What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-04 compared with 2023-05-04 · 308 added, 219 removed, 526 unchanged (50% of the section changed)

3 unchanged sentences

(amounts in thousands, except per unit amounts)

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

ASSETS (unaudited)

50 unchanged sentences

(amounts in thousands, except per unit amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

Rental revenue $ 154,603 $ 149,339 $ 294,694 $ 296,853

13 unchanged sentences

Total operating income

46,189 46,499 63,677 52,547

Other income (expense):

1 unchanged sentence

Interest expense ( 25,405 ) ( 25,042 ) ( 50,709 ) ( 50,056 )

Gain on sale of property 15,696 —

Income (loss) before income taxes 10,475 ( 18,817 )

Income tax benefit 1,219 1,596

Net income (loss) 11,694 ( 17,221 )

Gain on disposition of property 13,565 27,170 29,261 27,170

Income before income taxes 37,688 49,058 48,163 30,241

Income tax benefit (expense) ( 733 ) ( 363 ) 486 1,233

Net income 36,955 48,695 48,649 31,474

Private perpetual preferred unit distributions ( 1,051 ) ( 1,051 ) ( 2,101 ) ( 2,101 )

Net loss attributable to non-controlling interest in other partnerships 43 63

Net income (loss) attributable to common unitholders $ 10,687 $ ( 18,208 )

Net (income) loss attributable to non-controlling interest in other partnerships ( 1 ) 159 42 222

Net income attributable to common unitholders $ 35,903 $ 47,803 $ 46,590 $ 29,595

Total weighted average units:

7 unchanged sentences

Empire State Realty OP, L.P.

Condensed Consolidated Statements of Comprehensive Income (Loss)

Condensed Consolidated Statements of Comprehensive Income

(amounts in thousands)

Three Months Ended March 31,

Net income (loss) $ 11,694 $ ( 17,221 )

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

Net income $ 36,955 $ 48,695 $ 48,649 $ 31,474

Other comprehensive income:

Unrealized gain (loss) on valuation of interest rate swap agreements ( 5,402 ) 9,763

Unrealized gain on valuation of interest rate swap agreements 11,935 10,057 6,533 19,819

amount reclassified into interest expense ( 1,882 ) 2,741 ( 3,154 ) 6,036

Other comprehensive income (loss) ( 6,674 ) 13,057

Comprehensive income (loss) 5,020 ( 4,164 )

Net loss attributable to non-controlling interest in other partnerships 43 63

Other comprehensive loss attributable to non-controlling interest 381 —

Comprehensive income (loss) attributable to OP unitholders $ 5,444 $ ( 4,101 )

Other comprehensive income 10,053 12,798 3,379 25,855

Comprehensive income 47,008 61,493 52,028 57,329

Net (income) loss attributable to non-controlling interest in other partnerships ( 1 ) 159 42 222

Other comprehensive (income) loss attributable to non-controlling interest in other partnerships ( 285 ) ( 1,627 ) 96 ( 1,627 )

Comprehensive income attributable to OP unitholders $ 46,722 $ 60,025 $ 52,166 $ 55,924

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

1 unchanged sentence

Condensed Consolidated Statements of Capital

For The Three Months Ended March 31, 2023 and 2022

For The Three Months Ended June 30, 2023 and 2022

(amounts in thousands)

2 unchanged sentences

Private Perpetual Preferred Units Private Perpetual Preferred Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Non-controlling Interest in Other Partnerships Total Capital

Balance at March 31, 2023 6,224 $ 29,940 161,329 $ 948,251 81,712 $ 682,972 20,684 $ 925 5,503 $ ( 94 ) 2,717 $ 12 $ 15,060 $ 1,677,066

Conversion of operating partnership units to ESRT Partner's Capital

— — 726 2,475 ( 297 ) ( 2,474 ) ( 258 ) ( 6 ) ( 123 ) 5 ( 48 ) — — —

Repurchases of common shares — — ( 1,218 ) ( 7,411 ) — — — — — — — — — ( 7,411 )

Contributions from consolidated joint ventures — — — — — — — — — — — — 94 94

Equity compensation — — ( 7 ) 448 196 4,921 — — — — — — — 5,369

Distributions — ( 1,051 ) — ( 5,622 ) — ( 2,840 ) — ( 718 ) — ( 189 ) — ( 94 ) — ( 10,514 )

Net income — 1,051 — 21,854 — 10,099 — 2,837 — 754 — 359 1 36,955

Other comprehensive income — — — 5,955 — 2,738 — 772 — 205 — 98 285 10,053

Balance at June 30, 2023 6,224 $ 29,940 160,830 $ 965,950 81,611 $ 695,416 20,426 $ 3,810 5,380 $ 681 2,669 $ 375 15,440 $ 1,711,612

Series PR Operating Partnership Units Series ES Operating Partnership Units Limited Partners Series 60 Operating Partnership Units Limited Partners Series 250 Operating Partnership Units Limited Partners

General Partner Limited Partners

Balance at March 31, 2022 6,224 $ 29,940 169,726 $ 978,421 80,998 $ 648,004 22,034 $ ( 5,206 ) 5,821 $ ( 1,695 ) 2,937 $ ( 845 ) $ 13,413 $ 1,662,032

Conversion of operating partnership units to ESRT Partner's Capital

— — 565 848 ( 119 ) ( 944 ) ( 288 ) 56 ( 83 ) 21 ( 75 ) 19 — —

Repurchases of common shares — — ( 6,611 ) ( 52,439 ) — — — — — — — — — ( 52,439 )

Equity compensation — — 4 318 194 5,447 — — — — — — — 5,765

Distributions — ( 1,051 ) — ( 5,802 ) — ( 2,841 ) — ( 763 ) — ( 201 ) — ( 100 ) — ( 10,758 )

Net income (loss) — 1,051 — 29,579 — 12,823 — 3,872 — 1,003 — 526 ( 159 ) 48,695

Other comprehensive income — — — 6,878 — 3,031 — 904 — 235 — 123 1,627 12,798

Balance at June 30, 2022 6,224 $ 29,940 163,684 $ 957,803 81,073 $ 665,520 21,746 $ ( 1,137 ) 5,738 $ ( 637 ) 2,862 $ ( 277 ) $ 14,881 $ 1,666,093

Empire State Realty OP, L.P.

Condensed Consolidated Statements of Capital

For The Six Months Ended June 30, 2023 and 2022

(amounts in thousands)

General Partner Limited Partners

Balance at December 31, 2022 6,224 $ 29,940 161,129 $ 954,375 80,475 $ 681,827 21,081 $ 1,391 5,558 $ 16 2,789 $ 76 $ 15,466 $ 1,683,091

7 unchanged sentences

Other comprehensive income — — — 2,116 — 976 — 275 — 73 — 35 ( 96 ) 3,379

Balance at March 31, 2023 6,224 $ 29,940 161,329 $ 948,251 81,712 $ 682,972 20,684 $ 925 5,503 $ ( 94 ) 2,717 $ 12 $ 15,060 $ 1,677,066

Balance at June 30, 2023 6,224 $ 29,940 160,830 $ 965,950 81,611 $ 695,416 20,426 $ 3,810 5,380 $ 681 2,669 $ 375 $ 15,440 $ 1,711,612

10 unchanged sentences

Other comprehensive income — — — 14,973 — 6,517 — 1,962 — 509 — 267 1,627 25,855

Balance at March 31, 2022 6,224 $ 29,940 169,726 $ 978,421 80,998 $ 648,004 22,034 $ ( 5,206 ) 5,821 $ ( 1,695 ) 2,937 $ ( 845 ) $ 13,413 $ 1,662,032

Balance at June 30, 2022 6,224 $ 29,940 163,684 $ 957,803 81,073 $ 665,520 21,746 $ ( 1,137 ) 5,738 $ ( 637 ) 2,862 $ ( 277 ) $ 14,881 $ 1,666,093

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

2 unchanged sentences

(amounts in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows From Operating Activities

Net income (loss) $ 11,694 $ ( 17,221 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income $ 48,649 $ 31,474

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 93,688 125,410

Gain on sale of property ( 15,696 ) —

Gain on disposition of property ( 29,261 ) ( 27,170 )

Amortization of non-cash items within interest expense 4,521 5,169

12 unchanged sentences

Cash Flows From Investing Activities

Net proceeds from sale of property 39,137 —

Net proceeds from disposition of property 88,910 —

Development costs — ( 31 )

Additions to building and improvements ( 76,166 ) ( 56,614 )

Net cash used in investing activities ( 2,631 ) ( 34,976 )

Net cash provided by (used in) investing activities 12,744 ( 56,645 )

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

2 unchanged sentences

(amounts in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows From Financing Activities

23 unchanged sentences

Conversion of operating partnership units to ESRT partner's capital 5,019 2,345

Disposal of land in connection with foreclosure — 1,680

Extinguishment of debt in connection with property disposition — 30,000

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

7 unchanged sentences

(“ESRT”), a self-administered and self-managed real estate investment trust ("REIT"), conducts all of its business and owns (either directly or through subsidiaries) substantially all of its assets.

We own, manage, operate, acquire and reposition office, retail and multifamily assets in Manhattan and the greater New York metropolitan area.

We own, manage, operate, acquire and reposition office, retail and multifamily properties in Manhattan and the greater New York metropolitan area.

As the owner of the Empire State Building, the World’s Most Famous Building, ESRT also owns and operates its iconic, newly reimagined Observatory Experience.

As of March 31, 2023, our office and retail portfolio contained 9.6 million rentable square feet of office and retail space.

As of June 30, 2023, our office and retail portfolio contained 9.4 million rentable square feet of office and retail space.

We owned 11 office properties (including three long-term ground leasehold interests) encompassing approximately 8.6 million rentable square feet of office space.

Nine of these properties are located in the midtown Manhattan market and encompass in the aggregate approximately 7.6 million rentable square feet of office space, including the Empire State Building.

Nine of these properties are located in the midtown Manhattan market and encompass approximately 7.6 million rentable square feet of office space, including the Empire State Building.

Our Manhattan office and multifamily properties also contain an aggregate of approximately 0.5 million rentable square feet of retail space on their ground floor and/or contiguous levels.

Our remaining three office properties are located in Fairfield County, Connecticut and Westchester County, New York, encompassing in the aggregate approximately 1.3 million rentable square feet.

The majority of square footage for these three properties is located in densely populated metropolitan communities with immediate access to mass transportation.

Our remaining two office properties are located in Fairfield County, Connecticut, encompassing approximately 1.1 million rentable square feet.

These two properties are located in densely populated metropolitan communities with immediate access to mass transportation.

Additionally, we have entitled land at the Stamford Transportation Center in Stamford, Connecticut, adjacent to one of our office properties, that will support the development of an approximately 0.4 million rentable square foot office building and garage.

As of March 31, 2023, our portfolio included four standalone retail properties located in Manhattan encompassing approximately 0.2 million rentable square feet in the aggregate.

Additionally, as of March 31, 2023, our portfolio included three multifamily properties located in Manhattan totaling 721 units.

We were organized as a Delaware limited partnership on November 28, 2011 and operations commenced upon completion of the initial public offering of ESRT’s Class A common stock and related formation transactions on October 7, 2013.

As of June 30, 2023, our portfolio included four standalone retail properties located in Manhattan encompassing approximately 0.2 million rentable square feet.

Additionally, as of June 30, 2023, our portfolio included three multifamily properties located in Manhattan totaling 721 units.

We were organized as a Delaware limited partnership on November 28, 2011, and operations commenced upon completion of the initial public offering of ESRT’s Class A common stock and related formation transactions on October 7, 2013 (the "IPO").

ESRT's Class A common stock, par value $ 0.01 per share, is listed on the New York Stock Exchange under the symbol "ESRT." ESRT, as the sole general partner in our Company, has responsibility and discretion in the management and control of our Company, and our limited partners, in such capacity, have no authority to transact business for, or participate in the management activities, of our Company.

As of March 31, 2023, ESRT owned approximately 59.3 % of our operating partnership units.

As of June 30, 2023, ESRT owned approximately 59.4 % of our operating partnership units.

Summary of Significant Accounting Policies

There have been no material changes to the summary of significant accounting policies included in the section entitled "Summary of Significant Accounting Policies" in our December 31, 2022 Annual Report on Form 10-K.

There have been no material changes to the summary of significant accounting policies included in the "Summary of Significant Accounting Policies" section in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “Annual Report”).

Basis of Quarterly Presentation and Principles of Consolidation

3 unchanged sentences

The results of operations for the periods presented are not necessarily indicative of the results that may be expected for the corresponding full years.

These financial statements should be read in conjunction with the financial statements and accompanying notes included in the financial statements for the year ended December 31, 2022 contained in our Annual Report on Form 10-K.

Our observatory business is subject to seasonality based on tourism trends and the weather.

1 unchanged sentence

in the second quarter, 31.0 % to 33.0 % was realized in the third quarter, and 23.0 % to 25.0 % was realized in the fourth quarter.

Our multifamily business experiences some seasonality based on general market trends in New York City – the winter months (November through January) are slower in terms of lease activity.

Our multifamily business experiences some seasonality based on general market trends in New York City – the winter months (November through January) are slower in terms of leasing activity.

We seek to mitigate this by staggering lease terms such that lease expirations are matched with seasonal demand.

5 unchanged sentences

The primary beneficiary is required to consolidate the VIE.

As of March 31, 2023, we had a variable interest in and are deemed to be the primary beneficiary of 298 Mulberry, the multifamily asset we acquired in December 2022.

At December 31, 2022, we were the primary beneficiary of a variable interest in the intermediary entity which held title to 298 Mulberry, the multifamily asset acquired in December 2022.

The intermediary entity was utilized to execute a like-kind exchange and subsequent to March 31, 2023, the like-kind exchange was completed and we took title to 298 Mulberry.

Therefore,we had no VIEs at June 30, 2023.

We will assess the accounting treatment for each investment we may have in the future.

11 unchanged sentences

In December 2022, we entered into a purchase and sale agreement for 500 Mamaroneck Avenue in Harrison, NY at a gross asset valuation of $ 53.0 million.

The assets and related liabilities of the 500 Mamaroneck property are classified as held for sale in our condensed consolidated balance sheet as of March 31, 2023 and December 31, 2022 having met the held for sale criteria set forth in ASC 360 Property, Plant, and Equipment.

Subsequent to March 31, 2023, we closed on the sale of this property on April 5, 2023.

On February 1, 2023, we closed on the sale of 69-97 and 103-107 Main Street in Westport, Connecticut at a gross asset valuation of $ 40.0 million, and recorded a gain of $ 15.7 million, which is included in Gain on sale of property in our consolidated statement of operations.

The assets and related liabilities of the 500 Mamaroneck property were classified as held for sale in our condensed consolidated balance sheets as of December 31, 2022 having met the held-for-sale criteria set forth in ASC 360 Property, Plant, and Equipment.

We closed on the sale of this property on April 5, 2023 and no longer classify its assets and related liabilities as held for sale as of June 30, 2023.

In connection with the sale, we recorded a gain of $ 13.6 million which is included in Gain on disposition of property in our condensed consolidated statements of operations.

In accordance with ASC 450, included in this gain is approximately $ 2.0 million of estimated post-closing obligations related to contaminated soil remediation costs and our commitment to reimburse the buyer for a delay in rent commencement from a tenant impacted by the soil remediation efforts.

condensed consolidated statements of operations.

The Westport sale was a related party transaction approved in accordance with the Company's related party transactions policy.

See our Annual Report on Form 10-K for the year ended December 31, 2022 for more information.

See our Annual Report for more information.

Deferred Costs, Acquired Lease Intangibles and Goodwill

Deferred costs, net, consisted of the following as of March 31, 2023 and December 31, 2022 (amounts in thousands):

March 31, 2023 December 31, 2022

Deferred costs, net, consisted of the following as of June 30, 2023 and December 31, 2022 (amounts in thousands):

June 30, 2023 December 31, 2022

Leasing costs $ 219,404 $ 218,707

4 unchanged sentences

Total deferred costs, net, excluding net deferred financing costs $ 172,754 $ 183,977

At March 31, 2023 and December 31, 2022, $ 4.4 million and $ 5.0 million, respectively, of net deferred financing costs associated with the unsecured revolving credit facility was included in deferred costs, net on the condensed consolidated balance sheets.

Amortization expense related to deferred leasing costs and acquired deferred leasing costs was $ 5.8 million and $ 7.0 million for the three months ended March 31, 2023 and 2022, respectively.

Amortization expense related to acquired lease intangibles was $ 2.4 million and $ 4.2 million for the three months ended March 31, 2023 and 2022, respectively.

Amortizing acquired intangible assets and liabilities consisted of the following as of March 31, 2023 and December 31, 2022 (amounts in thousands):

March 31, 2023 December 31, 2022

At June 30, 2023 and December 31, 2022, $ 3.9 million and $ 5.0 million, respectively, of net deferred financing costs associated with the unsecured revolving credit facility was included in deferred costs, net on the condensed consolidated balance sheets.

Amortization expense related to deferred leasing costs and acquired deferred leasing costs was $ 6.1 million and $ 11.9 million for the three and six months ended June 30, 2023, respectively, and $ 7.3 million and $ 14.3 million for the three and six months ended June 30, 2022, respectively.

Amortization expense related to acquired lease intangibles was $ 2.3 million and $ 4.6 million for the three and six months ended June 30, 2023, respectively, and $ 4.1 million and $ 8.3 million for the three and six months ended June 30, 2022, respectively.

Amortizing acquired intangible assets and liabilities consisted of the following as of June 30, 2023 and December 31, 2022 (amounts in thousands):

June 30, 2023 December 31, 2022

Acquired below-market ground leases $ 396,916 $ 396,916

1 unchanged sentence

Acquired below-market ground leases, net $ 325,157 $ 329,073

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Acquired below-market leases $ ( 63,831 ) $ ( 64,656 )

1 unchanged sentence

Acquired below-market leases, net $ ( 15,280 ) $ ( 17,849 )

Rental revenue related to the amortization of below-market leases, net of above-market leases, was $ 0.7 million and $ 1.8 million for the three months ended March 31, 2023 and 2022, respectively.

As of March 31, 2023 and December 31, 2022, we had goodwill of $ 491.5 million.

Rental revenue related to the amortization of below-market leases, net of above-market leases, was $ 0.7 million and $ 1.4 million for the three and six months ended June 30, 2023, respectively, and $ 1.7 million and $ 3.5 million for the three and six months ended June 30, 2022, respectively.

As of June 30, 2023 and December 31, 2022, we had goodwill of $ 491.5 million.

Goodwill was allocated $ 227.5 million to the observatory reportable segment and $ 264.0 million to the real estate reportable segment.

3 unchanged sentences

Significant assumptions under the former included revenue and cost projections, weighted average cost of capital, long-term growth rate and income tax considerations while the latter included guideline company enterprise values, revenue multiples and control premium rates.

Our methodology to review goodwill impairment, which included a significant amount of judgment and estimates, provided a reasonable basis to determine whether impairment had occurred.

Our methodology to review goodwill impairment,

which included a significant amount of judgment and estimates, provided a reasonable basis to determine whether impairment had occurred.

Each quantitative analysis performed concluded the fair value of the reporting unit exceeds its carrying value.

For the quarter ended March 31, 2023, we performed an optional qualitative assessment and did not identify any events which occurred between our last quantitative assessment and the current reporting date which would indicate, on a more likely than not basis, that the goodwill allocated to the reporting unit was impaired.

Many of the factors employed in determining whether

or not goodwill is impaired are outside of our control, and it is reasonably likely that assumptions and estimates will change in future periods.

For the quarter ended June 30, 2023, we performed an optional qualitative assessment and did not identify any events which occurred between our last quantitative assessment and the current reporting date which would indicate, on a more likely than not basis, that the goodwill allocated to the reporting unit was impaired.

Many of the factors employed in determining whether or not goodwill is impaired are outside of our control, and it is reasonably likely that assumptions and estimates will change in future periods.

We will continue to assess the impairment of the observatory reporting unit goodwill going forward.

Debt consisted of the following as of March 31, 2023 and December 31, 2022 (amounts in thousands):

Principal Balance As of March 31, 2023

March 31, 2023 December 31, 2022 Stated

Debt consisted of the following as of June 30, 2023 and December 31, 2022 (amounts in thousands):

Principal Balance As of June 30, 2023

June 30, 2023 December 31, 2022 Stated

Rate Effective

9 unchanged sentences

1333 Broadway 160,000 160,000 4.21 % 4.29 % 2/5/2033

345 East 94th Street - Series A 43,600 43,600 70.0 % of LIBOR plus 0.95 %

345 East 94th Street - Series A (5)

43,600 43,600 70.0 % of SOFR plus 0.95 %

3.56 % 11/1/2030

345 East 94th Street - Series B 7,707 7,865 LIBOR plus 2.24 %

345 East 94th Street - Series B (5)

7,544 7,865 SOFR plus 2.24 %

3.56 % 11/1/2030

561 10th Avenue - Series A 114,500 114,500 70.0 % of LIBOR plus 1.07 %

561 10th Avenue - Series A (5)

114,500 114,500 70.0 % of SOFR plus 1.07 %

3.85 % 11/1/2033

561 10th Avenue - Series B 17,025 17,415 LIBOR plus 2.45 %

561 10th Avenue - Series B (5)

16,627 17,415 SOFR plus 2.45 %

3.85 % 11/1/2033

22 unchanged sentences

______________

(1) The effective rate is the yield as of March 31, 2023 and includes the stated interest rate, deferred financing cost amortization and interest associated with variable to fixed interest rate swap agreements.

(1) The effective rate is the yield as of June 30, 2023 and includes the stated interest rate, deferred financing cost amortization and interest associated with variable to fixed interest rate swap agreements.

(2) Pre-payment is generally allowed for each loan upon payment of a customary pre-payment penalty.

(3) Represents a $ 164 million mortgage loan bearing interest at 4.09 % and a $ 13.3 million loan bearing interest at 6.25 %.

(4) At March 31, 2023, we were in compliance with all debt covenants.

(4) At June 30, 2023, we were in compliance with all debt covenants.

(5) As of May 18, 2023, the benchmark index rate was converted from LIBOR to SOFR, plus a benchmark adjustment of 11.4 basis points.

Principal Payments

Aggregate required principal payments at March 31, 2023 are as follows (amounts in thousands):

Aggregate required principal payments at June 30, 2023 are as follows (amounts in thousands):

Year Amortization Maturities Total

7 unchanged sentences

Deferred Financing Costs

Deferred financing costs, net, consisted of the following at March 31, 2023 and December 31, 2022 (amounts in thousands):

March 31, 2023 December 31, 2022

Deferred financing costs, net, consisted of the following at June 30, 2023 and December 31, 2022 (amounts in thousands):

June 30, 2023 December 31, 2022

Financing costs $ 43,473 $ 43,473

1 unchanged sentence

Total deferred financing costs, net $ 14,542 $ 16,720

Amortization expense related to deferred financing costs was $ 1.1 million and $ 1.4 million for the three months ended March 31, 2023 and 2022, respectively.

Amortization expense related to deferred financing costs was $ 1.1 million and $ 2.2 million for the three and six months ended June 30, 2023, respectively, and $ 1.3 million and $ 2.7 million for the three and six months ended June 30, 2022, respectively.

Unsecured Revolving Credit and Term Loan Facilities

2 unchanged sentences

The third amendment revised the terms of the BofA Credit Facility to (i) replace LIBOR with SOFR given the phase-out of LIBOR and (ii) permit the addition of multifamily assets as Unencumbered Eligible Property (as defined therein) and add a capitalization rate for such assets.

As of March 31, 2023 , we had no borrowings under the revolving credit facility and $ 215.0 million under the term loan facility.

As of June 30, 2023 , we had no borrowings under the revolving credit facility and $ 215.0 million under the term loan facility.

On August 29, 2022, we entered into a second amendment to our credit agreement dated March 19, 2020 with Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto, which governs a senior unsecured term loan facility (the “Wells Term Loan Facility”).

2 unchanged sentences

We may request the Wells Term Loan Facility be increased through one or more increases or the addition of new pari passu term loan tranches, for a maximum aggregate principal amount not to exceed $ 225 million.

As of March 31, 2023 , our borrowings amounted to $ 175.0 million under the Wells Term Loan Facility.

As of June 30, 2023 , our borrowings amounted to $ 175.0 million under the Wells Term Loan Facility.

The terms of both the BofA Credit Facility and the Wells Term Loan Facility include customary covenants, including limitations on liens, investment, distributions, debt, fundamental changes, and transactions with affiliates and require certain customary financial reports.

Both facilities also require compliance with financial ratios including a maximum leverage ratio, a

maximum secured leverage ratio, a minimum fixed charge coverage ratio, a minimum unencumbered interest coverage ratio, and a maximum unsecured leverage ratio.

The agreements governing both facilities also contain customary events of default (subject in certain cases to specified cure periods), including but not limited to non-payment, breach of covenants, representations or warranties, cross defaults, bankruptcy or other insolvency events, judgments, ERISA events, invalidity of loan documents, loss of real estate investment trust qualification, and occurrence of a change of control.

As of March 31, 2023, we were in compliance with these covenants.

Both facilities also require compliance with financial ratios including a maximum leverage ratio, a maximum secured leverage ratio, a minimum fixed charge coverage ratio, a minimum unencumbered interest coverage ratio, and a maximum unsecured leverage ratio.

The agreements governing both facilities also contain customary events of default (subject in certain cases to specified cure periods), including but not limited to non-payment, breach of covenants,

representations or warranties, cross defaults, bankruptcy or other insolvency events, judgments, ERISA events, invalidity of loan documents, loss of real estate investment trust qualification, and occurrence of a change of control.

As of June 30, 2023, we were in compliance with these covenants.

Senior Unsecured Notes

2 unchanged sentences

The agreements also contain customary events of default (subject in certain cases to specified cure periods), including but not limited to non-payment, breach of covenants, representations or warranties, cross defaults, bankruptcy or other insolvency events, judgments, ERISA events, the occurrence of certain change of control transactions and loss of real estate investment trust qualification.

As of March 31, 2023, we were in compliance with these covenants.

As of June 30, 2023, we were in compliance with these covenants.

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following as of March 31, 2023 and December 31, 2022 (amounts in thousands):

March 31, 2023 December 31, 2022

Accounts payable and accrued expenses consisted of the following as of June 30, 2023 and December 31, 2022 (amounts in thousands):

June 30, 2023 December 31, 2022

Accrued capital expenditures $ 38,677 $ 44,293

Accounts payable and accrued expenses 29,468 32,927

Interest rate swaps liability 2,171 —

Accrued interest payable 3,564 3,509

Due to affiliated companies, net 1,572 —

Total accounts payable and accrued expenses $ 71,709 $ 80,729

5 unchanged sentences

We are exposed to credit risk in the event of non-performance by these counterparties;

however, we currently do not anticipate that any of the counterparties will fail to meet its obligations.

however, we currently do not anticipate that any of the counterparties will fail to meet their obligations.

We have agreements with our derivative counterparties that contain a provision where if we either default or are capable of being declared in default on any of our indebtedness, then we could also be declared in default on our derivative obligations.

As of March 31, 2023, the fair value of derivatives in a liability position, that includes accrued interest but excludes any adjustment for nonperformance risk, was $ 2.4 million.

If we had breached any of these provisions at March 31, 2023, we could have been required to settle our obligations under the agreements at their termination value of $ 2.4 million.

As of March 31, 2023 and December 31, 2022, we had interest rate swaps and caps with an aggregate notional value of $ 574.4 million and $ 574.8 million, respectively.

As of June 30, 2023, we did not have derivatives in a net liability position.

As of June 30, 2023 and December 31, 2022, we had interest rate swaps and caps with an aggregate notional value of $ 574.0 million and $ 574.8 million, respectively.

The notional value does not represent exposure to credit, interest rate or market risks.

As of March 31, 2023, the fair value of our interest rate swaps in an asset and liability position were $ 12.5 million and $( 2.2 ) million, respectively, and are included in prepaid expenses and other assets and in accounts payable and accrued expenses, respectively, on the condensed consolidated balance sheet.

As of December 31, 2022, the fair value of our derivative instruments in an asset position amounted to $ 17.9 million, which is included in prepaid expenses and other assets on the condensed consolidated balance sheet.

As of June 30, 2023 and December 31, 2022, the fair value of our derivative instruments in an asset position amounted to $ 19.4 million and $ 17.9 million, respectively, which is included in prepaid expenses and other assets on the condensed consolidated balance sheets.

These interest rate swaps have been designated as cash flow hedges and hedge the variability in future cash flows associated with our existing variable-rate term loan facilities.

Interest rate caps not designated as

hedges are not speculative and are used to manage our exposure to interest rate movements, but do not meet the strict hedge accounting requirements.

As of March 31, 2023 and 2022, our cash flow hedges are deemed highly effective and a net unrealized gain (loss) of $( 6.7 ) million and $ 13.1 million for the three months ended March 31, 2023 and 2022, respectively, relating to both active and terminated hedges of interest rate risk, are reflected in the condensed consolidated statements of comprehensive income (loss).

Interest rate caps not designated as hedges are not speculative and are used to manage our exposure to interest rate movements, but do not meet the strict hedge accounting requirements.

As of June 30, 2023 and 2022, our cash flow hedges are deemed highly effective and a net unrealized gain of $ 10.1 million and $ 3.4 million for the three and six months ended June 30, 2023, respectively and a net unrealized gain of $ 12.8 million and $ 25.9 million for the three and six months ended June 30, 2022, respectively, relating to both active and terminated hedges of interest rate risk, are reflected in the condensed consolidated statements of comprehensive income (loss).

Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the debt.

We estimate that $ 8.5 million net gain of the current balance held in accumulated other comprehensive income (loss) will be reclassified into interest expense within the next 12 months.

The table below summarizes the terms of agreements and the fair values of our derivative financial instruments as of March 31, 2023 and December 31, 2022 (amounts in thousands):

March 31, 2023 December 31, 2022

The table below summarizes the terms of agreements and the fair values of our derivative financial instruments as of June 30, 2023 and December 31, 2022 (amounts in thousands):

June 30, 2023 December 31, 2022

Derivative Notional Amount Receive Rate Pay Rate Effective Date Expiration Date Asset Liability Asset Liability

Interest rate swap $ 36,820 70 % of 1 Month LIBOR

Interest rate swap $ 36,820 70 % of 1 Month SOFR

2.5000 % December 1, 2021 November 1, 2030 $ 364 $ — $ 256 $ —

Interest rate swap 103,790 70 % of 1 Month LIBOR

Interest rate swap 103,790 70 % of 1 Month SOFR

2.5000 % December 1, 2021 November 1, 2033 375 — 365 —

Interest rate swap 10,710 70 % of 1 Month LIBOR

Interest rate swap 10,710 70 % of 1 Month SOFR

1.7570 % December 1, 2021 November 1, 2033 626 — 643 —

Interest rate swap 17,157 1 Month LIBOR 2.2540 % December 1, 2021 November 1, 2030 790 — 1,070 —

Interest rate cap 6,780 70 % of 1 Month LIBOR

Interest rate swap 16,761 1 Month SOFR 2.2540 % December 1, 2021 November 1, 2030 1,067 — 1,070 —

Interest rate cap 6,780 70 % of 1 Month SOFR

4.5000 % December 1, 2021 October 1, 2024 4 — 8 —

Interest rate cap 9,188 1 Month LIBOR 5.5000 % December 1, 2021 October 1, 2024 23 — 26 —

Interest rate cap 9,188 1 Month SOFR 5.5000 % December 1, 2021 October 1, 2024 28 — 26 —

Interest rate swap 175,000 SOFR Compound 2.5620 % August 31, 2022 December 31, 2026 8,961 — 8,040 —

2 unchanged sentences

$ 19,361 $ — $ 17,936 $ —

The table below shows the effect of our derivative financial instruments designated as cash flow hedges on accumulated other comprehensive income (loss) for the three months ended March 31, 2023 and 2022 (amounts in thousands):

Three months ended

Effects of Cash Flow Hedges March 31, 2023 March 31, 2022

The table below shows the effect of our derivative financial instruments designated as cash flow hedges on accumulated other comprehensive income (loss) for the three and six months ended June 30, 2023 and 2022 (amounts in thousands):

Three Months Ended Six Months Ended

Effects of Cash Flow Hedges June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

Amount of gain (loss) recognized in other comprehensive income (loss) $ 11,935 $ 10,057 $ 6,533 $ 19,819

Amount of loss reclassified from accumulated other comprehensive income (loss) into interest expense 1,882 ( 2,741 ) 3,154 ( 6,036 )

The table below shows the effect of our derivative financial instruments designated as cash flow hedges on the condensed consolidated statements of operations for the three months ended March 31, 2023 and 2022 (amounts in thousands):

Three months ended

Effects of Cash Flow Hedges March 31, 2023 March 31, 2022

The table below shows the effect of our derivative financial instruments designated as cash flow hedges on the condensed consolidated statements of operations for the three and six months ended June 30, 2023 and 2022 (amounts in thousands):

Three Months Ended Six Months Ended

Effects of Cash Flow Hedges June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

Total interest expense presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded $ ( 25,405 ) $ ( 25,042 ) $ ( 50,709 ) $ ( 50,056 )

1 unchanged sentence

Fair Valuation

The estimated fair values at March 31, 2023 and December 31, 2022 were determined by management, using available market information and appropriate valuation methodologies.

The estimated fair values at June 30, 2023 and December 31, 2022 were determined by management, using available market information and appropriate valuation methodologies.

Considerable judgment is necessary to interpret market data and develop estimated fair value.

2 unchanged sentences

The fair value of derivative instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative.

Although the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by ourselves and our counterparties.

Although the majority of the inputs used to value

our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by ourselves and our counterparties.

The impact of such credit valuation adjustments, determined based on the fair value of each individual contract, was not significant to the overall valuation.

1 unchanged sentence

The fair values of our mortgage notes payable, senior unsecured notes (Series A, B, C, D, E, F, G and H), unsecured term loan facilities and unsecured revolving credit facility which are determined using Level 3 inputs are estimated by discounting the future cash flows using current interest rates at which similar borrowings could be made by us.

The following tables summarize the carrying and estimated fair values of our financial instruments as of March 31, 2023 and December 31, 2022 (amounts in thousands):

March 31, 2023

The following tables summarize the carrying and estimated fair values of our financial instruments as of June 30, 2023 and December 31, 2022 (amounts in thousands):

June 30, 2023

Estimated Fair Value

12 unchanged sentences

Unsecured term loan facilities 388,773 390,000 — — 390,000

Disclosure about the fair value of financial instruments is based on pertinent information available to us as of March 31, 2023 and December 31, 2022.

Disclosure about the fair value of financial instruments is based on pertinent information available to us as of June 30, 2023 and December 31, 2022.

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.

2 unchanged sentences

The leases provide for base monthly rentals and reimbursements for real estate taxes, escalations linked to the consumer price index or common area maintenance known as operating expense escalation.

Operating expense reimbursements are reflected in our March 31, 2023 and 2022 condensed consolidated statements of operations as rental revenue.

Operating expense reimbursements are reflected in our June 30, 2023 and 2022 condensed consolidated statements of operations as rental revenue.

Rental revenue includes fixed and variable payments.

Fixed payments primarily relate to base rent and variable payments primarily relate to tenant expense reimbursements for certain property operating costs.

The components of rental revenue for the three months ended March 31, 2023 and 2022 are as follows (amounts in thousands):

Three months ended

Rental revenue March 31, 2023 March 31, 2022

The components of rental revenue for the three and six months ended June 30, 2023 and 2022 are as follows (amounts in thousands):

Three Months Ended Six Months Ended

Rental revenue June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

Fixed payments $ 138,318 $ 134,794 $ 262,882 $ 268,195

1 unchanged sentence

Total rental revenue $ 154,603 $ 149,339 $ 294,694 $ 296,853

As of March 31, 2023, we were entitled to the following future contractual minimum lease payments (excluding operating expense reimbursements) on non-cancellable operating leases to be received which expire on various dates through 2040 (amounts in thousands):

As of June 30, 2023, we were entitled to the following future contractual minimum lease payments (excluding operating expense reimbursements) on non-cancellable operating leases to be received which expire on various dates through 2040 (amounts in thousands):

Remainder of 2023 $ 246,802

3 unchanged sentences

The preceding table is prepared assuming such options are not exercised.

On March 12, 2023, Signature Bank, a tenant at 1400 Broadway and 1333 Broadway, was closed by the New York State Department of Financial Services and the Federal Deposit Insurance Corporation (“FDIC”) was named receiver.

As reported by the FDIC, to protect depositors, the FDIC transferred all the deposits and substantially all of the assets of Signature Bank to Signature Bridge Bank, N.A., (the “Bridge Bank”) a full-service bank that will be operated by the FDIC, in accordance with the terms of a transfer agreement (the “Transfer Agreement”).

On March 20, 2023, the FDIC entered into a purchase and assumption agreement (the “Flagstar Agreement”) for substantially all deposits and certain loan portfolios of Signature Bridge Bank, N.A., by Flagstar Bank, N.A., Hicksville, NY (“Flagstar”), a wholly owned subsidiary of New York Community Bancorp, Inc., Westbury, NY.

Our understanding is the terms of the Flagstar Agreement provides Flagstar with the right to accept or not to accept an assignment of Signature Bank’s lease by May 19, 2023.

Additionally, the terms of the Transfer Agreement provide the Bridge Bank 120 days, or until July 10, 2023, the right to assume or reject the lease.

As of the date of filing, there has been no official announcement from Flagstar or Bridge Bank with regards to Signature Bank’s lease.

While the tenant is current on all rent obligations to us through April 2023, uncertainty remains around whether the tenant will fulfill all of its obligations over the remaining term of their lease.

Our assessment of collectability of the remaining lease payments due to us is no longer probable and in accordance with ASC 842-30-25-13, we have recorded a $ 6.4 million reserve on Signature Bank’s straight-line rent receivable balance, that was calculated as the difference between the lease income that was recorded on a straight-line basis and the lease payments which have been collected from our tenant as of March 31, 2023.

We will continue to assess the collectability of lease payments due to us over the course of the lease.

On March 12, 2023, Signature Bank, a tenant at 1400 Broadway and 1333 Broadway, was closed by the New York State Department of Financial Services, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver.

On March 20, 2023, Flagstar Bank, N.A.

(“Flagstar”), a wholly owned subsidiary of New York Community Bancorp, Inc., assumed substantially all of the deposits and certain loan portfolios of Signature Bank.

As of March 31, 2023, Flagstar had not yet assumed or rejected our leases, and our assessment of collectability of the remaining lease payments due to us in accordance with ASC 842-30-25-13 caused us to record a $ 6.4 million reserve on Signature Bank’s straight-line rent receivable balance.

On May 18, 2023, Flagstar assumed the entire 313,109 square foot lease at 1400 Broadway under the same terms through 2039, with the exception of an approximate $ 3 per square foot reduction for the first five years of the lease amendment.

As such, we reversed $ 5.8 million of the $ 6.4 million reserve taken in the first quarter of 2023 and resumed accounting for this tenant on a straight-line basis.

On May 1, 2023, First Republic Bank, a tenant of 14,430 square feet of retail space in the base of One Grand Central Place was closed by the California Department of Financial Protection and Innovation and the FDIC was appointed as the receiver.

JPMorgan Chase Bank, National Association agreed to assume all of the deposits and to purchase substantially all of the assets of First Republic Bank.

The FDIC has until September 28, 2023 to assume or reject our lease at One Grand Central Place.

Although this tenant is current on its rental obligations to us, as of June 30, 2023, we maintain a $ 0.2 million reserve on First Republic Bank’s straight-line rent receivable balance.

We determine if an arrangement is a lease at inception.

Our operating lease agreements relate to three ground lease assets and are reflected in right-of-use assets of $ 28.6 million and lease liabilities of $ 28.6 million in our condensed consolidated balance sheet as of March 31, 2023.

Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

5 unchanged sentences

The weighted average incremental borrowing rate used to

calculate the right-of-use assets and lease liabilities as of March 31, 2023 was 4.5 %.

calculate the right-of-use assets and lease liabilities as of June 30, 2023 was 4.5 %.

Rent expense for lease payments related to our operating leases is recognized on a straight-line basis over the non-cancellable term of the leases.

The weighted average remaining lease term as of March 31, 2023 was 47.2 years.

As of March 31, 2023, the following table summarizes our future minimum lease payments discounted by our incremental borrowing rates to calculate the lease liabilities of our leases (amounts in thousands):

The weighted average remaining lease term as of June 30, 2023 was 46.9 years.

As of June 30, 2023, the following table summarizes our future minimum lease payments discounted by our incremental borrowing rates to calculate the lease liabilities of our leases (amounts in thousands):

Remainder of 2023 $ 759

5 unchanged sentences

Legal Proceedings

Except as described below, as of March 31, 2023, we were not involved in any material litigation, nor, to our knowledge, was any material litigation threatened against us or our properties, other than routine litigation arising in the ordinary course of business such as disputes with tenants.

Except as described below, as of June 30, 2023, we were not involved in any material litigation, nor, to our knowledge, was any material litigation threatened against us or our properties, other than routine litigation arising in the ordinary course of business such as disputes with tenants.

We believe that the costs and related liabilities, if any, which may result from such actions will not materially affect our condensed consolidated financial position, operating results or liquidity.

As previously disclosed, in October 2014, 12 former investors (the "Claimants") in Empire State Building Associates L.L.C.

(“ESBA”), which prior to the initial public offering of our company (the "Offering") owned the fee title to the Empire State Building, filed an arbitration with the American Arbitration Association against Peter L.

(“ESBA”), which, prior to the IPO, owned the fee title to the Empire State Building, filed an arbitration claim with the American Arbitration Association against Peter L.

Malkin, Anthony E.

Malkin, Thomas N.

Keltner, Jr., and our subsidiary ESRT MH Holdings LLC, the former supervisor of ESBA (the "Respondents").

The statement of claim (also filed later in federal court in New York for the expressed purpose of tolling the statute of limitations) alleges breach of fiduciary duty and related claims in connection with the Offering and formation transactions and seeks monetary damages and declaratory relief.

Claimants had opted out of a prior class action bringing similar claims that was settled with court approval.

Respondents filed an answer and counterclaims.

Keltner, Jr., and our subsidiary ESRT MH Holdings LLC, the former supervisor of ESBA (the "Respondent s ").

The Statement of Claim (also filed later in federal court in New York for the expressed purpose of tolling the statute of limitations) alleged breach of fiduciary duty and related claims in connection with the IPO and formation transactions and sought monetary damages and declaratory relief.

The Claimants had opted out of a prior class action bringing similar claims that were settled with court approval.

The Respondents filed an answer and counterclaims.

In March 2015, the federal court action was stayed on consent of all parties pending the arbitration.

Arbitration hearings started in May 2016 and concluded in August 2018.

On August 26, 2020, the arbitration panel issued an award that denied all Claimants’ claims with one exception, on which it awarded Claimants approximately $ 1.2 million, inclusive of seven years of interest through October 2, 2020.

This amount was recorded as an IPO litigation expense in the consolidated statement of operations for the year ended December 31, 2020.

Respondents believe that such award in favor of the Claimants is entirely without merit and sought to vacate that

portion of the award.

On September 27, 2021, the court denied Respondents' motion to vacate and entered judgement in the

aforementioned amount, inclusive of accumulated interest.

Respondents have appealed that ruling.

On May 10, 2022, Respondents moved to dismiss the appeal and judgment on the grounds that a recent decision of the United States Supreme Court held that the federal courts have no subject matter jurisdiction over the case.

Claimants opposed the motion.

On April 20, 2023, the Court granted the motion.

On April 21, 2023, Respondents filed a petition to vacate in part and otherwise confirm in New York State court, where it is currently pending.

In addition, certain of the Claimants in the federal court action sought to pursue claims in that case against Respondents.

Respondents believe that any such claims are meritless.

The magistrate judge assigned to the action has issued a Report and Recommendation rejecting Claimants’ claims;

On August 26, 2020, the arbitration panel issued an award that denied all Claimants’ claims with one exception, on which it awarded the Claimants approximately $ 1.2 million, inclusive of seven years of interest through October 2, 2020.

This amount was recorded as an IPO litigation expense in the consolidated statements of operations for the year ended December 31, 2020.The Respondents believe that such award in favor of the Claimants is entirely without merit and, in an action filed in the United States District Court for the Southern District of New York, sought to vacate that portion of the award.

On September 27, 2021, the court denied the Respondents' motion to vacate and entered judgement in the aforementioned amount, inclusive of accumulated interest.

The Respondents have appealed that ruling.

On May 10, 2022, the Respondents moved to dismiss the appeal and judgment on the grounds that a recent decision of the United States Supreme Court held that the federal courts have no subject matter jurisdiction over the case.

The Claimants opposed the motion.

On April 20, 2023, the federal appeals court granted the motion and the federal court action challenging the award was dismissed.

On April 21, 2023, the Respondents filed a petition to vacate in part and otherwise confirm in New York State court.

On April 28, 2023, the Claimants filed a motion to confirm in that same court..

On July 31, 2023, the New York State court denied the Respondents’ petition to vacate in part and confirmed the award.

The Respondents believe that ruling is incorrect and are considering their options with respect thereto.

In addition, certain of the Claimants in the federal court action sought to pursue claims in that case against the Respondents.

The Respondents believe that any such claims are meritless.

The magistrate judge assigned to the action has issued a Report and Recommendation rejecting the Claimants’ claims;

the district judge will decide whether to adopt the Report and Recommendation.

2 unchanged sentences

Malkin and Thomas N.

Keltner, Jr., our retired general counsel, have defense and indemnity rights from us with respect to this arbitration.

Keltner, Jr., our former general counsel, have defense and indemnity rights from us with respect to this arbitration.

Unfunded Capital Expenditures

At March 31, 2023, we estimate that we will incur approximately $ 107.9 million of capital expenditures (including tenant improvements and leasing commissions) on our properties pursuant to existing lease agreements.

At June 30, 2023, we estimate that we will incur approximately $ 138.4 million of capital expenditures (including tenant improvements and leasing commissions) on our properties pursuant to existing lease agreements.

We expect to fund these capital expenditures with operating cash flow, additional property level mortgage financings, our unsecured credit facility, cash on hand and other borrowings.

3 unchanged sentences

Financial instruments that subject us to credit risk consist primarily of cash and cash equivalents, restricted cash, short-term investments, tenant and other receivables and deferred rent receivables.

At March 31, 2023, we held on deposit at various major financial institutions cash and cash equivalents and restricted cash balances in excess of amounts insured by the Federal Deposit Insurance Corporation.

At June 30, 2023, we held on deposit at various major financial institutions cash and cash equivalents and restricted cash balances in excess of amounts insured by the FDIC.

Asset Retirement Obligations

3 unchanged sentences

Environmental site assessments and investigations have identified asbestos or asbestos-containing building materials in certain of our properties.

As of March 31, 2023, management has no plans to remove or alter these properties in a manner that would trigger federal and other applicable regulations for asbestos removal, and accordingly, the obligations to remove the asbestos or asbestos-containing building materials from these properties have indeterminable settlement dates.

As of June 30, 2023, management has no plans to remove or alter these properties in a manner that would trigger federal and other applicable regulations for asbestos removal, and accordingly, the obligations to remove the asbestos or asbestos-containing building materials from these properties have indeterminable settlement dates.

As such, we are unable to reasonably estimate the fair value of the associated conditional asset retirement obligation.

2 unchanged sentences

Certain of our properties have been inspected for soil contamination due to pollutants, which may have occurred prior to our ownership of these properties or subsequently in connection with its development and/or its use.

Required remediation to such properties has been completed, other than our post-closing obligations for remediation at our Westport retail assets, as discussed in more detail in our Annual Report on Form 10-K for the year ended December 31, 2022, and as of March 31, 2023, with the exception of these two assets, management believes that there are no obligations related to environmental remediation other than maintaining the affected sites in conformity with the relevant authority’s mandates and filing the required documents.

Required remediation to such properties has been completed, other than our post-closing obligations for remediation at our previously owned Westport retail assets, as discussed in more detail in our Annual Report, and at our previously owned 500 Mamaroneck property as discussed in “Financial Statements - Note 3.

Acquisitions and Dispositions.” As of June 30, 2023, with the exception of these three assets, management believes that there are no obligations related to environmental remediation other than maintaining the affected sites in conformity with the relevant authority’s mandates and filing the required documents.

All such maintenance costs are expensed as incurred.

3 unchanged sentences

We carry insurance coverage on our properties of types and in amounts with deductibles that we believe are in line with coverage customarily obtained by owners of similar properties.

As of March 31, 2023, there were 160,339,762 shares of Class A common stock 988,974 shares of Class B common stock and 110,618,164 operating partnership units outstanding, of which 161,328,736 , or 59.3 %, were owned by ESRT and 110,618,164 , or 40.7 %, were owned by other partners, including ESRT directors, members of senior management and other employees.

On May 16, 2019, the Empire State Realty Trust, Inc.

As of June 30, 2023, there were 159,842,614 shares of Class A common stock, 988,180 shares of Class B common stock and 110,086,858 operating partnership units outstanding.

The controlling interest of 59.4 % is owned by ESRT and the remaining 40.6 % noncontrolling interest in the OP is owned by other limited partners, including ESRT directors, members of senior management and other employees.

ESRT has two classes of common stock as a means to give its OP Unit holders voting rights in the public company that correspond to their economic interest in the combined entity.

A one-time option was created at our formation transactions for any pre-IPO OP Unit holder to exchange one OP Unit out of every 50 OP Units they owned for one Class B share, and such Class B share carries 50 votes.

On May 16, 2019, our shareholders approved the Empire State Realty Trust, Inc.

Empire State Realty OP, L.P.

2019 Equity Incentive Plan (“2019 Plan”) was approved by our shareholders.

The 2019 Plan provides for grants to directors, employees and consultants of ESRT and the Operating Partnership, including options, restricted stock, restricted stock units, stock appreciation rights, performance awards, dividend equivalents and other equity-based awards.

An aggregate of approximately 11.0 million shares of ESRT common stock are authorized for issuance under awards granted pursuant to the 2019 Plan.

We will not issue any new equity awards under the First Amended and Restated Empire State Realty Trust, Inc.

2019 Equity Incentive Plan (the “2019 Plan”) and replaced the First Amended and Restated Empire State Realty Trust, Inc.

and Empire State Realty OP, L.P.

2013 Equity Incentive Plan ("2013 Plan", and collectively with the 2019 Plan, the "Plans").

The shares of ESRT Class A common stock underlying any awards under the 2019 Plan and the 2013 Plan that are forfeited, canceled or otherwise terminated, other than by

exercise, will be added back to the shares of ESRT Class A common stock available for issuance under the 2019 Plan.

Shares tendered or held back upon exercise of a stock option or settlement of an award under the 2019 Plan or the 2013 Plan to cover the exercise price or tax withholding and shares subject to a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right upon exercise thereof, will not be added back to the shares of ESRT Class A common stock available for issuance under the 2019 Plan.

equity-based awards.

An aggregate of approximately 11.0 million shares of ESRT common stock are authorized for issuance under awards granted pursuant to the 2019 Plan.

We will not issue any new equity awards under the 2013 Plan.

The shares of ESRT Class A common stock underlying any awards under the Plans that are forfeited, canceled or otherwise terminated, other than by exercise, will be added back to the shares of ESRT Class A common stock available for issuance under the 2019 Plan.

Shares tendered or held back upon exercise of a stock option or settlement of an award under the Plans to cover the exercise price or tax withholding and shares subject to a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right upon exercise thereof, will not be added back to the shares of ESRT Class A common stock available for issuance under the 2019 Plan.

In addition, shares of ESRT Class A common stock repurchased on the open market will not be added back to the shares of ESRT Class A common stock available for issuance under the 2019 Plan.

11 unchanged sentences

The authorization does not obligate ESRT or us to acquire any particular amount of securities, and the program may be suspended or discontinued at ESRT and our discretion without prior notice.

The following table summarizes ESRT's purchases of equity securities in each of the three months ended March 31, 2023:

The following table summarizes ESRT's purchases of equity securities in each of the three months ended June 30, 2023:

Period Total Number of Shares Purchased Weighted Average Price Paid per Share Maximum Approximate Dollar Value Available for Future Purchase (in thousands)

January 2023 90,054 $ 6.70 $ 409,221

February 2023 — $ — $ 409,221

March 2023 843,333 $ 6.04 $ 404,130

April 1 - April 30, 2023 1,214,770 $ 6.09 $ 396,736

May 1 - May 31, 2023 2,700 $ 6.00 $ 396,720

June 1 - June 30, 2023 — $ — $ 396,720

Private Perpetual Preferred Units

As of March 31, 2023, there were 4,664,038 Series 2019 Preferred Units ("Series 2019 Preferred Units") and 1,560,360 Series 2014 Private Perpetual Preferred Units ("Series 2014 Preferred Units") outstanding.

As of June 30, 2023, there were 4,664,038 Series 2019 Preferred Units ("Series 2019 Preferred Units") and 1,560,360 Series 2014 Private Perpetual Preferred Units ("Series 2014 Preferred Units") outstanding.

The Series 2019 Preferred Units have a liquidation preference of $ 13.52 per unit and are entitled to receive cumulative preferential annual cash distributions of $ 0.70 per unit payable in arrears on a quarterly basis.

2 unchanged sentences

Distributions

Total distributions paid to OP unitholders were $ 8.7 million and $ 9.8 million for the three months ended March 31, 2023 and 2022, respectively.

Total distributions paid to preferred unitholders were $ 1.1 million and $ 1.1 million for the three months ended March 31, 2023 and 2022, respectively.

Total distributions paid to OP unitholders were $ 9.5 million and $ 18.2 million for the three and six months ended June 30, 2023, respectively, and $ 9.7 million and $ 19.5 million for the three and six months ended June 30, 2022, respectively.

Total distributions paid to preferred unitholders were $ 1.1 million and $ 2.1 million for the three and six months ended June 30, 2023, respectively, and $ 1.1 million and $ 2.1 million for the three and six months ended June 30, 2022, respectively.

Incentive and Share-Based Compensation

The Plans provide for grants to directors, employees and consultants consisting of stock options, restricted stock, dividend equivalents, stock payments, performance shares, LTIP units, stock appreciation rights and other incentive awards.

An aggregate of 11.0 million shares of ESRT common stock is authorized for issuance under awards granted pursuant to the 2019 Plan, and as of March 31, 2023, 4.4 million shares of ESRT common stock remain available for future issuance.

In March 2023, we made grants of LTIP units to executive officers under the 2019 Plan, including a total of 552,412 LTIP units that are subject to time-based vesting, 834,456 LTIP units that are subject to market-based vesting and 679,969 units that are subject to performance-based vesting with fair market values of $ 3.2 million, $ 3.9 million and $ 3.9 million, respectively.

In March 2023, we made grants of LTIP units and restricted stock to certain other employees under the 2019 Plan, including a total of 229,308 LTIP units and 370,465 shares of restricted stock that are subject to time-based vesting, 111,942 LTIP units that are subject to market-based vesting and 91,211 LTIP units that are subject to performance-based vesting, with fair market values of $ 1.5 million and $ 2.6 million, respectively, for the time-based vesting awards, $ 0.6 million for the market-based vesting awards and $ 0.6 million for the performance-based vesting awards.

The awards subject to time-based vesting vest ratably over four years , subject generally to the grantee's continued employment, with the first installment vesting on January 1, 2024.

The vesting of the LTIP units subject to market-based vesting is based on the achievement of relative total stockholder return hurdles over a three-year performance period, commencing on January 1, 2023.

The vesting of the LTIP units subject to performance-based vesting is based on the achievement of (i) operational metrics over a one -year performance period, subject to a three -year absolute TSR modifier, and (ii) environmental, social and governance ("ESG") metrics over a three -year performance period, in each case, commencing on January 1, 2023.

Following the completion of the respective performance periods, our Compensation and Human Capital Committee will determine the number of LTIP units to which the grantee is entitled based on our performance relative to the performance hurdles set forth in the LTIP unit award agreements the grantee entered in connection with the award grant.

These LTIP units then vest in two equal installments, on January 1, 2025 and December 31, 2026, subject generally to the grantee's continued employment on those dates.

In March 2023, we also made one-time additional grants of LTIP units to certain non-executive employees under the 2019 Plan.

At such time, we granted to certain other employees a total of 152,542 LTIP units that are subject to time-based vesting, with a fair market value of $ 1.0 million that vest over four and five year periods.

In 2023, our named executive officers could elect to receive their annual incentive bonus in any combination of (i) cash or vested LTIPs at the face amount of such bonus or (ii) time-vesting LTIPs which would vest over three years , subject to continued employment, at a premium over such face amount ( 120 % for awards granted in 2021, 2022, and 2023;

125 % for years prior to 2021).

In March 2023, we made grants of LTIP units to executive officers under the 2019 Plan in connection with the 2022 bonus election program.

We granted to executive officers a total of 521,571 LTIP units that are subject to time-based vesting with a fair market value of $ 3.0 million.

Of these LTIP units, 446,376 LTIP units vest ratably over three years from January 1, 2023, subject generally to the grantee's continued employment.

The first installment vests on January 1, 2024, and the remainder will vest thereafter in two equal annual installments on January 1, 2025 and January 1, 2026.

We also granted to our retired general counsel 75,195 LTIP units that vested immediately on the grant date.

An aggregate of 11.0 million shares of ESRT common stock is authorized for issuance under awards granted pursuant to the 2019 Plan, and as of June 30, 2023, 4.2 million shares of ESRT common stock remain available for future issuance.

Annually, we make grants of LTIP units to our non-employee directors under the 2019 Plan.

In May 2023, each of our directors received 60 % of their $ 200,000 annual base retainer in the form of equity vesting ratably over four years , and could elect to receive the remaining 40 % of such base retainer in (i) cash at the face value of the award, (ii) immediately vesting equity at the face value of the award, or (iii) equity vesting ratably over three years at 120 % of the face amount.

Each director could elect to receive any equity portion of the base retainer in either (i) LTIP units or (ii) restricted shares of our Class A common stock.

In accordance with each director's election, in May 2023, we granted a total of 237,856 LTIP units that are subject to time-based vesting with fair market values of $ 1.2 million.

The LTIP units vest ratably over three or four years from the date of the grant, based on grantee election, subject generally to the director's continued service on our Board of Directors.

Share-based compensation for time-based equity awards is measured at the fair value of the award on the date of grant and recognized as an expense on a straight-line basis over the shorter of (i) the stated vesting period, which is generally three , four or five years , or (ii) the period from the date of grant to the date the employee becomes retirement eligible, which may occur upon grant.

6 unchanged sentences

Our stock price, along with the prices of the comparative indexes, is assumed to follow the Geometric Brownian Motion Process.

Brownian Motion is a common assumption when modeling in financial markets, as it allows the modeled quantity (in this case the stock price) to vary randomly from its current value and take any value greater than zero.

Geometric Brownian Motion is a common assumption when modeling in financial markets, as it allows the modeled quantity (in this case the stock price) to vary randomly from its current value and take any value greater than zero.

The volatilities of the returns on our stock price and the comparative indexes were estimated based on implied volatilities and historical volatilities using an appropriate look-back period.

2 unchanged sentences

For restricted stock awards, the fair value of the awards is based on the market price of ESRT stock at the grant date.

LTIP units and ESRT restricted stock issued during the three months ended March 31, 2023 were valued at $ 20.2 million.

The weighted average per unit or share fair value was $ 5.69 for grants issued in 2023.

LTIP units and ESRT restricted stock issued during the six months ended June 30, 2023 were valued at $ 21.4 million.

The weighted average per unit or share fair value was $ 5.65 for grants issued for the six months ended June 30, 2023.

The fair value per unit or share granted in 2023 was estimated on the respective dates of grant using the following assumptions:

an expected life from 2.0 to 5.3 years, a dividend rate of 1.7 %, a risk-free interest rate from 4.4 % to 5.0 %, and an expected price volatility from 35.0 % to 46.0 %.

No other stock options, dividend equivalents, or stock appreciation rights were issued or outstanding in 2023.

The following is a summary of ESRT restricted stock and LTIP unit activity for the three months ended March 31, 2023:

No other stock options, dividend equivalents, or stock appreciation rights were issued or outstanding as of June 30, 2023.

The following is a summary of ESRT restricted stock and LTIP unit activity for the six months ended June 30, 2023:

Restricted Stock Time-based LTIPs Market-based LTIPs Performance-based LTIPs Weighted Average Grant Fair Value

3 unchanged sentences

Forfeited or unearned ( 8,413 ) — ( 1,692,910 ) ( 2,751 ) 4.29

Unvested balance at March 31, 2023 622,398 3,171,623 3,097,310 1,272,610 $ 6.56

Unvested balance at June 30, 2023 614,435 3,260,529 3,012,210 1,278,196 $ 6.52

The time-based LTIPs and ESRT restricted stock awards are treated for accounting purposes as immediately vested upon the later of (i) the date the grantee attains the age of 60 or 65 , as applicable, and (ii) the date on which grantee has first completed ten years of continuous service with our Company or its affiliates.

For award agreements that qualify, we recognize noncash compensation expense on the grant date for the time-based awards and ratably over the vesting period for the market-based and performance-based awards, and accordingly, we recognized $ 0.7 million and $ 1.0 million for the three months ended March 31, 2023 and 2022, respectively.

Unrecognized compensation expense was $ 4.2 million at March 31, 2023, which will be recognized over a weighted average period of 2.9 years.

For the remainder of the LTIP unit and ESRT restricted stock awards, we recognize noncash compensation expense ratably over the vesting period, and accordingly, we recognized noncash compensation expense of $ 3.7 million and $ 3.5 million for the three months ended March 31, 2023 and 2022, respectively.

Unrecognized compensation expense was $ 36.2 million at March 31, 2023, which will be recognized over a weighted average period of 2.8 years.

For award agreements that qualify, we recognize noncash compensation expense on the grant date for the time-based awards and ratably over the vesting period for the market-based and performance-based awards, and accordingly, we recognized $ 1.0 million and $ 1.7 million for the three and six months ended June 30, 2023, respectively, and $ 0.6 million and $ 1.6 million for the three and six months ended June 30, 2022, respectively.

Unrecognized compensation expense was $ 3.9 million at June 30, 2023, which will be recognized over a weighted average period of 2.6 years.

For the remainder of the LTIP unit and ESRT restricted stock awards, we recognize noncash compensation expense ratably over the vesting period, and accordingly, we recognized noncash compensation expense of $ 4.4 million and $ 8.1 million for the three and six months ended June 30, 2023, respectively, and $ 5.4 million and $ 8.9 million for the three and six months ended June 30, 2022, respectively.

Unrecognized compensation expense was $ 32.3 million at June 30, 2023, which will be recognized over a weighted average period of 2.7 years.

Earnings Per Unit

Earnings per unit for the three months ended March 31, 2023 and 2022 is computed as follows (amounts in thousands, except per share amounts):

Three Months Ended

March 31, 2023 March 31, 2022

Net income (loss) $ 11,694 $ ( 17,221 )

Earnings per unit for the three and six months ended June 30, 2023 and 2022 is computed as follows (amounts in thousands, except per share amounts):

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

Net income $ 36,955 $ 48,695 $ 48,649 $ 31,474

Private perpetual preferred unit distributions ( 1,051 ) ( 1,051 ) ( 2,101 ) ( 2,101 )

Net loss attributable to non-controlling interests in other partnerships 43 63

Net (income) loss attributable to non-controlling interests in other partnerships ( 1 ) 159 42 222

Earnings allocated to unvested units — ( 670 ) — ( 759 )

Net income (loss) attributable to common unitholders – basic and diluted $ 10,687 $ ( 18,297 )

Net income attributable to common unitholders – basic and diluted $ 35,903 $ 47,133 $ 46,590 $ 28,836

Weighted average units outstanding – basic 262,903 270,078 263,694 271,834

1 unchanged sentence

Stock-based compensation plans

1,293 7 1,042 3

Weighted average units outstanding –- diluted 264,196 270,085 264,736 271,837

2 unchanged sentences

Diluted $ 0.14 $ 0.17 $ 0.18 $ 0.11

There were zero and 194 antidilutive shares and LTIP units for the three months ended March 31, 2023 and 2022, respectively.

There were zero antidilutive shares and LTIP units for the three and six months ended June 30, 2023, respectively, and 603 and 398 antidilutive shares and LTIP units for the three and six months ended June 30, 2022, respectively.

Related Party Transactions

1 unchanged sentence

We earned supervisory fees from entities affiliated with Anthony E.

Malkin, our Chairman, President and Chief Executive Officer, of $ 0.2 million and $ 0.2 million for the three months ended March 31, 2023 and 2022, respectively.

Malkin, our Chairman, President and Chief Executive Officer, of $ 0.3 million and $ 0.5 million for the three and six months ended June 30, 2023, respectively, and $ 0.3 million and $ 0.5 million for the three and six months ended June 30, 2022, respectively.

These fees are included within third-party management and other fees.

1 unchanged sentence

We earned property management fees from entities affiliated with Anthony E.

Malkin of $ 0.1 million and $ 0.1 million for the three months ended March 31, 2023 and 2022, respectively.

Malkin of $ 0.05 million and $ 0.2 million for the three and six months ended June 30, 2023, respectively, and $ 0.1 million and $ 0.1 million for the three and six months ended June 30, 2022, respectively.

These fees are included within third-party management and other fees.

5 unchanged sentences

We also have agreements with these entities and excluded properties and businesses to provide them with general computer-related support services.

Total aggregate revenue was $ 0.1 million and $ 0.1 million for the three months ended March 31, 2023 and 2022, respectively.

As disclosed in greater detail in our Annual Report on Form 10-K for the year ended December 31, 2022, in connection with the sale of our Westport retail assets in February 2023, we advanced a loan to the buyer to facilitate closing with a principal amount of $ 0.6 million, which bears interest at SOFR plus 3.5 % and requires repayment of principal to the extent of available cash flow of the property.

As of March 31, 2023, the amount outstanding under the loan is $ 0.6 million and is recorded as part of amounts due to affiliated companies, net which is included in accounts payable and accrued expenses on the condensed consolidated balance sheet.

Total aggregate revenue was $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2023, respectively, and $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2022, respectively.

As disclosed in greater detail in our Annual Report, in connection with the sale of our Westport retail assets in February 2023, we advanced a loan to the buyer to facilitate closing with a principal amount of $ 0.6 million, which bears interest at SOFR plus 3.5 % and requires repayment of principal to the extent of available cash flow of the property.

As of June 30, 2023, the amount outstanding under the loan is $ 0.1 million.

Segment Reporting

5 unchanged sentences

We account for intersegment sales and rents as if the sales or rents were to third parties, that is, at current market prices.

The following tables provide components of segment net income (loss) for each segment for the three and three months ended March 31, 2023 and 2022 (amounts in thousands):

Three Months Ended March 31, 2023

The following tables provide components of segment net income (loss) for each segment for the three and six months ended June 30, 2023 and 2022 (amounts in thousands):

Three Months Ended June 30, 2023

Real Estate Observatory Intersegment Elimination Total

14 unchanged sentences

Total operating expenses 135,653 29,642 ( 20,942 ) 144,353

Total operating income (loss) 19,147 ( 1,659 ) — 17,488

Total operating income 42,398 3,791 — 46,189

Other income (expense):

1 unchanged sentence

Interest expense ( 25,405 ) — — ( 25,405 )

Gain on sale of property 15,696 — — 15,696

Income (loss) before income taxes 12,097 ( 1,622 ) — 10,475

Income tax (expense) benefit ( 198 ) 1,417 — 1,219

Net income (loss) $ 11,899 $ ( 205 ) $ — $ 11,694

Gain on disposition of property 13,565 — — 13,565

Income before income taxes 33,847 3,841 — 37,688

Income tax expense ( 197 ) ( 536 ) — ( 733 )

Net income $ 33,650 $ 3,305 $ — $ 36,955

Segment assets $ 3,928,943 $ 255,825 $ — $ 4,184,768

Expenditures for segment assets $ 32,908 $ — $ — $ 32,908

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Real Estate Observatory Intersegment Elimination Total

15 unchanged sentences

Total operating expenses 143,697 24,935 ( 17,109 ) 151,523

Total operating income 44,066 2,433 — 46,499

Other income (expense):

Interest income 426 5 — 431

Interest expense ( 25,042 ) — — ( 25,042 )

Gain on disposition of property 27,170 — — 27,170

Income before income taxes 46,620 2,438 — 49,058

Income tax expense ( 38 ) ( 325 ) — ( 363 )

Net income $ 46,582 $ 2,113 $ — $ 48,695

Segment assets $ 3,969,257 $ 247,974 $ — $ 4,217,231

Expenditures for segment assets $ 13,115 $ — $ — $ 13,115

Six Months June 30, 2023

Real Estate Observatory Intersegment Elimination Total

Rental revenue 294,694 — — $ 294,694

Intercompany rental revenue 36,856 — ( 36,856 ) —

Observatory revenue — 55,587 — 55,587

Third-party management and other fees 808 — — 808

Other revenue and fees 4,075 — — 4,075

Total revenues 336,433 55,587 ( 36,856 ) 355,164

Operating expenses:

Property operating expenses 81,563 — — 81,563

Intercompany rent expense — 36,856 ( 36,856 ) —

Ground rent expenses 4,663 — — 4,663

General and administrative expenses 31,783 — — 31,783

Observatory expenses — 16,512 — 16,512

Real estate taxes 63,278 — — 63,278

Depreciation and amortization 93,601 87 — 93,688

Total operating expenses 274,888 53,455 ( 36,856 ) 291,487

Total operating income 61,545 2,132 — 63,677

Other income (expense):

Interest income 5,847 87 — 5,934

Interest expense ( 50,709 ) — — ( 50,709 )

Gain on disposition of property 29,261 — — 29,261

Income before income taxes 45,944 2,219 — 48,163

Income tax (expense) benefit ( 395 ) 881 — 486

Net income $ 45,549 $ 3,100 $ — $ 48,649

Expenditures for segment assets 35,576 58 — $ 35,634

Six Months June 30, 2022

Real Estate Observatory Intersegment Elimination Total

Rental revenue 296,853 — — $ 296,853

Intercompany rental revenue 27,729 — ( 27,729 ) —

Observatory revenue — 40,609 — 40,609

Lease termination fees 20,032 — — 20,032

Third-party management and other fees 636 — — 636

Other revenue and fees 3,926 — — 3,926

Total revenues 349,176 40,609 ( 27,729 ) 362,056

Operating expenses:

Property operating expenses 76,077 — — 76,077

Intercompany rent expense — 27,729 ( 27,729 ) —

Ground rent expenses 4,663 — — 4,663

General and administrative expenses 29,562 — — 29,562

Observatory expenses — 13,991 — 13,991

Real estate taxes 59,806 — — 59,806

Depreciation and amortization 125,325 85 — 125,410

Total operating expenses 295,433 41,805 ( 27,729 ) 309,509

Total operating income (loss) 53,743 ( 1,196 ) — 52,547

2 unchanged sentences

Interest expense ( 50,056 ) — — ( 50,056 )

Loss before income taxes ( 15,188 ) ( 3,629 ) — ( 18,817 )

Gain on disposition of property 27,170 — — 27,170

Income (loss) before income taxes 31,432 ( 1,191 ) — 30,241

Income tax (expense) benefit ( 182 ) 1,415 — 1,233

Net loss $ ( 15,332 ) $ ( 1,889 ) $ — $ ( 17,221 )

Segment assets $ 3,998,791 $ 244,539 $ — $ 4,243,330

Net income $ 31,250 $ 224 $ — $ 31,474

Expenditures for segment assets 51,999 291 — $ 52,290

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements