Thomas Properties Group, Inc. Announces Third Quarter 2006 Results

Thomas Properties Group, Inc. (Nasdaq:TPGI) reported today the results of operations for the quarter ended September 30, 2006. Net income for the three months ended September 30, 2006 was $1,310,000 or $0.09 per share compared to net loss of $1,746,000 or $0.12 per share for the three months ended September 30, 2005. Financial schedules follow. Further information is available in the Supplemental Financial Information for the Third Quarter 2006, which is available in the Investor Relations section (Financial Information) on TPGI’s website at www.tpgre.com, or by calling Diana Laing, Chief Financial Officer, at the number below. About Thomas Properties Group, Inc. Thomas Properties Group, Inc. is a full-service real estate company that owns, acquires, develops and manages office, retail and multi-family properties throughout the United States. The company has four primary areas of focus: property operations, property acquisitions, property development and redevelopment, and investment management. The company seeks to capitalize on opportunities for above-average risk-adjusted investment returns from real estate ownership, while managing the volatility associated with the real estate industry through joint-venture ownership structures. For more information on Thomas Properties Group, Inc., visit the company's website at www.tpgre.com. Forward Looking Statements Statements made in this press release or during the 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 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, 2005, 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 per share data)   Three months ended September 30, 2006  2005  Revenues: Rental $ 8,251  $ 7,676  Tenant reimbursements 4,777  4,704  Parking and other 844  870  Investment advisory, management, leasing, and development services 2,113  1,148  Investment advisory, management, leasing, and development services - unconsolidated real estate entities 3,306  2,887  Total revenues 19,291  17,285  Expenses: Rental property operating and maintenance 3,612  3,265  Real estate taxes 1,512  1,451  Investment advisory, management, leasing, and development services 2,790  1,554  Rent - unconsolidated real estate entities 55  58  Interest 5,119  4,971  Depreciation and amortization 3,112  2,957  General and administrative 3,489  3,722  Total expenses 19,689  17,978  Gain on sale of real estate 9,599  -  Interest income 594  363  Equity in net loss of unconsolidated real estate entities (5,165) (5,639) Minority interests - unitholders in the Operating Partnership (2,568) 3,270  Minority interests in consolidated real estate entities 34  (115) Income (loss) before benefit for income taxes 2,098  (2,814) (Provision) benefit for income taxes (786) 1,068    Net income (loss) $ 1,310  $ (1,746)   Basic earnings (loss) per share $ 0.09  $ (0.12) Diluted earnings (loss) per share 0.09  (0.12)   Weighted average common shares - basic 14,343,833  14,303,774  Weighted average common shares - diluted 14,826,378  14,303,774    Reconciliation of net income (loss) to earnings before depreciation, amortization and deferred taxes (EBDT) (a):   Net income (loss) $ 1,310  $ (1,746) Adjustments: Deferred income tax expense (benefit) 786  (1,068) Minority interests 2,533  (3,155) Depreciation and amortization 3,112  2,957  Depreciation and amortization from unconsolidated real estate entities 4,456  5,023  Amortization of loan costs 97  97  Amortization of loan costs from unconsolidated entities 415  256  EBDT $ 12,709  $ 2,364    TPGI share of EBDT (b) $ 5,738  $ 1,094    EBDT per share – basic $ 0.40  $ 0.08  EBDT per share – diluted $ 0.39  $ 0.08    Reconciliation of net income (loss) to after tax cash flow (ATCF) (c):   Net income (loss) $ 1,310  $ (1,746) Adjustments: Deferred income tax expense (benefit) 786  (1,068) Minority interests 2,533  (3,155) Depreciation and amortization 3,112  2,957  Depreciation and amortization from unconsolidated real estate entities 4,456  5,023  Amortization of loan costs 97  97  Amortization of loan costs from unconsolidated entities 415  256  Non-cash compensation expense 199  126  Straight-line rent adjustments 1,313  1,747  Straight-line rent adjustments from unconsolidated entities (1,494) (186) Fair market value of rent adjustments (22) (45) Fair market value of rent adjustments from unconsolidated entities 30  (34) ATCF $ 12,735  $ 3,972    TPGI share of ATCF (d) $ 5,750  $ 1,837    ATCF per share – basic $ 0.40  $ 0.13  ATCF per share – diluted $ 0.39  $ 0.13  Nine months ended September 30, 2006  2005  Revenues: Rental $ 24,886  $ 24,229  Tenant reimbursements 14,319  14,286  Parking and other 3,059  3,266  Investment advisory, management, leasing, and development services 5,896  3,601  Investment advisory, management, leasing, and development services - unconsolidated real estate entities 9,645  6,124  Total revenues 57,805  51,506  Expenses: Rental property operating and maintenance 11,789  10,909  Real estate taxes 4,431  4,343  Investment advisory, management, leasing, and development services 6,894  4,482  Rent - unconsolidated real estate entities 170  175  Interest 15,878  16,224  Depreciation and amortization 9,517  9,384  General and administrative 11,755  9,649  Total expenses 60,434  55,166  Gain on purchase of other secured loan -  25,776  Gain on sale of real estate 9,599  -  Loss from early extinguishment of debt (360) -  Interest income 1,867  1,084  Equity in net loss of unconsolidated real estate entities (9,500) (9,377) Minority interests - unitholders in the Operating Partnership 728  (7,386) Minority interests in consolidated real estate entities (490) (82) (Loss) income before benefit for income taxes (785) 6,355  Benefit (provision) for income taxes 303  (2,811) Net (loss) income $ (482) $ 3,544    Basic (loss) earnings per share $ (0.03) $ 0.25  Diluted (loss) earnings per share (0.03) 0.25    Weighted average common shares - basic 14,333,815  14,298,532  Weighted average common shares - diluted 14,333,815  14,307,584    Reconciliation of net (loss) income to earnings before depreciation, amortization and deferred taxes (EBDT) (a):   Net (loss) income $ (482) $ 3,544  Adjustments: Deferred income tax (benefit) expense (303) 2,811  Minority interests (238) 7,468  Depreciation and amortization 9,517  9,384  Depreciation and amortization from unconsolidated real estate entities 11,138  9,142  Amortization of loan costs 358  448  Amortization of loan costs from unconsolidated entities 1,025  628  EBDT $ 21,015  $ 33,425    TPGI share of EBDT (b) $ 9,525  $ 15,459    EBDT per share – basic $ 0.66  $ 1.08  EBDT per share – diluted $ 0.64  $ 1.08      Reconciliation of net (loss) income to after tax cash flow (ATCF) (c):   Net (loss)income $ (482) $ 3,544  Adjustments: Deferred income tax (benefit) expense (303) 2,811  Minority interests (238) 7,468  Depreciation and amortization 9,517  9,384  Depreciation and amortization from unconsolidated real estate entities 11,138  9,142  Amortization of loan costs 358  448  Amortization of loan costs from unconsolidated entities 1,025  628  Non-cash compensation expense 2,373  389  Straight-line rent adjustments 4,065  4,118  Straight-line rent adjustments from unconsolidated entities (2,750) (960) Fair market value of rent adjustments (258) (195) Fair market value of rent adjustments from unconsolidated entities 40  (154) ATCF $ 24,485  $ 36,623    TPGI share of ATCF (d) $ 11,105  $ 16,938    ATCF per share – basic $ 0.77  $ 1.18  ATCF per share – diluted $ 0.75  $ 1.18  (a) The Company uses EBDT as a supplemental performance measure because EBDT excludes 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). EBDT is a non-GAAP financial measure and may not be directly comparable to similarly-titled measures reported by other companies.   (b) Based on an interest in our operating partnership of 45.1 and 46.3% for the three months ended September 30, 2006 and 2005, respectively.   (c) 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). ATCF is a non-GAAP financial measure and may not be directly comparable to similarly-titled measures reported by other companies.   (d) Based on an interest in our operating partnership of 45.3 and 46.3% for the nine months ended September 30, 2006 and 2005, respectively. THOMAS PROPERTIES GROUP, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share data)   September 30, 2006 December 31, 2005 ASSETS Investments in real estate $ 435,942  $ 409,735  Less accumulated depreciation (111,671) (104,325) 324,271  305,410  Investment in real estate - development property held for sale -  7,751  324,271  313,161  Investments in unconsolidated real estate entities 45,515  41,124  Cash and cash equivalents 84,604  63,915  Restricted cash 19,678  15,511  Rents and other receivables, net 2,521  1,804  Receivables - unconsolidated real estate entities 1,742  3,335  Deferred rents 19,046  23,111  Deferred leasing and loan costs, net 15,129  16,173  Deferred tax asset 38,294  39,440  Other assets 5,834  4,313  Total assets $ 556,634  $ 521,887    LIABILITIES AND STOCKHOLDERS' EQUITY Mortgage, other secured, and unsecured loans $ 334,026  $ 325,179  Accounts payable and other liabilities 31,213  13,545  Dividends and distributions payable 1,916  1,905  Prepaid rent 3,889  3,753  Total liabilities 371,044  344,382    Minority interests: Unitholders in the Operating Partnership 76,968  74,099  Minority interests in consolidated real estate entities 4,254  26  Total minority interests 81,222  74,125    Common stock 144  143  Limited voting stock 167  167  Additional paid-in capital 106,179  106,713  Retained deficit and dividends (2,122) (3,379) Unearned compensation, net -  (264) Total stockholders' equity 104,368  103,380  Total liabilities and stockholders' equity $ 556,634  $ 521,887