THOMAS PROPERTIES GROUP INC - FORM 8-K - EX-99.2 - PRESS RELEASE - May 6, 2011

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Exhibit 99.2
THOMAS PROPERTIES GROUP, INC. ANNOUNCES
FIRST QUARTER 2011 RESULTS
Thomas Properties Group, Inc. (Nasdaq: TPGI) reported today the results of operations for the quarter ended March 31, 2011.
The results of operations presented in this release include TPGI’s results of operations for the three months ended March 31, 2011 and 2010. The consolidated net loss for the three months ended March 31, 2011 was $(3.3) million or $(0.09) per share compared to consolidated net loss of $(2.4) million or $(0.08) per share for the three months ended March 31, 2010. The increase in the consolidated net loss is primarily due to a decrease in condominium unit sales at Murano, as we closed on the sale of only one condominium unit during the three months ended March 31, 2011 compared to nine units during the three months ended March 31, 2010.
After tax cash flow (“ATCF”) for the three months ended March 31, 2011 was $1.8 million or $0.05 per share compared to ATCF of $4.0 million or $0.13 per share for the three months ended March 31, 2010. The decrease in ATCF per share for the three months ended March 31, 2011 compared to the three months ended March 31, 2010 was primarily the result of the decrease in condominium unit sales at Murano and the increased number of shares of our common stock outstanding resulting from the issuances of common stock during 2010. 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) and reconciled to net loss in the financial statements below.
“Our property operations are improving, with occupancy at March 31, 2011 at 85.5%, compared with 83.5% at March 31, 2010. Our same-property results show an increase in same property net operating income of 11.7% on a cash basis and 8.4% on a GAAP basis, for the three months ended March 31, 2011 compared with the three months ended March 31, 2010,” said James A. Thomas, Chairman and CEO. “In addition, our balance sheet is stable and we have a very manageable debt maturity schedule.”
 
Mr. Thomas continued, “Focusing on the future, our goal is to expand our asset base and maximize the portfolio's recurring cash flow and revenue growth. We plan to reduce our development pipeline by selling excess land, and to sell operating properties that have achieved their maximum value. The sales proceeds will be redeployed into operating properties in high barrier-to-entry markets to generate superior growth in net operating income.”
 
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, May 6, 2011 at 10:00 a.m. Pacific Time. To participate in the call, dial (866) 356-3377 and (617) 597-5392 internationally, and provide confirmation code 19719862.
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 May 27, 2011, by calling (888) 286-8010 and (617) 801-6888 internationally, and providing confirmation code 54004945. 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, 2010, which is filed with the Securities and Exchange Commission. 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 March 31,
 
 
 
2011
 
2010
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
Rental
 
$
7,312
 
 
$
7,248
 
 
Tenant reimbursements
 
6,329
 
 
5,039
 
 
Parking and other
 
802
 
 
1,004
 
 
Investment advisory, management, leasing and development services
 
811
 
 
1,983
 
 
Investment advisory, management, leasing and development services - unconsolidated real estate entities
 
4,661
 
 
3,504
 
 
Reimbursement of property personnel costs
 
1,532
 
 
1,412
 
 
Condominium sales
 
480
 
 
4,153
 
 
Total revenues
 
21,927
 
 
24,343
 
 
Expenses:
 
 
 
 
 
Property operating and maintenance
 
6,587
 
 
6,252
 
 
Real estate and other taxes
 
1,887
 
 
1,761
 
 
Investment advisory, management, leasing and development services
 
3,029
 
 
2,359
 
 
Reimbursable property personnel costs
 
1,532
 
 
1,412
 
 
Cost of condominium sales
 
334
 
 
3,018
 
 
Interest
 
4,664
 
 
4,809
 
 
Depreciation and amortization
 
3,393
 
 
3,470
 
 
General and administrative
 
3,930
 
 
3,675
 
 
Total expenses
 
25,356
 
 
26,756
 
 
Interest income
 
13
 
 
9
 
 
Equity in net loss of unconsolidated real estate entities
 
(694
)
 
(840
)
 
Loss before income taxes and noncontrolling interests
 
(4,110
)
 
(3,244
)
 
Provision for income taxes
 
(96
)
 
(159
)
 
Net loss
 
(4,206
)
 
(3,403
)
 
Noncontrolling interests' share of net loss:
 
 
 
 
 
Unitholders in the Operating Partnership
 
1,076
 
 
1,026
 
 
Partners in consolidated real estate entities
 
(155
)
 
(44
)
 
 
 
921
 
 
982
 
 
TPGI share of net loss
 
$
(3,285
)
 
$
(2,421
)
 
Loss per share - basic and diluted
 
$
(0.09
)
 
$
(0.08
)
 
Weighted average common shares - basic and diluted
 
36,534,505
 
 
30,436,364
 
 
 
 
 
 
 
 
Reconciliation of net loss to EBDT(a):
 
 
 
 
 
Net loss
 
$
(3,285
)
 
$
(2,421
)
 
Adjustments:
 
 
 
 
 
Income tax provision
 
96
 
 
159
 
 
Noncontrolling interests - unitholders in the Operating Partnership
 
(1,076
)
 
(1,026
)
 
Depreciation and amortization
 
3,393
 
 
3,470
 
 
Amortization of loan costs
 
202
 
 
256
 
 
Unconsolidated real estate entities:
 
 
 
 
 
Depreciation and amortization
 
3,197
 
 
4,799
 
 
Amortization of loan costs
 
105
 
 
167
 
 
Earnings before depreciation, amortization and taxes
 
$
2,632
 
 
$
5,404
 
 

 
 

TPGI share of EBDT (b)
 
$
1,967
 
 
$
3,718
 
 
EBDT per share - basic and diluted
 
$
0.05
 
 
$
0.12
 
 
Weighted average common shares - basic
 
36,534,505
 
 
30,436,364
 
 
Weighted average common shares - diluted
 
36,808,767
 
 
30,436,364
 
 
 
 
 
 
 
 
Reconciliation of net loss to ATCF(c):
 
 
 
 
 
Net loss
 
$
(3,285
)
 
$
(2,421
)
 
Adjustments:
 
 
 
 
 
Income tax provision
 
96
 
 
159
 
 
Noncontrolling interests - unitholders in the Operating Partnership
 
(1,076
)
 
(1,026
)
 
Depreciation and amortization
 
3,393
 
 
3,470
 
 
Amortization of loan costs
 
202
 
 
256
 
 
Non-cash compensation expense
 
369
 
 
508
 
 
Straight-line rent adjustments
 
(63
)
 
540
 
 
Adjustments to reflect the fair market value of rent
 
2
 
 
—
 
 
Unconsolidated real estate entities:
 
 
 
 
 
Depreciation and amortization
 
3,197
 
 
4,799
 
 
Amortization of loan costs
 
105
 
 
167
 
 
Straight-line rent adjustments
 
(228
)
 
(282
)
 
Adjustments to reflect the fair market value of rent
 
(219
)
 
(301
)
 
ATCF before income taxes
 
$
2,493
 
 
$
5,869
 
 
TPGI share of ATCF before income taxes (b)
 
$
1,863
 
 
$
4,037
 
 
TPGI income tax expense - current
 
(46
)
 
(50
)
 
TPGI share of ATCF
 
$
1,817
 
 
$
3,987
 
 
ATCF per share - basic & diluted
 
$
0.05
 
 
$
0.13
 
 
Weighted average common shares - basic
 
36,534,505
 
 
30,436,364
 
 
Weighted average common shares - diluted
 
36,808,767
 
 
30,436,364
 
 
 
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 74.76% and 68.79% for the three months ended March 31, 2011, and 2010, 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)
 
 
March 31, 2011
 
December 31, 2010
 
(unaudited)
 
(audited)
ASSETS
 
 
 
Investments in real estate:
 
 
 
Operating properties, net
$
265,484
 
 
$
266,859
 
Land improvements—development properties
96,580
 
 
96,585
 
 
362,064
 
 
363,444
 
Condominium units held for sale
49,541
 
 
49,827
 
Improved land held for sale
 
2,823
 
 
2,819
 
Investments in unconsolidated real estate entities
16,322
 
 
17,975
 
Cash and cash equivalents, unrestricted
39,602
 
 
42,363
 
Restricted cash
8,414
 
 
13,069
 
Rents and other receivables, net
2,014
 
 
1,754
 
Receivables from unconsolidated real estate entities
2,286
 
 
2,979
 
Deferred rents
14,855
 
 
14,592
 
Deferred leasing and loan costs, net
12,982
 
 
13,538
 
Other assets, net
22,499
 
 
17,875
 
Total assets
$
533,402
 
 
$
540,235
 
LIABILITIES AND EQUITY
 
 
 
Liabilities:
 
 
 
Mortgage loans
$
254,190
 
 
$
254,612
 
Other secured loans
46,197
 
 
45,924
 
Accounts payable and other liabilities, net
25,199
 
 
29,020
 
Prepaid rent and deferred revenue
3,488
 
 
2,888
 
Total liabilities
329,074
 
 
332,444
 
Equity:
 
 
 
Stockholders’ equity:
 
 
 
Preferred stock, $.01 par value, 25,000,000 shares authorized, none issued
     or outstanding as of March 31, 2011 and December 31, 2010
—
 
 
—
 
Common stock, $.01 par value, 225,000,000 shares authorized, 37,094,995 and
     36,943,394 shares issued and outstanding as of March 31, 2011 and
     December 31, 2010, respectively
371
 
 
369
 
Limited voting stock, $.01 par value, 20,000,000 shares authorized, 12,313,331
     shares issued and outstanding as of March 31, 2011 and December 31, 2010
123
 
 
123
 
Additional paid-in capital
208,220
 
 
207,953
 
Retained deficit and dividends
(64,064
)
 
(60,790
)
Total stockholders’ equity
144,650
 
 
147,655
 
Noncontrolling interests:
 
 
 
Unitholders in the Operating Partnership
50,496
 
 
51,478
 
Partners in consolidated real estate entities
9,182
 
 
8,658
 
Total noncontrolling interests
59,678
 
 
60,136
 
Total equity
204,328
 
 
207,791
 
Total liabilities and equity
$
533,402
 
 
$
540,235
 
 

 
 

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

 

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