Segment Reporting

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

We have identified two reportable segments: (1) real estate and (2) observatory. Our real estate segment includes all activities related to the ownership, management, operation, acquisition, redevelopment, repositioning and disposition of our real estate assets. Our observatory segment includes the operation of the 86th and 102nd floor observatories at the Empire State Building. These two lines of businesses are managed separately because each business requires different support infrastructures, provides different services and has dissimilar economic characteristics such as investments needed, stream of revenues and marketing strategies. We account for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices. We include our historical construction operation in "Other," and it includes all activities related to providing construction services to tenants and to other entities within and outside our company. As of March 27, 2015, we no longer solicited new business for our construction management business. We completed all projects that were in progress.

The following tables provide components of segment profit for each segment for the three and six months ended June 30, 2015 and 2014 (amounts in thousands):

	Three Months Ended June 30, 2015
	Real Estate			Observatory			Other		Intersegment Elimination			Total
Revenues:
Rental revenue	$	112,866		$	—		$	—	$	—		$	112,866
Intercompany rental revenue	18,910			—			—		(18,910		)	—
Tenant expense reimbursement	18,582			—			—		—			18,582
Observatory revenue	—			30,600			—		—			30,600
Construction revenue	—			—			1,774		(1,400		)	374
Third-party management and other fees	594			—			—		—			594
Other revenue and fees	1,757			—			—		—			1,757
Total revenues	152,709			30,600			1,774		(20,310		)	164,773
Operating expenses:
Property operating expenses	37,935			—			—		—			37,935
Intercompany rent expense	—			18,910			—		(18,910		)	—
Ground rent expense	2,332			—			—		—			2,332
Marketing, general, and administrative expenses	9,113			—			—		—			9,113
Observatory expenses	—			7,420			—		—			7,420
Construction expenses	—			—			1,566		(1,213		)	353
Real estate taxes	22,952			—			—		—			22,952
Depreciation and amortization	39,542			87			—		—			39,629
Total operating expenses	111,874			26,417			1,566		(20,123		)	119,734
Total operating income (loss)	40,835			4,183			208		(187		)	45,039
Interest expense	(17,571		)	—			—		—			(17,571		)
Income (loss) before income taxes	23,264			4,183			208		(187		)	27,468
Income tax (expense) benefit	(422		)	(528		)	67		—			(883		)
Net income (loss)	$	22,842		$	3,655		$	275	$	(187	)	$	26,585
Segment assets	$	3,051,768		$	240,374		$	1,822	$	—		$	3,293,964
Expenditures for segment assets	$	31,796		$	24		$	—	$	—		$	31,820

	Three Months Ended June 30, 2014
	Real Estate			Observatory			Other		Intersegment Elimination			Total
Revenues:
Rental revenue	$	92,210		$	—		$	—	$	—		$	92,210
Intercompany rental revenue	16,298			—			—		(16,298		)	—
Tenant expense reimbursement	14,304			—			—		—			14,304
Observatory revenue	—			30,389			—		—			30,389
Construction revenue	—			—			13,864		(901		)	12,963
Third-party management and other fees	753			—			—		—			753
Other revenue and fees	4,549			—			—		—			4,549
Total revenues	128,114			30,389			13,864		(17,199		)	155,168
Operating expenses:
Property operating expenses	35,149			—			—		—			35,149
Intercompany rent expense	—			16,298			—		(16,298		)	—
Ground rent expense	447			—			—		—			447
Marketing, general, and administrative expenses	9,560			—			—		—			9,560
Observatory expenses	—			7,120			—		—			7,120
Construction expenses	—			—			13,582		(787		)	12,795
Real estate taxes	18,186			—			—		—			18,186
Acquisition expenses	735			—			—		—			735
Depreciation and amortization	28,556			77			4		—			28,637
Total operating expenses	92,633			23,495			13,586		(17,085		)	112,629
Total operating income (loss)	35,481			6,894			278		(114		)	42,539
Interest expense	(14,629		)	—			—		—			(14,629		)
Income (loss) before income taxes	20,852			6,894			278		(114		)	27,910
Income tax (expense) benefit	(630		)	(2,381		)	382		—			(2,629		)
Net income (loss)	$	20,222		$	4,513		$	660	$	(114	)	$	25,281
Segment assets	$	2,221,530		$	243,189		$	11,906	$	—		$	2,476,625
Expenditures for segment assets	$	37,735		$	—		$	—	$	—		$	37,735

	Six Months Ended June 30, 2015
	Real Estate			Observatory			Other			Intersegment Elimination			Total
Revenues:
Rental revenue	$	222,924		$	—		$	—		$	—		$	222,924
Intercompany rental revenue	30,574			—			—			(30,574		)	—
Tenant expense reimbursement	36,782			—			—			—			36,782
Observatory revenue	—			48,823			—			—			48,823
Construction revenue	—			—			5,696			(3,715		)	1,981
Third-party management and other fees	1,040			—			—			—			1,040
Other revenue and fees	5,105			—			—			—			5,105
Total revenues	296,425			48,823			5,696			(34,289		)	316,655
Operating expenses:
Property operating expenses	80,387			—			—			—			80,387
Intercompany rent expense	—			30,574			—			(30,574		)	—
Ground rent expense	4,663			—			—			—			4,663
Marketing, general, and administrative expenses	18,213			—			—			—			18,213
Observatory expenses	—			14,397			—			—			14,397
Construction expenses	—			—			6,539			(3,317		)	3,222
Real estate taxes	45,930			—			—			—			45,930
Depreciation and amortization	80,775			171			101			—			81,047
Total operating expenses	229,968			45,142			6,640			(33,891		)	247,859
Total operating income (loss)	66,457			3,681			(944		)	(398		)	68,796
Interest expense	(33,618		)	—			—			—			(33,618		)
Income (loss) before income taxes	32,839			3,681			(944		)	(398		)	35,178
Income tax (expense) benefit	(773		)	(272		)	340			—			(705		)
Net income (loss)	$	32,066		$	3,409		$	(604	)	$	(398	)	$	34,473
Expenditures for segment assets	$	69,189		$	24		$	—		$	—		$	69,213

	Six Months Ended June 30, 2014
	Real Estate			Observatory			Other			Intersegment Elimination			Total
Revenues:
Rental revenue	$	182,414		$	—		$	—		$	—		$	182,414
Intercompany rental revenue	31,566			—			—			(31,566		)	—
Tenant expense reimbursement	29,457			—			—			—			29,457
Observatory revenue	—			47,690			—			—			47,690
Construction revenue	—			—			29,789			(1,863		)	27,926
Third-party management and other fees	1,364			—			—			—			1,364
Other revenue and fees	6,623			—			—			—			6,623
Total revenues	251,424			47,690			29,789			(33,429		)	295,474
Operating expenses:
Property operating expenses	71,009			—			—			—			71,009
Intercompany rent expense	—			31,566			—			(31,566		)	—
Ground rent expense	898			—			—			—			898
Marketing, general, and administrative expenses	19,715			—			—			—			19,715
Observatory expenses	—			14,101			—			—			14,101
Construction expenses	—			—			28,697			(1,619		)	27,078
Real estate taxes	36,559			—			—			—			36,559
Acquisition expenses	735			—			—			—			735
Depreciation and amortization	58,608			137			7			—			58,752
Total operating expenses	187,524			45,804			28,704			(33,185		)	228,847
Total operating income (loss)	63,900			1,886			1,085			(244		)	66,627
Interest expense	(28,966		)	—			—			—			(28,966		)
Income (loss) before income taxes	34,934			1,886			1,085			(244		)	37,661
Income tax (expense) benefit	(930		)	(178		)	(41		)	—			(1,149		)
Net income (loss)	$	34,004		$	1,708		$	1,044		$	(244	)	$	36,512
Expenditures for segment assets	$	54,978		$	—		$	—		$	—		$	54,978