THOMAS PROPERTIES GROUP INC - FORM 8-K - EX-99.02 - PRESS RELEASE - February 18, 2011

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THOMAS PROPERTIES GROUP, INC. ANNOUNCES
FOURTH QUARTER 2010 RESULTS
Thomas Properties Group, Inc. (Nasdaq: TPGI) reported today the results of operations for the quarter ended December 31, 2010.
The results of operations presented in this release include TPGI’s results of operations for the three and twelve months ended December 31, 2010 and 2009. The consolidated net loss for the three months ended December 31, 2010 was $(6.2) million or $(0.18) per share compared to consolidated net loss of $(7.7) million or $(0.30) per share for the three months ended December 31, 2009. The consolidated net loss for the year ended December 31, 2010 was $(11.5) million or $(0.34) per share compared to consolidated net loss of $(21.6) million or $(0.86) per share for the year ended December 31, 2009. The decrease in the consolidated net loss for the year ended December 31, 2010 compared to the consolidated net loss for the year ended December 31, 2009 is primarily due to decreases in interest expense resulting from reduced debt balances, general and administrative expenses and impairment loss.
After tax cash flow (“ATCF”) for the three months ended December 31, 2010 was $(0.3) million or $(0.01) per share compared to after tax cash flow of $2.5 million or $0.10 per share for the three months ended December 31, 2009. After tax cash flow for the year ended December 31, 2010 was $9.1 million or $0.27 per share compared to after tax cash flow of $8.2 million or $0.33 per share for the year ended December 31, 2009. The decrease in ATCF per share for the year ended December 31, 2010 compared to the year ended December 31, 2009 was primarily the result of a larger number of shares outstanding in 2010 compared with 2009. The Company defines ATCF (a non-GAAP financial measure) as net income (loss) excluding the following items: noncontrolling interests, deferred income taxes, non-cash charges for depreciation and amortization and asset impairment, amortization of loan costs, non-cash compensation expense, straight-line rent adjustments, adjustments to reflect the fair market value of rent, and gain from extinguishment of debt. ATCF is further described in note (c) to the financial statements below.
"For the past two years, our company has been focused on stabilizing our balance sheet and maintaining occupancy in our portfolio. Since the beginning of 2009, we have reduced our pro-rata share of property debt by 34.8%, from $397.8 million to $259.5 million. In addition, we have extended the weighted average remaining life of our debt from 3.7 years to 5.9 years," said Jim Thomas, Chairman & CEO. "We have increased the occupancy of our portfolio, which at December 31, 2010 was 84.3% leased, compared with 83.6% leased at the beginning of 2009. We are now poised for growth. Going forward we will focus on internal growth through increasing occupancy and rental rates, as well as generating cash for reinvestment through sales of assets."
Supplemental Materials
The company will publish a Supplemental Financial Information package which will be available at www.tpgre.com in the Investor Relations tab, Supplemental Financial Information section.
Teleconference and Webcast
TPGI will hold a quarterly earnings conference call on Friday, February 18, 2011 at 11:00 a.m. Pacific Time. To participate in the call, dial (800) 798-2801 and (617) 614-6205 internationally, and provide confirmation code 25133739.
A live webcast (listen only mode) of the conference call will also be available at this time. A hyperlink to the live webcast will be available from the Investor Relations section of our website at www.tpgre.com. A replay of the call will be available through March 11, 2011, by calling (888) 286-8010 and (617) 801-6888 internationally, and providing confirmation code 60732686. The replay will also be available on Thomas Properties Group, Inc.’s web site at www.tpgre.com.
The webcast is also being distributed through the Thomson StreetEvents Network. Individual investors can listen to the call at www.earnings.com, Thomson’s individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson StreetEvents (www.streetevents.com), a password-protected event management site.
About Thomas Properties Group, Inc.
Thomas Properties Group, Inc., with headquarters in Los Angeles, is a full-service real estate company that owns, acquires, develops and manages primarily office, as well as mixed-use and residential properties on a nationwide basis. The company’s primary areas of focus are the acquisition and ownership of premier properties, property development and redevelopment, and property and investment management activities. For more information on Thomas Properties Group, Inc., visit www.tpgre.com.
Forward Looking Statements
Statements made in this press release or during the quarterly earnings conference call that are not historical may contain forward-looking statements. Although TPGI believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, these statements are subject to numerous risks and uncertainties. Factors that could cause actual results to differ materially from TPGI’s expectations include actual and perceived trends in various national and economic conditions

 
 

that affect global and regional markets for commercial real estate services (including interest rates), the availability of credit and equity investors to finance commercial real estate transactions, our ability to enter into or renew leases at favorable rates, which can be impacted by the financial condition of our tenants, risks associated with the success of our development and property redevelopment projects, general volatility in the securities and credit markets, and the impact of tax laws affecting real estate. For a discussion of some of the factors that may cause our results to differ from management’s expectations, see the information under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K for the year ended December 31, 2009 and our subsequent Form 10-Q quarterly reports, each of which is filed with the SEC. TPGI disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
 
 
 
 
 

 
 

THOMAS PROPERTIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(unaudited)
 
 
 
 
Three months ended December 31,
 
Twelve months ended December 31,
 
 
2010
 
2009
 
2010
 
2009
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
Rental
 
$
7,412
 
 
$
7,254
 
 
$
29,230
 
 
$
29,753
 
Tenant reimbursements
 
4,711
 
 
5,012
 
 
20,187
 
 
21,163
 
Parking and other
 
679
 
 
832
 
 
3,330
 
 
2,988
 
Investment advisory, management, leasing and development services
 
2,109
 
 
2,187
 
 
7,703
 
 
9,345
 
Investment advisory, management, leasing and development services - unconsolidated real estate entities
 
5,344
 
 
3,794
 
 
16,470
 
 
15,023
 
Reimbursement of property personnel costs
 
1,584
 
 
1,371
 
 
5,797
 
 
5,584
 
Condominium sales
 
425
 
 
7,299
 
 
14,984
 
 
30,226
 
Total revenues
 
22,264
 
 
27,749
 
 
97,701
 
 
114,082
 
Expenses:
 
 
 
 
 
 
 
 
Property operating and maintenance
 
6,390
 
 
6,900
 
 
25,049
 
 
25,339
 
Real estate and other taxes
 
1,693
 
 
1,798
 
 
6,914
 
 
7,225
 
Investment advisory, management, leasing and development services
 
4,234
 
 
3,272
 
 
12,221
 
 
11,910
 
Reimbursable property personnel costs
 
1,584
 
 
1,371
 
 
5,797
 
 
5,584
 
Cost of condominium sales
 
300
 
 
5,600
 
 
10,955
 
 
26,492
 
Interest
 
4,871
 
 
6,453
 
 
19,239
 
 
26,868
 
Depreciation and amortization
 
3,723
 
 
3,269
 
 
14,128
 
 
12,642
 
General and administrative
 
4,363
 
 
4,802
 
 
14,224
 
 
17,082
 
Impairment loss
 
4,500
 
 
4,400
 
 
4,500
 
 
13,000
 
Total expenses
 
31,658
 
 
37,865
 
 
113,027
 
 
146,142
 
Gain on sale of real estate
 
—
 
 
1,214
 
 
—
 
 
1,214
 
Gain on extinguishment of debt
 
—
 
 
11,412
 
 
—
 
 
11,921
 
Interest income
 
17
 
 
51
 
 
72
 
 
338
 
Equity in net loss of unconsolidated real estate entities
 
(246
)
 
(15,641
)
 
(1,184
)
 
(16,236
)
Loss before income taxes and noncontrolling interests
 
(9,623
)
 
(13,080
)
 
(16,438
)
 
(34,823
)
Benefit (provision) for income taxes
 
774
 
 
(203
)
 
357
 
 
(683
)
Net loss
 
(8,849
)
 
(13,283
)
 
(16,081
)
 
(35,506
)
Noncontrolling interests' share of net loss:
 
 
 
 
 
 
 
 
Unitholders in the Operating Partnership
 
2,804
 
 
4,079
 
 
4,843
 
 
11,535
 
Partners in consolidated real estate entities
 
(106
)
 
1,474
 
 
(234
)
 
2,408
 
 
 
2,698
 
 
5,553
 
 
4,609
 
 
13,943
 
TPGI share of net loss
 
$
(6,151
)
 
$
(7,730
)
 
$
(11,472
)
 
$
(21,563
)
Loss per share - basic and diluted
 
$
(0.18
)
 
$
(0.30
)
 
$
(0.34
)
 
$
(0.86
)
 
 
 
 
 
 
 
 
 
Weighted average common shares - basic and diluted
 
35,041,770
 
 
25,753,994
 
 
33,684,101
 
 
25,173,163
 
 
 
 
 
 
 
 
 
 
Reconciliation of net loss to EBDT(a):
 
 
 
 
 
 
 
 
Net loss
 
$
(6,151
)
 
$
(7,730
)
 
$
(11,472
)
 
$
(21,563
)
Adjustments:
 
 
 
 
 
 
 
 
Income tax (benefit) provision
 
(774
)
 
203
 
 
(357
)
 
683
 
Noncontrolling interests - unitholders in the Operating Partnership
 
(2,804
)
 
(4,079
)
 
(4,843
)
 
(11,535
)

 
 

Depreciation and amortization
 
3,723
 
 
3,269
 
 
14,128
 
 
12,642
 
Amortization of loan costs
 
203
 
 
318
 
 
897
 
 
690
 
Unconsolidated real estate entities:
 
 
 
 
 
 
 
 
Depreciation and amortization
 
2,714
 
 
4,811
 
 
15,599
 
 
19,412
 
Amortization of loan costs
 
281
 
 
214
 
 
718
 
 
897
 
Earnings before depreciation, amortization and taxes
 
$
(2,808
)
 
$
(2,994
)
 
$
14,670
 
 
$
1,226
 
TPGI share of EBDT (b)
 
$
(2,017
)
 
$
(1,950
)
 
$
10,408
 
 
$
790
 
EBDT per share - basic and diluted
 
$
(0.06
)
 
$
(0.08
)
 
$
0.31
 
 
$
0.03
 
Weighted average common shares - basic
 
35,041,770
 
 
25,753,994
 
 
33,684,101
 
 
25,173,163
 
Weighted average common shares - diluted
 
35,041,770
 
 
25,753,994
 
 
33,949,968
 
 
25,173,163
 
 
 
 
 
 
 
 
 
 
Reconciliation of net loss to ATCF(c):
 
 
 
 
 
 
 
 
Net loss
 
$
(6,151
)
 
$
(7,730
)
 
$
(11,472
)
 
$
(21,563
)
Adjustments:
 
 
 
 
 
 
 
 
Income tax (benefit) provision
 
(774
)
 
203
 
 
(357
)
 
683
 
Noncontrolling interests - unitholders in the Operating Partnership
 
(2,804
)
 
(4,079
)
 
(4,843
)
 
(11,535
)
Depreciation and amortization
 
3,723
 
 
3,269
 
 
14,128
 
 
12,642
 
Amortization of loan costs
 
203
 
 
318
 
 
897
 
 
690
 
Non-cash compensation expense
 
205
 
 
581
 
 
672
 
 
2,838
 
Straight-line rent adjustments
 
(775
)
 
(162
)
 
(1,842
)
 
(924
)
Adjustments to reflect the fair market value of rent
 
1
 
 
—
 
 
2
 
 
23
 
Impairment loss
 
4,500
 
 
4,400
 
 
4,500
 
 
13,000
 
Gain on extinguishment of debt
 
—
 
 
(11,412
)
 
—
 
 
(11,921
)
Unconsolidated real estate entities:
 
 
 
 
 
 
 
 
Depreciation and amortization
 
2,714
 
 
4,811
 
 
15,599
 
 
19,412
 
Amortization of loan costs
 
281
 
 
214
 
 
718
 
 
897
 
Straight-line rent adjustments
 
(294
)
 
(91
)
 
(1,191
)
 
(1,565
)
Adjustments to reflect the fair market value of rent
 
(235
)
 
(368
)
 
(1,102
)
 
(1,394
)
Impairment loss
 
—
 
 
14,000
 
 
—
 
 
16,012
 
Gain on extinguishment of debt
 
(331
)
 
—
 
 
(1,953
)
 
(4,189
)
ATCF before income taxes
 
$
263
 
 
$
3,954
 
 
$
13,756
 
 
$
13,106
 
TPGI share of ATCF before income taxes (b)
 
$
188
 
 
$
2,575
 
 
$
9,759
 
 
$
8,443
 
TPGI income tax expense - current
 
(494
)
 
(100
)
 
(639
)
 
(232
)
TPGI share of ATCF
 
$
(306
)
 
$
2,475
 
 
$
9,120
 
 
$
8,211
 
ATCF per share - basic & diluted
 
$
(0.01
)
 
$
0.10
 
 
$
0.27
 
 
$
0.33
 
Weighted average common shares - basic
 
35,041,770
 
 
25,753,994
 
 
33,684,101
 
 
25,173,163
 
Weighted average common shares - diluted
 
35,041,770
 
 
25,753,994
 
 
33,949,968
 
 
25,173,163
 
 
a.    
EBDT is a non-GAAP financial measure and may not be directly comparable to similarly-titled measures reported by other companies. We define EBDT as net income (loss) excluding the following items: i) income tax expense (benefit); ii) noncontrolling interests; iii) depreciation and amortization; and iv) amortization of loan costs. EBDT provides a performance measure that, when compared year over year, reflects the impact to operations from changes to occupancy rates, rental rates, operating costs, development and redevelopment activities, general and administrative expenses, and interest costs, and provides perspective on operating performance not immediately apparent from net income. EBDT should be considered only as a supplement to net income as a measure of our performance. EBDT also assists management in identifying trends for purposes of financial planning and forecasting results. However, the usefulness of EBDT as a performance measure is limited and EBDT should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs. EBDT also should not be used as a supplement to or substitute for cash flow from operating activities (computed in accordance with GAAP).
b.    
Based on an interest in our operating partnership of 71.83% and 70.95% for the three and twelve months ended December 31, 2010, respectively, and 65.13% and 64.42% for the three and twelve months ended December 31, 2009,

 
 

respectively.
c.    
ATCF is a non-GAAP financial measure and may not be directly comparable to similarly-titled measures reported by other companies. We define ATCF as net income (loss) excluding the following items: i) deferred income tax expense (benefit); ii) noncontrolling interests; iii) non-cash charges for depreciation and amortization and asset impairment; iv) amortization of loan costs; v) non-cash compensation expense; vi) the adjustment to recognize rental revenues using the straight-line method; vii) the adjustment to rental revenue to reflect the fair market value of rents; and viii) gain on extinguishment of debt. Management utilizes ATCF data in assessing performance of our business operations in period-to-period comparisons and for financial planning purposes. ATCF should be considered only as a supplement to net income as a measure of our performance. ATCF should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs. ATCF also should not be used as a supplement to or substitute for cash flow from operating activities (computed in accordance with GAAP).
 

 
 

THOMAS PROPERTIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
 
 
December 31,
2010
 
 
December 31,
2009
 
 
(unaudited)
 
(audited)
ASSETS
 
 
 
Investments in real estate:
 
 
 
Operating properties, net
$
266,859
 
 
$
276,603
 
Land improvements—development properties
96,585
 
 
95,558
 
 
363,444
 
 
372,161
 
Condominium units held for sale
49,827
 
 
64,101
 
Improved land held for sale
 
2,819
 
 
4,508
 
Investments in unconsolidated real estate entities
17,975
 
 
14,458
 
Cash and cash equivalents, unrestricted
42,363
 
 
35,935
 
Restricted cash
13,069
 
 
12,071
 
Rents and other receivables, net
1,754
 
 
2,073
 
Receivables from unconsolidated real estate entities
2,979
 
 
2,010
 
Deferred rents
14,592
 
 
12,954
 
Deferred leasing and loan costs, net
13,538
 
 
15,375
 
Other assets, net
17,875
 
 
23,757
 
Total assets
$
540,235
 
 
$
559,403
 
LIABILITIES AND EQUITY
 
 
 
Liabilities:
 
 
 
Mortgage loans
$
254,612
 
 
$
255,104
 
Other secured loans
45,924
 
 
63,132
 
Accounts payable and other liabilities, net
29,020
 
 
35,573
 
Prepaid rent and deferred revenue
2,888
 
 
3,249
 
Total liabilities
332,444
 
 
357,058
 
 
 
 
 
Equity:
 
 
 
Stockholders’ equity:
 
 
 
Preferred stock, $.01 par value, 25,000,000 shares authorized, none issued or outstanding as of December 31, 2010 and 2009
—
 
 
—
 
Common stock, $.01 par value, 225,000,000 shares authorized, 36,943,394 and 30,878,621 shares issued and outstanding as of December 31, 2010 and December 31, 2009, respectively
369
 
 
308
 
Limited voting stock, $.01 par value, 20,000,000 shares authorized, 12,313,331 and 13,813,331 shares issued and outstanding as of December 31, 2010 and December 31, 2009, respectively
123
 
 
138
 
Additional paid-in capital
207,953
 
 
185,344
 
Retained deficit and dividends
(60,790
)
 
(49,394
)
Total stockholders’ equity
147,655
 
 
136,396
 
Noncontrolling interests:
 
 
 
Unitholders in the Operating Partnership
51,478
 
 
63,042
 
Partners in consolidated real estate entities
8,658
 
 
2,907
 
Total noncontrolling interests
60,136
 
 
65,949
 
Total equity
207,791
 
 
202,345
 
Total liabilities and equity
$
540,235
 
 
$
559,403
 
 
 
 

 
 

Contact: Thomas Properties Group, Inc.
Website: www.tpgre.com
Diana Laing, Chief Financial Officer
213-613-1900
 
 
 
 

 

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