Exhibit 99.1
Thomas Properties Group, Inc.
Supplemental Financial Information
For the Quarter Ended December 31, 2009
Thomas Properties Group, Inc.
Supplemental Financial Information
For the Quarter Ended December 31, 2009
TABLEOF CONTENTS
| | |
Corporate | | |
Company Background | | 1 |
| |
Supplemental Financial Information | | |
Operating and Financial Information | | 3 |
Consolidated Statements of Operations | | 4 |
Consolidated Balance Sheets | | 5 |
Unconsolidated Real Estate Entities Statements of Operations | | 6 |
Unconsolidated Real Estate Entities Balance Sheets | | 7 |
Pro-Rata Consolidated Statements of Operations (Non-GAAP) | | 8 |
Pro-Rata Consolidated Balance Sheets (Non-GAAP) | | 10 |
Earnings Before Depreciation, Amortization and Taxes (EBDT) (Non-GAAP) | | 11 |
After Tax Cash Flow (ATCF) (Non-GAAP) | | 13 |
Investment Advisory, Management, Leasing and Development Services | | 15 |
Portfolio Data | | 16 |
Debt Summary | | 20 |
Capital Structure | | 22 |
Other Information | | 23 |
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 interests in premier properties, 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 December 31, 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 as well as 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 $4.5 million is unfunded. 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.
In January 2010, we entered into an agreement to provide consulting services to assist with certain real estate rehabilitation and/or development projects associated with real property owned by a local government agency.
Significant Recent Events
During the fourth quarter of 2009, we paid off two mezzanine loans on Two Commerce Square which were scheduled to mature in January 2010. The loans, which had a principal and accrued interest amount of $36.4 million, were paid off for a discounted amount of $25.0 million, resulting in gain from extinguishment of debt of $11.4 million. We issued 5,138,600 shares of our common stock in a registered direct offering to certain institutional investors, resulting in net proceeds to the Company of approximately $13.1 million, to provide partial funding for the loan payoff.
During the fourth quarter of 2009, we modified the $17.0 million Campus El Segundo construction loan. The loan has been extended to July 31, 2011, and has three one-year extension options.
During the fourth quarter of 2009, we modified the Four Points Centre construction loan. The loan has been extended to July 31, 2012 with two one-year extension options.
Subsequent to December 31, 2009, we negotiated on behalf of the California State Teachers’ Retirement System (“CalSTRS”), our partner in City National Plaza, for CalSTRS to acquire all of the property’s mezzanine debt, which has a principal balance of approximately $219.1 million, and is scheduled to mature on July 9, 2010. CalSTRS will contribute this debt to the partnership’s equity, reducing the leverage on the property from $568.0 million to $348.9 million, all of which is first mortgage debt. We are in discussions with CalSTRS to obtain an option to participate in the loan purchase, on or after the maturity of the mezzanine debt, based on our current pro rata share of 25% of the existing City National Plaza equity.
1
Thomas Properties Group, Inc.
Supplemental Financial Information
COMPANY BACKGROUND
At Murano we entered into contracts to sell an additional 13 condominium residences and closed the sales of 18 others during the quarter, resulting in a reduction of approximately $8.1 million in our construction loan balance, which had a balance of $37.0 million as of December 31, 2009. Subsequent to December 31, 2009, we entered into contracts to sell an additional six condominiums.
During the fourth quarter of 2009, we sold a 1.9 acre land parcel adjacent to our Four Points Centre development property in Austin, Texas, which is leased to a 4,200 square foot retail tenant under a ground lease. The land was sold for $2.1 million; we recognized a gain of approximately $1.2 million.
2
Thomas Properties Group, Inc.
Supplemental Financial Information
OPERATINGAND 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 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 are 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 been 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 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 pages 11 and 12 for a discussion of EBDT and a reconciliation of EBDT to net income (loss) and pages 13 and 14 for a discussion of ATCF and a reconciliation of ATCF to net income (loss).
3
Thomas Properties Group, Inc.
Supplemental Financial Information
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
| | | | | | | | | | | | | | | | |
| | | Three months ended
December 31, | | | Twelve months ended
December 31, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
Revenues: | | | | | | | | | | | | | | | | |
Rental | | $ | 7,254 | | | $ | 7,206 | | | $ | 29,753 | | | $ | 30,523 | |
Tenant reimbursements | | | 5,012 | | | | 5,758 | | | | 21,163 | | | | 25,874 | |
Parking and other | | | 832 | | | | 1,122 | | | | 2,988 | | | | 3,869 | |
Investment advisory, management, leasing and development services | | | 2,187 | | | | 1,624 | | | | 9,345 | | | | 7,194 | |
Investment advisory, management, leasing and development services-unconsolidated real estate entities | | | 3,794 | | | | 4,593 | | | | 15,023 | | | | 18,263 | |
Reimbursement of property personnel costs | | | 1,371 | | | | 1,004 | | | | 5,584 | | | | 6,079 | |
Condominium sales | | | 7,299 | | | | — | | | | 30,226 | | | | 79,758 | |
| | | | | | | | | | | | | | | | |
Total revenues | | | 27,749 | | | | 21,307 | | | | 114,082 | | | | 171,560 | |
| | | | | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | | |
Property operating and maintenance | | | 6,900 | | | | 6,731 | | | | 25,339 | | | | 25,608 | |
Real estate taxes | | | 1,798 | | | | 1,720 | | | | 7,225 | | | | 6,482 | |
Investment advisory, management, leasing and development services | | | 3,272 | | | | 2,280 | | | | 11,910 | | | | 14,800 | |
Reimbursable property personnel costs | | | 1,371 | | | | 1,004 | | | | 5,584 | | | | 6,079 | |
Cost of condominium sales | | | 5,600 | | | | 208 | | | | 26,492 | | | | 62,436 | |
Rent-unconsolidated real estate entities | | | 142 | | | | 93 | | | | 350 | | | | 284 | |
Interest | | | 6,453 | | | | 9,023 | | | | 26,868 | | | | 22,763 | |
Depreciation and amortization | | | 3,269 | | | | 3,268 | | | | 12,642 | | | | 11,766 | |
General and administrative | | | 4,660 | | | | 2,855 | | | | 16,732 | | | | 16,411 | |
Impairment loss | | | 4,400 | | | | 11,023 | | | | 13,000 | | | | 11,023 | |
| | | | | | | | | | | | | | | | |
Total expenses | | | 37,865 | | | | 38,205 | | | | 146,142 | | | | 177,652 | |
| | | | | | | | | | | | | | | | |
Gain on sale of real estate | | | 1,214 | | | | — | | | | 1,214 | | | | 3,618 | |
Gain from extinguishment of debt | | | 11,412 | | | | — | | | | 11,921 | | | | 255 | |
Interest income | | | 51 | | | | 454 | | | | 338 | | | | 2,795 | |
Equity in net loss of unconsolidated real estate entities | | | (15,641 | ) | | | (3,720 | ) | | | (16,236 | ) | | | (12,828 | ) |
| | | | | | | | | | | | | | | | |
Loss before income taxes and noncontrolling interests | | | (13,080 | ) | | | (20,164 | ) | | | (34,823 | ) | | | (12,252 | ) |
(Provision) benefit for income taxes | | | (203 | ) | | | 4,580 | | | | (683 | ) | | | 1,885 | |
| | | | | | | | | | | | | | | | |
Net loss | | | (13,283 | ) | | | (15,584 | ) | | | (35,506 | ) | | | (10,367 | ) |
Noncontrolling interests’ share of net loss: | | | | | | | | | | | | | | | | |
Unitholders in the Operating Partnership | | | 4,079 | | | | 7,809 | | | | 11,535 | | | | 4,683 | |
Partners in consolidated real estate entities | | | 1,474 | | | | 65 | | | | 2,408 | | | | 198 | |
| | | | | | | | | | | | | | | | |
| | | 5,553 | | | | 7,874 | | | | 13,943 | | | | 4,881 | |
| | | | | | | | | | | | | | | | |
TPGI share of net loss | | $ | (7,730 | ) | | $ | (7,710 | ) | | $ | (21,563 | ) | | $ | (5,486 | ) |
| | | | | | | | | | | | | | | | |
Loss per share-basic and diluted | | $ | (0.30 | ) | | $ | (0.33 | ) | | $ | (0.86 | ) | | $ | (0.24 | ) |
Weighted average common shares-basic and diluted | | | 25,753,994 | | | | 23,724,453 | | | | 25,173,163 | | | | 23,693,577 | |
4
Thomas Properties Group, Inc.
Supplemental Financial Information
CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
| | | | | | | | |
| | | December 31,
2009 | | | December 31,
2008 | |
| ASSETS | | | | | | | | |
Investments in real estate: | | | | | | | | |
Operating properties, net | | $ | 276,603 | | | $ | 274,784 | |
Land improvements – development properties | | | 97,750 | | | | 100,886 | |
Construction in progress | | | — | | | | 1,274 | |
| | | | | | | | |
| | | 374,353 | | | | 376,944 | |
| | | | | | | | |
Condominium units held for sale | | | 64,101 | | | | 101,112 | |
Real estate held for sale | | | — | | | | 609 | |
Investments in unconsolidated real estate entities | | | 14,458 | | | | 29,098 | |
Cash and cash equivalents, unrestricted | | | 35,935 | | | | 69,023 | |
Restricted cash | | | 12,071 | | | | 16,665 | |
Rents and other receivables, net | | | 4,389 | | | | 4,452 | |
Receivables from condominium sales contracts, net | | | — | | | | 10,485 | |
Receivables from unconsolidated real estate entities | | | 2,010 | | | | 4,701 | |
Above market rents, net | | | 838 | | | | 1,070 | |
Deferred rents | | | 12,954 | | | | 10,604 | |
Deferred leasing and loan costs, net | | | 15,375 | | | | 15,018 | |
Deferred tax asset, net of valuation allowance | | | 17,644 | | | | 15,534 | |
Other assets, net | | | 5,275 | | | | 5,120 | |
| | | | | | | | |
Total assets | | $ | 559,403 | | | $ | 660,435 | |
| | | | | | | | |
| | |
| | | December 31,
2009 | | | December 31,
2008 | |
| LIABILITIES AND EQUITY | | | | | | | | |
Liabilities: | | | | | | | | |
Mortgage, other secured and unsecured loans | | $ | 318,236 | | | $ | 387,945 | |
Accounts payable and other liabilities | | | 15,260 | | | | 27,750 | |
Unrecognized tax benefits | | | 19,639 | | | | 17,078 | |
Below market rents, net | | | 674 | | | | 920 | |
Dividends and distributions payable | | | — | | | | 2,377 | |
Prepaid rent and deferred revenue | | | 3,249 | | | | 3,638 | |
| | | | | | | | |
Total liabilities | | | 357,058 | | | | 439,708 | |
| | | | | | | | |
Equity: | | | | | | | | |
Stockholders’ equity: | | | | | | | | |
Common stock | | | 308 | | | | 238 | |
Limited voting stock | | | 138 | | | | 145 | |
Additional paid-in capital | | | 185,344 | | | | 158,341 | |
Retained deficit and dividends including $74 and $186 of other comprehensive loss as of December 31, 2009 and December 31, 2008, respectively | | | (49,394 | ) | | | (26,980 | ) |
| | | | | | | | |
Total stockholders’ equity | | | 136,396 | | | | 131,744 | |
Noncontrolling interests: | | | | | | | | |
Unitholders in the Operating Partnership | | | 63,042 | | | | 85,210 | |
Partners in consolidated real estate entities | | | 2,907 | | | | 3,773 | |
| | | | | | | | |
Total noncontrolling interests | | | 65,949 | | | | 88,983 | |
| | | | | | | | |
Total equity | | | 202,345 | | | | 220,727 | |
| | | | | | | | |
Total liabilities and equity | | $ | 559,403 | | | $ | 660,435 | |
| | | | | | | | |
5
Thomas Properties Group, Inc.
Supplemental Financial Information
UNCONSOLIDATED REAL ESTATE ENTITIES STATEMENTSOF OPERATIONS
(in thousands)
(unaudited)
The following are the combined statements of operations of our unconsolidated real estate entities for the three and twelve months ended December 31, 2009 and 2008.
| | | | | | | | | | | | | | | | |
| | | Three months ended
December 31, | | | Twelve months ended
December 31, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
Revenues: | | | | | | | | | | | | | | | | |
Rental | | $ | 50,536 | | | $ | 50,776 | | | $ | 207,669 | | | $ | 201,623 | |
Tenant reimbursements | | | 22,663 | | | | 23,277 | | | | 87,929 | | | | 87,622 | |
Parking and other | | | 6,814 | | | | 7,689 | | | | 27,811 | | | | 32,143 | |
| | | | | | | | | | | | | | | | |
Total revenues | | | 80,013 | | | | 81,742 | | | | 323,409 | | | | 321,388 | |
| | | | | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | | |
Property operating and maintenance | | | 32,421 | | | | 32,443 | | | | 122,847 | | | | 125,345 | |
Real estate taxes | | | 10,624 | | | | 11,260 | | | | 42,691 | | | | 44,674 | |
Interest | | | 26,180 | | | | 30,976 | | | | 104,105 | | | | 126,386 | |
Depreciation and amortization | | | 29,394 | | | | 30,575 | | | | 120,143 | | | | 125,565 | |
Impairment loss | | | 55,995 | | | | 4,840 | | | | 64,044 | | | | 4,840 | |
| | | | | | | | | | | | | | | | |
Total expenses | | | 154,614 | | | | 110,094 | | | | 453,830 | | | | 426,810 | |
| | | | | | | | | | | | | | | | |
Loss from continuing operations | | | (74,601 | ) | | | (28,352 | ) | | | (130,421 | ) | | | (105,422 | ) |
Gain on extinguishment of debt | | | — | | | | — | | | | 67,017 | | | | — | |
Interest income | | | 21 | | | | 183 | | | | 262 | | | | 1,165 | |
Loss from discontinued operations | | | — | | | | 1 | | | | (83 | ) | | | (104 | ) |
| | | | | | | | | | | | | | | | |
Net loss | | $ | (74,580 | ) | | $ | (28,168 | ) | | $ | (63,225 | ) | | $ | (104,361 | ) |
| | | | | | | | | | | | | | | | |
TPGI share of equity in net loss of unconsolidated real estate entities | | $ | (15,641 | ) | | $ | (3,720 | ) | | $ | (16,236 | ) | | $ | (12,828 | ) |
| | | | | | | | | | | | | | | | |
6
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 December 31, 2009 and 2008.
| | | | | | |
| | | December 31,
2009 | | December 31,
2008 |
| ASSETS | | | | | | |
Investments in real estate, net | | $ | 2,224,709 | | $ | 2,335,067 |
Land held for sale | | | 3,853 | | | 3,835 |
Cash and cash equivalents, unrestricted | | | 24,918 | | | 26,884 |
Restricted cash | | | 93,434 | | | 64,395 |
Rents and other receivables, net | | | 3,546 | | | 5,386 |
Above market rents, net | | | 2,117 | | | 2,988 |
Deferred rents | | | 79,960 | | | 67,378 |
Deferred leasing and loan costs, net | | | 144,287 | | | 168,980 |
Other assets | | | 7,258 | | | 7,163 |
Assets associated with discontinued operations | | | — | | | 86 |
| | | | | | |
Total assets | | $ | 2,584,082 | | $ | 2,682,162 |
| | | | | | |
| LIABILITIES AND EQUITY | | | | | | |
Mortgage, other secured, and unsecured loans | | $ | 2,217,118 | | $ | 2,237,717 |
Accounts and interest payable and other liabilities | | | 98,401 | | | 105,998 |
Below market rents, net | | | 62,527 | | | 80,467 |
Obligations associated with discontinued operations | | | — | | | 121 |
| | | | | | |
Total liabilities | | | 2,378,046 | | | 2,424,303 |
| | | | | | |
Redeemable noncontrolling interests | | | — | | | 18,771 |
Owners’ equity | | | 206,036 | | | 239,088 |
| | | | | | |
Total liabilities and equity | | $ | 2,584,082 | | $ | 2,682,162 |
| | | | | | |
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 three months ended December 31, 2009 and 2008, including reconciliation from the consolidated statements of operations to the pro-rata consolidated statements of operations.
| | | | | | | | | | | | | | | | | | | | | | | |
| | | For the three months ended December 31, 2009 | | | For the three months ended December 31, 2008 | |
| | | Consolidated | | | Plus
Unconsolidated
Investments at
Pro-Rata | | | Pro-Rata | | | Consolidated | | | Plus
Unconsolidated
Investments at
Pro-Rata | | Pro-Rata | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | |
Rental | | $ | 7,254 | | | $ | 9,654 | | | $ | 16,908 | | | $ | 7,206 | | | $ | 9,579 | | $ | 16,785 | |
Tenant reimbursements | | | 5,012 | | | | 3,852 | | | | 8,864 | | | | 5,758 | | | | 3,961 | | | 9,719 | |
Parking and other | | | 832 | | | | 1,229 | | | | 2,061 | | | | 1,122 | | | | 1,368 | | | 2,490 | |
Investment advisory, management, leasing and development services | | | 2,187 | | | | — | | | | 2,187 | | | | 1,624 | | | | — | | | 1,624 | |
Investment advisory, management, leasing and development services- unconsolidated real estate entities | | | 3,794 | | | | 156 | | | | 3,950 | | | | 4,593 | | | | 46 | | | 4,639 | |
Reimbursement of property personnel costs | | | 1,371 | | | | — | | | | 1,371 | | | | 1,004 | | | | — | | | 1,004 | |
Condominium sales | | | 7,299 | | | | — | | | | 7,299 | | | | — | | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | | 27,749 | | | | 14,891 | | | | 42,640 | | | | 21,307 | | | | 14,954 | | | 36,261 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | | | | | | | | | |
Property operating and maintenance | | | 6,900 | | | | 5,877 | | | | 12,777 | | | | 6,731 | | | | 5,651 | | | 12,382 | |
Real estate taxes | | | 1,798 | | | | 1,713 | | | | 3,511 | | | | 1,720 | | | | 1,825 | | | 3,545 | |
Investment advisory, management, leasing and development services | | | 3,272 | | | | — | | | | 3,272 | | | | 2,280 | | | | — | | | 2,280 | |
Reimbursable property personnel costs | | | 1,371 | | | | — | | | | 1,371 | | | | 1,004 | | | | — | | | 1,004 | |
Cost of condominium sales | | | 5,600 | | | | — | | | | 5,600 | | | | 208 | | | | — | | | 208 | |
Rent-unconsolidated real estate entities | | | 142 | | | | — | | | | 142 | | | | 93 | | | | — | | | 93 | |
Interest | | | 6,453 | | | | 4,183 | | | | 10,636 | | | | 9,023 | | | | 5,138 | | | 14,161 | |
Depreciation and amortization | | | 3,269 | | | | 4,811 | | | | 8,080 | | | | 3,268 | | | | 4,904 | | | 8,172 | |
General and administrative | | | 4,660 | | | | — | | | | 4,660 | | | | 2,855 | | | | — | | | 2,855 | |
Impairment loss | | | 4,400 | | | | 14,000 | | | | 18,400 | | | | 11,023 | | | | 1,210 | | | 12,233 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total expenses | | | 37,865 | | | | 30,584 | | | | 68,449 | | | | 38,205 | | | | 18,728 | | | 56,933 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Gain on sale of real estate | | | 1,214 | | | | — | | | | 1,214 | | | | — | | | | — | | | — | |
Gain from extinguishment of debt | | | 11,412 | | | | — | | | | 11,412 | | | | — | | | | — | | | — | |
Interest income | | | 51 | | | | 53 | | | | 104 | | | | 454 | | | | 54 | | | 508 | |
Equity in net loss of unconsolidated real estate entities | | | (15,641 | ) | | | 15,641 | | | | — | | | | (3,720 | ) | | | 3,720 | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
Loss before income taxes and noncontrolling interests | | | (13,080 | ) | | | 1 | | | | (13,079 | ) | | | (20,164 | ) | | | — | | | (20,164 | ) |
(Provision) benefit for income taxes | | | (203 | ) | | | — | | | | (203 | ) | | | 4,580 | | | | — | | | 4,580 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Net loss | | | (13,283 | ) | | | 1 | | | | (13,282 | ) | | | (15,584 | ) | | | — | | | (15,584 | ) |
Noncontrolling interests’ share of net loss: | | | | | | | | | | | | | | | | | | | | | | | |
Unitholders in the Operating Partnership | | | 4,079 | | | | — | | | | 4,079 | | | | 7,809 | | | | — | | | 7,809 | |
Partners in consolidated real estate entities | | | 1,474 | | | | — | | | | 1,474 | | | | 65 | | | | — | | | 65 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | 5,553 | | | | — | | | | 5,553 | | | | 7,874 | | | | — | | | 7,874 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Loss before discontinued operations | | | (7,730 | ) | | | 1 | | | | (7,729 | ) | | | (7,710 | ) | | | — | | | (7,710 | ) |
Loss from discontinued operations | | | — | | | | (1 | ) | | | (1 | ) | | | — | | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
TPGI share of net loss | | $ | (7,730 | ) | | $ | — | | | $ | (7,730 | ) | | $ | (7,710 | ) | | $ | — | | $ | (7,710 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
8
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 twelve months ended December 31, 2009 and 2008, including reconciliation from the consolidated statements of operations to the pro-rata consolidated statements of operations.
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | For the twelve months ended December 31, 2009 | | | For the twelve months ended December 31, 2008 | |
| | | Consolidated | | | Plus
Unconsolidated
Investments at
Pro-Rata | | | Pro-Rata | | | Consolidated | | | Plus
Unconsolidated
Investments at
Pro-Rata | | | Pro-Rata | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
Rental | | $ | 29,753 | | | $ | 39,682 | | | $ | 69,435 | | | $ | 30,523 | | | $ | 38,600 | | | $ | 69,123 | |
Tenant reimbursements | | | 21,163 | | | | 14,796 | | | | 35,959 | | | | 25,874 | | | | 14,893 | | | | 40,767 | |
Parking and other | | | 2,988 | | | | 5,056 | | | | 8,044 | | | | 3,869 | | | | 5,551 | | | | 9,420 | |
Investment advisory, management, leasing and development services | | | 9,345 | | | | — | | | | 9,345 | | | | 7,194 | | | | — | | | | 7,194 | |
Investment advisory, management, leasing and development services- unconsolidated real estate entities | | | 15,023 | | | | 341 | | | | 15,364 | | | | 18,263 | | | | 185 | | | | 18,448 | |
Reimbursement of property personnel costs | | | 5,584 | | | | — | | | | 5,584 | | | | 6,079 | | | | — | | | | 6,079 | |
Condominium sales | | | 30,226 | | | | — | | | | 30,226 | | | | 79,758 | | | | — | | | | 79,758 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | | 114,082 | | | | 59,875 | | | | 173,957 | | | | 171,560 | | | | 59,229 | | | | 230,789 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Property operating and maintenance | | | 25,339 | | | | 21,825 | | | | 47,164 | | | | 25,608 | | | | 22,176 | | | | 47,784 | |
Real estate taxes | | | 7,225 | | | | 6,959 | | | | 14,184 | | | | 6,482 | | | | 7,443 | | | | 13,925 | |
Investment advisory, management, leasing and development services | | | 11,910 | | | | — | | | | 11,910 | | | | 14,800 | | | | — | | | | 14,800 | |
Reimbursable property personnel costs | | | 5,584 | | | | — | | | | 5,584 | | | | 6,079 | | | | — | | | | 6,079 | |
Cost of condominium sales | | | 26,492 | | | | — | | | | 26,492 | | | | 62,436 | | | | — | | | | 62,436 | |
Rent-unconsolidated real estate entities | | | 350 | | | | — | | | | 350 | | | | 284 | | | | — | | | | 284 | |
Interest | | | 26,868 | | | | 16,300 | | | | 43,168 | | | | 22,763 | | | | 21,011 | | | | 43,774 | |
Depreciation and amortization | | | 12,642 | | | | 19,412 | | | | 32,054 | | | | 11,766 | | | | 20,508 | | | | 32,274 | |
General and administrative | | | 16,732 | | | | — | | | | 16,732 | | | | 16,411 | | | | — | | | | 16,411 | |
Impairment loss | | | 13,000 | | | | 16,012 | | | | 29,012 | | | | 11,023 | | | | 1,210 | | | | 12,233 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses | | | 146,142 | | | | 80,508 | | | | 226,650 | | | | 177,652 | | | | 72,348 | | | | 250,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Gain on sale of real estate | | | 1,214 | | | | — | | | | 1,214 | | | | 3,618 | | | | — | | | | 3,618 | |
Gain from extinguishment of debt | | | 11,921 | | | | 4,189 | | | | 16,110 | | | | 255 | | | | — | | | | 255 | |
Interest income | | | 338 | | | | 230 | | | | 568 | | | | 2,795 | | | | 317 | | | | 3,112 | |
Equity in net (loss) income of unconsolidated real estate entities | | | (16,236 | ) | | | 16,236 | | | | — | | | | (12,828 | ) | | | 12,828 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Loss (income) before income taxes and noncontrolling interests | | | (34,823 | ) | | | 22 | | | | (34,801 | ) | | | (12,252 | ) | | | 26 | | | | (12,226 | ) |
Provision for income taxes | | | (683 | ) | | | — | | | | (683 | ) | | | 1,885 | | | | — | | | | 1,885 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net (loss) income | | | (35,506 | ) | | | 22 | | | | (35,484 | ) | | | (10,367 | ) | | | 26 | | | | (10,341 | ) |
Noncontrolling interests’ share of net loss (income): | | | | | | | | | | | | | | | | | | | | | | | | |
Unitholders in the Operating Partnership | | | 11,535 | | | | — | | | | 11,535 | | | | 4,683 | | | | — | | | | 4,683 | |
Partners in consolidated real estate entities | | | 2,408 | | | | — | | | | 2,408 | | | | 198 | | | | — | | | | 198 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 13,943 | | | | — | | | | 13,943 | | | | 4,881 | | | | — | | | | 4,881 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
(Loss) income before discontinued operations | | | (21,563 | ) | | | 22 | | | | (21,541 | ) | | | (5,486 | ) | | | 26 | | | | (5,460 | ) |
Loss from discontinued operations | | | — | | | | (22 | ) | | | (22 | ) | | | — | | | | (26 | ) | | | (26 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
TPGI share of net loss | | $ | (21,563 | ) | | $ | — | | | $ | (21,563 | ) | | $ | (5,486 | ) | | $ | — | | | $ | (5,486 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
9
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 December 31, 2009 and 2008, including reconciliation from the consolidated balance sheets to the pro-rata consolidated balance sheets.
| | | | | | | | | | | | | | | | | | | | |
| | | December 31, 2009 | | December 31, 2008 |
| | | Consolidated | | Plus
Unconsolidated
Investments at
Pro-Rata | | | Pro-Rata | | Consolidated | | Plus
Unconsolidated
Investments at
Pro-Rata | | | Pro-Rata |
ASSETS | | | | | | | | | | | | | | | | | | | | |
Investments in real estate, net | | $ | 374,353 | | $ | 363,206 | | | $ | 737,559 | | $ | 376,944 | | $ | 369,177 | | | $ | 746,121 |
Condominium units held for sale | | | 64,101 | | | — | | | | 64,101 | | | 101,112 | | | — | | | | 101,112 |
Real estate held for sale | | | — | | | 963 | | | | 963 | | | 609 | | | 959 | | | | 1,568 |
Investments in unconsolidated real estate entities | | | 14,458 | | | (14,458 | ) | | | — | | | 29,098 | | | (29,098 | ) | | | — |
Cash and cash equivalents, unrestricted | | | 35,935 | | | 2,966 | | | | 38,901 | | | 69,023 | | | 4,021 | | | | 73,044 |
Restricted cash | | | 12,071 | | | 22,341 | | | | 34,412 | | | 16,665 | | | 13,095 | | | | 29,760 |
Receivables from condominium sales contracts, net | | | — | | | — | | | | — | | | 10,485 | | | — | | | | 10,485 |
Rents and other receivables, net | | | 6,399 | | | 790 | | | | 7,189 | | | 9,153 | | | 1,252 | | | | 10,405 |
Above market rents, net | | | 838 | | | 474 | | | | 1,312 | | | 1,070 | | | 643 | | | | 1,713 |
Deferred rents | | | 12,954 | | | 17,814 | | | | 30,768 | | | 10,604 | | | 14,682 | | | | 25,286 |
Deferred leasing and loan costs, net | | | 15,375 | | | 24,025 | | | | 39,400 | | | 15,018 | | | 26,826 | | | | 41,844 |
Deferred tax asset, net of valuation allowance | | | 17,644 | | | — | | | | 17,644 | | | 15,534 | | | — | | | | 15,534 |
Assets associated with discontinued operations | | | — | | | — | | | | — | | | — | | | 22 | | | | 22 |
Other assets | | | 5,275 | | | 1,458 | | | | 6,733 | | | 5,120 | | | 1,359 | | | | 6,479 |
| | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 559,403 | | $ | 419,579 | | | $ | 978,982 | | $ | 660,435 | | $ | 402,938 | | | $ | 1,063,373 |
| | | | | | | | | | | | | | | | | | | | |
LIABILITIES AND EQUITY | | | | | | | | | | | | | | | | | | | | |
Mortgage, other secured, and unsecured loans | | $ | 318,236 | | $ | 397,754 | | | $ | 715,990 | | $ | 387,945 | | $ | 372,999 | | | $ | 760,944 |
Accounts payable and other liabilities | | | 15,260 | | | 13,946 | | | | 29,206 | | | 27,750 | | | 16,170 | | | | 43,920 |
Unrecognized tax benefits | | | 19,639 | | | — | | | | 19,639 | | | 17,078 | | | — | | | | 17,078 |
Below market rents, net | | | 674 | | | 5,817 | | | | 6,491 | | | 920 | | | 7,209 | | | | 8,129 |
Dividends and distributions payable | | | — | | | — | | | | — | | | 2,377 | | | — | | | | 2,377 |
Prepaid rent and deferred revenue | | | 3,249 | | | 2,062 | | | | 5,311 | | | 3,638 | | | 1,837 | | | | 5,475 |
Obligations associated with discontinued operations | | | — | | | — | | | | — | | | — | | | 30 | | | | 30 |
| | | | | | | | | | | | | | | | | | | | |
Total liabilities | | | 357,058 | | | 419,579 | | | | 776,637 | | | 439,708 | | | 398,245 | | | | 837,953 |
| | | | | | | | | | | | | | | | | | | | |
Redeemable noncontrolling interest | | | — | | | — | | | | — | | | — | | | 4,693 | | | | 4,693 |
Noncontrolling interests | | | 65,949 | | | — | | | | 65,949 | | | 88,983 | | | — | | | | 88,983 |
Total stockholders’ equity | | | 136,396 | | | — | | | | 136,396 | | | 131,744 | | | — | | | | 131,744 |
| | | | | | | | | | | | | | | | | | | | |
Total liabilities and equity | | $ | 559,403 | | $ | 419,579 | | | $ | 978,982 | | $ | 660,435 | | $ | 402,938 | | | $ | 1,063,373 |
| | | | | | | | | | | | | | | | | | | | |
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 to EBDT:
| | | | | | | | | | | | | | | | | | | | | | |
| | | For the three months ended December 31, 2009 | | | For the three months ended December 31, 2008 | |
| | | Consolidated | | | Plus
Unconsolidated
Investments at
Pro-Rata | | Pro-Rata | | | Consolidated | | | Plus
Unconsolidated
Investments at
Pro-Rata | | Pro-Rata | |
Net loss | | $ | (7,730 | ) | | $ | — | | $ | (7,730 | ) | | $ | (7,710 | ) | | $ | — | | $ | (7,710 | ) |
Income tax provision (benefit) | | | 203 | | | | — | | | 203 | | | | (4,580 | ) | | | — | | | (4,580 | ) |
Noncontrolling interests – unitholders in the Operating Partnership | | | (4,079 | ) | | | — | | | (4,079 | ) | | | (7,809 | ) | | | — | | | (7,809 | ) |
Depreciation and amortization | | | 3,269 | | | | 4,811 | | | 8,080 | | | | 3,268 | | | | 4,904 | | | 8,172 | |
Amortization of loan costs | | | 318 | | | | 214 | | | 532 | | | | 212 | | | | 194 | | | 406 | |
| | | | | | | | | | | | | | | | | | | | | | |
EBDT | | $ | (8,019 | ) | | $ | 5,025 | | $ | (2,994 | ) | | $ | (16,619 | ) | | $ | 5,098 | | $ | (11,521 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
TPGI share of EBDT (1) | | $ | (5,223 | ) | | $ | 3,273 | | $ | (1,950 | ) | | $ | (10,140 | ) | | $ | 3,111 | | $ | (7,029 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
EBDT per share – basic and diluted | | | | | | | | | $ | (0.08 | ) | | | | | | | | | $ | (0.30 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Weighted average common shares outstanding – basic and diluted | | | | | | | | | | 25,753,994 | | | | | | | | | | | 23,724,453 | |
| | | | | | | | | | | | | | | | | | | | | | |
| (1) | Based on an interest in our operating partnership of 65.13% and 61.01% for the three months ended December 31, 2009 and 2008, respectively. |
11
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 twelve months ended December 31, 2009 | | | For the twelve months ended December 31, 2008 | |
| | | Consolidated | | | Plus
Unconsolidated
Investments at
Pro-Rata | | Pro-Rata | | | Consolidated | | | Plus
Unconsolidated
Investments at
Pro-Rata | | Pro-Rata | |
Net loss | | $ | (21,563 | ) | | $ | — | | $ | (21,563 | ) | | $ | (5,486 | ) | | $ | — | | $ | (5,486 | ) |
Income tax provision | | | 683 | | | | — | | | 683 | | | | (1,885 | ) | | | — | | | (1,885 | ) |
Noncontrolling interests – unitholders in the Operating Partnership | | | (11,535 | ) | | | — | | | (11,535 | ) | | | (4,683 | ) | | | — | | | (4,683 | ) |
Depreciation and amortization | | | 12,642 | | | | 19,412 | | | 32,054 | | | | 11,766 | | | | 20,508 | | | 32,274 | |
Amortization of loan costs | | | 690 | | | | 897 | | | 1,587 | | | | 449 | | | | 1,284 | | | 1,733 | |
| | | | | | | | | | | | | | | | | | | | | | |
EBDT | | $ | (19,083 | ) | | $ | 20,309 | | $ | 1,226 | | | $ | 161 | | | $ | 21,792 | | $ | 21,953 | |
| | | | | | | | | | | | | | | | | | | | | | |
TPGI share of EBDT (1) | | $ | (12,292 | ) | | $ | 13,082 | | $ | 790 | | | $ | 98 | | | $ | 13,326 | | $ | 13,424 | |
| | | | | | | | | | | | | | | | | | | | | | |
EBDT per share – basic and diluted | | | | | | | | | $ | 0.03 | | | | | | | | | | $ | 0.57 | |
| | | | | | | | | | | | | | | | | | | | | | |
Weighted average common shares outstanding – basic and diluted | | | | | | | | | | 25,173,163 | | | | | | | | | | | 23,693,577 | |
| | | | | | | | | | | | | | | | | | | | | | |
| (1) | Based on an interest in our operating partnership of 64.42% and 61.15% for the twelve months ended December 31, 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) deferred 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; vii) the adjustments to rental revenue to reflect the fair market value of rent; and viii) gain from extinguishment of debt. 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 December 31, 2009 | | | For the three months ended December 31, 2008 | |
| | | Consolidated | | | Plus
Unconsolidated
Investments at
Pro-Rata | | | Pro-Rata | | | Consolidated | | | Plus
Unconsolidated
Investments at
Pro-Rata | | | Pro-Rata | |
Net loss | | $ | (7,730 | ) | | $ | — | | | $ | (7,730 | ) | | $ | (7,710 | ) | | $ | — | | | $ | (7,710 | ) |
Income tax provision (benefit) | | | 203 | | | | — | | | | 203 | | | | (4,580 | ) | | | — | | | | (4,580 | ) |
Noncontrolling interests – unitholders in the Operating Partnership | | | (4,079 | ) | | | — | | | | (4,079 | ) | | | (7,809 | ) | | | — | | | | (7,809 | ) |
Depreciation and amortization | | | 3,269 | | | | 4,811 | | | | 8,080 | | | | 3,268 | | | | 4,904 | | | | 8,172 | |
Amortization of loan costs | | | 318 | | | | 214 | | | | 532 | | | | 212 | | | | 194 | | | | 406 | |
Non-cash compensation expense | | | 581 | | | | — | | | | 581 | | | | 1,038 | | | | — | | | | 1,038 | |
Straight-line rent adjustments | | | (162 | ) | | | (91 | ) | | | (253 | ) | | | 320 | | | | (454 | ) | | | (134 | ) |
Adjustments to reflect the fair market value of rent | | | — | | | | (368 | ) | | | (368 | ) | | | 20 | | | | (338 | ) | | | (318 | ) |
Impairment loss | | | 4,400 | | | | 14,000 | | | | 18,400 | | | | 11,023 | | | | 1,210 | | | | 12,233 | |
Gain from extinguishment of debt | | | (11,412 | ) | | | — | | | | (11,412 | ) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
ATCF before income taxes | | $ | (14,612 | ) | | $ | 18,566 | | | $ | 3,954 | | | $ | (4,218 | ) | | $ | 5,516 | | | $ | 1,298 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
TPGI share of ATCF before income taxes (1) | | $ | (9,517 | ) | | $ | 12,092 | | | $ | 2,575 | | | $ | (2,573 | ) | | $ | 3,365 | | | $ | 792 | |
TPGI income tax expense-current | | | (100 | ) | | | — | | | | (100 | ) | | | (294 | ) | | | — | | | | (294 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
TPGI share of ATCF | | $ | (9,617 | ) | | $ | 12,092 | | | $ | 2,475 | | | $ | (2,867 | ) | | $ | 3,365 | | | $ | 498 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
ATCF per share – basic and diluted | | | | | | | | | | $ | 0.10 | | | | | | | | | | | $ | 0.02 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average common shares outstanding – basic and diluted | | | | | | | | | | | 25,753,994 | | | | | | | | | | | | 23,724,453 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Based on an interest in our operating partnership of 65.13% and 61.01% for the three months ended December 31, 2009 and 2008, respectively. |
13
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) deferred 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; vii) the adjustments to rental revenue to reflect the fair market value of rent; and viii) and gain from extinguishment of debt. 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 twelve months ended December 31, 2009 | | | For the twelve months ended December 31, 2008 | |
| | | Consolidated | | | Plus
Unconsolidated
Investments at
Pro-Rata | | | Pro-Rata | | | Consolidated | | | Plus
Unconsolidated
Investments at
Pro-Rata | | | Pro-Rata | |
Net loss | | $ | (21,563 | ) | | $ | — | | | $ | (21,563 | ) | | $ | (5,486 | ) | | $ | — | | | $ | (5,486 | ) |
Income tax provision | | | 683 | | | | — | | | | 683 | | | | (1,885 | ) | | | — | | | | (1,885 | ) |
Noncontrolling interests – unitholders in the Operating Partnership | | | (11,535 | ) | | | — | | | | (11,535 | ) | | | (4,683 | ) | | | — | | | | (4,683 | ) |
Depreciation and amortization | | | 12,642 | | | | 19,412 | | | | 32,054 | | | | 11,766 | | | | 20,508 | | | | 32,274 | |
Amortization of loan costs | | | 690 | | | | 897 | | | | 1,587 | | | | 449 | | | | 1,284 | | | | 1,733 | |
Non-cash compensation expense | | | 2,838 | | | | — | | | | 2,838 | | | | 3,495 | | | | — | | | | 3,495 | |
Straight-line rent adjustments | | | (924 | ) | | | (1,565 | ) | | | (2,489 | ) | | | 3,433 | | | | (2,332 | ) | | | 1,101 | |
Adjustments to reflect the fair market value of rent | | | 23 | | | | (1,394 | ) | | | (1,371 | ) | | | (80 | ) | | | (1,357 | ) | | | (1,437 | ) |
Impairment loss | | | 13,000 | | | | 16,012 | | | | 29,012 | | | | 11,023 | | | | 1,210 | | | | 12,233 | |
Gain from extinguishment of debt | | | (11,921 | ) | | | (4,189 | ) | | | (16,110 | ) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
ATCF before income taxes | | $ | (16,067 | ) | | $ | 29,173 | | | $ | 13,106 | | | $ | 18,032 | | | $ | 19,313 | | | $ | 37,345 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
TPGI share of ATCF before income taxes (1) | | $ | (10,350 | ) | | $ | 18,793 | | | $ | 8,443 | | | $ | 11,027 | | | $ | 11,810 | | | $ | 22,837 | |
TPGI income tax expense-current | | | (232 | ) | | | — | | | | (232 | ) | | | (294 | ) | | | — | | | | (294 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
TPGI share of ATCF | | $ | (10,582 | ) | | $ | 18,793 | | | $ | 8,211 | | | $ | 10,733 | | | $ | 11,810 | | | $ | 22,543 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
ATCF per share – basic and diluted | | | | | | | | | | $ | 0.33 | | | | | | | | | | | $ | 0.95 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average common shares outstanding – basic and diluted | | | | | | | | | | | 25,173,163 | | | | | | | | | | | | 23,693,577 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Based on an interest in our operating partnership of 64.42% and 61.15% for the twelve months ended December 31, 2009 and 2008, respectively. |
14
Thomas Properties Group, Inc.
Supplemental Financial Information
INVESTMENT ADVISORY, MANAGEMENT, LEASING AND DEVELOPMENT SERVICES
(in thousands)
(unaudited)
| | | | | | | | | | | | | | | | |
| | | Three months ended
December 31, | | | Twelve months ended
December 31, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
Property management, leasing and development services fees: | | | | | | | | | | | | |
Property management fees | | $ | 3,049 | | | $ | 3,150 | | | $ | 12,478 | | | $ | 12,644 | |
Leasing commissions | | | 1,463 | | | | 1,447 | | | | 5,426 | | | | 7,565 | |
Development services fees | | | 1,665 | | | | 2,089 | | | | 6,268 | | | | 9,088 | |
| | | | | | | | | | | | | | | | |
| | | 6,177 | | | | 6,686 | | | | 24,172 | | | | 29,297 | |
Investment advisory fees: | | | | | | | | | | | | |
Asset management fees | | | 1,654 | | | | 1,831 | | | | 6,928 | | | | 7,102 | |
| | | | | | | | | | | | | | | | |
Total fees | | | 7,831 | | | | 8,517 | | | | 31,100 | | | | 36,399 | |
Investment advisory, management, leasing and development services expenses | | | (3,272 | ) | | | (2,280 | ) | | | (11,910 | ) | | | (14,800 | ) |
| | | | | | | | | | | | | | | | |
Net investment advisory, management, leasing and development services income | | $ | 4,559 | | | $ | 6,237 | | | $ | 19,190 | | | $ | 21,599 | |
| | | | | | | | | | | | | | | | |
Reconciliation to GAAP Presentation: | | | | | | | | | | | | |
Total fees | | $ | 7,831 | | | $ | 8,517 | | | $ | 31,100 | | | $ | 36,399 | |
Elimination of intercompany fee revenues | | | (1,850 | ) | | | (2,300 | ) | | | (6,732 | ) | | | (10,942 | ) |
| | | | | | | | | | | | | | | | |
Investment advisory, management, leasing and development services revenues | | $ | 5,981 | | | $ | 6,217 | | | $ | 24,368 | | | $ | 25,457 | |
| | | | | | | | | | | | | | | | |
15
Thomas Properties Group, Inc.
Supplemental Financial Information
PORTFOLIO DATA
Our Ownership Properties
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | As of December 31, 2009 | | | 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
December 31,
2009 | | | Remaining
Loan
Capacity at
December 31,
2009 |
Stabilized Properties |
CityWestPlace | | Houston, TX | | 1,473,020 | | 99.0 | % | | 25.0 | % | | 368,255 | | $ | 5,782,000 | | $ | 5,152,000 | | | | | $ | 53,350,000 | | | $ | — |
San Felipe Plaza | | Houston, TX | | 980,472 | | 87.7 | | | 25.0 | | | 245,118 | | | 3,066,000 | | | 2,822,000 | | | | | | 29,425,000 | | | | — |
2500 City West | | Houston, TX | | 578,284 | | 91.6 | | | 25.0 | | | 144,571 | | | 1,887,000 | | | 1,764,000 | | | | | | 21,033,000 | | | | — |
Research Park Plaza I and II | | Austin, TX | | 271,882 | | 96.6 | | | 6.3 | | | 16,993 | | | 306,000 | | | 283,000 | | | | | | 3,219,000 | | | | — |
Stonebridge Plaza II | | Austin, TX | | 192,864 | | 96.0 | | | 6.3 | | | 12,054 | | | 171,000 | | | 166,000 | | | | | | 2,344,000 | | | | — |
One Commerce Square | | Philadelphia,
PA | | 942,866 | | 92.6 | | | 100.0 | | | 942,866 | | | 14,493,000 | | | 12,838,000 | | | | | | 130,000,000 | | | | — |
2121 Market Street (7) | | Philadelphia,
PA | | 22,136 | | 100.0 | | | 50.0 | | | 11,068 | | | 1,066,000 | | | 1,066,000 | | | | | | 9,254,000 | | | | — |
Oak Hill Plaza | | King of
Prussia, PA | | 164,360 | | 93.1 | | | 25.0 | | | 41,090 | | | 721,000 | | | 699,000 | | | | | | 11,113,000 | (8) | | | — |
Reflections II | | Reston, VA | | 64,253 | | 100.0 | | | 25.0 | | | 16,063 | | | 324,000 | | | 324,000 | | | | | | 2,269,000 | | | | — |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total / Average | | | | 4,690,137 | | 94.0 | | | | | | 1,798,078 | | | 27,816,000 | | | 25,114,000 | | | | | | 262,007,000 | | | | — |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Properties Projected to Stabilize in 2010 |
Four Points Centre (Retail) | | Austin, TX | | 6,600 | | 27.3 | | | 100.0 | | | 6,600 | | | 178,000 | | | 178,000 | | | 186,000 | | | — | | | | — |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total / Average | | | | 6,600 | | 27.3 | | | | | | 6,600 | | | 178,000 | | | 178,000 | | | 186,000 | | | — | | | | — |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Properties Projected to Stabilize in 2011 |
City National Plaza | | Los Angeles,
CA | | 2,496,084 | | 83.2 | | | 25.0 | | | 624,020 | | | 15,144,000 | | | 14,157,000 | | | 6,669,000 | | | 142,000,000 | | | | — |
Two Commerce Square | | Philadelphia,
PA | | 953,276 | | 86.8 | | | 100.0 | | | 953,276 | | | 16,788,000 | | | 16,305,000 | | | 16,118,000 | | | 108,104,000 | | | | — |
Frost Bank Tower | | Austin, TX | | 535,078 | | 87.5 | | | 6.3 | | | 33,442 | | | 846,000 | | | 815,000 | | | 217,000 | | | 9,375,000 | | | | — |
One Congress Plaza | | Austin, TX | | 518,385 | | 86.9 | | | 6.3 | | | 32,399 | | | 643,000 | | | 631,000 | | | 516,000 | | | 8,001,000 | | | | — |
One American Center | | Austin, TX | | 503,951 | | 78.0 | | | 6.3 | | | 31,497 | | | 593,000 | | | 589,000 | | | 426,000 | | | 7,500,000 | | | | — |
300 West 6th Street | | Austin, TX | | 454,225 | | 87.5 | | | 6.3 | | | 28,389 | | | 725,000 | | | 717,000 | | | 401,000 | | | 7,938,000 | | | | — |
San Jacinto Center | | Austin, TX | | 410,248 | | 75.6 | | | 6.3 | | | 25,641 | | | 554,000 | | | 532,000 | | | 430,000 | | | 6,313,000 | | | | — |
Four Falls Corporate Center | | Conshohocken,
PA | | 253,985 | | 78.9 | | | 25.0 | | | 63,496 | | | 1,244,000 | | | 1,228,000 | | | 1,219,000 | | | 13,017,000 | | | | — |
Walnut Hill Plaza | | King of
Prussia, PA | | 150,573 | | 55.3 | | | 25.0 | | | 37,643 | | | 493,000 | | | 489,000 | | | 862,000 | | | — | (8) | | | — |
Fair Oaks Plaza | | Fairfax, VA | | 179,688 | | 84.3 | | | 25.0 | | | 44,922 | | | 897,000 | | | 870,000 | | | 1,058,000 | | | 11,075,000 | | | | — |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total / Average | | | | 6,455,493 | | 83.0 | | | | | | 1,874,725 | | | 37,927,000 | | | 36,333,000 | | | 27,916,000 | | | 313,323,000 | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Properties Projected to Stabilize in 2012 |
Brookhollow Central I, II, and III | | Houston, TX | | 805,967 | | 68.2 | | | 25.0 | | | 201,492 | | | 2,682,000 | | | 2,460,000 | | | 9,432,000 | | | 12,949,000 | | | | — |
Westech 360 I-IV | | Austin, TX | | 175,529 | | 50.1 | | | 6.3 | | | 10,971 | | | 164,000 | | | 164,000 | | | 351,000 | | | 7,230,000 | (9) | | | — |
Park Centre | | Austin, TX | | 203,193 | | 82.5 | | | 6.3 | | | 12,700 | | | 173,000 | | | 173,000 | | | 271,000 | | | — | (9) | | | — |
Great Hills Plaza | | Austin, TX | | 139,252 | | 64.5 | | | 6.3 | | | 8,703 | | | 117,000 | | | 117,000 | | | 189,000 | | | — | (9) | | | — |
Four Points Centre (Office) | | Austin, TX | | 192,062 | | 17.3 | | | 100.0 | | | 192,062 | | | 3,228,000 | | | 3,201,000 | | | 8,805,000 | | | 26,177,000 | | | | 10,400,000 |
Centerpointe I and II | | Fairfax, VA | | 421,651 | | 53.9 | | | 25.0 | | | 105,413 | | | 2,394,000 | | | 2,296,000 | | | 5,071,000 | | | 30,946,000 | | | | — |
Reflections I | | Reston, VA | | 123,546 | | 100.0 | | | 25.0 | | | 30,887 | | | 667,000 | | | 667,000 | | | 2,299,000 | | | 5,447,000 | | | | — |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total / Average | | | | 2,061,200 | | 62.1 | | | | | | 562,228 | | | 9,425,000 | | | 9,078,000 | | | 26,418,000 | | | 82,749,000 | | | | 10,400,000 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total / Average All Properties | | | | 13,213,430 | | 83.6 | | | | | | 4,241,631 | | $ | 75,346,000 | | $ | 70,703,000 | | $ | 54,520,000 | | $ | 658,079,000 | | | $ | 10,400,000 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Footnotes on following page.
16
Thomas Properties Group, Inc.
Supplemental Financial Information
PORTFOLIO DATA - 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 December 31, 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 December 31, 2009, calculated as if the leases began on December 31, 2009, and ii) estimated annual parking and other income for 2010, less estimated annual operating expenses for 2010 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 annual parking and other income, less estimated annual 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 December 31, 2009, and ii) estimated annual parking and other income for 2010, less estimated annual operating expenses for 2010 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 93% occupancy), and iii) estimated annual parking and other income, less estimated annual 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 for 2010 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) | Our Austin Portfolio bank term loan is secured by three of our Austin, Texas properties on a first mortgage basis and seven of our remaining Austin properties provide secondary equity pledges. Our pro rata share of the obligation is $7.2 million, which is reflected entirely on the Westech 360 I-IV line. See footnote 7 on page 21. |
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 | | 717,214 | | $ | — | | $ | — |
2010 | | 239,859 | | | 15.42 | | | 15.54 |
2011 | | 158,868 | | | 16.44 | | | 17.02 |
2012 | | 289,477 | | | 16.37 | | | 17.29 |
2013 | | 445,709 | | | 17.45 | | | 19.49 |
2014 | | 363,223 | | | 13.30 | | | 16.76 |
Thereafter | | 2,027,281 | | | 12.62 | | | 19.40 |
| | | | | | | | |
Total | | 4,241,631 | | | | | | |
| | | | | | | | |
17
Thomas Properties Group, Inc.
Supplemental Financial Information
PORTFOLIO DATA – CONTINUED
($ in thousands except for average amounts)
Our Development Properties
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Actual / Projected
Entitlements | | | | TPGI Share, as of December 31, 2009 |
| | | Location | | TPGI
Percentage
Interest | | | Number
of Acres | | | Potential Property Types | | Square
Feet | | Units | | Status of
Entitlements | | Costs
Incurred
to Date | | Average Cost
Per Square Foot | | Loan
Balance |
Pre-Development: | | | | | | | | | | | | | | | | | | | | | | |
Campus El Segundo (1) | | El Segundo, CA | | 100.0 | % | | 26.1 | | | Office/Retail/R&D/ Hotel | | 1,800,000 | | | | Entitled | | $ | 60,160 | | $ | 33.42 | | $ | 17,000 |
MetroStudio@Lankershim (2) | | Los Angeles, CA | | NA | | | 14.4 | | | Office/Production Facility | | 1,500,000 | | | | Pending | | | 14,614 | | | 9.74 | | | — |
Four Points Centre | | Austin, TX | | 100.0 | | | 252.5 | | | Office/ Retail/R&D/Hotel | | 1,680,000 | | | | Entitled | | | 18,082 | | | 10.76 | | | — |
2100 JFK Boulevard | | Philadelphia, PA | | 100.0 | | | 0.7 | | | Office/ Retail/R&D/Hotel | | 366,000 | | | | Entitled | | | 4,895 | | | 13.37 |
2500 City West land | | Houston, TX | | 25.0 | | | 3.3 | (3) | | Office/Retail/Residential/Hotel | | 500,000 | | | | Entitled | | | 900 | | | 7.20 | | | — |
CityWestPlace land | | Houston, TX | | 25.0 | | | 25.0 | | | Office/ Retail/ Residential | | 1,500,000 | | | | Entitled | | | 5,337 | | | 14.23 | | | — |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | 7,346,000 | | | | | | | 103,988 | | $ | 16.70 | | | 17,000 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Fee Services: | | | | | | | | | | | | | | | | | | | | | | |
Universal Village (4) | | Los Angeles, CA | | NA | | | 124.0 | | | Residential/ Retail | | 180,000 | | 2,937 | | Pending | | | — | | | | | | — |
Wilshire Grand (5) | | Los Angeles, CA | | NA | | | 2.7 | | | Office/Retail/Residential/Hotel | | 2,500,000 | | 50 | | Pending | | | — | | | | | | — |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | 10,026,000 | | 2,987 | | | | $ | 103,988 | | | | | $ | 17,000 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Condominium Units Held for Sale:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | As of December 31, 2009 |
| | | Location | | TPGI
Percentage
Interest | | | Description | | Number of
Units Sold
To Date | | Total
Square
Feet Sold
To Date | | Average
Sales Price
Per Square
Foot Sold
To Date | | Number of
Units
Remaining
To Be Sold
(7) | | Total
Square
Feet
Remaining
To Be Sold | | Average List
Price Per
Square Foot
To Be Sold | | Book
Carrying
Value | | Loan
Balance |
Murano | | Philadelphia, PA | | 73.0 | % (6) | | 43-story for-sale condominium project containing 302 units. Certificates of occupancy received for 100% of units. | | 194 | | 218,316 | | $ | 521 | | 108 | | 133,524 | | $ | 728 | | $ | 64,101 | | $ | 36,955 |
| (1) | 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. |
| (2) | 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. |
| (3) | 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. |
| (4) | 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. |
| (5) | 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. |
| (6) | We have a $26.1 million preferred equity interest in Murano. Excluding the preferred equity interest, we hold a 73% interest in the property. |
| (7) | Subsequent to December 31, 2009, we have entered into contracts to sell an additional six units and expect to close the sale of two previously contracted units. The average sales price of these eight units, which are expected to close in the first quarter of 2010, is $454 per square foot. Of the 108 units remaining to sell, 89 units are above the 29th floor and have superior views. |
18
Thomas Properties Group, Inc.
Supplemental Financial Information
PORTFOLIO DATA– 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 | | 100.0 | |
1835 Market Street | | Philadelphia, PA | | 1987 | | 686,503 | | 88.5 | |
CalEPA Headquarters | | Sacramento, CA | | 2000 | | 950,939 | | 100.0 | |
| | | | | | | | | |
Total/Weighted Average | | | | | | 2,159,092 | | 96.1 | % |
| | | | | | | | | |
19
Thomas Properties Group, Inc.
Supplemental Financial Information
DEBT SUMMARY
(in thousands)
| | | | | | | | | | | | | | | |
Mortgages and Other Loans | | Interest Rate at
December 31,
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 | | | | | | | | | | | | | | | |
Four Falls Corporate Center | | 5.3 | % | | | 52,067 | (1) | | | 13,017 | | 3/6/2010 | | | 3/6/2010 |
Oak Hill Plaza/ Walnut Hill Plaza | | 5.3 | | | | 44,452 | (2) | | | 11,113 | | 3/6/2010 | | | 3/6/2010 |
City National Plaza: | | | | | | | | | | | | | | | |
Senior mortgage loan | | 1.3 | | | | 348,925 | | | | 87,231 | | 7/9/2010 | | | 7/9/2010 |
Mezzanine loans | | 3.4 | | | | 219,074 | | | | 54,769 | | 7/9/2010 | | | 7/9/2010 |
Murano construction loan | | 7.0 | | | | 36,955 | (3) | | | 36,955 | | 7/31/2010 | | | 7/31/2010 |
Brookhollow Central I, II, and III | | 2.9 | | | | 51,793 | | | | 12,949 | | 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 | | | | | | 955,098 | | | | 266,492 | | | | | |
| | | | | | | | | | | | | | | |
2011 Maturity Date at End of Extension Options | | | | | | | | | | | | | | | |
CityWestPlace - mortgage loan (Buildings III & IV) | | 1.5 | | | | 92,400 | | | | 23,100 | | 7/1/2010 | (4) | | 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 | | 2/9/2011 | (5) | | 2/9/2012 |
Research Park Plaza I and II | | 1.6 | | | | 51,500 | | | | 3,219 | | 6/9/2010 | (6) | | 6/9/2012 |
Stonebridge Plaza II | | 1.4 | | | | 37,500 | | | | 2,344 | | 6/9/2010 | (6) | | 6/9/2012 |
| | | | | | | | | | | | | | | |
Subtotal 2012 maturities | | | | | | 212,780 | | | | 36,509 | | | | | |
| | | | | | | | | | | | | | | |
2013 Maturity Date at End of Extension Options | | | | | | | | | | | | | | | |
Two Commerce Square - mortgage loan | | 6.3 | | | | 108,104 | | | | 108,104 | | 5/9/2013 | | | 5/9/2013 |
| | | | | | | | | | | | | | | |
Subtotal 2013 maturities | | | | | | 108,104 | | | | 108,104 | | | | | |
| | | | | | | | | | | | | | | |
2014 and After Maturity Date at End of Extension Options | | | | | | | | | | | | | | | |
Austin Portfolio bank term loan | | 3.5 | | | | 115,675 | (7) | | | 7,230 | | 6/1/2013 | | | 6/1/2014 |
Campus El Segundo mortgage loan | | 4.1 | | | | 17,000 | | | | 17,000 | | 7/31/2011 | (8) | | 7/31/2014 |
Four Points Centre construction loan | | 2.5 | | | | 26,177 | | | | 26,177 | | 7/31/2012 | (9) | | 7/31/2014 |
Reflections I | | 5.2 | | | | 21,788 | | | | 5,447 | | 4/1/2015 | | | 4/1/2015 |
Reflections II | | 5.2 | | | | 9,077 | | | | 2,269 | | 4/1/2015 | | | 4/1/2015 |
City National Plaza - note payable to former partner | | 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 | | | | 18,508 | (10) | | | 9,254 | | 8/1/2033 | | | 8/1/2033 |
| | | | | | | | | | | | | | | |
Subtotal 2014 and thereafter maturities | | | | | | 1,149,283 | | | | 282,769 | | | | | |
| | | | | | | | | | | | | | | |
| | | | | $ | 2,517,665 | | | $ | 716,974 | | | | | |
| | | | | | | | | | | | | | | |
Weighted average interest rate at December 31, 2009 | | 4.3 | % | | | | | | | | | | | | |
Footnotes on following page.
20
Thomas Properties Group, Inc.
Supplemental Financial Information
DEBT SUMMARY – CONTINUED
Footnotes to Debt Summary on previous page:
In connection with some of the loans listed in the Debt Summary, in the case of consolidated assets, our operating partnership is subject to customary non-recourse carve out obligations; in the case of certain joint venture assets, TPG/CalSTRS is subject to customary non-recourse carve out obligations.
| (1) | $9.9 million of this loan is secured by both a subordinate lien on the property and a payment guaranty issued by the special purpose limited liability company which owns Oak Hill Plaza/Walnut Hill Plaza. |
| (2) | $9.2 million of this loan is secured by both a subordinate lien on the property and a payment guaranty issued by the special purpose limited liability company which owns Four Falls Corporate Center. |
| (3) | The Company has an interest guaranty for the Murano construction loan. |
| (4) | The loan has a remaining one-year extension option at our election. |
| (5) | The loan has a remaining one-year extension option at our election, subject to a debt service coverage ratio of 1:1. |
| (6) | The loan has two one-year extension options at our election. |
| (7) | We and our partners in the Austin Portfolio have committed to fund $60.0 million of new senior priority financing, which is senior to the Austin Portfolio bank loan. $20.0 million of the $60.0 million commitment has been funded as of December 31, 2009, of which our share is $1.3 million, and is accounted for as equity. |
| (8) | 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. We have guaranteed this loan. |
| (9) | 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 $3.9 million of which $1.3 million was paid in January, 2010 and the balance of $2.6 million will be paid in two equal installments, in June and December, 2010. $10.4 million remains unfunded and available to be drawn to fund any remaining project costs. |
| (10) | 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. |
21
Thomas Properties Group, Inc.
Supplemental Financial Information
CAPITAL STRUCTURE
(in thousands, except share data)
The following is the capital structure of TPGI as of December 31, 2009:
| | | | | |
Debt | | | | Aggregate
Principal |
Mortgage, other secured, and unsecured loans | | | | $ | 318,236 |
Company share of unconsolidated debt | | | | | 397,754 |
| | | | | |
Total combined debt | | | | $ | 715,990 |
| | | | | |
| | |
Equity | | Shares/Units
Outstanding | | Market Value (1)
|
Common stock | | 30,878,621 | | $ | 91,401 |
Operating partnership units (2) | | 14,484,995 | | | 42,876 |
| | | | | |
Total common equity | | 45,363,616 | | $ | 134,277 |
| | | | | |
Total consolidated market capitalization | | | | $ | 452,513 |
| | | | | |
Total combined market capitalization (3) | | | | $ | 850,267 |
| | | | | |
| (1) | Based on the closing price of $2.96 per share of TPGI common stock on December 31, 2009. |
| (2) | Includes outstanding operating partnership units not owned by TPGI and incentive units as of December 31, 2009. |
| (3) | Includes TPGI’s share of debt of unconsolidated real estate entities. |
22
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 | | |
23
