Business Context and Reporting Period
Company: Empire State Realty Trust, Inc. (and Empire State Realty OP, L.P.)
Filing Type: Form 8-K (Current Report)
Date of Report: April 25, 2018
Reporting Period: First Quarter 2018
This filing serves as a notification that the Company issued a press release announcing its financial results for the first quarter of 2018. The actual financial data is contained in the attached press release (Exhibit 99.1) and supplemental information (Exhibit 99.2), which are incorporated by reference but not deemed "filed" for liability purposes under Section 18 of the Exchange Act.
Key Financial Metrics
The provided text does not contain specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. The filing text is limited to the definitions and methodologies for the following non-GAAP financial measures used by the Company:
- Funds From Operations (FFO): Defined per NAREIT guidelines as net income excluding impairment writedowns, gains/losses from debt restructurings and sales of properties, plus real estate depreciation and amortization.
- Modified FFO: FFO adjusted to add back above or below-market ground lease amortization.
- Core FFO: Modified FFO adjusted to exclude acquisition expenses, deferred tax asset write-offs, and losses 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 to estimate ability to fund dividends.
- 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 regarding material changes in financial performance compared to the prior comparable period. It only references the issuance of the Q1 2018 results.
Guidance, Outlook, and Risks
Management Commentary: Management emphasizes that these non-GAAP measures are supplemental and should not be considered alternatives to GAAP net income or cash flow from operating activities. They are presented to assist investors in understanding operating performance and comparing results with other REITs.
Risks and Limitations Disclosed:
- FFO, Modified FFO, Core FFO, and Core FAD do not represent cash generated from operating activities and are not indicative of cash available to fund ongoing needs or distributions.
- There is no assurance that the Company's calculations for these measures are comparable to those of other REITs.
- NOI excludes significant economic costs such as capital expenditures and leasing costs necessary to maintain property performance.
- EBITDA should not be used as a measure of liquidity.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release) for the actual Q1 2018 revenue, net income, and FFO figures.
- Review Exhibit 99.2 (Supplemental Report) for the detailed reconciliation of GAAP net income to FFO, Modified FFO, Core FFO, and Core FAD.
- Verify the specific impact of below-market ground lease amortization on Modified FFO.
- Confirm the Company's occupancy rates and rental rate trends mentioned in the supplemental information.
- Check for any updates on debt maturities or refinancing activities referenced in the full press release.