Thomas Properties Group, Inc. Announces Second Quarter 2008 Results

Thomas Properties Group, Inc. (Nasdaq:TPGI) reported today the results of operations for the quarter ended June 30, 2008. The results of operations presented in this release include TPGI’s results of operations for the three and six months ended June 30, 2008 and 2007. The consolidated net income for the three months ended June 30, 2008 was $4,948,000 or $0.21 per share compared to consolidated net income of $650,000 or $0.03 per share for the three months ended June 30, 2007. The consolidated net income for the six months ended June 30, 2008 was $5,167,000 or $0.22 per share compared to consolidated net income of $395,000 or $0.02 per share for the six months ended June 30, 2007. After tax cash flow (a non-GAAP financial measure) for the three months ended June 30, 2008 was $11,955,000 or $0.50 per share compared to after tax cash flow of $6,256,000 or $0.30 per share for the three months ended June 30, 2007. After tax cash flow (a non-GAAP financial measure), for the six months ended June 30, 2008 was $18,399,000 or $0.78 per share compared to after tax cash flow of $9,503,000 or $0.54 per share for the six months ended June 30, 2007. We define after tax cash flow (ATCF) as net income (loss) excluding the following items: deferred income taxes, non-cash charges for depreciation and amortization, amortization of loan costs, non-cash compensation expense, straight-line rent adjustments and fair market value rent adjustments. ATCF is further described in note (c) to the financial statements below. "Our investment management platform continues to grow with the commitment of $250 million of equity from UBS Wealth Management – North American Property Fund Limited,” said Jim Thomas, Chairman and CEO. "This joint venture program and our High Performance Green Fund currently have buying capacity of over $1 billion, which positions us well to take advantage of future opportunities.” Thomas added, "On the development front, we expect to complete construction of both the Murano condominiums and the first two office buildings at Four Points Centre in the third quarter. We are very pleased that the construction of both of these properties has gone better than expected.” Financial schedules follow. Further information is available in the Supplemental Financial Information for the Second Quarter 2008, which is available in the Investor Relations section (Financial Information) on TPGI’s website. Teleconference and Webcast TPGI will hold a quarterly earnings conference call on Thursday, August 7, 2008 at 10:00 a.m. Pacific Time. To participate in the call, dial (800) 260-8140 and (617) 614-3672 internationally, and provide confirmation code 70404534. 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 August 28, 2008, by calling (888) 286-8010 and (617) 801-6888 internationally, and providing confirmation code 75921975. 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. The company seeks to capitalize on opportunities for above-average risk-adjusted investment returns from real estate, while managing the volatility associated with the real estate industry, through joint-venture ownership structures. 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, 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 10-K for the year ended December 31, 2007, which has been 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)             Three months endedJune 30,   Six months endedJune 30, 2008 2007 2008 2007   Revenues: Rental $ 8,002 $ 8,219 $ 15,835 $ 16,381 Tenant reimbursements 7,270 6,659 14,125 13,244 Parking and other 862 899 1,822 1,892 Investment advisory, management, leasing, and development services 2,338 2,177 4,403 4,380 Investment advisory, management, leasing, and development services - unconsolidated real estate entities 6,294 5,308 12,212 9,666 Condominium sales - percentage of completion   76,136     -     76,136     -   Total revenues   100,902     23,262     124,533     45,563     Expenses: Rental property operating and maintenance 6,851 5,468 12,859 11,207 Real estate taxes 1,576 1,549 3,176 3,024 Investment advisory, management, leasing, and development services 6,613 4,473 11,796 7,947 Cost of condominium sales - percentage of completion 59,115 - 59,115 - Rent - unconsolidated real estate entities 61 60 126 120 Interest 3,860 3,782 7,937 8,043 Depreciation and amortization 2,779 3,048 5,550 6,107 General and administrative   5,285     4,539     9,382     8,515   Total expenses   86,140     22,919     109,941     44,963     Gain on sale of real estate 1,099 1,420 3,618 2,389 Gain from early extinguishment of debt 255 - 255 - Interest income 691 1,730 1,754 2,569 Equity in net loss of unconsolidated real estate entities (2,575 ) (1,363 ) (5,140 ) (4,532 ) Minority interests - unitholders in the Operating Partnership (5,511 ) (941 ) (5,858 ) (348 ) Minority interests in consolidated real estate entities   (41 )   10     -     35     Income before provision for income taxes 8,680 1,199 9,221 713   Provision for income taxes   (3,732 )   (549 )   (4,054 )   (318 )     Net income $ 4,948   $ 650   $ 5,167   $ 395     Earnings per share-basic $ 0.21 $ 0.03 $ 0.22 $ 0.02 Earnings per share-diluted $ 0.21 $ 0.03 $ 0.22 $ 0.02   Weighted average common shares - basic 23,678,260 20,540,116 23,670,418 17,468,385 Weighted average common shares - diluted 23,678,260 20,611,368 23,670,418 17,531,688   Reconciliation of net income to EBDT(a):   Net income $ 4,948 $ 650 $ 5,167 $ 395 Adjustments: Deferred income tax expense 3,732 549 4,054 318 Minority interests 5,552 931 5,858 313 Depreciation and amortization 2,779 3,048 5,550 6,107 Amortization of loan costs 78 82 159 163 Unconsolidated real estate entities: Depreciation and amortization 4,969 4,265 10,087 8,119 Depreciation and amortization from discontinued operations - - - 12 Amortization of loan costs   547     358     843     770   Earnings before depreciation, amortization and income taxes $ 22,605   $ 9,883   $ 31,718   $ 16,197   TPGI share of earnings before depreciation, amortization and income taxes (b) $ 13,791   $ 5,537   $ 19,396   $ 8,254   Income tax expense-current $ (2,512 ) $ -   $ (2,512 ) $ -   EBDT $ 11,279   $ 5,537   $ 16,884   $ 8,254   EBDT per share – basic $ 0.48   $ 0.27   $ 0.71   $ 0.47   EBDT per share – diluted $ 0.48   $ 0.27   $ 0.71   $ 0.47     Reconciliation of net income to ATCF (c):   Net income $ 4,948 $ 650 $ 5,167 $ 395 Adjustments: Deferred income tax expense 3,732 549 4,054 318 Minority interests 5,552 931 5,858 313 Depreciation and amortization 2,779 3,048 5,550 6,107 Amortization of loan costs 78 82 159 163 Non-cash compensation expense 862 1,068 1,609 1,777 Straight-line rent adjustments 1,183 1,439 2,948 2,920 Fair market value of rent adjustments (48 ) (2 ) (58 ) (4 ) Unconsolidated real estate entities: Depreciation and amortization 4,969 4,265 10,087 8,119 Depreciation and amortization from discontinued operations - - - 12 Amortization of loan costs 547 358 843 770 Straight-line rent adjustments (470 ) (930 ) (1,332 ) (1,836 ) Fair market value of rent adjustments   (420 )   (293 )   (689 )   (407 ) ATCF $ 23,712   $ 11,165   $ 34,196   $ 18,647   TPGI share of ATCF before income taxes (b) $ 14,467   $ 6,256   $ 20,911   $ 9,503   Income tax expense-current $ (2,512 ) $ -   $ (2,512 ) $ -   ATCF $ 11,955   $ 6,256   $ 18,399   $ 9,503   ATCF per share – basic $ 0.50   $ 0.30   $ 0.78   $ 0.54   ATCF per share – diluted $ 0.50   $ 0.30   $ 0.78   $ 0.54     Weighted average common shares - basic 23,678,260 20,540,116 23,670,418 17,468,385 Weighted average common shares - diluted 23,678,260 20,611,368 23,670,418 17,531,688 (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) deferred income tax expense (benefit); ii) minority 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 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 61.01% and 50.96% for the three months ended June 30, 2008 and 2007, respectively, and 61.15% and 50.96% for the six months ended June 30, 2008 and 2007, 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) minority interests; iii) non-cash charges for depreciation and amortization; iv) amortization of loan costs; v) non-cash compensation expense; vi) the adjustment to recognize rental revenues using the straight-line method; and vii) the adjustment to rental revenue to reflect the fair market value of rents. 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. CONSOLIDATED BALANCE SHEETS (In thousands)     June 30, 2008 December 31, 2007 (unaudited) (audited) ASSETS Investments in real estate: Land and improvements $ 35,939 $ 35,499 Land improvements - development property 98,156 85,253 Construction in progress 131,391 135,396 Buildings and improvements 261,221 259,031 Tenant improvements   42,512     59,804   569,219 574,983 Less accumulated depreciation   (98,012 )   (111,619 ) 471,207 463,364   Investments in unconsolidated real estate entities 43,005 49,199 Cash and cash equivalents 91,946 126,647 Restricted cash 22,934 26,251 Rents and other receivables, net 3,524 2,352 Receivables from condominium sales contracts 65,008 - Receivables - unconsolidated real estate entities 5,255 6,640 Deferred rents 11,975 14,696 Deferred leasing and loan costs, net 15,608 13,051 Other assets, net   23,026     18,692   Total assets $ 753,488   $ 720,892     LIABILITIES AND EQUITY Liabilities: Mortgage loans $ 256,558 $ 257,278 Other secured loans 170,130 134,829 Unsecured loan 3,900 3,900 Accounts payable and other liabilities, net 68,810 74,733 Dividends and distributions payable 2,370 2,354 Due to affiliate - 2,000 Prepaid rent   1,957     3,402   Total liabilities   503,725     478,496   Minority Interests: Unitholders in the Operating Partnership 98,853 95,245 Minority interests in consolidated real estate entities   3,878     4,581   Total minority interests   102,731     99,826   Commitments and contingencies Stockholders' equity: Preferred stock, $.01 par value, 25,000,000 shares authorized, none issued or outstanding as of June 30, 2008 and December 31, 2007 - - Common stock, $.01 par value, 75,000,000 shares authorized, 23,853,904 and 23,747,936 shares issued and outstanding as of June 30, 2008 and December 31, 2007, respectively 238 237 Limited voting stock, $.01 par value, 20,000,000 shares authorized, 14,496,666 shares issued and outstanding as of June 30, 2008 and December 31, 2007 145 145 Additional paid-in capital 159,936 157,799 Retained deficit and dividends   (13,287 )   (15,611 ) Total stockholders' equity   147,032     142,570   Total liabilities and stockholders' equity $ 753,488   $ 720,892