42,226
 150,843
Net income from discontinued operations 4,389
 3,838
 8,178
 8,519
 427
 5,769
Gain on sale of discontinued operations 114,735
 —
 114,735
 1,113
 12,983
 —
Net income $250,332
 $31,248
 $406,943
 $61,585
 $55,636
 $156,612

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ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
SL Green Realty Corp., an S&P 500 Company, which is referred to as SL Green or the Company, a Maryland corporation, and SL Green Operating Partnership, L.P., which is referred to as SLGOP or the Operating Partnership, a Delaware limited partnership, were formed in June 1997 for the purpose of combining the commercial real estate business of S.L. Green Properties, Inc. and its affiliated partnerships and entities. The Company is a self-managed real estate investment trust, or REIT, with in-house capabilities in property management, acquisitions and dispositions, financing, development and redevelopment, construction and leasing. Unless the context requires otherwise, all references to "we," "our" and "us" means the Company and all entities owned or controlled by the Company, including the Operating Partnership.
Reckson Associates Realty Corp., or Reckson, and Reckson Operating Partnership, L.P. or ROP, are wholly-owned subsidiaries of the Operating Partnership.
The following discussion related to our consolidated financial statements should be read in conjunction with the financial statements appearing in this Quarterly Report on Form 10-Q and in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2013.2014.
As of June 30, 2014,March 31, 2015, we owned the following interests in commercial and residential properties in the New York Metropolitan area, primarily in midtown Manhattan. Our investments in the New York Metropolitan area also include investments in Brooklyn, Long Island, Westchester County, Connecticut and Northern New Jersey, which are collectively known as the Suburban properties:
 Consolidated Unconsolidated Total Consolidated Unconsolidated Total  
Location Type Number of Properties Square Feet Number of Properties Square Feet Number of Properties Square Feet 
Weighted Average Occupancy(1)
 Type Number of Properties Approximate Square Feet Number of Properties Approximate Square Feet Number of Properties Approximate Square Feet 
Weighted Average Occupancy(1)
Commercial:              Commercial:              
Manhattan Office 23
 18,429,045
 7
 3,476,115
 30
 21,905,160
 94.4% Office 23
 18,429,045
 7
 3,476,115
 30
 21,905,160
 96.0%
 Retail 7
(2) 389,317
 8
 432,250
 15
 821,567
 93.2% Retail 9
(2)403,735
 7
 279,628
 16
 683,363
 90.7%
 Development/Redevelopment 11
 2,063,790
 4
 1,605,782
 15
 3,669,572
 44.2% Development/Redevelopment 8
 883,862
 5
 1,952,782
 13
 2,836,644
 38.0%
 Fee Interest 2
 961,400
 —
 —
 2
 961,400
 100.0% Fee Interest 2
 783,530
 —
 —
 2
 783,530
 100.0%
 43
 21,843,552
 19
 5,514,147
 62
 27,357,699
 87.8% 42
 20,500,172
 19
 5,708,525
 61
 26,208,697
 89.7%
Suburban Office 27
 4,365,400
 4
 1,222,100
 31
 5,587,500
 81.7% Office 27
 4,365,400
 4
 1,222,100
 31
 5,587,500
 80.8%
 Retail 1
 52,000
 —
 —
 1
 52,000
 100.0% Retail 1
 52,000
 —
 —
 1
 52,000
 100.0%
 Development/Redevelopment 1
 85,000
 1
 65,641
 2
 150,641
 42.7% Development/Redevelopment 2
 86,000
 2
 65,641
 4
 151,641
 57.5%
 29
 4,502,400
 5
 1,287,741
 34
 5,790,141
 80.9% 30
 4,503,400
 6
 1,287,741
 36
 5,791,141
 80.3%
Total commercial propertiesTotal commercial properties 72
 26,345,952
 24
 6,801,888
 96
 33,147,840
 86.6%Total commercial properties 72
 25,003,572
 25
 6,996,266
 97
 31,999,838
 88.0%
Residential:                           
Manhattan Residential 2
(2) 653,337
 —
 —
 2
 653,337
 93.2% Residential 3
(2)735,587
 17
 2,046,733
 20
 2,782,320
 96.8%
Suburban Residential 1
 66,611
 —
 —
 1
 66,611
 84.4% Residential 1
 66,611
 —
 —
 1
 66,611
 84.4%
Total residential propertiesTotal residential properties 3
 719,948
 —
 —
 3
 719,948
 91.9%Total residential properties 4
 802,198
 17
 2,046,733
 21
 2,848,931
 96.4%
Total portfolioTotal portfolio 75
 27,065,900
 24
 6,801,888
 99
 33,867,788
 86.7%Total portfolio 76
 25,805,770
 42
 9,042,999
 118
 34,848,769
 88.7%

(1)The weighted average occupancy for commercial properties represents the total occupied square feet divided by total available rentable square feet. The weighted average occupancy for residential properties represents the total occupied units divided by total available units.
(2)
As of June 30, 2014,March 31, 2015, we owned a building that was comprised of approximately 270,132 square feet of retail space and approximately 222,855 square feet of residential space. For the purpose of this report, we have included the building as part ofin the retail properties count and have shownbifurcated the square footage under its respective classifications.
into the retail and residential components.

As of June 30, 2014,March 31, 2015, we also managed a 336,200an approximately 336,201 square foot office building owned by a third party. As of June 30, 2014, we alsoparty and held debt and preferred equity investments with a book value of $1.5 billion.$1.5 billion.
Critical Accounting Policies
Refer to the 20132014 Annual Report on Form 10-K of the Company and the Operating Partnership for a discussion of our critical accounting policies, which include investment in commercial real estate properties, investment in unconsolidated joint ventures,

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revenue recognition, allowance for doubtful accounts, reserve for possible credit losses and derivative instruments. There have been no changes to these accounting policies during the sixthree months ended June 30, 2014.March 31, 2015.
Results of Operations

Comparison of the three months ended June 30, 2014March 31, 2015 to the three months ended June 30, 2013March 31, 2014
The following comparison for the three months ended June 30, 2014,March 31, 2015, or 2014,2015, to the three months ended June 30, 2013,March 31, 2014, or 2013,2014, makes reference to the following:  (i) the effect of the “Same-Store Properties,” which represents all operating properties owned by us at January 1, 2014 and still owned by us in the same manner at January 1, 2013 and at June 30, 2014March 31, 2015 and totaled 5859 of our 7576 consolidated operating properties, representing 80.6%82.9% of our share of annualized cash rent, (ii) the effect of the “Acquisitions,“Acquisition Properties,” which represents all properties or interests in properties acquired in 20142015 and 20132014 and all non-Same-Store Properties, including properties that are under development, redevelopment or deconsolidated during the period, and (iii) “Other,” which represents corporate level items not allocable to specific properties, as well as the Service Corporation and eEmerge Inc. Any assets sold or held for sale are excluded from the income from continuing operations and from the following discussion.

 Same-Store Acquisition Other Consolidated Same-Store Acquisition Other Consolidated
(in millions) 2014 2013 
$
Change
 
%
Change
 2014 2013 2014 2013 2014 2013 
$
Change
 
%
Change
 2015 2014 
$
Change
 
%
Change
 2015 2014 2015 2014 2015 2014 
$
Change
 
%
Change
                                                
Rental revenue $248.5
 $243.5
 $5.0
 2.1 % $36.5
 $20.0
 $0.2
 $(0.7) $285.2
 $262.8
 $22.4
 8.5 % $258.8
 $248.8
 $10.0
 4.0% $43.6
 $7.3
 $0.9
 $(0.2) $303.3
 $255.9
 $47.4
 18.5 %
Escalation and reimbursement 35.8
 34.0
 1.8
 5.3 % 3.3
 4.5
 0.4
 0.2
 39.5
 38.7
 0.8
 2.1 % 40.3
 36.5
 3.8
 10.4% 0.3
 1.2
 0.4
 0.1
 41.0
 37.8
 3.2
 8.5 %
Investment income —
 —
 —
 — % —
 —
 39.7
 46.7
 39.7
 46.7
 (7.0) (15.0)% —
 —
 —
 —% 0.1
 —
 42.0
 54.1
 42.1
 54.1
 (12.0) (22.2)%
Other income 0.8
 1.2
 (0.4) (33.3)% 0.2
 0.1
 21.8
 4.4
 22.8
 5.7
 17.1
 300.0 % 1.5
 1.2
 0.3
 25.0% 4.0
 —
 4.4
 13.4
 9.9
 14.6
 (4.7) (32.2)%
Total revenues 285.1
 278.7
 6.4
 2.3 % 40.0
 24.6
 62.1
 50.6
 387.2
 353.9
 33.3
 9.4 % 300.6
 286.5
 14.1
 4.9% 48.0
 8.5
 47.7
 67.4
 396.3
 362.4
 33.9
 9.4 %
                                                
Property operating expenses 116.6
 112.9
 3.7
 3.3 % 11.7
 12.2
 3.6
 3.1
 131.9
 128.2
 3.7
 2.9 % 134.5
 124.2
 10.3
 8.3% 2.7
 4.2
 3.5
 1.8
 140.7
 130.2
 10.5
 8.1 %
Transaction related costs, net of recoveries —
 —
 —
 — % 0.5
 0.2
 1.2
 1.5
 1.7
 1.7
 —
 — %
Transaction related costs —
 0.8
 (0.8) 0.0 %
 (0.2) 0.5
 1.3
 1.2
 1.1
 2.5
 (1.4) (56.0)%
Marketing, general and administrative —
 —
 —
 — % —
 —
 23.9
 21.5
 23.9
 21.5
 2.4
 11.2 % —
 —
 —
 —% —
 —
 25.5
 23.3
 25.5
 23.3
 2.2
 9.4 %
Total expenses 116.6
 112.9
 3.7
 3.3 % 12.2
 12.4
 28.7
 26.1
 157.5
 151.4
 6.1
 4.0 %
 134.5
 125.0
 9.5
 7.6% 2.5
 4.7
 30.3
 26.3
 167.3
 156.0
 11.3
 7.2 %
                        
Net operating income $168.5
 $165.8
 $2.7
 1.6 % $27.8
 $12.2
 $33.4
 $24.5
 229.7
 202.5
 27.2
 13.4 % $166.1
 $161.5
 $4.6
 2.8% $45.5
 $3.8
 $17.4
 $41.1
 $229.0
 $206.4
 $22.6
 10.9 %
                        
Other income (expenses):                                                
Interest expense, net of interest income                 (84.1) (83.8) (0.3) 0.4 %
Interest expense and amortization of deferred financing costs, net of interest income                 (82.5) (79.8) (2.7) 3.4 %
Depreciation and amortization                 (94.8) (81.6) (13.2) 16.2 %                 (108.3) (86.5) (21.8) 25.2 %
Equity in net income (loss) from unconsolidated joint ventures                 8.6
 (3.8) 12.4
 326.3 %
Equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate                 1.4
 (3.6) 5.0
 138.9 %
Purchase price fair value adjustment                 71.4
 (2.3) 73.7
 3,204.3 %
Loss on early extinguishment of debt                 (1.0) —
 (1.0) 100.0 %
Equity in net income from unconsolidated joint ventures                 4.0
 6.1
 (2.1) (34.4)%
Equity in net gain on sale of interest in unconsolidated joint venture/real estate                 —
 104.6
 (104.6) (100.0)%
(Loss) gain on early extinguishment of debt                 —
 —
 —
 — %
Income from continuing operation                 131.2
 27.4
 103.8
 378.8 %                 42.2
 150.8
 (108.6) (72.0)%
Net income from discontinued operations                 4.4
 3.8
 0.6
 15.8 %                 0.4
 5.8
 (5.4) (93.1)%
Gain on sale of discontinued operations                 114.7
 —
 114.7
 100.0 %                 13.0
 —
 13.0
 100.0 %
Net income                 $250.3
 $31.2
 $219.1
 702.2 %                 $55.6
 $156.6
 $(101.0) (64.5)%


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Rental, Escalation and Reimbursement Revenues

Rental revenues increased primarily as a result of the properties acquired ($36.3 million), which included the consolidation of 388-390 Greenwich Street ($36.8 million) in 2014, and an increase in occupancy at our Same-Store Properties ($10.0 million). In May 2014, we acquired our joint venture partner's interest in 388-390 Greenwich Street thereby assuming full ownership of this triple net lease property. As a result of this acquisition, we consolidated the results of operations of this property beginning in May 2014. Prior to May 2014, we accounted for our investments in 388-390 Greenwich Street under the equity method of accounting.
Escalation and reimbursement revenue increased primarily as a result of higher real estate tax recoveries ($2.9 million) and higher operating expense escalations and electric reimbursements ($0.9 million) at the Same-Store Properties mainly attributable to increases in the related expenses.
Occupancy forin our Same-Store consolidated office operating properties increased to 90.9%93.4% at June 30, 2014March 31, 2015 as compared to 90.5%91.6% at June 30, 2013.March 31, 2014. Occupancy forin our Same-Store Manhattan consolidated office operating portfolio, excluding leases signed but not yet commenced, increased to 94.1%95.7% at June 30, 2014March 31, 2015 as compared to 93.8%93.7% at June 30, 2013.March 31, 2014. Occupancy for our Same-Store Suburban consolidated office operating portfolio, excluding leases signed but not yet commenced, increased to 79.6%81.0% at June 30, 2014March 31, 2015 as compared to 77.9%78.7% at June 30, 2013.March 31, 2014.
Rental revenues depend on our ability to maintain the occupancy rates of currently leased space and to lease currently available space and space available from unscheduled lease terminations.
The following table presents a summary of the commenced leasing activity for the three months ended June 30, 2014March 31, 2015 in our Manhattan and Suburban portfolio:
Useable
SF
 
Rentable
SF
 
New
Cash
Rent (per
rentable
SF) (1)
 
Prev.
Escalated
Rent (per
rentable
SF) (2)
 
TI/LC
per
rentable
SF
 
Free
Rent (in
months)
 
Average
Lease
Term (in
years)
Useable
SF
 
Rentable
SF
 
New
Cash
Rent (per
rentable
SF) (1)
 
Prev.
Escalated
Rent (per
rentable
SF) (2)
 
TI/LC
per
rentable
SF
 
Free
Rent (in
months)
 
Average
Lease
Term (in
years)
Manhattan 
  
  
  
  
  
  
 
  
  
  
  
  
  
Vacancy at beginning of period1,363,729
  
  
  
  
  
  
Vacancy at beginning of year1,030,205
  
  
  
  
  
  
Sold vacancies(3,653)            —
           
Properties in redevelopment:(61,123)            
Space which became available during the period(3)           
  
  
  
  
  
  
Properties under development—
           
Properties placed in service—
           
Space which became available during the year(3)
   
  
  
  
  
  
• Office157,512
  
  
  
  
  
  
68,450
  
  
  
  
  
  
• Retail—
  
  
  
  
  
  
1,701
  
  
  
  
  
  
• Storage279
  
  
  
  
  
  
—
  
  
  
  
  
  
157,791
  
  
  
  
  
  
70,151
  
  
  
  
  
  
Total space available1,456,744
  
  
  
  
  
  
1,100,356
  
  
  
  
  
  
Space leased during the period: 
  
  
  
  
  
  
• Office(4)221,908
 258,307
 $50.49
 $54.26
 $78.82
 7.0
 14.9
Leased space commenced during the year: 
  
  
  
  
  
  
• Office(4)
217,457
 238,695
 $59.34
 $53.94
 $53.57
 4.5
 8.4
• Retail298
 392
 $91.84
 $122.13
 $21.31
 4.0
 10.3
3,484
 4,415
 $1,073.83
 $314.96
 $—
 3.9
 11.9
• Storage47
 97
 $25.00
 $28.26
 $4.94
 —
 5.1
1,745
 1,745
 $9.43
 $—
 $—
 4.9
 10.7
Total space leased222,253
 258,796
 $50.55
 $54.42
 $78.70
 5.7
 14.9
Total leased space commenced222,686
 244,855
 $77.28
 $62.85
 $52.22
 4.5
 8.5
                         
Total available space at end of the period1,234,491
  
  
  
  
  
  
Total available space at end of year877,670
  
  
  
  
  
  
                         
Early renewals 
  
  
  
  
  
  
 
    
  
  
  
  
• Office55,992
 56,631
 $62.04
 $52.93
 $14.70
 1.2
 5.7
58,101
 61,612
 $71.17
 $65.25
 $12.03
 3.1
 7.2
• Retail11,517
 11,673
 $84.48
 $53.86
 $29.14
 0.40
 12.4
—
 —
 $—
 $—
 $—
 —
 0
• Storage—
 —
 $—
 $—
 $—
 —
 —
381
 443
 $35.00
 $33.94
 $—
 —
 6.2
Total early renewals67,509
 68,304
 $65.87
 $53.09
 $17.16
 1.0
 6.8
58,482
 62,055
 $70.91
 $65.02
 $11.94
 3.1
 7.2
                         
Total commenced leases, including replaced previous vacancy 
  
  
  
  
  
  
 
  
         
• Office 
 314,938
 $52.57
 $53.90
 $67.29
 6.0
 13.2
 
 300,307
 $61.77
 $57.67
 $45.05
 4.2
 8.1
• Retail 
 12,065
 $84.72
 $56.08
 $28.88
 0.5
 12.3
 
 4,415
 $1,073.83
 $314.96
 $—
 3.9
 12.0
• Storage 
 97
 $25.00
 $28.26
 $4.94
 —
 5.1
 
 2,188
 $14.61
 $33.94
 $—
 3.9
 9.8
Total commenced leases 
 327,100
 $53.75
 $54.01
 $65.85
 5.7
 13.2
 
 306,910
 $75.99
 $63.55
 $44.08
 4.2
 8.2

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Useable
SF
 
Rentable
SF
 
New
Cash
Rent (per
rentable
SF) (1)
 
Prev.
Escalated
Rent (per
rentable
SF) (2)
 
TI/LC
per
rentable
SF
 
Free
Rent (in
months)
 
Average
Lease
Term (in
years)
Useable
SF
 
Rentable
SF
 
New
Cash
Rent (per
rentable
SF) (1)
 
Prev.
Escalated
Rent (per
rentable
SF) (2)
 
TI/LC
per
rentable
SF
 
Free
Rent (in
months)
 
Average
Lease
Term (in
years)
Suburban 
  
  
  
  
  
  
 
  
  
  
  
  
  
Vacancy at beginning of period1,151,477
  
  
  
  
  
  
1,128,724
  
  
  
  
  
  
Space which became available during the period(3)   
  
  
  
  
  
Properties placed in service—
           
Space which became available during the year(3)
   
  
  
  
  
  
• Office41,572
  
  
  
  
  
  
199,603
  
  
  
  
  
  
• Retail700
  
  
  
  
  
  
—
  
  
  
  
  
  
• Storage300
  
  
  
  
  
  
3,672
  
  
  
  
  
  
42,572
  
  
  
  
  
  
203,275
  
  
  
  
  
  
Total space available1,194,049
  
  
  
  
  
  
1,331,999
  
  
  
  
  
  
Space leased during the year: 
  
  
  
    
  
• Office(5)57,665
 59,066
 $30.85
 $33.55
 $37.77
 3.7
 7.0
Leased space commenced during the year: 
  
  
  
  
  
  
• Office(5)
110,518
 111,711
 $32.61
 $35.10
 $18.03
 5.6
 7.5
• Retail—
 —
 $—
 $—
 $—
 —
 —
—
 —
 $—
 $—
 $—
 —
 0
• Storage100
 115
 $15.00
 $13.04
 $—
 —
 3.0
450
 450
 $18.00
 $12.00
 $—
 —
 5.0
Total space leased57,765
 59,181
 $30.82
 $33.46
 $37.70
 3.7
 7.0
Total leased space commenced110,968
 112,161
 $32.56
 $34.95
 $17.96
 5.6
 7.5
                         
Total available space at end of the period1,136,284
  
          
Total available space at end of the year1,221,031
  
         
                         
Early renewals 
  
           
  
         
• Office11,656
 12,361
 $33.85
 $33.20
 $6.72
 1.8
 4.3
50,340
 50,884
 $35.49
 $34.83
 $6.10
 2.9
 4.3
• Retail—
 —
 $—
 $—
 $—
 —
 —
—
 —
 $—
 $—
 $—
 —
 0
• Storage—
 —
 $—
 $—
 $—
 —
 —
—
 —
 $—
 $—
 $—
 —
 0
Total early renewals11,656
 12,361
 $33.85
 $33.20
 $6.72
 1.8
 4.3
50,340
 50,884
 $35.49
 $34.83
 $6.10
 2.9
 4.3
                         
Total commenced leases, including replaced previous vacancy 
  
  
  
  
  
  
 
  
  
  
  
  
  
• Office 
 71,427
 $31.37
 $33.44
 $32.40
 3.4
 6.6
 
 162,595
 $33.52
 $34.99
 $14.30
 4.7
 6.5
• Retail 
 —
 $—
 $—
 $—
 —
 —
 
 —
 $—
 $—
 $—
 —
 0
• Storage 
 115
 $15.00
 $13.04
 $—
 —
 3.0
 
 450
 $18.00
 $12.00
 $—
 —
 5.0
Total commenced leases 
 71,542
 $31.35
 $33.38
 $32.34
 3.4
 6.5
 
 163,045
 $33.47
 $34.90
 $14.26
 4.7
 6.5

(1)Annual initial base rent.
(2)Escalated rent is calculated as total annual income less electric charges.
(3)Includes expiring space, relocating tenants and move-outs where tenants vacated. Excludes lease expirations where tenants held over.
(4)Average starting office rent excluding new tenants replacing vacancies was $51.24$58.96 per rentable square feet for 151,354124,899 rentable square feet. Average starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $54.18$62.99 per rentable square feet for 207,985186,511 rentable square feet.
(5)Average starting office rent excluding new tenants replacing vacancies was $34.01$34.28 per rentable square feet for 26,20172,102 rentable square feet. Average starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $33.96$34.78 per rentable square feet for 38,562122,986 rentable square feet.
At June 30, 2014, 1.7%March 31, 2015, 2.9% and 5.9%8.6% of the office space leased at our consolidated Manhattan and Suburban operating properties, respectively, is expected to expire during the remainder of 2014.2015. Based on our estimates at March 31, 2015, the current market asking rents on these expected 20142015 lease expirations at our consolidated Manhattan operating properties would be approximately 64.1%are 8.1% higher than the existing in-place fully escalated rents while the current market asking rents on all our consolidated Manhattan operating properties were approximately 19.2%are 13.6% higher than the existing in-place fully escalated rents on leases that are scheduled to expire in all future years. Based on our estimates at March 31, 2015, the current market asking rents on these expected 20142015 lease expirations at our consolidated Suburban operating properties would be approximately 2.0%are 4.0% lower than the existing in-place fully escalated rents while the current market asking rents on all our consolidated Suburban operating properties were approximately 3.8%are 2.4% higher than the existing in-place fully escalated rents on leases that are scheduled to expire in all future years.
In May 2014, we acquired our joint partner's interest in 388-390 Greenwich Street thereby assuming full ownership of this triple net lease property. Prior to May 2014, we had accounted for our investment in 388-390 Greenwich Street under the equity method of accounting. AsInvestment Income
Investment income decreased primarily as a result of this acquisition,additional income recognized during the three months ended March 31, 2014 for a mezzanine investment that was previously on non-accrual for which the underlying property was sold ($10.1 million) and a financing receivable which we have consolidatedbegan accruing interest following the resultscompletion of operationsthe development of thisthe underlying property beginning in May 2014.($4.2 million). This decrease was partially offset by a higher invested balance during the first quarter of 2015. For the

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Rental revenues increased primarily as a result ofthree months ended March 31, 2015, the consolidation of 388-390 Greenwich Street ($14.9 million), properties acquired in 2013 ($8.8 million) and an overall increase in occupancy at the Same-Store Properties ($5.0 million). This increase was partially offset by lower revenues from development properties ($7.6 million).
Escalation and reimbursement revenue increased primarily as a result of the higher recoveries at the Same Store Properties ($1.8 million) and properties acquired in 2013 ($1.2 million). The increase in escalation and reimbursement revenue at the Same-Store Properties was primarily a result of higher operating expense escalations ($1.5 million) and real estate tax recoveries ($0.6 million).
Investment Income
Investment income increased primarily as a result of a higher investment balance in 2014, partially offset by the repayment of one of our debt investments in 2013, in which we recognized additional income of $6.4 million. The weighted average debt and preferred equity investment balance outstanding and weighted average yield were $1.5 billion and 10.4%, respectively, compared to $1.4 billion and 10.6%, respectively, for the three months ended June 30, 2014 compared to $1.3 billion and 11.0% during the three months ended June 30, 2013.same period in 2014. As of June 30, 2014, ourMarch 31, 2015, the debt and preferred equity investments had a weighted average term to maturity of 1.81.9 years.
Other Income 
Other income increaseddecreased primarily as a result of a promoteincentive income earnedreceived in connection with the sale of our2014 from a joint venture interest in 747 Madison Avenueinvestment ($10.3 million), a one-time fee earned in connection with the restructuring of one of our debt investments ($5.77.6 million) and higher contributionlower contributions from Service Corporation ($2.3 million).
Property Operating Expenses
Property operating expenses increased primarily as a result of the properties acquired in 2013 ($4.1 million) and higher operating expenses at the Same Store Properties ($3.7 million), partially offset by lower operating expenses from development properties ($4.6 million). The increase in property operating expenses at the Same-Store Properties was due mainly to higher real estate taxes ($1.4 million), utility costs ($1.0 million) and payroll costs ($0.9 million).
Marketing, General and Administrative Expenses
Marketing, general and administrative expenses for the three months ended June 30, 2014 were $23.9 million, or 5.4% of total revenues including our share of joint venture revenues and an annualized 50 basis points of total assets including our share of joint venture assets compared to $21.5 million, or 5.1% of total revenues including our share of joint venture revenues and an annualized 50 basis points of total assets including our share of joint venture assets for the three months ended June 30, 2013.
Interest Expense, Net of Interest Income
Interest expense, net of interest income, increased primarily as a result of the new mortgage at 388-390 Greenwich Street ($5.6 million) and an increased borrowing on the 2012 credit facility ($1.1 million). This increase was partially offset by the the capitalization of interest relating to properties under development ($3.8 million) and the refinancing of 220 East 42nd Street at a lower rate in 2013 ($1.1 million). The weighted average debt balance outstanding increased from $6.8 billion during the three months ended June 30, 2013 to $7.8 billion during the three months ended June 30, 2014. The weighted average interest rate decreased from 4.91% for the three months ended June 30, 2013 to 4.38% for the three months ended June 30, 2014.
Depreciation and Amortization
Depreciation and amortization increased mainly as a result of the properties acquired in 2013 ($5.9 million), the write-off of certain tenant improvements and value for in-place leases associated with a former tenant ($3.4 million), and the consolidation of 388-390 Greenwich ($3.3 million).
Equity in Net Income from Unconsolidated Joint Ventures
Equity in net income from unconsolidated joint ventures increased primarily as a result of net loss recognized in the second quarter of 2013 from the West Coast Office portfolio ($5.3 million), which interests were sold in March 2014, a debt and preferred equity investment that was originated in the first quarter of 2014 ($2.6 million) which we have accounted for as a real estate investment rather than a debt and preferred equity investment, increased occupancy at 280 Broadway ($1.8 million) and 3 Columbus Circle ($1.1 million) and the refinancing of 100 Park Avenue at a lower rate ($0.9 million). This increase was partially offset by lower net income contributions from 388-390 Greenwich ($3.3 million) as a result of our acquisition of the joint venture partner's interest. Occupancy at our unconsolidated Manhattan office properties was 91.4% and 87.4% at June 30, 2014 and 2013, respectively. Occupancy at our unconsolidated Suburban office properties was 89.3% and 84.3% at June 30, 2014 and 2013, respectively. At June 30, 2014, 2.9% and 18.9% of the space leased at our Manhattan and Suburban joint venture office properties, respectively, were expected to expire during the remainder of 2014. We estimate that current market asking rents on these expected 2014 lease expirations at our Manhattan and Suburban joint venture properties are approximately 47.5% higher and 4.9% lower, respectively, than then existing in-place fully escalated rents.

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Equity in Net Gain on Sale of Interest in Unconsolidated Joint Ventures/Real Estate
During the three months ended June 30, 2014, we recognized a gain on sale associated with the sale of condominium units at 248 Bedford Avenue, Brooklyn ($1.4 million). During the three months ended June 30, 2013, we recognized additional post closing costs related to the sale of 521 Fifth Avenue ($1.9 million), partially offset by the sale of two properties included in the West Coast portfolio ($1.5 million).
Purchase price fair value adjustment
Purchase price fair value adjustment for the three months ended June 30, 2014 and 2013 was attributable to the acquisition of our joint venture partner interest in 388-390 Greenwich Street and 16 Court Street, Brooklyn, respectively.
Loss on Early Extinguishment of Debt
Loss on early extinguishment of debt for the three months ended June 30, 2014 was attributable to the refinancing of the previous mortgage at 248-252 Bedford Avenue ($0.5 million) and the early repayment of the mortgage at 16 Court Street, Brooklyn ($0.5 million).
Discontinued Operations
Discontinued operations for the three months ended June 30, 2014 includes the gain recognized on the sale of 673 First Avenue ($117.8 million) and the results of operations of 673 First Avenue, which was sold in April 2014,and 2 Herald Square and 985-987 Third Avenue, which were held for sale at June 30, 2014. Discontinued operations for the three months ended June 30, 2013 includes the results of operations for 673 First Avenue, 2 Herald Square, 985-987 Third Avenue, and 333 West 34th Street and 300 Main Street, which were sold in August and September 2013, respectively.

Comparison of the six months ended June 30, 2014 to the six months ended June 30, 2013
The following comparison for the six months ended June 30, 2014, or 2014, to the six months ended June 30, 2013, or 2013, makes reference to the following:  (i) the effect of the “Same-Store Properties,” which represents all operating properties owned by us in the same manner at January 1, 2013 and at June 30, 2014 and totaled 58 of our 75 consolidated properties, representing 80.6% of our share of annualized cash rent, (ii) the effect of the “Acquisitions,” which represents all properties or interests in properties acquired in 2014 and 2013 and all non-Same-Store Properties, including properties that are under development or deconsolidated during the period, and (iii) “Other,” which represents corporate level items not allocable to specific properties, as well as the Service Corporation and eEmerge Inc.  Any assets sold or held for sale are excluded from the income from continuing operations and from the following discussion.


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  Same-Store Acquisition Other Consolidated
(in millions) 2014 2013 
$
Change
 
%
Change
 2014 2013 2014 2013 2014 2013 
$
Change
 
%
Change
                         
Rental revenue $487.5
 $483.0
 $4.5
 0.9 % $64.2
 $38.0
 $0.1
 $(2.4) $551.8
 $518.6
 $33.2
 6.4 %
Escalation and reimbursement 70.9
 69.7
 1.2
 1.7 % 8.6
 8.6
 0.4
 0.3
 79.9
 78.6
 1.3
 1.7 %
Investment income —
 —
 —
 — % —
 —
 93.8
 99.4
 93.8
 99.4
 (5.6) (5.6)%
Other income 2.0
 3.4
 (1.4) (41.2)% 0.2
 0.3
 35.1
 7.3
 37.3
 11.0
 26.3
 239.1 %
Total revenues 560.4
 556.1
 4.3
 0.8 % 73.0
 46.9
 129.4
 104.6
 762.8
 707.6
 55.2
 7.8 %
                         
Property operating expenses 235.2
 231.1
 4.1
 1.8 % 28.1
 23.8
 5.5
 5.1
 268.8
 260.0
 8.8
 3.4 %
Transaction related costs, net of recoveries —
 —
 —
 — % 1.7
 0.6
 2.5
 2.5
 4.2
 3.1
 1.1
 35.5 %
Marketing, general and administrative —
 —
 —
 — % —
 —
 47.1
 42.6
 47.1
 42.6
 4.5
 10.6 %
Total expenses 235.2
 231.1
 4.1
 1.8 % 29.8
 24.4
 55.1
 50.2
 320.1
 305.7
 14.4
 4.7 %
Net operating income $325.2
 $325.0
 $0.2
 0.1 % $43.2
 $22.5
 $74.3
 $54.4
 442.7
 401.9
 40.8
 10.2 %
Other income (expenses):                        
Interest expense, net of interest income                 (165.7) (166.5) 0.8
 (0.5)%
Depreciation and amortization                 (184.2) (160.2) (24.0) 15.0 %
Equity in net income from unconsolidated joint ventures                 14.7
 1.3
 13.4
 1,030.8 %
Equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate                 106.1
 (3.6) 109.7
 3,047.2 %
Purchase price fair value adjustment                 71.4
 (2.3) 73.7
 3,204.3 %
Loss on sale of investment in marketable securities                 —
 (0.1) 0.1
 (100.0)%
Loss on early extinguishment of debt                 (1.0) (18.5) 17.5
 (94.6)%
Income from continuing operation                 284.0
 52.0
 232.0
 446.2 %
Net income from discontinued operations                 8.2
 8.5
 (0.3) (3.5)%
Gain on sale of discontinued operations                 114.7
 1.1
 113.6
 10,327.3 %
Net income                 $406.9
 $61.6
 $345.3
 560.6 %

Rental, Escalation and Reimbursement Revenues

Occupancy in the Same-Store consolidated office properties increased to 90.9% at June 30, 2014 as compared to 90.5% at June 30, 2013. Occupancy for our Same-Store Manhattan consolidated office portfolio increased to 94.1% at June 30, 2014 as compared to 93.8% at June 30, 2013. Occupancy for our Suburban consolidated office portfolio increased to 79.6% at June 30, 2014 as compared to 77.9% at June 30, 2013.
Rental revenues depend on our ability to maintain the occupancy rates of currently leased space and to lease currently available space and space available from unscheduled lease terminations.

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The following table presents a summary of the leasing activity for the six months ended June 30, 2014 in our Manhattan and Suburban portfolio:
 
Useable
SF
 
Rentable
SF
 
New
Cash
Rent (per
rentable
SF) (1)
 
Prev.
Escalated
Rent (per
rentable
SF) (2)
 
TI/LC
per
rentable
SF
 
Free
Rent (in
months)
 
Average
Lease
Term (in
years)
Manhattan 
  
  
  
  
  
  
Vacancy at beginning of period1,155,271
  
  
  
  
  
  
Sold vacancies(3,653)            
Properties under redevelopment(61,123)            
Properties out of redevelopment155,684
            
Space which became available during the period(3)           
  
  
  
  
  
  
•       Office531,511
  
  
  
  
  
  
•       Retail5,700
  
  
  
  
  
  
•       Storage1,369
  
  
  
  
  
  
 538,580
  
  
  
  
  
  
Total space available1,784,759
  
  
  
  
  
  
Space leased during the period: 
  
  
  
  
  
  
•       Office(4)531,671
 596,472
 $55.78
 $54.62
 $60.67
 4.6
 9.8
•       Retail18,550
 18,819
 $87.70
 $66.81
 $44.10
 4.9
 15.0
•       Storage47
 97
 $25.00
 $28.26
 $4.94
 —
 5.1
Total space leased550,268
 615,388
 $56.75
 $54.81
 $60.16
 4.6
 10.0
              
Total available space at end of the period1,234,491
  
  
  
  
  
  
              
Early renewals 
  
  
  
  
  
  
•       Office193,970
 211,111
 $63.18
 $53.08
 $13.28
 1.4
 5.0
•       Retail11,517
 11,673
 $84.48
 $53.86
 $29.14
 0.40
 12.4
•       Storage1,569
 1,539
 $31.78
 $26.61
 $0.99
 —
 4.6
Total early renewals207,056
 224,323
 $64.07
 $52.94
 $14.02
 1.3
 5.4
              
Total commenced leases, including replaced previous vacancy 
  
  
  
  
  
  
•       Office 
 807,583
 $57.71
 $54.06
 $48.28
 3.7
 8.6
•       Retail 
 30,492
 $86.47
 $58.24
 $38.37
 3.2
 14.0
•       Storage 
 1,636
 $31.37
 $26.71
 $1.22
 —
 4.6
Total commenced leases 
 839,711
 $58.71
 $54.11
 $47.83
 3.7
 8.8

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Useable
SF
 
Rentable
SF
 
New
Cash
Rent (per
rentable
SF) (1)
 
Prev.
Escalated
Rent (per
rentable
SF) (2)
 
TI/LC
per
rentable
SF
 
Free
Rent (in
months)
 
Average
Lease
Term (in
years)
Suburban 
  
  
  
  
  
  
Vacancy at beginning of period1,069,848
  
  
  
  
  
  
Property out of redevelopment112,921
            
Space which became available during the period(3)   
  
  
  
  
  
•       Office133,601
  
  
  
  
  
  
•       Retail1,385
  
  
  
  
  
  
•       Storage650
  
  
  
  
  
  
 135,636
  
  
  
  
  
  
Total space available1,318,405
  
  
  
  
  
  
Space leased during the year: 
  
  
  
    
  
•       Office(5)181,871
 188,812
 $30.18
 $30.78
 $32.00
 3.7
 7.2
•       Retail—
 —
 $—
 $—
 $—
 —
 —
•       Storage250
 265
 $14.66
 $13.09
 $—
 —
 4.4
Total space leased182,121
 189,077
 $30.15
 $30.73
 $31.96
 3.7
 7.2
              
Total available space at end of the period1,136,284
  
          
              
Early renewals 
  
          
•       Office32,717
 35,814
 $33.42
 $31.90
 $12.15
 2.2
 5.8
•       Retail—
 —
 $—
 $—
 $—
 —
 —
•       Storage—
 —
 $—
 $—
 $—
 —
 —
Total early renewals32,717
 35,814
 $33.42
 $31.90
 $12.15
 2.20
 5.8
              
Total commenced leases, including replaced previous vacancy 
  
  
  
  
  
  
•       Office 
 224,626
 $30.69
 $31.09
 $28.84
 3.4
 7.0
•       Retail 
 —
 $—
 $—
 $—
 —
 —
•       Storage 
 265
 $14.66
 $13.09
 $—
 —
 4.4
Total commenced leases 
 224,891
 $30.67
 $31.05
 $28.80
 3.4
 7.0

(1)
Annual initial base rent.
(2)
Escalated rent is calculated as total annual income less electric charges.
(3)
Includes expiring space, relocating tenants and move-outs where tenants vacated. Excludes lease expirations where tenants held over.
(4)
Average starting office rent excluding new tenants replacing vacancies was $55.00 per rentable square feet for 365,338 rentable square feet. Average starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $58.00 per rentable square feet for 576,449 rentable square feet.
(5)
Average starting office rent excluding new tenants replacing vacancies was $31.16 per rentable square feet for 94,388 rentable square feet. Average starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $31.78 per rentable square feet for 130,302 rentable square feet.
At June 30, 2014, 1.7% and 5.9% of the space leased at our consolidated Manhattan and Suburban operating properties, respectively, is expected to expire during the remainder of 2014. Based on our estimates, the current market asking rents on these expected 2014 lease expirations at our consolidated Manhattan operating properties would be approximately 64.1% higher than the existing in-place fully escalated rents while the current market asking rents on all our consolidated Manhattan operating properties were approximately 19.2% higher than the existing in-place fully escalated rents on leases that are scheduled to expire in all future years. Based on our estimates, the current market asking rents on these expected 2014 lease expirations at our consolidated Suburban operating properties would be approximately 2.0% lower than the existing in-place fully escalated rents while the current market asking rents on all our consolidated Suburban operating properties were approximately 3.8% higher than the existing in-place fully escalated rents on leases that are scheduled to expire in all future years.
In May 2014, we acquired our joint partner's interest in 388-390 Greenwich Street thereby assuming full ownership of this triple net lease property. Prior to May 2014, we had accounted for our investment in 388-390 Greenwich Street under the equity

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method of accounting. As a result of this acquisition, we have consolidated the results of operations of this property beginning in May 2014.
Rental revenues increased primarily as a result of the properties acquired in 2013 ($19.2 million), the consolidation of 388-390 Greenwich Street ($14.8 million) and an overall increase in occupancy at the Same Store Properties ($4.5 million).
Escalation and reimbursement revenue increased primarily as a result of the properties acquired in 2013 ($2.7 million) and higher recoveries at the Same Store Properties ($1.2 million), partially offset by lower recoveries from development properties ($2.5 million). The increase in escalation and reimbursement revenue at the Same-Store Properties was primarily a result of higher real estate tax recoveries ($1.5 million) and operating expense escalations ($1.1 million), partially offset by lower electric reimbursements ($1.4 million).
Investment Income
Investment income decreased primarily as a result of the sale of 50% of our interest in one of our debt investments in 2013 ($12.9 million) and the repayment of one of our debt investments, in which we recognized additional income in 2013 ($6.4 million), partially offset by a higher investment balance in 2014 and additional income recognized on a mezzanine investment for which the underlying property was sold in June 2014 ($10.1 million). The weighted average debt and preferred equity investment balance outstanding and weighted average yield were $1.4 billion and 10.7%, respectively, for the six months ended June 30, 2014 compared to $1.2 billion and 10.4%, respectively, for the six months ended June 30, 2013. As of June 30, 2014, our debt and preferred equity investments had a weighted average term to maturity of 1.8 years.
Other Income
Other income increased primarily as a result of a promote income earned in connection with the sale of our joint venture interest in 747 Madison Avenue ($10.3 million), incentive incomenon-recurring fee received from a joint venture investmentcurrent tenant in 2015 ($7.7 million), a one-time fee earned in connection with the restructuring of one of our debt investments ($5.7 million) and a higher contribution from Service Corporation ($6.23.5 million).
Property Operating Expenses
Property operating expenses increased primarily as a result of higher operating expenses for the properties acquired in 2013 ($9.8 million) and at the Same StoreSame-Store Properties ($4.1 million), partially offset by lower operating expenses from development properties ($5.310.3 million). The increase in property operating expenses at the Same-Store Properties was due mainly toa result of higher real estate taxes ($2.14.5 million), which was driven by higher assessed values and tax rates, utility expenses due, in part, to seasonality ($2.0 million), repairs and maintenance ($1.0 million) and payroll costs ($1.70.5 million).
Transaction Related Costs
Transaction related costs increased primarily as a result of a higher volume of investment activity during the six months ended June 30, 2014.
Marketing, General and Administrative Expenses
Marketing, general and administrative, or MG&A, expenses increased primarily from the impact of stock based compensation related charges as a result of the issuance of stock based awards in the first quarter. MG&A expenses for the sixthree months ended June 30, 2014March 31, 2015 were $47.1$25.5 million, or 5.3%5.6% of total revenues including our share of joint venture revenues, and an annualized 5053 basis points of total assets including our share of joint venture assets compared to $42.6$23.3 million, or 5.1%5.4% of total revenues including our share of joint venture revenues, and an annualized 5053 basis points of total assets including our share of joint venture assets for the six months ended June 30, 2013.same period in 2014.
Interest Expense and Amortization of Deferred Financing Costs, Net of Interest Income
Interest expense and amortization of deferred financing costs, net of interest income, decreased primarilyincreased as a result of the capitalizationacquisition of our joint venture partner's interest relating to properties under development ($5.4 million), the refinancing of 220 East 42nd Street at a lower rate ($2.0 million) and decreased borrowing on the MRA facility ($1.6 million), partially offset by a new mortgage at 388-390 Greenwich Street ($5.611.2 million) and an, increased borrowingborrowings on the 2012 credit facility ($2.01.3 million) and the purchase of interest rate swaps during the fourth quarter of 2014 ($1.1 million). This increase was partially offset by the repayment of the mortgages at 625 Madison Avenue ($2.2 million) and 125 Park Avenue ($1.5 million) during the fourth quarter of 2014, decreased borrowings on our MRA ($1.1 million) and the repayment of 5.875% senior notes in August 2014 ($1.1 million). The weighted average consolidated debt balance outstanding increased from $6.8$7.1 billion duringfor the sixthree months ended June 30, 2013March 31, 2014 to $7.5$8.3 billion duringfor the sixthree months ended June 30, 2014.March 31, 2015. The weighted average interest rate decreased from 4.90%4.60% for the sixthree months ended June 30, 2013March 31, 2014 to 4.49%3.94% for the sixthree months ended June 30, 2014.March 31, 2015.
Depreciation and Amortization
Depreciation and amortization increased mainlyprimarily as a result of the properties acquired in 2013Acquisition Properties ($13.521.5 million), the write-off of certain tenant improvements and value for in-place leases associated with a former tenant ($3.4 million) andwhich included the consolidation of 388-390 Greenwich Street in 2014 ($3.320.4 million).
Equity in Net Income fromFrom Unconsolidated Joint Ventures
Equity in net income from unconsolidated joint ventures increaseddecreased primarily as a result of lower net loss recognizedincome contributions from 388-390 Greenwich ($5.4 million) as a result of our acquisition of our joint venture partner's interest in May 2014, the refinancing and early prepayment of 3 Columbus Circle in the first quarter of 2015 ($0.9 million) and 724 Fifth Avenue in the second quarter of 20132014 ($0.8 million), and 180 Broadway ($0.7 million), which was sold in September 2014. This increase was partially offset by higher contributions from the West Coast Office portfoliorefinancing and early prepayment in 2014 of 100 Park Avenue ($8.12.6 million), which interests were sold in March 2014, and a debt and preferred equity investment that was originated late in the first quarter of 2014 ($2.62.1 million), which we havehas been accounted for as a real estate

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investment rather than a debt and preferredan equity investment, an early renewal of a retail tenant,and net ofloss recognized in 2014 from the effect of a refinancing at 724 Fifth AvenueWest Coast Office portfolio ($1.42.4 million), and the commencement of leases following the completion of the redevelopment projectwhich interests were sold in June 2013 at 180 Broadway ($1.2 million). This increase was partially offset by lower net income from 388-390 Greenwich ($3.1 million) as a result of our acquisition of the joint venture partner's interest and the loss on extinguishment of debt partially offset by a lower interest rate associated with the refinancing of debt at 100 Park Avenue ($1.1 million). March 2014.
Occupancy at our unconsolidated Manhattan office operating properties was 91.4%94.1% and 87.4%91.3% at June 30,March 31, 2015 and 2014, and 2013, respectively. Occupancy at our unconsolidated Suburban office operating properties was 89.3%80.1% and 84.3%88.9% at June 30,March 31, 2015 and 2014, and 2013, respectively. At June 30,March 31, 2014, 2.9%8.3% and 18.9%7.5% of the space leased at our unconsolidated Manhattan and Suburban joint venture officeoperating properties, respectively, wereare expected to expire during the remainder of 2014. Wein 2015. At March 31, 2014, we estimate that current market asking rents on these expected 20142015 lease expirations at our unconsolidated Manhattan and Suburban joint ventureoffice operating properties are approximately 47.5%16.0% higher and 4.9%8.3% lower, respectively, than then existing in-place fully escalated rents.
Equity in Net Gain on Sale of Interest in Unconsolidated Joint Ventures
During the six months ended June 30, 2014, we recognized gains on the sale of two properties included in the West Coast portfolio ($85.6 million), the sale of partnership interests in 21 West 34th Street ($20.9 million) and the sale of condominium units at 248 Bedford Avenue, Brooklyn ($1.6 million), partially offset by additional post closing costs related to the sale of our partnership interest in 27-29 West 34th Street ($1.9 million). During the six months ended June 30, 2013, we recognized additional post closing costs related to the sale of 521 Fifth Avenue ($1.9 million), partially offset by the sale of two properties included in the West Coast portfolio ($1.5 million).
Purchase price fair value adjustment
Purchase price fair value adjustment for the six months ended June 30, 2014 and 2013 was attributable to the acquisition of our joint venture partner's interest in 388-390 Greenwich Street and 16 Court Street, Brooklyn, respectively.
Loss on Early Extinguishment of Debt
Loss on early extinguishment of debt for the six months ended June 30, 2014 was attributable to the refinancing of the previous mortgage at 248-252 Bedford Avenue ($0.5 million) and early repayment of the mortgage at 16 Court Street, Brooklyn ($0.5 million). Loss on early extinguishment of debt for the six months ended June 30, 2013 was attributable to the refinancing of the mortgage at 1515 Broadway.
Discontinued Operations
Discontinued operations for the sixthree months ended June 30, 2014March 31, 2015 includes the gain recognized on the sale of 673 First Avenue180 Maiden Lane ($117.817.0 million) and the related results of operations of 673 First Avenue, which was sold in April 2014,and 2 Herald Square and 985-987 Third Avenue, which were held for sale at June 30, 2014.operations. Discontinued operations for the sixthree months ended June 30, 2013March 31, 2014 includes the gain on sale recognized for 44 West 55th Street ($1.1 million), which was sold in February 2013, and the results of operations for 673 First Avenue,180 Maiden Lane and 2 Herald Square, 985-987 Third Avenue and 44 West 55th Street, 333 West 34th Street and 300 Main Street,673 First Avenue, which were sold in February, August and September 2013, respectively.2014.

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Reconciliation of Same-Store Operating Income to Net Operating Income
We present Same-Store net operating income, or Same-Store NOI, because we believe that these measures providethis measure provides investors with useful information regarding the operating performance of properties that are comparable for the periods presented. We determine Same-Store net operating income by subtracting Same-Store property operating expenses and ground rent from Same-Store rental revenues and other income. Our method of calculation may be different from methods used by other REITs, and, accordingly, may not be comparable to such other REITs. 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.

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For properties owned since January 1, 2013 (excluding assets held for sale)2014 and still owned and operated at June 30, 2014,March 31, 2015, Same-Store NOI is determined as follows (in millions):
  Three Months Ended March 31,
  2015 2014 $ Change % Change
Rental revenues $299.1
 $285.3
 $13.8
 4.84%
Other income 1.5
 1.2
 0.3
 25.00%
Total revenues 300.6
 286.5
 14.1
 4.92%
Property operating expenses 134.5
 125.0
 9.5
 7.60%
Operating income 166.1
 161.5
 4.6
 2.85%
Less: Non-building revenue 0.5
 0.2
 0.3
 150.00%
Same-Store NOI $165.6
 $161.3
 $4.3
 2.67%
  Three Months Ended June 30, Six Months Ended June 30,
  2014 2013 
$
Change
 
%
Change
 2014 2013 
$
Change
 
%
Change
Rental revenues, rent escalations, and reimbursement revenues $284.3
 $277.5
 $6.8
 2.45 % $558.4
 $552.7
 $5.7
 1.03 %
Other income 0.8
 1.2
 (0.4) (33.33)% 2.0
 3.4
 (1.4) (41.18)%
Total revenues 285.1
 278.7
 6.4
 2.30 % 560.4
 556.1
 4.3
 0.77 %
Property operating expenses 116.6
 112.9
 3.7
 3.28 % 235.2
 231.1
 4.1
 1.77 %
Operating income 168.5
 165.8
 2.7
 1.63 % 325.2
 325.0
 0.2
 0.06 %
Less: Non-building revenue 0.2
 0.7
 (0.5) (71.43)% 0.4
 1.5
 (1.1) (73.33)%
Same-Store NOI $168.3
 $165.1
 $3.2
 1.94 % $324.8
 $323.5
 $1.3
 0.40 %

Same-Store NOI increased by $4.3 million, or 2.7%, from $161.3 million for the three months ended March 31, 2014 to $165.6 million for the year ended March 31, 2015.
Liquidity and Capital Resources
We currently expect that our principal sources of funds to meet our short-term and long-term liquidity requirements for working capital and funds for acquisition and development or redevelopment of properties, tenant improvements, leasing costs, repurchases or repayments of outstanding indebtedness (which may include exchangeable debt) and for debt and preferred equity investments will include:
(1)Cash flow from operations;
(2)Cash on hand;
(3)Borrowings under ourthe 2012 credit facility;
(4)Other forms of secured or unsecured financing;
(5)Net proceeds from divestitures of properties and redemptions, participations and dispositions of debt and preferred equity investments; and
(6)Proceeds from common or preferred equity or debt offerings by the Company, the Operating Partnership (including issuances of units of limited partnership interest in the Operating Partnership and Trust preferred securities) or ROP.
Cash flow from operations is primarily dependent upon the occupancy level of our portfolio, the net effective rental rates achieved on our leases, the collectability of rent, operating escalations and recoveries from our tenants and the level of operating and other costs. Additionally, we believe that our debt and preferred equity investment program will continue to serve as a source of operating cash flow.

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The combined aggregate principal maturities of our property mortgages and other loans payable, corporate obligations and our share of joint venture debt, including as-of-right extension options, as of June 30, 2014March 31, 2015 are as follows (in thousands):
Remaining 2014 2015 2016 2017 2018 Thereafter TotalRemaining 2015 2016 2017 2018 2019 Thereafter Total
Property mortgages and other loans(1)
$169,413
 $277,017
 $570,257
 $1,147,642
 $64,462
 $3,901,635
 $6,130,426
$22,882
 $147,671
 $956,392
 $80,462
 $98,726
 $4,052,908
 $5,359,041
MRA facility—
 —
 —
 —
 —
 —
 —
Corporate obligations75,898
 7
 255,308
 355,008
 250,000
 1,333,000
 2,269,221
7
(1)255,308
 355,008
 250,000
 833,000
 1,070,000
 2,763,323
Joint venture debt-our share27,651
 44,260
 561,736
 442,584
 28
 353,580
 1,429,839
39,407
 534,026
 582,755
 2,196
 104,688
 446,744
 1,709,816
Total$272,962
 $321,284
 $1,387,301
 $1,945,234
 $314,490
 $5,588,215
 $9,829,486
$62,296
 $937,005
 $1,894,155
 $332,658
 $1,036,414
 $5,569,652
 $9,832,180

(1)IncludesIn April 2015, we redeemed all of the mortgage at 2 Herald Center, which is included in liabilities related to assets held for sale.outstanding 4.00% Exchangeable Senior Debentures due 2025.

As of June 30, 2014,March 31, 2015, we had $348.0$378.5 million of consolidated cash on hand, inclusive of $39.9$47.7 million of marketable securities. We expect to generate positive cash flow from operations for the foreseeable future. We may seek to access private and public

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debt and equity capital when the opportunity presents itself, although there is no guarantee that this capital will be made available to us at efficient levels or at all. Management believes that these sources of liquidity, if we are able to access them, along with potential refinancing opportunities for secured debt, will allow us to satisfy our debt obligations, as described above, upon maturity, if not before.
We also have investments in several real estate joint ventures with various partners who we consider to be financially stable and who have the ability to fund a capital call when needed. Most of our joint ventures are financed with non-recourse debt. We believe that property level cash flows along with unfunded committed indebtedness and proceeds from the refinancing of outstanding secured indebtedness will be sufficient to fund the capital needs of our joint venture properties.
Cash Flows
The following summary discussion of our cash flows is based on our consolidated statements of cash flows in "Item 1.8. Financial Statements" and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below.
Cash and cash equivalents were $308.1$330.8 million and $199.0$447.2 million at June 30,March 31, 2015 and 2014, and 2013, respectively, representing an increasea decrease of $109.1$116.4 million. The increasedecrease was a result of the following changes in cash flows (in thousands):
 Six Months Ended June 30,
 2014 2013 
Increase
(Decrease)
Net cash provided by operating activities$276,562
 $209,688
 $66,874
Net cash used in investing activities$(318,041) $(42,722) $(275,319)
Net cash provided by (used in) financing activities$142,890
 $(157,981) $300,871
 Three Months Ended March 31,
 2015 2014 
Increase
(Decrease)
Net cash provided by operating activities$90,959
 $88,148
 $2,811
Net cash provided by (used in) investing activities$230,297
 $(71,801) $302,098
Net cash (used in) provided by financing activities$(271,895) $224,123
 $(496,018)
Our principal source of operating cash flow is related to the leasing and operating of the properties in our portfolio. Our properties provide a relatively consistent stream of cash flow that provides us with resources to pay operating expenses, debt service and fund quarterly dividend and distribution payment requirements. At June 30, 2014,March 31, 2015, our Manhattan and Suburban consolidated office portfolioportfolios were 94.9%96% and 79.6%81% occupied, respectively. Our debt and preferred equity and joint venture investments also provide a steady stream of operating cash flow to us.

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Cash is used in investing activities to fund acquisitions, development or redevelopment projects and recurring and nonrecurring capital expenditures. We selectively invest in new projects that enable us to take advantage of our development, leasing, financing and property management skills and invest in existing buildings that meet our investment criteria. During the sixthree months ended June 30, 2014,March 31, 2015, when compared to the six monthsthree month ended June 30, 2013,March 31, 2014, we used cash primarily for the following investing activities (in thousands):
Acquisitions of real estate$(156,080)$(6,290)
Capital expenditures and capitalized interest(72,718)1,096
Escrow cash-capital improvements/acquisition deposits(37,833)31,777
Joint venture investments(88,619)(64,806)
Distributions from joint ventures146,582
(27,012)
Proceeds from sales of real estate/partial interest in property252,224
376,344
Debt and preferred equity and other investments(318,875)(9,011)
Increase in net cash used by investing activities$(275,319)
Increase in net cash provided by investing activities$302,098
Funds spent on capital expenditures, which are comprised ofcomprise building and tenant improvements, increaseddecreased from $61.5$48.2 million for the sixthree months ended June 30, 2013March 31, 2014 to $134.2$47.1 million for the sixthree months ended June 30, 2014.March 31, 2015. The increaseddecreased capital expenditures relate primarily to increaseddecreased costs incurred in connection with the redevelopment of properties and new leasing activity.properties.

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We generally fund our investment activity through sale of real estate, property-level financing, our 2012 credit facility, MRA facility, senior unsecured notes, convertible or exchangeable securities, construction loans sale of real estate and from time to time, the Company issuesissued common or preferred stock, or the Operating Partnership may issue common or preferred units of limited partnership interest. During the sixthree months ended June 30, 2014March 31, 2015, when compared to the sixthree months ended June 30, 2013,March 31, 2014, we used cash for the following financing activities (in thousands):
Proceeds from our debt obligations$934,270
$(59,216)
Repayments under our debt obligations(778,216)(560,146)
Noncontrolling interests, contributions in excess of distributions161
(110,647)
Other financing activities(24,707)24,021
Proceeds from stock options exercised and DRSPP issuance100,848
Proceeds from issuance of common and preferred stock120,573
Redemption of preferred stock192,500
(200)
Proceeds from issuance of common and preferred stock272
Dividends and distributions paid(23,409)(11,251)
Increase in net cash provided in financing activities$300,871
Increase in net cash used in financing activities$(496,018)
Capitalization
As of June 30, 2014,March 31, 2015, SL Green had 95,587,30199,532,817 shares of common stock, 3,500,0603,912,944 common units of limited partnership interest in the Operating Partnership held by persons other than the Company, and 9,200,000 shares of SL Green's 6.50% Series I Cumulative Redeemable Preferred Stock, or Series I Preferred Stock, outstanding. In addition, persons other than the Company held Preferred Units of limited partnership interests in the Operating Partnership having an aggregate liquidation preference of $53.6$110.9 million.
At-the-MarketAt-The-Market Equity Offering Program
In July 2011,June 2014, the Company, along with the Operating Partnership, entered into an "at-the-market" equity offering program, or ATM Program, to sell an aggregate of $250.0$300.0 million of SL Green's common stock. During the sixthree months ended June 30, 2014,March 31, 2015, we sold 25,659895,956 shares of our common stock outfor aggregate net proceeds of $113.4 million comprising the remaining balance of this ATM Program for aggregate net proceeds of $2.8 million.program. The net proceeds from this offeringthese offerings were contributed to the Operating Partnership in exchange for 25,659895,956 units of limited partnership interest of the Operating Partnership.
In June 2014,March 2015, the Company, along with the Operating Partnership, entered into a new ATM Program to sell an aggregate of $300.0 million of SL Green's common stock. During the sixthree months ended June 30, 2014,March 31, 2015, we sold 55,76556,680 shares of our common stock for aggregate net proceeds of $6.1$7.5 million. The net proceeds from this offeringthese offerings were contributed to the Operating Partnership in exchange for 55,76556,680 units of limited partnership interest of the Operating Partnership. As of June 30, 2014, $293.8March 31, 2015, $292.5 million remained available for issuance of common stock under the new ATM Program.program.

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Dividend Reinvestment and Stock Purchase Plan
In March 2012,February 2015, the Company filed a registration statement with the SEC for our dividend reinvestment and stock purchase plan, or DRIP,DRSPP, which automatically became effective upon filing. The Company registered 3,500,000 shares of SL Green's common stock under the DRIP.DRSPP. The DRIPDRSPP commenced on September 24, 2001.
During the sixthree months ended June 30, 2014,March 31, 2015, the Company issued 272775,161 shares of SL Green's common stock and received approximately $26,000$99.5 million of net proceeds respectively, from dividend reinvestments and/or stock purchases under the DRIP. DRIPDRSPP. DRSPP shares may be issued at a discount to the market price.
Third Amended and Restated 2005 Stock Option and Incentive Plan
The Third Amended and Restated 2005 Stock Option and Incentive Plan, or the 2005 Plan, was approved by the Company's board of directors in April 2013 and its stockholders in June 2013 at the Company's annual meeting of the stockholders. Subject to adjustments upon certain corporate transactions or events, awards with respect to up to a maximum of 17,130,000 fungible units may be granted as options, restricted stock, phantom shares, dividend equivalent rights and other equity-based awards under the 2005 Plan.  As of June 30, 2014March 31, 2015, 3,200,0001.5 million fungible units were available for issuance under the 2005 Plan after reserving for shares underlying outstanding restricted stock units, phantom stock units granted pursuant to our Non-Employee Directors’Directors' Deferral Program and LTIP Units, including, among others, outstanding LTIP Units issued under our 2011 Long-Term Outperformance Plan, which remain subject to performance-based vesting.Plan.

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2010 Notional Unit Long-Term Compensation Plan
In December 2009, the compensation committee of the Company's board of directors approved the general terms of the SL Green Realty Corp. 2010 Notional Unit Long-Term Compensation Program, or the 2010 Long-Term Compensation Plan. The 2010 Long-Term Compensation Plan is a long-term incentive compensation plan pursuant to which award recipients could earn, in the aggregate, from approximately $15.0 million up to approximately $75.0 million of LTIP Units in the Operating Partnership based on the Company's stock price appreciation over three years beginning on December 1, 2009; provided that, if maximum performance had been achieved, approximately $25.0 million of awards could be earned at any time after the beginning of the second year and an additional approximately $25.0 million of awards could be earned at any time after the beginning of the third year. In order to achieve maximum performance under the 2010 Long-Term Compensation Plan, the Company's aggregate stock price appreciation during the performance period had to equal or exceed 50%. The compensation committee determined that maximum performance had been achieved at or shortly after the beginning of each of the second and third years of the performance period and for the full performance period and, accordingly, 366,815 LTIP Units, 385,583 LTIP Units and 327,416 LTIP Units were earned under the 2010 Long-Term Compensation Plan in December 2010, 2011 and 2012, respectively. Substantially in accordance with the original terms of the program, 50% of these LTIP Units vested on December 17, 2012 (accelerated from the original January 1, 2013 vesting date), 25% of these LTIP Units vested on December 11, 2013 (accelerated from the original January 1, 2014 vesting date) and the remainder is scheduled to vestvested on January 1, 2015 based on continued employment. In accordance with the terms of the 2010 Long-Term Compensation Plan, distributions were not paid on any LTIP Units until they were earned, at which time we paid all distributions that would have been paid on the earned LTIP Units since the beginning of the performance period.
The cost of the 2010 Long-Term Compensation Plan (approximately $31.7($31.7 million, subject to forfeitures) will bewas amortized into earnings through the final vesting period.period of January 1, 2015. We recorded compensation expense of $1.6$0.3 million$1.9 million, $0.8 million and $2.8 million during the three and six months ended June 30,March 31, 2014 and 2013, respectively, related to the 2010 Long-Term Compensation Plan.
2011 Outperformance Plan
In August 2011, the compensation committee of the Company's board of directors approved the general terms of the SL Green Realty Corp. 2011 Outperformance Plan, or the 2011 Outperformance Plan. Participants in the 2011 Outperformance Plan maycould earn, in the aggregate, up to $85.0 million of LTIP Units in the Operating Partnership based on our total return to stockholders for the three-year period beginning September 1, 2011. Under the 2011 Outperformance Plan, participants will bewere entitled to share in a "performance pool" comprised of LTIP Units with a value equal to 10% of the amount if any, by which our total return to stockholders during the three-year period exceedsexceeded a cumulative total return to stockholders of 25%, subject to the maximum of $85.0 million of LTIP Units; provided that if maximum performance has beenwas achieved, approximately one-third of each award maycould be earned at any time after the beginning of the second year and an additional approximately one-third of each award maycould be earned at any time after the beginning of the third year. LTIP Units earned under the 2011 Outperformance Plan are subject to continued vesting requirements, with 50% of any awards earned vested on August 31, 2014 and the remaining 50% vesting on August 31, 2015, subject to continued employment with us through such dates. Participants were not entitled to distributions with respect to LTIP Units granted under the 2011 Outperformance Plan unless and until they were earned. For LTIP Units that were earned, each participant was also be entitled to the distributions that would have been paid had the number of earned LTIP Units been issued at the beginning of the performance period, with such distributions being paid in the form of additional LTIP Units. Thereafter, distributions are to be paid currently with respect to all earned LTIP Units, whether vested or unvested. In June 2014, the compensation committee determined that maximum performance had been achieved during the third year of the performance period and, accordingly, 560,908 LTIP Units,

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representing two-thirds of each award, were earned, subject to vesting, under the 2011 Outperformance Plan. In September 2014, the compensation committee determined that maximum performance had been achieved for the full three-year performance period and, accordingly, 280,454 LTIP units, representing the final third of each award, were earned, subject to vesting, under the 2011 Outperformance Plan.
The cost of the 2011 Outperformance Plan ($26.8 million, subject to forfeitures) will be amortized into earnings through the final vesting period. We recorded compensation expense of $0.7 million and $1.9 million during the three months ended March 31, 2015 and 2014, respectively, related to the 2011 Outperformance Plan.
2014 Outperformance Plan
In August 2014, the compensation committee of the Company's board of directors approved the general terms of the SL Green Realty Corp. 2014 Outperformance Plan, or the 2014 Outperformance Plan. Participants in the 2014 Outperformance Plan may earn, in the aggregate, up to 610,000 LTIP Units in our Operating Partnership based on our total return to stockholders for the three-year period beginning September 1, 2014. For each individual award, two-thirds of the LTIP Units may be earned based on the Company’s absolute total return to stockholders and one-third of the LTIP Units may be earned based on relative total return to stockholders compared to the constituents of the MSCI REIT Index. Awards earned based on absolute total return to stockholders will be determined independently of awards earned based on relative total return to stockholders. In the event the Company’s performance reaches either threshold before the end of the three-year performance period, a pro-rata portion of the maximum award may be earned. For each component, if the Company’s performance reaches the maximum threshold beginning with the 19th month of the performance period, participants will earn one-third of the maximum award that may be earned for that component. If the Company’s performance reaches the maximum threshold during the third year of the performance period for a component, participants will earn two-thirds (or an additional one-third) of the maximum award that may be earned for that component. LTIP Units earned under the 2014 Outperformance Plan will be subject to continued vesting requirements, with 50% of any awards earned vesting on August 31, 20142017 and the remaining 50% vesting on August 31, 2015,2018, subject to continued employment with us through such dates. Participants will not be entitled to distributions with respect to LTIP Units granted under the 20112014 Outperformance Plan unless and until they are earned. If LTIP Units are earned, each participant will also be entitled to the distributions that would have been paid had the number of earned LTIP Units been issued at the beginning of the performance period, with such distributions being paid in the form of cash or additional LTIP Units. Thereafter, distributions will be paid currently with respect to all earned LTIP Units, whether vested or unvested. In June 2014, the compensation committee determined that maximum performance had been achieved during the third year of the performance period and, accordingly, 560,908 LTIP Units, representing two-thirds of each award, were earned, subject to vesting, under the 2011 Outperformance Plan. The remaining one-third of each award will be earned based on performance through the end of the performance period.
The cost of the 20112014 Outperformance Plan (approximately $27.0($27.9 million,, subject to forfeitures), based on the portion of the 2014 Outperformance Plan granted as of March 31, 2015, will be amortized into earnings through the final vesting period. We recorded compensation expense of $4.3$1.4 million$6.1 million, $1.7 million and $4.5 million during the three and six months ended June 30, 2014 and 2013, respectively,March 31, 2015 related to the 20112014 Outperformance Plan.

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Deferred Compensation Plan for Directors
Under our Non-Employee Directors'Director's Deferral Program, which commenced July 2004, the Company's non-employee directors may elect to defer up to 100% of their annual retainer fee, chairman fees, meeting fees and annual stock grant. Unless otherwise elected by a participant, fees deferred under the program shall be credited in the form of phantom stock units. The program provides that a director's phantom stock units generally will be settled in an equal number of shares of common stock upon the earlier of (i) the January 1 coincident with or next following such director's termination of service from the Board of Directors or (ii) a change in control by us, as defined by the program. Phantom stock units are credited to each non-employee director quarterly using the closing price of SL Green's common stock on the first business day of the respective quarter. Each participating non-employee director is also credited with dividend equivalents or phantom stock units based on the dividend rate for each quarter, which are either paid in cash currently or credited to the director’s account as additional phantom stock units.
During the sixthree months ended June 30, 2014, 5,974March 31, 2015, 5,613 phantom stock units were earned.earned and 5,230 shares of common stock were issued to our board of directors. We recorded compensation expense of $1.3 million during the three months ended March 31, 2015 related to the Deferred Compensation Plan. As of June 30, 2014,March 31, 2015, there were 79,49981,262 phantom stock units outstanding pursuant to our Non-Employee Director's Deferral Program.
Employee Stock Purchase Plan
On September 18,In 2007, the Company's board of directors adopted the 2008 Employee Stock Purchase Plan, or ESPP, to encourage our employees to increase their efforts to make our business more successful by providing equity-based incentives to eligible employees. The ESPP is intended to qualify as an "employee stock purchase plan" under Section 423 of the Code, and has been adopted by the board to enable our eligible employees to purchase the Company's shares of common stock through payroll deductions. The ESPP became effective on January 1, 2008 with a maximum of 500,000 shares of the common stock available for issuance, subject to adjustment upon a merger, reorganization, stock split or other similar corporate change. The Company filed a registration statement on Form S-8 with the SEC with respect to the ESPP. The common stock is offered for purchase through a series of successive offering periods. Each offering period will be three months in duration and will begin on the first day of each calendar quarter, with the first offering period having commenced on January 1, 2008. The ESPP provides for eligible employees to purchase

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the common stock at a purchase price equal to 85% of the lesser of (1) the market value of the common stock on the first day of the offering period or (2) the market value of the common stock on the last day of the offering period. The ESPP was approved by our stockholders at our 2008 annual meeting of stockholders. As of June 30, 2014, 76,727March 31, 2015, 81,955 shares of SL Green's common stock had been issued under the ESPP.
Market Capitalization
At June 30, 2014,March 31, 2015, borrowings under our mortgages and other loans payable, our 2012 credit facility, senior unsecured notes, trust preferred securities and our share of joint venture debt represented 46.8%41.8% of our combined market capitalization of $20.9$23.4 billion (based on a common stock price of $109.41$128.38 per share, the closing price of SL Green's common stock on the NYSE on June 30, 2014)March 31, 2015). Market capitalization includes our consolidated debt, common and preferred stock and the conversion of all units of limited partnership interest in the Operating Partnership, and our share of joint venture debt.

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Indebtedness
The table below summarizes our consolidated mortgages and other loans payable, our 2012 credit facility, senior unsecured notes and trust preferred securities outstanding at June 30, 2014March 31, 2015 and December 31, 2013, respectively2014, (amounts in thousands).
June 30, 2014 December 31, 2013
Debt Summary:   March 31, 2015 December 31, 2014
Balance      
Fixed rate(1)
$5,554,152
 $5,561,749
Fixed rate$4,974,083
 $5,098,741
Variable rate—hedged542,128
 38,211
1,042,001
 1,042,045
Total fixed rate6,096,280
 5,599,960
6,016,084
 6,140,786
Variable rate1,538,297
 774,301
Variable rate(1)
1,196,319
 1,572,124
Variable rate—supporting variable rate assets723,055
 545,647
876,681
 719,819
Total variable rate2,261,352
 1,319,948
2,073,000
 2,291,943
Total$8,357,632
 $6,919,908
$8,089,084
 $8,432,729
Percent of Total Debt:
      
Total fixed rate72.9% 80.9%74.4% 72.8%
Variable rate27.1% 19.1%25.6% 27.2%
Total100.0% 100.0%100.0% 100.0%
Effective Interest Rate for the Period:   
Effective Interest Rate for the Year:   
Fixed rate5.22% 5.33%4.72% 4.97%
Variable rate2.01% 2.39%1.68% 1.90%
Effective interest rate4.49% 4.81%3.95% 4.24%

(1)IncludesAt December 31, 2014, the variable rate balance included the mortgage at 2 Herald Center,180 Maiden Lane, which iswas included in liabilities related to assets held for sale.

The variable rate debt shown above generally bears interest at an interest rate based on 30-day LIBOR (0.16%(0.18% and 0.17% at June 30, 2014March 31, 2015 and December 31, 2013,2014, respectively). Our consolidated debt at June 30, 2014March 31, 2015 had a weighted average term to maturity of 5.45.82 years.
Certain of our debt and preferred equity investments, with a face amountcarrying value of $723.1 million$0.9 billion at June 30, 2014,March 31, 2015, are variable rate investments which mitigate our exposure to interest rate changes on our unhedged variable rate debt.
Mortgage Financing
As of June 30, 2014,March 31, 2015, our total mortgage debt (excluding our share of joint venture mortgage debt of $1.4 billion)$1.7 billion) consisted of $4.6$4.6 billion of fixed rate debt, including swapped variable rate debt, with an effective weighted average interest rate of 5.12%4.72% and $1.5$0.8 billion of variable rate debt with an effective weighted average interest rate of 1.96%1.68%.
Corporate Indebtedness
2012 Credit Facility
In March 2014, we entered into an amendment to the $1.6 billion credit facility entered into by the Company in November 2012, or the 2012 credit facility, which among other things, increased the term loan portion of the 2012 credit facility by $383.0 million to $783.0 million, decreased the interest-rate margin applicable to the term loan portion of the facility by 25 basis points and extended the maturity of the term loan portion of the facility from March 30, 2018 to June 30, 2019. The 2012In November 2014, we increased the term loan portion of the facility by $50.0 million to $833.0 million. In January 2015, we entered into a second amended and restated credit agreement, which decreased the interest-rate margin and facility as amended, consists of a $1.2 billion revolving credit facility, orfee applicable to the revolving credit facility by 20 basis

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points and a $783.0 million term loan facility, orfive basis points, respectively, and extended the term loan facility. Thematurity date of the revolving credit facility matures into March 2017 and includes two six-month29, 2019 with an as-of-right extension options, subject to the payment of an extension fee of 10 basis points for each such extension.through March 29, 2020. We also have an option, subject to customary conditions, without the consent of existing lenders, to increase the capacity under the revolving credit facility to $1.5 billion at any time prior to the maturity date for the revolving credit facility without the consent of existing lenders, by obtaining additional commitments from our existing lenders and other financial institutions.
TheAs of March 31, 2015, the 2012 credit facility, bearsas amended, consists of a $1.2 billion revolving credit facility, or the revolving credit facility, and an $833.0 million term loan, or the term loan facility.
As of March 31, 2015, the 2012 credit facility bore interest at a spread over LIBOR ranging from (i) 10087.5 basis points to 175155.0 basis points for loans under the revolving credit facility and (ii) 95 basis points to 190 basis points for loans under the term loan facility, in each case based on the credit rating assigned to the senior unsecured long term indebtedness of ROP. At June 30,December 31, 2014,, the applicable spread

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was 145125 basis points for revolving credit facility and 140 basis points for the term loan facility. At June 30, 2014,March 31, 2015, the effective interest rate was 1.61%1.43% for the revolving credit facility and 1.64%1.65% for the term loan facility. We are required to pay quarterly in arrears a 1512.5 to 3530 basis point facility fee on the total commitments under the revolving credit facility based on the credit rating assigned to the senior unsecured long term indebtedness of ROP. As of June 30, 2014,March 31, 2015, the facility fee was 3025 basis points. At June 30, 2014,As of March 31, 2015, we had $116.3$107.6 million of outstanding letters of credit, $520.0 million drawn under the revolving credit facility and $783.0$833.0 million outstanding under the term loan facility, with total undrawn capacity of $1.1 billion$572.4 million under the revolving credit facility.
In connection with the amendment of the 2012 credit facility, we incurred debt origination and other loan costs of $2.8 million. We evaluated the modification pursuant to ASC 470 and determined that the terms of the amendment were not substantially different from the terms of the previous 2012 credit facility. As a result, these deferred costs and the unamortized balance of the costs previously incurred are amortized through the extended maturity date of the term loan facility.
The Company, the Operating Partnership and ROP are all borrowers jointly and severally obligated under the 2012 credit facility. None of our other subsidiaries are obligors under the 2012 credit facility.
The 2012 credit facility includes certain restrictions and covenants (see Restrictive Covenants below).
Master Repurchase Agreement
The Master Repurchase Agreement, as amended in December 2013, or MRA, provides us an ability to sell certain debt investments in exchange for cash with a simultaneous agreement to repurchase the same debt investments at a certain date or on demand. This MRA has a maximum facility capacity of $300.0 million and bears interest ranging from 250 and 325 basis points over one-month LIBOR depending on the pledged collateral. As of June 30, 2014,At March 31, 2015, we havehad $300.0 million of undrawn capacity under the MRA.
Senior Unsecured Notes
The following table sets forth our senior unsecured notes and other related disclosures as of June 30, 2014March 31, 2015 and December 31, 20132014, by scheduled maturity date (amounts(dollars in thousands):
Issuance June 30, 2014 Unpaid Principal Balance June 30, 2014 Accreted Balance December 31, 2013 Accreted Balance 
Coupon
Rate(1)
 
Effective
Rate
 
Term
(in Years)
 Maturity Date 
March 31,
2015
Unpaid
Principal
Balance
 
March 31,
2015
Accreted
Balance
 
December 31,
2014
Accreted
Balance
 
Coupon
Rate(1)
 
Effective
Rate
 
Term
(in Years)
 Maturity Date
August 13, 2004(2)
 $75,898
 $75,898
 $75,898
 5.88% 5.88% 10 August 15, 2014
March 31, 2006(2)
 255,308
 255,227
 255,206
 6.00% 6.00% 10 March 31, 2016 $255,308
 $255,261
 $255,250
 6.00% 6.00% 10 March 31, 2016
October 12, 2010(3)
 345,000
 303,354
 297,837
 3.00% 3.00% 7 October 15, 2017 345,000
 312,005
 309,069
 3.00% 3.00% 7 October 15, 2017
August 5, 2011(4)
 250,000
 249,712
 249,681
 5.00% 5.00% 7 August 15, 2018 250,000
 249,760
 249,744
 5.00% 5.00% 7 August 15, 2018
March 16, 2010(4)
 250,000
 250,000
 250,000
 7.75% 7.75% 10 March 15, 2020 250,000
 250,000
 250,000
 7.75% 7.75% 10 March 15, 2020
November 15, 2012(4)
 200,000
 200,000
 200,000
 4.50% 4.50% 10 December 1, 2022 200,000
 200,000
 200,000
 4.50% 4.50% 10 December 1, 2022
June 27, 2005(2)(5)
 7
 7
 7
 4.00% 4.00% 20 June 15, 2025 7
 7
 7
 4.00% 4.00% 20 June 15, 2025
March 26, 2007(6)
 10,008
 10,008
 10,701
 3.00% 3.00% 20 March 30, 2027 10,008
 10,008
 10,008
 3.00% 3.00% 20 March 30, 2027
 $1,386,221
 $1,344,206
 $1,339,330
      $1,310,323
 $1,277,041
 $1,274,078
     

(1)Interest on the senior unsecured notes is payable semi-annually with principal and unpaid interest due on the scheduled maturity dates.
(2)Issued by ROP.
(3)
Issued by the Operating Partnership. Interest on these exchangeable notes is payable semi-annually on April 15 and October 15. The notes had an initial exchange rate representing an exchange price that was set at a 30.0% premium to the last reported sale price of the SL Green's common stock on October 6, 2010, or $85.81.$85.81. The initial exchange rate is subject to adjustment under certain circumstances. The current exchange rate is 11.715312.1632 shares of SL Green's common stock per $1,000 principal amount of these notes. The notes are senior unsecured obligations of the Operating Partnership and are exchangeable upon the occurrence of specified events and during the period beginning on the twenty-second scheduled trading day prior to the maturity date and ending on the second business day prior to the maturity date, into cash or a combination of cash and shares of SL Green's common stock, if any, at our option. As a result of meeting specified events (as defined in the Indenture Agreement), these notes became exchangeable commencing January 1, 2015 and will remain exchangeable through June 30, 2015. The notes are guaranteed by ROP. On the issuance date, $78.3 million of the debt balance was recorded in equity. As of March 31, 2015, $32.9 million remained to be amortized into the debt balance.
(4)Issued by the Company, the Operating Partnership and ROP, as co-obligors.
(5)Exchangeable senior debentures which are currently callable at par. In addition, the debentures can be put to ROP, at the option of the holder at par plus accrued and unpaid interest, on June 15, 2015 and 2020 and upon the occurrence of certain change of control transactions. As a result of the acquisition of all outstanding shares of common stock of Reckson, or the Reckson Merger, the adjusted exchange rate for the debentures is 7.7461 shares of SL Green's

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common stock per $1,000 of principal amount of debentures and the adjusted reference dividend for the debentures is $1.3491. In April 2015, we redeemed the remaining outstanding debentures.
(6)Issued by the Operating Partnership. Interest on these remaining exchangeable notes is payable semi-annually on March 30 and September 30. The notes have an initial exchange rate representing an exchange price that was set at a 25.0% premium to the last reported sale price of the Company's common stock on March 20, 2007, or $173.30. The initial exchange rate is subject to adjustment under certain circumstances. The current exchange rate is 5.7952 shares of SL Green's common stock per $1,000 principal amount of these notes. The notes are senior unsecured obligations of the Operating Partnership and are exchangeable upon the occurrence of specified events and during the period beginning on the twenty-second scheduled trading day prior to the maturity date and ending on the second business day prior to the maturity date, into cash or a combination of cash and shares of SL Green's common stock, if any, at our option. The notes are guaranteed by ROP. On the issuance date, $78.3 million of the debt balance was recorded in equity. As of June 30, 2014, $41.6 million remained to be amortized into the debt balance.
(4)Issued by the Company,currently redeemable at the Operating Partnership’s option. The Operating Partnership may be required to repurchase the notes on March 30, 2017 and ROP, as co-obligors.
(5)
Exchangeable senior debentures which are currently callable at par. In addition, the debentures can be put to ROP, at the option of the holder at par plus accrued and unpaid interest, on June 15, 2015 and 20202022, and upon the occurrence of certain change of control transactions. As a result of the acquisition of all outstanding shares of common stock of Reckson, or the Reckson Merger, the adjusted exchange rate for the debentures is 7.7461 shares of SL Green's common stock per $1,000 of principal amount of debentures and the adjusted reference dividend for the debentures is $1.3491.
designated events.
(6)Issued by the Operating Partnership. Interest on these remaining exchangeable notes is payable semi-annually on March 30 and September 30. The notes have an initial exchange rate representing an exchange price that was set at a 25.0% premium to the last reported sale price of the Company's common

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stock on March 20, 2007, or $173.30. The initial exchange rate is subject to adjustment under certain circumstances. The notes are senior unsecured obligations of the Operating Partnership and are exchangeable upon the occurrence of specified events and during the period beginning on the twenty-second scheduled trading day prior to the maturity date and ending on the second business day prior to the maturity date, into cash or a combination of cash and shares of SL Green's common stock, if any, at our option. The notes are currently redeemable at the Operating Partnership’s option. The Operating Partnership may be required to repurchase the notes on March 30, 2017 and 2022, and upon the occurrence of certain designated events.
Junior SubordinateSubordinated Deferrable Interest Debentures
In June 2005, the Company and the Operating Partnership issued $100.0 million in unsecured trust preferred securities through a newly formed trust, SL Green Capital Trust I, or the Trust, which is a wholly-owned subsidiary of Trust Preferred Securities, which are reflected on the consolidated balance sheet as Junior Subordinate Deferrable Interest Debentures.Operating Partnership. The $100.0 million of junior subordinate deferrable interest debentures have a 30-year term ending July 2035. Theysecurities mature in 2035 and bear interest at a fixed rate of 5.61% for the first 10ten years ending July 2015. Thereafter, the interest rate will float at three-month LIBOR plus 125 basis points.points over the three-month LIBOR. Interest payments may be deferred for a period of up to eight consecutive quarters if the Operating Partnership exercises its right to defer such payments. The Trust Preferred Securitiespreferred securities are redeemable at the option of the Operating Partnership, in whole or in part, with no prepayment premium. We do not consolidate the Trust even though it is a variable interest entity as we are not the primary beneficiary. Because the Trust is not consolidated, we have recorded the debt on our consolidated balance sheets and the related payments are classified as interest expense.
Restrictive Covenants
The terms of the 2012 credit facility, as amended, and certain of our senior unsecured notes include certain restrictions and covenants which may limit, among other things, our ability to pay dividends, (as discussed below), make certain types of investments, incur additional indebtedness, incur liens and enter into negative pledge agreements and dispose of assets, and which require compliance with financial ratios relating to the minimum amount of tangible net worth, a maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed charges, a maximum ratio of secured indebtedness to total asset value and a maximum ratio of unsecured indebtedness to unencumbered asset value. The dividend restriction referred to above provides that, we will not during any time when a default is continuing, make distributions with respect to common stock or other equity interests, except to enable the Company to continue to qualify as a REIT for Federal income tax purposes. As of June 30,March 31, 2015 and December 31, 2014,, we were in compliance with all such covenants.
MarketInterest Rate Risk
We are exposed to changes in interest rates primarily from our variable rate debt. Our exposure to interest rate changes are managed through either the use of interest rate derivativederivatives instruments and/or through our variable rate debt and preferred equity investments. A hypothetical 100 basis point increase in interest rates along the entire interest rate curve for 20142015 would increase our annual interest cost, net of interest income from variable rate debt and preferred equity investments, by approximately $14.9$11.5 million and would increase our share of joint venture annual interest cost by approximately $8.0$7.1 million.
We recognize most derivatives on the balance sheet at fair value. Derivatives that are not hedges are adjusted to fair value through income. If a derivative is considered a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged asset, liability, or firm commitment through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value is immediately recognized in earnings.
We have $6.1Our long-term debt of $6.0 billion of fixed-rate long-term debt,bears interest at fixed rates, and therefore the fair value of these instruments is affected by changes in the market interest rates. The interest rate on ourOur variable rate debt and variable rate joint venture debt as of June 30, 2014 wasMarch 31, 2015 bore interest based on LIBOR plus a spread ranging fromof LIBOR plus 90 basis points to LIBOR plus 935 basis points.
Contractual Obligations
Refer to our 20132014 Annual Report on Form 10-K for a discussion of our contractual obligations. There have been no material changes, outside the ordinary course of business, to these contractual obligations during the sixthree months ended June 30, 2014March 31, 2015.
Off-Balance Sheet Arrangements
We have a number of off-balance sheet investments, including joint ventures and debt and preferred equity investments. These investments all have varying ownership structures. Substantially all of our joint venture arrangements are accounted for under the equity method of accounting as we have the ability to exercise significant influence, but not control, over the operating and financial decisions of these joint venture arrangements. Our off-balance sheet arrangements are discussed in Note 5, "Debt and Preferred Equity Investments" and Note 6, "Investments in Unconsolidated Joint Ventures" in the accompanying consolidated financial statements.

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Capital Expenditures
We estimate that for the six monthsyear ending December 31, 2014,2015, we expect to incur approximately $174.7$229.1 million of our share of recurring capital expenditures and $76.5$145.5 million of development or redevelopment expenditures, which are net of loan reserves, (including tenant improvements and leasing commissions) on existing consolidated properties, and we estimate that our share of capital expenditures at our joint venture properties, net of loan reserves, will be approximately $66.1 million.$74.9 million. We expect to fund these capital expenditures with operating cash flow, additional property level mortgage financings and cash on hand. Future property acquisitions may require substantial capital investments for refurbishment and leasing costs. We expect that these financing requirements will be met in a similar fashion. We believe that we will have sufficient resources to satisfy our capital needs during

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over the next 12-month period. Thereafter, we expect our capital needstwelve months and thereafter will be met through a combination of cash on hand, net cash provided by operations, borrowings, potential asset sales or additional equity or debt issuances.
Dividends/Distributions
We expect to pay dividends to our stockholders based on the distributions we receive from our Operating Partnership primarily from property revenues net of operating expenses or, if necessary, from working capital or borrowings.capital.
To maintain our qualification as a REIT, we must pay annual dividends to our stockholders of at least 90% of our REIT taxable income, determined before taking into consideration the dividends paid deduction and net capital gains. We intend to continue to pay regular quarterly dividends to our stockholders. Based on our current annual dividend rate of $2.00$2.40 per share, we would pay approximately $191.2$239.0 million in dividends to SL Green's common stockholders on an annual basis. Before we pay any dividend, whether for Federal income tax purposes or otherwise, which would only be paid out of available cash to the extent permitted under ourthe 2012 credit facility and senior unsecured notes, we must first meet both our operating requirements and scheduled debt service on our mortgages and loans payable.
Related Party Transactions
Cleaning/ Security/ Messenger and Restoration Services
Through Alliance Building Services, or Alliance, First Quality Maintenance, L.P., or First Quality, provides cleaning, extermination and related services, Classic Security LLC provides security services, Bright Star Couriers LLC provides messenger services, and Onyx Restoration Works provides restoration services with respect to certain properties owned by us. Alliance is partially owned by Gary Green, a son of Stephen L. Green, the chairman of SL Green's board of directors. In addition, First Quality has the non-exclusive opportunity to provide cleaning and related services to individual tenants at our properties on a basis separately negotiated with any tenant seeking such additional services. The Service Corporation has entered into an arrangement with Alliance whereby it will receive a profit participation above a certain threshold for services provided by Alliance to certain tenants at certain buildings above the base services specified in their lease agreements. Income earned from profit participation, which is included in other income on the consolidated statements of income, was $1.0 million $1.9 million, 0.9 million and $1.9$0.9 million for the three and six months ended June 30,March 31, 2015 and 2014, and 2013, respectively. We also recorded expenses of $4.7 million, $8.2 million, $4.3$4.0 million and $8.4$3.8 million for the three and six months ended June 30,March 31, 2015 and 2014, and 2013, respectively, for these services (excluding services provided directly to tenants).
Marketing Services
A-List Marketing, LLC, or A-List, provides marketing services to us. Deena Wolff, a sister of Marc Holliday, our chief executive officer, is the owner of A-List. We recorded approximately $77,100, $94,900, $104,900 and $107,300 for the three and six months ended June 30, 2014 and 2013, respectively, for these services.
Leases
Nancy Peck and Company leases 1,003 square feet of space at 420 Lexington Avenue under a lease that ends in August 2015. Nancy Peck and Company is owned by Nancy Peck, the wife of Stephen L. Green. The rent due pursuant to the lease was $35,516 per annum for year one increasing to $40,000 in year seven.
Management Fees
S.L. Green Management Corp., a consolidated entity, receives property management fees from an entity in which Stephen L. Green owns an interest. We received management fees from such entity of approximately $111,600, $216,400, $95,500$127,200 and $213,700$104,800 for the three and six months ended June 30,March 31, 2015 and 2014, and 2013, respectively.
Insurance
We maintain “all-risk” property and rental value coverage (including coverage regarding the perils of flood, earthquake and terrorism) within twothree property insurance portfolios and liability insurance. As of June 30, 2014, theThe first property portfolio maintains a blanket limit of $950.0 million per occurrence, including terrorism, for the majority of the New York City properties in our portfolio and expires December 31, 2014.2015. The second portfolio maintains a limit of $700.0 million per occurrence, including terrorism, for someseveral New York City properties and the majority of the Suburban properties and expires December 31, 2015. Each policyof these policies includes $100.0 million of flood coverage, with a lower sublimit for locations in high hazard flood zones. A third blanket property policy covers most of our residential assets and maintains a limit of $380 million per occurrence, including terrorism, for our residential properties and expires January 31, 2016. We maintain two liability policies which cover all our properties and provide limits of $201.0 million per occurrence and in the aggregate per location. The liability policies expire on October 31, 2014.2015 and January 31, 2016 and cover our commercial and residential, respectively. Additional coverage may be purchased on a stand-alone basis for certain assets.
In October 2006, we formed a wholly-owned taxable REIT subsidiary, Belmont Insurance Company, or Belmont, to act as a captive insurance company and be one of the elements of our overall insurance program. Belmont is a subsidiary of ours. Belmont was formed in an effort to, among other reasons, stabilize to some extent the fluctuations of insurance market conditions. Belmont

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is licensed in New York to write Terrorism, NBCR (nuclear, biological, chemical, and radiological), General Liability, Environmental Liability, Flood and D&O coverage.

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The Terrorism Risk Insurance Act, or TRIA, which was enacted in November 2002, was renewed December 31, 2005 and again on December 31, 2007. Congress extended TRIA, now called TRIPRA (Terrorism Risk Insurance Program Reauthorization and Extension Act of 2007) until December 31, 2014. TRIPRA was not renewed by Congress and expired on December 31, 2014. However, on January 12, 2015, TRIPRA was reauthorized until December 31, 2020 (Terrorism Insurance Program Reauthorization and Extension Act of 2015). The law extends the federal Terrorism Insurance Program that requires insurance companies to offer terrorism coverage and provides for compensation for insured losses resulting from acts of certified terrorism, subject to the current program trigger of $100.0 million. There is no assurance that TRIPRAmillion, which will be extended.increase by $20 million per annum, commencing December 31, 2015. Our debt instruments, consisting of a non-recourse mortgage loansnote secured by one of our properties, (which are generally non-recourse to us), mezzanine loans, ground leases, our 2012 credit facility, senior unsecured notes and other corporate obligations, as well as ground leases, contain customary covenants requiring us to maintain insurance. Although we believe that we currently maintain sufficient insurance coverage to satisfy these obligations, there is no assurance that in the future we will be able to procure coverage at a reasonable cost. In such instances, there can be no assurance that the lenders or ground lessors under these instruments will not take the position that a total or partial exclusion from “all-risk” insurance coverage for losses due to terrorist acts is a breach of these debt and ground lease instruments allowing the lenders or ground lessors to declare an event of default and accelerate repayment of debt or recapture of ground lease positions. In addition, if lenders prevail in asserting that we are required to maintain full coverage for these risks, it could result in substantially higher insurance premiums.
We own Belmont and the accounts of Belmont are part of our consolidated financial statements. If Belmont experiences a loss and is required to pay under its insurance policy, we would ultimately record the loss to the extent of Belmont’s required payment. Therefore, insurance coverage provided by Belmont should not be considered as the equivalent of third-party insurance, but rather as a modified form of self-insurance.
We monitor all properties that are subject to triple net leases to ensure that tenants are providing adequate coverage. Certain joint ventures may be covered under policies separate from our policies, at coverage limits which we deem to be adequate. We continually monitor these policies. Although we consider our insurance coverage to be appropriate, in the event of a major catastrophe, we may not have sufficient coverage to replace certain properties.
Funds fromFrom Operations
Funds From Operations, or FFO, is a widely recognized measure of REIT performance. We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, or 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 we do. The revised White Paper on FFO approved by the Board of Governors of NAREIT in April 2002, and as subsequently amended, defines FFO as net income (loss) (computed in accordance with Generally Accepted Accounting Principles, or GAAP), excluding gains (or losses) from debt restructurings, 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. We present FFO because we consider it an important supplemental measure of our operating performance and believe 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.
We also use FFO as one of several criteria to determine performance-based bonuses for members of our 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 extraordinary items, 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, 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 our financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions.

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FFO for the three and six months ended June 30, 2014March 31, 2015 and 20132014, are as follows (in thousands):
 Three Months Ended June 30, Six Months Ended June 30,Three Months Ended March 31,
 2014 2013 2014 20132015 2014
Net income attributable to SL Green common stockholders $235,541
 $8,276
 $381,631
 $27,185
$43,277
 $146,090
Add:           
Depreciation and amortization 94,838
 81,577
 184,217
 160,200
108,337
 86,515
Discontinued operations depreciation adjustments —
 2,060
 433
 4,126
—
 3,297
Unconsolidated joint ventures depreciation and noncontrolling interest adjustments 8,161
 17,620
 21,148
 25,148
Joint venture depreciation and noncontrolling interest adjustments8,622
 12,987
Net income attributable to noncontrolling interests 10,488
 3,248
 16,707
 6,704
7,670
 6,219
Less:           
Gain on sale of discontinued operations 114,735
 —
 114,735
 1,113
12,983
 —
Equity in net gain (loss) on sale of joint venture property/interest 1,444
 (3,583) 106,084
 (3,583)
Purchase price fair value adjustment 71,446
 (2,305) 71,446
 (2,305)
Depreciable real estate reserves, net of recoveries —
 (2,150) —
 (2,150)
Depreciation and amortization on non-rental real estate assets 503
 343
 1,017
 588
Funds from Operations $160,900
 $120,476
 $310,854
 $229,700
Equity in net gain on sale of interest in unconsolidated joint venture/real estate—
 104,640
Depreciation on non-rental real estate assets525
 514
Funds from Operations attributable to SL Green common stockholders and noncontrolling interests$154,398
 $149,954
Cash flows provided by operating activities $188,414
 $120,132
 $276,562
 $209,688
$90,959
 $88,148
Cash flows (used in) provided by investing activities $(246,240) $126,354
 $(318,041) $(42,722)
Cash flows provided by (used in) investing activities$230,297
 $(71,801)
Cash flows (used in) provided by financing activities $(81,233) $(267,621) $142,890
 $(157,981)$(271,895) $224,123
Inflation
Substantially all of our office leases provide for separate real estate tax and operating expense escalations as well as operating expense recoveries based on increases in the Consumer Price Index or other measures such as porters' wage. In addition, many of the leases provide for fixed base rent increases. We believe that inflationary increases maywill be at least partially offset by the contractual rent increases and expense escalations described above.
Accounting Standards Updates
The Accounting Standards Updates are discussed in Note 2, "Significant Accounting Policies-Accounting Standards Updates" in the accompanying consolidated financial statements.

Forward-Looking Information
This report 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 report that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including such matters as future capital expenditures, dividends and acquisitions (including the amount and nature thereof), development trends of the real estate industry and the Manhattan, Brooklyn, Westchester County, Connecticut, Long Island and Northern New Jersey office markets, business strategies, expansion and growth of our operations and other similar matters, 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 report are subject to a number of risks and uncertainties 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. These risks and uncertainties include:

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the effect of general economic, business and financial conditions, and their effect on the New York metropolitanCity real estate market in particular;
dependence upon certain geographic markets;
risks of real estate acquisitions, dispositions, developments and developments,redevelopment, including the cost of construction delays and cost overruns;
risks relating to debt and preferred equity investments;

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availability and creditworthiness of prospective tenants and borrowers;
bankruptcy or insolvency of a major tenant or a significant number of smaller tenants;
adverse changes in the real estate markets, including reduced demand for office space, increasing vacancy, and increasing availability of sublease space;
availability of capital (debt and equity);
unanticipated increases in financing and other costs, including a rise in interest rates;
our ability to comply with financial covenants in our debt instruments;
our ability to maintain its status as a REIT;
risks of investing through joint venture structures, including the fulfillment by our partners of their financial obligations;
the continuing threat of terrorist attacks, in particular in the New York Metropolitan area and on our tenants;attacks;
our ability to obtain adequate insurance coverage at a reasonable cost and the potential for losses in excess of our insurance coverage, including as a result of environmental contamination; and,
legislative, regulatory and/or safety requirements adversely affecting REITs and the real estate business including costs of compliance with the Americans with Disabilities Act, the Fair Housing Act and other similar laws and regulations.
Other factors and risks to our business, many of which are beyond our control, are described in other sections of this report and in our other filings with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of future events, new information or otherwise.


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ITEM 3.    Quantitative and Qualitative Disclosure About Market RiskQUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
For quantitative and qualitative disclosure about market risk, see Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operation - Market Rate Risk" in this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2014March 31, 2015 for the Company and the Operating Partnership and Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations—Market Rate Risk" in the Annual Report on Form 10-K for the year ended December 31, 20132014 for the Company and the Operating Partnership. Our exposures to market risk have not changed materially since December 31, 2013.2014.
ITEM 4.    CONTROLS AND PROCEDURES
SL GREEN REALTY CORP.
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-15(e) of the Exchange Act. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in our periodic reports. Also, the Company has investments in certain unconsolidated entities. As the Company does not control these entities, its disclosure controls and procedures with respect to such entities are necessarily substantially more limited than those the Company maintains with respect to its consolidated subsidiaries.
As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation as of the end of the period covered by this report, the Company's Chief Executive Officer and Chief Financial Officer concluded that its disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure of information relating to the Company that would potentially be subject to disclosure under the Exchange Act and the rules and regulations promulgated thereunder.
Changes in Internal Control over Financial Reporting
There have been no significant changes in the Company's internal control over financial reporting during the quarter ended June 30, 2014March 31, 2015 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.
SL GREEN OPERATING PARTNERSHIP, L.P.
Evaluation of Disclosure Controls and Procedures
The Operating Partnership maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Operating Partnership's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Operating Partnership's management, including the Chief Executive Officer and Chief Financial Officer of the Operating Partnership's general partner, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 13a-15(e) of the Exchange Act. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Operating Partnership to disclose material information otherwise required to be set forth in the Operating Partnership's periodic reports. Also, the Operating Partnership has investments in certain unconsolidated entities. As the Operating Partnership does not control these entities, the Operating Partnership's disclosure controls and procedures with respect to such entities are necessarily substantially more limited than those it maintains with respect to its consolidated subsidiaries.
As of the end of the period covered by this report, the Operating Partnership carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer of the Operating Partnership's general partner, of the effectiveness of the design and operation of the Operating Partnership's disclosure controls and procedures. Based upon that evaluation as of the end of the period covered by this report, the Chief Executive Officer and Chief Financial Officer of the Operating Partnership's general partner concluded that the Operating Partnership's disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure of information relating to the Operating Partnership that would potentially be subject to disclosure under the Exchange Act and the rules and regulations promulgated thereunder.


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Changes in Internal Control over Financial Reporting
There have been no significant changes in the Operating Partnership's internal control over financial reporting during the quarter ended June 30, 2014March 31, 2015 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.


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PART II
ITEM 1.3.    LEGAL PROCEEDINGS
As of June 30, 2014, neitherMarch 31, 2015, the Company norand the Operating Partnership were not involved in any material litigation nor, to management's knowledge, was any material litigation threatened against us or our portfolio other than routine litigation arising in the ordinary course of business or litigation that is adequately covered by insurance.
ITEM 1A.    RISK FACTORS
There have been no material changes to the risk factors disclosed in "Part I. Item 1A. Risk Factors" in the 20132014 Annual Report on Form 10-K of the Company and the Operating Partnership.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.    MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5.    OTHER INFORMATION
None.

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ITEM 6. EXHIBITS
(a)Exhibits:
3.110.1Articles of Restatement of the Operating Partnership, dated June 11, 2014, filed herewith.
3.2Third Amended and Restated Bylaws of the Company, dated June 11, 2014, filed herewith.
3.3
Thirteenth Amendment to the First Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated as of April 2, 2014, incorporated by reference to the Company's Form 8-K, dated April 4, 2014, filed with the SEC on April 4, 2014.

3.4
Fourteenth Amendment to the First Amended and Restated Agreement of Limited Partnership of theSL Green Operating Partnership, dated as of July 1, 2014, incorporated by reference to the Company's Form 8-K, dated July 2, 2014,L.P., filed with the SEC on July 2, 2014.

3.510.2
Fifteenth Amendment to the First Amended and Restated Agreement of Limited Partnership of theSL Green Operating Partnership, dated as of July 1, 2014, incorporated by reference to the Company's Form 8-K, dated July 2, 2014,L.P., filed with the SEC on July 2, 2014.

10.3Employment Agreement, dated as of October 30, 2014 between SL Green Realty Corp. and Matthew DiLiberto.
31.1Certification by the Chief Executive Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
31.2Certification by the Chief Financial Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
31.3Certification by the Chief Executive Officer of the Company, the sole general partner of the Operating Partnership pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
31.4Certification by the Chief Financial Officer of the Company, the sole general partner of the Operating Partnership pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.1Certification by the Chief Executive Officer of the Company pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.2Certification by the Chief Financial Officer of the Company pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.3Certification by the Chief Executive Officer of the Company, the sole general partner of the Operating Partnership pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.4Certification by the Chief Financial Officer of the Company, the sole general partner of the Operating Partnership pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
101.1101.10The following financial statements from SL Green Realty Corp. and SL Green Operating Partnership L.P.’s Quarterly Report on Form 10-Q for the three months ended June 30, 2014,March 31, 2015, formatted in XBRL: (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Income (unaudited), (iii) Consolidated Statements of Comprehensive Income (unaudited), (iv) Consolidated Statement of Equity (unaudited), (v) Consolidated Statement of Capital (unaudited) (vi) Consolidated Statements of Cash Flows (unaudited), and (vii) Notes to Consolidated Financial Statements (unaudited), detail tagged and filed herewith.


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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, 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/ James MeadMATTHEW J. DILIBERTO
Date: August 11, 2014Dated: May 8, 2015   
James MeadMatthew J. DiLiberto
 Chief Financial Officer



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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
     
  SL GREEN OPERATING PARTNERSHIP, L.P.
  By:  SL Green Realty Corp.
     
    /s/ James MeadMATTHEW J. DILIBERTO
Date: August 11, 2014Dated: May 8, 2015 By: 
James MeadMatthew J. DiLiberto
 Chief Financial Officer


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