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 March 31, 2005.
| ¨ | 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 0-50854
THOMAS PROPERTIES GROUP, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 20-0852352 | |
| (State or other jurisdiction of Incorporation or organization) |
(IRS employer identification number) | |
| 515 South Flower Street, Sixth Floor Los Angeles, CA |
90071 | |
| (Address of principal executive offices) | Zip Code | |
Registrant’s telephone number, including area code (213) 613-1900
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 is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class |
Outstanding at May 12, 2005 | |
| Common Stock, $.01 par value per share |
14,342,841 |
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2005
TABLE OF CONTENTS
| ITEM 1. | CONSOLIDATED/COMBINED FINANCIAL STATEMENTS |
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
| March 31, 2005 |
December 31, 2004 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Investments in real estate: |
||||||||
| Land and improvements |
$ | 61,029 | $ | 60,882 | ||||
| Buildings and improvements |
252,688 | 252,009 | ||||||
| Tenant improvements |
65,281 | 64,638 | ||||||
| 378,998 | 377,529 | |||||||
| Less accumulated depreciation |
(97,338 | ) | (95,044 | ) | ||||
| 281,660 | 282,485 | |||||||
| Investments in unconsolidated real estate entities |
43,247 | 31,624 | ||||||
| Cash and cash equivalents |
54,547 | 56,506 | ||||||
| Restricted cash |
9,442 | 12,949 | ||||||
| Short-term investments |
— | 14,000 | ||||||
| Rents and other receivables, net |
2,749 | 2,731 | ||||||
| Receivables—unconsolidated real estate entities |
2,388 | 381 | ||||||
| Deferred rents |
27,277 | 28,453 | ||||||
| Deferred leasing and loan costs, net |
16,286 | 16,871 | ||||||
| Deferred tax asset |
40,663 | 40,138 | ||||||
| Other assets, net |
9,779 | 5,464 | ||||||
| Total assets |
$ | 488,038 | $ | 491,602 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Liabilities: |
||||||||
| Mortgage loans |
$ | 204,718 | $ | 206,373 | ||||
| Other secured loans |
89,560 | 89,517 | ||||||
| Accounts payable and other liabilities, net |
8,960 | 9,177 | ||||||
| Dividends and distributions payable |
1,904 | — | ||||||
| Due to affiliate |
343 | 1,852 | ||||||
| Prepaid rent |
2,773 | 841 | ||||||
| Total liabilities |
308,258 | 307,760 | ||||||
| Minority interests: |
||||||||
| Unitholders in the Operating Partnership |
73,972 | 76,458 | ||||||
| Minority interests in consolidated real estate entities |
1,451 | 1,451 | ||||||
| Total minority interests |
75,423 | 77,909 | ||||||
| Commitments and contingencies |
||||||||
| Stockholders’ equity: |
||||||||
| Preferred stock, $.01 par value, 25,000,000 shares authorized, none issued or outstanding as of March 31, 2005 and December 31, 2004 |
— | — | ||||||
| Common stock, $.01 par value, 75,000,000 shares authorized, 14,342,481 shares issued and outstanding as of March 31, 2005 and December 31, 2004 |
143 | 143 | ||||||
| Limited voting stock, $.01 par value, 20,000,000 shares authorized, 16,666,666 shares issued and outstanding as of March 31, 2005 and December 31, 2004 |
167 | 167 | ||||||
| Additional paid-in capital |
106,673 | 106,673 | ||||||
| Deficit and dividends |
(2,217 | ) | (581 | ) | ||||
| Unearned compensation, net |
(409 | ) | (469 | ) | ||||
| Total stockholders’ equity |
104,357 | 105,933 | ||||||
| Total liabilities and stockholders’ equity |
$ | 488,038 | $ | 491,602 | ||||
See accompanying notes to consolidated and combined financial statements.
1
THOMAS PROPERTIES GROUP, INC. AND THOMAS PROPERTIES GROUP, INC.
PREDECESSOR
CONSOLIDATED/COMBINED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
| The Company |
TPGI Predecessor |
|||||||
| Three Months Ended March 31, |
||||||||
| 2005 |
2004 |
|||||||
| Revenues: |
||||||||
| Rental |
$ | 8,280 | $ | 5,051 | ||||
| Tenant reimbursements |
4,914 | 2,591 | ||||||
| Parking and other |
1,443 | 496 | ||||||
| Investment advisory, management, leasing, and development services |
1,369 | 1,465 | ||||||
| Investment advisory, management, leasing and development services—unconsolidated/uncombined real estate entities |
1,627 | 989 | ||||||
| Total revenues |
17,633 | 10,592 | ||||||
| Expenses: |
||||||||
| Rental property operating and maintenance |
3,953 | 1,879 | ||||||
| Real estate taxes |
1,581 | 816 | ||||||
| Investment advisory, management, leasing, and development services |
2,104 | 2,535 | ||||||
| Rent—unconsolidated/uncombined real estate entities |
58 | 71 | ||||||
| Interest |
6,312 | 5,288 | ||||||
| Depreciation and amortization |
3,317 | 1,401 | ||||||
| General and administrative |
2,209 | — | ||||||
| Total expenses |
19,534 | 11,990 | ||||||
| Loss before gain on sale of real estate, interest income, equity in net loss of unconsolidated/uncombined real estate entities, and minority interests |
(1,901 | ) | (1,398 | ) | ||||
| Gain on sale of real estate |
— | 975 | ||||||
| Interest income |
417 | — | ||||||
| Equity in net loss of unconsolidated/uncombined real estate entities |
(1,328 | ) | (232 | ) | ||||
| Minority interests—unitholders in the Operating Partnership |
1,511 | — | ||||||
| Minority interests in consolidated real estate entities |
— | — | ||||||
| Loss before benefit for income taxes |
(1,301 | ) | (655 | ) | ||||
| Benefit for income taxes |
525 | — | ||||||
| Net loss |
$ | (776 | ) | $ | (655 | ) | ||
| Loss per share—basic and diluted |
$ | (0.05 | ) | |||||
| Weighted average common shares outstanding—basic and diluted |
14,295,236 | |||||||
See accompanying notes to consolidated and combined financial statements.
2
THOMAS PROPERTIES GROUP, INC. AND THOMAS PROPERTIES GROUP, INC.
PREDECESSOR
CONSOLIDATED/COMBINED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| The Company |
TPGI Predecessor |
|||||||
| Three Months Ended March 31, |
||||||||
| 2005 |
2004 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ | (776 | ) | $ | (655 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Gain on sale of real estate |
— | (975 | ) | |||||
| Equity in net loss of unconsolidated/uncombined real estate entities |
1,328 | 232 | ||||||
| Deferred rents |
1,176 | 1,444 | ||||||
| Depreciation and amortization expense |
3,317 | 1,401 | ||||||
| Bad debt expense |
— | 10 | ||||||
| Amortization of loan costs |
175 | 59 | ||||||
| Amortization of loan premium |
(111 | ) | — | |||||
| Amortization of above and below market leases, net |
(109 | ) | — | |||||
| Vesting of stock options and restricted stock |
132 | — | ||||||
| Minority interests |
(1,511 | ) | — | |||||
| Changes in assets and liabilities: |
||||||||
| Rents and other receivables |
(18 | ) | (814 | ) | ||||
| Receivables—unconsolidated/uncombined real estate entities |
(2,007 | ) | (537 | ) | ||||
| Deferred leasing and loan costs |
(94 | ) | (332 | ) | ||||
| Deferred tax asset |
(525 | ) | — | |||||
| Other assets |
(4,315 | ) | (7,534 | ) | ||||
| Deferred interest payable |
652 | 847 | ||||||
| Accounts payable and other liabilities |
(111 | ) | 2,273 | |||||
| Due to affiliate |
(1,509 | ) | — | |||||
| Prepaid rent |
1,932 | (257 | ) | |||||
| Net cash used in operating activities |
(2,374 | ) | (4,838 | ) | ||||
| Cash flows from investing activities: |
||||||||
| Expenditures for improvements to real estate |
(1,988 | ) | (428 | ) | ||||
| Proceeds from sale of real estate |
— | 3,321 | ||||||
| Purchases of real estate and additional interests in unconsolidated/uncombined real estate entities |
(8,800 | ) | — | |||||
| Distributions received from unconsolidated/uncombined real estate entities |
179 | 140 | ||||||
| Contributions to unconsolidated/uncombined real estate entities |
(4,330 | ) | (27 | ) | ||||
| Change in short-term investments |
14,000 | — | ||||||
| Change in restricted cash |
3,507 | 1,945 | ||||||
| Net cash provided by investing activities |
2,568 | 4,951 | ||||||
| Cash flows from financing activities: |
||||||||
| Distributions to owners of TPGI Predecessor |
— | (192 | ) | |||||
| Principal payments on notes payable |
(2,153 | ) | (3,073 | ) | ||||
| Net cash used in financing activities |
(2,153 | ) | (3,265 | ) | ||||
| Net decrease in cash and cash equivalents |
(1,959 | ) | (3,152 | ) | ||||
| Cash and cash equivalents at beginning of period |
56,506 | 3,590 | ||||||
| Cash and cash equivalents at end of period |
$ | 54,547 | $ | 438 | ||||