UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
|
x |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended: June 30, 2015
OR
|
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from To
Commission File Number: 001-36746
PARAMOUNT GROUP, INC.
(Exact name of registrant as specified in its charter)
|
Maryland |
|
32-0439307 |
|
(State or other jurisdiction of incorporation or organization) |
|
(IRS Employer Identification No.) |
|
1633 Broadway, Suite 1801, New York, NY |
|
10019 |
|
(Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including area code: (212) 237-3100
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes ¨ No
Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
|
Large Accelerated Filer |
o |
|
Accelerated Filer |
o |
|
Non-Accelerated Filer |
x |
(Do not check if smaller reporting company) |
Smaller Reporting Company |
o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO x
As of July 31, 2015, there were 212,111,937 shares of the registrant’s common stock outstanding.
Table of Contents
2
PART I – FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
PARAMOUNT GROUP, INC.
(UNAUDITED)
|
(Amounts in thousands, except share and per share amounts) |
|
The Company |
|
|||||
|
ASSETS |
|
June 30, 2015 |
|
|
December 31, 2014 |
|
||
|
Rental property, at cost |
|
|
|
|
|
|
|
|
|
Land |
|
$ |
2,042,071 |
|
|
$ |
2,042,071 |
|
|
Buildings and improvements |
|
|
5,534,885 |
|
|
|
5,488,168 |
|
|
|
|
|
7,576,956 |
|
|
|
7,530,239 |
|
|
Accumulated depreciation and amortization |
|
|
(162,377 |
) |
|
|
(81,050 |
) |
|
Rental property, net |
|
|
7,414,579 |
|
|
|
7,449,189 |
|
|
Real estate fund investments |
|
|
335,545 |
|
|
|
323,387 |
|
|
Investments in unconsolidated joint ventures |
|
|
6,128 |
|
|
|
5,749 |
|
|
Cash and cash equivalents |
|
|
438,088 |
|
|
|
438,599 |
|
|
Restricted cash |
|
|
45,737 |
|
|
|
55,728 |
|
|
Marketable securities |
|
|
21,524 |
|
|
|
20,159 |
|
|
Deferred rent receivable |
|
|
40,308 |
|
|
|
8,267 |
|
|
Accounts and other receivables, net of allowance of $406 and $333 in 2015 and 2014, respectively |
|
|
10,781 |
|
|
|
7,692 |
|
|
Deferred charges, net of accumulated amortization of $13,002 and $10,859 in 2015 and 2014, respectively |
|
|
49,547 |
|
|
|
39,165 |
|
|
Intangible assets, net of accumulated amortization of $103,158 and $20,509 in 2015 and 2014, respectively |
|
|
583,126 |
|
|
|
669,385 |
|
|
Other assets |
|
|
9,529 |
|
|
|
13,121 |
|
|
Total assets |
|
$ |
8,954,892 |
|
|
$ |
9,030,441 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
Mortgages and notes payable |
|
$ |
2,853,237 |
|
|
$ |
2,852,287 |
|
|
Credit facility |
|
|
- |
|
|
|
- |
|
|
Due to affiliates |
|
|
27,299 |
|
|
|
27,299 |
|
|
Loans payable to noncontrolling interests |
|
|
43,981 |
|
|
|
42,195 |
|
|
Accounts payable and accrued expenses |
|
|
96,595 |
|
|
|
93,472 |
|
|
Deferred income taxes |
|
|
2,659 |
|
|
|
2,861 |
|
|
Interest rate swap liabilities |
|
|
160,473 |
|
|
|
194,196 |
|
|
Intangible liabilities, net of accumulated amortization of $21,064 and $3,757 in 2015 and 2014, respectively |
|
|
201,839 |
|
|
|
219,228 |
|
|
Dividends and distributions payable |
|
|
25,066 |
|
|
|
- |
|
|
Other liabilities |
|
|
45,922 |
|
|
|
43,950 |
|
|
Total liabilities |
|
|
3,457,071 |
|
|
|
3,475,488 |
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
Paramount Group, Inc. equity: |
|
|
|
|
|
|
|
|
|
Common stock $0.01 par value per share; authorized 900,000,000 shares; issued and outstanding 212,111,937 and 212,106,718 shares in 2015 and 2014, respectively |
|
|
2,122 |
|
|
|
2,122 |
|
|
Additional paid-in-capital |
|
|
3,893,756 |
|
|
|
3,851,432 |
|
|
Earnings (less than) in excess of distributions |
|
|
(5,843 |
) |
|
|
57,308 |
|
|
Accumulated other comprehensive loss |
|
|
(493 |
) |
|
|
- |
|
|
Paramount Group, Inc. equity |
|
|
3,889,542 |
|
|
|
3,910,862 |
|
|
Noncontrolling interests in: |
|
|
|
|
|
|
|
|
|
Consolidated joint ventures and funds |
|
|
703,596 |
|
|
|
685,888 |
|
|
Operating Partnership (51,660,088 and 51,543,993 units outstanding in 2015 and 2014, respectively) |
|
|
904,683 |
|
|
|
958,203 |
|
|
Total equity |
|
|
5,497,821 |
|
|
|
5,554,953 |
|
|
Total liabilities and equity |
|
$ |
8,954,892 |
|
|
$ |
9,030,441 |
|
See notes to combined consolidated financial statements (unaudited).
3
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
|
|
|
The Company |
|
|
|||||
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
||
|
(Amounts in thousands, except share and per share amounts) |
|
June 30, 2015 |
|
|
June 30, 2015 |
|
|
||
|
REVENUES: |
|
|
|
|
|
|
|
|
|
|
Rental income |
|
$ |
145,917 |
|
|
$ |
289,160 |
|
|
|
Tenant reimbursement income |
|
|
12,063 |
|
|
|
25,551 |
|
|
|
Fee and other income |
|
|
4,948 |
|
|
|
9,443 |
|
|
|
Total revenues |
|
|
162,928 |
|
|
|
324,154 |
|
|
|
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
Operating |
|
|
57,781 |
|
|
|
119,665 |
|
|
|
Depreciation and amortization |
|
|
79,421 |
|
|
|
153,004 |
|
|
|
General and administrative |
|
|
9,133 |
|
|
|
21,746 |
|
|
|
Acquisition and transaction related costs |
|
|
8,208 |
|
|
|
9,347 |
|
|
|
Total expenses |
|
|
154,543 |
|
|
|
303,762 |
|
|
|
Operating income |
|
|
8,385 |
|
|
|
20,392 |
|
|
|
Income from real estate fund investments |
|
|
14,072 |
|
|
|
19,293 |
|
|
|
Income from unconsolidated joint ventures |
|
|
2,011 |
|
|
|
2,986 |
|
|
|
Unrealized gains on interest rate swaps |
|
|
21,747 |
|
|
|
33,725 |
|
|
|
Interest and other income, net |
|
|
512 |
|
|
|
1,366 |
|
|
|
Interest and debt expense |
|
|
(42,236 |
) |
|
|
(84,124 |
) |
|
|
Net income (loss) before income taxes |
|
|
4,491 |
|
|
|
(6,362 |
) |
|
|
Income tax expense |
|
|
(1,343 |
) |
|
|
(1,917 |
) |
|
|
Net income (loss) |
|
|
3,148 |
|
|
|
(8,279 |
) |
|
|
Less net (income) loss attributable to noncontrolling interests in: |
|
|
|
|
|
|
|
|
|
|
Consolidated joint ventures and funds |
|
|
(9,004 |
) |
|
|
(9,672 |
) |
|
|
Operating Partnership |
|
|
1,147 |
|
|
|
3,511 |
|
|
|
Net loss attributable to common shareholders |
|
$ |
(4,709 |
) |
|
$ |
(14,440 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS PER COMMON SHARE - BASIC: |
|
|
|
|
|
|
|
|
|
|
Loss per common share |
|
$ |
(0.02 |
) |
|
$ |
(0.07 |
) |
|
|
Weighted average shares outstanding |
|
|
212,106,718 |
|
|
|
212,106,718 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS PER COMMON SHARE - DILUTED: |
|
|
|
|
|
|
|
|
|
|
Loss per common share |
|
$ |
(0.02 |
) |
|
$ |
(0.07 |
) |
|
|
Weighted average shares outstanding |
|
|
212,106,718 |
|
|
|
212,106,718 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DIVIDENDS PER COMMON SHARE |
|
$ |
0.095 |
|
|
$ |
0.190 |
|
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes the $0.039 cash dividend for the 38 day period following the completion of our initial public offering and related formation transactions and ending on December 31, 2014. |
|
|
|||||||
See notes to combined consolidated financial statements (unaudited).
4
COMBINED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
|
|
|
The Predecessor |
|
|||||
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||
|
(Amounts in thousands) |
|
June 30, 2014 |
|
|
June 30, 2014 |
|
||
|
REVENUES: |
|
|
|
|
|
|
|
|
|
Rental income |
|
$ |
8,499 |
|
|
$ |
16,312 |
|
|
Tenant reimbursement income |
|
|
441 |
|
|
|
896 |
|
|
Distributions from real estate fund investments |
|
|
4,744 |
|
|
|
11,247 |
|
|
Realized and unrealized gains, net |
|
|
33,750 |
|
|
|
79,917 |
|
|
Fee and other income |
|
|
6,400 |
|
|
|
11,582 |
|
|
Total revenues |
|
|
53,834 |
|
|
|
119,954 |
|
|
EXPENSES: |
|
|
|
|
|
|
|
|
|
Operating |
|
|
4,214 |
|
|
|
7,753 |
|
|
Depreciation and amortization |
|
|
2,899 |
|
|
|
5,566 |
|
|
General and administrative |
|
|
4,363 |
|
|
|
12,448 |
|
|
Profit sharing compensation |
|
|
3,438 |
|
|
|
8,232 |
|
|
Other |
|
|
2,634 |
|
|
|
3,901 |
|
|
Total expenses |
|
|
17,548 |
|
|
|
37,900 |
|
|
Operating income |
|
|
36,286 |
|
|
|
82,054 |
|
|
Income from unconsolidated joint ventures |
|
|
903 |
|
|
|
2,035 |
|
|
Unrealized loss on interest rate swaps |
|
|
(354 |
) |
|
|
(196 |
) |
|
Interest and other income, net |
|
|
997 |
|
|
|
1,706 |
|
|
Interest and debt expense |
|
|
(7,988 |
) |
|
|
(15,787 |
) |
|
Net income before income taxes |
|
|
29,844 |
|
|
|
69,812 |
|
|
Income tax expense |
|
|
(3,842 |
) |
|
|
(7,105 |
) |
|
Net income |
|
|
26,002 |
|
|
|
62,707 |
|
|
Net income attributable to noncontrolling interests |
|
|
(25,823 |
) |
|
|
(53,133 |
) |
|
Net income attributable to the Predecessor |
|
$ |
179 |
|
|
$ |
9,574 |
|
See notes to combined consolidated financial statements (unaudited).
5
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
|
|
|
The Company |
|
|||||
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||
|
(Amounts in thousands) |
|
June 30, 2015 |
|
|
June 30, 2015 |
|
||
|
Net income (loss) |
|
$ |
3,148 |
|
|
$ |
(8,279 |
) |
|
Other comprehensive loss: |
|
|
|
|
|
|
|
|
|
Pro rata share of other comprehensive loss of unconsolidated joint ventures |
|
|
(613 |
) |
|
|
(613 |
) |
|
Comprehensive income (loss) |
|
|
2,535 |
|
|
|
(8,892 |
) |
|
Less comprehensive (income) loss attributable to noncontrolling interests in: |
|
|
|
|
|
|
|
|
|
Consolidated joint ventures and funds |
|
|
(9,004 |
) |
|
|
(9,672 |
) |
|
Operating Partnership |
|
|
1,267 |
|
|
|
3,631 |
|
|
Comprehensive loss attributable to Paramount Group, Inc. |
|
$ |
(5,202 |
) |
|
$ |
(14,933 |
) |
|
|
|
|
|
|
|
|
|
|
|
See notes to combined consolidated financial statements (unaudited). |
|
|||||||
6
PARAMOUNT GROUP, INC. AND PARAMOUNT PREDECESSOR
COMBINED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)
|
|
|
Common Shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling Interests in |
|
|
|
|
|
||||||||||
|
(Amounts in thousands) |
|
Shares |
|
|
Amount |
|
|
Additional Paid in Capital |
|
|
Earnings (Less than) In Excess of Distributions |
|
|
Accumulated Other Comprehensive Loss |
|
|
Predecessor Shareholders' Equity |
|
|
Consolidated Joint Ventures and Funds |
|
|
Operating Partnership |
|
|
Total Equity |
|
|||||||||
|
The Predecessor |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2013 |
|
|
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
321,769 |
|
|
$ |
1,703,675 |
|
|
$ |
- |
|
|
$ |
2,025,444 |
|
|
Net income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
9,574 |
|
|
|
53,133 |
|
|
|
- |
|
|
|
62,707 |
|
|
Contributions |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,253 |
|
|
|
88,804 |
|
|
|
- |
|
|
|
90,057 |
|
|
Distributions |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(22,323 |
) |
|
|
(2,183 |
) |
|
|
- |
|
|
|
(24,506 |
) |
|
Balance as of June 30, 2014 |
|
|
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
310,273 |
|
|
$ |
1,843,429 |
|
|
$ |
- |
|
|
$ |
2,153,702 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2014 |
|
|
212,107 |
|
|
$ |
2,122 |
|
|
$ |
3,851,432 |
|
|
$ |
57,308 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
685,888 |
|
|
$ |
958,203 |
|
|
$ |
5,554,953 |
|
|
Net (loss) income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(14,440 |
) |
|
|
- |
|
|
|
- |
|
|
|
9,672 |
|
|
|
(3,511 |
) |
|
|
(8,279 |
) |
|
Common shares and units issued under Omnibus share plan |
|
|
5 |
|
|
|
- |
|
|
|
(2,131 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
2,131 |
|
|
|
- |
|
|
Dividends and distributions |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(48,573 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(11,819 |
) |
|
|
(60,392 |
) |
|
Contributions from noncontrolling interests |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
14,031 |
|
|
|
- |
|
|
|
14,031 |
|
|
Distributions to noncontrolling interests |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(5,673 |
) |
|
|
- |
|
|
|
(5,673 |
) |
|
Pro rata share of other comprehensive loss of unconsolidated joint ventures |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(493 |
) |
|
|
- |
|
|
|
|
|
|
|
(120 |
) |
|
|
(613 |
) |
|
Adjustments to noncontrolling interests |
|
|
- |
|
|
|
- |
|
|
|
43,981 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(43,981 |
) |
|
|
- |
|
|
Amortization of equity awards |
|
|
- |
|
|
|
- |
|
|
|
885 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3,780 |
|
|
|
4,665 |
|
|
Other |
|
|
- |
|
|
|
- |
|
|
|
(411 |
) |
|
|
(138 |
) |
|
|
- |
|
|
|
- |
|
|
|
(322 |
) |
|
|
- |
|
|
|
(871 |
) |
|
Balance as of June 30, 2015 |
|
|
212,112 |
|
|
$ |
2,122 |
|
|
$ |
3,893,756 |
|
|
$ |
(5,843 |
) |
|
$ |
(493 |
) |
|
$ |
- |
|
|
$ |
703,596 |
|
|
$ |
904,683 |
|
|
$ |
5,497,821 |
|
See notes to combined consolidated financial statements (unaudited).
7
PARAMOUNT GROUP, INC. AND PARAMOUNT PREDECESSOR
COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
The Company |
|
|
The Predecessor |
|
||
|
|
|
Six Months Ended June 30, |
|
|||||
|
(Amounts in thousands) |
|
2015 |
|
|
2014 |
|
||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(8,279 |
) |
|
$ |
62,707 |
|
|
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
153,004 |
|
|
|
5,566 |
|
|
Unrealized (gains) losses on interest rate swaps |
|
|
(33,725 |
) |
|
|
196 |
|
|
Straight-lining of rental income |
|
|
(32,042 |
) |
|
|
90 |
|
|
Realized and unrealized gains, net, on real estate fund investments |
|
|
(12,136 |
) |
|
|
(79,917 |
) |
|
Income from unconsolidated joint ventures |
|
|
(2,986 |
) |
|
|
(2,035 |
) |
|
Distributions of income from unconsolidated joint ventures |
|
|
1,993 |
|
|
|
1,768 |
|
|
Amortization of above and below-market leases, net |
|
|
(1,762 |
) |
|
|
- |
|
|
Amortization of deferred financing costs |
|
|
1,170 |
|
|
|
216 |
|
|
Transfer taxes due in connection with the sale of shares by a former joint venture partner |
|
|
5,872 |
|
|
|
- |
|
|
Realized and unrealized gains on marketable securities |
|
|
(924 |
) |
|
|
(1,228 |
) |
|
Other non-cash adjustments |
|
|
8,091 |
|
|
|
3,756 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Restricted cash |
|
|
- |
|
|
|
2,481 |
|
|
Real estate fund investments |
|
|
(22 |
) |
|
|
(164,181 |
) |
|
Accounts and other receivables |
|
|
(261 |
) |
|
|
(2,669 |
) |
|
Deferred charges |
|
|
(12,523 |
) |
|
|
- |
|
|
Other assets |
|
|
2,721 |
|
|
|
(3,456 |
) |
|
Accounts payable and accrued expenses |
|
|
(7,635 |
) |
|
|
(2,945 |
) |
|
Profit sharing payables |
|
|
- |
|
|
|
5,414 |
|
|
Deferred income taxes |
|
|
(202 |
) |
|
|
10,043 |
|
|
Other liabilities |
|
|
1,972 |
|
|
|
1,693 |
|
|
Net cash provided by (used in) operating activities |
|
|
62,326 |
|
|
|
(162,501 |
) |
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Acquisitions of, and additions to, rental properties |
|
|
(41,914 |
) |
|
|
(65,451 |
) |
|
Changes in restricted cash |
|
|
9,550 |
|
|
|
253 |
|
|
Distributions of capital from unconsolidated joint ventures |
|
|
- |
|
|
|
1,123 |
|
|
Net cash used in investing activities |
|
|
(32,364 |
) |
|
|
(64,075 |
) |
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Dividends paid to common shareholders and unitholders |
|
|
(35,325 |
) |
|
|
- |
|
|
Contributions from noncontrolling interests |
|
|
11,203 |
|
|
|
88,804 |
|
|
Distributions to noncontrolling interests |
|
|
(5,673 |
) |
|
|
(2,183 |
) |
|
Contributions from Predecessor shareholders |
|
|
- |
|
|
|
1,253 |
|
|
Distributions to Predecessor shareholders |
|
|
- |
|
|
|
(22,323 |
) |
|
Proceeds from loans payable to noncontrolling interests |
|
|
- |
|
|
|
39,075 |
|
|
Repayment of mortgage notes and loans payable |
|
|
(678 |
) |
|
|
(1,877 |
) |
|
Offering costs |
|
|
- |
|
|
|
(9,577 |
) |
|
Net cash (used in) provided by financing activities |
|
|
(30,473 |
) |
|
|
93,172 |
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
|
(511 |
) |
|
|
(133,404 |
) |
|
Cash and cash equivalents at beginning of period |
|
|
438,599 |
|
|
|
307,161 |
|
|
Cash and cash equivalents at end of period |
|
$ |
438,088 |
|
|
$ |
173,757 |
|
|
|
|
|||||||
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
|
Cash payments for interest |
|
$ |
78,860 |
|
|
$ |
10,665 |
|
|
Cash payments for income taxes |
|
$ |
1,213 |
|
|
$ |
5,168 |
|
|
NON-CASH TRANSACTIONS: |
|
|
|
|
|
|
|
|
|
Dividends and distributions declared but not yet paid |
|
$ |
25,066 |
|
|
$ |
- |
|
|
Contributions from non controlling interests called but not yet received |
|
|
2,828 |
|
|
|
- |
|
|
(Purchases) sale of marketable securities |
|
|
(441 |
) |
|
|
6,946 |
|
|
See notes to combined consolidated financial statements (unaudited). |
|
|||||||
8
PARAMOUNT GROUP, INC. AND PARAMOUNT PREDECESSOR
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
As used in these consolidated and combined financial statements, unless indicated otherwise, all references to “we,” “us,” “our,” the “Company,” and “Paramount” refer to Paramount Group, Inc. and its consolidated subsidiaries, including Paramount Group Operating Partnership LP, upon completion of the Formation Transactions (as more fully described below) and the initial public offering of common stock.
We are a fully-integrated real estate investment trust (“REIT”) focused on owning, operating, managing, acquiring and redeveloping high-quality, Class A office properties in select central business district submarkets of New York City, Washington, D.C. and San Francisco. As of June 30, 2015, our portfolio consisted of 12 Class A office properties aggregating approximately 10.4 million square feet that had an occupancy rate of 92.9%.
We were incorporated in Maryland as a corporation on April 14, 2014 to continue the business of our Predecessor, as defined, and did not have any meaningful operations until the acquisition of substantially all of the assets of our Predecessor and the assets of the Property Funds, as defined, that it controlled, as well as the interests of unaffiliated third parties in certain properties. Our properties were acquired through a series of Formation Transactions (the “Formation Transactions”) concurrently with our initial public offering of 150,650,000 common shares at a public offering price of $17.50 per share on November 24, 2014 (the “Offering”).
We conduct our business through, and substantially all of our interests are held by, Paramount Group Operating Partnership LP, a Delaware limited partnership (the “Operating Partnership”). We are the sole general partner of, and owned approximately 80.4% of, the Operating Partnership as of June 30, 2015.
Our Predecessor
Our Predecessor is not a legal entity but a combination of entities under common control as they were entities controlled by members of the Otto family that held various assets, including interests in (i) 15 private equity real estate funds controlled by our Predecessor (which included nine primary funds and six parallel funds) (collectively, the “Funds”) that owned interests in 12 properties, (ii) a wholly-owned property, Waterview, in Rosslyn, Virginia and (iii) three partially owned properties in New York, NY (See note 4, Investments in Unconsolidated Joint Ventures).
Below is a summary of the 15 private equity real estate funds that were controlled by our Predecessor prior to the completion of the Formation Transactions.
The following funds are collectively referred to herein as the “Property Funds”:
|
• |
Paramount Group Real Estate Fund I, L.P. (“Fund I”) |
|
• |
Paramount Group Real Estate Fund II, L.P. (“Fund II”) |
|
• |
Paramount Group Real Estate Fund III, L.P. (“Fund III”) |
|
• |
Paramount Group Real Estate Fund IV, L.P. (“Fund IV”) |
|
• |
PGREF IV Parallel Fund (Cayman), L.P. (“Fund IV Cayman”) |
|
• |
Paramount Group Real Estate Fund V (CIP), L.P. (“Fund V CIP”) |
|
• |
Paramount Group Real Estate Fund V (Core), L.P. (“Fund V Core”) |
|
• |
PGREF V (Core) Parallel Fund (Cayman), L.P. (“Fund V Cayman”) |
|
• |
Paramount Group Real Estate Fund VII, LP (“Fund VII”) |
|
• |
Paramount Group Real Estate Fund VII-H, LP (“Fund VII-H”) |
9
PARAMOUNT GROUP, INC. AND PARAMOUNT PREDECESSOR
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The following fund was formed to acquire, develop and manage the residential development project at 75 Howard Street:
|
• |
Paramount Group Residential Development Fund, LP (“Residential Fund”) |
The following funds are collectively referred to herein as the “Alternative Investment Funds”:
|
• |
Paramount Group Real Estate Special Situations Fund, L.P. (“PGRESS”) |
|
• |
Paramount Group Real Estate Special Situations Fund–H, L.P. (“PGRESS-H |