XML 34 R21.htm IDEA: XBRL DOCUMENT v3.22.4
Segment Reporting
 12 Months Ended
Dec. 31, 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 operates 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 different 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. 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 profit for each segment for the years ended December 31, 2022, 2021 and 2020 (amounts in thousands):

2022
Real EstateObservatoryIntersegment EliminationTotal
Revenues:
Rental revenue$591,048 $— $— $591,048 
Intercompany rental revenue65,005 — (65,005)— 
Observatory revenue— 105,978 — 105,978 
Lease termination fees20,032 — — 20,032 
Third-party management and other fees1,361 — — 1,361 
Other revenue and fees8,622 — — 8,622 
Total revenues686,068 105,978 (65,005)727,041 
Operating expenses:
Property operating expenses157,935 — — 157,935 
Intercompany rent expense— 65,005 (65,005)— 
Ground rent expense9,326 — — 9,326 
General and administrative expenses61,765 — — 61,765 
Observatory expenses— 31,036 — 31,036 
Real estate taxes123,057 — — 123,057 
Depreciation and amortization216,707 187 — 216,894 
Total operating expenses568,790 96,228 (65,005)600,013 
Total operating income117,278 9,750 — 127,028 
Other income (expense):
Interest income4,901 47 — 4,948 
Interest expense(101,206)— — (101,206)
Gain on sale/disposition of properties33,988 — — 33,988 
Income before income taxes54,961 9,797 — 64,758 
Income tax expense(584)(962)— (1,546)
Net income$54,377 $8,835 $— $63,212 
Segment assets$3,909,299 $254,295 $— $4,163,594 
Expenditures for segment assets$85,646 $315 $— $85,961 
2021
Real EstateObservatoryIntersegment EliminationTotal
Revenues:
Rental revenue$559,690 $— $— $559,690 
Intercompany rental revenue23,413 — (23,413)— 
Observatory revenue— 41,474 — 41,474 
Lease termination fees16,230 — — 16,230 
Third-party management and other fees1,219 — — 1,219 
Other revenue and fees5,343 138 — 5,481 
Total revenues605,895 41,612 (23,413)624,094 
Operating expenses:
Property operating expenses126,986 — — 126,986 
Intercompany rent expense— 23,413 (23,413)— 
Ground rent expense9,326 — — 9,326 
General and administrative expenses55,947 — — 55,947 
Observatory expenses— 23,206 — 23,206 
Real estate taxes119,967 — — 119,967 
Impairment charge7,723 — — 7,723 
Depreciation and amortization201,676 130 — 201,806 
Total operating expenses521,625 46,749 (23,413)544,961 
Total operating income (loss)84,270 (5,137)— 79,133 
Other income (expense):
Interest income701 3 — 704 
Interest expense(94,292)(102)— (94,394)
Loss on early extinguishment of debt(214)— — (214)
Loss before income taxes(9,535)(5,236)— (14,771)
Income tax (expense) benefit(613)2,347 — 1,734 
Net loss$(10,148)$(2,889)$— $(13,037)
Segment assets$4,037,122 $245,325 $— $4,282,447 
Expenditures for segment assets$398,368 $4 $— $398,372 
2020
Real EstateObservatoryIntersegment EliminationTotal
Revenues:
Rental revenue$563,071 $— $— $563,071 
Intercompany rental revenue17,827 — (17,827)— 
Observatory revenue— 29,057 — 29,057 
Lease termination fees9,416 — — 9,416 
Third-party management and other fees1,225 — — 1,225 
Other revenue and fees6,459 — — 6,459 
Total revenues597,998 29,057 (17,827)609,228 
Operating expenses:
Property operating expenses136,141 — — 136,141 
Intercompany rent expense— 17,827 (17,827)— 
Ground rent expense9,326 — — 9,326 
General and administrative expenses62,244 — — 62,244 
Observatory expenses— 23,723 — 23,723 
Real estate taxes121,923 — — 121,923 
Impairment charges6,204 — — 6,204 
Depreciation and amortization190,863 143 — 191,006 
Total operating expenses526,701 41,693 (17,827)550,567 
Total operating income (loss)71,297 (12,636)— 58,661 
Other income (expense):
Interest income2,542 95 — 2,637 
Interest expense(89,907)— — (89,907)
Loss on early extinguishment of debt(86)— — (86)
IPO litigation expense(1,165)— — (1,165)
Loss before income taxes(17,319)(12,541)— (29,860)
Income tax (expense) benefit(843)7,814 — 6,971 
Net loss$(18,162)$(4,727)$— $(22,889)
Segment assets$3,903,884 $246,811 $— $4,150,695 
Expenditures for segment assets$101,306 $2,754 $— $104,060 

During the fourth quarter 2021, we incurred a $7.7 million impairment charge relating to our property in Norwalk, Connecticut. Our methodology to calculate the fair value of the property involved a combination of the discounted cash flow method, utilizing Level 3 unobservable inputs such as market capitalization rates obtained from external sources, and the market based approach utilizing recent sales comparables.

During the second quarter 2020, we wrote off $4.1 million of prior expenditures on a Combined Heat Power/Redundancy onsite power generation project in our real estate segment that is rendered economically unviable due to New York City's Local Law 97 and from its measurement of carbon from natural gas combustion generates fines. During the third quarter 2020, we also wrote off $2.1 million of prior expenditures on a build-to-suit development project in our real estate segment that was halted due to reconsideration by the user driven by the COVID-19 pandemic. The $7.7 million and $6.2 million write-offs are shown as impairment charges in the consolidated statement of operations for the years ended December 31, 2021 and 2020, respectively.