EX-99.1 2 dex991.htm THOMAS PROPERTIES GROUP, INC. SUPPLEMENTAL FINANCIAL INFORMATION Thomas Properties Group, Inc. Supplemental Financial Information

Exhibit 99.1

LOGO

Thomas Properties Group, Inc.

Supplemental Financial Information

For the Third Quarter 2009


Thomas Properties Group, Inc.

Supplemental Financial Information

For the Quarter Ended September 30, 2009

TABLE OF CONTENTS

 

Corporate

  

Company Background

   1

Supplemental Financial Information

  

Operating and Financial Information

   2

Consolidated Statements of Operations

   3

Consolidated Balance Sheets

   4

Unconsolidated Real Estate Entities Statements of Operations

   5

Unconsolidated Real Estate Entities Balance Sheets

   6

Pro-Rata Consolidated Statements of Operations (Non-GAAP)

   7

Pro-Rata Consolidated Balance Sheets (Non-GAAP)

   9

Earnings Before Depreciation, Amortization and Taxes (EBDT) (Non-GAAP)

   10

After Tax Cash Flow (ATCF) (Non-GAAP)

   12

Investment Advisory, Management, Leasing and Development Services

   14

Portfolio Data

   15

Debt Summary

   19

Capital Structure

   21

Other Information

   22

This supplemental financial information, together with other statements and information publicly disseminated by Thomas Properties Group, Inc., contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements reflect management’s current views with respect to financial results related to future events. Such statements are also based on assumptions and expectations which may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial or otherwise, may differ from the results discussed in the forward-looking statements. Management does not undertake any obligation to update information provided in forward-looking statements other than regularly scheduled releases of information. A discussion of some of the factors that may affect our future results is set forth under the captions “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in our annual reports on Form 10-K and our quarterly reports on Form 10-Q, which are filed with the Securities and Exchange Commission.


Thomas Properties Group, Inc.

Supplemental Financial Information

COMPANY BACKGROUND

Thomas Properties Group, Inc. (TPGI) is a full-service real estate operating company that owns, acquires, develops and manages primarily office, as well as mixed-use and residential properties on a nationwide basis. Our company’s primary areas of focus are the acquisition and ownership of premier properties (through strategic joint ventures), property development and redevelopment, and investment and property management activities.

Our properties are located in Southern California and Sacramento, California; Philadelphia, Pennsylvania; Northern Virginia; Houston, Texas; and Austin, Texas. As of September 30, 2009, we own interests in and asset manage 27 operating properties with 13.2 million rentable square feet and provide asset and/or property management services on behalf of third parties for an additional four operating properties with 2.2 million rentable square feet.

Our Investment Management Platform

Our sponsorship of partnerships and joint ventures provides us with additional institutional capital for investment and shared risk exposure. These arrangements provide us with the opportunity to earn fees for asset management, property management, leasing and other services, as well as possible carried interest or promote fees.

Our Thomas High Performance Green Fund is intended to invest in commercial properties to be developed or redeveloped into high performance, energy-efficient, high productivity buildings. The fund currently has total capital commitments of $180 million, of which we have committed $50 million, and all of which is unfunded. The Green Fund is expected to invest nationally, focusing on markets with green sensibility and attractive office fundamentals. Green Fund investments will potentially seek ratings from the U. S. Green Building Council’s LEED Green Building Rating System.

TPG/CalSTRS is a value-add/core-plus joint venture with total capital commitments of $378.3 million of which $6.6 million is unfunded. Additionally, CalSTRS and TPG are committed to fund up to $3.75 million and $1.25 million, respectively, as may be required to fund temporary operating cash shortfalls. This joint venture, in which we own a 25% interest, currently owns twelve office properties. The joint venture also holds a 25% interest in a joint venture which owns an additional ten office properties in Austin, Texas.

Our Fee Services

We have been engaged by NBC Universal to entitle and master plan approximately 124 acres on their Universal Studios Hollywood backlot for housing and related retail and community-serving uses. We are pursuing environmental clearance and governmental approvals for approximately 2,937 residential units and 180,000 square feet of retail and community-serving space. We earn a monthly developer fee on this project.

We have been retained by Korean Air, a subsidiary of Hanjin Group, as fee developer for the entitlement, design and redevelopment of the 2.7 acre Wilshire Grand property in downtown Los Angeles, for which we are proposing the development of two buildings to include approximately 1.5 million square feet of office, 560 hotel rooms, and 100 residential condominiums, with supporting retail and restaurant uses, for a total project size of up to approximately 2.5 million gross square feet. We earn a monthly developer fee on this project.

Significant Recent Events

On October 10, 2009, the Campus El Segundo construction loan in the amount of $17.0 million was modified. The loan has been extended to July 31, 2011, and has three one-year extension options at our election subject to our compliance with certain loan covenants.

On October 13, 2009, the Four Points Centre construction loan was modified. The loan has been extended to July 31, 2012 with two one-year extension options subject to certain conditions.

On October 14, 2009, we entered into a discounted payoff agreement with the holders of the existing mezzanine debt on Two Commerce Square. We have agreed to pay off the two mezzanine loans, with a principal amount of approximately $36.1 million, for a discounted amount of $25.0 million on or before November 30, 2009 (subject to an extension right of up to 29 days).

On October 6, 2009 we sold a 1.9 acre land parcel adjacent to our Four Points Centre development property in Austin, Texas, which is subject to a ground lease to a retail tenant. The land was sold for $2.1 million; we expect to recognize a gain of approximately $1.2 million in the fourth quarter, 2009.

Continuing the momentum generated during the Murano accelerated marketing event held on June 27, 2009, we entered into contracts for an additional 24 units and settled 56 units during the quarter; resulting in approximately a $25.0 million reduction in our construction loan balance. Subsequent to September 30, 2009, we have entered into contracts to sell an additional six units.

 

1


Thomas Properties Group, Inc.

Supplemental Financial Information

OPERATING AND FINANCIAL INFORMATION

Financial Measures

This supplemental financial information includes certain financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) under the full consolidation accounting method, and certain financial measures prepared in accordance with the pro-rata consolidation method (non-GAAP). Along with net income, we use two additional measures, Earnings before Depreciation, Amortization and Deferred Taxes (“EBDT”) and After Tax Cash Flow (“ATCF”), to report operating results. EBDT and ATCF are non-GAAP financial measures and may not be directly comparable to similarly-titled measures reported by other companies. We believe the financial measures presented under the pro-rata consolidation method provide supplemental information helpful to an understanding of our results of operations. Although these financial measures are not presented in accordance with GAAP, we believe these measures assist investors in understanding our business and operating results. We believe this information provides useful supplemental data regarding the underlying economics of our business operations because operating results presented under GAAP may include items that are nonrecurring or not necessarily relevant to ongoing operations, or difficult to forecast for future periods. Management uses these non-GAAP financial measures to review our company’s operating results for comparative purposes with respect to previous periods or forecasts, and also to evaluate future prospects. Our investors can also use these non-GAAP financial measures as supplementary information to evaluate operating performance. Our non-GAAP financial measures are not intended to be performance measures that should be regarded as alternatives to, or more meaningful than, our GAAP financial measures. Non-GAAP financial measures have limitations as they do not include all items of income and expense that affect our operations, and accordingly should always be considered as supplemental to our financial results presented in accordance with GAAP.

Pro-Rata Consolidated Statements of Operations and Pro-Rata Consolidated Balance Sheets

Included are pro-rata consolidated statements of operations, as well as pro-rata consolidated balance sheets, because we believe this information is useful to investors as this method reflects the manner in which we operate our business, and provides more detailed information regarding the operations of the unconsolidated investments. We have made investments in which our economic ownership is less than 100% as a means of procuring additional investment opportunities and sharing risk. A significant amount of our business activity has and will continue to be conducted through our unconsolidated investments. Under GAAP, these investments are not consolidated in our financial statements. Under the pro-rata consolidation method, we present the results of our investments proportionate to our share of ownership. Our management considers the performance of our unconsolidated investments both individually and as a contributing factor to our operating performance for purposes of financial planning and making operating decisions. We believe this presentation of the performance of our unconsolidated investments is helpful to investors in understanding and evaluating our current operating performance as well as for purposes of period-to-period comparisons. We provide reconciliations from the full consolidation method to the pro-rata consolidation method in this supplemental financial information.

Earnings Before Depreciation, Amortization and Deferred Taxes (EBDT) and After Tax Cash Flow (ATCF)

EBDT and ATCF are non-GAAP financial measures and may not be directly comparable to similarly-titled measures reported by other companies. We present these financial measures under the pro-rata consolidation method to provide supplemental information helpful to an understanding of our results of operations. Although these financial measures are not presented in accordance with GAAP, we believe these measures assist investors in understanding our business and operating results. EBDT and ATCF reflect operating performance measurements for our company that assist management in evaluating trends for comparative and planning purposes. However our non-GAAP financial measures are not intended to be regarded as alternatives to, or more meaningful than, our GAAP financial measures.

See page 10 for a discussion of EBDT and a reconciliation of EBDT to net income (loss) and page 12 for a discussion of ATCF and a reconciliation of ATCF to net income (loss).

 

2


Thomas Properties Group, Inc.

Supplemental Financial Information

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)

 

     Three months ended
September 30,
    Nine months ended
September 30,
 
     2009     2008     2009     2008  
           (revised)              

Revenues:

        

Rental

   $ 7,385      $ 7,482      $ 22,499      $ 23,317   

Tenant reimbursements

     4,566        5,991        16,151        20,116   

Parking and other

     571        925        2,156        2,747   

Investment advisory, management, leasing and development services

     2,622        1,799        7,158        5,570   

Investment advisory, management, leasing and development services- unconsolidated real estate entities

     3,388        4,244        11,229        13,670   

Reimbursement of property personnel costs

     1,425        1,657        4,213        5,075   

Condominium sales

     22,927        3,622        22,927        79,758   
                                

Total revenues

     42,884        25,720        86,333        150,253   
                                

Expenses:

        

Property operating and maintenance

     5,936        6,018        18,439        18,877   

Real estate taxes

     1,943        1,586        5,427        4,762   

Investment advisory, management, leasing and development services

     2,799        4,142        8,638        12,520   

Reimbursable property personnel costs

     1,425        1,657        4,213        5,075   

Cost of condominium sales

     20,892        3,113        20,892        62,228   

Rent-unconsolidated real estate entities

     42        65        208        191   

Interest

     6,787        5,803        20,415        13,740   

Depreciation and amortization

     3,008        2,948        9,373        8,498   

General and administrative

     3,865        4,173        12,072        13,556   

Impairment loss

     8,600        —          8,600        —     
                                

Total expenses

     55,297        29,505        108,277        139,447   
                                

Gain on sale of real estate

     —          —          —          3,618   

Gain from early extinguishment of debt

     —          —          509        255   

Interest income

     34        587        287        2,341   

Equity in net loss of unconsolidated real estate entities

     (3,103     (3,968     (595     (9,108
                                

(Loss) income before income taxes and noncontrolling interests

     (15,482     (7,166     (21,743     7,912   

(Provision) benefit for income taxes

     (242     1,359        (480     (2,695
                                

Net (loss) income

     (15,724     (5,807     (22,223     5,217   

Noncontrolling interests’ share of net loss (income):

        

Unitholders in the Operating Partnership

     6,007        2,733        7,456        (3,126

Partners in consolidated real estate entities

     (1,195     133        934        133   
                                
     4,812        2,866        8,390        (2,993
                                

TPGI share of net (loss) income

   $ (10,912   $ (2,941   $ (13,833   $ 2,224   
                                

(Loss) income per share-basic and diluted

   $ (0.43   $ (0.13   $ (0.56   $ 0.09   

Weighted average common shares-basic and diluted

     25,212,319        23,701,294        24,978,388        23,681,997   

 

3


Thomas Properties Group, Inc.

Supplemental Financial Information

CONSOLIDATED BALANCE SHEETS

(in thousands)

 

     September 30,
2009
    December 31,
2008
 
     (unaudited)        
ASSETS     

Investments in real estate:

    

Operating properties, net

   $ 276,878      $ 274,784   

Land improvements – development properties

     97,715        100,886   

Construction in progress

     —          1,274   
                
     374,593        376,944   
                

Condominium units held for sale

     73,567        101,112   

Real estate held for sale

     619        609   

Investments in unconsolidated real estate entities

     34,096        29,098   

Cash and cash equivalents, unrestricted

     50,582        69,023   

Restricted cash

     15,194        16,665   

Rents and other receivables, net

     4,537        4,452   

Receivables from condominium sales contracts, net

     1,786        10,485   

Receivables from unconsolidated real estate entities

     2,503        4,701   

Above market rents, net

     894        1,070   

Deferred rents

     11,670        10,604   

Deferred leasing and loan costs, net

     14,646        15,018   

Deferred tax asset, net of valuation allowance

     15,729        15,534   

Other assets, net

     6,356        5,120   
                

Total assets

   $ 606,772      $ 660,435   
                
     September 30,
2009
    December 31,
2008
 
     (unaudited)        
LIABILITIES AND EQUITY     

Liabilities:

    

Mortgage, other secured and unsecured loans

   $ 366,060      $ 387,945   

Accounts payable and other liabilities

     13,922        27,750   

Unrecognized tax benefits

     17,582        17,078   

Below market rents, net

     730        920   

Deferred revenue

     822        819   

Dividends and distributions payable

     500        2,377   

Prepaid rent

     1,569        2,819   
                

Total liabilities

     401,185        439,708   
                

Equity:

    

Stockholders’ equity:

    

Common stock

     257        238   

Limited voting stock

     138        145   

Additional paid-in capital

     170,598        158,341   

Retained deficit and dividends including $143 and $186 of other comprehensive loss as of September 30, 2009 and December 31, 2008, respectively

     (41,733     (26,980
                

Total stockholders’ equity

     129,260        131,744   

Noncontrolling interests:

    

Unitholders in the Operating Partnership

     71,908        85,210   

Partners in consolidated real estate entities

     4,419        3,773   
                

Total noncontrolling interests

     76,327        88,983   
                

Total equity

     205,587        220,727   
                

Total liabilities and equity

   $ 606,772      $ 660,435   
                

 

4


Thomas Properties Group, Inc.

Supplemental Financial Information

UNCONSOLIDATED REAL ESTATE ENTITIES STATEMENTS OF OPERATIONS

(in thousands)

(unaudited)

The following are the combined statements of operations of our unconsolidated real estate entities for the three and nine months ended September 30, 2009 and 2008.

 

     Three months ended
September 30,
    Nine months ended
September 30,
 
     2009     2008     2009     2008  

Revenues:

        

Rental

   $ 52,102      $ 50,775      $ 157,133      $ 150,847   

Tenant reimbursements

     20,296        19,817        65,266        64,345   

Parking and other

     6,975        7,479        21,238        25,436   
                                

Total revenues

     79,373        78,071        243,637        240,628   
                                

Expenses:

        

Property operating and maintenance

     31,069        31,801        90,426        92,902   

Real estate taxes

     9,777        12,505        32,067        33,414   

Interest

     24,959        30,710        77,925        95,410   

Depreciation and amortization

     29,251        32,184        90,749        94,990   

Impairment loss

     8,049        —          8,049        —     
                                

Total expenses

     103,105        107,200        299,216        316,716   
                                

Loss from continuing operations

     (23,732     (29,129     (55,579     (76,088

Gain on extinguishment of debt

     —          —          67,017        —     

Loss from discontinued operations

     (86     (34     (83     (105
                                

Net (loss) income

   $ (23,818   $ (29,163   $ 11,355      $ (76,193
                                

 

5


Thomas Properties Group, Inc.

Supplemental Financial Information

UNCONSOLIDATED REAL ESTATE ENTITIES BALANCE SHEETS

(in thousands)

(unaudited)

The following are the combined balance sheets of our unconsolidated real estate entities as of September 30, 2009 and December 31, 2008.

 

     September 30,
2009
   December 31,
2008
          (revised)
ASSETS      

Investments in real estate, net

   $ 2,310,796    $ 2,335,067

Land held for sale

     3,853      3,835

Cash and cash equivalents, unrestricted

     20,447      26,884

Restricted cash

     92,465      64,395

Rents and other receivables, net

     3,797      5,386

Above market rents, net

     2,220      2,988

Deferred rents

     73,254      67,378

Deferred leasing and loan costs, net

     150,836      168,980

Other assets

     11,733      7,163

Assets associated with discontinued operations

     —        86
             

Total assets

   $ 2,669,401    $ 2,682,162
             
LIABILITIES AND EQUITY      

Mortgage, other secured, and unsecured loans

   $ 2,221,674    $ 2,237,717

Accounts and interest payable and other liabilities

     95,923      105,998

Below market rents, net

     67,019      80,467

Obligations associated with discontinued operations

     —        121
             

Total liabilities

     2,384,616      2,424,303
             

Redeemable noncontrolling interests

     —        18,771

Owners’ equity

     284,785      239,088
             

Total liabilities and equity

   $ 2,669,401    $ 2,682,162
             

 

6


Thomas Properties Group, Inc.

Supplemental Financial Information

PRO-RATA CONSOLIDATED STATEMENTS OF OPERATIONS (NON-GAAP)

(in thousands)

(unaudited)

The following are the pro-rata consolidated statements of operations of TPGI for the three months ended September 30, 2009 and 2008, including reconciliation from the consolidated statements of operations to the pro-rata consolidated statements of operations.

 

    For the three months ended September 30, 2009     For the three months ended September 30, 2008  
    Consolidated     Plus
Unconsolidated
Investments at
Pro-Rata
    Pro-Rata     Consolidated     Plus
Unconsolidated
Investments at
Pro-Rata
    Pro-Rata  

Revenues:

           

Rental

  $ 7,385      $ 10,023      $ 17,408      $ 7,482      $ 9,645      $ 17,127   

Tenant reimbursements

    4,566        3,360        7,926        5,991        3,536        9,527   

Parking and other

    571        1,224        1,795        925        1,366        2,291   

Investment advisory, management, leasing and development services

    2,622        —          2,622        1,799        —          1,799   

Investment advisory, management, leasing and development services- unconsolidated real estate entities

    3,388        74        3,462        4,244        46        4,290   

Reimbursement of property personnel costs

    1,425        —          1,425        1,657        —          1,657   

Condominium sales

    22,927        —          22,927        3,622        —          3,622   
                                               

Total revenues

    42,884        14,681        57,565        25,720        14,593        40,313   
                                               

Expenses:

           

Property operating and maintenance

    5,936        5,535        11,471        6,018        5,685        11,703   

Real estate taxes

    1,943        1,568        3,511        1,586        2,251        3,837   

Investment advisory, management, leasing and development services

    2,799        —          2,799        4,142        —          4,142   

Reimbursable property personnel costs

    1,425        —          1,425        1,657        —          1,657   

Cost of condominium sales

    20,892        —          20,892        3,113        —          3,113   

Rent-unconsolidated real estate entities

    42        —          42        65        —          65   

Interest

    6,787        3,964        10,751        5,803        5,100        10,903   

Depreciation and amortization

    3,008        4,773        7,781        2,948        5,517        8,465   

General and administrative

    3,865        —          3,865        4,173        —          4,173   

Impairment loss

    8,600        2,012        10,612        —          —          —     
                                               

Total expenses

    55,297        17,852        73,149        29,505        18,553        48,058   
                                               

Interest income

    34        90        124        587        —          587   

Equity in net income (loss) of unconsolidated real estate entities

    (3,103     3,103        —          (3,968     3,968        —     
                                               

(Loss) income before income taxes and noncontrolling interests

    (15,482     22        (15,460     (7,166     8        (7,158

(Provision) benefit for income taxes

    (242     —          (242     1,359        —          1,359   
                                               

Net (loss) income

    (15,724     22        (15,702     (5,807     8        (5,799

Noncontrolling interests’ share of net loss (income):

           

Unitholders in the Operating Partnership

    6,007        —          6,007        2,733        —          2,733   

Partners in consolidated real estate entities

    (1,195     —          (1,195     133        —          133   
                                               
    4,812        —          4,812        2,866        —          2,866   
                                               

(Loss) income before discontinued operations

    (10,912     22        (10,890     (2,941     8        (2,933

Loss from discontinued operations

    —          (22     (22     —          (8     (8
                                               

TPGI share of net (loss) income

  $ (10,912   $ —        $ (10,912   $ (2,941   $ —        $ (2,941
                                               

 

7


Thomas Properties Group, Inc.

Supplemental Financial Information

PRO-RATA CONSOLIDATED STATEMENTS OF OPERATIONS (NON-GAAP)

(in thousands)

(unaudited)

The following are the pro-rata consolidated statements of operations of TPGI for the nine months ended September 30, 2009 and 2008, including reconciliation from the consolidated statements of operations to the pro-rata consolidated statements of operations.

 

    For the nine months ended September 30, 2009     For the nine months ended September 30, 2008  
    Consolidated     Plus
Unconsolidated
Investments at
Pro-Rata
    Pro-Rata     Consolidated     Plus
Unconsolidated
Investments at
Pro-Rata
    Pro-Rata  

Revenues:

           

Rental

  $ 22,499      $ 30,028      $ 52,527      $ 23,317      $ 29,021      $ 52,338   

Tenant reimbursements

    16,151        10,944        27,095        20,116        10,932        31,048   

Parking and other

    2,156        3,827        5,983        2,747        4,446        7,193   

Investment advisory, management, leasing and development services

    7,158        —          7,158        5,570        —          5,570   

Investment advisory, management, leasing and development services- unconsolidated real estate entities

    11,229        185        11,414        13,670        139        13,809   

Reimbursement of property personnel costs

    4,213        —          4,213        5,075        —          5,075   

Condominium sales

    22,927        —          22,927        79,758        —          79,758   
                                               

Total revenues

    86,333        44,984        131,317        150,253        44,538        194,791   
                                               

Expenses:

           

Property operating and maintenance

    18,439        15,948        34,387        18,877        16,525        35,402   

Real estate taxes

    5,427        5,246        10,673        4,762        5,618        10,380   

Investment advisory, management, leasing and development services

    8,638        —          8,638        12,520        —          12,520   

Reimbursable property personnel costs

    4,213        —          4,213        5,075        —          5,075   

Cost of condominium sales

    20,892        —          20,892        62,228        —          62,228   

Rent-unconsolidated real estate entities

    208        —          208        191        —          191   

Interest

    20,415        12,117        32,532        13,740        15,873        29,613   

Depreciation and amortization

    9,373        14,601        23,974        8,498        15,604        24,102   

General and administrative

    12,072        —          12,072        13,556        —          13,556   

Impairment loss

    8,600        2,012        10,612        —          —          —     
                                               

Total expenses

    108,277        49,924        158,201        139,447        53,620        193,067   
                                               

Gain on sale of real estate

    —          —          —          3,618        —          3,618   

Gain from early extinguishment of debt

    509        4,189        4,698        255        —          255   

Interest income

    287        177        464        2,341        —          2,341   

Equity in net income (loss) of unconsolidated real estate entities

    (595     595        —          (9,108     9,108        —     
                                               

Income (loss) before income taxes and noncontrolling interests

    (21,743     21        (21,722     7,912        26        7,938   

Provision for income taxes

    (480     —          (480     (2,695     —          (2,695
                                               

Net (loss) income

    (22,223     21        (22,202     5,217        26        5,243   

Noncontrolling interests’ share of net loss (income):

           

Unitholders in the Operating Partnership

    7,456        —          7,456        (3,126     —          (3,126

Partners in consolidated real estate entities

    934        —          934        133        —          133   
                                               
    8,390        —          8,390        (2,993     —          (2,993
                                               

(Loss) income before discontinued operations

    (13,833     21        (13,812     2,224        26        2,250   

Loss from discontinued operations

    —          (21     (21     —          (26     (26
                                               

TPGI share of net (loss) income

  $ (13,833   $ —        $ (13,833   $ 2,224      $ —        $ 2,224   
                                               

 

8


Thomas Properties Group, Inc.

Supplemental Financial Information

PRO-RATA CONSOLIDATED BALANCE SHEETS (NON-GAAP)

(in thousands)

(unaudited)

The following are the pro-rata consolidated balance sheets of TPGI as of September 30, 2009 and December 31, 2008, including reconciliation from the consolidated balance sheets to the pro-rata consolidated balance sheets.

 

      September 30, 2009    December 31, 2008
                          (revised)      
      Consolidated    Plus
Unconsolidated
Investments at
Pro-Rata
    Pro-Rata    Consolidated    Plus
Unconsolidated
Investments at
Pro-Rata
    Pro-Rata
ASSETS                

Investments in real estate, net

   $ 374,593    $ 385,325      $ 759,918    $ 376,944    $ 369,177      $ 746,121

Condominium units held for sale

     73,567      —          73,567      101,112      —          101,112

Real estate held for sale

     619      963        1,582      609      959        1,568

Investments in unconsolidated real estate entities

     34,096      (34,096     —        29,098      (29,098     —  

Cash and cash equivalents, unrestricted

     50,582      2,566        53,148      69,023      4,021        73,044

Restricted cash

     15,194      22,321        37,515      16,665      13,095        29,760

Receivables from condominium sales contracts, net

     1,786      —          1,786      10,485      —          10,485

Rents and other receivables, net

     7,040      833        7,873      9,153      1,252        10,405

Above market rents, net

     894      488        1,382      1,070      643        1,713

Deferred rents

     11,670      16,349        28,019      10,604      14,682        25,286

Deferred leasing and loan costs, net

     14,646      24,937        39,583      15,018      26,826        41,844

Deferred tax asset, net of valuation allowance

     15,729      —          15,729      15,534      —          15,534

Assets associated with discontinued operations

     —        —          —        —        22        22

Other assets

     6,356      2,554        8,910      5,120      1,359        6,479
                                           

Total assets

   $ 606,772    $ 422,240      $ 1,029,012    $ 660,435    $ 402,938      $ 1,063,373
                                           
LIABILITIES AND EQUITY                

Mortgage, other secured, and unsecured loans

   $ 366,060    $ 399,243      $ 765,303    $ 387,945    $ 372,999      $ 760,944

Accounts payable and other liabilities

     13,922      14,773        28,695      27,750      16,170        43,920

Unrecognized tax benefits

     17,582      —          17,582      17,078      —          17,078

Below market rents, net

     730      6,198        6,928      920      7,209        8,129

Deferred revenue

     822      —          822      819      —          819

Dividends and distributions payable

     500      —          500      2,377      —          2,377

Prepaid rent

     1,569      2,026        3,595      2,819      1,837        4,656

Obligations associated with discontinued operations

     —        —          —        —        30        30
                                           

Total liabilities

     401,185      422,240        823,425      439,708      398,245        837,953
                                           

Redeemable noncontrolling interest

     —        —          —        —        4,693        4,693

Noncontrolling interests

     76,327      —          76,327      88,983      —          88,983

Total stockholders’ equity

     129,260      —          129,260      131,744      —          131,744
                                           

Total liabilities and equity

   $ 606,772    $ 422,240      $ 1,029,012    $ 660,435    $ 402,938      $ 1,063,373
                                           

 

9


Thomas Properties Group, Inc.

Supplemental Financial Information

EARNINGS BEFORE DEPRECIATION, AMORTIZATION AND TAXES (EBDT) (NON-GAAP)

(in thousands, except share and per share data)

(unaudited)

We use EBDT as a supplemental performance measure. EBDT excludes the following items: i) income tax expense (benefit); ii) noncontrolling interests; iii) non-cash charges for 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 in occupancy, rental rates, operating costs, development and redevelopment activities, general and administrative expenses, and interest costs; and EBDT 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 our 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) or as an alternative to net income (loss) as an indicator of our operating performance.

Reconciliation of Net Loss to EBDT:

 

      For the three months ended September 30, 2009     For the three months ended September 30, 2008  
      Consolidated     Plus
Unconsolidated
Investments at
Pro-Rata
   Pro-Rata     Consolidated     Plus
Unconsolidated
Investments at
Pro-Rata
   Pro-Rata  

Net loss

   $ (10,912   $ —      $ (10,912   $ (2,941   $ —      $ (2,941

Income tax provision (benefit)

     242        —        242        (1,359     —        (1,359

Noncontrolling interests – unitholders in the Operating Partnership

     (6,007     —        (6,007     (2,733     —        (2,733

Depreciation and amortization

     3,008        4,773      7,781        2,948        5,517      8,465   

Amortization of loan costs

     202        191      393        78        247      325   
                                              

EBDT

   $ (13,467   $ 4,964    $ (8,503   $ (4,007   $ 5,764    $ 1,757   
                                              

TPGI share of EBDT (1)

   $ (8,660   $ 3,110    $ (5,550   $ (2,445   $ 3,517    $ 1,072   
                                              

EBDT per share – basic

        $ (0.22        $ 0.05   
                          

EBDT per share – diluted

        $ (0.22        $ 0.05   
                          

Weighted average common shares outstanding – basic

          25,212,319             23,701,294   
                          

Weighted average common shares outstanding – diluted

          25,212,319             23,701,294   
                          

 

(1) Based on an interest in our operating partnership of 64.65 % and 61.01% for the three months ended September 30, 2009 and 2008, respectively.

 

10


Thomas Properties Group, Inc.

Supplemental Financial Information

EARNINGS BEFORE DEPRECIATION, AMORTIZATION AND TAXES (EBDT) (NON-GAAP)

(in thousands, except share and per share data)

(unaudited)

We use EBDT as a supplemental performance measure. EBDT excludes the following items: i) income tax expense (benefit); ii) noncontrolling interests; iii) non-cash charges for 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 in occupancy, rental rates, operating costs, development and redevelopment activities, general and administrative expenses, and interest costs; and EBDT 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 our 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) or as an alternative to net income (loss) as an indicator of our operating performance.

Reconciliation of Net (Loss) Income to EBDT:

 

      For the nine months ended September 30, 2009     For the nine months ended September 30, 2008
      Consolidated     Plus
Unconsolidated
Investments at
Pro-Rata
   Pro-Rata     Consolidated    Plus
Unconsolidated
Investments at
Pro-Rata
   Pro-Rata

Net (loss) income

   $ (13,833   $ —      $ (13,833   $ 2,224    $ —      $ 2,224

Income tax provision

     480        —        480        2,695      —        2,695

Noncontrolling interests – unitholders in the Operating Partnership

     (7,456     —        (7,456     3,126      —        3,126

Depreciation and amortization

     9,373        14,601      23,974        8,498      15,604      24,102

Amortization of loan costs

     372        683      1,055        237      1,090      1,327
                                           

EBDT

   $ (11,064   $ 15,284    $ 4,220        16,780      16,694      33,474
                                           

TPGI share of EBDT (1)

   $ (7,100   $ 9,808    $ 2,708      $ 10,261    $ 10,208    $ 20,469
                                           

EBDT per share – basic

        $ 0.11            $ 0.86
                         

EBDT per share – diluted

        $ 0.11            $ 0.86
                         

Weighted average common shares outstanding – basic

          24,978,388              23,681,997
                         

Weighted average common shares outstanding – diluted

          24,978,388              23,681,997
                         

 

(1) Based on an interest in our operating partnership of 64.17% and 61.15% for the nine months ended September 30, 2009 and 2008, respectively.

 

11


Thomas Properties Group, Inc.

Supplemental Financial Information

AFTER TAX CASH FLOW (ATCF) (NON-GAAP)

(in thousands, except share and per share data)

(unaudited)

We define ATCF as net income (loss) excluding the following items: i) income tax expense (benefit); ii) noncontrolling interests; iii) non-cash charges for depreciation, 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; and vii) the adjustments to rental revenue to reflect the fair market value of rent. Our 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).

Reconciliation of Net Loss to ATCF:

 

      For the three months ended September 30, 2009     For the three months ended September 30, 2008  
      Consolidated     Plus
Unconsolidated
Investments at
Pro-Rata
    Pro-Rata     Consolidated     Plus
Unconsolidated
Investments at
Pro-Rata
    Pro-Rata  

Net loss

   $ (10,912   $ —        $ (10,912   $ (2,941   $ —        $ (2,941

Income tax provision (benefit)

     242        —          242        (1,359     —          (1,359

Noncontrolling interests – unitholders in the Operating Partnership

     (6,007     —          (6,007     (2,733     —          (2,733

Depreciation and amortization

     3,008        4,773        7,781        2,948        5,517        8,465   

Amortization of loan costs

     202        191        393        78        247        325   

Non-cash compensation expense

     654        —          654        848        —          848   

Straight-line rent adjustments

     (843     (489     (1,332     165        (546     (381

Adjustments to reflect the fair market value of rent

     (5     (316     (321     (42     (330     (372

Impairment loss

     8,600        2,012        10,612        —          —          —     
                                                

ATCF before income taxes

   $ (5,061   $ 6,171      $ 1,110      $ (3,036   $ 4,888      $ 1,852   
                                                

TPGI share of ATCF before income taxes (1)

   $ (3,278   $ 3,896      $ 618      $ (1,852   $ 2,982      $ 1,130   

TPGI income tax expense-current

     (72     —          (72     2,512        —          2,512   
                                                

TPGI share of ATCF

   $ (3,350   $ 3,896      $ 546      $ 660      $ 2,982      $ 3,642   
                                                

ATCF per share – basic

       $ 0.02          $ 0.15   
                        

ATCF per share – diluted

       $ 0.02          $ 0.15   
                        

Weighted average common shares outstanding – basic

         25,212,319            23,701,294   
                        

Weighted average common shares outstanding – diluted

         25,212,319            23,701,294   
                        

 

(1) Based on an interest in our operating partnership of 64.65% and 61.01% for the three months ended September 30, 2009 and 2008, respectively.

 

12


Thomas Properties Group, Inc.

Supplemental Financial Information

AFTER TAX CASH FLOW (ATCF) (NON-GAAP)

(in thousands, except share and per share data)

(unaudited)

We define ATCF as net income (loss) excluding the following items: i) income tax expense (benefit); ii) noncontrolling interests; iii) non-cash charges for depreciation, 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; and vii) the adjustments to rental revenue to reflect the fair market value of rent. Our 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).

Reconciliation of Net (Loss) Income to ATCF:

 

      For the nine months ended September 30, 2009     For the nine months ended September 30, 2008  
      Consolidated     Plus
Unconsolidated
Investments at
Pro-Rata
    Pro-Rata     Consolidated     Plus
Unconsolidated
Investments at
Pro-Rata
    Pro-Rata  

Net (loss) income

   $ (13,833   $ —        $ (13,833   $ 2,224      $ —        $ 2,224   

Income tax provision

     480        —          480        2,695        —          2,695   

Noncontrolling interests – unitholders in the Operating Partnership

     (7,456     —          (7,456     3,126        —          3,126   

Depreciation and amortization

     9,373        14,601        23,974        8,498        15,604        24,102   

Amortization of loan costs

     372        683        1,055        237        1,090        1,327   

Non-cash compensation expense

     2,257        —          2,257        2,457          2,457   

Straight-line rent adjustments

     (762     (1,474     (2,236     3,113        (1,878     1,235   

Adjustments to reflect the fair market value of rent

     23        (1,026     (1,003     (100     (1,019     (1,119

Impairment loss

     8,600        2,012        10,612        —          —          —     
                                                

ATCF before income taxes

   $ (946   $ 14,796      $ 13,850      $ 22,250      $ 13,797      $ 36,047   
                                                

TPGI share of ATCF before income taxes (1)

   $ (607   $ 9,494      $ 8,887      $ 13,606      $ 8,437      $ 22,043   

TPGI income tax expense-current

     (132     —          (132     —          —          —     
                                                

TPGI share of ATCF

   $ (739   $ 9,494      $ 8,755      $ 13,606      $ 8,437      $ 22,043   
                                                

ATCF per share – basic

       $ 0.35          $ 0.93   
                        

ATCF per share – diluted

       $ 0.35          $ 0.93   
                        

Weighted average common shares outstanding – basic

         24,978,388            23,681,997   
                        

Weighted average common shares outstanding – diluted

         24,978,388            23,681,997   
                        

 

(1) Based on an interest in our operating partnership of 64.17% and 61.15% for the nine months ended September 30, 2009 and 2008, respectively.

 

13


Thomas Properties Group, Inc.

Supplemental Financial Information

INVESTMENT ADVISORY, MANAGEMENT, LEASING AND DEVELOPMENT SERVICES

(in thousands)

(unaudited)

 

      Three months ended
September 30,
    Nine months ended
September 30,
 
      2009     2008     2009     2008  

Property management, leasing and development services fees:

        

Property management fees

   $ 3,046      $ 3,049      $ 9,430      $ 9,494   

Leasing commissions

     1,144        1,104        3,963        6,118   

Development services fees

     1,567        2,214        4,603        6,999   
                                
     5,757        6,367        17,996        22,611   

Investment advisory fees:

        

Asset management fees

     1,647        1,828        5,274        5,271   

Acquisition and disposition fees

     —          —          —          —     
                                

Total fees

     7,404        8,195        23,270        27,882   

Investment advisory, management, leasing and development services expenses

     (2,799     (4,142     (8,638     (12,520
                                

Net investment advisory, management, leasing and development services income

   $ 4,605      $ 4,053      $ 14,632      $ 15,362   
                                

Reconciliation to GAAP Presentation:

        

Total fees

   $ 7,404      $ 8,195      $ 23,270      $ 27,882   

Elimination of intercompany fee revenues

     (1,394     (2,152     (4,883     (8,642
                                

Investment advisory, management, leasing and development services revenues

   $ 6,010      $ 6,043      $ 18,387      $ 19,240   
                                

 

14


Thomas Properties Group, Inc.

Supplemental Financial Information

PORTFOLIO DATA AS OF SEPTEMBER 30, 2009

Our Ownership Properties

 

                         TPGI Share (1)  
     Location   Rentable
Square
Feet (2)
  Percent
Leased (3)
    TPGI
Percentage
Interest
    Rentable
Square Feet
  Estimated
Stabilized Net
Operating
Income (4)
  Estimated
Stabilized Net
Operating Income-
Cash Basis (5)
  Expected Capital
Expenditures to
Complete
Stabilization (6)
  Loan Balance
at September 30,
2009
    Remaining
Loan
Capacity
 

Stabilized Properties

                   

CityWestPlace

  Houston, TX   1,473,020   99.0   25.0   368,255   $ 5,776,000   $ 5,155,000     $ 53,350,000      $ —     

San Felipe Plaza

  Houston, TX   980,472   89.0      25.0      245,118     3,060,000     2,805,000       29,425,000        —     

2500 City West

  Houston, TX   578,284   93.6      25.0      144,571     1,842,000     1,724,000       21,033,000        —     

Research Park Plaza I and II

  Austin, TX   271,889   96.6      6.3      16,993     288,000     263,000       3,219,000        —     

Stonebridge Plaza II

  Austin, TX   192,864   98.7      6.3      12,054     165,000     159,000       2,344,000        —     

One Commerce Square

  Philadelphia, PA   942,866   92.3      100.0      942,866     14,737,000     12,859,000       130,000,000        —     

2121 Market Street (7)

  Philadelphia, PA   22,136   100.0      50.0      11,068     1,065,000     1,065,000       9,294,000        —     

Oak Hill Plaza

  King of Prussia, PA   164,360   93.1      25.0      41,090     712,000     686,000       11,113,000 (8)      —     

Reflections II

  Reston, VA   64,253   100.0      25.0      16,063     328,000     328,000       2,280,000        —     
                                               

Total / Average

    4,690,144   94.6        1,798,078     27,973,000     25,044,000       262,058,000        —     
                                               

Properties Projected to Stabilize in 2010

                   

300 West 6th Street

  Austin, TX   454,225   87.1      6.3      28,389     661,000     642,000   $ 234,000     7,938,000        —     

Four Points Centre (Retail)

  Austin, TX   6,600   27.3      100.0      6,600     169,000     169,000     237,000     —          —     
                                                   

Total / Average

    460,825   86.3        34,989     830,000     811,000     471,000     7,938,000        —     
                                                   

Properties Projected to Stabilize in 2011

                   

City National Plaza

  Los Angeles, CA   2,496,084   83.2      25.0      624,020     15,092,000     14,112,000     7,470,000     141,999,000        —     

Frost Bank Tower

  Austin, TX   535,078   88.4      6.3      33,442     849,000     818,000     220,000     9,375,000        —     

One Congress Plaza

  Austin, TX   518,385   86.9      6.3      32,399     651,000     638,000     543,000     8,001,000        —     

One American Center

  Austin, TX   503,951   78.0      6.3      31,497     581,000     578,000     446,000     7,500,000        —     

San Jacinto Center

  Austin, TX   410,248   85.5      6.3      25,641     535,000     512,000     382,000     6,313,000        —     

Two Commerce Square

  Philadelphia, PA   953,276   82.6      100.0      953,276     16,640,000     16,288,000     18,344,000     144,371,000        —     

Four Falls Corporate Center

  Conshohocken, PA   253,985   80.7      25.0      63,496     1,246,000     1,232,000     1,393,000     13,017,000        —     

Walnut Hill Plaza

  King of Prussia, PA   150,573   55.3      25.0      37,643     495,000     490,000     932,000     —   (8)      —     

Fair Oaks Plaza

  Fairfax, VA   179,688   83.0      25.0      44,922     898,000     872,000     1,143,000     11,075,000        —     
                                                   

Total / Average

    6,001,268   82.8        1,846,336     36,987,000     35,540,000     30,873,000     341,651,000     
                                                   

Properties Projected to Stabilize in 2012

                   

Brookhollow Central I, II, and III

  Houston, TX   805,967   65.3      25.0      201,492     2,641,000     2,459,000     8,078,000     13,444,000        —     

Westech 360 I-IV

  Austin, TX   175,529   52.8      6.3      10,971     164,000     164,000     146,000     7,165,000 (9)      —     

Park Centre

  Austin, TX   203,193   84.4      6.3      12,700     175,000     175,000     300,000     —   (9)      —     

Great Hills Plaza

  Austin, TX   139,252   59.5      6.3      8,703     117,000     117,000     191,000     —   (9)      —     

Four Points Centre (Office)

  Austin, TX   192,062   17.3      100.0      192,062     3,225,000     3,198,000     10,137,000     29,669,000        10,800,000 (10) 

Centerpointe I and II

  Fairfax, VA   421,651   56.6      25.0      105,413     2,392,000     2,294,000     5,794,000     30,946,000        —     

Reflections I

  Reston, VA   123,546   100.0      25.0      30,887     667,000     667,000     2,299,000     5,472,000        —     
                                                   

Total / Average

    2,061,200   61.6        562,228     9,381,000     9,074,000     26,945,000     86,696,000        10,800,000   
                                                   

Total / Average All Properties

    13,213,437   83.8        4,241,631   $ 75,171,000   $ 70,469,000   $ 58,289,000   $ 698,343,000      $ 10,800,000   
                                                   

Footnotes on following page.

 

15


Thomas Properties Group, Inc.

Supplemental Financial Information

PORTFOLIO DATA AS OF SEPTEMBER 30, 2009 - CONTINUED

Footnotes to Portfolio Data on previous page:

 

(1) TPGI share information set forth in the table on the previous page is calculated by multiplying the applicable data for each property by our percentage ownership of each property.

 

(2) For purposes of the table on the previous page, both on-site and off-site parking is excluded. Total portfolio square footage includes office properties and mixed-use space (including retail), but excludes 168 apartment units at 2121 Market Street.

 

(3) Occupancy at stabilization is expected to be approximately 93%. Certain properties that have occupancy greater than 93% as of September 30, 2009 are not considered stabilized due to upcoming tenant vacancies not yet reflected.

 

(4) For properties currently stabilized, the estimated stabilized net operating income (NOI) represents the sum of i) the annual straight-line rent under existing leases which were in place as of September 30, 2009, calculated as if the leases began on September 30, 2009, and ii) estimated parking and other income, less estimated operating expenses and adjusted for non-recurring items. For properties expected to become stabilized in future years, estimated stabilized NOI represents the sum of i) the annual straight-line rent under existing leases which will be in place in the year the properties are stabilized, calculated as if the leases began at the point of stabilization, ii) the annual expected market rent for the remaining space (up to the stabilized occupancy percentage), and iii) estimated parking and other income, less estimated operating expenses and adjusted for non-recurring items.

 

(5) For properties currently stabilized, the estimated stabilized NOI – cash basis represents the sum of i) the annual cash rent under existing leases which were in place as of September 30, 2009, and ii) estimated parking and other income, less estimated operating expenses and adjusted for non-recurring items. For properties expected to become stabilized in future years, estimated stabilized NOI-cash basis represents the sum of i) the annual cash rent under existing leases which will be in place in the year the properties are stabilized, ii) the annual expected market rent for the remaining space (up to the stabilized occupancy percentage), and iii) estimated parking and other income, less estimated operating expenses and adjusted for non-recurring items.

 

(6) Expected capital expenditures to complete stabilization represent capital expenditures, including tenant improvements and leasing commissions, expected to be spent to complete the stabilization of the property.

 

(7) The square footage and occupancy information presented for 2121 Market Street represents the information for two retail/office tenants only; the estimated NOI includes 168 residential units comprising 132,823 square feet.

 

(8) Oak Hill Plaza and Walnut Hill Plaza are co-borrowers under a loan agreement. The entire loan balance is included on the Oak Hill Plaza line.

 

(9) Three of our Austin, Texas properties secure the Austin Portfolio bank term loan on a first mortgage basis and seven of our remaining Austin properties provide secondary equity pledges to secure the Austin Portfolio bank term loan of which our pro rata share is $7,165,000. The entire loan balance is included on the Westech 360 I-IV line. These mortgage liens and equity pledges also secure the Austin Portfolio senior secured priority financing payable to the partners (see note 8 on page 20), which has a priority right to repayment ahead of the Austin Portfolio bank term loan.

 

(10) We paid $2.225 million in June 2009 of which approximately $1.8 million is held by the lender for our use for project costs.

Lease Expirations

The table below reflects the square footage of expiring leases in TPGI’s 100% owned properties and TPGI’s share of the square footage of expiring leases in TPGI’s joint venture properties. For properties where existing leases have been renewed or replaced, the later expiration date is used.

 

TPGI Percentage Interest in Consolidated and Unconsolidated Properties’ Lease Expirations

Year

   Rentable
Square
Feet of
Expiring
Leases
   Annualized
Rent Per
Leased
Square
Foot
   Annualized
Rent Per
Leased
Square Foot
at Expiration

Vacant

   736,005    $ —      $ —  

2009

   104,003      13.77      13.82

2010

   225,503      15.68      15.75

2011

   159,370      15.34      16.12

2012

   288,466      14.95      17.29

2013

   436,828      15.97      18.66

Thereafter

   2,291,456      13.04      20.52
          

Total

   4,241,631      
          

 

16


Thomas Properties Group, Inc.

Supplemental Financial Information

PORTFOLIO DATA AS OF SEPTEMBER 30, 2009 – CONTINUED

($ in thousands except for average amounts)

Our Development Properties

 

                           Actual / Projected
Entitlements
        TPGI Share
     Location    TPGI Percentage
Interest
    Number
of Acres
   

Potential Property
Types

   Square
Feet
   Units    Status of
Entitlements
   Costs
Incurred to
Date
    Loan
Balance

Fee Services:

                       

Universal Village (1)

   Los Angeles, CA    NA      124.0      Residential/Retail    180,000    2,937    Pending      —          —  

Wilshire Grand (2)

   Los Angeles, CA    NA      2.7      Office/ Retail/ Residential/ Hotel    2,500,000    50    Pending      —          —  

Pre-Development:

                       

Campus El Segundo (3)

   El Segundo, CA    100.0   26.1      Office/ Retail/ R&D/ Hotel    1,800,000       Entitled    $ 60,160      $ 17,000

MetroStudio@Lankershim (4)

   Los Angeles, CA    NA      14.4      Office/ Production Facility    1,500,000       Pending      14,612        —  

Four Points Centre

   Austin, TX    100.0      252.5      Office/ Retail/ R&D/ Hotel    1,680,000       Entitled      18,044 (5)      —  

2100 JFK Boulevard

   Philadelphia, PA    100.0      0.7      Office/ Retail/ R&D/ Hotel    366,000       Entitled      4,900     

2500 City West land

   Houston, TX    25.0      3.3 (6)    Office/ Retail/ Residential/ Hotel    500,000       Entitled      900        —  

CityWestPlace land

   Houston, TX    25.0      25.0      Office/ Retail/ Residential    1,500,000       Entitled      5,345        —  
                                     
             10,026,000    2,987       $  103,961      $ 17,000
                                     

Condominium Units Held for Sale:

 

     Location    TPGI Percentage
Interest
   

Description

   Average Sales
Price Per
Square Foot
To Date
   Units Sold To
Date
    Book Carrying
Value
   Loan Balance    Remaining Loan
Capacity

Murano

   Philadelphia, PA    73.0 %(7)    43-story for-sale condominium project containing 302 units (average unit SF = 1,158); 119 remaining for sale (average unit SF = 1,238). Certificates of occupancy received for 100% of units    $ 537    183 (8)    $ 73,567    $ 45,020    $ 656
                                         

 

(1) We have been engaged by NBC Universal to entitle and master plan their Universal Studios Hollywood backlot on which we have a right of first offer (ROFO) to develop approximately 124 acres for residential and related retail and community-serving uses. We are pursuing environmental clearance and governmental approvals for approximately 2,937 residential units and 180,000 square feet of retail and community-serving space. Upon successful completion of the entitlement process and our exercise of the ROFO, it is anticipated this project will be developed in phases over several years, subject to market conditions.
(2) We have been engaged by Korean Air to entitle and master plan a 2.7 acre site in downtown Los Angeles for 2,500,000 square feet of development that consists of office, hotel, residential and retail uses.
(3) We have completed infrastructure improvements to our Campus El Segundo development site, including installing underground utilities, rough grading, and streetscape improvements. The first phase of development is anticipated to include a 225,000 square foot, six-story Class A office building and parking structure to be constructed on 2.7 acres, which we are currently marketing to prospective tenants.
(4) We are currently entitling this property, targeting approximately 1.5 million square feet. The first phase of this transit-oriented development is planned to become a television production facility and office space, in accordance with the space needs of NBC Universal. We expect to enter into a long-term ground lease with the Los Angeles Metropolitan Transportation Authority (which owns the land) upon completion of entitlements.
(5) Costs do not include approximately 1.9 acres of land with carrying value of $0.6 million related to a ground lease we have with a retail tenant. Subsequent to the third quarter, we sold this parcel to a third party buyer for a purchase price of $2.1 million.
(6) The number of acres excludes approximately 3.0 acres currently under contract for sale with a third party. This parcel is not encumbered by any debt and has a carrying value of approximately $3.9 million, of which TPGI’s share is approximately $1.0 million.
(7) We have a $25.1 million preferred equity interest in Murano. Excluding the preferred equity interest, we hold a 73% interest in the property.
(8) Subsequent to September 30, 2009, we sold six additional units and three additional units cleared their rescission period. These nine units sold at an average price of $410 per square foot, and are expected to close in the fourth quarter.

 

17


Thomas Properties Group, Inc.

Supplemental Financial Information

PORTFOLIO DATA AS OF SEPTEMBER 30, 2009 – CONTINUED

Our Managed Properties

 

Managed Properties

   Location    Year Built
Renovated
   Rentable
Square Feet
   Percent
Leased
 

800 South Hope Street

   Los Angeles, CA    1985/2000    242,176    97.6

Pacific Financial Plaza

   Newport Beach, CA    1982/1993    279,474    96.8   

1835 Market Street

   Philadelphia, PA    1987    686,503    89.4   

CalEPA Headquarters

   Sacramento, CA    2000    950,939    100.0   
                 

Total/Weighted Average

         2,159,092    96.0
                 

 

18


Thomas Properties Group, Inc.

Supplemental Financial Information

DEBT SUMMARY

(in thousands)

 

Mortgages and Other Loans

   Interest Rate at
September 30,
2009
    Principal
Amount
    TPGI Share
of Principal
Amount
   Maturity
Date
    Maturity Date at
End of Extension
Options

2010 Maturity Date at End of Extension Options

           

Two Commerce Square – senior mezzanine loan

   19.3 %(1)    $ 31,554      $ 31,554    1/9/2010      1/9/2010

Two Commerce Square – junior mezzanine loan

   15.0 (1)      4,594        4,594    1/9/2010      1/9/2010

Four Falls Corporate Center

   5.3        52,067 (2)      13,017    3/6/2010      3/6/2010

Oak Hill Plaza/ Walnut Hill Plaza

   5.3        44,452 (3)      11,113    3/6/2010      3/6/2010

City National Plaza

   2.1        567,999        141,999    7/9/2010      7/9/2010

Murano construction loan

   7.0        45,020 (4)      45,020    2/1/2010 (5)    7/31/2010

Brookhollow Central I, II, and III

   3.0        53,770        13,444    8/9/2010      8/9/2010

San Felipe Plaza

   5.0        117,700        29,425    8/11/2010      8/11/2010

2500 City West

   4.9        84,132        21,033    8/11/2010      8/11/2010
                     

Subtotal 2010 maturities

       1,001,288        311,199     
                     

2011 Maturity Date at End of Extension Options

           

CityWestPlace - mortgage loan (Buildings III & IV)

   1.5        92,400        23,100    7/1/2010 (6)    7/1/2011
                     

Subtotal 2011 maturities

       92,400        23,100     
                     

2012 Maturity Date at End of Extension Options

           

Centerpointe I and II

   1.8        123,780        30,946    2/9/2010 (7)    2/9/2012

Austin Portfolio senior secured priority financing

   10.0        21,074 (8)      —      6/1/2012      6/1/2012

Research Park Plaza I and II

   1.6        51,500        3,219    6/9/2010 (9)    6/9/2012

Stonebridge Plaza II

   1.4        37,500        2,344    6/9/2010 (9)    6/9/2012
                     

Subtotal 2012 maturities

       233,854        36,509     
                     

2013 Maturity Date at End of Extension Options

           

Two Commerce Square – mortgage loan

   6.3        108,223        108,223    5/9/2013      5/9/2013
                     

Subtotal 2013 maturities

       108,223        108,223     
                     

2014 and After Maturity Date at End of Extension Options

           

Austin Portfolio bank term loan

   3.5        114,647 (10)      7,165    6/1/2013      6/1/2014

Campus El Segundo mortgage loan

   2.6        17,000        17,000    7/31/2011 (11)    7/31/2014

Four Points Centre construction loan

   2.2        29,669        29,669    7/31/2012 (12)    7/31/2014

Reflections I

   5.2        21,886        5,472    4/1/2015      4/1/2015

Reflections II

   5.2        9,118        2,280    4/1/2015      4/1/2015

Note payable to former partner in City National Plaza

   5.8        19,758        4,940    7/1/2012      1/4/2016

One Commerce Square - mortgage loan

   5.7        130,000        130,000    1/6/2016      1/6/2016

CityWestPlace - mortgage loan (Buildings I & II)

   6.2        121,000        30,250    7/6/2016      7/6/2016

Fair Oaks Plaza

   5.5        44,300        11,075    2/9/2017      2/9/2017

Frost Bank Tower

   6.1        150,000        9,375    6/11/2017      6/11/2017

One Congress Plaza

   6.1        128,000        8,001    6/11/2017      6/11/2017

300 West 6th Street

   6.0        127,000        7,938    6/11/2017      6/11/2017

One American Center

   6.0        120,000        7,500    6/11/2017      6/11/2017

San Jacinto Center

   6.1        101,000        6,313    6/11/2017      6/11/2017

2121 Market Street

   6.1        18,587 (13)      9,294    8/1/2033      8/1/2033
                     

Subtotal 2014 and thereafter maturities

     $ 1,151,965      $ 286,272     
                     
     $ 2,587,730      $ 765,303     
                     

Weighted average interest rate at September 30, 2009

   4.5         

Footnotes on following page.

 

19


Thomas Properties Group, Inc.

Supplemental Financial Information

DEBT SUMMARY – CONTINUED

Footnotes to Debt Summary on previous page:

 

(1) The senior mezzanine loan bears interest at a rate such that the weighted average rate on this loan and the rate on the mortgage loan secured by Two Commerce Square equals 9.2% per annum. The effective interest rate on the senior mezzanine loan as of September 30, 2009 was 19.3% per annum. On October 14, 2009, we entered into a discounted payoff agreement with the holders of the existing mezzanine debt on Two Commerce Square. We have agreed to pay off the two mezzanine loans, with a principal amount of approximately $36.1 million, for a discounted amount of $25.0 million on or before November 30, 2009 (subject to an extension right of up to 29 days). Subsequent to September 30, 2009, we deposited $6.0 million with the holders of the loans under the agreement, which deposit will be credited against the payoff amount on closing. If we exercise the 29 day extension right, the deposit will be increased by an additional $7.0 million.

 

(2) $9.9 million of this loan is secured by both a subordinate lien on the property and a payment guaranty issued by the partnership, which owns Oak Hill Plaza/Walnut Hill Plaza.

 

(3) $9.2 million of this loan is secured by both a subordinate lien on the property and a payment guaranty issued by the partnership, which owns Four Falls Corporate Center.

 

(4) We may borrow an additional $0.7 million under this construction loan. The Company has a completion guaranty for the Murano construction loan, which includes a guaranty of interest.

 

(5) The loan has one six-month extension option remaining. The extension option is subject to an exit fee equal to 0.5% of the outstanding principal balance and unfunded commitments and may be reduced to 0.25% if certain conditions are met. We expect to exercise this final six-month extension option, which would extend the maturity date to July 31, 2010.

 

(6) The loan has a remaining one-year extension option at our election.

 

(7) The loan has two one-year extension options at our election, subject to a debt service coverage ratio of 1:1.

 

(8) We and our partners in the Austin Portfolio replaced the unfunded $100 million commitment under a $292.5 million credit facility with $60 million of new senior secured priority financing committed to be funded by the partners. Approximately $14 million of this new financing was used to acquire at a discount and immediately retire third party term loan debt with an $80 million face value. $20 million of the $60 million commitment has been funded by the partners as of September 30, 2009. The remaining commitment will provide an ongoing source of capital for leasing costs and capital improvements. See also Note 10 below.

 

(9) The loan has two one-year extension options at our election.

 

(10) The Austin Portfolio bank term loan represents the modified balance under the amended credit agreement after third party term loan debt with a face value of $80 million was acquired at a discount for approximately $14 million and immediately retired. As a result, the previously funded loan of $192.5 million was reduced to $112.5 million. See also Note 8 above.

 

(11) The loan agreement was modified and the loan maturity was extended to July 31, 2011 with three one-year extension options, subject to our compliance with certain covenants, with a final maturity date of July 31, 2014 if all extension options are exercised. The lender has the right to require payment of $2.5 million at the time of each extension. The interest rate on the loan has been increased to LIBOR plus 3.75% per annum. We have guaranteed this loan.

 

(12) The loan agreement was modified and the loan maturity was extended to July 31, 2012 with two one-year extension options at our election subject to certain conditions. We have provided a completion guaranty and have guaranteed a portion of the principal and interest payable. We have also provided additional collateral of approximately 62.4 acres of fully entitled unimproved land, which is adjacent to our Four Points Centre office buildings. We have committed to pay down the principal amount of the loan in the total amount of $7.8 million of which $3.9 million was paid in October 2009 and the balance will be paid in three equal installments, in January, June and December, 2010. The interest rate on the loan has been increased to LIBOR plus 3.50%. We paid $2.225 million in June 2009 of which approximately $1.8 million is held by the lender to fund any remaining project costs, and $10.8 million remains unfunded and available to be drawn to fund any remaining project costs.

 

(13) The loan is guaranteed by our operating partnership and our co-general partner in the partnership that owns 2121 Market Street, up to a maximum amount of $3.3 million.

 

20


Thomas Properties Group, Inc.

Supplemental Financial Information

CAPITAL STRUCTURE

(in thousands, except share data)

The following is the capital structure of TPGI as of September 30, 2009:

 

Debt

        Aggregate
Principal

Mortgage, other secured, and unsecured loans

      $ 366,060

Company share of unconsolidated debt

        399,243
         

Total combined debt

      $ 765,303
         

Equity

   Shares/Units
Outstanding
   Market Value
(1)

Common stock

   25,693,354    $ 74,254

Operating partnership units (2)

   14,325,552      41,401
           

Total common equity

   40,018,906    $ 115,655
           

Total consolidated market capitalization

      $ 481,715
         

Total combined market capitalization (3)

      $ 880,958
         

 

(1) Based on the closing price of $2.89 per share of TPGI common stock on September 30, 2009.

 

(2) Includes outstanding operating partnership units not owned by TPGI and incentive units as of September 30, 2009.

 

(3) Includes TPGI’s share of debt of unconsolidated real estate entities.

 

21


Thomas Properties Group, Inc.

Supplemental Financial Information

OTHER INFORMATION

Principal Corporate Office

Thomas Properties Group, Inc.

515 South Flower Street

Sixth Floor

Los Angeles, CA 90071

Phone: (213) 613-1900

Fax: (213) 633-4760

www.tpgre.com

The information contained on our website is not incorporated herein by reference and does not constitute a part of this supplemental financial information.

 

Investor Relations

   Transfer Agent and Registrar    Stock Market Listing

Diana M. Laing

   Computershare Trust Company    NASDAQ: TPGI

Chief Financial Officer

   P.O. Box 43023   

515 South Flower Street

   Providence, RI 02940-3023   

Sixth Floor

   Phone: (781) 575-2879   

Los Angeles, CA 90071

     

Phone: (213) 613-1900

     

E-mail: dlaing@tpgre.com

     

Board of Directors and Executive Officers

 

James A. Thomas

   Chairman, President and CEO

Randall L. Scott

   Executive Vice President, Director

John R. Sischo

 

Paul S. Rutter

  

Executive Vice President, Director

 

Executive Vice President and General Counsel

Thomas S. Ricci

   Executive Vice President

Diana M. Laing

   Chief Financial Officer and Secretary

Robert D. Morgan

   Senior Vice President, Accounting and Administration

R. Bruce Andrews

   Director

Edward D. Fox

   Director

John L. Goolsby

   Director

Winston H. Hickox

   Director

 

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