Segment Reporting

6 Months Ended

Jun. 30, 2022

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 traditional 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 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 six months ended June 30, 2022 and 2021 (amounts in thousands):

	Three Months Ended June 30, 2022
	Real Estate		Observatory		Intersegment Elimination		Total
Revenues:
Rental revenue	$	149,339	$	—	$	—	$	149,339
Intercompany rental revenue	17,109		—		(17,109)		—
Observatory revenue	—		27,368		—		27,368
Lease termination fees	18,859		—		—		18,859
Third-party management and other fees	326		—		—		326
Other revenue and fees	2,130		—		—		2,130
Total revenues	187,763		27,368		(17,109)		198,022
Operating expenses:
Property operating expenses	37,433		—		—		37,433
Intercompany rent expense	—		17,109		(17,109)		—
Ground rent expense	2,332		—		—		2,332
General and administrative expenses	15,876		—		—		15,876
Observatory expenses	—		7,776		—		7,776
Real estate taxes	29,802		—		—		29,802
Depreciation and amortization	58,254		50		—		58,304
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

	Three Months Ended June 30, 2021
	Real Estate		Observatory		Intersegment Elimination		Total
Revenues:
Rental revenue	$	140,797	$	—	$	—	$	140,797
Intercompany rental revenue	6,029		—		(6,029)		—
Observatory revenue	—		8,359		—		8,359
Lease termination fees	3,339		—		—		3,339
Third-party management and other fees	327		—		—		327
Other revenue and fees	586		—		—		586
Total revenues	151,078		8,359		(6,029)		153,408
Operating expenses:
Property operating expenses	28,793		—		—		28,793
Intercompany rent expense	—		6,029		(6,029)		—
Ground rent expense	2,332		—		—		2,332
General and administrative expenses	14,089		—		—		14,089
Observatory expenses	—		5,268		—		5,268
Real estate taxes	31,354		—		—		31,354
Depreciation and amortization	45,066		22		—		45,088
Total operating expenses	121,634		11,319		(6,029)		126,924
Total operating income (loss)	29,444		(2,960)		—		26,484
Other income (expense):
Interest income	163		1		—		164
Interest expense	(23,422)		—		—		(23,422)
Income (loss) before income taxes	6,185		(2,959)		—		3,226
Income tax (expense) benefit	(135)		1,320		—		1,185
Net income (loss)	$	6,050	$	(1,639)	$	—	$	4,411
Segment assets	$	3,880,853	$	242,619	$	—	$	4,123,472
Expenditures for segment assets	$	19,975	$	—	$	—	$	19,975

	Six Months Ended June 30, 2022
	Real Estate		Observatory		Intersegment Elimination		Total
Revenues:
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 expense	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
Other income (expense):
Interest income	575		5		—		580
Interest expense	(50,056)		—		—		(50,056)
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 income	$	31,250	$	224	$	—	$	31,474
Expenditures for segment assets	$	51,999	$	291	$	—	$	52,290

	Six Months Ended June 30, 2021
	Real Estate		Observatory		Intersegment Elimination		Total
Revenues:
Rental revenue	$	281,028	$	—	$	—	$	281,028
Intercompany rental revenue	10,961		—		(10,961)		—
Observatory revenue	—		10,962		—		10,962
Lease termination fees	4,628		—		—		4,628
Third-party management and other fees	603		—		—		603
Other revenue and fees	1,491		—		—		1,491
Total revenues	298,711		10,962		(10,961)		298,712
Operating expenses:
Property operating expenses	59,072		—		—		59,072
Intercompany rent expense	—		10,961		(10,961)		—
Ground rent expense	4,663		—		—		4,663
General and administrative expenses	27,942		—		—		27,942
Observatory expenses	—		9,856		—		9,856
Real estate taxes	62,801		—		—		62,801
Depreciation and amortization	89,485		60		—		89,545
Total operating expenses	243,963		20,877		(10,961)		253,879
Total operating income (loss)	54,748		(9,915)		—		44,833
Other income (expense):
Interest income	283		3		—		286
Interest expense	(46,976)		—		—		(46,976)
Loss on early extinguishment of debt	(214)		—		—		(214)
Income (loss) before income taxes	7,841		(9,912)		—		(2,071)
Income tax (expense) benefit	(418)		3,709		—		3,291
Net income (loss)	$	7,423	$	(6,203)	$	—	$	1,220
Expenditures for segment assets	$	43,307	$	4	$	—	$	43,311