Cousins Properties Incorporated (NYSE:CUZ) today reported its
results of operations for the three and nine months ended September
30, 2005. All per share amounts are reported on a diluted basis;
basic per share data is included in the Consolidated Statements of
Income accompanying this release. Net Income Available to Common
Stockholders ("Net Income Available") was $9.9 million, or $0.19
per share, for the third quarter of 2005 compared with $224.7
million, or $4.41 per share, for the third quarter of 2004. Funds
From Operations Available to Common Stockholders ("FFO") was $17.0
million, or $0.33 per share, for the third quarter of 2005 compared
with $29.3 million, or $0.58 per share, for the third quarter of
2004. Net Income Available was $21.9 million, or $0.42 per share,
for the nine months ended September 30, 2005 compared with $281.3
million, or $5.56 per share, for the nine months ended September
30, 2004. FFO was $50.9 million, or $0.98 per share, for the nine
months ended September 30, 2005 compared with $81.6 million, or
$1.61 per share, for the nine months ended September 30, 2004. Net
Income Available and FFO for the third quarter and nine months
ended September 30, 2005 reflect a decrease in rental revenues
resulting from the sale of $1.3 billion of consolidated and joint
venture operating properties in 2004 and the recognition of gains
on sale of these properties in the second and third quarters of
2004 offset by a reduction in interest expense, mainly due to the
sold properties. Third quarter highlights of the Company included
the following: -- Commenced construction of The Avenue Webb Gin, a
382,000-square-foot open-air specialty retail center located in
Gwinnett County, Georgia. Tenant openings at The Avenue Webb Gin
are scheduled to begin in August 2006. -- Closed the sale of 1155
Perimeter Center West, a 365,000-square- foot office building owned
by a joint venture in which the Company has a 50% ownership
interest. The Company's share of the gain on the sale was
approximately $1.6 million. The building, when sold, was 89%
leased. -- Closed the sale of a recently completed retail
development project, Hanover Square, a 187,000-square-foot shadow
anchored Target shopping center in suburban Richmond, Virginia, of
which the Company owned 69,000 square feet. Included in the sale
was 11 acres of undepreciated land. The Company recognized a gain,
net of taxes, of $1.1 million on the sale of the shopping center
and $340,000 on the sale of the undepreciated land. -- Sold 649
residential lots during the quarter. The Company recognized pre-tax
profits on lots sold at wholly-owned projects of $1.2 million and
recognized its share of pre-tax profits on lots sold by
unconsolidated entities of $3.4 million. -- Through CL Realty, LLC,
commenced development of Blue Valley, a 197-lot residential
development in suburban Atlanta. -- Through CL Realty, LLC,
purchased 15 acres of beachfront land on Padre Island Beach in
Corpus Christi, Texas, for an anticipated residential development.
-- Recognized pre-tax and pre-minority interest profits of $712,000
on 905 Juniper, a 117-unit condominium project under development in
Midtown Atlanta. Approximately 95% of the units are now under
non-cancelable contracts, but only 30% of these contracts have
sufficient deposits to allow percentage-of-completion accounting.
Other recent developments included the following: -- The grand
opening of The Avenue Carriage Crossing on October 19, 2005. The
787,000-square-foot center is located in suburban Memphis and is
90% leased or sold to tenants including Dillard's, Parisian, Barnes
& Noble and Linen's N Things. -- Completed the foundation of 50
Biscayne, the 529-unit condominium development located in Miami,
Florida, in which the Company is a partner. The Company expects to
begin revenue recognition under the percentage-of-completion method
in the fourth quarter of 2005 on approximately 81% of these units
because the foundation is complete and these units are subject to
contracts that have sufficient deposits. -- Purchased land in Cobb
County, Georgia, for the development of West Park, an estate lot
residential community. -- Purchased 45 acres in Austin, Texas, for
potential future retail or multi-family development. At September
30, 2005, the Company's portfolio of operational office buildings
was 85% leased compared with 84% at June 30, 2005, and its
portfolio of operational retail centers was 96% leased compared
with 95% at June 30, 2005. At September 30, 2005, the Company and
its joint ventures had seven retail, office and industrial projects
under development totaling 2.7 million Company-owned square feet,
and two condominium projects under development containing a total
of 646 units. The Company estimates its share of the total cost of
these projects will be $599 million and expects completion of these
projects throughout 2006, 2007 and 2008. In addition, the Company
had 21 residential communities under development directly or
through investments in unconsolidated entities in which
approximately 12,400 lots remain to be developed and/or sold. "We
continue to see significant development opportunities for each of
our divisions," said Tom Bell, President and CEO of Cousins. "With
approximately $600 million of development underway and more coming,
our value creation strategy also seems to be working quite well.
Leasing of our office portfolio is improving and the office
environment in most of our markets is recovering. Lastly, I want to
congratulate the residential team for an outstanding quarter." The
Consolidated Statements of Income, Consolidated Balance Sheets and
a schedule entitled Funds From Operations, which reconciles Net
Income Available to FFO, are attached to this press release. More
detailed information on Net Income Available and FFO results is
included in the "Net Income and Funds From Operations-Supplemental
Detail" schedule which is included along with other supplemental
information in the Company's Current Report on Form 8-K, which the
Company is furnishing to the Securities and Exchange Commission
("SEC"), and which can be viewed through the "Quarterly
Disclosures" and "SEC Filings" links on the Investor Relations page
of the Company's Web site at www.cousinsproperties.com. This
information may also be obtained by calling the Company's Investor
Relations Department at (770) 857-2449. The Company will conduct a
conference call at 3:00 p.m. (Eastern time) on Tuesday, November 1,
2005, to discuss the results of the quarter ended September 30,
2005. The number to call for this interactive teleconference is
(913) 981-5582. A replay of the conference call will be available
for 14 days by dialing (719) 457-0820 and entering the pass code,
8164921. The Company will also provide an online Web simulcast and
rebroadcast of its third quarter 2005 earnings release conference
call. The live broadcast will be available through the "Q3 2005
Cousins Properties Incorporated Earnings Conference Call" link on
the Investor Relations page of the Company's Web site, as well as
at www.streetevents.com and www.earnings.com. The rebroadcast will
be available on the Investor Relations page of the Company's Web
site for 30 days. Cousins Properties Incorporated, headquartered in
Atlanta, has extensive experience in the real estate industry
including the development, acquisition, financing, management and
leasing of properties. The property types that Cousins actively
invests in include office, retail, medical office, industrial,
multi-family and land development projects. The Company's portfolio
consists of interests in 7.5 million square feet of office and
medical office space, 3.7 million square feet of retail space,
416,000 square feet of industrial space, over 3,200 acres of
strategically located land tracts for sale or future development,
and significant land holdings for development of single-family
residential communities. Cousins also provides leasing and
management services to third-party investors; its client-services
portfolio comprises 11.1 million square feet of office space.
Cousins is a fully integrated equity real estate investment trust
(REIT) that has been public since 1962 and trades on the New York
Stock Exchange under the symbol "CUZ." For more information on the
Company, please visit Cousins' Web site at
www.cousinsproperties.com. Certain matters discussed in this news
release are forward-looking statements within the meaning of the
federal securities laws and are subject to uncertainties and risks,
including, but not limited to, general and local economic
conditions, local real estate conditions, the activity of others
developing competitive projects, the risks associated with
development projects (such as delay, cost overruns and
leasing/sales risk of new properties), the cyclical nature of the
real estate industry, the financial condition of existing tenants,
interest rates, the Company's ability to obtain favorable financing
or zoning, environmental matters, the effects of terrorism, and
other risks detailed from time to time in the Company's filings
with the Securities and Exchange Commission, including the
Company's Current Report on Form 8-K filed on December 10, 2003.
The words "believes", "expects", "anticipates", "estimates" and
similar expressions are intended to identify forward-looking
statements. Although the Company believes that its plans,
intentions and expectations reflected in any forward-looking
statement are reasonable, the Company can give no assurance that
these plans, intentions or expectations will be achieved. Such
forward-looking statements are based on current expectations and
speak as of the date of such statements. The Company undertakes no
obligation to publicly update or revise any forward-looking
statement, whether as a result of future events, new information or
otherwise. -0- *T COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
FUNDS FROM OPERATIONS (UNAUDITED) (In thousands, except per share
amounts) Three Months Ended Nine Months Ended September 30,
September 30, ------------------ ------------------ 2005 2004 2005
2004 -------- --------- -------- --------- Net Income Available to
Common Stockholders $9,923 $224,739 $21,914 $281,288 Depreciation
and amortization: Consolidated properties 8,572 8,335 27,467 27,611
Discontinued properties - 1,057 68 5,254 Share of unconsolidated
joint ventures 2,045 3,712 6,873 13,284 Depreciation of furniture,
fixtures and equipment and amortization of specifically
identifiable intangible assets: Consolidated properties (730) (659)
(2,094) (1,994) Share of unconsolidated joint ventures (4) (11)
(74) (29) Gain on sale of investment properties, net of applicable
income tax provision: Consolidated properties (796) (50,082)
(13,201) (88,648) Discontinued properties (1,070) (67,291) (1,107)
(67,939) Share of unconsolidated joint ventures (1,633) (99,300)
(1,945) (99,300) Gain on sale of undepreciated investment
properties 732 8,836 13,010 12,070 -------- --------- --------
--------- Funds From Operations Available to Common Stockholders
$17,039 $29,336 $50,911 $81,597 -------- --------- --------
--------- Per Common Share - Basic: Net Income Available $.20 $4.58
$.44 $5.76 -------- --------- -------- --------- Funds From
Operations $.34 $.60 $1.02 $1.67 -------- --------- --------
--------- Weighted Average Shares 50,079 49,060 49,932 48,818
-------- --------- -------- --------- Per Common Share - Diluted:
Net Income Available $.19 $4.41 $.42 $5.56 -------- ---------
-------- --------- Funds From Operations $.33 $.58 $.98 $1.61
-------- --------- -------- --------- Diluted Weighted Average
Shares 52,013 50,943 51,759 50,633 -------- --------- --------
--------- The table above shows Funds From Operations Available to
Common Stockholders ("FFO") and the related reconciliation to Net
Income Available to Common Stockholders ("Net Income Available")
for Cousins Properties Incorporated and Subsidiaries. The Company
calculates FFO in accordance with the National Association of Real
Estate Investment Trusts' ("NAREIT") definition, which is net
income available to common stockholders (computed in accordance
with accounting principles generally accepted in the United States
("GAAP")), excluding extraordinary items, cumulative effect of
change in accounting principle and gains or losses from sales of
depreciable property, plus depreciation and amortization of real
estate assets, and after adjustments for unconsolidated
partnerships and joint ventures to reflect FFO on the same basis.
FFO is used by industry analysts and investors as a supplemental
measure of an equity REIT's operating performance. Historical cost
accounting for real estate assets implicitly assumes that the value
of real estate assets diminishes predictably over time. Since real
estate values instead have historically risen or fallen with market
conditions, many industry investors and analysts have considered
presentation of operating results for real estate companies that
use historical cost accounting to be insufficient by themselves.
Thus, NAREIT created FFO as a supplemental measure of REIT
operating performance that excludes historical cost depreciation,
among other items. Management believes that the use of FFO,
combined with the required primary GAAP presentations, has been
fundamentally beneficial, improving the understanding of operating
results of REITs among the investing public and making comparisons
of REIT operating results more meaningful. Company management
evaluates the operating performance of its reportable segments and
of its divisions based on FFO. Additionally, the Company uses FFO
and FFO per share, along with other measures, to assess performance
in connection with evaluating and granting incentive compensation
to its officers and employees. COUSINS PROPERTIES INCORPORATED AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except per share amounts) Three Months
Ended Nine Months Ended September 30, September 30,
------------------ ------------------ 2005 2004 2005 2004 --------
--------- -------- --------- REVENUES: Rental property revenues
$24,652 $23,410 $73,088 $78,546 Development income 623 624 1,804
2,181 Management fees 2,141 2,242 6,735 6,456 Leasing and other
fees 2,037 1,518 4,083 2,943 Multi-family residential unit sales
4,986 - 4,986 - Residential lot and outparcel sales 10,946 3,341
17,006 11,595 Interest and other 740 1,094 1,459 1,649 --------
--------- -------- --------- 46,125 32,229 109,161 103,370 COSTS
AND EXPENSES: Rental property operating expenses 9,978 8,200 28,813
25,407 General and administrative expenses 8,943 8,431 25,836
25,019 Depreciation and amortization 8,572 8,335 27,467 27,611
Multi-family residential unit cost of sales 4,274 - 4,274 -
Residential lot and outparcel cost of sales 8,350 2,219 12,492
7,887 Interest expense 1,675 2,753 6,559 11,916 Other 826 978 2,043
2,692 -------- --------- -------- --------- 42,618 30,916 107,484
100,532 -------- --------- -------- --------- INCOME FROM
CONTINUING OPERATIONS BEFORE INCOME FROM UNCONSOLIDATED JOINT
VENTURES AND INCOME TAXES 3,507 1,313 1,677 2,838 PROVISION FOR
INCOME TAXES FROM OPERATIONS (2,021) (713) (3,947) (1,566) INCOME
FROM UNCONSOLIDATED JOINT VENTURES 10,008 106,676 20,791 124,928
-------- --------- -------- --------- INCOME FROM CONTINUING
OPERATIONS BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES 11,494
107,276 18,521 126,200 GAIN ON SALE OF INVESTMENT PROPERTIES, NET
OF APPLICABLE INCOME TAX PROVISION 796 50,082 13,201 88,648
-------- --------- -------- --------- INCOME FROM CONTINUING
OPERATIONS 12,290 157,358 31,722 214,848 DISCONTINUED OPERATIONS,
NET OF APPLICABLE INCOME TAX PROVISION: Income from discontinued
operations 375 2,027 522 4,313 Gain on sale of investment
properties 1,070 67,291 1,107 67,939 -------- --------- --------
--------- 1,445 69,318 1,629 72,252 -------- --------- --------
--------- NET INCOME 13,735 226,676 33,351 287,100 DIVIDENDS TO
PREFERRED STOCKHOLDERS (3,812) (1,937) (11,437) (5,812) --------
--------- -------- --------- NET INCOME AVAILABLE TO COMMON
STOCKHOLDERS $9,923 $224,739 $21,914 $281,288 -------- ---------
-------- --------- PER SHARE INFORMATION - BASIC: Income from
continuing operations $0.17 $3.17 $0.41 $4.28 Income from
discontinued operations 0.03 1.41 0.03 1.48 -------- ---------
-------- --------- Net income available to common stockholders
$0.20 $4.58 $0.44 $5.76 -------- --------- -------- --------- PER
SHARE INFORMATION - DILUTED: Income from continuing operations
$0.16 $3.05 $0.39 $4.13 Income from discontinued operations 0.03
1.36 0.03 1.43 -------- --------- -------- --------- Net income
available to common stockholders $0.19 $4.41 $0.42 $5.56 --------
--------- -------- --------- CASH DIVIDENDS DECLARED PER COMMON
SHARE $0.37 $0.37 $1.11 $1.11 -------- --------- -------- ---------
WEIGHTED AVERAGE SHARES - BASIC 50,079 49,060 49,932 48,818
-------- --------- -------- --------- WEIGHTED AVERAGE SHARES -
DILUTED 52,013 50,943 51,759 50,633 -------- --------- --------
--------- *T
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