Thomas Properties Group, Inc.
/quotes/comstock/15*!tpgi/quotes/nls/tpgi
(TPGI
2.94,
+0.04,
+1.38%)
reported today the results
of operations for the quarter and year ended December 31, 2009.
"Last year was one of the most difficult ever for the real estate
industry and the impacts were felt across the board in all
sectors,"
said James A. Thomas, Chairman and CEO. "Even in this environment,
we
were able to increase cash flow as evidenced by improvements in
the
fourth quarter, and we favorably restructured some of our debt and
loan
terms to better position our properties for the future."
The results of operations presented in this release include a
consolidated net loss for the three months ended December 31, 2009
of
$(7.7) million or $(0.30) per share compared to a consolidated net
loss
of $(7.7) million or $(0.33) per share for the three months ended
December 31, 2008. The consolidated net loss for the year ended
December
31, 2009 was $(21.6) million or $(0.86) per share compared to
$(5.5)
million or $(0.24) per share for the year ended December 31, 2008.
Included in the consolidated net loss for the three and twelve
months
ended December 31, 2009 are pre-tax, non-cash impairment charges
of $4.4
million and $13.0 million, respectively, related to the Murano
condominium project, and $14.0 million and $16.0 million,
respectively,
related to joint venture investments.
After tax cash flow (ATCF) for the three months ended December 31, 2009
was $2.5 million or $0.10 per share compared to after tax cash
flow of
$0.5 million or $0.02 per share for the three months ended
December 31,
2008. The increase in ATCF for the quarter ended December 31, 2009
over
the prior year period resulted from an increase in gains from
sales of
condominium units at the Murano property and a reduction in
interest
expense, partially offset by reductions in property net operating
income
and net revenues from the investment advisory management, leasing
and
development services business. ATCF for the twelve months ended
December
31, 2009 was $8.2 million or $0.33 per share compared to ATCF of
$22.5
million or $0.95 per share for the twelve months ended December
31,
2008. The reduction in ATCF for the year ended December 31, 2009
compared to the prior year primarily resulted from a decline in
gains
from sales of condominium units at Murano and a reduction in
property
net operating income. The Company defines ATCF (a non-GAAP
financial
measure) as net income (loss) excluding the following items:
non-controlling interests, deferred income taxes, non-cash charges
for
depreciation and amortization and asset impairment, amortization
of loan
costs, non-cash compensation expense, straight-line rent
adjustments,
adjustments to reflect the fair market value of rent, and gain
from
extinguishment of debt. ATCF is further described in note (c) to
the
financial statements below.
Thomas further stated, "We have accomplished a number of financing and
capital transactions, reducing our consolidated debt balances by
$69.7
million at December 31, 2009 compared to December 31, 2008. Also,
subsequent to year end, we negotiated on behalf of the California
State
Teachers Retirement System (CalSTRS), our partner in City National
Plaza
in downtown Los Angeles, for CalSTRS to acquire all $219.1 million
of
mezzanine debt on that property. CalSTRS will contribute this debt
to
the partnership's equity, reducing the leverage on the property
from
$568.0 million to $348.9 million, all of which is first mortgage
debt.
We are in discussions with CalSTRS to obtain an option to
participate in
the loan purchase, on or after the maturity of the mezzanine debt,
based
on our current pro rata share of 25% of the existing City National
Plaza
equity. We are confident that the increased equity, together with
the
property's substantial cash reserves, will facilitate the
refinancing of
the mortgage later in 2010."
Other significant recent activities include:
--
During fourth quarter 2009, two mezzanine loans on Two Commerce
Square
scheduled to mature in January 2010 were paid off. The loans,
which
had a principal and accrued interest amount of $36.4 million,
were
paid off for a discounted amount of $25.0 million, resulting in a
gain
on extinguishment of debt of $11.4 million. The Company issued
5,138,600 shares of common stock in a registered direct offering
to
certain institutional investors, and the net proceeds to the
Company
of approximately $13.1 million provided partial funding for the
loan
payoff.
--
During fourth quarter 2009, the Campus El Segundo construction
loan in
the amount of $17.0 million was modified. The loan has been
extended
to July 31, 2011, and has three one-year extension options.
--
During fourth quarter 2009, the construction loan for Four
Points
Centre in Austin, Texas, was modified. The loan has been
extended to
July 31, 2012 with two one-year extension options.
--
At Murano in Philadelphia, the Company entered into contracts to
sell
an additional 13 condominium residences and closed the sale of
18
others during the fourth quarter, reducing the construction loan
balance by approximately $8.1 million, to $37.0 million at
December
31, 2009. During the first two months of 2010, the Company has
entered
into contracts to sell an additional six condominiums.
--
During fourth quarter 2009, a 1.9-acre land parcel adjacent to
Four
Points Centre, which is leased to a 4,200 square foot retail
tenant
under a ground lease, was sold for $2.1 million for a gain of
approximately $1.2 million.
Supplemental Materials
The company will publish a Supplemental Financial Information package
which will be available at www.tpgre.com
in the Investor Relations tab, Supplemental Financial Information
section.
Teleconference and Webcast
TPGI will hold a quarterly earnings conference call on Friday, March 5,
2010 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 46693312.
A live webcast (listen only mode) of the conference call will also be
available at this 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 26, 2010, by
calling (888) 286-8010 and (617) 801-6888 internationally, and
providing
confirmation code 23437189. 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 to both institutional and individual investors. Individual
investors can listen to the call at www.fulldisclosure.com,
Thomson/CCBN's individual investor portal, powered by
StreetEvents.
Institutional investors can access the call via Thomson's
password-protected event management site, StreetEvents (www.streetevents.com).
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 and residential
properties on a nationwide basis. The company's primary areas of
focus
are the acquisition and ownership of premier 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
credit
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 - Factors That May Influence Future Results of
Operations"
in our Form 10-K for the year ended December 31, 2008, our
quarterly
reports on Form 10-Q for 2009, and our other public documents
which are
filed with the SEC. 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,
2009 2008 2009 2008
Revenues:
Rental $ 7,254 $ 7,206 $ 29,753 $ 30,523
Tenant reimbursements 5,012 5,758 21,163 25,874
Parking and other 832 1,122 2,988 3,869
Investment advisory, management, leasing and development services 2,187 1,624 9,345 7,194
Investment advisory, management, leasing and development services - 3,794 4,593 15,023 18,263
unconsolidated real estate entities
Reimbursement of property personnel costs 1,371 1,004 5,584 6,079
Condominium sales 7,299 - 30,226 79,758
Total revenues 27,749 21,307 114,082 171,560
Expenses:
Property operating and maintenance 6,900 6,731 25,339 25,608
Real estate taxes 1,798 1,720 7,225 6,482
Investment advisory, management, leasing and development services 3,272 2,280 11,910 14,800
Reimbursable property personnel costs 1,371 1,004 5,584 6,079
Cost of condominium sales 5,600 208 26,492 62,436
Rent - unconsolidated real estate entities 142 93 350 284
Interest 6,453 9,023 26,868 22,763
Depreciation and amortization 3,269 3,268 12,642 11,766
General and administrative 4,660 2,855 16,732 16,411
Impairment loss 4,400 11,023 13,000 11,023
Total expenses 37,865 38,205 146,142 177,652
Gain on sale of real estate 1,214 - 1,214 3,618
Gain from extinguishment of debt 11,412 - 11,921 255
Interest income 51 454 338 2,795
Equity in net loss of unconsolidated real estate entities (15,641 ) (3,720 ) (16,236 ) (12,828 )
Loss before income taxes and noncontrolling interests (13,080 ) (20,164 ) (34,823 ) (12,252 )
(Provision) benefit for income taxes (203 ) 4,580 (683 ) 1,885
Net loss (13,283 ) (15,584 ) (35,506 ) (10,367 )
Noncontrolling interests' share of net loss:
Unitholders in the Operating Partnership 4,079 7,809 11,535 4,683
Partners in consolidated real estate entities 1,474 65 2,408 198
5,553 7,874 13,943 4,881
TPGI share of net loss $ (7,730 ) $ (7,710 ) $ (21,563 ) $ (5,486 )
Loss per share - basic and diluted $ (0.30 ) $ (0.33 ) $ (0.86 ) $ (0.24 )
Weighted average common shares - basic and diluted 25,753,994 23,724,453 25,173,163 23,693,577
Reconciliation of net loss to EBDT(a):
Net loss $ (7,730 ) $ (7,710 ) $ (21,563 ) $ (5,486 )
Adjustments:
Income tax provision (benefit) 203 (4,580 ) 683 (1,885 )
Noncontrolling interests - unitholders in the Operating Partnership (4,079 ) (7,809 ) (11,535 ) (4,683 )
Depreciation and amortization 3,269 3,268 12,642 11,766
Amortization of loan costs 318 212 690 449
Unconsolidated real estate entities:
Depreciation and amortization 4,811 4,904 19,412 20,508
Amortization of loan costs 214 194 897 1,284
(Loss) earnings before depreciation, amortization and taxes $ (2,994 ) $ (11,521 ) $ 1,226 $ 21,953
TPGI share of EBDT (b) $ (1,950 ) $ (7,029 ) $ 790 $ 13,424
EBDT per share - basic and diluted $ (0.08 ) $ (0.30 ) $ 0.03 $ 0.57
Weighted average common shares - basic and diluted 25,753,994 23,724,453 25,173,163 23,693,577
Reconciliation of net loss to ATCF(c):
Net (loss) income $ (7,730 ) $ (7,710 ) $ (21,563 ) $ (5,486 )
Adjustments:
Income tax provision (benefit) 203 (4,580 ) 683 (1,885 )
Noncontrolling interests - unitholders in the Operating Partnership (4,079 ) (7,809 ) (11,535 ) (4,683 )
Depreciation and amortization 3,269 3,268 12,642 11,766
Amortization of loan costs 318 212 690 449
Non-cash compensation expense 581 1,038 2,838 3,495
Straight-line rent adjustments (162 ) 320 (924 ) 3,433
Adjustments to reflect the fair market value of rent - 20 23 (80 )
Impairment loss 4,400 11,023 13,000 11,023
Gain from extinguishment of debt (11,412 ) - (11,921 ) -
Unconsolidated real estate entities:
Depreciation and amortization 4,811 4,904 19,412 20,508
Amortization of loan costs 214 194 897 1,284
Straight-line rent adjustments (91 ) (454 ) (1,565 ) (2,332 )
Adjustments to reflect the fair market value of rent (368 ) (338 ) (1,394 ) (1,357 )
Impairment loss 14,000 1,210 16,012 1,210
Gain from extinguishment of debt - - (4,189 ) -
ATCF before income taxes $ 3,954 $ 1,298 $ 13,106 $ 37,345
TPGI share of ATCF before income taxes (b) $ 2,575 $ 792 $ 8,443 $ 22,837
TPGI income tax expense - current (100 ) (294 ) (232 ) (294 )
TPGI share of ATCF $ 2,475 $ 498 $ 8,211 $ 22,543
ATCF per share - basic and diluted $ 0.10 $ 0.02 $ 0.33 $ 0.95
Weighted average common shares - basic and diluted 25,753,994 23,724,453 25,173,163 23,693,577
(a) EBDT is a non-GAAP financial measure and may not be directly
comparable to similarly-titled measures reported by other
companies. We
define EBDT as net income (loss) excluding the following items: i)
income tax expense (benefit); ii) noncontrolling interests; iii)
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 to occupancy rates,
rental rates, operating costs, development and redevelopment
activities,
general and administrative expenses, and interest costs, and
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 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).
(b) Based on an interest in our operating partnership of 65.13% and
64.42% for the three and twelve months ended December 31, 2009,
respectively, and 61.01% and 61.15% for the three and twelve
months
ended December 31, 2008, respectively.
(c) ATCF is a non-GAAP financial measure and may not be directly
comparable to similarly-titled measures reported by other
companies. We
define ATCF as net income (loss) excluding the following items: i)
deferred income tax expense (benefit); ii) noncontrolling
interests;
iii) non-cash charges for depreciation and amortization and asset
impairment; iv) amortization of loan costs; v) non-cash
compensation
expense; vi) the adjustment to recognize rental revenues using the
straight-line method; vii) the adjustment to rental revenue to
reflect
the fair market value of rents; and viii) gain on extinguishment
of
debt. 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).
THOMAS PROPERTIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
December 31, December 31,
2009 2008
ASSETS
Investments in real estate:
Operating properties, net $ 276,603 $ 274,784
Land improvements - development properties 97,750 100,886
Construction in progress - 1,274
374,353 376,944
Condominium units held for sale 64,101 101,112
Real estate held for sale - 609
Investments in unconsolidated real estate entities 14,458 29,098
Cash and cash equivalents, unrestricted 35,935 69,023
Restricted cash 12,071 16,665
Rents and other receivables, net 4,389 4,452
Receivables from condominium sales contracts, net - 10,485
Receivables from unconsolidated real estate entities 2,010 4,701
Deferred rents 12,954 10,604
Deferred leasing and loan costs, net 15,375 15,018
Other assets, net 23,757 21,724
Total assets $ 559,403 $ 660,435
LIABILITIES AND EQUITY
Liabilities:
Mortgage loans $ 255,104 $ 255,579
Other secured loans 63,132 128,466
Unsecured loan - 3,900
Accounts payable and other liabilities, net 35,573 45,748
Dividends and distributions payable - 2,377
Prepaid rent and deferred revenue 3,249 3,638
Total liabilities 357,058 439,708
Equity:
Stockholders' equity:
Preferred stock, $.01 par value, 25,000,000 shares authorized, none - -
issued or outstanding as of December 31, 2009 and December 31, 2008,
respectively
Common stock, $.01 par value, 225,000,000 and 75,000,000 shares 308 238
authorized, 30,878,621 and 23,853,904 shares issued and outstanding
as of December 31, 2009 and December 31, 2008, respectively
Limited voting stock, $.01 par value, 20,000,000 shares authorized, 138 145
13,813,331 and 14,496,666 shares issued and outstanding as of
December 31, 2009 and December 31, 2008, respectively
Additional paid-in capital 185,344 158,341
Retained deficit and dividends (49,394 ) (26,980 )
Total stockholders' equity 136,396 131,744
Noncontrolling interests:
Unitholders in the Operating Partnership 63,042 85,210
Partners in consolidated real estate entities 2,907 3,773
Total noncontrolling interests 65,949 88,983
Total equity 202,345 220,727
Total liabilities and equity $ 559,403 $ 660,435
SOURCE: Thomas Properties Group, Inc.
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