Business Context and Reporting Period
Company: Empire State Realty Trust, Inc. (ESRT) and Empire State Realty OP, L.P.
Filing Type: Form 8-K (Current Report)
Date of Report: July 24, 2019
Reporting Period: Second Quarter 2019
Business Overview: The registrant is a real estate investment trust (REIT) owning and operating commercial properties, including the Empire State Building. This filing announces the release of financial results for the second quarter of 2019 via a press release and supplemental information.
Key Financial Metrics
Revenue, Profit, Cash Flow, Margins, Debt, and Liquidity:
The provided filing text does not contain specific numerical values for revenue, net income, cash flow, margins, debt levels, or liquidity ratios. The document serves as a notification that these results were released in a press release (Exhibit 99.1) and supplemental report (Exhibit 99.2), which are incorporated by reference but not detailed in the text of this 8-K.
Non-GAAP Measures Defined:
The filing provides detailed definitions for the following supplemental financial measures used by the company, though specific values are not listed in this text:
- Funds From Operations (FFO): Net income excluding impairment writedowns, gains/losses from debt restructurings and sales, plus real estate depreciation/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/leasing costs.
- Net Operating Income (NOI): Operating performance measure excluding cost of funds, depreciation, and general administrative expenses.
- EBITDA: Net income plus interest, taxes, depreciation, and amortization.
Material Changes
The filing text does not provide specific data regarding material changes in financial performance compared to the prior comparable period. It only confirms the issuance of the Q2 2019 results.
Guidance, Outlook, and Risks
Management Commentary and Outlook:
The text does not contain specific forward-looking guidance or management commentary on future performance. It notes that the supplemental information is available on the company's website.
Risks and Contingencies:
The filing includes standard disclaimers regarding the non-GAAP measures defined above:
- These measures do not represent cash generated from operating activities.
- They should not be considered alternatives to GAAP net income or cash flow from operating activities.
- They are not indicative of cash available to fund ongoing needs or distributions.
- Comparability with other REITs is not assured due to varying computation methods.
Unusual Items:
The definitions of Core FFO and Modified FFO imply the existence of non-recurring items such as acquisition expenses, deferred tax asset write-offs, and below-market ground lease amortization, though specific instances or amounts are not detailed in this text.
Investor Verification Checklist
- Verify Numerical Results: Review the attached press release (Exhibit 99.1) and supplemental report (Exhibit 99.2) for actual Q2 2019 revenue, FFO, NOI, and debt figures, as they are absent from this 8-K text.
- Compare Non-GAAP Metrics: Analyze the company's specific calculations for Core FFO and Core FAD against industry peers, noting the specific adjustments for ground lease amortization and acquisition expenses.
- Assess Liquidity: Check the supplemental information for details on capital expenditures, leasing commissions, and debt service capabilities, as the filing explicitly states these non-GAAP measures do not indicate cash available for distributions.
- Review Ground Lease Impact: Investigate the materiality of the below-market ground lease amortization mentioned in the Modified FFO definition, stemming from the 2014 acquisition of option properties.