Thomas Properties Group, Inc. Announces Fourth Quarter 2012 Results

Thomas Properties Group, Inc. Announces Fourth Quarter 2012 Results

LOS ANGELES--(BUSINESS WIRE)-- Thomas Properties Group, Inc. (NAS: TPGI) reported today the results of operations for the quarter and year ended December 31, 2012.

The results of operations presented in this release include TPGI's results of operations for the three and twelve months ended December 31, 2012 and 2011. The consolidated net loss for the three months ended December 31, 2012 was $13.4 million or $0.29 per share compared to consolidated net income of $10.1 million or $0.27 per share for the three months ended December 31, 2011. The consolidated net loss for the twelve months ended December 31, 2012 was $25.4 million or $0.61 per share compared to consolidated net income of $5.9 million or $0.16 per share for twelve months ended December 31, 2011. The increase in the consolidated net loss during the twelve months ended December 31, 2012 compared to the twelve months ended December 31, 2011 is due to a $6.1 million decrease in investment advisory fees primarily related to one-time incentive fees earned in 2011, $4.6 million of increased impairment charges at our development properties, $23.7 million decrease in income from unconsolidated real estate entities primarily due to our share of gain on disposition of certain joint venture assets in 2011, and a $1.3 million gain from sale of a land parcel for the year ended December 31, 2011 with no comparable gain from sale in 2012.


TPGI's share of after tax cash flow ("ATCF") for the three months ended December 31, 2012 was $4.1 million or $0.09 per share compared to ATCF of $17.9 million or $0.49 per share for the three months ended December 31, 2011. TPGI's share of after tax cash flow for the twelve months ended December 31, 2012 was $7.4 million or $0.18 per share compared to after tax cash flow of $27.2 million or $0.74 per share for the twelve months ended December 31, 2011. The decrease in ATCF per share for the twelve months ended December 31, 2012 compared to the twelve months ended December 31, 2011 was primarily the result of the overall reduction in consolidated net income described above for the twelve months ended December 31, 2012 compared to the same period in the prior year, and the increased number of shares of our common stock outstanding resulting from the issuance of common stock in 2012. The Company defines ATCF (a non-GAAP financial measure) as net income (loss) excluding the following items: noncontrolling interests, deferred income tax expense (benefit), non-cash charges for depreciation and amortization and asset impairment, amortization of loan costs, non-cash compensation expense, adjustments to recognize rental revenues using the straight-line method, adjustments to rental revenue to reflect the fair market value of rents, and gain from extinguishment of debt. ATCF is further described in note (a) and reconciled to net income (loss) in the financial statements below.

"During 2012, we made real progress toward the achievement of our strategic plan," said Jim Thomas, Chairman and CEO. "We have continued to dispose of non-core operating assets and non income-producing investments and to pay down debt where practicable. We have recapitalized and increased our ownership interest in our Austin properties, and we have increased the occupancy of our present portfolio to 88%. We are continuing our focused strategy of maximizing our recurring cash flow and expanding our asset base."

Supplemental Materials

The Company publishes a Supplemental Financial Information package which is available at www.tpgre.com in the Investor Relations tab, Supplemental Financial Information section. The Company also provides an estimated net asset value workbook, available for download at www.tpgre.com in the Investor Relations tab, NAV Workbook section.

Teleconference and Webcast

TPGI will hold a quarterly earnings conference call on Thursday, February 14, 2013 at 10:00 a.m. Pacific Time. To participate in the call, dial (866) 713-8564 and (617) 597-5312 internationally, and provide confirmation code 43009130.

A live webcast (listen only mode) of the conference call will also be available at that time. A hyperlink to the live webcast will be available from the Investor Relations section of our website at www.tpgre.com. A replay of the call will be available through March 7, 2013, by calling (888) 286-8010 and (617) 801-6888 internationally, and providing confirmation code 72959301. The replay will also be available on Thomas Properties Group, Inc.'s web site at www.tpgre.com. The webcast is also being distributed through the Thomson StreetEvents Network. Individual investors can listen to the call at www.earnings.com, Thomson's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson StreetEvents (www.streetevents.com), a password-protected event management site.

About Thomas Properties Group, Inc.

Thomas Properties Group, Inc., with headquarters in Los Angeles, is a full-service real estate company that owns, acquires, develops and manages primarily office, as well as mixed-use properties on a nationwide basis. The Company's primary areas of focus are the acquisition and ownership of interests in premier office properties, property development and redevelopment, and property and investment management activities. For more information on Thomas Properties Group, Inc., visit www.tpgre.com.

Forward Looking Statements

Statements made in this press release or during the quarterly earnings conference call that are not historical may contain forward-looking statements. Although TPGI believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, these statements are subject to numerous risks and uncertainties. Factors that could cause actual results to differ materially from TPGI's expectations include actual and perceived trends in various national and economic conditions that affect global and regional markets for commercial real estate services (including interest rates), the availability of debt and equity investors to finance commercial real estate transactions, our ability to enter into or renew leases at favorable rates, which can be impacted by the financial condition of our tenants, risks associated with the success of our development and property redevelopment projects, general volatility in the securities and credit markets, and the impact of tax laws affecting real estate. For a discussion of some of the factors that may cause our results to differ from management's expectations, see the information under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-K for the year ended December 31, 2011 and our subsequent Form 10-Q quarterly reports, each of which is filed with the Securities and Exchange Commission. TPGI disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

THOMAS PROPERTIES GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)


(unaudited)

Three months ended
December 31,

Twelve months ended
December 31,

2012

2011

2012

2011

Revenues:

Rental

$

7,626

$

7,460

$

30,969

$

29,693

Tenant reimbursements

5,195

5,386

20,941

22,437

Parking and other

741

734

3,012

2,959

Investment advisory, management, leasing and development services

1,914

831

4,583

8,520

Investment advisory, management, leasing and development services -

unconsolidated real estate entities

3,779

4,172

15,688

17,862

Reimbursement of property personnel costs

1,043

1,421

5,183

5,810

Condominium sales

5,974

1,578

10,240

7,700

Total revenues

26,272

21,582

90,616

94,981

Expenses:

Property operating and maintenance

6,126

6,205

24,324

24,589

Real estate and other taxes

1,909

1,853

7,536

7,469

Investment advisory, management, leasing and development services

3,833

2,842

12,461

12,754

Reimbursable property personnel costs

1,043

1,421

5,183

5,810

Cost of condominium sales

4,878

1,049

8,129

5,091

Interest

4,188

4,309

16,847

17,938

Depreciation and amortization

3,919

3,434

15,701

13,622

General and administrative

4,725

3,632

17,749

15,434

Impairment loss

12,745

8,095

12,745

8,095

Total expenses

43,366

32,840

120,675

110,802

Interest income

22

10

74

35

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

(1,059

)

21,889

(3,672

)

19,951

Gain (loss) on sale of real estate

1,258

1,258

Income (loss) before income taxes and noncontrolling interests

(18,131

)

11,899

(33,657

)

5,423

Benefit (provision) for income taxes

17

428

385

1,429

Net income (loss)

(18,114

)

12,327

(33,272

)

6,852

Noncontrolling interests' share of net (income) loss:

Unitholders in the Operating Partnership

3,864

(3,263

)

7,681

(1,500

)

Partners in consolidated real estate entities

863

1,004

195

508

4,727

(2,259

)

7,876

(992

)

TPGI's share of net income (loss)

$

(13,387

)

$

10,068

$

(25,396

)

$

5,860

Income (loss) per share - basic and diluted

$

(0.29

)

$

0.27

$

(0.61

)

$

0.16

Weighted average common shares - basic

45,594,590

36,647,394

41,631,796

36,619,558

Weighted average common shares - diluted

45,594,590

36,865,327

41,631,796

36,865,286

Reconciliation of net income (loss) to ATCF (a):

Net income (loss)

$

(13,387

)

$

10,068

$

(25,396

)

$

5,860

Adjustments:

Income tax (benefit) provision

(17

)

(428

)

(385

)

(1,429

)

Noncontrolling interests - unitholders in the Operating Partnership

(3,864

)

3,263

(7,681

)

1,500

Depreciation and amortization

3,919

3,434

15,701

13,622

Depreciation and amortization - non-controlling interest share

(2,130

)

(2,355

)

Amortization of loan costs

142

170

582

750

Amortization of loan costs - non-controlling interest share

33

33

Non-cash compensation expense

169

238

1,404

898

Straight-line rent adjustments

66

20

(230

)

(150

)

Straight-line rent adjustments - non-controlling interest share

192

226

Adjustments to reflect the fair market value of rent

41

7

72

23

Adjustments to reflect the fair market value of rent - non-controlling

interest share

293

293

Impairment loss

12,745

8,095

12,745

8,095

Unconsolidated real estate entities at TPGI's share:

Depreciation and amortization

8,065

2,487

15,568

10,011

Depreciation and amortization from discontinued operations

548

490

2,655

Amortization of loan costs

(69

)

76

118

292

Amortization of loan costs from discontinued operations

40

42

135

Straight-line rent adjustments

(590

)

27

(707

)

(145

)

Straight-line rent adjustments from discontinued operations

(51

)

(20

)

(352

)

Adjustments to reflect the fair market value of rent

(943

)

(221

)

(1,532

)

(1,017

)

Adjustments to reflect the fair market value of rent from

discontinued operations

(29

)

(31

)

(28

)

Impairment loss

600

3,150

600

3,150

Impairment loss from discontinued operations

1,943

1,943

Gain on extinguishment of debt from discontinued operations

(1,297

)

(1,630

)

Gain of foreclosure of real estate from discontinued operations

(7,506

)

(7,506

)

ATCF before income taxes

$

5,265

$

24,034

$

9,537

$

36,677

TPGI's share of ATCF before income taxes (b)

$

4,143

$

17,946

$

7,346

$

27,401

TPGI's income tax refund (expense) - current

(20

)

(64

)

88

(221

)

TPGI's share of ATCF

$

4,123