NEW YORK CONVENTION CENTER OPERATING CORPORATION

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Financial Statements and

Independent Auditors’ Report

March 31, 2023 and 2022

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Table of Contents

Page

Independent Auditors’ Report 1 - 3

Management’s Discussion and Analysis 4 - 19

Financial Statements:

Statements of Net Position 20

Statements of Revenue, Expenses and Changes in Net Position 21

Statements of Cash Flows 22 - 23

Notes to Financial Statements 24 - 39

Required Supplementary Information:

Schedule of the Corporation’s Proportionate Share of the Net

Pension Liability (Asset) 40

Schedule of the Corporation’s Pension Contributions 41

Schedule of Changes in the Corporation’s Total OPEB Liability

and Related Ratios 42

Independent Auditors’ Report on Internal Control Over Financial

Reporting and on Compliance and Other Matters Based on an

Audit of the Financial Statements Performed in Accordance with

Government Auditing Standards 43 - 44

Independent Auditors’ Report on Investment Compliance 45 - 47

* * * * * *

INDEPENDENT AUDITORS’ REPORT

The Board of Directors

New York Convention Center

Operating Corporation:

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of the New York Convention Center

Operating Corporation (the “Corporation”), as of and for the years ended March 31, 2023 and 2022,

and the related notes to financial statements, which collectively comprise the Corporation’s basic

financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the

financial position of the Corporation, as of March 31, 2023 and 2022, and the changes in financial

position and cash flows for the years then ended in accordance with accounting principles generally

accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United

States of America (GAAS) and the standards applicable to financial audits contained in Government

Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities

under those standards are further described in the Auditors’ Responsibilities for the Audit of the

Financial Statements section of our report. We are required to be independent of the Corporation

and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements

relating to our audits. We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our audit opinion.

Emphasis of Matter

As discussed in notes 1(n) and 12 to the financial statements, the Corporation adopted the provisions

of Governmental Accounting Standards Board (GASB) Statement No. 96 - “Subscription-Based

Information Technology Arrangements,” during the year ended March 31, 2023. Our opinion is not

modified with respect to this matter.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in

accordance with accounting principles generally accepted in the United States of America, and for

the design, implementation, and maintenance of internal control relevant to the preparation and fair

presentation of financial statements that are free from material misstatement, whether due to fraud

or error.

6390 Main Street, Suite 200

Williamsville, NY 14221

P 716.634.0700

TF 800.546.7556

F 716.634.0764

W EFPRgroup.com

In preparing the financial statements, management is required to evaluate whether there are

conditions or events, considered in the aggregate, that raise substantial doubt about the

Corporation’s ability to continue as a going concern for the twelve months beyond the financial

statement date, including any currently known information that may raise substantial doubt shortly

thereafter.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole

are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report

that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute

assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and

Government Auditing Standards will always detect a material misstatement when it exists. The risk

of not detecting a material misstatement resulting from fraud is higher than for one resulting from

error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the

override of internal control. Misstatements are considered material if there is a substantial likelihood

that, individually or in the aggregate, they would influence the judgment made by a reasonable user

based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:

•

Exercise professional judgment and maintain professional skepticism throughout the audits.

•

Identify and assess the risks of material misstatement of the financial statements, whether due

to fraud or error, and design and perform audit procedures responsive to those risks. Such

procedures include examining, on a test basis, evidence regarding the amounts and disclosures

in the financial statements.

•

Obtain an understanding of internal control relevant to the audits in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an

opinion on the effectiveness of the Corporation’s internal control. Accordingly, no such opinion is

expressed.

•

Evaluate the appropriateness of accounting policies used and the reasonableness of significant

accounting estimates made by management, as well as evaluate the overall presentation of the

financial statements.

•

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,

that raise substantial doubt about the Corporation’s ability to continue as a going concern for a

reasonable period of time.

We are required to communicate with those charged with governance regarding, among other

matters, the planned scope and timing of the audits, significant audit findings, and certain internal

control-related matters that we identified during the audits.

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the

management’s discussion and analysis and the additional information on pages 40 through 42 be

presented to supplement the basic financial statements. Such information is the responsibility of

management and, although not a part of the basic financial statements, is required by GASB who

considers it to be an essential part of financial reporting for placing the basic financial statements in

an appropriate operational, economic, or historical context. We have applied certain limited

procedures to the required supplementary information in accordance with auditing standards

generally accepted in the United States of America, which consisted of inquiries of management

about the methods of preparing the information and comparing the information for consistency with

management’s responses to our inquiries, the basic financial statements, and other knowledge we

obtained during our audit of the basic financial statements. We do not express an opinion or provide

any assurance on the information because the limited procedures do not provide us with sufficient

evidence to express an opinion or provide any assurance.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated June 21,

2023 on our consideration of the Corporation’s internal control over financial reporting and on our

tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements

and other matters. The purpose of that report is solely to describe the scope of our testing of internal

control over financial reporting and compliance and the results of that testing, and not to provide an

opinion on the effectiveness of the Corporation’s internal control over financial reporting or on

compliance. That report is an integral part of an audit performed in accordance with Government

Auditing Standards in considering Corporation’s internal control over financial reporting and

compliance.

Williamsville, New York

June 21, 2023

MANAGEMENT’S DISCUSSION AND ANALYSIS

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Management’s Discussion and Analysis

March 31, 2023 and 2022

Overview of the Financial Statements

This annual report includes the independent auditors’ report, management’s discussion and analysis,

and the financial statements of New York Convention Center Operating Corporation (“NYCCOC”,

the “Javits Center”, or the “Center”). The financial statements include notes and required

supplementary information that explain in more detail the information in the annual report. Readers

should consider management’s discussion and analysis in conjunction with the financial statements

taken as a whole.

The financial statements of the Javits Center report information using accounting methods similar to

those used by private sector companies. These statements offer short and long-term financial

information about the Center’s financial activities and may be summarized as follows:

The Statements of Net Position present the financial position of the Javits Center at the end of each

fiscal year reported. It includes all the Center’s assets, deferred outflows of resources, liabilities and

deferred inflows of resources, and provides information about the nature and amounts of investments

in resources (assets) and the obligations to the Center’s creditors (liabilities). It also provides the

basis for evaluating the net position of the Center and assessing the Center’s liquidity and financial

strength. The current assets and liabilities represent assets expected to be converted into cash

and/or utilized and liabilities expected to be paid and/or settled during the subsequent fiscal year.

The Statements of Revenue, Expenses and Changes in Net Position present the Javits Center’s

revenue and expenses, for the fiscal years ended March 31, 2023 and 2022. These statements

measure the financial performance of the Center during the fiscal years presented and can be used

to determine whether the Center has recovered all its costs through space rental and related event

services.

The Statements of Cash Flows present cash receipts, cash payments and net changes in cash and

equivalents resulting from operating, noncapital financing, capital and related financing and investing

activities, and provides answers to such questions as where cash originated from, what cash was

used for, and what was the change in Javits Center’s cash position for the fiscal years presented.

The mission of the Javits Center is to serve the citizens of the State and City of New York by

generating new business and employment opportunities, serving as a catalyst for the continued

redevelopment of the local community and operating in the public interest, consistent with the social,

economic, and environmental priorities of existing state policy. The Center meets these objectives

through maximizing the booking of trade events, public events, and special events (corporate events

and conferences) that stimulate spending within the regional economy, create jobs at the Center and

in the surrounding community and generate a reliable source of revenue for the State and City of

New York.

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Management’s Discussion and Analysis, Continued

Business Overview and Major Initiatives

Fiscal Year 2023 was another year of transition for the Javits Center. The events and meetings

industry continued its steady recovery from the impact of the COVID-19 pandemic. For the Javits

Center, it was the first full year of operation of the new 1.2 million square feet of expansion space,

referred to now as North Javits. While challenges remain, and operations are not yet back to pre-

pandemic levels, the Javits Center continues in the right direction in serving its statutory purpose of

generating positive economic impact for the City and State of New York.

An Evolving Business Environment

Even prior to the pandemic, the events industry was going through significant changes as both

attendees and exhibitors were looking for more experiential and dynamic experience. That changing

environment was one of the driving forces behind the Javits Center’s expansion. The expansion

created the opportunity for the Javits Center to diversify its offering to the market and meet the

market’s new demands. The expansion created a significant increase in meeting room space,

dramatic new special event space, and for the first time, outdoor space with views of the Hudson

River. These features were well timed coming out of the pandemic. The Javits Center saw a

significant increase in its corporate and association events business in Fiscal Year 2023, as well as

an increase in galas and fundraising. In many instances these events introduced new customers to

the Javits Center’s portfolio, positioning the Center with a broader customer base for the future. In

addition, this higher margin business helped the Javits Center meet market demands while

compensating for trends away from the more traditional trade show format. With the new space

operational, the sales team has been working on more all-inclusive packages to attract additional

customers to the space. With business continuing to grow, the Javits Center expects to return to

pre-pandemic levels for the 2024 calendar year.

Capital Projects and Facilities Improvements

While North Javits provided important new event space and back of house areas to enhance

operational efficiency, it is critical for the Javits Center to continually maintain and upgrade the facility

as a whole. While resources were limited in Fiscal Year 2023, the Javits Center continued to improve

the overall facilities. Major projects included:

● The continued upgrade of the life safety systems, including the fire alarm system, in

the original Javits Center and integrating it into the new life safety system in North

Javits. This system will increase safety for attendees while improving operational

efficiencies around monitoring safety issues.

● The installation of the largest solar farm in New York City, which involves 1400 solar

panels on the Javits Center’s 6.75-acre green roof. The project includes the first

contained, solar battery storage unit in New York City. The project will reduce the

Center’s carbon footprint while providing energy savings during the life of the project.

This is a no cost capital project for the Javits Center.

● Fiscal Year 2023 saw the new rooftop farm in operations for a full growing season.

This one-acre farm generated over 50 different crops last year, including crops such

as corn, squash, and tomatoes. All produce is used within the Javits Center or

donated to local community food banks, while providing significant environmental

benefits to the community.

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Management’s Discussion and Analysis, Continued

● Partnering with a new Out-of-Home advertising agency, the Javits Center was able to

replace its aging 11

Avenue marquee at no cost to the Javits Center while increasing

advertising revenue.

Community Engagement

Building on its recent efforts to engage with the community on a higher level, a number of initiatives

continued to help make the Javits Center a part of the local community.

● The Javits Center expanded and formalized its rooftop tour program. A team of

“Ambassadors” were hired and trained to perform tours from April through October.

Tours were provided to groups such as schools and local community groups free of

charge, and to private sector organizations for a fee. In addition, individuals were

able to book through a new online booking system for a small administrative fee.

● The Javits Juniors continued its Javits Juniors Scholarship program for the fifth year,

in conjunction with the Mariam B. and Jacob K Javits Foundation. Since 2018 the

program has distributed $180,000 in scholarship money to local college bound high

school seniors.

● Sustainability continued to be a key theme for the Javits Center. As part of the

sustainability program, the Center continued to be enrolled in three demand response

programs, under which the Center is compensated for reducing energy during peak

periods of local high demand. Utilizing the building management system, the Center

monitors the energy consumption level and responds accordingly to assist local

agencies managing the region’s output. As a result, the Center has achieved

significant financial savings while reducing its carbon footprint during peak demand

periods.

● Javits Cares resumed its pre-pandemic role of repurposing materials left behind at

the end of events and making them available to non-profit groups and schools in the

tri state area. Most significantly, the Javits Center resumed its partnership with

Material for the Arts, a NYC run organization which provides materials for arts

programs throughout New York City.

Looking Forward

The Javits Center will look to build upon its successes in Fiscal Year 2023 as it continues to work

toward returning to pre-pandemic levels of business. Key initiatives for the next fiscal year will

include:

● Continue to attract new and diversified customer base to the Javits Center. As part

of that process, the Center will increase its sales staff and tailor it to the new market

conditions and demands.

● Explore new revenue sources to ensure the Javits Center remains operationally self-

sufficient for years to come.

● Continue to ensure the Javits Center capital needs are being addressed and ensuring

that the Center remains a premier destination for events of all kinds.

● Ensure the Javits Center is hiring and retaining the necessary talent to continue its

historical success.

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Management’s Discussion and Analysis, Continued

2023 Financial Highlights

In Fiscal 2023, there were 65 trade and public events and 46 special events, which was 49 events

more than the prior fiscal year including the return of New York International Automobile Show,

Summer Fancy Food Show, International Vision Expo and ICSC@New York from Fiscal 2020.

The Javits Center’s total operating revenue increased $44.8 million (35.9%) to $169.7 million, mostly

driven by the increases in event labor and services for major recurring events and significant new

trade, public and special events.

The Javits Center’s total operating expenses increased $63.8 million (59.2%) to $171.5 million,

primarily resulting from an increase in event related labor and services expense, utilities, and

insurance premiums.

Javits Center’s total net position decreased to $51.8 million, due to the current year net loss of $9.4

million. The Unrestricted - board designated reserve to cover the other postemployment benefits

obligation, decreased by $13.6 million. The decrease is mainly driven by favorable medical premiums

negotiated by New York State with the insurance carriers and a higher discount rate used to calculate

the present value for this liability. This combined impact of these two changes was offset by a $3.9

million decrease in net investment in capital assets related to fiscal year depreciation net of change

in lease liabilities.

During Fiscal 2023, the Center adopted the provisions of GASB Statement No. 96, “Subscription-

Based Information Technology Arrangements” (“GASB 96”). This accounting standard requires

entities to record the value of multi-year, subscription-based software license contracts as intangible

capital assets and amortize the total value over the term of the contract. The effects of GASB 96

were implemented retrospectively by restating prior years’ financial statements and disclosures, as

applicable. The restatement activity reflects the addition to capital assets, accumulated

depreciation/amortization, and the corresponding current and noncurrent contract liabilities.

Additionally, applicable prepaid expense balances were reclassified from other current assets to

capital assets and the related software license expenses were reclassified from facility operating

expenses to depreciation and amortization expense.

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Management’s Discussion and Analysis, Continued

Summarized Statements

SUMMARIZED STATEMENTS OF NET POSITION

Summarized statements of net position at March 31, 2023 and 2022 are as follows:

*Restated for implementation of GASB Statement No. 96.

Financial Analysis

• Current Assets - Current assets decreased by $2.8 million (2.5%) to $107.3 million, resulting in

a current ratio of 2.7 to 1. Lower current assets are primarily attributable to a $10 million reduction

in the combined balance of cash, cash equivalents, and investments, partially offset by $7.2

million increase in accounts receivable. The lower net cash and investment balance reflects

timing of event related labor expenditures incurred prior to customer invoicing and payment. The

increase in accounts receivable at year-end is generally driven by the overall increase of services

performed and billed for events.

• Capital Assets, Noncurrent - Capital assets, noncurrent decreased by $5.7 million (16.4%) to

$29.2 million. The decrease reflects the impact from $8.3 million of depreciation and amortization

expense, partially offset by $2.6 million of Javits-funded capital additions during the year. The

GASB 96 adoption accounts for $1.9 million of the depreciation and amortization expense and

$1.3 million of the capital additions.

March 31,

2023 2022* Increase/

(000's) (000's)

(Decrease)

Assets:

Current assets 107,286$ 110,064 (2,778)

Capital assets, noncurrent 29,240 34,968 (5,728)

Noncurrent assets 6,272 4,516 1,756

Total assets 142,798 149,548 (6,750)

Deferred outflows of resources 7,292 13,820 (6,528)

Liabilities:

Current liabilities 40,228 35,737 4,491

Noncurrent liabilities 2,906 4,629 (1,723)

Other postemployment benefits

obligation, noncurrent 42,467 38,282 4,185

Total liabilities 82,833 98,514 (15,681)

Deferred inflows of resources 19,320 6,067 13,253

Net position:

Net investment in capital assets 28,954 32,983 (4,029)

Unrestricted - board designated 43,255 38,971 4,284

Unrestricted deficit (10,994) (20,012) 9,018

Total net position 61,215$ 51,942 9,273

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Management’s Discussion and Analysis, Continued

Financial Analysis

• Current Assets - Current assets increased by $8.1 million (7.9%) to $110.1 million, resulting in

a current ratio of 3.1 to 1. The increase is primarily attributable to a $4.2 million increase in other

assets, a $2.2 million increase in accounts receivable, and a $1.1 million increase in unbilled

show costs. The increase in other assets is mainly driven by $4.9 million of construction in

progress costs for expansion related projects funded by NYCCDC and the timing of the related

billing and payments. The increase in both accounts receivable and unbilled show costs at year-

end are generally driven by the overall increase of services performed and billed for events.

• Capital Assets, Noncurrent - Capital assets, noncurrent decreased by $2.9 million (7.8%) to

$35.0 million. The decrease reflects the impact from $7.8 million of depreciation and amortization

expense, partially offset by a modest amount of Javits-funded capital additions during the year

of $0.9 million. The GASB 96 adoption accounts for $1.5 million of the depreciation and

amortization expenses and $0.4 million of the capital additions in fiscal year 2022. Fiscal year

2021 was not restated in the MD&A for GASB 96 adoption but would have had an impact of $4.0

million on net capital assets.

• Deferred Outflows of Resources - Deferred outflows of resources are sums paid towards future

contributions for retirement and other postemployment benefits, which will be reflected in

actuarial valuations in subsequent years. As a result of accounting and financial reporting under

GASB Statements No. 68 and No. 75 and the accompanying changes of assumptions or other

inputs and net differences between planned and actual investment earnings on respective plan

investments, deferred outflows of resources increased by $2.0 million.

• Current Liabilities - Current liabilities decreased by $5.9 million (14.1%) to $35.7 million in fiscal

year 2022. The decrease is primarily driven by a $17.3 million reduction in advances for capital

improvements from affiliate, which relates to the payments received in fiscal year 2021 from

NYCCDC for the acquisition of furniture, fixtures and equipment for the expansion project. This

impact was partially offset by an increase of $7.7 million of unearned revenue for deposits on

hand for future events, an increase of $1.8 million in accounts payable and $1.5 million in accrued

expenses. The increase of unearned revenue, accounts payable and accrued expenses are

related to the timing of cash payments received in advance of events closing out, as well as cash

payments disbursed for operations in relation to year end.

• Noncurrent Liabilities - Noncurrent liabilities decreased by $14.0 million (75.1%) to $4.6 million.

The decrease is primarily related to a $13.8 million decrease in the net pension liability related

to the changes in actuarial assumptions and the difference between projected and actual

investments earnings on pension plan investments related to GASB Statement No. 68.

Additionally, the overall decrease reflects a $1.5 million reduction in lease liabilities related to the

payments mostly offset by a $1.3 million increase to the liability related to the adoption of GASB

96.

• Other Postemployment Benefits Obligation, Noncurrent - Other postemployment benefit

obligation, noncurrent (“OPEB”) increased by $4.2 million (10.9%) to $42.5 million, mainly due to

employees accruing benefits for and additional year of service and the decrease in the discount

rate.

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Management’s Discussion and Analysis, Continued

• Deferred Inflows of Resources - Deferred inflows of resources reflect the difference between

changes in the actuarial valuations for Pension and Other Postemployment Benefits (OPEB). As

a result of accounting and financial reporting for Pensions and OPEB, GASB Statements No. 68

and No. 75, and the accompanying changes of actuarial assumptions and net differences

between planned and actual investment earnings on pension plan investments, deferred inflows

of resources increased by $13.3 million.

• Net Position - Net position increased to $9.3 million (17.9%) to $61.2 million as a result of net

income in fiscal year 2022. The Board of Directors reserved $43.3 million in unrestricted net

position for other postemployment benefit obligations, an increase of $4.3 million over fiscal year

2021 due to the obligation’s annual growth. This impact was substantially offset by a $4.0 million

decrease in the net investment in capital assets related to fiscal year depreciation and

amortization expense and the net of change in lease liabilities.

SUMMARIZED CAPITAL ASSETS

Summarized capital assets at March 31, 2023 and 2022 are as follows:

*Restated for implementation of GASB Statement No. 96.

• Capital Assets - Capital assets, net of accumulated depreciation and amortization for fiscal year

2023 decreased by $5.7 million (16.4%) to $29.2 million. The decrease reflects the impact from

$8.3 million of depreciation and amortization expense, partially offset by $2.6 million of Javits-

funded capital additions during the year. The GASB 96 adoption accounts for $1.9 million of the

depreciation and amortization expense and $1.3 million of the capital additions.

March 31, March 31,

2023 2022* Increase/

(000's) (000's) (Decrease)

Construction in progress 190$ - 190

Furniture, fixtures and equipment 25,195 27,095 (1,900)

Other capital assets 2,904 2,904 -

Improvements to Center 41,827 41,728 99

Right to use assets 7,578 14,281 (6,703)

Intangible asset, subscription-based

information technology arrangement 7,000 6,161 839

Total capital assets 84,694 92,169 (7,475)

Less accumulated depreciation

and amortization (55,454) (57,201) 1,747

29,240$ 34,968 (5,728)

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Management’s Discussion and Analysis, Continued

Summarized capital assets at March 31, 2022 and 2021 are as follows:

*Restated for implementation of GASB Statement No. 96.

• Capital Assets - Capital assets, net of accumulated depreciation and amortization for fiscal year

2022 decreased $2.9 million to $35.0 million (16.4%) compared to fiscal year 2021. The

decrease is attributable to $7.9 million in depreciation and amortization for the fiscal year.

Subsequent to the COVID-19 pandemic, the Center incurred a modest amount of capital

additions to furniture, fixtures, and equipment which increased by $0.9 million. In addition, $6.8

million related to the completed network infrastructure project was transferred from construction

in progress to furniture, fixtures and equipment, and right of use assets, respectively, which did

not impact the net Capital asset balance..

March 31, March 31,

2022* 2021 Increase/

(000's) (000's) (Decrease)

Construction in progress -$ 6,792 (6,792)

Furniture, fixtures and equipment 27,095 26,297 798

Other capital assets 2,904 2,904 -

Improvements to Center 41,728 41,728 -

Right to use assets 14,281 7,743 6,538

Intangible asset, subscription-based

information technology arrangement 6,161 - 6,161

Total capital assets 92,169 85,464 6,705

Less accumulated depreciation

and amortization (57,201) (47,555) (9,646)

34,968$ 37,909 (2,941)

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Management’s Discussion and Analysis, Continued

SUMMARIZED STATEMENTS OF REVENUE, EXPENSES AND CHANGES IN NET POSITION

Summarized statements of revenue, expenses, and changes in net position for the years ended

March 31, 2023 and 2022 are as follows:

*Restated for implementation of GASB Statement No. 96.

• Operating Revenue - Total operating revenue was $169.7 million, an increase of $44.8 million

(35.9%) from $124.9 million in fiscal year 2022. The increase of $65.2 million (94.1%) in event

related services is directly related to the hosting of 49 (79.0%) more events than the prior year,

which also covered $13.5 million of JAVAX related non-recurring revenue from fiscal year 2022.

Space rental revenue decreased by $21.0 million (42.1%) as a result of non-recurring fiscal year

2022 revenue from the Field Hospital and JAVAX ($34.7 million), partially offset by higher

revenue from the increased number of events in the current year. Advertising, concession, and

other revenue increased by $0.6 million (10.8%) primarily resulting from favorable food and

beverage commission and event advertising.

• Operating Expenses - Total operating expenses increased by $63.8 million (59.2%) to $171.5

million from $107.7 million. Employee compensation and benefits expense increased by $57.3

million (75.8%), which reflects the higher number of hosted events. These expense increases

were partially offset by lower actuarially-determined pension and other postemployment benefits

(OPEB) costs, due to higher discount rates, favorable pension asset investment performance

and lower NY State-negotiated retiree healthcare insurance premiums. Facility operating

expenses increased by $6.4 million (32.8%) driven by higher utilities cost, event related

professional services, additional facility repair and maintenance costs and renewed service

contracts which were paused in fiscal year 2022. Selling, general and administrative expenses

increased by $2.1 million (21.9%) primarily driven by higher insurance premiums related to the

expansion and increases in credit card fees, consultant services and sales commissions.

March 31,

2023 2022* Increase/

(000's) (000's)

(Decrease)

Operating revenue:

Event-related services 134,578$ 69,350 65,228

Space rental 28,920 49,925 (21,005)

Advertising, concession and other 6,224 5,619 605

Total operating revenue 169,722 124,894 44,828

Total operating expenses 171,475 107,686 63,789

Depreciation and amortization 8,294 7,869 425

Income (loss) from operations (10,047) 9,339 (19,386)

Total nonoperating income (expense) 650 (67) 717

Change in net position (9,397) 9,272 (18,669)

Total net position at beginning of year 61,215 51,943 9,272

Total net position at end of year 51,818$ 61,215 (9,397)

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Management’s Discussion and Analysis, Continued

• Depreciation and Amortization - increased by $0.4 million (5.4%) due to GASB 96 adoption.

• Nonoperating Income (Expense) - Net interest income (expense) increased by $1.8 million

(>1,000%) mainly due to higher interest rates for US Treasury securities partially offset by a

reserve for disputed IRS penalties for the late filing of administrative forms, while the government

considers our penalty abatement request.

• Change in Net Position - Net position decreased $9.4 million (15.4%) to $51.8 million as a result

of the net loss in fiscal year 2023.

Summarized statements of revenue, expenses, and changes in net position for the years ended

March 31, 2022 and 2021 are as follows:

*Restated for implementation of GASB Statement No. 96.

• Operating Revenue - Total operating revenue was $124.9 million, an increase of $64.8 million

(107.8%) from $60.1 million in fiscal year 2021. The increase of $49.6 million (>10,000%) in

event related services and space rental revenue of $26.5 million (61.9%) were attributed to

revenue from the Field Hospital of $24.6 million, JAVAX of $23.6 million and the return of event

hosting in August 2021. Advertising, concession, and other revenue decreased by $11.4 million

(66.9%) which was primarily due to services and maintenance in connection with the Field

Hospital and JAVAX in fiscal year 2021.

• Operating Expenses - Total operating expenses increased by $51.6 million (92.0%) to $107.7

million from $56.1 million. Employee compensation and benefits increased by $47.1 million

(164.5%) driven by event and JAVAX related labor. Facility operating expenses increased by

$2.9 million (17.5%) driven by higher utilities cost, additional facility repair and maintenance and

reiterated service contracts which were paused in fiscal year 2021. Selling, general and

administrative expenses increased by $1.7 million (20.4%) primarily driven by higher insurance

premiums related to the expansion.

March 31,

2022* 2021 Increase/

(000's) (000's)

(Decrease)

Operating revenue:

Event-related services 69,350$ 42,841 26,509

Space rental 49,925 278 49,647

Advertising, concession and other 5,619 16,998 (11,379)

Total operating revenue 124,894 60,117 64,777

Total operating expenses 107,686 56,073 51,613

Depreciation and amortization 7,869 5,593 2,276

Income (loss) from operations 9,339 (1,549) 10,888

Total nonoperating income (expense) (67) 74 (141)

Change in net position 9,272 (1,475) 10,747

Total net position at beginning of year 51,943 53,417 (1,474)

Total net position at end of year 61,215$ 51,942 9,273

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Management’s Discussion and Analysis, Continued

• Depreciation and Amortization - Increased by $2.3 million (40.7%) mostly due to GASB 96

adoption. While fiscal year 2022 was required to be restated in the audited financial statements,

fiscal year 2021 was not restated in the MD&A.

• Nonoperating Income (Expense) - Net interest income (expense) decreased by $141K

attributable to significantly lower interest rates available on investments and lower investment

position throughout the year.

• Change in Net Position - Net position increased $9.3 million (17.9%) to $61.2 million as a result

of the net surplus in fiscal year 2022.

OPERATING RESULTS AND HIGHLIGHTS

The Javits Center prepares and obtains approval from the Board of Directors for an annual operating

budget and also maintains a rolling a five-year capital plan ($145.7 million). These plans are not

changed during the year and are tools to assist in the management of the business. Elements of the

five-year capital plan in any given year are only approved by management as cash and investment

surplus is available for the project to proceed. The capital plan provides for replacement of many

assets that are past their useful life and other areas that require a retrofit or complete upgrade.

Management has prioritized needs across the facility with the goal of maintaining infrastructure in a

sustainable manner and safeguarding the facility’s assets by directing appropriate resources to them.

The Center has established a funding agreement with NYCCDC to make available funds to keep the

building in peak maintenance condition. When a surplus is achieved, moderate goals are set to

make necessary improvements. Funding for capital expenditures was constrained during the

COVID-19 pandemic and continues to be somewhat challenging. We recognize the importance of

making funds available to support and maintain the investments we have made in the building to

keep the Center aligned to remain competitive.

SUMMARIZED STATEMENTS OF REVENUE, EXPENSES AND CHANGES IN NET POSITION

A Summarized Statement of Revenue, Expenses and Changes in Net Position, Actual vs. Plan for

the year ended March 31, 2023 is as follows:

2023 2023

Actual Plan Variance

(000's) (000's) (000's)

Operating revenue:

Event-related services 134,578$ 113,711 20,867

Space rental 28,920 26,165 2,755

Advertising, concession and other 6,224 3,177 3,047

Total operating revenue 169,722 143,053 26,669

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Management’s Discussion and Analysis, Continued

Fiscal Year 2023, the first full year of operations post-pandemic, presented more uncertainty from a

planning perspective than a typical year prior to 2020. Total operating revenue for the year ended

March 31, 2023 was $169.7 million, which was $26.7 million (18.6%) higher than plan of $143.1

million. Event-related services and Space rental revenues favorable variances to plan were driven

by 33 unplanned events, strong performance of recurring events and an increase in significant new

events. Advertising, concession, and other revenue was $3.0 million (95.9%) higher than plan

attributed to an increase in food and beverage commission and event advertising.

Total operating expenses were $171.4 million, which was $7.3 million (4.5%) higher than the plan of

$164.2 million. Employee compensation and benefits expense was $9.9 million (8.1%) higher than

plan directly related to an increase in event related labor and workers compensation expense,

partially offset by lower other postemployment benefits and pension expense and favorable house

labor expense. Facility operating expenses were $1.4 million (5.2%) lower than plan mainly related

to deferring various facility maintenance costs and the impact of GASB 96 adoption which was

partially offset by an increase in event related professional service and supplies. Selling, general and

administrative expenses were $1.2 million (12.1%) higher than the plan driven by increases in

consultant and temporary services, bad debt reserve and event related equipment rental which was

partially offset by lower cost in insurance premiums, promotional and telephone expenses.

Depreciation and amortization expense was $1.7 million higher than the plan mainly due to the

reclassification of operating expenses to depreciation and amortization expense related to the GASB

96 adoption. The plan amounts were not restated.

Net loss of $9.4 million was $18.4 million better than the plan net loss of $27.8 million mainly related

to unplanned events and over plan performance of new and recurring planned events as well as

controlling variable expenses.

2023 2023

Actual Plan Variance

(000's) (000's) (000's)

Operating expenses:

Employee compensation and benefits 133,006$ 123,088 9,918

Facility operating expenses 26,022 27,451 (1,429)

Selling, general and administrative 11,892 10,612 1,280

Annual other postemployment benefits expenses 555 3,000 (2,445)

Total operating expenses 171,475 164,151 7,324

Depreciation and amortization 8,294 6,595 1,699

Income (loss) from operations (10,047) (27,693) 17,646

Total nonoperating income (expense) 650 (89) 739

Net income (loss) (9,397)$ (27,782) 18,385

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Management’s Discussion and Analysis, Continued

A Summarized Statement of Revenue, Expenses and Changes in Net Position, Actual vs. Plan for

the year ended March 31, 2022 is as follows:

2022* 2022

Actual Plan Variance

(000's) (000's) (000's)

Operating revenue:

Event-related services 69,350$ 61,541 7,809

Space rental 49,925 16,655 33,270

Advertising, concession and other 5,619 2,406 3,213

Total operating revenue 124,894 80,602 44,292

Operating expenses:

Employee compensation and benefits 75,642 74,364 1,278

Facility operating expenses 19,597 16,756 2,841

Selling, general and administrative 9,758 8,443 1,315

Annual other postemployment benefits expenses 2,689 3,514 (825)

Total operating expenses 107,686 103,077 4,609

Depreciation and amortization 7,869 6,433 1,436

Income (loss) from operations 9,339 (28,908) 38,247

Total nonoperating income (expense) (67) 42 (109)

Net income (loss) 9,272$ (28,866) 38,138

*Restated for implementation of GASB Statement No. 96.

Total operating revenue for the year ended March 31, 2022 was $124.9 million, which was $44.3

million (55%) higher than plan of $80.6 million. Space Rental was $33.3 million over plan primary

due to rental revenue from the Field Hospital and JAVAX. Service revenue of $69.4 million and

Advertising, concession and other revenue of $5.6 million were higher than plan attributed to the

return of 62 events and services provided to the Field Hospital and JAVAX.

Total operating expenses were $107.7 million, which was $4.6 million (4.5%) higher than the plan of

$103.1 million. Employee compensation and benefits was $1.3 million (1.7%) higher than the plan

due to JAVAX labor and an increase of expansion related facility staff. Facility operating expenses

were $2.8 million (17.0%) higher than the plan primarily driven by JAVAX related service contracts

and higher cost in utilities, less $1.5 million reclassified to depreciation and amortization expense as

part of the GASB 96 restatement. Selling, general and administrative expenses were $1.3 million

(15.6%) higher than the plan driven by increases in consultant, temporary service, JAVAX and events

related equipment rental and promotion expenses which was partially offset by lower insurance

premiums.

Depreciation and amortization expense was $1.4 million higher than the plan mainly due to the

restatement related to GASB 96 adoption. The plan amounts were not restated.

Net surplus of $9.3 million was $38.1 million better than plan net loss of $28.9 million primarily due

to rental and service revenue from the Field Hospital and JAVAX.

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Management’s Discussion and Analysis, Continued

Request for Information

This financial report is designed to provide a general overview of the Javits Center’s finances for all

those with an interest in the New York Convention Center Operating Corporation’s finances.

Questions concerning any of the information provided in this report or requests for additional financial

information should be addressed to the Audit Committee Chairman, Jacob K. Javits Convention

Center, 655 West 34th Street, New York, New York 10001-1188.

FINANCIAL STATEMENTS

2022

2023 (as restated)

Current assets:

Cash and equivalents 20,901,746$ 10,026,223

Short-term investments 60,451,752 80,992,865

Accounts receivable, net of allowances of

$1,104,927 in 2023 and $205,515 in 2022

17,812,189 10,580,983

Unbilled show costs

1,132,340 1,053,594

Other current assets

6,988,560 7,410,657

Total current assets

107,286,587 110,064,322

Capital assets, net 29,239,751 34,968,426

Net pension asset - proportionate share 1,870,079 -

Other assets

4,401,682 4,515,689

Total assets

142,798,099 149,548,437

7,291,998 13,819,862

Current liabilities:

Accounts payable

4,183,600 7,025,882

Accrued expenses, current 5,459,342 4,755,218

Unearned revenue

20,936,613 14,255,681

Lease liability, current 2,871,243 2,965,676

Insurance claim reserve 3,754,489 2,520,935

Advances for capital improvements from affiliate 2,262,158 3,425,746

Other postemployment benefits obligation, current

760,000 788,000

Total current liabilities

40,227,445 35,737,138

Accrued expenses, net of current portion 1,276,119 962,151

Net pension liability - proportionate share - 49,107

Lease liability, net of current portion 1,630,260 3,617,675

Other postemployment benefits obligation,

net of current portion

28,875,000 42,467,000

Total liabilities

72,008,824 82,833,071

26,263,112 19,320,450

Net position

Net investment in capital assets 25,079,335 28,953,555

Unrestricted - board designated for other

postemployment benefit obligation

29,635,000 43,255,000

Unrestricted deficit

(2,896,174) (10,993,777)

Total net position

51,818,161$ 61,214,778

See accompanying notes to financial statements.

Liabilities

Deferred inflows of resources

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Statements of Net Position

March 31, 2023 and 2022

Assets

Deferred outflows of resources

2022

2023 (as restated)

Operating revenue:

Event-related services 134,578,041$ 69,349,951

Space rentals 28,919,770 49,924,750

Concession commissions

2,976,874 1,636,200

Advertising and other income

3,247,634 3,982,360

Total operating revenue

169,722,319 124,893,261

Operating expenses:

Employee compensation and benefits 133,005,847 75,641,864

Facility operating expenses 26,022,428 19,597,386

Selling, general and administrative expenses

11,891,203 9,757,263

Annual other postemployment benefits expenses

555,000 2,689,000

Total operating expenses

171,474,478 107,685,513

Operating income before depreciation

and amortization expense

(1,752,159) 17,207,748

Depreciation and amortization expense

(8,294,295) (7,868,682)

Operating income (loss) (10,046,454) 9,339,066

Nonoperating income (expense)

649,837 (66,678)

Change in net position (9,396,617) 9,272,388

Net position at beginning of year

61,214,778 51,942,390

Net position at end of year

51,818,161$ 61,214,778

See accompanying notes to financial statements.

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Statements of Revenue, Expenses and Changes in Net Position

Years ended March 31, 2023 and 2022

2022

2023 (as restated)

Cash flows from operating activities:

Cash receipts from customers 169,172,045$ 130,352,151

Cash paid for operating expenses

(174,904,895) (104,386,884)

Net cash provided by (used in)

operating activities

(5,732,850) 25,965,267

Cash flows from noncapital financing activities:

Principal payments on insurance financing agreement

- (4,209,855)

Interest payments on insurance financing agreement

- (28,064)

Net cash used in noncapital financing activities

- (4,237,919)

Principal payments on lease obligations (3,350,576) (3,522,064)

Interest payments on lease obligations (56,908) (83,278)

Payments for capital improvements for affiliate (1,163,588) (17,292,987)

Acquisition of capital assets

(1,296,892) (544,444)

Net cash used in capital and related

financing activities

(5,867,964) (21,442,773)

Purchase of short-term investments

(213,542,910) (320,000,000)

Proceeds from sales and maturities of short-term investments

234,927,242 304,004,378

Interest received on investments 977,998 40,770

Cash received for collateral

114,007 260,492

Net cash provided by (used in)

investing activities

22,476,337 (15,694,360)

Net change in cash and equivalents 10,875,523 (15,409,785)

Cash and equivalents at beginning of year

10,026,223 25,436,008

Cash and equivalents at end of year

20,901,746$ 10,026,223

(Continued)

See accompanying notes to financial statements.

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Statements of Cash Flows

Years ended March 31, 2023 and 2022

Cash flows from capital and related financing activities:

Cash flows from investing activities:

2022

2023 (as restated)

by (used in) operating activities:

Operating income (loss)

(10,046,454)$ 9,339,066

Adjustments to reconcile operating income (loss) to net

cash provided by (used in) operating activities:

Depreciation and amortization expense

8,294,295 7,868,682

Insurance financing agreement

- 4,209,855

Changes in:

Accounts receivable

(7,231,206) (2,225,678)

Unbilled show costs

(78,746) (1,053,594)

Other assets

580,520 (233,737)

Due from affiliate

(158,423) (3,955,354)

Accounts payable

(2,842,282) 1,768,211

Accrued expenses

(96,380) 1,563,621

Unearned revenue

6,680,932 7,684,568

Insurance claim reserve

1,233,554 (773,341)

Other postemployment benefits obligation

(13,620,000) 4,284,000

Net pension and OPEB related accounts

11,551,340 (2,511,032)

Net cash provided by (used in)

operating activities

(5,732,850)$ 25,965,267

Supplemental disclosure of non-cash financing activities:

Insurance financing agreement

-$ 4,209,855

Intangible right to use assets - software arrangements

obtained in exchanged for lease liabilities

1,268,728$ 360,239

Accumulated amortization on disposals:

Right to use assets - equipment

6,703,723 -

Intangible right to use assets - software arrangements

429,297 391,313

7,133,020$ 391,313

See accompanying notes to financial statements.

Reconciliation of operating income (loss) to net cash provided

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Statements of Cash Flows, Continued

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Notes to Financial Statements

March 31, 2023 and 2022

Note 1 - Summary of Significant Accounting Policies

(a) Reporting Entity

The New York Convention Center Operating Corporation (the “Corporation”) is a public benefit

corporation established by the State of New York (the “State”) to operate the Jacob K. Javits

Convention Center of New York (the “Javits Center” or “Center”). As such, it is included as a

component unit in the State’s annual financial report. As a component unit of the State, the Javits

Center is eligible for, and subject to, appropriation of funds as approved in the State’s budget.

Operating revenue is principally comprised of amounts derived from event-related support

services and space rental.

The Center was constructed by the New York Convention Center Development Corporation

(“NYCCDC”), another component unit of the State which is jointly owned by the New York State

Urban Development Corporation and the Triborough Bridge and Tunnel Authority (“TBTA”), also

component units of the State. Construction of the Center was financed with TBTA bonds.

Accordingly, the cost of the original construction and financing of the Center are excluded from

the accompanying financial statements. The Corporation leases the Center from the State for a

nominal amount.

(b) Basis of Accounting

The accompanying financial statements are prepared on the accrual basis of accounting in

accordance with accounting principles generally accepted in the United States of America.

Net position of the Corporation and changes therein are classified and reported as follows:

Net investment in capital assets - consists of capital assets, net of accumulated depreciation

and reduced by the outstanding balances of related debt obligations of those assets.

Unrestricted - board designated net position - net position that the Board of Directors

approved and designated to be used to fund the Other Postemployment Benefits (“OPEB”)

liability (note 8).

Unrestricted net position - reports the balance of net position that does not meet the definition

of the above two categories.

The Corporation has adopted the provisions of Governmental Accounting Standards Board

(“GASB”) Statement No. 34 “Basic Financial Statements - and Management’s Discussion and

Analysis - for State and Local Governments” and GASB Statement No. 37, “Basic Financial

Statements - and Management’s Discussion and Analysis - for State and Local Governments:

Omnibus”. The two statements require that State and Local governments’ financial statements

include management’s discussion and analysis, government-wide financial statements, fund

financial statements, notes to financial statements and required supplementary information. The

statements require State and Local governments to report infrastructure assets.

Private sector standards of accounting and financial reporting issued prior to December 1, 1989,

are generally followed to the extent they do not conflict or contradict guidance of the GASB.

Governments also have the option of following subsequent private sector guidance for their

business-type activities and enterprise funds. The Corporation has elected to not follow

subsequent private sector guidance.

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Notes to Financial Statements, Continued

Note 1 - Summary of Significant Accounting Policies, Continued

(d) Cash and Equivalents

The Corporation considers cash to consist of all cash on deposit with financial institutions that

can be withdrawn without prior notice or penalty. Cash and equivalents are primarily

collateralized with government securities held by a financial institution in the name of the

Corporation. During fiscal year 2023, the Corporation, through the New York State Department

of Taxation and Finance, established a money market account into which surplus funds in the

Center’s operating bank account are swept each day. As a result, substantially all of the balance

in cash and equivalents are held in an interest bearing account.

(e) Short-Term Investments

As of March 31, 2023 and 2022, the Corporation’s short-term investments consist of U.S.

Treasury notes and bills, respectively. These investments are specifically identified and held in

segregated accounts at depository institutions in the name of the New York State Department of

Taxation and Finance. Short-term investments are carried at amortized cost, which

approximates fair value, plus accrued interest receivable.

The State’s statutes and guidelines authorize the Corporation to invest in obligations of the U.S.

Government and its agencies, certificates of deposit, commercial paper, banker’s acceptances,

and obligations of the State.

(f) Recognition of Revenue and Reserve for Doubtful Accounts

Amounts received for space rental and event-related services in advance of the scheduled event

are reported as unearned revenue. Such amounts are recognized as revenue in the accounting

period in which the event occurs. Similarly, costs incurred which are directly attributable to an

event (primarily labor) are initially recorded as other assets and either expensed or billed to

customers at the event’s conclusion.

Revenue from advertising is recognized on a straight-line basis over the term of the advertising

agreement.

The allowance for possible credit losses provides for risks of losses inherent in the credit

extension process. The Corporation maintains an allowance on a specific and general basis at

levels considered adequate to meet present and future losses of receivables. Accordingly, these

estimates could change in the near term.

(g) Capitalized Costs, Depreciation and Amortization

Capitalized costs include all capital costs related to the Javits Center since it began operations,

including major additions and improvements. These expenditures include construction, design,

engineering and software subscription costs.

Depreciation and amortization is calculated on a straight-line basis ranging from 3 to 15 years,

which is the estimated useful life of the assets.

(h) Security Deposit

During October 2013 and 2014, the Corporation contracted with two insurance companies. The

terms of the contracts required the Corporation to pay security deposits which will be held for an

indefinite amount of time. As a result, security deposits of $4,401,682 and $4,515,689 as of

March 31, 2023 and 2022, respectively, are reflected as non-current other assets in the

statements of net position.

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Notes to Financial Statements, Continued

Note 1 - Summary of Significant Accounting Policies, Continued

(i) Deferred Outflows and Inflows of Resources

In the statements of net position, in addition to assets, the Corporation will sometimes report a

separate section of deferred outflows of resources. This separate financial statement element,

represents a consumption of net position that applies to a future period and so will not be

recognized as an outflow of resources (expense/expenditure) until then. The Corporation has

two items that qualify for reporting in this category. The first item is related to pension. This

represents the effect of the net change in the Corporation’s proportion of the collective net

pension liability and difference during the measurement period between the Corporation’s

contributions and its proportionate share of total contributions to the pension system not included

in pension expense, and contributions to the pension system subsequent to the measurement

date. The second item is related to other postemployment benefits. This represents the

Corporation’s difference between expected and actual experience and changes of assumptions

or other inputs to the health insurance program and contributions to the health insurance program

subsequent to the measurement date.

In the statements of net position, in addition to liabilities, the Corporation will sometimes report a

separate section of deferred inflows of resources. The separate financial statement element

represents an increase in net position that applies to future periods and so will not be recognized

as an inflows of resources until then. The Corporation has two items that qualify for reporting in

this category. The first item is related to pension. This represents the change in the proportion

between the Corporation’s contributions and the proportionate share of total plan contributions.

The second item is related to other postemployment benefits. This represents the difference

between the expected and actual experience and changes of assumptions or other inputs related

to the health insurance program.

(j) Retirement Benefits

The Corporation provides retirement benefits for its employees through contributions to the New

York State and Local Employees’ Retirement System (the “System” or “ERS”). The System

provides various plans and options, some of which require employee contributions. See note 7

of the financial statements for additional details.

(k) Other Postemployment Benefits (“OPEB”)

The Corporation provides health care benefits for certain of its qualifying retirees through the

New York State Health Insurance Program. See note 8 of the financial statements for additional

details.

(l) Estimates

The preparation of financial statements in accordance with accounting principles generally

accepted in the United States of America requires management to make estimates and

assumptions that affect the amounts reported in the financial statements and accompanying

notes. Actual results could differ from those estimates.

(m) Subsequent Events

The Corporation has evaluated subsequent events through the date of the report which is the

date the financial statements were available to be issued.

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Notes to Financial Statements, Continued

Note 1 - Summary of Significant Accounting Policies, Continued

(n) Recent Accounting Standards Adopted

For the year ended March 31, 2023, the Corporation adopted GASB Statement No. 96 -

“Subscription-Based Information Technology Arrangements.” This Statement provides guidance

on the accounting and financial reporting for subscription-based information technology

arrangements (SBITAs) for government end users. To the extent relevant, the standard for

SBITAs are based on the standards established in Statement No. 87 - “Leases,” as amended.

This Standard was effective for reporting periods beginning after June 15, 2022. These financial

statements and notes reflect the adoption of this new Standard.

Note 2 - Short-term Investments

Authorization for investment in securities is governed by written internal guidelines, statutes, and

State guidelines. The investments are reported at amortized cost in the statements of net position

and amounted to $60,451,752 and $80,992,865 as of March 31, 2023 and 2022, respectively.

The interest rate earned on investments approximated 3.00% and 0.16% for the years ended March

31, 2023 and 2022, respectively.

Fair Value Measurements

Accounting principles generally accepted in the United States of America established a framework

that provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure

fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for

identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs

(level 3 measurements). The three levels of the fair value hierarchy under generally accepted

accounting principles are as follows:

• Level 1 - Valuations are based on quoted prices in active markets for identical assets or

liabilities that the Corporation has the ability to access.

• Level 2 - Valuations are based on quoted prices in markets that are not active or for which

all significant inputs are not observable directly, or indirectly.

• Level 3 - Valuations are based on inputs that are unobservable and significant to overall

fair value measurement.

The Corporation’s short-term investments at March 31, 2023 and 2022 are classified as follows:

2023

Level 1 Level 2 Level 3 Total

U.S. Treasury notes $ 60,451,752 - - 60,451,752

2022

Level 1 Level 2 Level 3 Total

U.S. Treasury bills $ 80,992,865 - - 80,992,865

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Notes to Financial Statements, Continued

Note 3 - 2009 Renovation Project and Due From Affiliate

In December 1999, the United States Trust Company of New York (“USTC”) sold $53,500,000

principal amount of Certificates of Participation (the “1999 Certificates”). The 1999 Certificates were

sold to provide funds to make a loan to the Corporation, pursuant to a loan agreement dated as of

December 31, 1999, between the Corporation and USTC to be used to pay a portion of the purchase

price for the acquisition of a parcel of property and the building and improvements thereon (the “Yale

Building”), for the purpose of the future expansion of the Javits Center.

In August 2006, the Corporation entered into an agreement to sell the Yale Building to NYCCDC, a

related party. The agreement provided that NYCCDC defeased the 2003 Certificates in the amount

of $66,200,000. In addition to the defeasance amount, NYCCDC has agreed to make an additional

$15,000,000 payment to the Corporation upon the sale or lease of certain property (as defined in the

Purchase and Sale Agreement). The Corporation has further agreed to provide additional funding

for certain future capital improvements to the Javits Center and its related expansion and has fully

reserved this amount in prior years.

The Corporation has previously funded capital expenditures related to the renovation projects of the

Javits Center, on behalf of NYCCDC amounting to $3,392,071. These amounts have been recorded

as a receivable from NYCCDC and management has also recorded an offsetting reserve of

$3,392,071 due to the uncertainty regarding its collectability as of March 31, 2023 and 2022.

The Corporation has entered into an agreement for the procurement of furniture, fixtures, and

equipment for the Expansion (“FF&E”) on behalf of NYCCDC. NYCCDC reimbursed an equipment

lease as part of the agreement. The Corporation has recorded this lease as a lease liability

amounting to $341,087 and $568,480 as of March 31, 2023 and 2022, respectively, in the statements

of net position, as the related FF&E is property of NYCCDC.

Note 4 - Other Assets

Other assets at March 31, 2023 and 2022 consist of the following:

2023 2022

Current other assets:

Due from affiliate $ 6,236,485 6,078,062

Prepaid maintenance 38,296 282,292

Prepaid software license subscription 140,252 264,810

Prepaid insurance 145,036 298,205

Prepaid workers compensation escrow 400,000 400,000

Prepaid other 28,491 87,288

$ 6,988,560 7,410,657

Non-current other assets - security deposit $ 4,401,682 4,515,689

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Notes to Financial Statements, Continued

Note 5 - Capital Assets

Capital asset activity for the years ended March 31, 2023 and 2022 are summarized as follows:

2023

Balance at Balance at

March 31, March 31,

2022 Additions Transfers Retirements 2023

Non-depreciable assets -

construction in progress $ - 1,296,892 (1,106,548) - 190,344

Depreciable assets:

Furniture, fixtures, and equipment 27,095,431 - 979,579 (2,880,338) 25,194,672

Video display equipment 194,519 - - - 194,519

Telephone equipment 1,715,551 - - - 1,715,551

Other equipment 993,551 - - - 993,551

Improvements to center 41,728,357 - 126,969 (28,098) 41,827,228

Right to use assets - equipment 14,281,116 - - (6,703,723) 7,577,393

Intangible right to use assets -

software arrangements 6,160,900 1,268,728 - (429,297) 7,000,331

Total depreciable assets 92,169,425 1,268,728 1,106,548 (10,041,456) 84,503,245

Accumulated depreciation and

amortization:

Furniture, fixtures, and equipment 19,909,648 2,413,063 - (2,880,338) 19,442,373

Video display equipment 144,712 31,454 - - 176,166

Telephone equipment 1,715,551 - - - 1,715,551

Other equipment 993,551 - - - 993,551

Improvements to center 22,371,104 2,680,247 - (28,098) 25,023,253

Right to use assets - equipment 8,724,080 1,307,538 - (6,703,723) 3,327,895

Intangible right to use assets -

software arrangements 3,342,353 1,861,993 - (429,297) 4,775,049

Total accumulated depreciation and

amortization 57,200,999 8,294,295 - (10,041,456) 55,453,838

Total capital assets, net $ 34,968,426 (5,728,675) - - 29,239,751

2022

Balance at Balance at

March 31, March 31,

2021 Additions Transfers Retirements 2022

Non-depreciable assets -

construction in progress $ 6,792,445 517,831 (7,310,276) - -

Depreciable assets:

Furniture, fixtures, and equipment 26,296,231 26,613 772,587 - 27,095,431

Video display equipment 194,519 - - - 194,519

Telephone equipment 1,715,551 - - - 1,715,551

Other equipment 993,551 - - - 993,551

Improvements to center 41,728,357 - - - 41,728,357

Right to use assets - equipment 7,743,427 - 6,537,689 - 14,281,116

Intangible right to use assets -

software arrangements 6,191,974 360,239 - (391,313) 6,160,900

Total depreciable assets 84,863,610 386,852 7,310,276 (391,313) 92,169,425

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Notes to Financial Statements, Continued

Note 5 - Capital Assets, Continued

Balance at Balance at

March 31, March 31,

2021 Additions Transfers Retirements 2022

Accumulated depreciation and

amortization:

Furniture, fixtures, and equipment $ 18,153,179 1,756,469 - - 19,909,648

Video display equipment 113,262 31,450 - - 144,712

Telephone equipment 1,715,549 2 - - 1,715,551

Other equipment 993,551 - - - 993,551

Improvements to center 19,442,389 2,928,715 - - 22,371,104

Right to use assets - equipment 7,137,050 1,587,030 - - 8,724,080

Intangible right to use assets -

software arrangements 2,168,650 1,565,016 - (391,313) 3,342,353

Total accumulated depreciation and

amortization 49,723,630 7,868,682 - (391,313) 57,200,999

Total capital assets, net $ 41,932,425 (6,963,999) - - 34,968,426

The Corporation recorded depreciation and amortization expense of $8,294,295 and $7,868,682 for

the years ended March 31, 2023 and 2022, respectively.

Note 6 - Unearned Revenue

Unearned revenue consisted of the following at March 31, 2023 and 2022:

2023 2022

Event-related services $ 11,729,529 3,682,818

Space rentals 8,541,233 10,150,592

Advertising and other 665,851 422,271

$ 20,936,613 14,255,681

Note 7 - Pension Plan

(a) New York State and Local Employees’ Retirement System

The Corporation participates in the New York State and Local Employees’ Retirement System

(the “System” or “ERS”). This is a cost-sharing multiple-employer retirement system. The

System provides retirement benefits as well as death and disability benefits. The net position

of the System is held in the New York State Common Retirement Fund (the “Fund”), which

was established to hold all net position and record changes in plan net position allocated to

the System. The Comptroller of the State of New York serves as the trustee of the Fund and

is the administrative head of the System. System benefits are established under the

provisions of the New York State Retirement and Social Security Law. Once a public

employer elects to participate in the System, the election is irrevocable. The New York

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Notes to Financial Statements, Continued

Note 7 - Pension Plan, Continued

(a) New York State and Local Employees’ Retirement System, Continued

State Constitution provides that pension membership is a contractual relationship and plan

benefits cannot be diminished or impaired. Benefits can be changed for future members only

by enactment of a State statute. The Corporation also participates in the Public Employees’

Group Life Insurance Plan (“GLIP”), which provides death benefits in the form of life

insurance. The System is included in the State’s financial report as a pension trust fund.

That report, including information regarding benefits provided, may be found at

www.osc.state.ny.us/retire/publications/index.php or obtained by writing to the New York

State and Local Retirement System, 110 State Street, Albany, New York 12244.

The System was noncontributory until July 27, 1976. Employees who joined after July 27,

1976 contribute 3.0 percent of their salary for the first ten years of membership and

employees who joined on or after January 1, 2010 contribute 3.0 percent to 6.0 percent of

their salary for their entire length of service. The Comptroller annually certifies the actuarially

determined rates expressly used in computing the employers’ contributions based on salaries

paid during the fiscal year ending March 31.

Contributions for the current year and two preceding years were equal to 100 percent of the

contributions required, and were as follows:

2023 $1,127,734

2022 $1,140,321

2021 $2,075,113

(b) Pension Liabilities (Assets), Pension Expense, and Deferred Outflows/Inflows of Resources

Related to Pension

At March 31, 2023 and 2022, the Corporation reported the following liability (asset) for its

proportionate share of the net pension liability (asset) for the System. The net pension liability

(asset) was measured as of March 31, 2022 and 2021, respectively. The total pension liability

used to calculate the net pension liability (asset) was determined by the actuarial valuation.

The Corporation’s proportionate share of the net pension liability (asset) was based on a

projection of the Corporation’s long-term share of contributions to the System relative to the

projected contributions of all participating members, actuarially determined. This information

was provided by the System in reports provided to the Corporation.

2023 2022

Measurement date 3/31/2022 3/31/2021

Net pension liability (asset) - proportionate share ($1,870,079) 49,107

Corporation’s proportion of the System’s

net pension liability (asset) 0.0228767% 0.0493169%

For the years ended March 31, 2023 and 2022, the Corporation recognized pension expense

(income) of ($470,039) and $1,095,286, respectively. At March 31, 2023, the Corporation’s

proportionate share was 0.0228767% which was a percentage decrease of 0.0264402 from

its proportionate share at March 31, 2022. At March 31, 2023 and 2022, the Corporation

reported deferred outflows of resources and deferred inflows of resources related to pension

from the following sources:

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Notes to Financial Statements, Continued

Note 7 - Pension Plan, Continued

(b) Pension Liabilities (Assets), Pension Expense, and Deferred Outflows/Inflows of Resources

Related to Pension, Continued

2023 2022

Deferred Deferred Deferred Deferred

Outflows of Inflows of Outflows of Inflows of

Resources Resources Resources Resources

Differences between expected and

actual experience $ 141,624 183,694 599,727 -

Changes of assumptions 3,120,952 52,663 9,029,157 170,293

Net difference between projected and

actual investment earnings on pension

plan investments - 6,123,725 - 14,106,365

Changes in proportion and differences

between the Corporation's contributions

and proportionate share of contributions 144,856 2,265,030 107,710 368,792

Contributions subsequent to the

measurement date 1,127,734 - 1,140,321 -

Total $ 4,535,166 8,625,112 10,876,915 14,645,450

Amounts reported as deferred outflows of resources and deferred inflows of resources related

to pension as of March 31, 2023 will be recognized in pension expense as follows:

System’s Year Ending March 31:

2024 $ (1,044,737)

2025 (1,227,845)

2026 (2,129,244)

2027 (815,854)

Total $ (5,217,680)

The Corporation’s contributions subsequent to the March 31, 2022 measurement date will be

recognized as a reduction (addition) of the net pension liability (asset) in the system year

ended March 31, 2023.

The total pension liability at March 31, 2023 and 2022 was determined by using an actuarial

valuation as noted in the following table, with update procedures used to roll forward the total

pension liability to the measurement date. The actuarial valuation used the following actuarial

assumptions:

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Notes to Financial Statements, Continued

Note 7 - Pension Plan, Continued

2023 2022

Measurement date March 31, 2022 March 31, 2021

Actuarial valuation date April 1, 2021 April 1, 2020

Investment rate of return, net of

investment expenses 5.9% 5.9%

Salary scale 4.4% Average 4.4% Average

Decrement tables April 1, 2015 - April 1, 2015 -

March 31, 2020 March 31, 2020

System Experience System Experience

Inflation rate 2.7% 2.7%

Annuitant mortality rates are based on April 1, 2015 - March 1, 2020 System experience with

adjustments for mortality improvements based on the Society of Actuaries (SOA) Scale MP-

2020. The previous actuarial valuation as of April 1, 2022 used the same assumptions to

measure the total pension liability.

The actuarial assumptions used in the April 1, 2021 and 2020 valuations are based on the

results of an actuarial experience studies for the periods April 1, 2015 - March 31, 2020.

The long-term expected rate of return on pension plan investments was determined using a

building-block method in which best-estimate ranges of expected future real rates of return

(expected return, net of investment expenses and inflation) are developed for each major

asset class. These ranges are combined to produce the long-term expected rate of return

by weighting the expected future real rates of return by the target asset allocation percentage

and by adding expected inflation.

The target allocation and best estimates of arithmetic real rates of return for each major asset

class are summarized as follows:

Long-term Long-term

Target Expected Rate Target Expected Rate

Allocation

of Return* Allocation of Return*

Domestic equity 32.00% 3.30% 32.00% 4.05%

International equity 15.00% 5.85% 15.00% 6.30%

Private equity 10.00% 6.50% 10.00% 6.75%

Real estate 9.00% 5.00% 9.00% 4.95%

Opportunistic/ARS portfolio 3.00% 4.10% 3.00% 4.50%

Credit 4.00% 3.78% 4.00% 3.63%

Real assets 3.00% 5.80% 3.00% 5.95%

Fixed income 23.00% 0.00% 23.00% 0.00%

Cash 1.00% (1.00%) 1.00% 0.50%

100.00% 100.00%

*The real rate of return is net of the long-term inflation assumption of 2.50% and 2.00% for

2023 and 2022, respectively.

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Notes to Financial Statements, Continued

Note 7 - Pension Plan, Continued

(d) Discount Rate

The discount rate used to calculate the total pension liability was 5.9% as of March 31, 2023

and 2022. The projection of cash flows used to determine the discount rate assumes that

contributions from plan members will be made at the current contribution rates and that

contributions from employers will be made at statutorily required rates, actuarially

determined. Based upon the assumptions, the System’s fiduciary net position was projected

to be available to make all projected future benefit payments of current plan members.

Therefore, the long-term expected rate of return on pension plan investments was applied

to all periods of projected benefit payments to determine the total pension liability.

(e) Sensitivity of the Proportionate Share of the Net Pension Liability (Asset) to the Discount Rate

Assumption

The following presents the Corporation’s proportionate share of the net pension liability

(asset) as of March 31, 2023 and 2022 calculated using the current discount rate, as well as

what the Corporation’s proportionate share of the net pension liability (asset) would be if it

were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point

higher than the current rate:

2023

1% Current 1%

Decrease Rate Increase

(4.9%) (5.9%) (6.9%)

Proportionate share of the net pension

liability (asset) $ 4,813,563 (1,870,079) (7,460,622)

2022

1% Current 1%

Decrease Rate Increase

(4.9%) (5.9%) (6.9%)

Proportionate share of the net pension

liability (asset) $ 13,630,148 49,107 (12,475,792)

(f) Pension Plan Fiduciary Net Position

The components of the current-year net pension liability of all participating employers as of

the respective measurement dates, were as follows:

(Dollars in Millions)

Measurement date 3/31/2022 3/31/2021

Total pension liability $ 223,875 220,680

Net position (232,050) (220,580)

Net pension liability (asset) $ (8,175) 100

ERS net position as a percentage of total pension

liability 103.65% 99.95%

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Notes to Financial Statements, Continued

Note 8 - Other Postemployment Benefits

As a participating employer of New York State Health Insurance Program (the “Program”), the

Corporation provides healthcare benefits for retirees and other former employees under the

provisions of the Program. Eligibility, under the Program for the retiree healthcare benefits require

that (i) the employee must have at least 10 years of State service with the Corporation or at least 10

years of combined service with participating employers or agencies of the State, (ii) the employee

must qualify for retirement as a member of a retirement system administered by the State, and (iii)

the employee must be enrolled in the Program as an enrollee or dependent when they retire. The

plan does not currently issue a standalone financial report since there are no assets legally

segregated for the sole purpose of paying benefits under the plan and there are no assets

accumulated in a trust that meets the criteria in GASB Statement No. 75, paragraph 4.

Employees covered by benefit terms

At March 31, 2023 and 2022, the following employees were covered by the benefit terms:

2023 2022

Inactive plan members or beneficiaries currently receiving benefits 63 53

Covered spouse of retirees 26 25

Inactive plan members entitled to but not yet receiving benefits 1 1

Active plan members 83 105

173 184

Total OPEB Liability

The Corporation’s total OPEB liability as of March 31, 2023 and 2022, amounting to $29,635,000

and $43,255,000, were determined by an actuarial valuation as of April 1, 2022 and 2021,

respectively.

Actuarial Assumptions and Other Inputs

The total OPEB liability in the April 1, 2022 and 2021 actuarial valuations were determined using the

following actuarial assumptions and other inputs, applied to all periods included in the measurement,

unless otherwise specified:

2023 2022

Inflation 2.50% 2.50%

Salary increases including wage inflation 3.30% - 8.80% 3.00% - 8.00%

Discount rate 2.83% 2.27%

Healthcare cost trend rates:

• Drugs 5.50% in 2023 and 6.00% in 2022, decreasing to 4.50%

• Pre-Medicare Medical 5.50% in 2023 and 2022, decreasing to 4.50%

• Medicare Medical 4.80% in 2023 and 2022, decreasing to 4.50%

The discount rate was calculated using the Fidelity Municipal GO AA Index as of March 31, 2022

and 2021 for the 2023 and 2022 valuation.

Annuitant mortality rates are based on PUB 2010 general table with adjustments for mortality

improvements based on the SOA Scale MP-2021. The previous annuitant mortality rates are based

on April 1, 2015 - March 31, 2020 System experience with adjustments for mortality improvements

based on SOA Scale MP-2020.

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Notes to Financial Statements, Continued

Note 8 - Other Postemployment Benefits, Continued

Changes in the Total OPEB Liability

2023 2022

Total OPEB liability as of April 1, $ 43,255,000 38,971,000

Changes for the year:

Service cost 2,148,000 2,139,000

Interest 1,021,000 1,198,000

Changes of benefit terms 194,000 -

Differences between expected and actual experience (1,489,000) 796,000

Changes of assumptions (14,623,000) 861,000

Plan sponsor contributions (871,000) (710,000)

Total changes (13,620,000) 4,284,000

Total OPEB liability as of March 31, $ 29,635,000 43,255,000

Sensitivity of the total OPEB liability to changes in the discount rate

The following presents the Corporation’s total OPEB liability as of March 31, 2023 and 2022, using

the current discount rate as well as what the Corporation’s total OPEB liability would be if it were

calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than

the current discount rate:

2023

1% Current 1%

Decrease Rate Increase

(1.83%) (2.83%) (3.83%)

Total OPEB liability $ 36,271,000 29,635,000 24,678,000

2022

1% Current 1%

Decrease Rate Increase

(1.27%) (2.27%) (3.27%)

Total OPEB liability $ 53,325,000 43,255,000 35,708,000

Sensitivity of the total OPEB liability to changes in the healthcare costs trend rates

The following presents the Corporation’s total OPEB liability as of March 31, 2023 and 2022, using

current healthcare cost trend rates as well as what the Corporation’s total OPEB liability would be if

it were calculated using rates that are 1-percentage-point lower or 1-percentage-point higher than

the current rates:

2023

1% Current 1%

Decrease Trend Rates Increase

Total OPEB liability $ 24,246,000 29,635,000 36,942,000

2022

1% Current 1%

Decrease Trend Rates Increase

Total OPEB liability $ 34,841,000 43,255,000 54,794,000

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Notes to Financial Statements, Continued

Note 8 - Other Postemployment Benefits, Continued

OPEB expense and deferred outflows of resources and deferred inflows of resources related to

OPEB

For the years ended March 31, 2023 and 2022, the Corporation recorded OPEB expense of

$555,000 and $2,689,000, respectively. At March 31, 2023 and 2022, the Corporation reported

deferred outflows of resources and deferred inflows of resources related to OPEB from the following

sources:

2023 2022

Deferred Deferred Deferred Deferred

Outflows of Inflows of Outflows of Inflows of

Resources Resources Resources Resources

Differences between expected and

actual experience $ 619,000 1,839,000 722,000 687,000

Changes of assumptions or other inputs 1,112,000 15,799,000 1,350,000 3,988,000

Corporation's contributions

subsequent to the measurement

date 1,025,832 - 870,947 -

Total $ 2,756,832 17,638,000 2,942,947 4,675,000

The Corporation’s contribution subsequent to the measurement date will be recognized as a

reduction of the total OPEB liability in the year ended March 31, 2023. Other amounts reported as

deferred outflows of resources and deferred inflows of resources related to other postemployment

benefits are as follows:

Year ending

2024 $ (2,808,000)

2025 (2,808,000)

2026 (2,617,000)

2027 (2,452,000)

2028 (2,269,000)

Thereafter (2,953,000)

Total $ (15,907,000)

Note 9 - Leases

The Corporation leases equipment and subscription based software under various lease agreements

that bear interest ranging between 0% and 1% as explicitly stated in the agreements, except for

contracts related to software subscription. Management has elected not to discount these payments

as the portion of payment allocated to interest was determined not to be material. All agreements

contain expiration dates through January 2026. The gross amount of the equipment and subscription

based software under the leases as of March 31, 2023 and 2022 was $14,577,724 and $20,442,016,

respectively. Accumulated amortization on the equipment amounted to $8,102,944 and $12,066,433

at March 31, 2023 and 2022, respectively. Decreases in the gross amount of the equipment, as well

as accumulated amortization, is due to retirement of leased equipment and subscription based

software in the amount of $7,133,020. Amortization of leased equipment is included in depreciation

and amortization expense on the statements of revenue, expenses, and changes in net position.

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Notes to Financial Statements, Continued

Note 9 - Leases, Continued

The total of the lease liabilities for the equipment and subscription based software for the years ended

March 31, 2023 and 2022 amounted to $4,501,503 and $6,583,351, respectively. The principal

payments on these leases for the years ended March 31, 2023 and 2022 totaled $3,350,576 and

$3,522,064, respectively.

Future minimum payments under the finance agreement are as follows:

Year ending March 31, Principal Interest

2024 $ 2,871,243 30,273

2025 1,470,689 5,065

2026 159,571 -

$ 4,501,503 35,338

Note 10 - Estimated Litigation and Insurance Claims

There are various litigation and claims proceedings in which the Corporation is involved, including

arbitration proceedings with Unions which currently or formerly represented Corporation employees,

Equal Employment Opportunity Commission (“EEOC”) complaints, personal injury, and property damage

claims, as well as contractual claims. Generally, these develop in the normal course of business.

While the ultimate outcome of these matters cannot presently be determined, estimated liabilities for

litigation and insurance claims are provided in the financial statements when management believes

a settlement is probable and the amount can be reasonably estimated.

Management believes the ultimate amounts which may be required to settle such litigation in excess

of insurance coverage carried by the Corporation will not have a material effect on its financial

condition, beyond that which has been provided for in the financial statements.

Note 11 - Other Commitments and Contingencies

The Corporation entered into a food and beverage agreement effective May 3, 2019 with a vendor.

The vendor began operating on June 16, 2019. The agreement is for 10 years and runs through

June 15, 2029 with an optional 5-year period at the Corporation’s discretion, contingent on the

approval of the State Comptroller. The agreement provides for a share of the net receipts for the

concession services. In December 2020, the Center entered into an amendment to the agreement

with the vendor to guarantee any negative net receipts from the period April 1, 2020 through March

31, 2022, if the Center does not exercise the option for the extended term of the agreement or

terminates the current agreement early. The Center has no plans to terminate the agreement. On

January 6, 2023, the Center entered into a second amendment to the food and beverage agreement

which suspends the guarantee through March 31, 2025.

The Corporation’s management proposed a Capital Plan amounting to $145,700,000, to be made

under the five-year budget for the Javits Center. The proposed plan is intended to allow the Center

to continue to operate effectively while bringing the building up to peak maintenance condition. It is

the intention of the Corporation that both NYCCDC and the Corporation pay for and record their

respective capital outlays in their separate financial statements.

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Notes to Financial Statements, Continued

Note 11 - Other Commitments and Contingencies, Continued

Future operations of the Corporation may require additional financing by the State to the extent that

operating, and capital expenditures exceed revenue from operations. For Fiscal 2023 operations,

no appropriations were made by the State Legislature. As of March 31, 2023, the Corporation is not

aware of any State Legislature proposed appropriations for Fiscal 2024.

Note 12 - Cumulative Effect of Change in Accounting Principle

The Corporation adopted the provisions of GASB Statement No. 96 - “Subscription - Based

Information Technology Arrangements” during the year ended March 31, 2023. The March 31, 2022

balances were restated as follows:

2022 2022

As previously as

stated restated

Other current assets $ 7,664,014 (253,357) 7,410,657

Capital assets, net $ 32,149,879 2,818,547 34,968,426

Accrued expenses, current $ 4,895,246 (140,028) 4,755,218

Lease liability, current $ 1,541,345 1,424,331 2,965,676

Lease liability, net of current portion $ 2,336,788 1,280,887 3,617,675

Facility operating expenses $ 21,162,402 (1,565,016) 19,597,386

Depreciation and amortization expenses $ 6,303,666 1,565,016 7,868,682

Note 13 - Accounting Standards Issued But Not Yet Implemented

GASB has issued the following pronouncements which will be implemented in the years required.

The effects of the implementation of these pronouncements are not known at this time.

Statement No. 94 - Public-Private and Public-Public Partnerships and Availability Payment

Arrangements. Effective for fiscal years beginning after June 15, 2022.

Statement No. 99 - Omnibus 2022. Effective for various periods through fiscal years beginning after

June 15, 2023.

Statement No. 101 - Compensated Absences. Effective for fiscal years beginning after December

15, 2023.

REQUIRED SUPPLEMENTARY INFORMATION

2023 2022 2021 2020 2019 2018 2017 2016

Corporation's proportion of the

net pension liability (asset) 0.0228767% 0.0493169% 0.0521947% 0.0517816% 0.0556461% 0.0539285% 0.0515835% 0.0544342%

Corporation's proportionate

share of the net pension

liability (asset) (1,870,079)$ 49,107 13,821,461 3,668,886 1,795,946 5,067,243 8,279,299 1,838,920

Corporation's covered payroll 10,891,924$ 8,030,523 16,069,337 15,918,333 15,819,063 16,195,996 15,730,483 14,570,941

Corporation's proportionate

share of the net pension liability

(asset) as a percentage of its

covered payroll 17.17% 0.61% 86.01% 23.05% 11.35% 31.29% 52.63% 12.62%

Plan fiduciary net position as a

percentage of the total pension

liability (asset) 103.65% 99.95% 86.39% 96.27% 98.24% 94.70% 90.70% 97.90%

Notes to schedule:

(1)

The following is a summary of assumption changes:

2023 2022 2021 2020 2019 2018 2017 2016

Inflation 2.7% 2.7% 2.5% 2.5% 2.5% 2.5% 2.5% 2.7%

Salary increase 4.4% 4.4% 4.2% 4.2% 3.8% 3.8% 3.8% 4.9%

Cost-of-living adjustments 1.4% 1.4% 1.3% 1.3% 1.4% 1.3% 1.3% 1.4%

Investment rate of return 5.9% 5.9% 6.8% 7.0% 7.0% 7.0% 7.0% 7.5%

Discount rate 5.9% 5.9% 6.8% 7.0% 7.0% 7.0% 7.0% 7.5%

(2)

(3)

The amounts presented for each fiscal year were determined as of the March 31, 2022, 2021, 2020, 2019, 2018, 2017, 2016 and 2015 measurement dates of

the plans.

Data not available prior to fiscal year 2016 implementation of GASB No. 68 - "Accounting and Financial Reporting for Pensions."

NEW YORK CONVENTION CENTER

OPERATING CORPORATION

Required Supplementary Information

Schedule of the Corporation's Proportionate Share of the Net Pension Liability (Asset)

Year ended March 31, 2023

2023 2022 2021 2020 2019 2018 2017 2016 2015 2014

Contractually required

contribution 1,127,734$ 1,140,321 2,075,113 2,011,120 2,051,164 2,176,080 2,168,869 2,203,928 2,672,399 2,600,268

Contribution in relation

to the contractually

required contribution (1,127,734) (1,140,321) (2,075,113) (2,011,120) (2,051,164) (2,176,080) (2,168,869) (2,203,928) (2,672,399) (2,600,268)

Contribution deficiency

(excess) -$ - - - - - - - - -

Corporation's covered

payroll 10,891,924$ 8,030,523 16,069,337 15,918,333 15,819,063 16,195,996 15,730,483 14,570,941 14,323,790 13,488,121

Contribution as a

percentage of

covered payroll

10.35% 14.20% 12.91% 12.63% 12.97% 13.44% 13.79% 15.13% 18.66% 19.28%

NEW YORK CONVENTION CENTER

Required Supplementary Information

Schedule of the Corporation's Pension Contributions

Year ended March 31, 2023

OPERATING CORPORATION

2023 2022 2021 2020 2019 2018

Total OPEB liability

Service cost 2,148,000$ 2,139,000 2,201,000 2,081,000 1,902,000 2,106,000

Interest 1,021,000 1,198,000 1,329,000 1,388,000 1,310,000 1,156,000

Changes of benefit terms 194,000 - - - - -

Differences between expected

and actual experience (1,489,000) 796,000 33,000 (1,015,000) (94,000) -

Changes of assumptions or

other inputs (14,623,000) 861,000 (2,457,000) (1,103,000) 1,120,000 (3,499,000)

Plan sponsor contributions (871,000) (710,000) (632,000) (639,000) (488,000) (471,000)

Net change in total OPEB liability (13,620,000) 4,284,000 474,000 712,000 3,750,000 (708,000)

Total OPEB liability at beginning

of year 43,255,000 38,971,000 38,497,000 37,785,000 34,035,000 34,743,000

Total OPEB liability at end of year 29,635,000$ 43,255,000 38,971,000 38,497,000 37,785,000 34,035,000

Covered payroll 10,342,278$ 10,342,278 10,879,968 10,879,968 10,922,438 10,922,438

Total OPEB liability as a

percentage of covered payroll 286.54% 418.23% 358.19% 353.83% 345.94% 311.61%

Notes to schedule:

(1)

2023 2022 2021 2020 2019 2018

2.83% 2.27% 2.94% 3.29% 3.51% 3.67%

(2)

(3)

OPERATING CORPORATION

Changes of assumptions or other inputs - Changes of assumptions or other inputs reflect the effects of changes in the

discount rate each period. The following are the discount rates used in each period:

This schedule is presented to illustrate the requirement to show information for 10 years. However, information is

presented for those years that are available.

There are no assets accumulated in a trust that meet the criteria in GASB Statement No. 75, paragraph 4.

NEW YORK CONVENTION CENTER

Required Supplementary Information

Schedule of Changes in the Corporation's

Total OPEB Liability and Related Ratios

Year ended March 31, 2023

INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED

IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

The Board of Directors

New York Convention Center

Operating Corporation:

We have audited, in accordance with the auditing standards generally accepted in the United States

of America and the standards applicable to financial audits contained in Government Auditing

Standards, issued by the Comptroller General of the United States, the financial statements of New

York Convention Center Operating Corporation (the “Corporation”), and the related notes to financial

statements, and have issued our report thereon dated June 21, 2023.

Report on Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the Corporation’s

internal control over financial reporting (internal control) as a basis for designing audit procedures

that are appropriate in the circumstances for the purpose of expressing our opinion on the financial

statements, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s

internal control. Accordingly, we do not express an opinion on the effectiveness of the Corporation’s

internal control.

A deficiency in internal control exists when the design or operation of a control does not allow

management or employees, in the normal course of performing their assigned functions, to prevent

or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a

combination of deficiencies, in internal control, such that there is a reasonable possibility that a

material misstatement of the Corporation’s financial statements will not be prevented, or detected

and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of

deficiencies, in internal control that is less severe than a material weakness, yet important enough

to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of

this section and was not designed to identify all deficiencies in internal control that might be material

weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify

any deficiencies in internal control that we consider to be material weaknesses. However, material

weaknesses or significant deficiencies may exist that were not identified.

6390 Main Street, Suite 200

Williamsville, NY 14221

P 716.634.0700

TF 800.546.7556

F 716.634.0764

W EFPRgroup.com

Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Corporation’s financial statements are

free from material misstatement, we performed tests of its compliance with certain provisions of laws,

regulations, contracts, and grant agreements, noncompliance with which could have a direct and

material effect on the financial statements. However, providing an opinion on compliance with those

provisions was not an objective of our audit, and accordingly, we do not express such an opinion.

The results of our tests disclosed no instances of noncompliance or other matters that are required

to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and

compliance and the results of that testing, and not to provide an opinion on the effectiveness of the

Corporation’s internal control or on compliance. This report is an integral part of an audit performed

in accordance with Government Auditing Standards in considering the Corporation’s internal control

and compliance. Accordingly, this communication is not suitable for any other purpose.

Williamsville, New York

June 21, 2023

INDEPENDENT AUDITORS’ REPORT ON INVESTMENT COMPLIANCE

The Board of Directors

New York Convention Center

Operating Corporation:

Report on Investment Compliance

Opinion on Investment Compliance

We have audited the New York Convention Center Operating Corporation’s (the “Corporation”),

compliance with Section 201.3 of Title Two of the Official Compilation of Codes, Rules, and

Regulations of the State of New York for the year ended March 31, 2023.

In our opinion, the New York Convention Center Operating Corporation complied, in all material

respects, with Section 201.3 of Title Two of the Official Compilation of Codes, Rules, and Regulations

of the State of New York for the year ended March 31, 2023.

Basis for Opinion Investment Compliance

We conducted our audit of compliance in accordance with auditing standards generally accepted in

the United States of America and the standards applicable to financial audits contained in

Government Auditing Standards, issued by the Comptroller General of the United States. Our

responsibilities under those standards are further described in the Auditor’s Responsibilities for the

Audit of Investment Compliance section of our report.

We are required to be independent of the Corporation and to meet our other ethical responsibilities,

in accordance with relevant ethical requirements relating to our audit. We believe that the audit

evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on

investment compliance. Our audit does not provide a legal determination of the Corporation’s

compliance with the compliance requirements referred to above.

Responsibilities of Management for Investment Compliance

Management is responsible for compliance with the requirements of Section 201.3 of Title Two of

the Official Compilation of Codes, Rules, and Regulations of the State of New York.

6390 Main Street, Suite 200

Williamsville, NY 14221

P 716.634.0700

TF 800.546.7556

F 716.634.0764

W EFPRgroup.com

Auditor’s Responsibilities for the Audit of Investment Compliance

Our objectives are to obtain reasonable assurance about whether material noncompliance with the

compliance requirements referred to above occurred, whether due to fraud or error, and express an

opinion on the Corporation’s compliance based on our audit. Reasonable assurance is a high level

of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted

in accordance with generally accepted auditing standards and Government Auditing Standards, will

always detect material noncompliance when it exists. The risk of not detecting material

noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve

collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Noncompliance with the compliance requirements referred to above is considered material if there

is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made

by a reasonable user of the report on compliance about the Corporation’s investment compliance.

In performing an audit in accordance with generally accepted auditing standards and Government

Auditing Standards, we:

• Exercise professional judgment and maintain professional skepticism throughout the audit.

• Identify and assess the risks of material noncompliance, whether due to fraud or error, and design

and perform audit procedures responsive to those risks. Such procedures include examining, on

a test basis, evidence regarding the Corporation’s compliance with the compliance requirements

referred to above and performing such other procedures as we considered necessary in the

circumstances.

• Obtain an understanding of the Corporation’s internal control over investment compliance

relevant to the audit in order to design audit procedures that are appropriate in the circumstances

and to test and report on internal control over investment compliance but not for the purpose of

expressing an opinion on the effectiveness of Corporation’s internal control over compliance.

Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other

matters, the planned scope and timing of the audit and any significant deficiencies and material

weaknesses in internal control over investment compliance that we identified during the audit.

Report on Internal Control over Compliance

A deficiency in internal control over investment compliance exists when the design or operation of a

control over compliance does not allow management or employees, in the normal course of

performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of

compliance requirement on a timely basis. A material weakness in internal control over investment

compliance is a deficiency, or a combination of deficiencies, in internal control over investment

compliance, such that there is a reasonable possibility that material noncompliance with a type of

compliance requirement will not be prevented, or detected and corrected, on a timely basis. A

significant deficiency in internal control over compliance is a deficiency, or a combination of

deficiencies, in internal control over investment compliance that is less severe than a material

weakness in internal control over investment compliance, yet important enough to merit attention by

those charged with governance.

Our consideration of internal control over investment compliance was for the limited purpose

described in the Auditor’s Responsibilities for the Audit of Investment Compliance section above and

was not designed to identify all deficiencies in internal control over investment compliance that might

be material weaknesses or significant deficiencies in internal control over investment compliance.

Given these limitations, during our audit we did not identify any deficiencies in internal control over

investment compliance that we consider to be material weaknesses, as defined above. However,

material weaknesses or significant deficiencies in internal control over investment compliance may

exist that were not identified.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal

control over investment compliance. Accordingly, no such opinion is expressed.

This report is intended solely for the information and use of management of the Corporation, the New

York State Office of the State Comptroller, the New York State Division of the Budget, and the New

York State Authority Budget Office and is not intended to be and should not be used by anyone other

than those specified parties.

Williamsville, New York

June 21, 2023