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8-K - FORM 8-K - THOMAS PROPERTIES GROUP INC | a2010q4earningsreleasecove.htm |
EX-99.02 - PRESS RELEASE - THOMAS PROPERTIES GROUP INC | exhibit9902.htm |

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EX-99.1 2 dex991.htm SUPPLEMENTAL FINANCIAL INFORMATION
EXHIBIT 99.1
Thomas Properties Group, Inc.
Supplemental Financial Information
For the Quarter Ended December 31, 2010
2
Thomas Properties Group, Inc.
Supplemental Financial Information
For the Quarter Ended December 31, 2010
TABLE OF CONTENTS
Page No. | |
Corporate | |
Supplemental Financial Information | |
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 Property Portfolio
Our properties are located in Southern California and Sacramento, California; Philadelphia, Pennsylvania; Northern Virginia; Houston, Texas; and Austin, Texas. As of December 31, 2010, we own interests in and asset manage 27 operating properties with 13.2 million rentable square feet and provide leasing, asset and/or property management services on behalf of third parties for an additional four operating properties with 2.3 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.
TPG/CalSTRS, LLC (“TPG/CalSTRS”) is a value-add/core-plus joint venture with the California State Teachers’ Retirement System (“CalSTRS”), which has total capital commitments of $511.7 million of which $24.8 million and $19.0 million is currently unfunded by CalSTRS and us, respectively. This joint venture, in which our operating partnership, Thomas Properties Group, L.P. (“TPG”), is the managing member, currently owns 12 office properties. The joint venture also holds a 25.0% interest in a separate joint venture which owns an additional ten office properties in Austin, Texas.
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 $80 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.
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Thomas Properties Group, Inc.
Supplemental Financial Information
OPERATING AND FINANCIAL INFORMATION
Financial Measures
This supplemental financial information includes certain financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) under the full consolidation accounting method, and certain financial measures prepared in accordance with the pro-rata consolidation method (non-GAAP). We believe the financial measures presented under the pro-rata consolidation method provide supplemental information helpful to an understanding of our results of operations and financial condition. 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. Although these financial measures are not presented in accordance with GAAP, we believe these measures assist 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 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 on pages 7 - 9 of 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 10 and 11 for a discussion of EBDT and a reconciliation of EBDT to net income (loss) and pages 12 and 13 for a discussion of ATCF and a reconciliation of ATCF to net income (loss).
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Three months ended | Twelve months ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenues: | ||||||||||||||||
Rental | $ | 7,412 | $ | 7,254 | $ | 29,230 | $ | 29,753 | ||||||||
Tenant reimbursements | 4,711 | 5,012 | 20,187 | 21,163 | ||||||||||||
Parking and other | 679 | 832 | 3,330 | 2,988 | ||||||||||||
Investment advisory, management, leasing and development services | 2,109 | 2,187 | 7,703 | 9,345 | ||||||||||||
Investment advisory, management, leasing and development services- unconsolidated real estate entities | 5,344 | 3,794 | 16,470 | 15,023 | ||||||||||||
Reimbursement of property personnel costs | 1,584 | 1,371 | 5,797 | 5,584 | ||||||||||||
Condominium sales | 425 | 7,299 | 14,984 | 30,226 | ||||||||||||
Total revenues | 22,264 | 27,749 | 97,701 | 114,082 | ||||||||||||
Expenses: | ||||||||||||||||
Property operating and maintenance | 6,390 | 6,900 | 25,049 | 25,339 | ||||||||||||
Real estate and other taxes | 1,693 | 1,798 | 6,914 | 7,225 | ||||||||||||
Investment advisory, management, leasing and development services | 4,234 | 3,272 | 12,221 | 11,910 | ||||||||||||
Reimbursable property personnel costs | 1,584 | 1,371 | 5,797 | 5,584 | ||||||||||||
Cost of condominium sales | 300 | 5,600 | 10,955 | 26,492 | ||||||||||||
Interest | 4,871 | 6,453 | 19,239 | 26,868 | ||||||||||||
Depreciation and amortization | 3,723 | 3,269 | 14,128 | 12,642 | ||||||||||||
General and administrative | 4,363 | 4,802 | 14,224 | 17,082 | ||||||||||||
Impairment loss | 4,500 | 4,400 | 4,500 | 13,000 | ||||||||||||
Total expenses | 31,658 | 37,865 | 113,027 | 146,142 | ||||||||||||
Gain on sale of real estate | — | 1,214 | — | 1,214 | ||||||||||||
Gain on extinguishment of debt | — | 11,412 | — | 11,921 | ||||||||||||
Interest income | 17 | 51 | 72 | 338 | ||||||||||||
Equity in net loss of unconsolidated real estate entities | (246 | ) | (15,641 | ) | (1,184 | ) | (16,236 | ) | ||||||||
Loss before income taxes and noncontrolling interests | (9,623 | ) | (13,080 | ) | (16,438 | ) | (34,823 | ) | ||||||||
Benefit (provision) for income taxes | 774 | (203 | ) | 357 | (683 | ) | ||||||||||
Net loss | (8,849 | ) | (13,283 | ) | (16,081 | ) | (35,506 | ) | ||||||||
Noncontrolling interests' share of net loss: | ||||||||||||||||
Unitholders in the Operating Partnership | 2,804 | 4,079 | 4,843 | 11,535 | ||||||||||||
Partners in consolidated real estate entities | (106 | ) | 1,474 | (234 | ) | 2,408 | ||||||||||
2,698 | 5,553 | 4,609 | 13,943 | |||||||||||||
TPGI share of net loss | $ | (6,151 | ) | $ | (7,730 | ) | $ | (11,472 | ) | $ | (21,563 | ) | ||||
Loss per share-basic and diluted | $ | (0.18 | ) | $ | (0.30 | ) | $ | (0.34 | ) | $ | (0.86 | ) | ||||
Weighted average common shares-basic and diluted | 35,041,770 | 25,753,994 | 33,684,101 | 25,173,163 |
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December 31, 2010 | December 31, 2009 | December 31, 2010 | December 31, 2009 | |||||||||||||
(unaudited) | (audited) | (unaudited) | (audited) | |||||||||||||
ASSETS | LIABILITIES AND EQUITY | |||||||||||||||
Investments in real estate: | Liabilities: | |||||||||||||||
Operating properties, net | $ | 266,859 | $ | 276,603 | Mortgage and other secured loans | $ | 300,536 | $ | 318,236 | |||||||
Land improvements—development properties | 96,585 | 95,558 | Accounts payable and other liabilities | 14,154 | 15,260 | |||||||||||
363,444 | 372,161 | Unrecognized tax benefits | 14,412 | 19,639 | ||||||||||||
Condominium units held for sale | 49,827 | 64,101 | Prepaid rent and deferred revenue | 2,888 | 3,249 | |||||||||||
Improved land held for sale | 2,819 | 4,508 | Below market rents, net | 454 | 674 | |||||||||||
Investments in unconsolidated real estate entities | 17,975 | 14,458 | Total liabilities | 332,444 | 357,058 | |||||||||||
Cash and cash equivalents, unrestricted | 42,363 | 35,935 | ||||||||||||||
Restricted cash | 13,069 | 12,071 | Equity: | |||||||||||||
Rents and other receivables, net | 1,754 | 2,073 | Stockholders’ equity: | |||||||||||||
Receivables from unconsolidated real estate entities | 2,979 | 2,010 | Common stock | 369 | 308 | |||||||||||
Deferred rents | 14,592 | 12,954 | Limited voting stock | 123 | 138 | |||||||||||
Deferred leasing and loan costs, net | 13,538 | 15,375 | Additional paid-in capital | 207,953 | 185,344 | |||||||||||
Above market rents, net | 617 | 838 | Retained deficit and dividends, including $2 and ($74) of other comprehensive income (loss) as of December 31, 2010 and December 31, 2009, respectively | (60,790 | ) | (49,394 | ) | |||||||||
Deferred tax asset, net of valuation allowance | 13,460 | 17,644 | Total stockholders’ equity | 147,655 | 136,396 | |||||||||||
Other assets, net | 3,798 | 5,275 | Noncontrolling interests: | |||||||||||||
Total assets | $ | 540,235 | $ | 559,403 | Unitholders in the Operating Partnership | 51,478 | 63,042 | |||||||||
Partners in consolidated real estate entities | 8,658 | 2,907 | ||||||||||||||
Total noncontrolling interests | 60,136 | 65,949 | ||||||||||||||
Total equity | 207,791 | 202,345 | ||||||||||||||
Total liabilities and equity | $ | 540,235 | $ | 559,403 |
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Thomas Properties Group, Inc.
Supplemental Financial Information
UNCONSOLIDATED REAL ESTATE ENTITIES STATEMENTS OF OPERATIONS
(in thousands)
(unaudited)
The following are the combined statements of operations of our unconsolidated real estate entities for the three and twelve months ended December 31, 2010 and 2009.
Three months ended | Twelve months ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2010 | 2009 | 2010 | 2009 | ||||||||||||
Revenues: | |||||||||||||||
Rental | $ | 50,952 | $ | 50,845 | $ | 203,106 | $ | 207,978 | |||||||
Tenant reimbursements | 20,633 | 22,663 | 85,674 | 87,929 | |||||||||||
Parking and other | 7,165 | 7,527 | 28,016 | 28,525 | |||||||||||
Total revenues | 78,750 | 81,035 | 316,796 | 324,432 | |||||||||||
Expenses: | |||||||||||||||
Property operating and maintenance | 31,732 | 33,458 | 123,436 | 123,884 | |||||||||||
Real estate and other taxes | 7,217 | 10,624 | 38,754 | 42,691 | |||||||||||
Interest | 28,508 | 26,180 | 108,445 | 104,105 | |||||||||||
Depreciation and amortization | 25,908 | 29,380 | 111,677 | 120,129 | |||||||||||
Impairment loss | — | 55,995 | — | 64,044 | |||||||||||
Total expenses | 93,365 | 155,637 | 382,312 | 454,853 | |||||||||||
Loss from continuing operations | (14,615 | ) | (74,602 | ) | (65,516 | ) | (130,421 | ) | |||||||
Gain on extinguishment of debt | 6,618 | — | 13,695 | 67,017 | |||||||||||
Interest income | 18 | 22 | 85 | 262 | |||||||||||
Loss from discontinued operations | — | — | — | (83 | ) | ||||||||||
Net loss | $ | (7,979 | ) | $ | (74,580 | ) | $ | (51,736 | ) | $ | (63,225 | ) | |||
TPGI share of equity in net loss of unconsolidated real estate entities | $ | (246 | ) | $ | (15,641 | ) | $ | (1,184 | ) | $ | (16,236 | ) |
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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, 2010 and 2009.
December 31, 2010 | December 31, 2009 | ||||||
ASSETS | |||||||
Investments in real estate, net | $ | 2,169,185 | $ | 2,224,709 | |||
Land held for sale | — | 3,853 | |||||
Cash and cash equivalents, unrestricted | 40,579 | 24,918 | |||||
Restricted cash | 47,041 | 93,434 | |||||
Rents and other receivables, net | 3,581 | 3,546 | |||||
Above market rents, net | 1,436 | 2,117 | |||||
Deferred rents | 100,037 | 79,960 | |||||
Deferred leasing and loan costs, net | 134,889 | 144,287 | |||||
Other assets | 6,420 | 7,258 | |||||
Total assets | $ | 2,503,168 | $ | 2,584,082 | |||
LIABILITIES AND EQUITY | |||||||
Mortgage, other secured, and unsecured loans | $ | 1,925,798 | $ | 2,217,118 | |||
Accounts and interest payable and other liabilities | 101,126 | 98,401 | |||||
Below market rents, net | 48,337 | 62,527 | |||||
Total liabilities | $ | 2,075,261 | $ | 2,378,046 | |||
Equity | 427,907 | 206,036 | |||||
Total liabilities and equity | $ | 2,503,168 | $ | 2,584,082 | |||
6
Thomas Properties Group, Inc.
Supplemental Financial Information
PRO-RATA CONSOLIDATED STATEMENTS OF OPERATIONS (NON-GAAP)
(in thousands)
(unaudited)
The following are the pro-rata consolidated statements of operations of TPGI for the three months ended December 31, 2010 and 2009, including reconciliation from the consolidated statements of operations to the pro-rata consolidated statements of operations.
For the three months ended December 31, 2010 | For the three months ended December 31, 2009 | ||||||||||||||||||||||
Consolidated | Plus Unconsolidated Investments at Pro-Rata | Pro-Rata | Consolidated | Plus Unconsolidated Investments at Pro-Rata | Pro-Rata | ||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Rental | $ | 7,412 | $ | 7,616 | $ | 15,028 | $ | 7,254 | $ | 9,654 | $ | 16,908 | |||||||||||
Tenant reimbursements | 4,711 | 2,600 | 7,311 | 5,012 | 3,852 | 8,864 | |||||||||||||||||
Parking and other | 679 | 996 | 1,675 | 832 | 1,229 | 2,061 | |||||||||||||||||
Investment advisory, management, leasing and development services | 2,109 | — | 2,109 | 2,187 | — | 2,187 | |||||||||||||||||
Investment advisory, management, leasing and development services- unconsolidated real estate entities | 5,344 | 102 | 5,446 | 3,794 | 156 | 3,950 | |||||||||||||||||
Reimbursement of property personnel costs | 1,584 | — | 1,584 | 1,371 | — | 1,371 | |||||||||||||||||
Condominium sales | 425 | — | 425 | 7,299 | — | 7,299 | |||||||||||||||||
Total revenues | 22,264 | 11,314 | 33,578 | 27,749 | 14,891 | 42,640 | |||||||||||||||||
Expenses: | |||||||||||||||||||||||
Property operating and maintenance | 6,390 | 4,478 | 10,868 | 6,900 | 5,877 | 12,777 | |||||||||||||||||
Real estate and other taxes | 1,693 | 1,000 | 2,693 | 1,798 | 1,713 | 3,511 | |||||||||||||||||
Investment advisory, management, leasing and development services | 4,234 | — | 4,234 | 3,272 | — | 3,272 | |||||||||||||||||
Reimbursable property personnel costs | 1,584 | — | 1,584 | 1,371 | — | 1,371 | |||||||||||||||||
Cost of condominium sales | 300 | — | 300 | 5,600 | — | 5,600 | |||||||||||||||||
Interest | 4,871 | 3,769 | 8,640 | 6,453 | 4,183 | 10,636 | |||||||||||||||||
Depreciation and amortization | 3,723 | 2,714 | 6,437 | 3,269 | 4,811 | 8,080 | |||||||||||||||||
General and administrative | 4,363 | — | 4,363 | 4,802 | — | 4,802 | |||||||||||||||||
Impairment loss | 4,500 | — | 4,500 | 4,400 | 14,000 | 18,400 | |||||||||||||||||
Total expenses | 31,658 | 11,961 | 43,619 | 37,865 | 30,584 | 68,449 | |||||||||||||||||
Gain on sale of real estate | — | — | — | 1,214 | — | 1,214 | |||||||||||||||||
Gain on extinguishment of debt | — | 331 | 331 | 11,412 | — | 11,412 | |||||||||||||||||
Interest income | 17 | 70 | 87 | 51 | 53 | 104 | |||||||||||||||||
Equity in net (loss) income of unconsolidated real estate entities | (246 | ) | 246 | — | (15,641 | ) | 15,641 | — | |||||||||||||||
(Loss) income before income taxes and noncontrolling interests | (9,623 | ) | — | (9,623 | ) | (13,080 | ) | 1 | (13,079 | ) | |||||||||||||
Benefit (provision) for income taxes | 774 | — | 774 | (203 | ) | — | (203 | ) | |||||||||||||||
Net (loss) income | (8,849 | ) | — | (8,849 | ) | (13,283 | ) | 1 | (13,282 | ) | |||||||||||||
Noncontrolling interests' share of net loss: | |||||||||||||||||||||||
Unitholders in the Operating Partnership | 2,804 | — | 2,804 | 4,079 | — | 4,079 | |||||||||||||||||
Partners in consolidated real estate entities | (106 | ) | — | (106 | ) | 1,474 | — | 1,474 | |||||||||||||||
2,698 | — | 2,698 | 5,553 | — | 5,553 | ||||||||||||||||||
(Loss) income before discontinued operations | (6,151 | ) | — | (6,151 | ) | (7,730 | ) | 1 | (7,729 | ) | |||||||||||||
Loss from discontinued operations | — | — | — | — | (1 | ) | (1 | ) | |||||||||||||||
TPGI share of net loss | $ | (6,151 | ) | $ | — | $ | (6,151 | ) | $ | (7,730 | ) | $ | — | $ | (7,730 | ) |
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 twelve months ended December 31, 2010 and 2009, including reconciliation from the consolidated statements of operations to the pro-rata consolidated statements of operations.
For the twelve months ended December 31, 2010 | For the twelve months ended December 31, 2009 | ||||||||||||||||||||||
Consolidated | Plus Unconsolidated Investments at Pro-Rata | Pro-Rata | Consolidated | Plus Unconsolidated Investments at Pro-Rata | Pro-Rata | ||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Rental | $ | 29,230 | $ | 35,365 | $ | 64,595 | $ | 29,753 | $ | 39,682 | $ | 69,435 | |||||||||||
Tenant reimbursements | 20,187 | 12,784 | 32,971 | 21,163 | 14,796 | 35,959 | |||||||||||||||||
Parking and other | 3,330 | 4,418 | 7,748 | 2,988 | 5,056 | 8,044 | |||||||||||||||||
Investment advisory, management, leasing and development services | 7,703 | — | 7,703 | 9,345 | — | 9,345 | |||||||||||||||||
Investment advisory, management, leasing and development services- unconsolidated real estate entities | 16,470 | 409 | 16,879 | 15,023 | 341 | 15,364 | |||||||||||||||||
Reimbursement of property personnel costs | 5,797 | — | 5,797 | 5,584 | — | 5,584 | |||||||||||||||||
Condominium sales | 14,984 | — | 14,984 | 30,226 | — | 30,226 | |||||||||||||||||
Total revenues | 97,701 | 52,976 | 150,677 | 114,082 | 59,875 | 173,957 | |||||||||||||||||
Expenses: | |||||||||||||||||||||||
Property operating and maintenance | 25,049 | 18,997 | 44,046 | 25,339 | 21,825 | 47,164 | |||||||||||||||||
Real estate and other taxes | 6,914 | 5,966 | 12,880 | 7,225 | 6,959 | 14,184 | |||||||||||||||||
Investment advisory, management, leasing and development services | 12,221 | — | 12,221 | 11,910 | — | 11,910 | |||||||||||||||||
Reimbursable property personnel costs | 5,797 | — | 5,797 | 5,584 | — | 5,584 | |||||||||||||||||
Cost of condominium sales | 10,955 | — | 10,955 | 26,492 | — | 26,492 | |||||||||||||||||
Interest | 19,239 | 15,839 | 35,078 | 26,868 | 16,300 | 43,168 | |||||||||||||||||
Depreciation and amortization | 14,128 | 15,599 | 29,727 | 12,642 | 19,412 | 32,054 | |||||||||||||||||
General and administrative | 14,224 | — | 14,224 | 17,082 | — | 17,082 | |||||||||||||||||
Impairment loss | 4,500 | — | 4,500 | 13,000 | 16,012 | 29,012 | |||||||||||||||||
Total expenses | 113,027 | 56,401 | 169,428 | 146,142 | 80,508 | 226,650 | |||||||||||||||||
Gain on sale of real estate | — | — | — | 1,214 | — | 1,214 | |||||||||||||||||
Gain on extinguishment of debt | — | 1,953 | 1,953 | 11,921 | 4,189 | 16,110 | |||||||||||||||||
Interest income | 72 | 288 | 360 | 338 | 230 | 568 | |||||||||||||||||
Equity in net (loss) income of unconsolidated real estate entities | (1,184 | ) | 1,184 | — | (16,236 | ) | 16,236 | — | |||||||||||||||
(Loss) income before income taxes and noncontrolling interests | (16,438 | ) | — | (16,438 | ) | (34,823 | ) | 22 | (34,801 | ) | |||||||||||||
Benefit (provision) for income taxes | 357 | — | 357 | (683 | ) | — | (683 | ) | |||||||||||||||
Net (loss) income | (16,081 | ) | — | (16,081 | ) | (35,506 | ) | 22 | (35,484 | ) | |||||||||||||
Noncontrolling interests' share of net loss: | |||||||||||||||||||||||
Unitholders in the Operating Partnership | 4,843 | — | 4,843 | 11,535 | — | 11,535 | |||||||||||||||||
Partners in consolidated real estate entities | (234 | ) | — | (234 | ) | 2,408 | — | 2,408 | |||||||||||||||
4,609 | — | 4,609 | 13,943 | — | 13,943 | ||||||||||||||||||
(Loss) income before discontinued operations | (11,472 | ) | — | (11,472 | ) | (21,563 | ) | 22 | (21,541 | ) | |||||||||||||
Loss from discontinued operations | — | — | — | — | (22 | ) | (22 | ) | |||||||||||||||
TPGI share of net loss | $ | (11,472 | ) | $ | — | $ | (11,472 | ) | $ | (21,563 | ) | $ | — | $ | (21,563 | ) |
8
Thomas Properties Group, Inc.
Supplemental Financial Information
PRO-RATA CONSOLIDATED BALANCE SHEETS (NON-GAAP)
(in thousands)
(unaudited)
The following are the pro-rata consolidated balance sheets of TPGI as of December 31, 2010 and 2009, including reconciliation from the consolidated balance sheets to the pro-rata consolidated balance sheets.
December 31, 2010 | December 31, 2009 | ||||||||||||||||||||||
Consolidated | Plus Unconsolidated Investments at Pro-Rata | Pro-Rata | Consolidated | Plus Unconsolidated Investments at Pro-Rata | Pro-Rata | ||||||||||||||||||
ASSETS | |||||||||||||||||||||||
Investments in real estate, net | $ | 363,444 | $ | 240,922 | $ | 604,366 | $ | 372,161 | $ | 363,206 | $ | 735,367 | |||||||||||
Investments in unconsolidated real estate entities | 17,975 | (17,975 | ) | — | 14,458 | (14,458 | ) | — | |||||||||||||||
Condominium units held for sale | 49,827 | — | 49,827 | 64,101 | — | 64,101 | |||||||||||||||||
Land held for sale | 2,819 | — | 2,819 | 4,508 | 963 | 5,471 | |||||||||||||||||
Cash and cash equivalents, unrestricted | 42,363 | 9,022 | 51,385 | 35,935 | 2,966 | 38,901 | |||||||||||||||||
Restricted cash | 13,069 | 8,593 | 21,662 | 12,071 | 22,341 | 34,412 | |||||||||||||||||
Rents and other receivables, net | 4,733 | 817 | 5,550 | 4,083 | 790 | 4,873 | |||||||||||||||||
Above market rents, net | 617 | 344 | 961 | 838 | 474 | 1,312 | |||||||||||||||||
Deferred rents | 14,592 | 14,536 | 29,128 | 12,954 | 17,814 | 30,768 | |||||||||||||||||
Deferred leasing and loan costs, net | 13,538 | 19,293 | 32,831 | 15,375 | 24,025 | 39,400 | |||||||||||||||||
Deferred tax asset, net of valuation allowance | 13,460 | — | 13,460 | 17,644 | — | 17,644 | |||||||||||||||||
Other assets | 3,798 | 945 | 4,743 | 5,275 | 1,458 | 6,733 | |||||||||||||||||
Total assets | $ | 540,235 | $ | 276,497 | $ | 816,732 | $ | 559,403 | $ | 419,579 | $ | 978,982 | |||||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||||||
Mortgage, other secured, and unsecured loans | $ | 300,536 | $ | 259,543 | $ | 560,079 | $ | 318,236 | $ | 397,754 | $ | 715,990 | |||||||||||
Accounts payable and other liabilities | 14,154 | 10,791 | 24,945 | 15,260 | 13,946 | 29,206 | |||||||||||||||||
Unrecognized tax benefits | 14,412 | — | 14,412 | 19,639 | — | 19,639 | |||||||||||||||||
Below market rents, net | 454 | 3,933 | 4,387 | 674 | 5,817 | 6,491 | |||||||||||||||||
Prepaid rent and deferred revenue | 2,888 | 2,230 | 5,118 | 3,249 | 2,062 | 5,311 | |||||||||||||||||
Total liabilities | 332,444 | 276,497 | 608,941 | 357,058 | 419,579 | 776,637 | |||||||||||||||||
Noncontrolling interests | 60,136 | — | 60,136 | 65,949 | — | 65,949 | |||||||||||||||||
Total stockholders' equity | 147,655 | — | 147,655 | 136,396 | — | 136,396 | |||||||||||||||||
Total liabilities and equity | $ | 540,235 | $ | 276,497 | $ | 816,732 | $ | 559,403 | $ | 419,579 | $ | 978,982 |
9
Thomas Properties Group, Inc.
Supplemental Financial Information
EARNINGS BEFORE DEPRECIATION, AMORTIZATION AND TAXES (EBDT) (NON-GAAP)
(in thousands, except share and per share data)
(unaudited)
We use EBDT as a supplemental performance measure. EBDT excludes the following items: i) income tax expense (benefit); ii) noncontrolling interests; iii) non-cash charges for depreciation and amortization; and iv) amortization of loan costs. EBDT provides a performance measure that, when compared year over year, reflects the impact to operations from changes in occupancy, rental rates, operating costs, development and redevelopment activities, general and administrative expenses, and interest costs; and EBDT provides perspective on operating performance not immediately apparent from net income. EBDT should be considered only as a supplement to net income as a measure of our performance. EBDT also assists our management in identifying trends for purposes of financial planning and forecasting results. However, the usefulness of EBDT as a performance measure is limited and EBDT should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs. EBDT also should not be used as a supplement to or substitute for cash flow from operating activities (computed in accordance with GAAP) or as an alternative to net income (loss) as an indicator of our operating performance.
Reconciliation of Net Loss to EBDT:
For the three months ended December 31, 2010 | For the three months ended December 31, 2009 | ||||||||||||||||||||||
Consolidated | Plus Unconsolidated Investments at Pro-Rata | Pro-Rata | Consolidated | Plus Unconsolidated Investments at Pro-Rata | Pro-Rata | ||||||||||||||||||
Net loss | $ | (6,151 | ) | $ | — | $ | (6,151 | ) | $ | (7,730 | ) | $ | — | $ | (7,730 | ) | |||||||
Income tax (benefit) provision | (774 | ) | — | (774 | ) | 203 | — | 203 | |||||||||||||||
Noncontrolling interests - unitholders in the Operating Partnership | (2,804 | ) | — | (2,804 | ) | (4,079 | ) | — | (4,079 | ) | |||||||||||||
Depreciation and amortization | 3,723 | 2,714 | 6,437 | 3,269 | 4,811 | 8,080 | |||||||||||||||||
Amortization of loan costs | 203 | 281 | 484 | 318 | 214 | 532 | |||||||||||||||||
EBDT | $ | (5,803 | ) | $ | 2,995 | $ | (2,808 | ) | $ | (8,019 | ) | $ | 5,025 | $ | (2,994 | ) | |||||||
TPGI share of EBDT (1) | $ | (4,168 | ) | $ | 2,151 | $ | (2,017 | ) | $ | (5,223 | ) | $ | 3,273 | $ | (1,950 | ) | |||||||
EBDT per share - basic and diluted | $ | (0.06 | ) | $ | (0.08 | ) | |||||||||||||||||
Weighted average common shares outstanding - basic and diluted | 35,041,770 | 25,753,994 |
(1) Based on an interest in our operating partnership of 71.83% and 65.13% for the three months ended December 31, 2010 and 2009, respectively.
10
Thomas Properties Group, Inc.
Supplemental Financial Information
EARNINGS BEFORE DEPRECIATION, AMORTIZATION AND TAXES (EBDT) (NON-GAAP)
(in thousands, except share and per share data)
(unaudited)
We use EBDT as a supplemental performance measure. EBDT excludes the following items: i) income tax expense (benefit); ii) noncontrolling interests; iii) non-cash charges for depreciation and amortization; and iv) amortization of loan costs. EBDT provides a performance measure that, when compared year over year, reflects the impact to operations from changes in occupancy, rental rates, operating costs, development and redevelopment activities, general and administrative expenses, and interest costs; and EBDT provides perspective on operating performance not immediately apparent from net income. EBDT should be considered only as a supplement to net income as a measure of our performance. EBDT also assists our management in identifying trends for purposes of financial planning and forecasting results. However, the usefulness of EBDT as a performance measure is limited and EBDT should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs. EBDT also should not be used as a supplement to or substitute for cash flow from operating activities (computed in accordance with GAAP) or as an alternative to net income (loss) as an indicator of our operating performance.
Reconciliation of Net Loss to EBDT:
For the twelve months ended December 31, 2010 | For the twelve months ended December 31, 2009 | ||||||||||||||||||||||
Consolidated | Plus Unconsolidated Investments at Pro-Rata | Pro-Rata | Consolidated | Plus Unconsolidated Investments at Pro-Rata | Pro-Rata | ||||||||||||||||||
Net loss | $ | (11,472 | ) | $ | — | $ | (11,472 | ) | $ | (21,563 | ) | $ | — | $ | (21,563 | ) | |||||||
Income tax (benefit) provision | (357 | ) | — | (357 | ) | 683 | — | 683 | |||||||||||||||
Noncontrolling interests - unitholders in the Operating Partnership | (4,843 | ) | — | (4,843 | ) | (11,535 | ) | — | (11,535 | ) | |||||||||||||
Depreciation and amortization | 14,128 | 15,599 | 29,727 | 12,642 | 19,412 | 32,054 | |||||||||||||||||
Amortization of loan costs | 897 | 718 | 1,615 | 690 | 897 | 1,587 | |||||||||||||||||
EBDT | $ | (1,647 | ) | $ | 16,317 | $ | 14,670 | $ | (19,083 | ) | $ | 20,309 | $ | 1,226 | |||||||||
TPGI share of EBDT (1) | $ | (1,169 | ) | $ | 11,577 | $ | 10,408 | $ | (12,292 | ) | $ | 13,082 | $ | 790 | |||||||||
EBDT per share - basic and diluted | $ | 0.31 | $ | 0.03 | |||||||||||||||||||
Weighted average common shares outstanding - basic | 33,684,101 | 25,173,163 | |||||||||||||||||||||
Weighted average common shares outstanding - diluted | 33,949,968 | 25,173,163 |
(1) Based on an interest in our operating partnership of 70.95% and 64.42% for the twelve months ended December 31, 2010 and 2009, respectively.
11
Thomas Properties Group, Inc.
Supplemental Financial Information
AFTER TAX CASH FLOW (ATCF) (NON-GAAP)
(in thousands, except share and per share data)
(unaudited)
We define ATCF as net income (loss) excluding the following items: i) 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, 2010 | For the three months ended December 31, 2009 | ||||||||||||||||||||||
Consolidated | Plus Unconsolidated Investments at Pro-Rata | Pro-Rata | Consolidated | Plus Unconsolidated Investments at Pro-Rata | Pro-Rata | ||||||||||||||||||
Net loss | $ | (6,151 | ) | $ | — | $ | (6,151 | ) | $ | (7,730 | ) | $ | — | $ | (7,730 | ) | |||||||
Income tax (benefit) provision | (774 | ) | — | (774 | ) | 203 | — | 203 | |||||||||||||||
Noncontrolling interests - unitholders in the Operating Partnership | (2,804 | ) | — | (2,804 | ) | (4,079 | ) | — | (4,079 | ) | |||||||||||||
Depreciation and amortization | 3,723 | 2,714 | 6,437 | 3,269 | 4,811 | 8,080 | |||||||||||||||||
Amortization of loan costs | 203 | 281 | 484 | 318 | 214 | 532 | |||||||||||||||||
Non-cash compensation expense | 205 | — | 205 | 581 | — | 581 | |||||||||||||||||
Straight-line rent adjustments | (775 | ) | (294 | ) | (1,069 | ) | (162 | ) | (91 | ) | (253 | ) | |||||||||||
Adjustments to reflect the fair market value of rent | 1 | (235 | ) | (234 | ) | — | (368 | ) | (368 | ) | |||||||||||||
Impairment loss | 4,500 | — | 4,500 | 4,400 | 14,000 | 18,400 | |||||||||||||||||
Gain on extinguishment of debt | — | (331 | ) | (331 | ) | (11,412 | ) | — | (11,412 | ) | |||||||||||||
ATCF before income taxes | $ | (1,872 | ) | $ | 2,135 | $ | 263 | $ | (14,612 | ) | $ | 18,566 | $ | 3,954 | |||||||||
TPGI share of ATCF before income taxes (1) | $ | (1,345 | ) | $ | 1,533 | $ | 188 | $ | (9,517 | ) | $ | 12,092 | $ | 2,575 | |||||||||
TPGI income tax expense-current | (494 | ) | — | (494 | ) | (100 | ) | — | (100 | ) | |||||||||||||
TPGI share of ATCF | $ | (1,839 | ) | $ | 1,533 | $ | (306 | ) | $ | (9,617 | ) | $ | 12,092 | $ | 2,475 | ||||||||
ATCF per share - basic and diluted | $ | (0.01 | ) | $ | 0.10 | ||||||||||||||||||
Weighted average common shares outstanding - basic and diluted | 35,041,770 | 25,753,994 |
(1) Based on an interest in our operating partnership of 71.83% and 65.13% for the three months ended December 31, 2010 and 2009, 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 twelve months ended December 31, 2010 | For the twelve months ended December 31, 2009 | ||||||||||||||||||||||
Consolidated | Plus Unconsolidated Investments at Pro-Rata | Pro-Rata | Consolidated | Plus Unconsolidated Investments at Pro-Rata | Pro-Rata | ||||||||||||||||||
Net loss | $ | (11,472 | ) | $ | — | $ | (11,472 | ) | $ | (21,563 | ) | $ | — | $ | (21,563 | ) | |||||||
Income tax (benefit) provision | (357 | ) | — | (357 | ) | 683 | — | 683 | |||||||||||||||
Noncontrolling interests - unitholders in the Operating Partnership | (4,843 | ) | — | (4,843 | ) | (11,535 | ) | — | (11,535 | ) | |||||||||||||
Depreciation and amortization | 14,128 | 15,599 | 29,727 | 12,642 | 19,412 | 32,054 | |||||||||||||||||
Amortization of loan costs | 897 | 718 | 1,615 | 690 | 897 | 1,587 | |||||||||||||||||
Non-cash compensation expense | 672 | — | 672 | 2,838 | — | 2,838 | |||||||||||||||||
Straight-line rent adjustments | (1,842 | ) | (1,191 | ) | (3,033 | ) | (924 | ) | (1,565 | ) | (2,489 | ) | |||||||||||
Adjustments to reflect the fair market value of rent | 2 | (1,102 | ) | (1,100 | ) | 23 | (1,394 | ) | (1,371 | ) | |||||||||||||
Impairment loss | 4,500 | — | 4,500 | 13,000 | 16,012 | 29,012 | |||||||||||||||||
Gain on extinguishment of debt | — | (1,953 | ) | (1,953 | ) | (11,921 | ) | (4,189 | ) | (16,110 | ) | ||||||||||||
ATCF before income taxes | $ | 1,685 | $ | 12,071 | $ | 13,756 | $ | (16,067 | ) | $ | 29,173 | $ | 13,106 | ||||||||||
TPGI share of ATCF before income taxes (1) | $ | 1,195 | $ | 8,564 | $ | 9,759 | $ | (10,350 | ) | $ | 18,793 | $ | 8,443 | ||||||||||
TPGI income tax expense-current | (639 | ) | — | (639 | ) | (232 | ) | — | (232 | ) | |||||||||||||
TPGI share of ATCF | $ | 556 | $ | 8,564 | $ | 9,120 | $ | (10,582 | ) | $ | 18,793 | $ | 8,211 | ||||||||||
ATCF per share - basic and diluted | $ | 0.27 | $ | 0.33 | |||||||||||||||||||
Weighted average common shares outstanding - basic | 33,684,101 | 25,173,163 | |||||||||||||||||||||
Weighted average common shares outstanding - diluted | 33,949,968 | 25,173,163 |
(1) Based on an interest in our operating partnership of 70.95% and 64.42% for the twelve months ended December 31, 2010 and 2009, respectively.
13
Thomas Properties Group, Inc.
Supplemental Financial Information
INVESTMENT ADVISORY, MANAGEMENT, LEASING AND DEVELOPMENT SERVICES
(in thousands)
(unaudited)
Three months ended December 31, 2010 | Property Management Fees | Development Services Fees | Leasing Fees | Investment Advisory Fees | Total Fees | ||||||||||||||
Source of revenues: | |||||||||||||||||||
Consolidated real estate entities | $ | 375 | $ | 20 | $ | 483 | $ | 132 | $ | 1,010 | |||||||||
Unconsolidated real estate entities | 2,329 | 328 | 2,108 | 2,333 | 7,098 | ||||||||||||||
Managed properties | 367 | 523 | 84 | 141 | 1,115 | ||||||||||||||
Total investment advisory, management, leasing and development services revenue | $ | 3,071 | $ | 871 | $ | 2,675 | $ | 2,606 | 9,223 | ||||||||||
Investment advisory, management, leasing and development services expenses | (4,234 | ) | |||||||||||||||||
Net investment advisory, management, leasing and development services income | $ | 4,989 | |||||||||||||||||
Reconciliation to GAAP presentation: | |||||||||||||||||||
Total investment advisory, management, leasing and development services revenue | $ | 9,223 | |||||||||||||||||
Elimination of intercompany fee revenues | (1,770 | ) | |||||||||||||||||
Investment advisory, management, leasing and development services revenue, as reported | $ | 7,453 | |||||||||||||||||
Three months ended December 31, 2009 | |||||||||||||||||||
Source of revenues: | |||||||||||||||||||
Consolidated real estate entities | $ | 402 | $ | 33 | $ | 346 | $ | 114 | $ | 895 | |||||||||
Unconsolidated real estate entities | 2,261 | 197 | 868 | 1,424 | 4,750 | ||||||||||||||
Managed properties | 386 | 1,435 | 249 | 116 | 2,186 | ||||||||||||||
Total investment advisory, management, leasing and development services revenue | $ | 3,049 | $ | 1,665 | $ | 1,463 | $ | 1,654 | 7,831 | ||||||||||
Investment advisory, management, leasing and development services expenses | (3,272 | ) | |||||||||||||||||
Net investment advisory, management, leasing and development services income | $ | 4,559 | |||||||||||||||||
Reconciliation to GAAP presentation: | |||||||||||||||||||
Total investment advisory, management, leasing and development services revenue | $ | 7,831 | |||||||||||||||||
Elimination of intercompany fee revenues | (1,850 | ) | |||||||||||||||||
Investment advisory, management, leasing and development services revenue, as reported | $ | 5,981 |
14
Thomas Properties Group, Inc.
Supplemental Financial Information
INVESTMENT ADVISORY, MANAGEMENT, LEASING AND DEVELOPMENT SERVICES
(in thousands)
(unaudited)
Twelve months ended December 31, 2010 | Property Management Fees | Development Services Fees | Leasing Fees | Investment Advisory Fees | Total Fees | ||||||||||||||
Source of revenues: | |||||||||||||||||||
Consolidated real estate entities | $ | 1,537 | $ | 297 | $ | 672 | $ | 469 | $ | 2,975 | |||||||||
Unconsolidated real estate entities | 9,597 | 712 | 3,936 | 6,457 | 20,702 | ||||||||||||||
Managed properties | 1,622 | 4,186 | 413 | 489 | 6,710 | ||||||||||||||
Total investment advisory, management, leasing and development services revenue | $ | 12,756 | $ | 5,195 | $ | 5,021 | $ | 7,415 | 30,387 | ||||||||||
Investment advisory, management, leasing and development services expenses | (12,221 | ) | |||||||||||||||||
Net investment advisory, management, leasing and development services income | $ | 18,166 | |||||||||||||||||
Reconciliation to GAAP presentation: | |||||||||||||||||||
Total investment advisory, management, leasing and development services revenue | $ | 30,387 | |||||||||||||||||
Elimination of intercompany fee revenues | (6,214 | ) | |||||||||||||||||
Investment advisory, management, leasing and development services revenue, as reported | $ | 24,173 | |||||||||||||||||
Twelve months ended December 31, 2009 | |||||||||||||||||||
Source of revenues: | |||||||||||||||||||
Consolidated real estate entities | $ | 1,607 | $ | 90 | $ | 849 | $ | 450 | $ | 2,996 | |||||||||
Unconsolidated real estate entities | 9,311 | 939 | 2,538 | 5,971 | 18,759 | ||||||||||||||
Managed properties | 1,560 | 5,239 | 2,039 | 507 | 9,345 | ||||||||||||||
Total investment advisory, management, leasing and development services revenue | $ | 12,478 | $ | 6,268 | $ | 5,426 | $ | 6,928 | 31,100 | ||||||||||
Investment advisory, management, leasing and development services expenses | (11,910 | ) | |||||||||||||||||
Net investment advisory, management, leasing and development services income | $ | 19,190 | |||||||||||||||||
Reconciliation to GAAP presentation: | |||||||||||||||||||
Total investment advisory, management, leasing and development services revenue | $ | 31,100 | |||||||||||||||||
Elimination of intercompany fee revenues | (6,732 | ) | |||||||||||||||||
Investment advisory, management, leasing and development services revenue, as reported | $ | 24,368 |
15
Thomas Properties Group, Inc.
Supplemental Financial Information
PORTFOLIO DATA
Our Ownership Properties
As of December 31, 2010 | TPGI Share (1) (in thousands except square footage) | |||||||||||||||||||||||||||||||||
Location | Rentable Square Feet (2) | Percent Leased (3) | TPGI Percentage Interest | Rentable Square Feet | Adjusted Historical Net Operating Income - Cash Basis (4) | Estimated Stabilized Net Operating Income-Cash Basis (5) | Expected Capital Expenditures to Complete Stabilization (6) | Loan Balance at December 31, 2010 | Remaining Loan Capacity at December 31, 2010 | |||||||||||||||||||||||||
Stabilized Properties | ||||||||||||||||||||||||||||||||||
CityWestPlace | Houston, TX | 1,473,020 | 99.0 | % | 25.0 | % | 368,255 | $ | 5,127 | $ | 5,380 | $ | — | $ | 54,000 | $ | — | |||||||||||||||||
San Felipe Plaza | Houston, TX | 980,472 | 87.3 | 25.0 | 245,118 | 2,815 | 3,080 | — | 27,500 | — | ||||||||||||||||||||||||
2500 City West | Houston, TX | 578,284 | 90.4 | 25.0 | 144,571 | 1,682 | 1,848 | — | 16,250 | — | ||||||||||||||||||||||||
Research Park Plaza I and II | Austin, TX | 271,882 | 90.6 | 6.3 | 16,993 | 279 | 297 | — | 3,219 | — | ||||||||||||||||||||||||
Stonebridge Plaza II | Austin, TX | 192,864 | 95.5 | 6.3 | 12,054 | 174 | 166 | — | 2,344 | — | ||||||||||||||||||||||||
One Commerce Square (7) | Philadelphia, PA | 942,866 | 89.3 | 75.0 | 707,150 | 9,194 | 9,909 | — | 97,500 | — | ||||||||||||||||||||||||
2121 Market Street (8) | Philadelphia, PA | 22,136 | 100.0 | 50.0 | 11,068 | 1,162 | 1,458 | — | 9,085 | — | ||||||||||||||||||||||||
4,461,524 | 92.6 | 1,505,209 | 20,433 | 22,138 | — | 209,898 | — | |||||||||||||||||||||||||||
Properties Projected to Stabilize in 2011 | ||||||||||||||||||||||||||||||||||
Centerpointe I and II (9) | Fairfax, VA | 421,859 | 91.7 | 25.0 | 105,465 | 639 | 2,276 | 2,837 | 19,291 | — | ||||||||||||||||||||||||
421,859 | 91.7 | 105,465 | 639 | 2,276 | 2,837 | 19,291 | — | |||||||||||||||||||||||||||
Properties Projected to Stabilize in 2012 | ||||||||||||||||||||||||||||||||||
City National Plaza (10) | Los Angeles, CA | 2,496,084 | 84.4 | 7.9 | 198,127 | 2,826 | 4,471 | 2,924 | 27,781 | — | ||||||||||||||||||||||||
Westech 360 I-IV | Austin, TX | 175,529 | 48.2 | 6.3 | 10,971 | 25 | 156 | 295 | 7,492 | (11 | ) | — | ||||||||||||||||||||||
Frost Bank Tower | Austin, TX | 535,078 | 88.2 | 6.3 | 33,442 | 573 | 867 | 332 | 9,375 | — | ||||||||||||||||||||||||
300 West 6th Street | Austin, TX | 454,225 | 87.2 | 6.3 | 28,389 | 526 | 700 | 351 | 7,938 | — | ||||||||||||||||||||||||
San Jacinto Center | Austin, TX | 410,248 | 87.2 | 6.3 | 25,641 | 276 | 516 | 846 | 6,313 | — | ||||||||||||||||||||||||
Four Points Centre (Office) | Austin, TX | 192,062 | 18.3 | 100.0 | 192,062 | (835 | ) | 2,830 | 8,032 | 23,687 | 9,000 | |||||||||||||||||||||||
Four Points Centre (Retail) | Austin, TX | 6,600 | — | 100.0 | 6,600 | (20 | ) | 80 | 168 | — | — | |||||||||||||||||||||||
Great Hills Plaza | Austin, TX | 139,252 | 68.7 | 6.3 | 8,703 | 46 | 114 | 185 | — | (11 | ) | — | ||||||||||||||||||||||
One Congress Plaza | Austin, TX | 518,385 | 89.3 | 6.3 | 32,399 | 467 | 650 | 524 | 8,000 | — | ||||||||||||||||||||||||
Fair Oaks Plaza | Fairfax, VA | 179,688 | 87.4 | 25.0 | 44,922 | 628 | 877 | 1,006 | 11,075 | — | ||||||||||||||||||||||||
Reflections I | Reston, VA | 123,546 | — | 25.0 | 30,887 | 538 | 748 | 2,298 | 5,347 | — | ||||||||||||||||||||||||
Reflections II | Reston, VA | 64,253 | 100.0 | 25.0 | 16,063 | 356 | 208 | 613 | 2,228 | — | ||||||||||||||||||||||||
Two Commerce Square (7) | Philadelphia, PA | 953,276 | 85.2 | 75.0 | 714,957 | 8,171 | 12,976 | 13,949 | 80,709 | — | ||||||||||||||||||||||||
6,248,226 | 80.7 | 1,343,163 | 13,577 | 25,193 | 31,523 | 189,945 | 9,000 | |||||||||||||||||||||||||||
Properties Projected to Stabilize in 2013 | ||||||||||||||||||||||||||||||||||
Brookhollow Central I, II, and III | Houston, TX | 806,004 | 66.2 | 25.0 | 201,501 | 405 | 2,459 | 7,881 | 9,313 | 4,300 | ||||||||||||||||||||||||
Park Centre | Austin, TX | 203,193 | 84.4 | 6.3 | 12,700 | 118 | 173 | 290 | — | (11 | ) | — | ||||||||||||||||||||||
One American Center | Austin, TX | 503,951 | 77.1 | 6.3 | 31,497 | 357 | 678 | 1,294 | 7,500 | — | ||||||||||||||||||||||||
1,513,148 | 72.3 | 245,698 | 880 | 3,310 | 9,465 | 16,813 | 4,300 | |||||||||||||||||||||||||||
Total / Average | 12,644,757 | 84.3 | % | 3,199,535 | $ | 35,529 | $ | 52,917 | $ | 43,825 | $ | 435,947 | $ | 13,300 | ||||||||||||||||||||
Properties Controlled by Special Servicer | ||||||||||||||||||||||||||||||||||
Oak Hill Plaza | King of Prussia, PA | 164,360 | 97.2 | % | 25.0 | 41,090 | $ | 11,113 | (12 | ) | ||||||||||||||||||||||||
Walnut Hill Plaza | King of Prussia, PA | 150,573 | 56.2 | 25.0 | 37,643 | — | (12 | ) | ||||||||||||||||||||||||||
Four Falls Corporate Center | Conshohocken, PA | 253,985 | 79.8 | 25.0 | 63,496 | 13,017 | ||||||||||||||||||||||||||||
568,918 | 142,229 | $ | 24,130 | (13 | ) |
Footnotes on following page.
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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 95%. Certain properties that have occupancy greater than 95% as of December 31, 2010, are not considered stabilized due to upcoming tenant vacancies not yet reflected. Certain properties that have occupancy less than 95% as of December 31, 2010, are considered stabilized as they were previously stabilized, and their return to stabilization is expected in the near term and/or we do not expect to incur significant capital expenditures to re-stabilize. |
(4) | Adjusted historical net operating income - cash basis represents the sum of: |
Pro-Rata | |||
Year Ended | |||
December 31, 2010 | |||
(in thousands) | |||
Rental, tenant reimbursements, and parking and other revenue | $ | 105,314 | |
Property operating and maintenance expenses and real estate taxes | (56,926 | ) | |
Net operating income | 48,388 | ||
Adjustments: | |||
Straight line and other GAAP rent adjustments | (4,537 | ) | |
Free rent granted for the period | 2,459 | ||
Lease termination fees | (142 | ) | |
Net operating loss from development properties | 2,839 | ||
Net operating income from properties controlled by special servicer | (1,490 | ) | |
Elimination of intercompany revenues and expenses | (3,119 | ) | |
Adjustment for change in ownership interest | (8,869 | ) | |
Adjusted Historical Net Operating Income - Cash Basis | $ | 35,529 |
(5) | For properties currently stabilized, the estimated stabilized net operating income - cash basis represents the sum of i) the annual cash rent under existing leases which were in place as of December 31, 2010, 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 net operating income - 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 95% 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) | During the fourth quarter, TPG and Brandywine Realty Trust (“BDN”) finalized contribution agreements whereby BDN has become a 25% limited partner in the partnerships that own Commerce Square, which were previously wholly-owned by TPG. BDN will contribute a total of $25 million of preferred equity to the partnerships, of which $5 million was contributed at closing with the balance to be contributed by December 31, 2012. The preferred equity will be invested in a value-enhancement program designed to increase rental rates and occupancy at Commerce Square. Although we consolidate Commerce Square for accounting purposes, we reflect our share of the loan balances on the preceding page at our ownership share of 75%. |
(8) | 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. |
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PORTFOLIO DATA - CONTINUED
(9) | On October 19, 2010, TPG/CalSTRS restructured the debt and equity capital in our Centerpointe partnership by acquiring the mezzanine A and B notes for approximately $40 million, at a discount to par of approximately $6.6 million or 14%. In addition, the mezzanine C loan was modified to provide us with the right to prepay the loan equal to a 50% discount on the principal plus a participation feature for the lender. The mezzanine C loan was also extended through February 9, 2012 with one additional year of extension available up to February 9, 2013. CalSTRS and TPG, which contributed 95% and 5%, respectively, of the $40 million, created a new class of equity in the Centerpointe partnership in the amount of $46.6 million (the “preferred equity”), which has a priority on distributions of available project cash and capital proceeds. After February 9, 2012, TPG may be required, at the election of CalSTRS, to increase its interest in the preferred equity to 25%, and commensurately reduce CalSTRS' interest to 75%, by contributing an amount equal to approximately $9.3 million. |
(10) | During the first quarter of 2010, CalSTRS, our partner in CNP, acquired all of the property's mezzanine debt. On July 6, 2010, CalSTRS contributed this debt to the equity in TPG/CalSTRS, reducing the leverage on CNP by the full $219.1 million balance on the mezzanine loans. Solely with respect to the ownership interest of TPG/CalSTRS in CNP, CalSTRS' percentage interest increased from 75.0% to 92.1% and TPG's percentage interest decreased from 25.0% to 7.9%. We are in discussions with CalSTRS to obtain an option to participate in up to an additional 17.1% interest in CNP through TPG/CalSTRS. |
(11) | 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 $7.5 million, which is reflected entirely on the Westech 360 I-IV line. See footnote 4 on page 23 for discussions of the senior priority financing, which is senior to this term loan. |
(12) | 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. |
(13) | Due to uncertainty regarding these matured loans currently in default, the stabilized net operating income and expected capital expenditures to complete stabilization data has been omitted. See footnote 13 on page 23 for further discussion regarding these loans. |
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PORTFOLIO DATA - CONTINUED
Lease Expirations
The following table presents a summary of lease expirations for our portfolio for leases in place at December 31, 2010, 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 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 | 2010 Market Net Rent (1) | |||||||||||||
Vacant | 603,170 | 18.0 | % | $ | — | $ | — | $ | 19.94 | |||||||||
2011 | 156,800 | 4.7 | % | 13.58 | 14.61 | 20.47 | ||||||||||||
2012 | 210,841 | 6.3 | % | 16.02 | 16.54 | 21.85 | ||||||||||||
2013 | 410,793 | 12.3 | % | 17.92 | 19.30 | 22.90 | ||||||||||||
2014 | 298,981 | 8.9 | % | 15.52 | 17.34 | 20.39 | ||||||||||||
2015 | 435,157 | 13.0 | % | 15.55 | 17.85 | 22.30 | ||||||||||||
2016 | 124,747 | 3.7 | % | 12.86 | 17.59 | 20.99 | ||||||||||||
2017 | 232,340 | 7.0 | % | 15.14 | 23.22 | 21.21 | ||||||||||||
2018 | 159,987 | 4.8 | % | 10.53 | 21.59 | 19.72 | ||||||||||||
2019 | 55,890 | 1.7 | % | 18.08 | 24.64 | 21.40 | ||||||||||||
2020 | 308,612 | 9.2 | % | 12.24 | 21.62 | 23.94 | ||||||||||||
Thereafter | 344,446 | 10.4 | % | 10.58 | 23.18 | 19.77 | ||||||||||||
Total/Weighted Average | 3,341,764 | 100.0 | % | $ | 14.43 | $ | 19.62 | $ | 21.29 |
(1) | The source of the 2010 Market Net Rent is Torto Wheaton data as of December 31, 2010. We have made no assumptions of increases in rental rates for years subsequent to 2010. |
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PORTFOLIO DATA - CONTINUED
($ in thousands except for average amounts)
Our Development Properties
Actual/Projected Entitlements | TPGI Share as of December 31, 2010 | |||||||||||||||||||||||||||||
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 | % | 23.9 | Office/Retail/R&D/Hotel | 1,700,000 | Entitled | $ | 57,229 | $ | 33.66 | $ | 17,000 | |||||||||||||||||
MetroStudio@Lankershim (2) | Los Angeles, CA | NA | 14.4 | Office/Production Facility | 1,500,000 | Pending | 16,440 | 10.96 | — | |||||||||||||||||||||
Four Points Centre | Austin, TX | 100 | 252.5 | Office/Retail/R&D/Hotel | 1,680,000 | Entitled | 18,038 | 10.74 | — | |||||||||||||||||||||
2100 JFK Boulevard | Philadelphia, PA | 100 | 0.7 | Office/Retail/R&D/Hotel | 366,000 | Entitled | 4,878 | 13.33 | — | |||||||||||||||||||||
2500 City West land | Houston, TX | 25 | 6.3 | Office/Retail/Residential/Hotel | 500,000 | Entitled | 1,832 | 14.65 | — | |||||||||||||||||||||
CityWestPlace land | Houston, TX | 25 | 25.0 | Office/Retail/Residential | 1,500,000 | Entitled | 5,336 | 14.23 | — | |||||||||||||||||||||
7,246,000 | 103,753 | $ | 17.29 | 17,000 | ||||||||||||||||||||||||||
Fee Services | ||||||||||||||||||||||||||||||
Universal Village (3) | Los Angeles, CA | NA | 124.0 | Residential/Retail | 180,000 | 2,937 | Pending | — | — | |||||||||||||||||||||
Wilshire Grand (4) | Los Angeles, CA | NA | 2.7 | Office/Retail/Residential/Hotel | 2,500,000 | 100 | Pending | — | — | |||||||||||||||||||||
9,926,000 | 3,037 | $ | 103,753 | $ | 17,000 |
Condominium Units Held for Sales | As of December 31, 2010 | ||||||||||||||||||||||||||||||||||||
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 (6) | 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 | % | (5 | ) | 43-story for-sale condominium project containing 302 units. Certificates of occupancy received for 100% of units | 220 | 247,365 | $ | 516 | 82 | 104,134 | $ | 811 | (7 | ) | $ | 49,827 | $ | 22,237 |
(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. The number of acres and the costs incurred to date exclude approximately 2.2 acres currently held for sale. TPGI's carrying value of the 2.2 acres is approximately $2.8 million. |
(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) | 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. |
(4) | We have been engaged by Korean Air to entitle and master plan a 2.7 acre site in downtown Los Angeles for 2.5 million square feet of development that consists of office, hotel, residential and retail uses. |
(5) | We have a $30.2 million preferred equity interest in Murano. Excluding the preferred equity interest, we hold a 73% interest in the property. |
(6) | Of the 82 units remaining to sell as of December 31, 2010, 74 units are on high-rise floors with superior views. Subsequent to December 31, 2010, we have sold one additional unit. |
(7) | The list price per square foot ranges from $386 to $1,747. |
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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 | 98.5 | % | |||||
CalEPA Headquarters | Sacramento, CA | 2000 | 950,939 | 100.0 | % | |||||
1835 Market Street | Philadelphia, PA | 1987 | 686,503 | 88.1 | % | |||||
816 Congress | Austin, TX | 1984 | 433,024 | 70.8 | % | |||||
Total/Weighted Average | 2,312,642 | 90.8 | % |
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Thomas Properties Group, Inc.
Supplemental Financial Information
DEBT SUMMARY
(in thousands)
As of December 31, 2010 | |||||||||||||||
Mortgages and Other Loans | Interest Rate | Principal Amount | TPGI Share of Principal Amount | Maturity Date | Maturity Date at End of Extension Options | ||||||||||
2012 Maturity Date at End of Extension Options | |||||||||||||||
Centerpointe I & II - senior mortgage loan (1) | 0.9 | % | $ | 55,000 | $ | 13,750 | 2/9/2012 | 2/9/2012 | |||||||
Research Park Plaza I and II (2) | 1.6 | % | 51,500 | 3,219 | 6/9/2011 | 6/9/2012 | |||||||||
Stonebridge Plaza II (2) | 1.4 | % | 37,500 | 2,344 | 6/9/2011 | 6/9/2012 | |||||||||
Murano construction loan (3) | 9.5 | % | 22,237 | 22,237 | 7/31/2011 | 7/31/2012 | |||||||||
Subtotal - 2012 maturities | 166,237 | 41,550 | |||||||||||||
2013 Maturity Date at End of Extension Options | |||||||||||||||
Centerpointe I & II - mezzanine C loan (1)(2) | 3.5 | % | 22,162 | 5,541 | 2/9/2012 | 2/9/2013 | |||||||||
Two Commerce Square | 6.3 | % | 107,612 | 80,709 | 5/9/2013 | 5/9/2013 | |||||||||
Subtotal - 2013 maturities | 129,774 | 86,250 | |||||||||||||
2014 Maturity Date at End of Extension Options | |||||||||||||||
Austin Portfolio bank term loan (4) | 3.5 | % | 119,877 | 7,492 | 6/1/2013 | 6/1/2014 | |||||||||
Campus El Segundo (5) | 4.1 | % | 17,000 | 17,000 | 7/31/2011 | 7/31/2014 | |||||||||
Four Points Centre (6) | 3.8 | % | 23,687 | 23,687 | 7/31/2012 | 7/31/2014 | |||||||||
Subtotal - 2014 maturities | 160,564 | 48,179 | |||||||||||||
2015 and Thereafter- Maturity Date at End of Extension Options | |||||||||||||||
Reflections I | 5.2 | % | 21,387 | 5,347 | 4/1/2015 | 4/1/2015 | |||||||||
Reflections II | 5.2 | % | 8,910 | 2,228 | 4/1/2015 | 4/1/2015 | |||||||||
Brookhollow Central I, II, and III (7) | 2.9 | % | 37,250 | 9,313 | 7/21/2013 | 7/21/2015 | |||||||||
City National Plaza - note payable to former partner | 5.8 | % | 19,758 | 1,568 | 7/1/2012 | 1/4/2016 | |||||||||
One Commerce Square | 5.7 | % | 130,000 | 97,500 | 1/6/2016 | 1/6/2016 | |||||||||
CityWestPlace (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 | 8,000 | 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 | |||||||||
San Felipe Plaza (8) | 4.8 | % | 110,000 | 27,500 | 12/1/2018 | 12/1/2018 | |||||||||
2500 City West (9) | 5.5 | % | 65,000 | 16,250 | 12/5/2019 | 12/5/2019 | |||||||||
CityWestPlace (Buildings III & IV) (10) | 5.0 | % | 95,000 | 23,750 | 3/5/2020 | 3/5/2020 | |||||||||
City National Plaza - senior mortgage loan (11) | 5.9 | % | 350,000 | 27,781 | 7/1/2020 | 7/1/2020 | |||||||||
2121 Market Street (12) | 6.1 | % | 18,169 | 9,085 | 8/1/2033 | 8/1/2033 | |||||||||
Subtotal - 2015 and thereafter maturities | 1,646,774 | 300,773 | |||||||||||||
Total | $ | 2,103,349 | $ | 476,752 | |||||||||||
Weighted average interest rate at December 31, 2010 | 5.3 | % | |||||||||||||
Loans on Properties Controlled by a Special Servicer | |||||||||||||||
Four Falls Corporate Center (13) | 5.3 | % | $ | 52,067 | $ | 13,017 | 3/6/2010 | 3/6/2010 | |||||||
Oak Hill Plaza/ Walnut Hill Plaza (13) | 5.3 | % | 44,452 | 11,113 | 3/6/2010 | 3/6/2010 | |||||||||
Total - properties controlled by a special servicer | $ | 96,519 | $ | 24,130 |
Footnotes on following page
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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) | On October 19, 2010, TPG/CalSTRS restructured the debt and equity capital in our Centerpointe partnership by acquiring the mezzanine A and B notes for approximately $40 million, at a discount to par of approximately $6.6 million or 14%. In addition, the mezzanine C loan was modified to provide us with the right to prepay the loan equal to a 50% discount on the principal plus a participation feature for the lender. The mezzanine C loan was also extended through February 9, 2012 with one additional year of extension available up to February 9, 2013. |
(2) | The loan has a one-year extension option at our election. |
(3) | This loan is nonrecourse to the Company, but the Company and its development partners jointly and severally guarantee the payment of interest on the loan during the term of the loan. On July 26, 2010, the loan agreement was modified and the loan maturity was extended to July 31, 2011 with two six-month extension options at our election subject to certain conditions. During the extension period, the interest rate was increased to the greater of 9.5% per annum or LIBOR plus 3.3%. |
(4) | We and our partners in the Austin Portfolio have committed to fund $60.0 million of senior priority financing, which is senior to the Austin Portfolio bank loan. $33.0 million of the $60.0 million commitment has been funded as of December 31, 2010, of which our share is $2.1 million, and is accounted for as equity. |
(5) | The loan has 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. |
(6) | The loan has two one-year extension options at our election subject to certain conditions. As of December 31, 2010, $9.0 million is available to be drawn to fund tenant improvement costs and certain other project costs related to two office buildings. The first option to extend is subject to a 75% loan-to-value ratio and a minimum debt yield, among other things. The second option to extend is subject to a 75% loan-to-value ratio, executed leases representing at least 90% of the net rentable area, and a minimum debt yield, among other things. As of January 31, 2011, if the office buildings are not at least 65% leased on terms consistent with the appraisal pro forma, we must pre-fund 18 months of interest into a restricted cash account with the lender; if the buildings are less than 35% leased at that time, we will also have to pay $2.0 million as a principal reduction of the loan. We are in discussions with the lender to execute a forbearance agreement related to these requirements. 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 amount of $11.0 million as of December 31, 2010. Upon the occurrence of certain events, our maximum liability as guarantor will be reduced to 31.5% of all sums payable under this loan, and upon the occurrence of further events, our maximum liability as guarantor will be reduced to 25% of all sums payable under the loan. We have agreed to certain financial covenants on this loan as the guarantor, which we were in compliance with as of December 31, 2010. We have also provided additional collateral of approximately 62.4 acres of fully entitled unimproved land which is immediately adjacent to the office buildings. |
(7) | On July 21, 2010, we entered into a new mortgage loan in the amount of $55.0 million. At closing, $37.0 million of the loan was funded, with an additional $3.0 million to be funded over three years and $15.0 million available for future funding of construction costs related to the redevelopment of Brookhollow Central I. The loan bears interest at LIBOR plus 2.6% and is for a three-year term plus two one-year extensions, subject to certain conditions, to mature upon final extension in July 2015. |
(8) | On July 21, 2010, we entered into a new mortgage loan in the amount of $110.0 million. The loan bears interest at a fixed rate of 4.8% and is for a term of 8.3 years, maturing in December 2018. |
(9) | On July 21, 2010, we entered into a new mortgage loan in the amount of $65.0 million. The loan bears interest at a fixed rate of 5.5% and is for a term of 9.3 years, maturing in December 2019. |
(10) | On October 12, 2010, we entered into a new mortgage loan in the amount of $95 million. The loan bears interest at a fixed rate of 5.03% and will mature in March 2020. |
(11) | On July 6, 2010, we entered into a new mortgage loan in the amount of $350.0 million. The loan bears interest at a fixed rate of 5.9% and is for a term of ten years, to mature on July 1, 2020. |
(12) | 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. |
(13) | Subsidiaries of TPG/CalSTRS (the “borrowers”) elected not to repay these mortgage loans in the aggregate amount of $96.5 million by the maturity date of March 6, 2010 and therefore, the loans are in default. We are in discussions with the special servicer regarding a cooperative resolution on each of these assets including the likely appointment of a receiver and the judicial transfer of the properties. These loans are non-recourse to the Company. Pending a resolution of these loan defaults, we continue to manage the properties pursuant to our management agreement with the borrowers. The borrowers are accruing interest on these loans at a default rate, which ranges from 10.3% to 10.5% per annum. |
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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, 2010:
Debt | Aggregate Principal | ||||||
Mortgage and other secured loans | $ | 300,536 | |||||
Company share of unconsolidated debt | 235,412 | ||||||
Company share of unconsolidated debt controlled by special servicer | 24,130 | ||||||
Total combined debt | $ | 560,078 | |||||
Equity | Shares/Units Outstanding | Market Value (1) | |||||
Common stock | 36,943,394 | $ | 155,901 | ||||
Operating partnership units (2) | 12,598,887 | 53,167 | |||||
Total common equity | 49,542,281 | $ | 209,068 | ||||
Total consolidated market capitalization | $ | 509,604 | |||||
Total combined market capitalization (3) | $ | 769,146 | |||||
(1) | Based on the closing price of $4.22 per share of TPGI common stock on December 31, 2010. |
(2) | Includes operating partnership units and incentive units as of December 31, 2010. |
(3) | Includes TPGI's share of debt of unconsolidated real estate entities. |
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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 | |
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 | |
Edward D. Fox | Director | |
John L. Goolsby | Director | |
Winston H. Hickox | Director |
25