THOMAS PROPERTIES GROUP INC - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - August 2, 2013

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Exhibit 99.2
THOMAS PROPERTIES GROUP, INC. ANNOUNCES
SECOND QUARTER 2013 RESULTS
Thomas Properties Group, Inc. (NYSE: TPGI) reported today the results of operations for the quarter ended June 30, 2013.
The results of operations presented in this release include TPGI’s results of operations for three and six months ended June 30, 2013 and 2012. The consolidated net loss for the three months ended June 30, 2013 was $5.6 million or $0.12 per share compared to consolidated net loss of $4.8 million or $0.12 per share for the three months ended June 30, 2012.The consolidated net loss for the six months ended June 30, 2013 was $14.5 million or $0.31 per share compared to consolidated net loss of $7.9 million or $0.21 per share for the six months ended June 30, 2012. The increase in the consolidated net loss during the six months ended June 30, 2013 compared to the six months ended June 30, 2012 was primarily due to an overall increase in our share of net loss from unconsolidated real estate entities and a decrease in investment advisory fees due to our increased ownership interest in the Austin properties from 6.25% to an effective interest of 33.3%. Additionally there was an increase in general and administrative expenses of $3.4 million primarily due to the settlement of a lawsuit. This was offset by increased revenue from the settlement of twelve units at our Murano condominium project for the six months ended June 30, 2013 compared to the settlement of four units for the six months ended June 30, 2012.
TPGI's share of after tax cash flow (“ATCF”) for the three months ended June 30, 2013 was $1.1 million or $0.02 per share compared to ATCF of $0.4 million or $0.01 per share for the three months ended June 30, 2012. The $0.01 increase in ATCF per share for the three months ended June 30, 2013 compared to the three months ended June 30, 2012 was primarily due to our increased share of ATCF from the Austin properties. TPGI's share of ATCF for the six months ended June 30, 2013 was $1.3 million or $0.03 per share compared to ATCF of $2.1 million or $0.05 per share for the six months ended June 30, 2012. The decrease in ATCF per share for the six months ended June 30, 2013 compared to the six months ended June 30, 2012 was primarily the result of the overall increase in consolidated net loss described above, and the increased number of shares of our common stock outstanding resulting from the issuance of common stock in 2012. The Company defines ATCF (a non-GAAP financial measure) as net income (loss) excluding the following items: noncontrolling interests, deferred income tax expense (benefit), non-cash charges for depreciation and amortization and asset impairment, amortization of loan costs, non-cash compensation expense, adjustments to recognize rental revenues using the straight-line method, adjustments to rental revenue to reflect the fair market value of rents, and gain from extinguishment of debt. ATCF is further described in note (a) and reconciled to net income (loss) in the financial statements below.
“We are pleased with our continued progress toward achievement of our strategic plan,” stated Jim Thomas, Chairman and CEO. “We have completed the sales of non-core land and operating assets, and through our renovation and leasing efforts we have increased the occupancy at our properties. During July, the Murano condominium mortgage was completely repaid from proceeds of unit sales. As we recently announced, we have elected to liquidate our TPG/CalSTRS joint venture and plan to acquire a controlling interest in CityWestPlace and San Felipe Plaza, two Class A properties in dynamic Houston markets. Our separate account management and Austin joint venture relationships with CalSTRS continue.”
Supplemental Materials
The Company publishes a Supplemental Financial Information package which is available at www.tpgre.com in the Investor Relations tab, Supplemental Financial Information section. The Company also provides an estimated net asset value workbook, available for download at www.tpgre.com in the Investor Relations tab, NAV Workbook section.
Teleconference and Webcast
TPGI will hold a quarterly earnings conference call on Friday, August 2, 2013 at 10:00 a.m. Pacific Time. To participate in the call, dial (877) 415-3183 and (857) 244-7326 internationally, and provide confirmation code 90609600.
A live webcast (listen only mode) of the conference call will also be available at that time. A hyperlink to the live webcast will be available from the Investor Relations section of our website at www.tpgre.com. A replay of the call will be available through August 30, 2013, by calling (888) 286-8010 and (617) 801-6888 internationally, and providing confirmation code 46503144. The replay will also be available on Thomas Properties Group, Inc.’s web site at www.tpgre.com. The webcast is also being distributed through the Thomson StreetEvents Network. Individual investors can listen to the call at www.earnings.com, Thomson’s individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson StreetEvents (www.streetevents.com), a password-protected event management site.
About Thomas Properties Group, Inc.
Thomas Properties Group, Inc., with headquarters in Los Angeles, is a full-service real estate company that owns, acquires, develops and manages primarily office, as well as mixed-use properties on a nationwide basis. The Company’s primary areas of focus are the acquisition and ownership of interests in premier office properties, property development and redevelopment, and property and investment management activities. For more information on Thomas Properties Group, Inc., visit www.tpgre.com.





Forward Looking Statements
Statements made in this press release or during the quarterly earnings conference call that are not historical may contain forward-looking statements. Although TPGI believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, these statements are subject to numerous risks and uncertainties. Factors that could cause actual results to differ materially from TPGI’s expectations include actual and perceived trends in various national and economic conditions that affect global and regional markets for commercial real estate services (including interest rates), the availability of debt and equity investors to finance commercial real estate transactions, our ability to enter into or renew leases at favorable rates, which can be impacted by the financial condition of our tenants, risks associated with the success of our development and property redevelopment projects, general volatility in the securities and credit markets, and the impact of tax laws affecting real estate. For a discussion of some of the factors that may cause our results to differ from management’s expectations, see the information under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K for the year ended December 31, 2012 and our subsequent Form 10-Q quarterly reports, each of which is filed with the Securities and Exchange Commission. TPGI disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
 






THOMAS PROPERTIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(unaudited)
 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Revenues:
 
 
 
 
 
 
 
Rental
$
7,910

 
$
7,684

 
$
15,299

 
$
15,530

Tenant reimbursements
5,393

 
4,981

 
10,969

 
10,402

Parking and other
828

 
745

 
2,208

 
1,485

Investment advisory, management, leasing and development services
636

 
733

 
1,528

 
1,664

Investment advisory, management, leasing and development services -
    unconsolidated real estate entities
3,178

 
4,219

 
6,282

 
8,321

Reimbursement of property personnel costs
903

 
1,356

 
2,033

 
2,867

Condominium sales
3,395

 
1,045

 
7,793

 
1,964

Total revenues
22,243

 
20,763

 
46,112

 
42,233

Expenses:
 
 
 
 
 
 
 
Property operating and maintenance
6,505

 
5,751

 
13,123

 
12,015

Real estate and other taxes
1,942

 
1,965

 
3,937

 
3,885

Investment advisory, management, leasing and development services
2,288

 
3,000

 
4,208

 
5,994

Reimbursable property personnel costs
903

 
1,356

 
2,033

 
2,867

Cost of condominium sales
2,773

 
721

 
6,411

 
1,393

Interest
3,303

 
4,216

 
7,244

 
8,454

Depreciation and amortization
3,920

 
4,152

 
8,112

 
7,662

General and administrative
4,553

 
4,892

 
12,480

 
9,131

Impairment loss
—

 
—

 
753

 
—

Total expenses
26,187

 
26,053

 
58,301

 
51,401

Interest income
91

 
8

 
114

 
13

Equity in net income (loss) of unconsolidated real estate entities
(3,565
)
 
(794
)
 
(6,321
)
 
(816
)
Gain (loss) on sale of real estate
141

 
—

 
(559
)
 
—

Income (loss) before income taxes and noncontrolling interests
(7,277
)
 
(6,076
)
 
(18,955
)
 
(9,971
)
Benefit (provision) for income taxes
(18
)
 
(31
)
 
(40
)
 
(74
)
Net income (loss)
(7,295
)
 
(6,107
)
 
(18,995
)
 
(10,045
)
Noncontrolling interests' share of net (income) loss:
 
 
 
 
 
 
 
Unitholders in the Operating Partnership
1,289

 
1,550

 
3,711

 
2,591

Partners in consolidated real estate entities
455

 
(247
)
 
764

 
(470
)
 
1,744

 
1,303

 
4,475

 
2,121

TPGI's share of net income (loss)
$
(5,551
)
 
$
(4,804
)
 
$
(14,520
)
 
$
(7,924
)
Income (loss) per share - basic and diluted
$
(0.12
)
 
$
(0.12
)
 
$
(0.31
)
 
$
(0.21
)
Weighted average common shares - basic and diluted
46,610,859

 
38,591,868

 
46,419,772

 
37,664,573

 
 
 
 
 
 
 
 
Reconciliation of net income (loss) to ATCF (a):
 
 
 
 
 
 
 
Net income (loss)
$
(5,551
)
 
$
(4,804
)
 
$
(14,520
)
 
$
(7,924
)
Adjustments:
 
 
 
 
 
 
 
Income tax (benefit) provision
18

 
31

 
40

 
74

Noncontrolling interests - unitholders in the Operating Partnership
(1,289
)
 
(1,550
)
 
(3,711
)
 
(2,591
)
Depreciation and amortization
3,920

 
4,152

 
8,112

 
7,662

Amortization of loan costs
112

 
160

 
273

 
320

Non-cash compensation expense
304

 
263

 
1,257

 
911





 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Straight-line rent adjustments
(360
)
 
(88
)
 
(34
)
 
(355
)
Adjustments to reflect the fair market value of rent
40

 
11

 
83

 
19

Impairment loss
—

 
—

 
753

 
—

(Gain) loss on sale of real estate
(141
)
 
—

 
559

 
—

Unconsolidated real estate entities at TPGI's share:
 
 
 
 
 
 
 
Depreciation and amortization
7,314

 
2,243

 
14,727

 
4,599

Depreciation and amortization from discontinued operations
(4
)
 
203

 
230

 
377

Amortization of loan costs
(55
)
 
74

 
(109
)
 
150

Amortization of loan costs from discontinued operations
—

 
9

 
—

 
14

Straight-line rent adjustments
(671
)
 
6

 
(1,362
)
 
(7
)
Straight-line rent adjustments from discontinued operations
—

 
(15
)
 
(31
)
 
(20
)
Adjustments to reflect the fair market value of rent
(939
)
 
(191
)
 
(1,864
)
 
(422
)
Adjustments to reflect the fair market value of rent from
  discontinued operations
—

 
(5
)
 
11

 
(21
)
Noncontrolling interests' share:
 
 
 
 
 
 
 
Depreciation and amortization
(1,862
)
 
—

 
(3,830
)
 
—

Depreciation and amortization from discontinued operations
—

 
—

 
(86
)
 
—

Amortization of loan costs
28

 
—

 
56

 
—

Straight-line rent adjustments
273

 
—

 
494

 
—

Straight-line rent adjustments from discontinued operations
—

 
—

 
10

 
—

Adjustments to reflect the fair market value of rent
290

 
—

 
577

 
—

Adjustments to reflect the fair market value of rent from
  discontinued operations
—

 
—

 
(4
)
 
—

ATCF before income taxes
$
1,427

 
$
499

 
$
1,631

 
$
2,786

TPGI's share of ATCF before income taxes (b)
$
1,139

 
$
378

 
$
1,298

 
$
2,095

TPGI's income tax benefit (expense) - current
(18
)
 
(19
)
 
(40
)
 
(36
)
TPGI's share of ATCF
$
1,121

 
$
359

 
$
1,258

 
$
2,059

ATCF per share - basic
$
0.02

 
$
0.01

 
$
0.03

 
$
0.05

ATCF per share - diluted
$
0.02

 
$
0.01

 
$
0.03

 
$
0.05

Dividends paid per share
$
0.02

 
$
0.015

 
$
0.04

 
$
0.03

Weighted average common shares - basic
46,610,859

 
38,591,868

 
46,419,772

 
37,664,573

Weighted average common shares - diluted
46,875,641

 
38,961,852

 
46,684,554

 
38,020,891


a.
ATCF is a non-GAAP financial measure and may not be directly comparable to similarly-titled measures reported by other companies. We define ATCF as net income (loss) excluding the following items: i) deferred income tax expense (benefit); ii) noncontrolling interests; iii) non-cash charges for depreciation and amortization and asset impairment; iv) amortization of loan costs; v) non-cash compensation expense; vi) the adjustment to recognize rental revenues using the straight-line method; vii) the adjustment to rental revenue to reflect the fair market value of rents; and viii) gain 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 substitute for cash flow from operating activities (computed in accordance with GAAP).
b.
Based on an interest in our operating partnership of 79.83% and 79.60% for the three and six months ended June 30, 2013, respectively, and 75.63% and 75.18% for the three and six months ended June 30, 2012, respectively.





THOMAS PROPERTIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

 
June 30,
 
December 31,
 
2013
 
2012
 
(unaudited)
 
(audited)
ASSETS
 
 
 
Investments in real estate:
 
 
 
Operating properties, net
$
267,844

 
$
267,798

Land improvements—development properties, net
6,331

 
6,403

Investments in real estate, net
274,175

 
274,201

Condominium units held for sale
32,095

 
37,891

Investments in unconsolidated real estate entities
68,429

 
106,210

Cash and cash equivalents, unrestricted
127,879

 
76,689

Restricted cash
3,935

 
11,611

Marketable securities
9,879

 
—

Rents and other receivables, net
1,401

 
1,825

Receivables from unconsolidated real estate entities
2,216

 
2,347

Deferred rents
20,343

 
18,994

Deferred leasing and loan costs, net
12,556

 
10,716

Other assets, net
13,667

 
10,222

Assets associated with land held for sale
—

 
60,286

Total assets
$
566,575

 
$
610,992

LIABILITIES AND EQUITY
 
 
 
Liabilities:
 
 
 
Mortgage loans
$
261,738

 
$
259,995

Accounts payable and other liabilities, net
25,299

 
28,346

Losses and distributions in excess of investments in unconsolidated real estate entities
11,366

 
10,084

Prepaid rent
2,355

 
1,784

Deferred revenue
11,250

 
10,566

Obligations associated with land held for sale
—

 
21,380

Total liabilities
312,008

 
332,155

 
 
 
 
Equity:
 
 
 
Stockholders’ equity:
 
 
 
Preferred stock, $.01 par value, 25,000,000 shares authorized, none issued or outstanding as
    of June 30, 2013 and December 31, 2012
—

 
—

Common stock, $.01 par value, 225,000,000 shares authorized, 46,969,703 and 46,126,481
    shares issued and outstanding as June 30, 2013 of and December 31, 2012, respectively
470

 
461

Limited voting stock, $.01 par value, 20,000,000 shares authorized, 11,646,949 and 12,313,331 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively
116

 
123

Additional paid-in capital
261,833

 
258,780

Retained deficit and dividends
(100,140
)
 
(83,635
)
Total stockholders’ equity
162,279

 
175,729

Noncontrolling interests:
 
 
 
Unitholders in the Operating Partnership
37,781

 
44,154

Partners in consolidated real estate entities
54,507

 
58,954

Total noncontrolling interests
92,288

 
103,108

Total equity
254,567

 
278,837

Total liabilities and equity
$
566,575

 
$
610,992









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

 




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