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EX-99.2 - EXHIBIT 99.2 - THOMAS PROPERTIES GROUP INCexhibit992-erq32013.htm
8-K - 8-K - THOMAS PROPERTIES GROUP INCa2013q3earningsreleasecove.htm


Exhibit 99.1



Thomas Properties Group, Inc.
Supplemental Financial Information
For the Quarter Ended September 30, 2013





Thomas Properties Group, Inc.
Supplemental Financial Information
For the Quarter Ended September 30, 2013
TABLE OF CONTENTS
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.
Additional Information about the Proposed Merger Transaction and Where to Find It
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed transaction, TPG and Parkway have filed a preliminary joint proxy statement/prospectus with the SEC as part of Parkway’s registration statement on Form S-4. These materials are not yet final and may be amended. INVESTORS ARE URGED TO READ THE PRELIMINARY JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors may obtain free copies of the registration statement, the preliminary joint proxy statement/prospectus, the definitive joint proxy statement/prospectus and other relevant documents filed by TPG and Parkway with the SEC (if and when they become available) through the website maintained by the SEC at www.sec.gov. Copies of the documents filed by TPG with the SEC are available free of charge on TPG’s website at www.tpgre.com, and copies of the documents filed by Parkway with the SEC are also available free of charge on Parkway’s website at www.PKY.com.




TPG, Parkway and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from TPG’s and Parkway’s stockholders in respect of the proposed transaction. Information regarding TPG’s directors and executive officers can be found in TPG’s definitive proxy statement filed with the SEC on April 30, 2013. Information regarding Parkway’s directors and executive officers can be found in Parkway’s definitive proxy statement filed with the SEC on April 4, 2013. Additional information regarding the interests of such potential participants is included in the preliminary joint proxy statement/prospectus and will be included in the definitive joint proxy statement/prospectus and other relevant documents filed with the SEC in connection with the proposed transaction if and when they become available. These documents are available free of charge on the SEC’s website and from TPG or Parkway, as applicable, using the sources indicated above.





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 Property Portfolio
Our properties are located in Southern California and Sacramento, California; Philadelphia, Pennsylvania; Houston, Texas; and Austin, Texas. As of September 30, 2013, we owned interests in and asset managed 10 operating properties with 7.0 million rentable square feet and provided leasing, asset and/or property management services on behalf of a third party for an additional three operating properties with 1.9 million rentable square feet.
TPG/CalSTRS Austin Joint Venture
TPG/CalSTRS Austin, LLC is a joint venture between TPG Austin Partner, LLC and the California State Teachers' Retirement System (“CalSTRS”), in which each partner owns 50.0%. TPG Austin Partner, LLC, the managing member, is a joint venture between our operating partnership, Thomas Properties Group, L.P. (“TPG”), and Madison International Realty (“Madison”), which have ownership interests of 66.7% and 33.3%, respectively. As of September 30, 2013, TPG/CalSTRS Austin, LLC owns five properties in Austin, Texas. TPG's effective ownership interest in the Austin properties is 33.3%. As of September 30, 2013, TPG/CalSTRS Austin, LLC has total capital commitments of $250.0 million, of which $10.4 million, $6.9 million and $3.5 million is unfunded by CalSTRS, TPG and Madison, respectively.
Recent Events
Parkway Properties, Inc. Merger
On September 4, 2013, TPGI entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Parkway Properties, Inc., (“Parkway”). Under the terms of the Merger Agreement, TPGI will merge with and into Parkway, with Parkway surviving the merger, and our Operating Partnership will merge with a wholly owned subsidiary of Parkway. Each outstanding share of common stock of TPGI will be canceled and converted into the right to receive 0.3822 shares (the “Exchange Ratio”) of common stock of Parkway, and each outstanding share of limited voting stock of TPGI will be canceled and converted into the right to receive limited voting stock of Parkway at the Exchange Ratio. Pursuant to the Merger Agreement, each outstanding limited partnership unit of TPGI's Operating Partnership will be converted into the right to receive common limited partnership units of Parkway Properties LP at the Exchange Ratio.

Special Meeting

TPGI will hold a Special Meeting of its Stockholders (the “Special Meeting”) on December 17, 2013. The record date for determination of stockholders entitled to vote at the Special Meeting has been set as the close of business on November 11, 2013. At the Special Meeting, TPGI’s stockholders will vote on the a proposal to approve the merger with Parkway and other proposals as described in the preliminary joint proxy statement/prospectus of TPGI and Parkway filed by Parkway with the Securities and Exchange Commission. Completion of the transaction is subject to the approval of shareholders of both companies and satisfaction of customary closing conditions.

Property Sale
On September 27, 2013, three properties in Northern Virginia (Fair Oaks Plaza and Reflections I and II), owned by TPG/CalSTRS, LLC (“TPG/CalSTRS”), a joint venture with CalSTRS, and subject to special servicer oversight as a result of mortgage loan defaults, were sold to an entity owned by three of TPG's executives (John Sischo, Randall Scott and Thomas Ricci), two of which are directors. TPG has no continuing involvement, commitments or obligations with respect to such properties. TPG/CalSTRS recognized a non-cash gain of approximately $14.3 million, of which TPG's share was approximately $2.2 million.



1



Thomas Properties Group, Inc.
Supplemental Financial Information
COMPANY BACKGROUND - CONTINUED
TPG/CalSTRS Liquidation
On September 30, 2013, pursuant to the Redemption and Liquidation Option Agreement ("Option Agreement"), TPG/CalSTRS was liquidated. Under the Option Agreement (a) TPG made a capital contribution to TPG/CalSTRS of approximately $166.3 million, (the "Contribution Amount"), (b) TPG/CalSTRS made a distribution to CalSTRS of all of the interests in the entities that owned City National Plaza, plus cash equal to the Contribution Amount, and (c) TPG/CalSTRS made a distribution to TPG of all of the interests in the entities that own San Felipe Plaza and CityWestPlace, which are now wholly-owned by TPG. TPG recognized a gain on the liquidation of the joint venture of approximately $118.2 million due to the transfer of our interest in City National Plaza to CalSTRS resulting in a gain of $62.7 million, and a remeasurement of our historical 25% interest in CityWestPlace and San Felipe Plaza upon the acquisition of the other 75% interest from CalSTRS, resulting in a gain of $55.5 million.

Parkway Loan
In connection with the execution of the Merger Agreement, TPG entered into an $80.0 million loan agreement with Parkway to fund a portion of TPG's obligations with respect to the TPG/CalSTRS liquidation. The loan with Parkway was funded on September 27, 2013, and bears interest at a rate of 6% per annum for the first six months, 8% per annum for the following six months, and 12% per annum thereafter, with interest payable monthly in arrears. If the merger with Parkway is not consummated, the loan will mature on January 15, 2015.

Litigation Relating to the Merger Transaction with Parkway

On October 24, 2013, a purported stockholder of TPGI filed a lawsuit entitled Osieczanek v. Thomas Properties Group, Inc., et. al. against TPGI and its directors, Parkway, and PKY Masters, LP in the Chancery Court of the State of Delaware. This action was brought as a putative class action, alleging that TPGI’s directors breached certain alleged duties to TPGI’s stockholders by failing to provide TPGI’s stockholders with material information in connection with the mergers and that Parkway aided and abetted those breaches. The lawsuit seeks various forms of relief, including that the court enjoin the merger and rescind the merger agreement. TPGI and its directors believe that this action is without merit.

Significant Leasing Activity
Subsequent to September 30, 2013, we entered into a long-term lease for 581,000 square feet with Statoil Gulf Services L.L.C., the U.S. upstream wholly-owned subsidiary of Norwegian energy company, Statoil ASA (Aa2/AA-), as their North American headquarters at CityWestPlace. Beginning with initial occupancy in mid-2015, Statoil will over time occupy the entirety of CityWestPlace Building 2, comprising 431,000 square feet, as well as extend their existing lease for 150,000 square feet in CityWestPlace Building 4. Statoil is significantly growing its presence at CityWestPlace from its current occupancy of 225,000 square feet.




2



Thomas Properties Group, Inc.
Supplemental Financial Information
OPERATING AND FINANCIAL INFORMATION
Financial Measures
This supplemental financial information includes certain financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) under the full consolidation accounting method, and certain non- GAAP financial measures. We believe the non-GAAP financial measures provide supplemental information helpful to an understanding of our results of operations and financial condition. Along with net income, we use After Tax Cash Flow (“ATCF”), to report operating results. ATCF is a non-GAAP financial measure and may not be directly comparable to similarly-titled measures reported by other companies. Although this financial measure is not presented in accordance with GAAP, we believe this measure assists investors in understanding our business and operating results by providing 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 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 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. See pages 6 - 9 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
 
Nine months ended
 
September 30,
 
September 30,
 
2013
 
2012
 
2013
 
2012
Revenues:
 
 
 
 
 
 
 
Rental
$
8,165

 
$
7,813

 
$
23,464

 
$
23,343

Tenant reimbursements
5,423

 
5,344

 
16,392

 
15,746

Parking and other
769

 
786

 
2,977

 
2,271

Investment advisory, management, leasing and development services
998

 
1,005

 
2,526

 
2,669

Investment advisory, management, leasing and development services-
   unconsolidated real estate entities
4,114

 
3,588

 
10,396

 
11,909

Reimbursement of property personnel costs
846

 
1,273

 
2,879

 
4,140

Condominium sales
3,630

 
2,302

 
11,423

 
4,266

Total revenues
23,945

 
22,111

 
70,057

 
64,344

Expenses:
 
 
 
 
 
 
 
Property operating and maintenance
6,421

 
6,183

 
19,544

 
18,198

Real estate and other taxes
2,003

 
1,742

 
5,940

 
5,627

Investment advisory, management, leasing and development services
2,968

 
2,634

 
7,176

 
8,628

Reimbursable property personnel costs
846

 
1,273

 
2,879

 
4,140

Cost of condominium sales
2,985

 
1,858

 
9,396

 
3,251

Interest
3,350

 
4,205

 
10,594

 
12,659

Depreciation and amortization
3,738

 
4,120

 
11,850

 
11,782

General and administrative
7,603

 
3,893

 
20,083

 
13,024

Impairment loss

 

 
753

 

Total expenses
29,914

 
25,908

 
88,215

 
77,309

Interest income
66

 
39

 
180

 
52

Equity in net income (loss) of unconsolidated real estate entities
(1,846
)
 
(1,797
)
 
(8,167
)
 
(2,613
)
Gain (loss) on sale of real estate
(7
)
 

 
(566
)
 

Gain on liquidation of joint venture
118,201

 

 
118,201

 

Income (loss) before income taxes and noncontrolling interests
110,445

 
(5,555
)
 
91,490

 
(15,526
)
Benefit (provision) for income taxes
(7,987
)
 
442

 
(8,027
)
 
368

Net income (loss)
102,458

 
(5,113
)
 
83,463

 
(15,158
)
Noncontrolling interests' share of net (income) loss:
 
 
 
 
 
 
 
Unitholders in the Operating Partnership
(22,532
)
 
1,226

 
(18,821
)
 
3,817

Partners in consolidated real estate entities
355

 
(198
)
 
1,119

 
(668
)
 
(22,177
)
 
1,028

 
(17,702
)
 
3,149

TPGI's share of net income (loss)
$
80,281

 
$
(4,085
)
 
$
65,761

 
$
(12,009
)
Income (loss) per share - basic
$
1.71

 
$
(0.09
)
 
$
1.40

 
$
(0.30
)
Income (loss) per share - diluted
1.71

 
(0.09
)
 
1.40

 
(0.30
)
Weighted average common shares-basic
46,610,859

 
45,517,207

 
46,484,165

 
40,301,224

Weighted average common shares-diluted
46,884,429

 
45,517,207

 
46,752,071

 
40,301,224


4



Thomas Properties Group, Inc.
Supplemental Financial Information
CONSOLIDATED BALANCE SHEETS
(in thousands)
 
September 30, 2013
 
December 31, 2012
 
 
September 30, 2013
 
December 31, 2012
 
(unaudited)
 
(audited)
 
 
(unaudited)
 
(audited)
ASSETS
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Investments in real estate:
 
 
 
 
Liabilities:
 
 
 
Operating properties, net
$
826,688

 
$
267,798

 
Mortgage loans including loan premiums
$
595,538

 
$
259,995

Land improvements—development properties, net
15,431

 
6,403

 
Unsecured loan
80,000

 

Investments in real estate, net
842,119

 
274,201

 
Accounts payable and other liabilities, net
71,329

 
20,195

 
 
 
 
 
Unrecognized tax benefits
8,027

 
8,027

Condominium units held for sale
29,388

 
37,891

 
Losses and distributions in excess of investments in
unconsolidated real estate entities
276

 
10,084

Investments in unconsolidated real estate entities
66,308

 
106,210

 
Prepaid rent
7,118

 
1,784

Cash and cash equivalents, unrestricted
62,274

 
76,837

 
Deferred revenue
10,950

 
10,566

Restricted cash
8,794

 
11,463

 
Below market rents, net
99

 
124

Marketable securities
9,160

 

 
Mortgage loans associated with land held for sale

 
21,380

Rents and other receivables, net
1,858

 
1,825

 
Total liabilities
773,337

 
332,155

Receivables from unconsolidated real estate entities
1,373

 
2,347

 
Equity:
 
 
 
Deferred rents
22,013

 
18,994

 
Stockholders’ equity:
 
 
 
Deferred leasing and loan costs, net
60,211

 
10,716

 
Common stock
470

 
461

Above market rents, net
50

 
191

 
Limited voting stock
116

 
123

Deferred tax asset, net of valuation allowance
21,074

 
8,027

 
Additional paid-in capital
261,893

 
258,780

Other assets, net
4,644

 
2,004

 
Retained deficit and dividends
(20,798
)
 
(83,635
)
Assets associated with land held for sale

 
60,286

 
Total stockholders’ equity
241,681

 
175,729

Total assets
$
1,129,266

 
$
610,992

 
Noncontrolling interests:

 

 
 
 
 
 
Unitholders in the Operating Partnership
60,096

 
44,154

 
 
 
 
 
Partners in consolidated real estate entities
54,152

 
58,954

 
 
 
 
 
Total noncontrolling interests
114,248

 
103,108

 
 
 
 
 
Total equity
355,929

 
278,837

 
 
 
 
 
Total liabilities and equity
$
1,129,266

 
$
610,992

 
 
 
 
 
 


 

 
 
 
 
 
 

 


 


5



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; viii) impairment loss; ix) gain on liquidation of joint venture; and x) gain (loss) on sale of real estate. 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).
Reconciliation of Net Income (Loss) to ATCF:
 
For the three months ended September 30, 2013
 
 
 
Plus Unconsolidated
Investments at TPGI's Share
 
Less Non-Controlling
Interests Share
 
 
 
Consolidated
 
Continuing Operations
 
Discontinued Operations
 
Continuing Operations
 
Discontinued Operations
 
TPGI's Share
Net income (loss)
$
80,281

 
$

 
$

 
$

 
$

 
$
80,281

Income tax (benefit) provision
7,987

 

 

 

 

 
7,987

Noncontrolling interests - unitholders in the
   Operating Partnership
22,532

 

 

 

 

 
22,532

Depreciation and amortization
3,738

 
5,223

 
1,822

 
(1,754
)
 

 
9,029

Amortization of loan costs
143

 
(84
)
 
28

 
28

 

 
115

Non-cash compensation expense
558

 

 

 

 

 
558

Straight-line rent adjustments
(1,078
)
 
(531
)
 
133

 
177

 

 
(1,299
)
Adjustments to reflect the fair market value of rent
33

 
(819
)
 
(65
)
 
273

 

 
(578
)
Gain on liquidation of joint venture
(118,201
)
 

 

 

 

 
(118,201
)
Loss (gain) on sale of real estate
8

 

 
(2,192
)
 

 

 
(2,184
)
ATCF before income taxes
$
(3,999
)
 
$
3,789

 
$
(274
)
 
$
(1,276
)
 
$

 
$
(1,760
)
 
 
 
 
 
 
 
 
 
 
 
 
TPGI's share of ATCF before income taxes (1)
$
(3,192
)
 
$
3,025

 
$
(219
)
 
$
(1,019
)
 
$

 
$
(1,405
)
TPGI's income tax benefit (expense) - current
(23
)
 

 

 

 

 
(23
)
TPGI's share of ATCF
$
(3,215
)
 
$
3,025

 
$
(219
)
 
$
(1,019
)
 
$

 
$
(1,428
)
 
 
 
 
 
 
 
 
 
 
 
 
ATCF per share - basic
 
$
(0.03
)
ATCF per share - diluted
 
$
(0.03
)
Dividends paid per share
 
$
0.02

Weighted average common shares outstanding - basic
 
46,610,859

Weighted average common shares outstanding - diluted
 
46,884,429


(1) Based on an interest in our operating partnership of 79.83% for the three months ended September 30, 2013.

6





Thomas Properties Group, Inc.
Supplemental Financial Information
AFTER TAX CASH FLOW (ATCF) (NON-GAAP)
(in thousands, except share and per share data)
(unaudited)
Reconciliation of Net Income (Loss) to ATCF:
 
For the three months ended September 30, 2012
 
 
 
Plus Unconsolidated
Investments at TPGI's Share
 
Less Non-Controlling
Interests Share
 
 
 
Consolidated
 
Continuing Operations
 
Discontinued Operations
 
Continuing Operations
 
Discontinued Operations
 
TPGI's Share
Net income (loss)
$
(4,085
)
 
$

 
$

 
$

 
$

 
$
(4,085
)
Income tax (benefit) provision
(442
)
 

 

 

 

 
(442
)
Noncontrolling interests - unitholders in the
   Operating Partnership
(1,226
)
 

 

 

 

 
(1,226
)
Depreciation and amortization
4,120

 
1,103

 
1,914

 
(201
)
 
(23
)
 
6,913

Amortization of loan costs
120

 
8

 
54

 

 

 
182

Non-cash compensation expense
324

 

 

 

 

 
324

Straight-line rent adjustments
59

 
(141
)
 
30

 
31

 
3

 
(18
)
Adjustments to reflect the fair market value of rent
12

 
(100
)
 
(77
)
 

 

 
(165
)
ATCF before income taxes
$
(1,118
)
 
$
870

 
$
1,921

 
$
(170
)
 
$
(20
)
 
$
1,483

 
 
 
 
 
 
 
 
 
 
 
 
TPGI's share of ATCF before income taxes (1)
$
(878
)
 
$
683

 
$
1,509

 
$
(135
)
 
$
(15
)
 
$
1,164

TPGI's income tax benefit (expense) - current
144

 

 

 

 

 
144

TPGI's share of ATCF
$
(734
)
 
$
683

 
$
1,509

 
$
(135
)
 
$
(15
)
 
$
1,308

 
 
 
 
 
 
 
 
 
 
 
 
ATCF per share - basic
 
$
0.03

ATCF per share - diluted
 
$
0.03

Dividends paid per share
 
$
0.015

Weighted average common shares outstanding - basic
 
45,517,207

Weighted average common shares outstanding - diluted
 
45,902,063


(1) Based on an interest in our operating partnership of 78.56% for the three months ended September 30, 2012.

7



Thomas Properties Group, Inc.
Supplemental Financial Information
AFTER TAX CASH FLOW (ATCF) (NON-GAAP)
(in thousands, except share and per share data)
(unaudited)
Reconciliation of Net Income (Loss) to ATCF:
 
For the nine months ended September 30, 2013
 
 
 
Plus Unconsolidated
Investments at TPGI's Share
 
Less Non-Controlling
Interests Share
 
 
 
Consolidated
 
Continuing Operations
 
Discontinued Operations
 
Continuing Operations
 
Discontinued Operations
 
TPGI's Share
Net income (loss)
$
65,761

 
$

 
$

 
$

 
$

 
65,761

Income tax (benefit) provision
8,027

 

 

 

 

 
8,027

Noncontrolling interests - unitholders in the Operating Partnership
18,821

 

 

 

 

 
18,821

Depreciation and amortization
11,850

 
16,442

 
5,560

 
(5,582
)
 
(86
)
 
28,184

Amortization of loan costs
416

 
(251
)
 
85

 
84

 

 
334

Non-cash compensation expense
1,815

 

 

 

 

 
1,815

Straight-line rent adjustments
(1,110
)
 
(2,012
)
 
221

 
671

 
10

 
(2,220
)
Adjustments to reflect the fair market value of rent
115

 
(2,548
)
 
(188
)
 
849

 
(4
)
 
(1,776
)
Impairment loss
753

 

 

 

 

 
753

Gain on liquidation of joint venture
(118,201
)
 

 

 

 

 
(118,201
)
Loss (gain) on sale of real estate
566

 

 
(2,192
)
 

 

 
(1,626
)
ATCF before income taxes
$
(11,187
)
 
$
11,631

 
$
3,486

 
$
(3,978
)
 
$
(80
)
 
$
(128
)
 
 
 
 
 
 
 
 
 
 
 
 
TPGI's share of ATCF before income taxes (1)
$
(8,914
)
 
$
9,268

 
$
2,778

 
$
(3,170
)
 
$
(64
)
 
$
(102
)
TPGI's income tax benefit (expense) - current
(63
)
 

 

 

 

 
(63
)
TPGI's share of ATCF
$
(8,977
)
 
$
9,268

 
$
2,778

 
$
(3,170
)
 
$
(64
)
 
$
(165
)
ATCF per share - basic
 
$

ATCF per share - diluted
 
$

Dividends paid per share
 
$
0.06

Weighted average common shares outstanding - basic
 
46,484,165

Weighted average common shares outstanding - diluted
 
46,752,071


(1) Based on an interest in our operating partnership of 79.68% for the nine months ended September 30, 2013.








8



Thomas Properties Group, Inc.
Supplemental Financial Information
AFTER TAX CASH FLOW (ATCF) (NON-GAAP)
(in thousands, except share and per share data)
(unaudited)
Reconciliation of Net Income (Loss) to ATCF:
 
For the nine months ended September 30, 2012
 
 
 
Plus Unconsolidated Investments at TPGI's Share
 
Less Non-Controlling
Interests Share
 
 
 
Consolidated
 
Continuing Operations
 
Discontinued Operations
 
Continuing Operations
 
Discontinued Operations
 
TPGI's Share
Net income (loss)
$
(12,009
)
 
$

 
$

 
$

 
$

 
(12,009
)
Income tax (benefit) provision
(368
)
 

 

 

 

 
(368
)
Noncontrolling interests - unitholders in the Operating Partnership
(3,817
)
 

 

 

 

 
(3,817
)
Depreciation and amortization
11,782

 
2,306

 
5,687

 
(201
)
 
(23
)
 
19,551

Amortization of loan costs
440

 
34

 
195

 

 

 
669

Non-cash compensation expense
1,235

 

 

 

 

 
1,235

Straight-line rent adjustments
(296
)
 
(197
)
 
59

 
31

 
3

 
(400
)
Adjustments to reflect the fair market value of rent
31

 
(379
)
 
(241
)
 

 

 
(589
)
ATCF before income taxes
$
(3,002
)
 
$
1,764

 
$
5,700

 
$
(170
)
 
$
(20
)
 
$
4,272

 
 
 
 
 
 
 
 
 
 
 
 
TPGI's share of ATCF before income taxes (1)
$
(2,294
)
 
$
1,348

 
$
4,356

 
$
(130
)
 
$
(15
)
 
$
3,265

TPGI's income tax benefit (expense) - current
108

 

 

 

 

 
108

TPGI's share of ATCF
$
(2,186
)
 
$
1,348

 
$
4,356

 
$
(130
)
 
$
(15
)
 
$
3,373

 
 
 
 
 
 
 
 
 
 
 
 
ATCF per share - basic
 
$
0.08

ATCF per share - diluted
 
$
0.08

Dividends paid per share
 
$
0.045

Weighted average common shares outstanding - basic
 
40,301,224

Weighted average common shares outstanding - diluted
 
40,668,418


(1) Based on an interest in our operating partnership of 76.43% for the nine months ended September 30, 2012.


9



Thomas Properties Group, Inc.
Supplemental Financial Information
INVESTMENT ADVISORY, MANAGEMENT, LEASING AND DEVELOPMENT SERVICES
(in thousands)
(unaudited)

 
Three months ended September 30, 2013
Property
Management
Fees
 
Development
Services
Fees
 
Leasing
Fees
 
Investment
Advisory
Fees
 
Total Fees
Source of revenues:
 
 
 
 
 
 
 
 
 
Consolidated real estate entities
$
464

  
$
49

  
$
500

  
$
61

  
$
1,074

Unconsolidated real estate entities
2,095

 
238

 
793

 
2,233

  
5,359

Unaffiliated real estate entities
358

 
118

 
381

 
141

  
998

Total investment advisory, management, leasing and development services revenue
$
2,917

  
$
405

  
$
1,674

  
$
2,435

  
7,431

Investment advisory, management, leasing and development services expenses
 
(2,968
)
Net investment advisory, management, leasing and development services income
 
$
4,463

 
 
 
 
 
 
 
 
 
 
Reconciliation to GAAP presentation:
 
 
 
 
 
 
 
 
 
Total investment advisory, management, leasing and development services revenue
 
$
7,431

Elimination of intercompany fee revenues
 
(2,319
)
Investment advisory, management, leasing and development services revenue, as reported
 
$
5,112

 
 
 
 
 
 
 
 
 
 
Three months ended September 30, 2012
 
 
 
 
 
 
 
 
 
Source of revenues:
 
 
 
 
 
 
 
 
 
Consolidated real estate entities
$
440

  
$
129

  
$
240

  
$
67

  
$
876

Unconsolidated real estate entities
2,103

  
98

  
845

  
1,262

  
4,308

Unaffiliated real estate entities
501

  
115

  
298

  
90

  
1,004

Total investment advisory, management, leasing and development services revenue
$
3,044

  
$
342

  
$
1,383

  
$
1,419

  
6,188

Investment advisory, management, leasing and development services expenses
 
(2,634
)
Net investment advisory, management, leasing and development services income
 
$
3,554

 
 
 
 
 
 
 
 
 
 
Reconciliation to GAAP presentation:
 
 
 
 
 
 
 
 
 
Total investment advisory, management, leasing and development services revenue
 
$
6,188

Elimination of intercompany fee revenues
 
(1,595
)
Investment advisory, management, leasing and development services revenue, as reported
 
$
4,593



10



Thomas Properties Group, Inc.
Supplemental Financial Information
INVESTMENT ADVISORY, MANAGEMENT, LEASING AND DEVELOPMENT SERVICES
(in thousands)
(unaudited)
 
Nine months ended September 30, 2013
Property
Management
Fees
 
Development
Services
Fees
 
Leasing
Fees
 
Investment
Advisory
Fees
 
Total Fees
Source of revenues:
 
 
 
 
 
 
 
 
 
Consolidated real estate entities
$
1,369

  
$
231

  
$
1,556

  
$
195

  
$
3,351

Unconsolidated real estate entities
5,967

 
574

 
2,894

 
4,759

  
14,194

Unaffiliated real estate entities
1,254

 
325

 
638

 
309

  
2,526

Total investment advisory, management, leasing and development services revenue
$
8,590

  
$
1,130

  
$
5,088

  
$
5,263

  
20,071

Investment advisory, management, leasing and development services expenses
 
(7,176
)
Net investment advisory, management, leasing and development services income
 
$
12,895

 
 
 
 
 
 
 
 
 
 
Reconciliation to GAAP presentation:
 
 
 
 
 
 
 
 
 
Total investment advisory, management, leasing and development services revenue
 
$
20,071

Elimination of intercompany fee revenues
 
(7,149
)
Investment advisory, management, leasing and development services revenue, as reported
 
$
12,922

 
 
 
 
 
 
 
 
 
 
Nine months ended September 30, 2012
 
 
 
 
 
 
 
 
 
Source of revenues:
 
 
 
 
 
 
 
 
 
Consolidated real estate entities
$
1,314

  
$
301

  
$
435

  
$
201

  
$
2,251

Unconsolidated real estate entities
6,308

  
564

  
3,335

  
3,555

  
13,762

Unaffiliated real estate entities
1,456

  
255

  
708

  
250

  
2,669

Total investment advisory, management, leasing and development services revenue
$
9,078

  
$
1,120

  
$
4,478

  
$
4,006

  
18,682

Investment advisory, management, leasing and development services expenses
 
(8,628
)
Net investment advisory, management, leasing and development services income
 
$
10,054

 
 
 
 
 
 
 
 
 
 
Reconciliation to GAAP presentation:
 
 
 
 
 
 
 
 
 
Total investment advisory, management, leasing and development services revenue
 
$
18,682

Elimination of intercompany fee revenues
 
(4,104
)
Investment advisory, management, leasing and development services revenue, as reported
 
$
14,578


11



Thomas Properties Group, Inc.
Supplemental Financial Information
PORTFOLIO DATA
Our Operating Properties
  
 
 
As of September 30, 2013
 
TPGI's Share (1)
(in thousands except square footage)
 
 
Location
 
Rentable Square
Feet (2)
 
Percent Leased 
 
TPGI's Percentage Interest
 
Rentable
Square
Feet
 
Trailing Twelve Months Ended September 30, 2013 Adjusted Historical NOI - Cash Basis (3)
 
Current Annualized NOI (4)
 
Pro-Forma Annualized NOI at 95% Occupancy (5)
 
Currently Committed Leasing Capital Costs (6)
 
Estimated Incremental Leasing Capital Costs (6)
 
Net Current Assets
 
Encumbrances at September 30, 2013
 
Consolidated Operating Properties:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
One Commerce Square (7)
Philadelphia, PA
 
942,866

 
82.8
%
 
75.0
%
 
707,150

 
$
12,450

 
$
12,254

 
$
14,324

 
$
(1,063
)
 
$
(6,326
)
 
$

 
$
143,282

 
Two Commerce Square (7)
Philadelphia, PA
 
953,276

 
88.1

 
75.0

 
714,957

 
14,066

 
13,396

 
14,584

 
(3,431
)
 
(3,630
)
 

 
123,403

 
Four Points Centre
Austin, TX
 
192,062

 
100.0

 
100.0

 
192,062

 
1,075

 
3,123

 
2,967

 
(1,026
)
 

 
(554
)
 
23,441

(8)
San Felipe Plaza
Houston, TX
 
980,472

 
88.9

 
100.0

 
980,472

 
12,998

 
15,026

 
15,340

 
(2
)
 
(718
)
 
(10,149
)
 
110,000

 
CityWestPlace
Houston, TX
 
1,473,020

 
97.6

 
100.0

 
1,473,020

 
23,906

 
25,486

 
24,810

 
(764
)
 

 
6,236

 
211,766

 
Subtotal Consolidated Operating Properties
 
4,541,696

 
90.7

 
 
 
4,067,661

 
64,495

 
69,285

 
72,025

 
(6,286
)
 
(10,674
)
 
(4,467
)
 
611,892

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TPG/CalSTRS Austin Joint Venture
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Operating Properties:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Frost Bank Tower
Austin, TX
 
535,078

 
90.9

 
33.3

 
178,358

 
4,816

 
4,960

 
5,188

 
(52
)
 
(478
)
 
(910
)
 
50,000

 
300 West 6th Street
Austin, TX
 
454,225

 
90.4

 
33.3

 
151,407

 
2,820

 
4,389

 
4,593

 
(474
)
 
(457
)
 
(985
)
 
42,333

 
San Jacinto Center
Austin, TX
 
410,248

 
84.7

 
33.3

 
136,748

 
2,327

 
2,987

 
3,346

 

 
(846
)
 
(710
)
 
33,666

 
One Congress Plaza
Austin, TX
 
518,385

 
78.9

 
33.3

 
172,793

 
2,196

 
3,027

 
3,779

 
(225
)
 
(1,754
)
 
(1,133
)
 
42,666

 
One American Center
Austin, TX
 
503,951

 
77.4

 
33.3

 
167,982

 
2,047

 
2,649

 
3,418

 
(442
)
 
(1,773
)
 
(1,054
)
 
40,000

 
Subtotal TPG/CalSTRS Austin, Joint Venture
 
2,421,887

 
84.4

 
 
 
807,288

 
14,206

 
18,012

 
20,324

 
(1,193
)
 
(5,308
)
 
(4,792
)
 
208,665

 
Total / Average
 
 
6,963,583

 
88.5
%
 
 
 
4,874,949

 
$
78,701

 
$
87,297

 
$
92,349

 
$
(7,479
)
 
$
(15,982
)
 
$
(9,259
)
 
$
820,557

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Footnotes on following page.

12



Thomas Properties Group, Inc.
Supplemental Financial Information
PORTFOLIO DATA - CONTINUED
Footnotes to Portfolio Data on previous page:
(1)
TPGI's 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 with certain exceptions for Commerce Square (see footnote 7 below).
(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).
(3)
Adjusted historical net operating income (“NOI”) - cash basis represents the sum of (in thousands):
 
 
 
Less
 
Plus
 
Trailing
 
Twelve
 
Nine
 
Nine
 
Twelve
 
Months Ended
 
Months Ended
 
Months Ended
 
Months Ended
 
December 31, 2012
 
September 30, 2012
 
September 30, 2013
 
September 30, 2013
Rental, tenant reimbursements, and parking and other revenue
$
54,922

 
$
(41,360
)
 
$
42,833

 
$
56,395

Property operating and maintenance expenses and real estate taxes
(31,860
)
 
23,825

 
(25,484
)
 
(33,519
)
Consolidated Net Operating Income
23,062

 
(17,535
)
 
17,349

 
22,876

 
 
 
 
 
 
 
 
Rental, tenant reimbursements, and parking and other revenue
41,424

 
(24,680
)
 
44,866

 
61,610

Property operating and maintenance expenses and real estate taxes
(20,283
)
 
12,358

 
(21,712
)
 
(29,637
)
TPGI's Share of Unconsolidated Net Operating Income
21,141

 
(12,322
)
 
23,154

 
31,973

 
 
 
 
 
 
 
 
Adjustments:
 
 
 
 
 
 
 
Straight line and other GAAP rent adjustments
(1,878
)
 
(948
)
 
4,129

 
1,303

Free rent granted and termination fees earned for the period
3,896

 
(2,245
)
 
4,005

 
5,656

Net operating (income) loss from development and other properties
777

 
(501
)
 
244

 
520

Net operating income from sold properties
(3,889
)
 
2,603

 
(1,533
)
 
(2,819
)
Elimination of intercompany revenues and expenses
(2,132
)
 
(597
)
 
1,949

 
(780
)
Adjustment to revenues and operating expenses for change in ownership interest in
Austin (a)
8,570

 
(16,277
)
 

 
(7,707
)
Adjustment to revenues and operating expenses for change in ownership interest in
   Houston
25,832

 
(19,819
)
 
21,666

 
27,679

Adjusted Historical Net Operating Income - Cash Basis
$
75,379

 
$
(67,641
)
 
$
70,963

 
$
78,701

(a) Adjusted Historical NOI reflects the Austin portfolio at 33.33%. 
 
 
 
 
 
 
 

(4)
Current annualized net operating income represents the sum of i) TPGI's share of net operating income for the month of October 2013, annualized; and ii) the annual straight-line rent adjustment for existing leases which were in place as of September 30, 2013, calculated as if the leases began on September 30, 2013




13



Thomas Properties Group, Inc.
Supplemental Financial Information
PORTFOLIO DATA - CONTINUED

(5)
For properties that are less than 95% leased, pro-forma annualized net operating income represents the sum of i) current annualized net operating income, and ii) an upward adjustment to net operating income based on current market rent to achieve 95% occupancy. For properties that are more than 95% leased, pro-forma annualized net operating income represents the sum of i) current annualized net operating income, and ii) a downward adjustment to net operating income based on average in place rent to achieve 95% occupancy.
(6)
Currently committed leasing capital costs represent existing contractual obligations for tenant improvement and leasing commission costs for leases in place as of September 30, 2013. Estimated incremental leasing capital costs represents capital expenditures, including tenant improvements and leasing commissions, expected to be spent to achieve 95% occupancy.
(7)
Brandywine Realty Trust ("BDN") has a 25% preferred equity position in the partnerships that own Commerce Square, for which it contributed $25.8 million. The preferred equity, which earns a preferred return of 9.25%, is being invested in a value-enhancement program designed to increase rental rates and occupancy at Commerce Square. Although TPGI's percentage interest has been reflected as 75%, the NOI amounts, leasing and capital cost amounts, and encumbrances are reflected at 100%, and the preferred equity balances and accrued preferred returns of $17.7 million and $11.4 million have been included in the encumbrances of One Commerce Square and Two Commerce Square, respectively.
(8)
An additional $0.4 million may be borrowed under this loan.


14



Thomas Properties Group, Inc.
Supplemental Financial Information
PORTFOLIO DATA - CONTINUED
Lease Expirations
The following table presents a summary of lease expirations for our portfolio for leases in place at September 30, 2013, plus available space. This table assumes that none of the tenants exercise renewal options or early termination rights, if any, at or prior to the scheduled expirations. Annualized net rent is based on the current net rent per leased square foot and excludes the effect of GAAP deferred rent adjustments and parking and other revenues.
 
TPGI's Share of Consolidated and Unconsolidated Properties' Lease Expirations
Year
  
Rentable
Square Feet
of Expiring
Leases
  
Percentage of
Aggregate
Square Feet
 
Current
Annualized Net
Rent Per Leased
Square Foot
  
Annualized Net
Rent Per Leased
Square Foot at
Expiration
Vacant
  
477,529

  
9.8
%
 
$

  
$

2013
  
80,414

  
1.6

 
19.60

  
19.59

2014
  
661,599

  
13.6

 
15.62

  
22.96

2015
  
389,777

  
8.0

 
17.70

  
23.44

2016
  
213,540

  
4.4

 
22.08

  
23.97

2017
  
576,220

  
11.8

 
17.01

  
25.39

2018
  
358,153

  
7.3

 
12.21

  
20.81

2019
  
104,339

  
2.1

 
19.10

  
25.62

2020
  
335,248

  
6.9

 
14.66

  
22.44

2021
  
899,261

  
18.4

 
13.50

  
22.14

2022
  
133,389

  
2.7

 
14.40

  
24.98

Thereafter
  
645,480

  
13.4

 
14.49

  
30.90

Total/Weighted Average
  
4,874,949

  
100.0
%
 
$
15.47

  
$
24.22

 
 
 
 
 
 
 
 
 







15



Thomas Properties Group, Inc.
Supplemental Financial Information
PORTFOLIO DATA - CONTINUED
Lease Activity
 
TPGI's Share
 
For the Three Months Ended
 
September 30, 2013
 
June 30, 2013
 
March 31, 2013
 
December 31, 2012
 
September 30, 2012
Retention (square feet):
 
 
 
 
 
 
 
 
 
Retained tenants
83,087

 
156,693

 
12,743

 
67,564

 
59,147

Leases expired and terminated
222,596

 
210,757

 
91,020

 
108,250

 
101,973

Retention %
37.3
%
 
74.3
 %
 
14.0
%
 
62.4
 %
 
58.0
 %
 
 
 
 
 
 
 
 
 
 
All Leases Signed (square feet)
112,222

 
286,712

 
45,356

 
208,223

 
182,528

Weighted Average Lease Term (years):
8.4

 
7.4

 
5.6

 
7.4

 
7.6

Weighted Average Free Rent Term (months):
5.5

 
3.2

 
3.5

 
2.5

 
4.7

Total Capital Costs Committed (per square foot per lease year) (1):
 
 
 
 
 
 
 
 
 
New leases
$
6.14

 
$
5.67

 
$
6.99

 
$
5.85

 
$
6.92

Renewals
$
4.11

 
$
2.69

 
$
4.37

 
$
3.42

 
$
1.73

Combined
$
5.30

 
$
3.93

 
$
6.34

 
$
4.79

 
$
6.20

 
 
 
 
 
 
 
 
 
 
Quarterly Leasing Spread (square feet):
 
 
 
 
 
 
 
 
 
New leases
17,864

 
100,435

 
25,543

 
78,469

 
61,488

Renewals
50,825

 
152,356

 
12,405

 
63,082

 
32,637

Total Leases Subject to Comparison (square feet)
68,689

 
252,791

 
37,948

 
141,551

 
94,125

 
 
 
 
 
 
 
 
 
 
New Leases/Expansions:
 
 
 
 
 
 
 
 
 
Expiring Cash Rental Rate
$
16.24

 
$
22.03

 
$
20.31

 
$
18.52

 
$
21.38

Initial Cash Rental Rate
$
21.31

 
$
19.65

 
$
20.83

 
$
17.48

 
$
20.21

Increase (decrease) %
31.2
%
 
(10.8
)%
 
2.6
%
 
(5.6
)%
 
(5.5
)%
 
 
 
 
 
 
 
 
 
 
Expiring GAAP Rental Rate
$
15.42

 
$
19.69

 
$
19.72

 
$
17.05

 
$
19.82

New GAAP Rental Rate
$
23.19

 
$
20.68

 
$
21.36

 
$
18.55

 
$
21.84

Increase (decrease) %
50.4
%
 
5.0
 %
 
8.3
%
 
8.8
 %
 
10.2
 %
 
 
 
 
 
 
 
 
 
 
Renewals of Existing Leased Space:
 
 
 
 
 
 
 
 
 
Expiring Cash Rental Rate
$
17.36

 
$
17.54

 
$
15.92

 
$
15.64

 
$
16.63

Initial Cash Rental Rate
$
18.61

 
$
17.57

 
$
24.73

 
$
18.52

 
$
21.60

Increase (decrease) %
7.2
%
 
0.2
 %
 
55.3
%
 
18.4
 %
 
29.9
 %
 
 
 
 
 
 
 
 
 
 
Expiring GAAP Rental Rate
$
16.83

 
$
16.80

 
$
15.72

 
$
16.40

 
$
15.75

New GAAP Rental Rate
$
20.54

 
$
19.40

 
$
25.06

 
$
23.46

 
$
22.45

Increase (decrease) %
22.0
%
 
15.5
 %
 
59.4
%
 
43.0
 %
 
42.5
 %
 
 
 
 
 
 
 
 
 
 
Combined:
 
 
 
 
 
 
 
 
 
Expiring Cash Rental Rate
$
17.07

 
$
19.32

 
$
18.88

 
$
17.22

 
$
19.71

Initial Cash Rental Rate
$
19.31

 
$
18.40

 
$
22.10

 
$
17.94

 
$
20.69

Increase (decrease) %
13.1
%
 
(4.8
)%
 
17.1
%
 
4.2
 %
 
5.0
 %
 
 
 
 
 
 
 
 
 
 
Expiring GAAP Rental Rate
$
16.47

 
$
17.94

 
$
18.41

 
$
16.75

 
$
18.39

New GAAP Rental Rate
$
21.23

 
$
19.91

 
$
22.57

 
$
20.74

 
$
22.05

Increase (decrease) %
28.9
%
 
11.0
 %
 
22.6
%
 
23.8
 %
 
19.9
 %

(1) Includes tenant improvements and leasing commissions.

16



Thomas Properties Group, Inc.
Supplemental Financial Information
PORTFOLIO DATA - CONTINUED
 ($ in thousands except for average amounts)
Our Development Properties
 
 
 
 
 
 
 
 
 
 
Entitlements
 
As of September 30, 2013
 
 
Location
 
TPGI's Percentage Interest
 
Number of Acres
 
Potential Property Types
 
Square Feet
 
Status
 
Costs Incurred to Date
 
Average Cost Per Square Foot
 
Loan Balance
Pre-Development
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Four Points Centre
 
Austin, TX
 
100
%
 
19.0

 
Office/ Retail/ R&D/ Hotel
 
480,000

 
Entitled
 
$
6,330

(1)
$
13.19

 
$

CityWestPlace land
 
Houston, TX
 
100

 
9.9

 
Office/ Retail/ Residential
 
500,000

 
Entitled
 
9,101

 
18.2

 

 
 
 
 
 
 
 
 
 
 
980,000

 
 
 
$
15,431

 
$
15.74

 


Condominium Units Held for Sale
 
As of September 30, 2013
 
 
Location
 
TPGI's Percentage Interest (2)
 
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 (3)
 
Total Square Feet Remaining To Be Sold
 
List Price Per Square Foot to Be Sold (4)
 
Book Carrying Value
 
Loan Balance (5)
Murano
 
Philadelphia, PA
 
73%
 
43-story for-sale condominium project containing 302 units. Certificates of occupancy received for 100% of units
 
267
 
301,822
 
$520
 
35
 
49,508
 
$513 to $1,236
 
$
29,388

 
$


(1)
Inclusive of capitalized interest.

(2)
We consolidate our Murano residential condominium project which we control. Our unaffiliated partner's interest is reflected in our consolidated balance sheets under the "Noncontrolling Interests" caption. Our partner has a stated ownership interest of 27%. Net proceeds from the project are distributed based on an order of preferences described in the partnership agreement. The Company anticipates that we will receive distributions in excess of our stated 73% ownership interest according to these distribution preferences.

(3)
The 35 units remaining to sell as of September 30, 2013 are all on high-rise floors with superior views. Subsequent to September 30, 2013, we closed the sales of nine units, which reduced the number of units remaining to be sold to 26, and two units remain under contract, which if they close, will bring the number of units remaining to be sold to 24.

(4)
The average list price per square foot is $741.

(5)
This loan was paid off in July 2013.

17



Thomas Properties Group, Inc.
Supplemental Financial Information
PORTFOLIO DATA - CONTINUED
 
 
Our Managed Properties

We provide leasing, asset and/or property management services on behalf of third parties for the following properties:

 
Managed Properties
 
Location
 
Rentable Square Feet
 
Percent Leased
 
Managed by TPG since
800 South Hope Street
 
Los Angeles, CA
 
242,176

  
98.5
%
 
2000
CalEPA Headquarters
 
Sacramento, CA
 
950,939

  
100.0

 
2000
1835 Market Street
 
Philadelphia, PA
 
686,503

  
84.4

 
2002
Total/Weighted Average
 
1,879,618

  
94.1
%
 
 



18



Thomas Properties Group, Inc.
Supplemental Financial Information
DEBT SUMMARY
(in thousands)  
 
 
As of September 30, 2013
Mortgages and Other Loans
 
Interest
Rate

 
Principal
Amount
 
TPGI's Share
of Principal
Amount
 
Maturity
Date
2014 Maturity Date
 
 
 
 
 
 
 
 
Four Points Centre (1)
 
3.69
%
 
$
23,441

 
23,441

  
7/31/2014
 
 
 
 
 
 
 
 
 
2015 Maturity Date
 
 
 
 
 
 
 
 
Parkway loan (2)
 
6.00
%
 
80,000

 
80,000

 
1/15/2015
 
 
 
 
 
 
 
 
 
2016 Maturity Date
 
 
 
 
 
 
One Commerce Square
 
5.67
%
 
125,548

 
94,161

  
1/6/2016
CityWestPlace (Buildings I & II)
 
6.16
%
 
118,041

 
118,041

  
7/6/2016
 
 
 
 
243,589

 
212,202

 
 
2017 Maturity Date
 
 
 
 
 
 
Frost Bank Tower
 
6.06
%
 
150,000

 
50,000

  
6/11/2017
One Congress Plaza
 
6.08
%
 
128,000

 
42,666

  
6/11/2017
300 West 6th Street
 
6.01
%
 
127,000

 
42,333

  
6/11/2017
One American Center
 
6.03
%
 
120,000

 
40,000

  
6/11/2017
San Jacinto Center
 
6.05
%
 
101,000

 
33,666

  
6/11/2017
 
 
 
 
626,000

 
208,665

 
 
2018 and Thereafter- Maturity Date
 
 
 
 
 
 
San Felipe Plaza
 
4.78
%
 
110,000

 
110,000

  
12/1/2018
CityWestPlace (Buildings III & IV)
 
5.03
%
 
93,725

  
93,725

 
3/5/2020
Two Commerce Square (3)
 
3.96
%
 
112,000

 
84,000

  
4/5/2023
 
 
315,725

 
287,725

  
 
Total
 
$
1,288,755

 
$
812,033

  
 
Weighted average interest rate at September 30, 2013
 
5.61
%
 
 
 
 
 
 
Footnotes on following page.

19



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, our operating partnership is subject to customary non-recourse carve out obligations, in the case of consolidated assets; and TPG/CalSTRS is subject to customary non-recourse carve out obligations in the case of certain joint venture assets.

(1)
The Four Points Centre loan bears interest at LIBOR plus 3.50%. As of September 30, 2013, the loan has an unfunded balance of $0.4 million which is available to fund any remaining project costs. The loan has a one year extension option at our election subject to certain conditions that will put the maturity date at the end of extension options as July 31, 2015. The option to extend is subject to (1) a loan-to-value ratio and a minimum appraised land ratio of 62.5%, and (2) the adjusted net operating income of the property and improvements as a percentage of the outstanding principal balance must be at least 10.0%. If these requirements are not met, we can pay down the principal balance in an amount sufficient to satisfy these requirements. The debt yield is calculated by dividing the net operating income of the property by the outstanding principal balance of the loan. Through September 30, 2013, the property has generated net operating losses.

Beginning in August 2014, we are required to pay down the loan balance by $42,000 each month. We have guaranteed completion of the tenant improvements and 46.5% of the balance of the outstanding principal balance and interest payable on the loan, which results in a maximum guarantee of $10.9 million as of September 30, 2013. We have agreed to certain financial covenants on this loan as the guarantor, which we were in compliance with as of September 30, 2013.

(2)
TPG entered into a loan agreement with Parkway LP, in connection with a merger agreement, to fund a portion of the Company’s obligations with respect to the TPG/CalSTRS liquidation. The loan funded on September 27, 2013, in the amount of $80 million. The net proceeds were $78.8 million after payment of loan fees of $1.2 million. The loan bears interest at a rate of 6% per annum for the first six months, 8% per annum for the following six months, and 12% per annum thereafter, with interest payable monthly in arrears. The loan will mature on January 15, 2015. The loan may be prepaid at any time without penalty. The loan agreement contains affirmative and negative covenants, including covenants that restrict the Company’s ability to create liens on its properties, incur additional indebtedness, and engage in mergers, consolidations or sales of all or substantially all of its assets, in each case, subject to specified exceptions.

(3)
The mortgage loan is subject to interest only payments through March 5, 2018, and thereafter, principal and interest payments are due based on a thirty-year amortization schedule. The loan may be defeased, and is subject to yield maintenance payments for any prepayments made 60 days prior to the maturity date.





20



Thomas Properties Group, Inc.
Supplemental Financial Information
CAPITAL STRUCTURE
(in thousands, except share data)
The following is the capital structure of TPGI as of September 30, 2013:

         
Debt
 
 
 
Aggregate
Principal
Mortgage and other loans
 
$
675,538

Company share of unconsolidated debt
 
209,411

Total combined debt
 
$
884,949

 
 
 
 
 
Equity
 
Shares/Units
Outstanding
 
Market Value (1)
Common stock
 
46,969,703

  
$
315,636

Operating partnership units (2)
 
11,871,049

  
79,773

Total common equity
 
58,840,752

  
$
395,409

Total consolidated market capitalization
 
$
1,070,947

Total combined market capitalization (3)
 
$
1,280,358




(1)
Based on the closing price of $6.72 per share of TPGI common stock on September 30, 2013.
(2)
Includes operating partnership units and incentive units as of September 30, 2013.
(3)
Includes TPGI's share of debt of unconsolidated real estate entities.


21



Thomas Properties Group, Inc.
Supplemental Financial Information
OTHER INFORMATION
Principal Corporate Office
Thomas Properties Group, Inc.
515 South Flower Street
Sixth Floor
Los Angeles, CA 90071
Phone: (213) 613-1900
Fax: (213) 633-4760
www.tpgre.com

The information contained on our website is not incorporated herein by reference and does not constitute a part of this supplemental financial information.
 
Investor Relations
 
Transfer Agent and Registrar
 
Stock Market Listing
Diana M. Laing
 
Computershare Trust Company
 
NYSE: TPGI
Chief Financial Officer
 
P.O. Box 43078
 
 
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
John R. Sischo
 
Co-Chief Operating Officer and Director
Paul S. Rutter
 
Co-Chief Operating Officer and General Counsel
Randall L. Scott
 
Executive Vice President and Director
Thomas S. Ricci
 
Executive Vice President
Diana M. Laing
 
Chief Financial Officer and Secretary
Todd L. Merkle
 
Chief Investment Officer
Robert D. Morgan
 
Senior Vice President, Accounting and Administration
R. Bruce Andrews
 
Director
Bradley H. Carroll
 
Director
Edward D. Fox
 
Director
John L. Goolsby
 
Director
Winston H. Hickox
 
Director


22