EX-99.2

EX-99.2 3 d70144dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

LOGO

SUPPLEMENTAL OPERATING AND FINANCIAL DATA

FOR THE QUARTER ENDED JUNE 30, 2015


		SAFE HARBOR

This supplemental package 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 our 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 and other risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission. We do not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

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		TABLE OF CONTENTS


		Page
Company Profile		4

Research Coverage		5

Selected Financial Information
Financial Highlights		6
Consolidated Balance Sheets		7
Consolidated Statements of Income		8
Funds From Operations (“FFO”)		9
Funds Available for Distribution (“FAD”)		10
Net Operating Income (“NOI”)		11
Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”)		12
Consolidated Joint Ventures and Funds		13 - 14
Unconsolidated Joint Ventures		15 - 16
Capital Structure		17
Debt Analysis		18
Debt Maturities		19

Selected Property Data
Portfolio Summary		20
Funds Summary		21
Top Tenants and Industry Diversification		22
Leasing Activity		23 - 24
Lease Expirations		25
Capital Expenditures - Cash Basis		26

Definitions		27

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		COMPANY PROFILE

Paramount Group, Inc. (“Paramount”) 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.

EXECUTIVE MANAGEMENT


Albert Behler	Chairman, Chief Executive Officer and President
Michael Walsh	Executive Vice President, Chief Financial Officer and Treasurer
Jolanta Bott	Executive Vice President, Operations and Human Resources
Theodore Koltis	Executive Vice President, Leasing
Daniel Lauer	Executive Vice President, Chief Investment Officer
Ralph DiRuggiero	Senior Vice President, Property Management
Gage Johnson	Senior Vice President, General Counsel and Secretary
Vito Messina	Senior Vice President, Asset Management
Wilbur Paes	Senior Vice President, Chief Accounting Officer
BOARD OF DIRECTORS
Albert Behler	Director, Chairman of the Board
Thomas Armbrust	Director
Dan Emmett	Director, Chair of Audit Committee
Lizanne Galbreath	Director, Chair of Compensation Committee
Peter Linneman	Director, Chair of Nominating and Corporate Governance Committee; Lead Independent Director
David O’Connor	Director
Katharina Otto-Bernstein	Director
COMPANY INFORMATION
Corporate Headquarters	Investor Relations	Stock Exchange Listing	Trading Symbol
1633 Broadway, Suite 1801	IR@paramount-group.com	New York Stock Exchange	PGRE
New York, NY 10019	(212) 492-2298
(212) 237-3100

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		RESEARCH COVERAGE ⁽¹⁾


James Feldman	Vin Chao	Steve Sakwa	Brad Burke
Bank of America Merrill Lynch	Deutsche Bank	Evercore ISI	Goldman Sachs
(646) 855-5808	(212) 250-6799	(212) 446-9462	(917) 343-2082

Jed Reagan	Richard Anderson	Vance Edelson	Ross Nussbaum
Green Street Advisors	Mizuho Securities USA Inc.	Morgan Stanley	UBS
(949) 640-8780	(949) 640-8780	(212) 761-0078	(212) 713-2484

Brendan Maiorana
Wells Fargo
(443) 263-6516

⁽¹⁾

With the exception of Green Street Advisors, an independent research firm, the equity analysts listed above are those analysts that, according to First Call Corporation, have published research material on the Company and are listed as covering the Company. Please note that any opinions, estimates or forecasts regarding the Company’s performance made by such analysts do not represent the opinions, estimates or forecasts of the Company or its management. The Company does not by its reference above, imply its endorsement of or concurrence with any information, conclusions or recommendations made by any of such analysts.

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		FINANCIAL HIGHLIGHTS
(unaudited and in thousands, except square feet and per share data)


	Quarter Ended
	June 30, 2015			March 31, 2015
SELECTED FINANCIAL DATA
Total revenues	$	162,928		$	161,226
Pro rata share of NOI ⁽¹⁾	$	92,452		$	87,969
Pro rata share of Cash NOI ⁽¹⁾	$	80,457		$	75,341
Net loss attributable to Paramount Group, Inc.	$	(4,709	)	$	(9,731	)
Per share - basic	$	(0.02	)	$	(0.05	)
Per share - diluted	$	(0.02	)	$	(0.05	)
FFO attributable to Paramount Group, Inc. common
shareholders plus assumed conversions ⁽¹⁾	$	52,663		$	43,317
Per share - diluted	$	0.25		$	0.20
FFO payout ratio ⁽¹⁾		38.3	%		46.5	%
Core FFO attributable to Paramount Group, Inc.
common shareholders plus assumed conversions	$	46,315		$	38,963
Per share - diluted	$	0.22		$	0.18
Core FFO payout ratio ⁽¹⁾		43.5	%		51.7	%
FAD attributable to Paramount Group, Inc.	$	21,635		$	16,852
FAD payout ratio ⁽¹⁾		93.1	%		119.6	%

COMMON SHARE DATA


	Quarter Ended
	June 30, 2015			March 31, 2015
Share Price
High	$	19.73		$	20.21
Low	$	16.97		$	17.66
Closing (end of period)	$	17.16		$	19.30
Dividends per common share	$	0.095		$	0.095	⁽²⁾
Annualized dividends per common share	$	0.380		$	0.380
Dividend yield (on closing share price)		2.2	%		2.0	%

PORTFOLIO STATISTICS


	Number of		Square		% Occupied ⁽¹⁾			% Leased ⁽¹⁾
	Properties		Feet		at June 30, 2015			at June 30, 2015
Region:
New York		6		7,152,207		93.3	%		95.2	%
Washington, D.C.		5		1,602,655		86.4	%		90.2	%
San Francisco		1		1,611,125		97.3	%		97.8	%

		12		10,365,987		92.9	%		94.8	%

⁽¹⁾	See page 27 for our definition of this measure.

⁽²⁾	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.

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		CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands)


	June 30, 2015			March 31, 2015			December 31, 2014
ASSETS:
Rental Property
Land	$	2,042,071		$	2,042,071		$	2,042,071
Buildings and improvements		5,534,885			5,503,475			5,488,168

		7,576,956			7,545,546			7,530,239
Accumulated depreciation and amortization		(162,377	)		(121,165	)		(81,050	)

Rental Property, net		7,414,579			7,424,381			7,449,189
Real estate fund investments		335,545			324,282			323,387
Investments in partially owned entities		6,128			6,370			5,749
Cash and cash equivalents		438,088			380,889			438,599
Restricted cash		45,737			53,864			55,728
Marketable securities		21,524			21,386			20,159
Deferred rent receivable		40,308			24,261			8,267
Accounts and other receivables, net		10,781			12,863			7,692
Deferred charges, net		49,547			43,713			39,165
Intangible assets, net		583,126			629,021			669,385
Other assets		9,529			31,948			13,121

Total Assets	$	8,954,892		$	8,952,978		$	9,030,441

LIABILITIES:
Mortgages and notes payable	$	2,853,237		$	2,852,754		$	2,852,287
Credit facility		—			—			—
Due to affiliates ⁽¹⁾		27,299			27,299			27,299
Loans payable to noncontrolling interests		43,981			43,188			42,195
Accounts payable and accrued expenses		96,595			78,282			93,472
Deferred income taxes		2,659			3,183			2,861
Interest rate swap liabilities		160,473			182,218			194,196
Intangible liabilities, net		201,839			210,964			219,228
Dividends and distributions payable		25,066			—			—
Other liabilities		45,922			45,742			43,950

Total Liabilities		3,457,071			3,443,630			3,475,488
EQUITY:
Paramount Group, Inc. stockholders’ equity		3,889,542			3,829,373			3,910,862
Noncontrolling interests in consolidated joint ventures and funds		703,596			685,176			685,888
Noncontrolling interests in Operating Partnership		904,683			994,799			958,203

Total Equity		5,497,821			5,509,348			5,554,953

TOTAL LIABILITIES AND EQUITY	$	8,954,892		$	8,952,978		$	9,030,441

⁽¹⁾	Represents notes payable to affiliates, which are due in October 2017 and bear interest at a fixed rate of 0.50%.

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		CONSOLIDATED STATEMENTS OF INCOME
(unaudited and in thousands, except share and per share data)


	Quarter Ended
	June 30, 2015			March 31, 2015
REVENUES:
Property rentals	$	128,954		$	126,402
Straight-line rent adjustments		16,091			15,951
Amortization of below-market leases, net		872			890

Rental income		145,917			143,243
Tenant reimbursement income		12,063			13,488
Fee income		1,780			1,535
Other income		3,168			2,960

Total revenues		162,928			161,226
EXPENSES:
Operating		57,781			61,884
Depreciation and amortization		79,421			73,583
General and administrative ⁽¹⁾		9,133			12,613
Acquisition and transaction related costs		8,208			1,139

Total expenses		154,543			149,219
Operating income		8,385			12,007
Income from real estate fund investments		14,072			5,221
Income from partially owned entities		2,011			975
Unrealized gains on interest rate swaps		21,747			11,978
Interest and other income, net		512			854
Interest and debt expense		(42,236	)		(41,888	)

Net income (loss) before income taxes		4,491			(10,853	)
Income tax expense		(1,343	)		(574	)

Net income (loss)		3,148			(11,427	)
Less net (income) loss attributable to noncontrolling interests in:
Consolidated joint ventures and funds		(9,004	)		(668	)
Operating Partnership		1,147			2,364

Net loss attributable to Paramount Group, Inc.	$	(4,709	)	$	(9,731	)

Weighted average common shares outstanding
Basic		212,106,718			212,106,718

Diluted		212,106,718			212,106,718

Net loss per share attributable to Paramount Group, Inc.
Basic	$	(0.02	)	$	(0.05	)

Diluted	$	(0.02	)	$	(0.05	)

⁽¹⁾

Includes $3,315 of severance costs in the quarter ended March 31, 2015 and expense of $362 and $733 in the quarters ended June 30, 2015 and March 31, 2015, respectively, from the mark-to-market of investments in our deferred compensation plan for which there is a corresponding increase in interest and other income, net.

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		FUNDS FROM OPERATIONS (“FFO”)
(unaudited and in thousands, except share and per share data)


	Quarter Ended
	June 30, 2015			March 31, 2015
Reconciliation of net income (loss) to FFO:
Net income (loss)	$	3,148		$	(11,427	)
Real estate depreciation and amortization		79,421			73,583
Pro rata share of real estate depreciation and amortization of partially owned entities		1,530			1,476

FFO ⁽¹⁾		84,099			63,632
Less FFO attributable to noncontrolling interests in consolidated joint ventures and funds		(18,614	)		(9,789	)

FFO attributable to Paramount Group Operating Partnership		65,485			53,843
Less FFO attributable to noncontrolling interests in Operating Partnership		(12,822	)		(10,526	)

FFO attributable to Paramount Group, Inc. common shareholders plus assumed conversions ⁽¹⁾	$	52,663		$	43,317

Per diluted share	$	0.25		$	0.20

Reconciliation of FFO to Core FFO:
FFO	$	84,099		$	63,632
Non-core (income) expense:
Transfer taxes due in connection with the sale of shares by a former joint venture partner		5,872			—
Acquisition and transaction related costs		2,336			1,139
Predecessor income tax true-up		721			—
Severance costs		—			3,315
Unrealized gains on interest rate swaps		(21,747	)		(11,978	)
Pro rata share of unrealized gains on interest rate swaps of partially owned entities		(624	)		(386	)

Core FFO ⁽¹⁾		70,657			55,722
Less Core FFO attributable to noncontrolling interests in consolidated joint ventures and funds		(13,065	)		(7,291	)

Core FFO attributable to Paramount Group Operating Partnership		57,592			48,431
Less Core FFO attributable to noncontrolling interests in Operating Partnership		(11,277	)		(9,468	)

Core FFO attributable to Paramount Group, Inc. common shareholders plus assumed conversions ⁽¹⁾	$	46,315		$	38,963

Per diluted share	$	0.22		$	0.18

Reconciliation of weighted average shares outstanding:
Weighted average shares outstanding		212,106,718			212,106,718
Effect of dilutive securities		5,004			11,928

Denominator for FFO per diluted share		212,111,722			212,118,646

⁽¹⁾	See page 27 for our definition of this measure.

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		FUNDS AVAILABLE FOR DISTRIBUTION (“FAD”)
(unaudited and in thousands)


	Quarter Ended
	June 30, 2015			March 31, 2015
Reconciliation of Core FFO to FAD
Core FFO	$	70,657		$	55,722
Add:
Amortization of stock-based compensation expense		1,370			1,174
Amortization of deferred financing costs		688			584
Less:
Recurring tenant improvements, leasing commissions and other capital expenditures		(16,882	)		(18,093	)
Straight-line rent adjustments		(16,091	)		(15,951	)
Unrealized gains on real estate fund investments		(11,264	)		(873	)
Amortization of below-market leases, net		(872	)		(890	)
Pro rata share of straight-line rent adjustments of partially owned entities		48			41

FAD ⁽¹⁾		27,654			21,714
Less FAD attributable to noncontrolling interests in consolidated joint ventures and funds		(751	)		(768	)

FAD attributable to Paramount Group Operating Partnership		26,903			20,946
Less FAD attributable to noncontrolling interests in Operating Partnership		(5,268	)		(4,094	)

FAD attributable to Paramount Group, Inc. ⁽¹⁾	$	21,635		$	16,852

FAD payout ratio ⁽¹⁾		93.1	%		119.6	%

⁽¹⁾	See page 27 for our definition of this measure.

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		NET OPERATING INCOME (“NOI”)
(unaudited and in thousands)


	Quarter Ended
	June 30, 2015			March 31, 2015
Reconciliation of net income (loss) to NOI:
Net income (loss)	$	3,148		$	(11,427	)
Add:
Depreciation and amortization		79,421			73,583
General and administrative expenses		9,133			12,613
Interest and debt expense		42,236			41,888
Transfer taxes due in connection with the sale of shares by a former joint venture partner		5,872			—
Acquisition and transaction related costs		2,336			1,139
Income tax expense		1,343			574
NOI from partially owned entities		4,278			3,781
Less:
Income from real estate fund investments		(14,072	)		(5,221	)
Income from partially owned entities		(2,011	)		(975	)
Fee income		(1,780	)		(1,535	)
Unrealized gains on interest rate swaps		(21,747	)		(11,978	)
Interest and other income, net		(512	)		(854	)

NOI ⁽¹⁾		107,645			101,588
Less NOI attributable to noncontrolling interests in consolidated joint ventures		(15,193	)		(13,619	)

Pro rata share of NOI ⁽¹⁾	$	92,452		$	87,969

Reconciliation of NOI to Cash NOI:
NOI	$	107,645		$	101,588
Less:
Straight-line rent adjustments		(16,091	)		(15,951	)
Amortization of below-market leases, net		(872	)		(890	)
Pro rata share of straight-line rent adjustments of partially owned entities		48			41

Cash NOI ⁽¹⁾		90,730			84,788
Less Cash NOI attributable to noncontrolling interests in consolidated joint ventures		(10,273	)		(9,447	)

Pro rata share of Cash NOI ⁽¹⁾	$	80,457		$	75,341

⁽¹⁾	See page 27 for our definition of this measure.

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		EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (“EBITDA”)
(unaudited and in thousand)


	Quarter Ended
	June 30, 2015			March 31, 2015
Reconciliation of net income (loss) to EBITDA:
Net income (loss)	$	3,148		$	(11,427	)
Add:
Depreciation and amortization		79,421			73,583
Interest and debt expense		42,236			41,888
Income tax expense		1,343			574
Pro rata share of above adjustments of partially owned entities		2,895			3,190

EBITDA ⁽¹⁾		129,043			107,808
Less EBITDA attributable to noncontrolling interests in consolidated joint ventures and funds		(28,071	)		(19,323	)

Pro rata share of EBITDA ⁽¹⁾	$	100,972		$	88,485

Reconciliation of EBITDA to Adjusted EBITDA:
EBITDA	$	129,043		$	107,808
Add:
Transfer taxes due in connection with the sale of shares by a former joint venture partner		5,872			—
Acquisition and transaction related costs		2,336			1,139
Severance costs		—			3,315
Less:
Unrealized gains on interest rate swaps		(21,747	)		(11,978	)
EBITDA from real estate fund investments		(15,124	)		(4,010	)
Pro rata share of unrealized gains on interest rate swaps of partially owned entities		(624	)		(386	)

Adjusted EBITDA ⁽¹⁾		99,756			95,888
Less Adjusted EBITDA attributable to noncontrolling interests in consolidated joint ventures		(14,936	)		(13,411	)

Pro rata share of Adjusted EBITDA ⁽¹⁾	$	84,820		$	82,477

⁽¹⁾ See page 27 for our definition of this measure.

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		CONSOLIDATED JOINT VENTURES AND FUNDS - BALANCE SHEETS
(unaudited and in thousands)


	As of June 30, 2015
	Consolidated Properties
	31 West 52nd Street		One Market Plaza		Real Estate Funds ⁽¹⁾		Total
Ownership %	64.2%		49.0%		Various
ASSETS:
Rental property, net	$	819,090	$	1,275,185	$	65,476	$	2,159,751
Real estate fund investments		—		—		335,545		335,545
Cash and cash equivalents		22,234		8,172		31,238		61,644
Restricted cash		9		24,267		—		24,276
Deferred rent receivable		2,315		9,168		—		11,483
Accounts and other receivables, net		1,236		134		3,197		4,567
Deferred charges, net		—		1,334		—		1,334
Intangible assets, net		83,251		82,315		—		165,566
Other assets		536		1,397		896		2,829

Total Assets	$	928,671	$	1,401,972	$	436,352	$	2,766,995

LIABILITIES:
Mortgages and notes payable	$	413,490	$	855,339	$	—	$	1,268,829
Loans payable to noncontrolling interests		—		—		43,981		43,981
Accounts payable and accrued expenses		3,747		22,934		293		26,974
Interest rate swap liabilities		24,013		73,647		—		97,660
Intangible liabilities, net		43,006		73,861		—		116,867
Other liabilities		211		419		426		1,056

Total Liabilities		484,467		1,026,200		44,700		1,555,367

EQUITY:
Paramount Group, Inc. stockholders’ equity		285,217		184,196		38,619		508,032
Noncontrolling interests in consolidated joint ventures and funds		158,987		191,576		353,033		703,596

Total Equity		444,204		375,772		391,652		1,211,628

TOTAL LIABILITIES AND EQUITY	$	928,671	$	1,401,972	$	436,352	$	2,766,995

⁽¹⁾	See page 21 for details of our ownership interest in the Funds and the Funds’ ownership interest in the underlying investments.

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		CONSOLIDATED JOINT VENTURES AND FUNDS - OPERATING RESULTS
(unaudited and in thousands)


	Quarter Ended June 30, 2015
	Consolidated Properties
	31 West 52nd Street			One Market Plaza			Real Estate Funds ⁽¹⁾			Total
Total revenues	$	17,317		$	28,848		$	926		$	47,091
Total operating expenses		6,105			7,017			318			13,440

Net operating income		11,212			21,831			608			33,651
Depreciation and amortization expense		(6,538	)		(13,739	)		(298	)		(20,575	)
Income from real estate fund investments		—			—			14,072			14,072
Unrealized gains on interest rate swaps		3,278			8,580			—			11,858
Interest and other income, net		21			34			—			55
Interest and debt expense		(5,218	)		(13,280	)		(793	)		(19,291	)

Net income before income taxes		2,755			3,426			13,589			19,770
Income tax expense		—			(39	)		(3	)		(42	)

Net income	$	2,755		$	3,387		$	13,586		$	19,728

Paramount Group, Inc.’s pro rata share
Ownership %	64.2%			49.0%			Various			Total
Net income	$	1,770		$	1,664		$	824		$	4,258
Add: Management fee income		126			110			1,521			1,757
Add: Carried interest		—			—			4,709			4,709

Net income attributable to Paramount Group, Inc.		1,896			1,774			7,054			10,724
Add: Real estate depreciation and amortization		4,197			6,728			40			10,965

FFO ⁽²⁾attributable to Paramount Group, Inc.		6,093			8,502			7,094			21,689
Less: Unrealized gains on interest rate swaps		(2,104	)		(4,204	)		—			(6,308	)

Core FFO attributable to Paramount Group, Inc.	$	3,989		$	4,298		$	7,094		$	15,381

Noncontrolling Interests’ pro rata share
Ownership %	35.8%			51.0%			Various			Total
Net income	$	985		$	1,723		$	12,762		$	15,470
Less: Management fee expense		(126	)		(110	)		(1,521	)		(1,757	)
Less: Carried interest		—			—			(4,709	)		(4,709	)

Net income attributable to noncontrolling interests		859			1,613			6,532			9,004
Add: Real estate depreciation and amortization		2,341			7,011			258			9,610

FFO attributable to noncontrolling interests		3,200			8,624			6,790			18,614
Less: Unrealized gains on interest rate swaps		(1,174	)		(4,375	)		—			(5,549	)

Core FFO attributable to noncontrolling interests	$	2,026		$	4,249		$	6,790		$	13,065

⁽¹⁾	See page 21 for details of our ownership interest in the Funds and the Funds’ ownership interest in the underlying investments.

⁽²⁾	See page 27 for our definition of this measure.

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		UNCONSOLIDATED JOINT VENTURES - BALANCE SHEETS
(unaudited and in thousands)


	As of June 30, 2015
	712 Fifth Avenue			Oder-Center, Germany			Total
Ownership %	50.0%			9.5%
ASSETS:
Rental property, net	$	198,722		$	6,626		$	205,348
Cash and cash equivalents		13,838			973			14,811
Restricted cash		323			—			323
Deferred rent receivable		13,122			—			13,122
Accounts and other receivables, net		188			—			188
Deferred charges, net		28,191			—			28,191
Other assets		494			206			700

Total Assets	$	254,878		$	7,805		$	262,683

LIABILITIES:
Mortgages and notes payable	$	246,500		$	24,014		$	270,514
Accounts payable and accrued expenses		3,055			181			3,236
Interest rate swap liabilities		11,349			—			11,349
Other liabilities		856			53			909

Total Liabilities		261,760			24,248			286,008

Total Equity		(6,882	)		(16,443	)		(23,325	)

TOTAL LIABILITIES AND EQUITY	$	254,878		$	7,805		$	262,683

- 15 -


		UNCONSOLIDATED JOINT VENTURES - OPERATING RESULTS
(unaudited and in thousands)


	Quarter Ended June 30, 2015
	712			Oder-Center,
	Fifth Avenue			Germany			Total
Total revenues	$	14,111		$	1,084		$	15,195
Total operating expenses		5,831			128			5,959

Net operating income		8,280			956			9,236
Depreciation and amortization expense		(2,954	)		(98	)		(3,052	)
Unrealized gains on interest rate swaps		1,248			—			1,248
Interest and other income, net		4			—			4
Interest and debt expense		(2,611	)		(292	)		(2,903	)

Net income before income taxes		3,967			566			4,533
Income tax expense		—			(3	)		(3	)

Net income	$	3,967		$	563		$	4,530

Paramount Group, Inc.’s pro rata share Ownership %	50.0%			9.5%			Total
Net income	$	1,984		$	53		$	2,037
Less: Step-up basis adjustment		—			(26	)		(26	)

Net income attributable to Paramount Group, Inc.		1,984			27			2,011
Add: Real estate depreciation and amortization		1,477			53			1,530

FFO ⁽¹⁾attributable to Paramount Group, Inc.		3,461			80			3,541
Less: Unrealized gains on interest rate swaps		(624	)		—			(624	)

Core FFO attributable to Paramount Group, Inc.	$	2,837		$	80		$	2,917

Joint Venture Partners’ pro rata share Ownership %	50.0%			90.5%			Total
Net income	$	1,984		$	510		$	2,494
Add: Real estate depreciation and amortization		1,477			89			1,566

FFO attributable to joint venture partner		3,461			599			4,060
Less: Unrealized gains on interest rate swaps		(624	)		—			(624	)

Core FFO attributable to joint venture partner	$	2,837		$	599		$	3,436

⁽¹⁾	See page 27 for our definition of this measure.

- 16 -


		CAPITAL STRUCTURE
(unaudited and in thousands, except share and per share data)


					As of June 30, 2015
Debt:
Consolidated debt:
Mortgages and notes payable					$	2,853,237
$1.0 billion credit facility						—

						2,853,237
Less:
Noncontrolling interests’ share of consolidated debt (One Market Plaza and 31 West 52nd Street)						(584,252	)
Add:
Pro rata share of unconsolidated joint venture debt (712 Fifth Avenue and Oder-Center, Germany)						125,531

Total debt						2,394,516

	Shares / Units Outstanding		Share Price at As of June 30, 2015
Equity:
Common stock		212,111,937	$	17.16		3,639,841
Operating Partnership units		51,660,088		17.16		886,487

		263,772,025		17.16		4,526,328

Total Market Capitalization					$	6,920,844

- 17 -


		DEBT ANALYSIS
(unaudited and in thousands)


	Total Debt						Fixed Rate Debt						Variable Rate Debt
	Amount			Rate			Amount			Rate			Amount			Rate
Consolidated Debt:
1633 Broadway	$	926,260			5.39	%	$	772,100			6.15	%	$	154,160			1.61	%
31 West 52nd Street		413,490			4.99	%		337,500			5.74	%		75,990			1.66	%
900 Third Avenue		274,337			5.10	%		255,000			5.35	%		19,337			1.77	%
Waterview		210,000			5.76	%		210,000			5.76	%		—			—
1899 Pennsylvania Avenue		89,811			4.88	%		89,811			4.88	%		—			—
Liberty Place		84,000			4.50	%		84,000			4.50	%		—			—
One Market Plaza		855,339			6.14	%		855,339			6.14	%		—			—

Total consolidated debt		2,853,237			5.51	%		2,603,750			5.89	%		249,487			1.64	%

Noncontrolling interests’ share		(584,252	)					(557,048	)					(27,204	)

Pro rata share of consolidated debt	$	2,268,985			5.43	%	$	2,046,702			5.84	%	$	222,283			1.64	%

Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	246,500			4.08	%	$	135,000			5.78	%	$	111,500			2.03	%
Oder-Center, Germany		24,014			4.62	%		24,014			4.62	%		—			0.00	%

Total unconsolidated debt		270,514			4.13	%		159,014			5.60	%		111,500			2.03	%

Joint venture partners’ share		(144,983	)					(89,233	)					(55,750	)

Pro rata share of unconsolidated debt	$	125,531			4.09	%	$	69,781			5.74	%	$	55,750			2.03	%

Pro Rata Share of Total Debt	$	2,394,516			5.36	%	$	2,116,483			5.84	%	$	278,033			1.72	%


	Required	Actual
Credit Facility Covenants: ⁽¹⁾
Total Debt / Total Assets	Less than 60%		40.1	%
Secured Debt / Total Assets	Less than 50%		36.4	%
Fixed Charge Coverage	Greater than 1.5x		2.4	x
Unsecured Debt / Unencumbered Assets	Less than 60%		13.8	%
Unencumbered Interest Coverage	Greater than 1.75x		14.3	x


	Amount		%
Debt Composition:
Fixed rate debt:
Pro rata consolidated fixed rate debt	$	2,046,702
Pro rata unconsolidated fixed rate debt		69,781

Total fixed rate debt		2,116,483		88.4	%

Variable rate debt:
Pro rata consolidated variable rate debt		222,283
Pro rata unconsolidated variable rate debt		55,750

Total variable rate debt		278,033		11.6	%

Pro Rata Share of Total Debt	$	2,394,516		100.0	%

⁽¹⁾

This section presents ratios as of June 30, 2015 in accordance with the terms of the Company’s credit facility, which has been filed with the SEC. Management is not presenting these ratios and the related calculations for any other purpose or for any other period, and is not intending for these measures to otherwise provide information to investors about the Company’s financial condition or results of operations. Investors should not rely on these measures other than for purposes of testing our compliance with the credit facility.

- 18 -


		DEBT MATURITIES
(unaudited and in thousands)


	2015		2016			2017			2018			2019			Thereafter			Total
Consolidated Debt:
1633 Broadway	$	—	$	926,260		$	—		$	—		$	—		$	—		$	926,260
31 West 52nd Street		—		—			413,490			—			—			—			413,490
900 Third Avenue		—		—			274,337			—			—			—			274,337
Waterview		—		—			210,000			—			—			—			210,000
1899 Pennsylvania Avenue		—		—			—			—			—			89,811			89,811
Liberty Place		—		—			—			84,000			—			—			84,000
One Market Plaza		—		—			—			—			855,339			—			855,339

Total consolidated debt		—		926,260			897,827			84,000			855,339			89,811			2,853,237
Noncontrolling interests’ share		—		—			(148,029	)		—			(436,223	)		—			(584,252	)

Pro rata share of consolidated debt	$	—	$	926,260		$	749,798		$	84,000		$	419,116		$	89,811		$	2,268,985

Unconsolidated Debt:
712 Fifth Avenue	$	—	$	—		$	—		$	246,500		$	—		$	—		$	246,500
Oder-Center, Germany		—		—			—			—			—			24,014			24,014

Total unconsolidated debt		—		—			—			246,500			—			24,014			270,514
Joint venture partners’ share		—		—			—			(123,250	)		—			(21,733	)		(144,983	)

Pro rata share of unconsolidated debt	$	—	$	—		$	—		$	123,250		$	—		$	2,281		$	125,531

Pro rata share of debt	$	—	$	926,260		$	749,798		$	207,250		$	419,116		$	92,092			2,394,516

Weighted average rate		—		5.39	%		5.25	%		4.25	%		6.14	%		4.87	%		5.36	%

% of Debt Maturing		—		38.7	%		31.3	%		8.7	%		17.5	%		3.8	%		100.0	%

- 19 -


		PORTFOLIO SUMMARY
(unaudited)


Property	Submarket	% Ownership			Square Feet ⁽¹⁾		% Occupied ⁽²⁾			% Leased ⁽²⁾			Annualized Rent ⁽²⁾
Property	Submarket	% Ownership			Square Feet ⁽¹⁾		% Occupied ⁽²⁾			% Leased ⁽²⁾			Amount		Per Square Foot ⁽³⁾
As of June 30, 2015
New York:
1633 Broadway	West Side		100.0	%		2,643,065		95.7	%		95.7	%	$	160,808,000	$	69.13
1301 Avenue of the Americas	Sixth Ave /Rock Center		100.0	%		1,767,992		85.4	%		91.2	%		110,867,000		74.19
1325 Avenue of the Americas	Sixth Ave /Rock Center		100.0	%		814,892		91.1	%		94.2	%		46,766,000		65.91
31 West 52nd Street	Sixth Ave /Rock Center		64.2	%		786,647		100.0	%		100.0	%		59,015,000		77.44
900 Third Avenue	East Side		100.0	%		596,270		96.0	%		97.0	%		40,818,000		72.11
712 Fifth Avenue	Madison/Fifth		50.0	%		543,341		98.5	%		98.5	%		56,475,000		106.06

Subtotal /Weighted Average						7,152,207		93.3	%		95.2	%		474,749,000		74.38

Washington, D.C.:
Waterview	Rosslyn, VA		100.0	%		647,243		98.9	%		98.9	%		33,739,000		50.86
425 Eye Street	East End		100.0	%		380,090		88.9	%		96.4	%		15,052,000		45.81
2099 Pennsylvania Avenue	CBD		100.0	%		208,636		62.0	%		62.0	%		9,937,000		76.66
1899 Pennsylvania Avenue	CBD		100.0	%		192,481		71.9	%		88.8	%		11,033,000		81.05
Liberty Place	East End		100.0	%		174,205		80.1	%		80.1	%		10,833,000		76.97

Subtotal /Weighted Average						1,602,655		86.4	%		90.2	%		80,594,000		57.68

San Francisco:
One Market Plaza	South Financial District		49.0	%		1,611,125		97.3	%		97.8	%		96,057,000		62.43

Total /Weighted Average						10,365,987		92.9	%		94.8	%	$	651,400,000	$	69.93

⁽¹⁾	Represents the remeasured square feet, which includes an aggregate of 197,196 square feet of either REBNY or BOMA remeasurement adjustments that are not reflected in current leases.

⁽²⁾	See page 27 for our definition of this measure.

⁽³⁾	Excludes square feet and revenue from parking, storage, theater, signage and roof space.

- 20 -


		FUNDS SUMMARY
(unaudited)

Property Funds:

The following is a summary of the Property Funds, our ownership interest in these Funds and the Funds’ ownership interest in the underlying investments, as of June 30, 2015.


	% Ownership			60 Wall Street			One Market Plaza			50 Beale Street
Fund II		10.0	%		46.3	%		—			—
Fund III		3.1	%		16.0	%		2.0	%		—
Fund VII/VII-H		7.2	%		—			—			42.8	%

Total Property Funds					62.3	%		2.0	%		42.8	%
Other Investors					37.7	%		98.0	%⁽¹⁾		57.2	%

Total					100.0	%		100.0	%		100.0	%

The following is a summary of the Property Fund investments and our ownership interest in the underlying investments, as of June 30, 2015.


	Submarket	% Ownership			Square Feet		% Leased			Annualized Rent ⁽²⁾
	Submarket	% Ownership			Square Feet		% Leased			Amount			Per Square Foot ⁽³⁾
60 Wall Street	Downtown		5.1	%		1,625,483		100.0	%	$	67,000,000	⁽⁴⁾	$	41.22	⁽⁴⁾
50 Beale Street	South Financial District		3.1	%		663,483		98.6	%		33,304,000			50.91

Alternative Investment Funds:

The following is a summary of our ownership interest in the Alternative Investment Funds and the Funds’ underlying investments, as of June 30, 2015.


		%		Interest/				Investment
Fund	Investment Type	Ownership		Dividend Rate		Initial Maturity		Total		Our Share
Fund VIII	Mezzanine loan		1.7%		8.3%		Jan-2022	$	46,747,000	$	805,000
PGRESS Funds	Preferred Equity Investments		4.9% - 5.4%		10.3% - 15.0%		Sep-2015 - Feb-2019		95,717,000		4,615,000

⁽¹⁾	Includes a 49.0% direct ownership interest held by us.

⁽²⁾	See page 27 for our definition of this measure.

⁽³⁾	Excludes square feet and revenue from parking, storage, signage and roof space.

⁽⁴⁾	Represents triple net base rent only.

- 21 -


		TOP TENANTS AND INDUSTRY DIVERSIFICATION
(unaudited)


	Lease Expiration			Square Feet Occupied			% of Total Square Feet			Annualized Rent ⁽¹⁾				% of Annualized Rent
	Lease Expiration			Square Feet Occupied			% of Total Square Feet			Amount		Per Square Foot		% of Annualized Rent
Top 10 Tenants:
As of June 30, 2015
The Corporate Executive Board Company		Jan-2028			625,062			6.0	%	$	31,709,000	$	50.73		4.9	%
Barclays Capital, Inc.		Dec-2020			497,418			4.8	%		29,207,000		58.72		4.5	%
Allianz Global Investors, LP		Jan-2031	⁽²⁾		326,457	⁽²⁾		3.1	%		26,198,000		80.25		4.0	%
Credit Agricole Corporate & Investment Bank		Feb-2023			313,879			3.0	%		25,219,000		80.35		3.9	%
Clifford Chance, LLP		Jun-2024			328,992			3.2	%		24,925,000		75.76		3.8	%
Commerzbank AG		May-2016			287,535			2.8	%		24,422,000		84.94		3.7	%
Kasowitz Benson Torres & Friedman, LLP		Mar-2037	⁽³⁾		302,213	⁽³⁾		2.9	%		18,904,000		62.55		2.9	%
Deloitte & Touche, LLP		Mar-2016			212,052			2.0	%		16,853,000		79.48		2.6	%
Google		Apr-2025			249,709			2.4	%		16,310,000		65.32		2.5	%
WMG Acquisition Corp. (Warner Music Group)		Jul-2029			293,487			2.8	%		16,241,000		55.34		2.5	%



	Square Feet Occupied		% of Occupied Square Feet			Annualized Rent		% of Annualized Rent
Industry Diversification:
As of June 30, 2015
Financial Services - Commercial and Investment Banking		1,894,950		20.1	%	$	136,836,000		21.0	%
Legal Services		1,795,801		19.1	%		131,199,000		20.1	%
Financial Services - All other		1,380,036		14.7	%		109,203,000		16.8	%
Technology and Media		1,425,865		15.2	%		87,256,000		13.4	%
Insurance		401,284		4.3	%		30,548,000		4.7	%
Retail		322,377		3.4	%		26,505,000		4.1	%
Accounting		275,263		2.9	%		20,835,000		3.2	%
Real Estate		223,998		2.4	%		16,289,000		2.5	%
Government		316,700		3.4	%		14,684,000		2.3	%
Other		1,374,199		14.6	%		78,045,000		12.0	%

⁽¹⁾	See page 27 for our definition of this measure.

⁽²⁾	5,546 of the square feet leased expires in December 2018.

⁽³⁾	100,422 of the square feet leased expires in November 2015.

- 22 -


		LEASING ACTIVITY
(unaudited)


	Total			New York			Washington, D.C.			San Francisco
Quarter Ended June 30, 2015:
Total square feet leased		199,972			137,975			28,863			33,134
Pro rata share of total square feet leased:		171,405			126,306			28,863			16,236
Initial rent ⁽¹⁾	$	71.84		$	78.58		$	40.72		$	74.72
Weighted average lease term (years)		11.1			10.5			15.1			8.1
Tenant improvements and leasing commissions:
Per square foot	$	81.57		$	78.23		$	109.30		$	58.27
Per square foot per annum	$	7.38		$	7.43		$	7.25		$	7.20
Percentage of initial rent		10.3	%		9.5	%		17.8	%		9.6	%
Rent concessions:
Average free rent period (in months)		8.4			8.2			13.4			1.1
Average free rent period per annum (in months)		0.8			0.8			0.9			0.1
Second generation space: ⁽¹⁾
Square feet		138,232			126,306			—			11,926
Cash basis:
Initial rent ⁽¹⁾	$	78.26		$	78.58		$	—		$	74.86
Prior escalated rent	$	67.80		$	68.68		$	—		$	58.54
Percentage increase		15.4	%		14.4	%		—			27.9	%
GAAP basis:
Straight-line rent	$	76.96		$	76.60		$	—		$	80.81
Prior straight-line rent	$	64.69		$	65.31		$	—		$	58.09
Percentage increase		19.0	%		17.3	%		—			39.1	%

⁽¹⁾	See page 27 for our definition of this measure.

- 23 -


		LEASING ACTIVITY
(unaudited)


	Total			New York			Washington, D.C.			San Francisco
Six Months Ended June 30, 2015:
Total square feet leased		355,800			289,486			33,180			33,134
Pro rata share of total square feet leased:		325,693			276,277			33,180			16,236
Initial rent ⁽¹⁾	$	73.67		$	77.08		$	44.79		$	74.72
Weighted average lease term (years)		12.6			12.7			13.8			8.1
Tenant improvements and leasing commissions:
Per square foot	$	95.80		$	96.90		$	105.02		$	58.27
Per square foot per annum	$	7.61		$	7.64		$	7.60		$	7.20
Percentage of initial rent		10.3	%		9.9	%		17.0	%		9.6	%
Rent concessions:
Average free rent period (in months)		10.8			11.2			12.3			1.1
Average free rent period per annum (in months)		0.9			0.9			0.9			0.1
Second generation space: ⁽¹⁾
Square feet		161,962			145,719			4,317			11,926
Cash basis:
Initial rent ⁽¹⁾	$	76.87		$	77.18		$	72.00		$	74.86
Prior escalated rent	$	66.45		$	67.04		$	68.58		$	58.54
Percentage increase		15.7	%		15.1	%		5.0	%		27.9	%
GAAP basis:
Straight-line rent	$	75.39		$	74.91		$	76.56		$	80.81
Prior straight-line rent	$	63.75		$	64.08		$	68.39		$	58.09
Percentage increase		18.3	%		16.9	%		11.9	%		39.1	%

⁽¹⁾	See page 27 for our definition of this measure.

- 24 -


		LEASE EXPIRATIONS
(unaudited)


Year of Lease Expiration ⁽³⁾	Square Feet of Expiring Leases		Annualized Rent ⁽¹⁾				% of Annualized Rent
Year of Lease Expiration ⁽³⁾	Square Feet of Expiring Leases		Amount		Per Square Foot ⁽²⁾		% of Annualized Rent
Month to Month		7,282	$	687,000	$	80.80		0.1	%

3Q 2015		244,872		17,565,000		72.48		2.6	%
4Q 2015		251,881		16,956,000		67.29		2.6	%

Total 2015		496,753		34,521,000		69.82		5.2	%

1Q 2016		3,314		1,515,000		151.57		0.2	%
2Q 2016		521,486		41,685,000		82.98		6.3	%
Remaining 2016		265,539		17,778,000		67.11		2.7	%
2017		587,768		43,500,000		74.61		6.5	%
2018		371,446		28,063,000		75.43		4.2	%
2019		448,362		34,097,000		76.63		5.1	%
2020		675,321		44,673,000		71.23		6.7	%
2021		1,303,775		76,367,000		59.98		11.5	%
2022		277,974		18,586,000		85.77		2.8	%
2023		664,222		52,868,000		80.03		8.0	%
2024		682,055		52,930,000		78.05		8.0	%
Thereafter		3,319,988		217,114,000		65.09		32.7	%

⁽¹⁾	See page 27 for our definition of this measure.

⁽²⁾	Excludes square feet and revenue from parking, storage, theater, signage and roof space.

⁽³⁾	Leases that expire on the last day of the quarter are treated as occupied and are reflected as expiring space in the following quarters.

- 25 -


		CAPITAL EXPENDITURES - CASH BASIS
(unaudited and in thousands)


	Quarter Ended
	June 30, 2015		March 31, 2015
Capital expenditures to maintain assets:
Recurring ⁽¹⁾	$	273	$	3,754
Non-recurring ⁽¹⁾		—		—

Total capital expenditures to maintain assets	$	273	$	3,754

Tenant improvements:
Recurring ⁽¹⁾	$	13,254	$	10,795
Non-recurring ⁽¹⁾		1,431		1,693

Total tenant improvements	$	14,685	$	12,488

Leasing commissions:
Recurring ⁽¹⁾	$	3,355	$	3,544
Non-recurring ⁽¹⁾		1,678		2,587

Total leasing commissions	$	5,033	$	6,131

Total capital expenditures, tenant improvements and leasing commissions:
Total recurring ⁽¹⁾	$	16,882	$	18,093
Total non-recurring ⁽¹⁾		3,109		4,280

Total capital expenditures, tenant improvements and leasing commissions	$	19,991	$	22,373

Development expenditures ⁽¹⁾⁽²⁾	$	5,321	$	5,394

⁽¹⁾	See page 27 for our definition of this measure.

⁽²⁾	Primarily represents development expenditures relating to the lobby and retail repositioning at One Market Plaza. Of the $25,000 budgeted, $11,234 has been expended as of June 30, 2015.

- 26 -


		DEFINITIONS

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) is calculated by adjusting EBITDA for certain other items, including acquisition and transaction related costs and unrealized gains or losses on interest rate swaps, including our share of such adjustments of unconsolidated joint ventures.

Annualized Rent represents the end of period monthly base rent plus escalations in accordance with the lease terms, multiplied by 12.

Capital Expenditures consist of expenditures to maintain assets, tenant improvement allowances and leasing commissions. Recurring Capital Expenditures include capital expenditures to maintain current revenues and tenant improvements and leasing commissions related to space leased that has not been vacant for more than twelve months. Nonrecurring Capital Expenditures include capital expenditures completed in the year of acquisition and the following two years that were planned at the time of acquisition, as well as tenant improvements and leasing commissions on space leased that has been vacant for more than twelve months. Development Expenditures consist of hard and soft costs related to the development of a property in getting it ready for its intended use.

Core FFO Payout Ratio is calculated as dividends per share divided by Core FFO per share.

Core Funds from Operations (“Core FFO”) is calculated by adjusting FFO for certain other items, including acquisition and transaction related costs and unrealized gains or losses on interest rate swaps, including our share of such adjustments of unconsolidated joint ventures.

Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) is calculated as GAAP net income or loss plus (i) depreciation and amortization (ii) interest and debt expense and (iii) income tax expense, including our share of such adjustments of unconsolidated joint ventures.

FAD Payout Ratio is calculated as total dividends divided by FAD.

FFO Payout Ratio is calculated as dividends per share divided by FFO per share.

Funds Available for Distribution (“FAD”) is calculated as Core FFO less (i) recurring tenant improvements, leasing commissions and other capital expenditures (ii) straight-line rent adjustments (iii) unrealized gains on real estate fund investments and (iv) amortization of above and below-market leases, net, plus (v) amortization of stock-based compensation expense and (vi) amortization of deferred financing costs.

Funds from Operations (“FFO”) is calculated in accordance with the definition adopted by 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.

Initial Rent represents the weighted average cash basis starting rent per square foot and does not include free rent or periodic step-ups in rent.

Leased % represents percentage of square feet that is leased, including signed leases not yet commenced.

Net Operating Income (“NOI”) is calculated as GAAP net income or loss plus (i) depreciation and amortization (ii) general and administrative expenses (iii) interest and debt expense (iv) acquisition and transaction related costs and (v) income tax expense, less (vi) fee income (vii) unrealized gains or losses on interest rate swaps (viii) interest and other income and (ix) the gain on consolidation of a partially owned entity, including our share of such adjustments of unconsolidated joint ventures. 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 our pro rata 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.

Occupied % represents the percentage of space for which we have commenced rental revenue in accordance with GAAP.

Second Generation Space relates to space leased that has not been vacant for more than twelve months.

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