Business Context and Reporting Period
This Form 8-K filing by Empire State Realty OP, L.P. and Empire State Realty Trust, Inc. reports the announcement of financial results for the first quarter of 2018. The report date is April 25, 2018. The filing serves to disclose the press release and supplemental information regarding the Company's Q1 2018 performance, which are incorporated by reference as Exhibits 99.1 and 99.2.
Key Financial Metrics
The filing text provided does not contain specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. It explicitly states that the detailed financial results are contained in the attached press release (Exhibit 99.1) and supplemental report (Exhibit 99.2).
The document defines the following non-GAAP financial measures used by the Company:
- Funds From Operations (FFO): Net income excluding impairment writedowns, gains/losses from debt restructurings and sales of properties, plus real estate depreciation and amortization.
- Modified FFO: FFO adjusted for above or below-market ground lease amortization.
- Core FFO: Modified FFO adjusted for acquisition expenses, deferred tax asset write-offs, and loss on early extinguishment of debt.
- Core Funds Available for Distribution (Core FAD): Core FFO adjusted for non-real estate depreciation, financing costs, and capital expenditures, among other items.
- Net Operating Income (NOI): A measure of property performance excluding cost of funds, depreciation, and corporate expenses.
- EBITDA: Net income plus interest, taxes, depreciation, and amortization.
Material Changes
The filing text does not provide specific data points to compare current period results against prior periods. It notes that the supplemental information attached to the filing contains the detailed results necessary to assess material changes.
Guidance, Outlook, and Risks
Management Commentary: Management presents these non-GAAP measures to provide investors with a relevant basis for comparison among REITs and to evaluate operating performance, noting that real estate generally appreciates or maintains residual value better than other depreciable assets.
Risks and Limitations: The filing includes extensive disclaimers stating that FFO, Modified FFO, Core FFO, Core FAD, NOI, and EBITDA:
- Do not represent cash generated from operating activities.
- Should not be considered alternatives to GAAP net income or cash flow from operating activities.
- Are not indicative of cash available to fund ongoing needs or make distributions.
- May not be comparable to similarly titled measures used by other companies due to varying calculation methods.
Regulatory Status: The information in Items 2.02 and 7.01 is furnished and not deemed "filed" for purposes of Section 18 of the Exchange Act, limiting its incorporation by reference into other documents unless specifically stated.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release) for specific Q1 2018 revenue, net income, and FFO figures.
- Review Exhibit 99.2 (Supplemental Report) for detailed reconciliations between GAAP net income and non-GAAP measures (FFO, Core FFO, Core FAD).
- Verify the specific impact of below-market ground lease amortization on Modified FFO.
- Confirm capital expenditure levels and leasing commission costs deducted in the Core FAD calculation.
- Check for any updates on debt maturities or refinancing activities not detailed in this summary text.