– Leases 1,014,101 square feet in 2018 –
– Completes $105
million of share repurchases in 2018 –
– Initiates Guidance
for Full Year 2019 –
Paramount Group, Inc. PGRE ("Paramount" or the "Company") filed its Annual Report on Form 10-K for the year ended December 31, 2018 today and reported results for the fourth quarter ended December 31, 2018.
Fourth Quarter Highlights:
- Reported net income attributable to common stockholders of $5.3 million, or $0.02 per diluted share, for the quarter ended December 31, 2018, compared to a net loss of $6.8 million, or $0.03 per diluted share, for the quarter ended December 31, 2017.
- Reported Core Funds from Operations ("Core FFO") attributable to common stockholders of $59.3 million, or $0.25 per diluted share, for the quarter ended December 31, 2018, compared to $51.6 million, or $0.22 per diluted share, for the quarter ended December 31, 2017.
- Reported a 13.4% increase in Same Store Cash Net Operating Income ("NOI") and a 12.8% increase in Same Store NOI in the quarter ended December 31, 2018, compared to the same period in the prior year.
- Leased 213,269 square feet, of which the Company's share was 143,622 square feet that was leased at a weighted average initial rent of $93.40 per square foot. Of the square footage leased, 118,752 square feet represented second generation space, for which the Company achieved a positive mark-to-market of 2.9% on a cash basis and 11.0% on a GAAP basis.
- Reported leased occupancy and same store leased occupancy of 96.4% at December 31, 2018, in-line with the leased occupancy and same store leased occupancy reported at September 30, 2018.
- Repurchased an aggregate of 7.56 million shares, or $105.4 million of its common stock in 2018, at a weighted average price of $13.95 per share, of which 7.3 million shares were repurchased in the fourth quarter.
- Declared a fourth quarter cash dividend of $0.10 per common share on December 14, 2018, which was paid on January 15, 2019.
Transactions Subsequent to Fourth Quarter:
- Completed the acquisition of 111 Sutter Street, a 293,000 square foot office building located in San Francisco's North Financial District. Simultaneously with closing, the Company brought in a joint venture partner to acquire 51% of the equity interest. The Company will retain the remaining 49% equity interest and manage and lease the asset. The purchase price was $227 million, or approximately $775 per square foot. In connection with the acquisition, the joint venture completed a $138.2 million financing of the property. The four-year loan is interest only loan at LIBOR plus 215 basis points and has three one-year extension options.
Financial Results
Quarter Ended December 31, 2018
Net income attributable to common stockholders was $5.3 million, or $0.02 per diluted share, for the quarter ended December 31, 2018, compared to a net loss of $6.8 million, or $0.03 per diluted share, for the quarter ended December 31, 2017.
Funds from Operations ("FFO") attributable to common stockholders was $56.3 million, or $0.24 per diluted share, for the quarter ended December 31, 2018, compared to $48.1 million, or $0.20 per diluted share, for the quarter ended December 31, 2017. FFO attributable to common stockholders for the quarters ended December 31, 2018 and 2017 includes the impact of non-core items, which are listed in the table on page 10. The aggregate of these items, net of amounts attributable to noncontrolling interests, decreased FFO attributable to common stockholders for the quarters ended December 31, 2018 and 2017 by $3.0 million and $3.5 million, or $0.01 and $0.02 per diluted share, respectively.
Core FFO attributable to common stockholders, which excludes the impact of the non-core items listed on page 10, was $59.3 million, or $0.25 per diluted share, for the quarter ended December 31, 2018, compared to $51.6 million, or $0.22 per diluted share, for the quarter ended December 31, 2017.
Year Ended December 31, 2018
Net income attributable to common stockholders was $9.1 million, or $0.04 per diluted share, for the year ended December 31, 2018, compared to $86.4 million, or $0.37 per diluted share, for the year ended December 31, 2017. Net income attributable to common stockholders for the year ended December 31, 2018 includes $32.2 million, or $0.13 per diluted share, of gain on sale of real estate, net of "sting" taxes and $41.6 million, or $0.17 per diluted share, of real estate impairment loss. Net income attributable to common stockholders for the year ended December 31, 2017 includes $98.1 million, or $0.42 per diluted share, of gain on sale of real estate.
FFO attributable to common stockholders was $224.5 million, or $0.94 per diluted share, for the year ended December 31, 2018, compared to $205.6 million, or $0.87 per diluted share, for the year ended December 31, 2017. FFO attributable to common stockholders for the years ended December 31, 2018 and 2017 includes the impact of non-core items, which are listed in the table on page 10. The aggregate of these items, net of amounts attributable to noncontrolling interests, decreased FFO attributable to common stockholders for the years ended December 31, 2018 and 2017 by $5.4 million and $4.5 million, respectively, or $0.02 per diluted share.
Core FFO attributable to common stockholders, which excludes the impact of the non-core items listed on page 10, was $229.9 million, or $0.96 per diluted share, for the year ended December 31, 2018, compared to $210.1 million, or $0.89 per diluted share, for the year ended December 31, 2017.
Portfolio Operations
Quarter Ended December 31, 2018
Same Store Cash NOI increased by $10.5 million, or 13.4%, to $89.3 million for the quarter ended December 31, 2018 from $78.8 million for the quarter ended December 31, 2017. Same Store NOI increased by $11.6 million, or 12.8%, to $102.8 million for the quarter ended December 31, 2018 from $91.2 million for the quarter ended December 31, 2017.
During the quarter ended December 31, 2018, the Company leased 213,269 square feet, of which the Company's share was 143,622 square feet that was leased at a weighted average initial rent of $93.40 per square foot. This leasing activity, offset by lease expirations in the quarter, caused leased occupancy and same store leased occupancy (properties owned by the Company in both reporting periods) to remain at 96.4% leased at December 31, 2018, in-line with the leased occupancy and same store leased occupancy at September 30, 2018. Of the 213,269 square feet leased in the fourth quarter, 118,752 square feet represented second generation space (space that had been vacant for less than twelve months) for which the Company achieved a positive mark-to-market of 2.9% on a cash basis and 11.0% on a GAAP basis. The weighted average lease term for leases signed during the fourth quarter was 3.3 years and weighted average tenant improvements and leasing commissions on these leases were $10.15 per square foot per annum, or 10.9% of initial rent.
Year Ended December 31, 2018
Same Store Cash NOI increased by $32.3 million, or 10.3%, to $347.7 million for the year ended December 31, 2018 from $315.4 million for the year ended December 31, 2017. Same Store NOI increased by $34.0 million, or 9.1%, to $408.7 million for the year ended December 31, 2018 from $374.7 million for the year ended December 31, 2017.
During the year ended December 31, 2018, the Company leased 1,014,101 square feet, of which the Company's share was 766,509 square feet that was leased at a weighted average initial rent of $84.44 per square foot. This leasing activity, partially offset by lease expirations in the year, increased leased occupancy by 290 basis points to 96.4% at December 31, 2018 from 93.5% at December 31, 2017. Same store leased occupancy (properties owned by the Company in both reporting periods) increased by 310 basis points to 96.4% at December 31, 2018 from 93.3% at December 31, 2017. Of the 1,014,101 square feet leased in the year, 469,463 square feet represents second generation space (space that has been vacant for less than twelve months) for which the Company achieved a positive mark-to-market of 13.3% on a cash basis and 13.2% on a GAAP basis. The weighted average lease term for leases signed during the year was 9.1 years and weighted average tenant improvements and leasing commissions on these leases were $9.77 per square foot per annum, or 11.6% of initial rent.
Guidance
The Company is providing Estimated Core FFO Guidance for the full year of 2019, which is reconciled below to estimated net income attributable to common stockholders per diluted share in accordance with GAAP. The Company estimates that net income attributable to common stockholders to be between $0.00 and $0.04 per diluted share. The estimated net income attributable to common stockholders per diluted share is not a projection and is being provided solely to satisfy the disclosure requirements of the U.S. Securities and Exchange Commission.
The Company estimates 2019 Core FFO to be between $0.88 and $0.92 per diluted share. The Estimated Core FFO of $0.90 per diluted share, at the midpoint of the Company's Guidance for 2019, when compared to Core FFO of $0.96 per diluted share for 2018, assumes, among other items, increases and decreases in the Company's share of the following components: (i) an increase in Same Store Cash NOI of 5.0% to 7.0%, resulting in an incremental $0.08 per diluted share, offset by (ii) a decrease in non-cash straight-line rent and amortization of above and below-market lease revenue, net of $0.07 per diluted share, (iii) a $0.03 per diluted share net decrease in Cash NOI from acquisition and disposition activity, comprised of a $0.04 per diluted share reduction from the disposition of 1899 Pennsylvania Avenue and 425 Eye Street in 2018, partially offset by $0.01 from the acquisition of a 49% joint venture interest in 111 Sutter Street in February 2019, (iv) a decrease in lease termination income of $0.01 per diluted share, (v) an increase in interest and debt expense of $0.03 per diluted share, including $0.01 per diluted share resulting from new debt in connection with the acquisition of 111 Sutter Street, and (vi) an increase in general and administrative expenses of $0.02 per diluted share resulting solely from the inability to capitalize internal leasing costs due to a change in the accounting rules for such costs. In addition, the Company expects to realize a $0.02 per diluted share benefit due to a lower number of shares and units outstanding, resulting from the 7.5 million shares that were repurchased in 2018.
|
For the Year Ending December 31, 2019: |
Low | High | |||||||||||||||
|
Estimated net income attributable to common stockholders per diluted share |
$ | 0.00 | $ | 0.04 | |||||||||||||
|
Pro rata share of real estate depreciation and amortization, including the Company's share of unconsolidated joint ventures |
0.88 | 0.88 | |||||||||||||||
| Estimated Core FFO per diluted share | $ | 0.88 | $ | 0.92 | |||||||||||||
Except as described above, these estimates reflect management's view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of the events referenced in this release and otherwise to be referenced during the conference call referred to on page 7. These estimates do not include the impact on operating results from possible future property acquisitions or dispositions, capital markets activity or realized and unrealized gains or losses on real estate fund investments. The estimates set forth above may be subject to fluctuations as a result of several factors, including the straight-lining of rental income and the amortization of above and below-market leases. There can be no assurance that the Company's actual results will not differ materially from the estimates set forth above.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. You can identify these statements by our use of the words "assumes," "believes," "estimates," "expects," "guidance," "intends," "plans," "projects" and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company's control and could materially affect actual results, performance or achievements. These factors include, without limitation, the ability to enter into new leases or renew leases on favorable terms, dependence on tenants' financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the costs and availability of financing, the ability of our joint venture partners to satisfy their obligations, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, regulatory changes, including changes to tax laws and regulations, and other risks and uncertainties detailed from time to time in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
FFO is a supplemental measure of our performance. We present FFO in accordance with the definition adopted by the National Association of Real Estate Investment Trusts ("Nareit"). Nareit defines FFO as GAAP net income or loss adjusted to exclude net gains from sales of depreciated real estate assets, impairment losses on depreciable real estate and depreciation and amortization expense from real estate assets, including our share of such adjustments of unconsolidated joint ventures. FFO is commonly used in the real estate industry to assist investors and analysts in comparing results of real estate companies because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. In addition, we present Core FFO as an alternative measure of our operating performance, which adjusts FFO for certain other items that we believe enhance the comparability of our FFO across periods. Core FFO, when applicable, excludes the impact of certain items, including, transaction related costs, realized and unrealized gains or losses on real estate fund investments, unrealized gains or losses on interest rate swaps, severance costs and gains or losses on early extinguishment of debt, in order to reflect the Core FFO of our real estate portfolio and operations. In future periods, we may also exclude other items from Core FFO that we believe may help investors compare our results.
FFO and Core FFO are presented as supplemental financial measures and do not fully represent our operating performance. Other REITs may use different methodologies for calculating FFO and Core FFO or use other definitions of FFO and Core FFO and, accordingly, our presentation of these measures may not be comparable to other real estate companies. Neither FFO nor Core FFO is intended to be a measure of cash flow or liquidity. Please refer to our financial statements, prepared in accordance with GAAP, for purposes of evaluating our financial condition, results of operations and cash flows.
NOI is used to measure the operating performance of our properties. NOI consists of property-related revenue (which includes rental income, tenant reimbursement income, lease termination income and certain other income) less operating expenses (which includes building expenses such as cleaning, security, repairs and maintenance, utilities, property administration and real estate taxes). We also present Cash NOI which deducts from NOI, straight-line rent adjustments and the amortization of above and below-market leases, net, including our share of such adjustments of unconsolidated joint ventures. In addition, we present PGRE's share of NOI and Cash NOI which represents our share of NOI and Cash NOI of consolidated and unconsolidated joint ventures, based on our percentage ownership in the underlying assets. We use NOI and Cash NOI internally as performance measures and believe they provide useful information to investors regarding our financial condition and results of operations because they reflect only those income and expense items that are incurred at property level.
Same Store NOI is used to measure the operating performance of properties that were owned by us in a similar manner during both the current period and prior reporting periods and represents Same Store NOI from consolidated and unconsolidated joint ventures based on our percentage ownership in the underlying assets. Same Store NOI also excludes lease termination income, bad debt expense and certain other items that may vary from period to period. We also present Same Store Cash NOI, which excludes the effect of non-cash items such as the straight-lining of rental revenue and the amortization of above and below-market leases.
A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in this press release and in our Supplemental Information for the quarter ended December 31, 2018, which is available on our website.
Investor Conference Call and Webcast
The Company will host a conference call and audio webcast on Thursday, February 14, 2019 at 10:00 a.m. Eastern Time (ET), during which management will discuss the fourth quarter results and provide commentary on business performance. A question and answer session with analysts and investors will follow the prepared remarks.
The conference call can be accessed by dialing 877-407-0789 (domestic) or 201-689-8562 (international). An audio replay of the conference call will be available from 1:00 p.m. ET on February 14, 2019 through February 21, 2019 and can be accessed by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13686702.
A live audio webcast of the conference call will be available through the "Investors" section of the Company's website, www.paramount-group.com. A replay of the webcast will be archived on the Company's website.
About Paramount Group, Inc.
Headquartered in New York City, Paramount Group, Inc. is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York City, Washington, D.C. and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.
| Paramount Group, Inc. | ||||||||||||
| Consolidated Balance Sheets | ||||||||||||
|
(Unaudited and in thousands) |
||||||||||||
| ASSETS: | December 31, 2018 | December 31, 2017 | ||||||||||
| Real estate, at cost | ||||||||||||
| Land | $ | 2,065,206 | $ | 2,209,506 | ||||||||
| Buildings and improvements | 6,036,445 | 6,119,969 | ||||||||||
| 8,101,651 | 8,329,475 | |||||||||||
| Accumulated depreciation and amortization | (644,639 | ) | (487,945 | ) | ||||||||
| Real estate, net | 7,457,012 | 7,841,530 | ||||||||||
| Cash and cash equivalents | 339,653 | 219,381 | ||||||||||
| Restricted cash | 25,756 | 31,044 | ||||||||||
| Investments in unconsolidated joint ventures | 78,863 | 44,762 | ||||||||||
| Investments in unconsolidated real estate funds | 10,352 | 7,253 | ||||||||||
| Preferred equity investments, net | 36,042 | 35,817 | ||||||||||
| Marketable securities | 22,660 | 29,039 | ||||||||||
| Accounts and other receivables, net | 20,076 | 17,082 | ||||||||||
| Deferred rent receivable | 267,456 | 220,826 | ||||||||||
| Deferred charges, net | 117,858 | 98,645 | ||||||||||
| Intangible assets, net | 270,445 | 352,206 | ||||||||||
| Other assets | 109,805 | 20,076 | ||||||||||
| Total assets | $ | 8,755,978 | $ | 8,917,661 | ||||||||
| LIABILITIES: | ||||||||||||
| Notes and mortgages payable, net | $ | 3,566,917 | $ | 3,541,300 | ||||||||
| Revolving credit facility | - | - | ||||||||||
| Due to affiliates | - | 27,299 | ||||||||||
| Accounts payable and accrued expenses | 124,334 | 117,630 | ||||||||||
| Dividends and distributions payable | 25,902 | 25,211 | ||||||||||
| Intangible liabilities, net | 95,991 | 130,028 | ||||||||||
| Other liabilities | 51,170 | 54,109 | ||||||||||
| Total liabilities | 3,864,314 | 3,895,577 | ||||||||||
| EQUITY: | ||||||||||||
| Paramount Group, Inc. equity | 4,000,800 | 4,176,741 | ||||||||||
| Noncontrolling interests in: | ||||||||||||
| Consolidated joint ventures | 394,995 | 404,997 | ||||||||||
| Consolidated real estate fund | 66,887 | 14,549 | ||||||||||
| Operating Partnership | 428,982 | 425,797 | ||||||||||
| Total equity | 4,891,664 | 5,022,084 | ||||||||||
| Total liabilities and equity | $ | 8,755,978 | $ | 8,917,661 | ||||||||
| Paramount Group, Inc. | |||||||||||||
| Consolidated Statements of Income | |||||||||||||
|
(Unaudited and in thousands, except share and per share amounts) |
|||||||||||||
| For the Three Months Ended | For the Year Ended | ||||||||||||
| December 31, | December 31, | ||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||
| REVENUES: | |||||||||||||
| Property rentals | $ | 149,654 | $ | 142,639 | $ | 592,240 | $ | 554,907 | |||||
| Straight-line rent adjustments | 13,390 | 10,924 | 59,061 | 54,453 | |||||||||
| Amortization of above and below-market leases, net | 3,448 | 5,359 | 16,059 | 19,523 | |||||||||
| Rental income | 166,492 | 158,922 | 667,360 | 628,883 | |||||||||
| Tenant reimbursement income | 13,961 | 13,657 | 56,950 | 52,418 | |||||||||
| Fee and other income | 10,222 | 7,678 | 34,651 | 37,666 | |||||||||
| Total revenues | 190,675 | 180,257 | 758,961 | 718,967 | |||||||||
| EXPENSES: | |||||||||||||
| Operating | 67,643 | 68,440 | 274,078 | 266,136 | |||||||||
| Depreciation and amortization | 63,684 | 67,894 | 258,225 | 266,037 | |||||||||
| General and administrative | 13,285 | 16,953 | 57,563 | 61,577 | |||||||||
| Transaction related costs | 608 | 976 | 1,471 | 2,027 | |||||||||
| Real estate impairment loss | - | - | 46,000 | - | |||||||||
| Total expenses | 145,220 | 154,263 | 637,337 | 595,777 | |||||||||
| Operating income | 45,455 | 25,994 | 121,624 | 123,190 | |||||||||
| Income from unconsolidated joint ventures | 537 | 1,042 | 3,468 | 20,185 | |||||||||
| Loss from unconsolidated real estate funds | (1 | ) | (90 | ) | (269 | ) | (6,143 | ) | |||||
| Interest and other income (loss), net | 1,229 | 2,951 | 8,117 | (9,031 | ) | ||||||||
| Interest and debt expense | (37,657 | ) | (36,194 | ) | (147,653 | ) | (143,762 | ) | |||||
| Loss on early extinguishment of debt | - | - | - | (7,877 | ) | ||||||||
| Gain on sale of real estate | - | - | 36,845 | 133,989 | |||||||||
| Unrealized gain on interest rate swaps | - | - | - | 1,802 | |||||||||
| Net income (loss) before income taxes | 9,563 | (6,297 | ) | 22,132 | 112,353 | ||||||||
| Income tax expense | (968 | ) | (935 | ) | (3,139 | ) | (5,177 | ) | |||||
| Net income (loss) | 8,595 | (7,232 | ) | 18,993 | 107,176 | ||||||||
|
Less net (income) loss attributable to noncontrolling interests in: |
|||||||||||||
| Consolidated joint ventures | (2,662 | ) | (664 | ) | (8,182 | ) | 10,365 | ||||||
| Consolidated real estate fund | (52 | ) | 398 | (720 | ) | (19,797 | ) | ||||||
| Operating Partnership | (563 | ) | 705 | (944 | ) | (11,363 | ) | ||||||
| Net income (loss) attributable to common stockholders | $ | 5,318 | $ | (6,793 | ) | $ | 9,147 | $ | 86,381 | ||||
| Per share: | |||||||||||||
| Basic | $ | 0.02 | $ | (0.03 | ) | $ | 0.04 | $ | 0.37 | ||||
| Diluted | $ | 0.02 | $ | (0.03 | ) | $ | 0.04 | $ | 0.37 | ||||
| Weighted average common shares outstanding: | |||||||||||||
| Basic | 237,036,494 | 239,997,181 | 239,526,694 | 236,372,801 | |||||||||
|
Diluted |
237,077,240 | 239,997,181 | 239,555,636 | 236,401,548 | |||||||||
| Paramount Group, Inc. | ||||||||||||||||
| Reconciliation of Net Income (Loss) to FFO and Core FFO | ||||||||||||||||
|
(Unaudited and in thousands, except share and per share amounts) |
||||||||||||||||
| For the Three Months Ended | For the Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Reconciliation of Net Income (Loss) to FFO and Core FFO: | ||||||||||||||||
| Net income (loss) | $ | 8,595 | $ | (7,232 | ) | $ | 18,993 | $ | 107,176 | |||||||
|
Real estate depreciation and amortization (including our share of unconsolidated joint ventures) |
65,832 | 69,915 | 266,236 | 273,938 | ||||||||||||
| Real estate impairment loss | - | - | 46,000 | - | ||||||||||||
| Gain on sale of depreciable real estate | - | - | (36,845 | ) | (110,583 | ) | ||||||||||
| FFO | 74,427 | 62,683 | 294,384 | 270,531 | ||||||||||||
| Less FFO attributable to noncontrolling interests in: | ||||||||||||||||
| Consolidated joint ventures | (12,143 | ) | (9,965 | ) | (45,622 | ) | (19,748 | ) | ||||||||
| Consolidated real estate fund | (52 | ) | 398 | (720 | ) | (20,132 | ) | |||||||||
| FFO attributable to Paramount Group Operating Partnership | 62,232 | 53,116 | 248,042 | 230,651 | ||||||||||||
|
Less FFO attributable to noncontrolling interests in Operating Partnership |
(5,961 | ) | (4,995 | ) | (23,577 | ) | (25,093 | ) | ||||||||
| FFO attributable to common stockholders | $ | 56,271 | $ | 48,121 | $ | 224,465 | $ | 205,558 | ||||||||
| Per diluted share | $ | 0.24 | $ | 0.20 | $ | 0.94 | $ | 0.87 | ||||||||
| FFO | $ | 74,427 | $ | 62,683 | $ | 294,384 | $ | 270,531 | ||||||||
| Non-core items: | ||||||||||||||||
|
Our share of earnings from 712 Fifth Avenue in excess of distributions received and (distributions in excess of basis) |
2,646 | 176 | 2,727 | (14,205 | ) | |||||||||||
| Transaction related costs | 608 | 976 | 1,471 | 2,027 | ||||||||||||
|
Realized and unrealized loss from unconsolidated real estate funds |
85 | 99 | 560 | 6,380 | ||||||||||||
| "Sting" taxes in connection with the sale of real estate | - | - | 1,248 | - | ||||||||||||
| Severance costs | - | 2,626 | - | 2,626 | ||||||||||||
|
After-tax net gain on sale of residential condominium land parcel |
- | - | - | (21,568 | ) | |||||||||||
| Valuation allowance on preferred equity investment | - | - | - | 19,588 | ||||||||||||
| Loss on early extinguishment of debt | - | - | - | 7,877 | ||||||||||||
|
Unrealized gain on interest rate swaps (including our share of unconsolidated joint ventures) |
- | - | - | (2,750 | ) | |||||||||||
| Core FFO | 77,766 | 66,560 | 300,390 | 270,506 | ||||||||||||
| Less Core FFO attributable to noncontrolling interests in: | ||||||||||||||||
| Consolidated joint ventures | (12,143 | ) | (9,965 | ) | (45,622 | ) | (35,022 | ) | ||||||||
| Consolidated real estate fund | (52 | ) | 398 | (720 | ) | 156 | ||||||||||
|
Core FFO attributable to Paramount Group Operating Partnership |
65,571 | 56,993 | 254,048 | 235,640 | ||||||||||||
|
Less Core FFO attributable to noncontrolling interests in Operating Partnership |
(6,281 | ) | (5,360 | ) | (24,148 | ) | (25,568 | ) | ||||||||
| Core FFO attributable to common stockholders | $ | 59,290 | $ | 51,633 | $ | 229,900 | $ | 210,072 | ||||||||
| Per diluted share | $ | 0.25 | $ | 0.22 | $ | 0.96 | $ | 0.89 | ||||||||
| Reconciliation of weighted average shares outstanding: | ||||||||||||||||
| Weighted average shares outstanding | 237,036,494 | 239,997,181 | 239,526,694 | 236,372,801 | ||||||||||||
| Effect of dilutive securities | 40,746 | 37,360 | 28,942 | 28,747 | ||||||||||||
| Denominator for FFO and Core FFO per diluted share | 237,077,240 | 240,034,541 | 239,555,636 | 236,401,548 | ||||||||||||
| Paramount Group, Inc. | ||||||||||||||||
| Reconciliation of Net Income (Loss) to Same Store NOI and Same Store Cash NOI | ||||||||||||||||
|
(Unaudited and in thousands) |
||||||||||||||||
|
For the Three Months Ended |
For the Year Ended |
|||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
|
Reconciliation of Net Income (Loss) to Same Store NOI and Same Store Cash NOI: |
||||||||||||||||
| Net income (loss) | $ | 8,595 | $ | (7,232 | ) | $ | 18,993 | $ | 107,176 | |||||||
| Add (subtract) adjustments to arrive at NOI and Cash NOI: | ||||||||||||||||
| Depreciation and amortization | 63,684 | 67,894 | 258,225 | 266,037 | ||||||||||||
| General and administrative | 13,285 | 16,953 | 57,563 | 61,577 | ||||||||||||
| Interest and debt expense | 37,657 | 36,194 | 147,653 | 143,762 | ||||||||||||
| Loss on early extinguishment of debt | - | - | - | 7,877 | ||||||||||||
| Transaction related costs | 608 | 976 | 1,471 | 2,027 | ||||||||||||
| Income tax expense | 968 | 935 | 3,139 | 5,177 | ||||||||||||
| NOI from unconsolidated joint ventures | 6,973 | 4,869 | 20,730 | 19,643 | ||||||||||||
| Income from unconsolidated joint ventures | (537 | ) | (1,042 | ) | (3,468 | ) | (20,185 | ) | ||||||||
| Loss from unconsolidated real estate funds | 1 | 90 | 269 | 6,143 | ||||||||||||
| Fee income | (5,676 | ) | (4,374 | ) | (18,629 | ) | (24,212 | ) | ||||||||
| Interest and other (income) loss, net | (1,229 | ) | (2,951 | ) | (8,117 | ) | 9,031 | |||||||||
| Real estate impairment loss | - | - | 46,000 | - | ||||||||||||
| Gain on sale of real estate | - | - | (36,845 | ) | (133,989 | ) | ||||||||||
| Unrealized gain on interest rate swaps | - | - | - | (1,802 | ) | |||||||||||
| NOI | 124,329 | 112,312 | 486,984 | 448,262 | ||||||||||||
|
Less NOI attributable to noncontrolling interests in: |
||||||||||||||||
| Consolidated joint ventures | (18,026 | ) | (15,928 | ) | (69,017 | ) | (55,464 | ) | ||||||||
| Consolidated real estate fund | (9 | ) | 353 | 11 | (154 | ) | ||||||||||
| PGRE's share of NOI | 106,294 | 96,737 | 417,978 | 392,644 | ||||||||||||
| Acquisitions | - | - | (5,254 | ) | - | |||||||||||
| Dispositions | - | (4,640 | ) | - | (14,480 | ) | ||||||||||
|
Lease termination income (including our share of unconsolidated joint ventures) |
(3,553 | ) | (388 | ) | (4,303 | ) | (2,381 | ) | ||||||||
| Other, net | 90 | (509 | ) | 320 | (1,053 | ) | ||||||||||
| PGRE's share of Same Store NOI | $ | 102,831 | $ | 91,200 | $ | 408,741 | $ | 374,730 | ||||||||
| NOI | $ | 124,329 | $ | 112,312 | $ | 486,984 | $ | 448,262 | ||||||||
| Less: | ||||||||||||||||
|
Straight-line rent adjustments (including our share of unconsolidated joint ventures) |
(13,320 | ) | (10,765 | ) | (59,122 | ) | (54,886 | ) | ||||||||
|
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures) |
(3,286 | ) | (5,196 | ) | (15,408 | ) | (18,912 | ) | ||||||||
| Cash NOI | 107,723 | 96,351 | 412,454 | 374,464 | ||||||||||||
| Less Cash NOI attributable to noncontrolling interests in: | ||||||||||||||||
| Consolidated joint ventures | (14,953 | ) | (13,085 | ) | (56,552 | ) | (42,325 | ) | ||||||||
| Consolidated real estate fund | (9 | ) | 353 | 11 | (154 | ) | ||||||||||
| PGRE's share of Cash NOI | 92,761 | 83,619 | 355,913 | 331,985 | ||||||||||||
| Acquisitions | - | - | (4,188 | ) | - | |||||||||||
| Dispositions | - | (4,469 | ) | - | (14,160 | ) | ||||||||||
|
Lease termination income (including our share of unconsolidated joint ventures) |
(3,553 | ) | (388 | ) | (4,303 | ) | (2,381 | ) | ||||||||
| Other, net | 90 | 5 | 320 | (50 | ) | |||||||||||
| PGRE's share of Same Store Cash NOI | $ | 89,298 | $ | 78,767 | $ | 347,742 | $ | 315,394 | ||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190213005775/en/
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