Segment Reporting

9 Months Ended

Sep. 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 nine months ended September 30, 2022 and 2021 (amounts in thousands):

	Three Months Ended September 30, 2022
	Real Estate		Observatory		Intersegment Elimination		Total
Revenues:
Rental revenue	$	148,290	$	—	$	—	$	148,290
Intercompany rental revenue	19,072		—		(19,072)		—
Observatory revenue	—		33,051		—		33,051
Lease termination fees	—		—		—		—
Third-party management and other fees	389		—		—		389
Other revenue and fees	1,982		—		—		1,982
Total revenues	169,733		33,051		(19,072)		183,712
Operating expenses:
Property operating expenses	42,798		—		—		42,798
Intercompany rent expense	—		19,072		(19,072)		—
Ground rent expense	2,331		—		—		2,331
General and administrative expenses	15,725		—		—		15,725
Observatory expenses	—		8,516		—		8,516
Real estate taxes	31,831		—		—		31,831
Depreciation and amortization	46,933		51		—		46,984
Total operating expenses	139,618		27,639		(19,072)		148,185
Total operating income	30,115		5,412		—		35,527
Other income (expense):
Interest income	1,530		34		—		1,564
Interest expense	(25,516)		—		—		(25,516)
Gain on disposition of property	—		—		—		—
Income before income taxes	6,129		5,446		—		11,575
Income tax expense	(359)		(1,098)		—		(1,457)
Net income	$	5,770	$	4,348	$	—	$	10,118
Segment assets	$	3,950,883	$	250,257	$	—	$	4,201,140
Expenditures for segment assets	$	18,686	$	24	$	—	$	18,710

	Three Months Ended September 30, 2021
	Real Estate		Observatory		Intersegment Elimination		Total
Revenues:
Rental revenue	$	139,558	$	—	$	—	$	139,558
Intercompany rental revenue	5,310		—		(5,310)		—
Observatory revenue	—		12,796		—		12,796
Lease termination fees	11,321		—		—		11,321
Third-party management and other fees	314		—		—		314
Other revenue and fees	921		138		—		1,059
Total revenues	157,424		12,934		(5,310)		165,048
Operating expenses:
Property operating expenses	33,357		—		—		33,357
Intercompany rent expense	—		5,310		(5,310)		—
Ground rent expense	2,331		—		—		2,331
General and administrative expenses	14,427		—		—		14,427
Observatory expenses	—		6,370		—		6,370
Real estate taxes	29,566		—		—		29,566
Depreciation and amortization	65,759		35		—		65,794
Total operating expenses	145,440		11,715		(5,310)		151,845
Total operating income (loss)	11,984		1,219		—		13,203
Other income (expense):
Interest income	211		—		—		211
Interest expense	(23,577)		—		—		(23,577)
Income (loss) before income taxes	(11,382)		1,219		—		(10,163)
Income tax (expense) benefit	53		(73)		—		(20)
Net income (loss)	$	(11,329)	$	1,146	$	—	$	(10,183)
Segment assets	$	3,870,142	$	242,021	$	—	$	4,112,163
Expenditures for segment assets	$	21,349	$	—	$	—	$	21,349

	Nine Months Ended September 30, 2022
	Real Estate		Observatory		Intersegment Elimination		Total
Revenues:
Rental revenue	$	445,143	$	—	$	—	$	445,143
Intercompany rental revenue	46,801		—		(46,801)		—
Observatory revenue	—		73,660		—		73,660
Lease termination fees	20,032		—		—		20,032
Third-party management and other fees	1,025		—		—		1,025
Other revenue and fees	5,908		—		—		5,908
Total revenues	518,909		73,660		(46,801)		545,768
Operating expenses:
Property operating expenses	118,875		—		—		118,875
Intercompany rent expense	—		46,801		(46,801)		—
Ground rent expense	6,994		—		—		6,994
General and administrative expenses	45,287		—		—		45,287
Observatory expenses	—		22,507		—		22,507
Real estate taxes	91,637		—		—		91,637
Depreciation and amortization	172,258		136		—		172,394
Total operating expenses	435,051		69,444		(46,801)		457,694
Total operating income (loss)	83,858		4,216		—		88,074
Other income (expense):
Interest income	2,105		39		—		2,144
Interest expense	(75,572)		—		—		(75,572)
Gain on disposition of property	27,170		—		—		27,170
Income (loss) before income taxes	37,561		4,255		—		41,816
Income tax (expense) benefit	(541)		317		—		(224)
Net income	$	37,020	$	4,572	$	—	$	41,592
Expenditures for segment assets	$	70,795	$	315	$	—	$	71,110

	Nine Months Ended September 30, 2021
	Real Estate		Observatory		Intersegment Elimination		Total
Revenues:
Rental revenue	$	420,586	$	—	$	—	$	420,586
Intercompany rental revenue	16,271		—		(16,271)		—
Observatory revenue	—		23,758		—		23,758
Lease termination fees	15,949		—		—		15,949
Third-party management and other fees	917		—		—		917
Other revenue and fees	2,412		138		—		2,550
Total revenues	456,135		23,896		(16,271)		463,760
Operating expenses:
Property operating expenses	92,429		—		—		92,429
Intercompany rent expense	—		16,271		(16,271)		—
Ground rent expense	6,994		—		—		6,994
General and administrative expenses	42,369		—		—		42,369
Observatory expenses	—		16,226		—		16,226
Real estate taxes	92,367		—		—		92,367
Depreciation and amortization	155,244		95		—		155,339
Total operating expenses	389,403		32,592		(16,271)		405,724
Total operating income (loss)	66,732		(8,696)		—		58,036
Other income (expense):
Interest income	494		3		—		497
Interest expense	(70,553)		—		—		(70,553)
Loss on early extinguishment of debt	(214)		—		—		(214)
Income (loss) before income taxes	(3,541)		(8,693)		—		(12,234)
Income tax (expense) benefit	(365)		3,636		—		3,271
Net loss	$	(3,906)	$	(5,057)	$	—	$	(8,963)
Expenditures for segment assets	$	64,655	$	4	$	—	$	64,659