EX-99.2

EX-99.2 3 d684387dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

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Supplemental Operating and Financial Data

For the Quarter Ended December 31, 2013

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Fourth Quarter 2013


*Table of Contents*	*Page*

*Summary*
Company Profile		3
Financial Highlights		4

*Selected Property Data*
Property Summary		5
Property Detail		6
Tenant Lease Expirations		7
Largest Tenants and Portfolio Tenant Diversification by Industry		10
Observatory Metrics		11

*Financial information*
Condensed Consolidated Balance Sheet		12
Condensed Consolidated Statement of Income		13
FFO, FAD and EBITDA		14
Net Operating Income		15
Consolidated Debt Analysis
Debt Summary		16
Debt Detail		17
Debt Maturities		18
Supplemental Definitions		19

Forward-looking Statements

This supplemental package includes “forward looking statements”. Forward-looking statements may be identified by the use of words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates,” “contemplates,” “aims,” “continues,” “would” or “anticipates” or the negative of these words and phrases or similar words or phrases. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: the factors included in (i) the Company’s prospectus relating to the IPO, including those set forth under the headings “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business and Properties,” (ii) the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2013 under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and (iii) in future periodic reports filed by the Company under the Securities Exchange Act of 1934, as amended. While forward-looking statements reflect the Company’s good faith beliefs, they are not guarantees of future performance. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes after the date of this press release, except as required by applicable law. For a further discussion of these and other factors that could impact the Company’s future results, performance or transactions, see the section entitled “Risk Factors” in the prospectus relating to the IPO, and other risks described in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. Prospective investors should not place undue reliance on any forward-looking statements, which are based only on information currently available to the Company (or to third parties making the forward-looking statements).

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Fourth Quarter 2013

COMPANY PROFILE

Empire State Realty Trust, Inc. is a leading real estate investment trust (REIT) that owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area, including the Empire State Building, the world’s most famous office building.


*BOARD OF DIRECTORS*
Anthony E. Malkin	William H. Berkman	Alice M. Connell
Chairman, Chief Executive	Director, Chair of	Director
Officer and President	Compensation Committee

Thomas J. DeRosa	Steven J. Gilbert	S. Michael Giliberto
Director, Chair of	Director, Lead Director	Director
Audit Committee

Lawrence E. Golub
Director, Chair of Nominating/Corporate
Governance Committee

*EXECUTIVE MANAGEMENT*
Anthony E. Malkin	Thomas P. Durels	David A. Karp
Chairman, Chief Executive	Executive Vice President and	Executive Vice President, Chief
Officer and President	Chief of Property Operations and Leasing	Financial Officer and Treasurer

Thomas N. Keltner, Jr.
Executive Vice President,
General Counsel and Secretary

*COMPANY INFORMATION*
Corporate Headquarters	Investor Relations	New York Stock Exchange
One Grand Central Place	David A. Karp	Trading Symbol: ESRT
60 East 42nd Street	IR@empirestaterealtytrust.com
New York, NY 10165 www.empirestaterealtytrust.com
(212) 953-0888

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Fourth Quarter 2013

Financial Highlights

(unaudited and dollars in thousands, except per share amounts)


	Period from
	October 7, 2013 through
	December 31, 2013
Selected Items:
Revenue	$	127,583
EBITDA ⁽¹⁾	$	48,405
Cash net operating income ⁽¹⁾	$	54,000
Net income	$	193,431
Core funds from operations (“Core FFO”) ⁽¹⁾	$	41,395
Core funds available for distribution (“Core FAD”) ⁽¹⁾	$	21,819
Core FFO per share - diluted	$	0.17
Core FAD per share - diluted	$	0.09
Dividends declared and paid per share	$	0.0795

Portfolio statistics:
Number of properties		18
Total rentable square footage		8,350,871
Percent occupied ⁽²⁾		86.1	%

Observatory metrics:
Fourth quarter 2013
Number of visitors		980,000
Increase in visitors over fourth quarter 2012		8.5	%
Observatory revenues	$	25,389
Increase in revenues over fourth quarter 2012		10.4	%
Full year 2013
Number of visitors		4,300,000
Increase in visitors over full year 2012		2.7	%
Observatory revenues	$	101,758
Increase in revenues over full year 2012		10.8	%

Ratios:
Interest Coverage Ratio		3.9	x
Consolidated Debt to Total Market Capitalization ⁽³⁾		24	%
Consolidated Debt to EBITDA (annualized)		5.9	x
Core FFO Payout Ratio ⁽⁴⁾		47	%
Core FAD Payout Ratio ⁽⁵⁾		89	%

Class A Common Stock Price & Dividends:
Class A common stock price at quarter end	$	15.30
Average closing price	$	14.64
Dividends per share - annualized	$	0.34
Dividend yield ⁽⁶⁾		2.2	%

Notes:

(1)	Represents non-GAAP financial measures. For a discussion on what these metrics represent and why the Company presents them, see page 19 and for a reconciliation of these metrics to net income, see see pages 14 and 15.

(2)	Based on leases signed and commenced as of December 31, 2013.

(3)	Market capitalization represents the sum of (i) Company’s common stock per share price as of December 31, 2013 multiplied by the total outstanding number of shares of common stock and operating partnership units as of December 31, 2013 and (ii) our outstanding indebtedness as of December 31, 2013.

(4)	Represents the amount of Core FFO paid out in distributions.

(5)	Represents the amount of Core FAD paid out in distributions.

(6)	Based on the closing price per share of Class A common stock on December 31, 2013.

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Fourth Quarter 2013

Property Summary

(unaudited and dollars in thousands, except per square foot amounts)


	Period from October 7, 2013 through December 31, 2013
				Manhattan			Greater New York			Standalone
	Total			Office			Office			Retail
	Portfolio			Portfolio⁽¹⁾			Portfolio			Portfolio			Observatory
Number of properties		18			7			5			6
Square feet		8,350,871			6,306,601			1,840,095			204,175
Occupancy ⁽²⁾		86.1	%		84.7	%		89.7	%		97.7	%

Revenue	$	121,768		$	77,584		$	16,731		$	3,718		$	23,735
Operating expenses		(57,331	)		(42,628	)		(7,838	)		(1,178	)		(5,687	)

Net operating income		64,437			34,956			8,893			2,540			18,048

Straight-line rent		(8,932	)		(8,807	)		(94	)		(31	)		—
Above/below-market lease amortization		(1,903	)		(1,903	)		—			—			—
Acquired ground lease amortization		398			398			—			—			—

Cash net operating income	$	54,000		$	24,644		$	8,799		$	2,509		$	18,048


Leasing activity
Total leases executed		55			48			6			1
Total square footage executed		414,806			364,797			45,705			4,304
Average rent psf - leases executed	$	43.82		$	43.78		$	35.57		$	135.00
Previously escalated rents psf	$	41.29		$	40.54		$	41.06		$	107.53
Percentage of new rent over previously escalated rents		6.1	%		8.0	%		-13.4	%		25.5	%

Capital Expenditures
Tenant improvements - first generation	$	33,074
Tenant improvements - second generation		1,219
Leasing commissions - first generation		2,088
Leasing commissions - second generation		6,909
Building improvements - first generation ⁽³⁾		31,987
Building improvements - second generation		1,030

Total	$	76,307

Notes:

(1)	Includes 418,377 rentable square feet of retail space in the Company’s seven Manhattan office properties.

(2)	Based on leases signed and commenced as of December 31, 2013.

(3)	The Company estimates that between $110 million and $150 million of capital is needed beyond 2013 to complete substantially the renovation and repositioning program of its Manhattan office properties.

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Fourth Quarter 2013

Property Detail

(unaudited)


									Annualized
									Rent
Property Name	Location or Sub-Market	Rentable Square Feet ⁽¹⁾		Percent Occupied ⁽²⁾			Annualized Rent ⁽³⁾		per Occupied Square Foot ⁽⁴⁾		Number of Leases ⁽⁵⁾
*Manhattan Office Properties - Office*
The Empire State Building ⁽⁶⁾	Penn Station -Times Sq. South		2,690,927		81.6	%	$	98,832,773	$	44.98		197
One Grand Central Place	Grand Central		1,171,150		79.1	%		43,256,542		46.70		283
250 West 57th Street	Columbus Circle - West Side		475,094		87.9	%		18,934,387		45.33		159
501 Seventh Avenue	Penn Station -Times Sq. South		454,065		94.1	%		17,247,701		40.35		32
1359 Broadway	Penn Station -Times Sq. South		443,389		92.1	%		17,847,582		43.70		28
1350 Broadway ⁽⁸⁾	Penn Station -Times Sq. South		361,445		83.8	%		13,595,308		44.87		69
1333 Broadway	Penn Station -Times Sq. South		292,154		98.7	%		12,506,959		43.38		11

*Manhattan Office Properties - Office*			5,888,224		84.4	%		222,221,252		44.73		779

*Manhattan Office Properties - Retail*
The Empire State Building ⁽⁷⁾	Penn Station -Times Sq. South		143,758		92.1	%		14,943,258		112.82		16
One Grand Central Place	Grand Central		68,332		92.3	%		6,696,843		106.20		18
250 West 57th Street	Columbus Circle - West Side		51,960		80.7	%		4,930,146		117.54		7
501 Seventh Avenue	Penn Station -Times Sq. South		35,502		100.0	%		1,870,571		52.69		10
1359 Broadway	Penn Station -Times Sq. South		25,264		35.8	%		1,181,278		130.67		5
1350 Broadway ⁽⁸⁾	Penn Station -Times Sq. South		30,895		100.0	%		5,785,621		187.27		6
1333 Broadway	Penn Station -Times Sq. South		62,666		95.6	%		7,002,880		116.85		4

*Manhattan Office Properties - Retail*			418,377		89.1	%		42,410,597		113.76		66

*Sub-Total/Weighted Average Manhattan Office Properties - Office and Retail*			6,306,601		84.7	%		264,631,849		49.55		845


*Greater New York Metropolitan Area Office Properties*
First Stamford Place ⁽⁹⁾	Stamford, CT		784,160		86.5	%		28,099,513		41.41		50
Metro Center	Stamford, CT		279,385		96.9	%		14,312,707		52.89		30
383 Main Street	Norwalk, CT		257,965		88.0	%		7,220,781		31.80		20
500 Mamaroneck Avenue	Harrison, NY		289,772		94.7	%		7,774,671		28.35		34
10 Bank Street	White Plains, NY		228,813		87.3	%		6,955,211		34.81		28

*Sub-Total/Weighted Average Greater New York Metropolitan Office Properties*			1,840,095		89.7	%		64,362,883		39.00		162


*Standalone Retail Properties*
10 Union Square	Union Square		58,005		100.0	%		5,907,580		101.85		14
1542 Third Avenue	Upper East Side		56,250		91.6	%		2,223,374		43.13		2
1010 Third Avenue	Upper East Side		44,662		100.0	%		3,206,483		71.79		2
77 West 55th Street	Midtown		24,102		100.0	%		2,849,250		118.22		3
69-97 Main Street	Westport, CT		16,826		100.0	%		2,071,813		123.13		5
103-107 Main Street	Westport, CT		4,330		100.0	%		452,625		104.53		3

*Sub-Total/Weighted Average Standalone* *Retail Properties*			204,175		97.7	%		16,711,125		83.79		29


*Portfolio Total*			8,350,871		86.1	%	$	345,705,857	$	48.08		1,036


*Total/Weighted Average Office Properties*			7,728,319		85.6	%	$	286,584,135	$	43.30		941
*Total/Weighted Average Retail Properties*			622,552		91.9	%		59,121,722		103.31		95

*Portfolio Total*			8,350,871		86.1	%	$	345,705,857	$	48.09		1,036

Notes:

(1)	Excludes (i) 162,859 square feet of space across the Company’s portfolio attributable to building management use and tenant amenities and (ii) 69,757 square feet of space attributable to the Company’s observatory.

(2)	Based on leases signed and commenced as of December 31, 2013.

(3)	Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.

(4)	Represents annualized rent under leases commenced as of December 31, 2013 divided by occupied square feet.

(5)	Represents the number of leases at each property or on a portfolio basis. If a tenant has more than one lease, whether or not at the same property, but with different expirations, the number of leases is calculated equal to the number of leases with different expirations.

(6)	Includes 86,902 rentable square feet of space leased by the Company’s broadcasting tenants.

(7)	Includes 5,300 rentable square feet of space leased by Host Services of New York, a licensee of the Company’s observatory.

(8)	Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 37 years (expiring July 31, 2050).

(9)	First Stamford Place consists of three buildings.

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Fourth Quarter 2013

Tenant Lease Expirations

(unaudited)


*Total Lease Expirations*	Number of Leases Expiring ⁽¹⁾		Rentable Square Feet Expiring ⁽²⁾		Percent of Portfolio Rentable Square Feet Expiring			Annualized Rent ⁽³⁾		Percent of Portfolio Annualized Rent ⁽⁴⁾			Annualized Rent Per Rentable Square Foot
Available		—		1,023,785		12.2	%	$	—		0.0	%	$	—
Signed leases not commenced		13		136,188		1.7	%		—		0.0	%		—
2014		196		423,670		5.1	%		19,868,475		5.7	%		46.90
2015		237		715,359		8.6	%		32,454,746		9.4	%		45.37
2016		120		428,851		5.1	%		17,963,684		5.2	%		41.89
2017		99		424,685		5.1	%		21,193,062		6.1	%		49.90
2018		119		608,500		7.3	%		28,985,064		8.4	%		47.63
2019		45		482,261		5.8	%		20,866,045		6.0	%		43.27
2020		71		693,210		8.3	%		36,569,513		10.6	%		52.75
2021		40		444,074		5.3	%		22,967,907		6.6	%		51.72
2022		34		377,328		4.5	%		20,747,639		6.0	%		54.99
2023		28		457,587		5.5	%		21,792,423		6.3	%		47.62
Therafter		47		2,135,373		25.6	%		102,297,299		29.6	%		47.91

Total		1,049		8,350,871		100.0	%	$	345,705,857		100.0	%	$	48.09

Notes:

(1)	If a lease has two different expiration dates, it is considered to be two leases (for the purpose of lease count and square footage).

(2)	Excludes (i) 162,859 rentable square feet of space across the Company portfolio attributable to building management use and tenant amenities and (ii) 69,757 square feet of space attributable to the Company’s observatory.

(3)	Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.

(4)	Represents the percentage of annualized rent of the Company’s office and retail portfolio in the aggregate.

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Fourth Quarter 2013

Tenant Lease Expirations

(unaudited)


*Manhattan Office Properties ⁽¹⁾*	Number of Leases Expiring ⁽²⁾		Rentable Square Feet Expiring ⁽³⁾		Percent of Portfolio Rentable Square Feet Expiring			Annualized Rent ⁽⁴⁾		Percent of Portfolio Annualized Rent ⁽⁵⁾			Annualized Rent Per Rentable Square Foot
Available		—		823,041		14.0	%	$	—		0.0	%	$	—
Signed leases not commenced		8		96,923		1.6	%		—		0.0	%		—
2014		167		373,393		6.3	%		17,189,802		7.7	%		46.04
2015		205		587,219		10.0	%		25,554,684		11.5	%		43.52
2016		91		252,720		4.3	%		10,939,701		4.9	%		43.29
2017		71		228,597		3.9	%		11,196,708		5.0	%		48.98
2018		82		337,657		5.7	%		16,973,308		7.6	%		50.27
2019		30		214,865		3.6	%		9,170,151		4.1	%		42.68
2020		40		424,049		7.2	%		18,348,771		8.3	%		43.27
2021		28		318,126		5.4	%		14,361,697		6.5	%		45.14
2022		21		151,425		2.6	%		7,667,379		3.5	%		50.63
2023		18		298,343		5.1	%		13,171,886		5.9	%		44.15
Thereafter		26		1,781,866		30.3	%		77,647,165		34.9	%		43.58

Total Manhattan office properties		787		5,888,224		100.0	%		222,221,252		100.0	%		44.73


*Greater New York Metropolitan Area Office Properties*
Available		—		155,182		8.4	%		—		0.0	%		—
Signed leases not commenced		3		34,565		1.9	%		—		0.0	%		—
2014		22		39,074		2.1	%		1,767,210		2.7	%		45.23
2015		20		98,237		5.3	%		3,750,997		5.8	%		38.18
2016		18		90,665		4.9	%		3,141,333		4.9	%		34.65
2017		21		149,268		8.1	%		5,994,628		9.3	%		40.16
2018		30		243,440		13.2	%		9,362,131		14.5	%		38.46
2019		9		240,449		13.1	%		8,817,115		13.7	%		36.67
2020		18		203,494		11.1	%		7,811,147		12.1	%		38.39
2021		6		96,066		5.2	%		4,166,113		6.5	%		43.37
2022		6		168,044		9.1	%		6,582,373		10.2	%		39.17
2023		6		114,106		6.2	%		4,957,470		7.7	%		43.45
Therafter		6		207,505		11.3	%		8,012,366		12.4	%		38.61

Total greater New York metropolitan area office properties		165		1,840,095		100.0	%		64,362,883		100.0	%		39.00


*Retail Properties*
Available		—		45,562		7.3	%		—		0.0	%		—
Signed leases not commenced		2		4,700		0.8	%		—		0.0	%		—
2014		7		11,203		1.8	%		911,463		1.5	%		81.36
2015		12		29,903		4.8	%		3,149,065		5.3	%		105.31
2016		11		85,466		13.7	%		3,882,650		6.6	%		45.43
2017		7		46,820		7.5	%		4,001,726		6.8	%		85.47
2018		7		27,403		4.4	%		2,649,625		4.5	%		96.69
2019		6		26,947		4.3	%		2,878,779		4.9	%		106.83
2020		13		65,667		10.5	%		10,409,595		17.6	%		158.52
2021		6		29,882		4.8	%		4,440,097		7.5	%		148.59
2022		7		57,859		9.3	%		6,497,887		11.0	%		112.31
2023		4		45,138		7.3	%		3,663,067		6.2	%		81.15
Therafter		15		146,002		23.5	%		16,637,768		28.1	%		113.96

Total retail properties		97		622,552		100.0	%		59,121,722		100.0	%		103.31


Total portfolio lease expirations		1,049		8,350,871		100.0	%	$	345,705,857		100.0	%	$	48.09

Notes:

(1)	Excludes (i) retail space in the Company’s Manhattan office properties and (ii) the Empire State Building broadcasting licenses and observatory operations.

(2)	If a lease has two different expiration dates, it is considered to be two leases (for the purpose of lease count and square footage).

(3)	Excludes (i) 162,859 rentable square feet of space across the Company portfolio attributable to building management use and tenant amenities and (ii) 69,757 square feet of space attributable to the Company’s observatory.

(4)	Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.

(5)	Represents the percentage of annualized rent of the Company’s office and retail portfolio in the aggregate.

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Fourth Quarter 2013

Tenant Lease Expirations Empire State Building - Office

(unaudited)


*Empire State Building Office ⁽¹⁾*	Number of Leases Expiring ⁽²⁾		Rentable Square Feet Expiring		Percent of Portfolio Rentable Square Feet Expiring			Annualized Rent ⁽³⁾		Percent of Portfolio Annualized Rent			Annualized Rent Per Rentable Square Foot
Available		—		490,451		18.2	%	$	—		0.0	%	$	—
Signed leases not commenced		3		3,422		0.1	%		—		0.0	%		—
2014		36		126,759		4.7	%		5,710,329		5.8	%		45.05
2015		37		179,184		6.7	%		7,648,051		7.7	%		42.68
2016		14		73,060		2.7	%		3,358,603		3.4	%		45.97
2017		20		63,243		2.4	%		3,374,330		3.4	%		53.35
2018		22		70,229		2.6	%		3,449,180		3.5	%		49.11
2019		10		38,301		1.4	%		1,717,166		1.7	%		44.83
2020		17		228,593		8.5	%		10,316,319		10.4	%		45.13
2021		10		72,345		2.7	%		3,410,586		3.5	%		47.14
2022		9		35,151		1.3	%		1,976,543		2.0	%		56.23
2023		7		35,699		1.3	%		1,830,267		1.9	%		51.27
Thereafter		12		1,274,490		47.4	%		56,041,399		56.7	%		43.97

Total Empire State Building office		197		2,690,927		100.0	%	$	98,832,773		100.0	%	$	44.98

Notes:

(1)	Excludes retail space, broadcasting licenses and observatory operations.

(2)	If a lease has two different expiration dates, it is considered to be two leases (for the purpose of lease count and square footage).

(3)	Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.

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Fourth Quarter 2013

20 Largest Tenants and Portfolio Tenant Diversification by Industry

(unaudited)


20 Largest Tenants	Number of Leases		Number of Properties		Lease Expiration ⁽¹⁾	Weighted Average Remaining Lease Term⁽²⁾		Total Occupied Square Feet ⁽³⁾		Percent of Portfolio Rentable Square Feet ⁽⁴⁾			Annualized Rent ⁽⁵⁾		Percent of Portfolio Annualized Rent ⁽⁶⁾

1. LF USA		6		3	Oct. 2021-Oct. 2028		13.5 years		886,995		10.6	%	$	36,115,628		10.4	%
2. Coty, Inc.		1		1	Jan. 2030		16.1 years		308,660		3.7	%		14,573,848		4.2	%
3. PVH Corp.		1		1	Oct. 2028		14.8 years		223,616		2.7	%		9,168,174		2.7	%
4. Thomson Reuters		4		2	Apr. 2018-Apr. 2020		5.6 years		147,208		1.8	%		7,113,465		2.1	%
5. Urban Outfitters		1		1	Sept. 2029		15.8 years		56,730		0.7	%		6,200,000		1.8	%
6. Legg Mason		1		1	Sept. 2024		10.8 years		140,398		1.7	%		5,970,109		1.7	%
7. Federal Deposit Insurance Corp.		1		1	Jan. 2020		6.0 years		121,879		1.5	%		5,906,747		1.7	%
8. LinkedIn		1		1	Feb. 2026		12.2 years		115,559		1.4	%		5,255,092		1.5	%
9. Host Services of New York		1		1	May 2020		6.3 years		5,300		0.1	%		5,064,790		1.5	%
10. Odyssey Reinsurance		1		1	Sept. 2022		8.8 years		101,619		1.2	%		3,898,014		1.1	%
11. Duane Reade (a division of Walgreen Co.)		2		2	Feb. 2021-May 2025		9.5 years		23,134		0.3	%		3,715,942		1.1	%
12. Shutterstock		1		1	Sept. 2024		10.8 years		77,845		0.9	%		3,658,715		1.1	%
13. Bank of America		3		3	Apr. 2015-Feb. 2018		2.7 years		29,671		0.4	%		3,298,821		1.0	%
14. Reed Elsevier, Inc.		1		1	Nov. 2019		5.9 years		96,727		1.2	%		3,155,742		0.8	%
15. Aetna Life Insurance Company		1		1	June 2018		4.5 years		51,621		0.6	%		2,966,060		0.9	%
16. Human Rights Watch		1		1	Oct. 2026		12.8 years		66,479		0.8	%		2,720,359		0.8	%
17. JPMorgan Chase Bank		3		2	Dec. 2021-Dec 2027		13.5 years		28,391		0.3	%		2,677,469		0.8	%
18. Jefferies Group, Inc.		2		1	June 2021-Nov. 2022		8.1 years		44,930		0.5	%		2,589,006		0.7	%
19. Ethan Allen Retail, Inc.		1		1	July 2022		8.6 years		34,670		0.3	%		2,586,165		0.7	%
20. AT&T Wireless		2		2	Jan. 2018-Oct. 2021		7.9 years		6,541		0.1	%		2,431,275		0.7	%

Total		35							2,567,973		30.8	%	$	129,065,421		37.3	%

Notes:

(1)

Expiration dates are per lease and do not assume exercise of renewal or extension options. Except for the Federal Deposit Insurance Corporation lease (February 1, 2015), none of these leases contain early termination options. For tenants with more than two leases, the lease expiration is shown as a range.

(2)	Represents the weighted average lease term, based on annualized rent.

(3)	Based on leases signed and commenced as of December 31, 2013.

(4)	Represents the percentage of rentable square feet of the Company’s office and retail portfolios in the aggregate.

(5)	Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.

(6)	Represents the percentage of annualized rent of the Company’s office and retail portfolios in the aggregate.

Portfolio Tenant Diversification by Industry

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Fourth Quarter 2013

Observatory Metrics

(unaudited and in thousands)


	Three Months Ended
Observatory NOI	December 31, 2013			September 30, 2013		June 30, 2013		March 31, 2013		December 31, 2012

Observatory revenue	$	25,389		$	32,356	$	27,304	$	16,709	$	23,025
Observatory expenses		6,193			6,482		6,109		5,522		5,313
Intercompany rent expense ⁽¹⁾		20,276			24,260		13,550		3,416		19,428

Observatory NOI	$	(1,080	)	$	1,614	$	7,645	$	7,771	$	(1,716	)

Note:

(1)	The observatory pays a market-based rent payment comprised of fixed and percentage rent to the Empire State Building.

Annual Observatory Revenues 2009 to 2013

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Fourth Quarter 2013

Condensed Consolidated Balance Sheet

(unaudited and dollars in thousands)


	December 31, 2013
Assets
Commercial real estate properties, at cost
Land	$	187,566
Development costs		6,459
Building and improvements		1,103,818
Building leasehold interests and improvements		351,580

		1,649,423
Less: accumulated depreciation		(295,351	)

Commercial real estate properties, net		1,354,072
Cash and cash equivalents		60,743
Restricted cash		55,621
Tenant and other receivables, net		24,817
Deferred rent receivables, net		62,689
Prepaid expenses and other assets		35,407
Deferred costs, net		78,938
Acquired below-market ground lease, net		62,312
Acquired lease intangibles, net		249,983
Goodwill		491,479

Total assets	$	2,476,061


Liabilities and Equity
Mortgage notes payable	$	883,112
Term loan and credit facility		325,000
Accounts payable and accrued expenses		81,908
Acquired below-market leases, net		129,882
Deferred revenue and other liabilities		21,568
Tenants’ security deposits		31,406

Total liabilities		1,472,876
Total equity		1,003,185

Total liabilities and equity	$	2,476,061

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Fourth Quarter 2013

Condensed Consolidated Statement of Income

(unaudited and dollars in thousands, except per share amounts)


	Period from October 7, 2013 through December 31, 2013
Revenues
Rental revenue	$	79,987
Tenant expense reimbursement		15,836
Observatory revenue		23,735
Construction revenue		5,265
Third party management and other fees		550
Other revenue and fees		2,210

Total revenues		127,583

Operating expenses
Property operating expenses		34,453
Marketing, general, and administrative expenses		15,254
Observatory expenses		5,687
Construction expenses		5,468
Real estate taxes		17,191
Depreciation and amortization		27,375

Total operating expenses		105,428

Total operating income		22,155
Other income (expense)
Interest expense		(13,147	)
Acquisition expenses		(138,140	)
Gain on consolidation of non-controlled entities		322,563

Net income		193,431
Net income attributable to non-controlling interests		(118,186	)

Net income attributable to Empire State Realty Trust, Inc.	$	75,245


Weighted average common shares outstanding
Basic		95,574


Diluted		95,611


Net income per share attributable to Empire State Realty Trust, Inc.
Basic	$	0.79


Diluted	$	0.79

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Fourth Quarter 2013

Funds from Operations (“FFO”), Funds Available for Distribution (“FAD”) and EBITDA

(unaudited and dollars in thousands, except per share amounts)


	Period from October 7, 2013 through December 31, 2013
Reconciliation of Net Income to FFO and Core FFO

Net Income	$	193,431
Real estate depreciation and amortization		27,352

FFO		220,783
Gain on consolidation of non-controlled entities		(322,563	)
Acquisition expenses		138,140
Severance expenses		2,738
Retirement equity compensation expenses		2,297

Core FFO	$	41,395


FFO per share
Basic	$	0.90

Diluted	$	0.90


Core FFO per share
Basic	$	0.17

Diluted	$	0.17


Reconciliation of Core FFO to Core FAD
Core FFO	$	41,395
Add:
Amortization of deferred financing costs		1,074
Amortization of below-market ground lease		398
Non-real estate depreciation and amortization		23
Amortization of non-cash compensation expense		697
Deduct:
Straight-line rental revenues		(8,932	)
Amortization of debt premiums		(922	)
Above/below-market rent revenue		(1,903	)
FF&E purchases		(853	)
Tenant improvements - second generation		(1,219	)
Building improvements - second generation		(1,030	)
Leasing commissions - second generation		(6,909	)

Core FAD	$	21,819


Core FAD per share
Basic	$	0.09

Diluted	$	0.09


Reconciliation of Net Income to EBITDA
Net Income	$	193,431
Interest expense		13,147
Income tax benefit		(1,125	)
Depreciation and amortization		27,375
Acquisition expenses		138,140
Gain on consolidation of non-controlled entities		(322,563	)

EBITDA	$	48,405

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Fourth Quarter 2013

Net Operating Income (“NOI”)

(unaudited and dollars in thousands)


	Period from October 7, 2013 through December 31, 2013
Reconciliation of Net Income to NOI and Cash NOI

Net income	$	193,431
Add:
Marketing, general and administrative expenses		15,254
Depreciation and amortization		27,375
Interest expense		13,147
Construction expenses		5,468
Acquisition expenses		138,140
Less:
Construction revenue		(5,265	)
Third-party management and other fees		(550	)
Gain on consolidation of non-controlled entities		(322,563	)

Net operating income		64,437

Straight-line rent		(8,932	)
Above/below-market lease amortization		(1,903	)
Assumed ground lease amortization		398

Cash net operating income	$	54,000

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Fourth Quarter 2013

Debt Summary

(unaudited and dollars in thousands)


			Weighted Average
	Principal		Interest			Maturity
Debt Summary	Balance		Rate			(Years)
Fixed rate mortgage debt	$	835,647		5.78	%		2.6
Variable rate mortgage debt		47,465		3.91	%		0.9
Term loan and credit facility		325,000		1.51	%		4.7

Total	$	1,208,112		4.56	%		3.1


Available Borrowing	Facility		Outstanding at December 31, 2013		Letters of Credit		Empire Reserve ⁽²⁾		Remaining Capacity at December 31, 2013
Mortgages	$	—	$	883,112	$	—	$	—	$	10,615
Term loan and credit facility ⁽¹⁾		800,000		325,000		—		33,225		441,775

Total	$	800,000	$	1,208,112	$	—	$	33,225	$	452,390


				Current			In
Covenant Summary	Required			Quarter			Compliance
Secured Credit Facility
Maximum Total Leverage		< 60	%		33.1	%	Yes
Maximum Secured Debt		< 40	%		24.2	%	Yes
Minimum Fixed Charge Coverage		> 1.5	x		3.0	x	Yes
Maximum Variable Rate Indebtedness		< 25	%		10.2	%	Yes

Notes:

(1)	The term loan and credit facility has an accordion feature allowing for an increase in maximum aggregate principal balance to $1,250,000 under certain circumstances.

(2)	Reflects a reserve for Empire State Building capital expenditures.

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Fourth Quarter 2013

Debt Detail

(unaudited and dollars in thousands)


	Stated Interest Rate (%)			Current Interest Rate (%)			Principal Balance			Maturity Date		Amortization


Fixed rate debt:
501 Seventh Avenue (first lien mortgage loan)		5.75	%		5.75	%	$	1,037			8/1/2014		25 years
501 Seventh Avenue (second lien mortgage loan)		5.75	%		5.75	%		31,459			8/1/2014		25 years
501 Seventh Avenue (second lien mortgage loan)		6.04	%		6.04	%		6,889			8/1/2014		25 years
1359 Broadway (first lien mortgage loan)		5.75	%		5.75	%		9,579			8/1/2014		25 years
1359 Broadway (second lien mortgage loan)		5.75	%		5.75	%		5,561			8/1/2014		25 years
1359 Broadway (second lien mortgage loan)		5.87	%		5.87	%		11,311			8/1/2014		25 years
1359 Broadway (second lien mortgage loan)		6.40	%		6.40	%		18,572			8/1/2014		25 years
One Grand Central Place (first lien)		5.34	%		5.34	%		71,723			11/5/2014		25 years
One Grand Central Place (second lien)		7.00	%		7.00	%		14,884			11/5/2014		25 years
500 Mamaroneck Avenue, Harrison, NY		5.41	%		5.41	%		32,620			1/1/2015		30 years
250 West 57th Street (first lien mortgage loan)		5.33	%		5.33	%		25,621			1/5/2015		25 years
250 West 57th Street (second lien mortgage loan)		6.13	%		6.13	%		11,252			1/5/2015		25 years
Metro Center		5.89	%		5.89	%		96,158			1/1/2016		30 years
10 Union Square		6.00	%		6.00	%		20,972			5/1/2017		30 years
10 Bank Street		5.72	%		5.72	%		33,444			6/1/2017		30 years
1542 Third Avenue		5.90	%		5.90	%		19,011			6/1/2017		30 years
First Stamford Place		5.65	%		5.65	%		245,629			7/5/2017		30 years
383 Main Avenue, Norwalk, CT		5.59	%		5.59	%		30,403			7/5/2017		30 years
1010 Third Avenue and 77 West 55th Street		5.69	%		5.69	%		28,096			7/5/2017		30 years
1333 Broadway		6.32	%		6.32	%		78,121	⁽¹⁾		1/5/2018		30 years
1350 Broadway (first lien mortgage loan)		5.87	%		5.87	%		43,305	⁽²⁾		4/5/2018		Interest only

Total fixed rate debt								835,647

Variable rate debt:
501 Seventh Avenue (third lien mortgage loan)		LIBOR plus 2.0	%		2.17	%		6,540			8/1/2014		Interest only
1350 Broadway (second lien mortgage loan)			⁽⁴⁾		4.25	%		13,543	⁽³⁾		10/10/2014		Interest only
One Grand Central Place (third lien)			⁽⁵⁾		3.75	%		6,382			11/5/2014		Interest only
250 West 57th Street (third lien mortgage loan)			⁽⁴⁾		4.25	%		21,000			1/5/2015		Interest only
Secured Revolving Credit Facility		LIBOR plus 1.20	%		1.37	%		25,000			10/5/2017		Interest only
Secured Term Credit Facility		LIBOR plus 1.35	%		1.52	%		300,000			10/5/2018		Interest only

Total variable rate debt								372,465

Total / weighted average debt					4.56	%	$	1,208,112

Notes:

(1)	Includes unamortized premium of $7,674.

(2)	Includes unamortized premium of $3,885.

(3)	Includes unamortized premium of $134.

(4)	Greater of 4.25% and Prime plus 1.00%.

(5)	Greater of Prime plus 0.50% and 3.75%.

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Fourth Quarter 2013

Debt Maturities

(unaudited and dollars in thousands)


Year	Maturities ⁽¹⁾		Percentage of Total Debt			Weighted Average Interest Rate of Maturing Debt

2014		197,480		16.3	%		5.49	%
2015		90,493		7.5	%		5.21	%
2016		96,158		8.0	%		5.89	%
2017		402,555		33.3	%		5.42	%
2018		421,426		34.9	%		2.86	%

Total debt	$	1,208,112		100.0	%		4.56	%

Debt Maturity Profile

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Note:

(1)	Assumes no extension options are exercised.

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Fourth Quarter 2013

Supplemental Definitions

Funds From Operations (“FFO”)

The Company computes FFO in accordance with the “White Paper” on FFO published by the National Association of Real Estate Investment Trusts, or NAREIT, which defines FFO as net income (loss) (determined in accordance with GAAP), excluding impairment writedowns of investments in depreciable real estate and investments in in-substance real estate investments, gains or losses from debt restructurings and sales of depreciable operating properties, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs), less distributions to non-controlling interests and gains/losses from discontinued operations and after adjustments for unconsolidated partnerships and joint ventures. FFO is a widely recognized non-GAAP financial measure for REITs that the Company believes, when considered with financial statements determined in accordance with GAAP, is useful to investors in understanding financial performance and providing a relevant basis for comparison among REITS. In addition, FFO is useful to investors as it captures features particular to real estate performance by recognizing that real estate has generally appreciated over time or maintains residual value to a much greater extent than do other depreciable assets. Investors should review FFO, along with GAAP net income, when trying to understand an equity REIT’s operating performance. The Company presents FFO because it considers it an important supplemental measure of its operating performance and believes that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of the Company’s properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of its properties, all of which have real economic effect and could materially impact the Company’s results of operations, the utility of FFO as a measure of its performance is limited. There can be no assurance that FFO presented by the Company is comparable to similarly titled measures of other REITs. FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. Although FFO is a measure used for comparability in assessing the performance of REITs, as the NAREIT White Paper only provides guidelines for computing FFO, the computation of FFO may vary from one company to another.

Core Funds From Operations (“Core FFO”)

Core FFO adds back to traditionally defined FFO the following items associated with the Company’s initial public offering, or IPO, and formation transactions: gain on consolidation of non-controlling entities, acquisition expenses, severance expenses and retirement equity compensation expenses. The Company presents Core FFO because it considers it an important supplemental measure of its operating performance in that it excludes items associated with its IPO and formation transactions. There can be no assurance that Core FFO presented by the Company is comparable to similarly titled measures of other REITs. Core FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. Core FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions.

Funds Available for Distribution (‘FAD”)

In addition to FFO, the Company presents FAD by (i) adding to FFO non-real estate depreciation and amortization, the amortization of deferred financing costs, amortization of debt discounts and amortization of below market ground lease and (ii) deducting straight line rent, recurring 2nd generation leasing commissions, tenant improvements, prebuilts, capital expenditures, furniture, fixtures & equipment purchases and above/below market rent revenue. FAD is presented solely as a supplemental disclosure that management believes provides useful information regarding the Company’s ability to fund its dividends. FAD does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. FAD is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. There can be no assurance that FAD presented by the Company is comparable to similarly titled measures of other REITs.

Net Operating Income

Net Operating Income, or NOI is a non-GAAP financial measure of performance. NOI is used by investors and the Company’s management to evaluate and compare the performance of the Company’s properties and to determine trends in earnings and to compute the fair value of its properties as it is not affected by; (i) the cost of funds of the property owner, (ii) the impact of depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP, (iii) acquisition expenses and formation transaction expenses; or (iv) general and administrative expenses and other gains and losses that are specific to the property owner. The cost of funds is eliminated from net operating income because it is specific to the particular financing capabilities and constraints of the owner. The cost of funds is also eliminated because it is dependent on historical interest rates and other costs of capital as well as past decisions made by the Company regarding the appropriate mix of capital which may have changed or may change in the future. Depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets are eliminated because they may not accurately represent the actual change in value in the Company’s office or retail properties that result from use of the properties or changes in market conditions. While certain aspects of real property do decline in value over time in a manner that is reasonably captured by depreciation and amortization, the value of the properties as a whole have historically increased or decreased as a result of changes in overall economic conditions instead of from actual use of the property or the passage of time. Gains and losses from the sale of real property vary from property to property and are affected by market conditions at the time of sale which will usually change from period to period. These gains and losses can create distortions when comparing one period to another or when comparing the Company’s operating results to the operating results of other real estate companies that have not made similarly timed, purchases or sales. The Company believes that eliminating these costs from net income is useful because the resulting measure captures the actual revenue, generated and actual expenses incurred in operating its properties as well as trends in occupancy rates, rental rates and operating costs. However, the usefulness of NOI is limited because it excludes general and administrative costs, interest expense, interest income and other expense, depreciation and amortization expense and gains or losses from the sale of properties, and other gains and losses as stipulated by GAAP, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company’s properties, all of which are significant economic costs. NOI may fail to capture significant trends in these components of net income which further limits its usefulness. NOI is a measure of the operating performance of the Company’s properties but does not measure its performance as a whole. NOI is therefore not a substitute for net income as computed in accordance with GAAP. This measure should be analyzed in conjunction with net income computed in accordance with GAAP and discussions elsewhere in this Supplemental Package regarding the components of net income that are eliminated in the calculation of NOI. Other companies may use different methods for calculating NOI than the Company does.

EBITDA

The Company computes EBITDA as net income plus interest expense, net of interest income, income taxes and depreciation and amortization. The Company presents EBITDA because it believes that EBITDA, along with cash flow from operating activities, investing activities and financing activities, provides investors with an additional indicator of its ability to incur and service debt. EBITDA should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of the Company’s financial performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of its liquidity.

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