Cousins Properties Incorporated (NYSE:CUZ) today reported its
results of operations for the three and nine months ended September
30, 2006. 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. Funds from Operations to Common
Stockholders (�FFO�) was $13.9 million, or $0.26 per share, for the
third quarter of 2006, after a supplemental adjustment to exclude
loss on extinguishment of debt. This compares to FFO of $17.0
million, or $0.33 per share, for the third quarter of 2005. FFO was
$46.9 million, or $0.90 per share, for the nine months ended
September 30, 2006, after a supplemental adjustment to exclude loss
on extinguishment of debt. This compares to FFO of $50.9 million,
or $0.98 per share, for the nine months ended September 30, 2005.
Loss on extinguishment of debt was $15.4 million, or $0.29 per
share, for the third quarter and $18.2 million, or $0.35 per share,
for the nine months ended September 30, 2006. The third quarter
amount relates to defeasance costs on a mortgage loan repaid upon a
property sale, and the year-to-date amount also includes an
adjustment to mark to market the debt associated with a property
contributed to a venture. Net Income Available to Common
Stockholders (�Net Income Available�) was $174.5 million, or $3.33
per share, for the third quarter of 2006 compared with Net Income
Available of $9.9 million, or $0.19 per share, for the third
quarter of 2005. Net Income Available was $179.4 million, or $3.44
per share, for the nine months ended September 30, 2006 compared
with $21.9 million, or $0.42 per share, for the nine months ended
September 30, 2005. Third quarter highlights of the Company
included the following: Sold Frost Bank Tower, a
531,000-square-foot office building in Austin, Texas, for $188
million, or $354 per square foot. GAAP gains and Value Creation on
this transaction were $54 million and $44 million, respectively.
Through CSC Associates, sold Bank of America Plaza, a 1.25
million-square-foot office building in Atlanta, for $436 million,
or $348 per square foot. The Company�s share of GAAP gains and
Value Creation on this transaction were $133 million and $88
million, respectively. Purchased all the interests in 191 Peachtree
Tower, a 1.2 million-square-foot office building in downtown
Atlanta, for $153 million, or $127 per square foot. Executed a
274,000-square-foot lease with the American Cancer Society at
Inforum in downtown Atlanta. This space will be the Society�s
international headquarters. Through a joint venture with Seefried
Properties, Inc., acquired 85 acres of land north of DFW
International Airport in Flower Mound, Texas, for development of
Lakeside Ranch Business Park, a 1.7 million-square-foot industrial
project. The Company also executed a 355,000-square-foot lease with
Home Depot Supply at the first building in Lakeside Ranch. Through
a joint venture with Faison Enterprises, Inc., acquired
approximately 100 acres of land in Murfreesboro, Tennessee, closed
a $131 million construction loan and began construction of Phase I
and II of The Avenue Murfreesboro, an 805,000-square-foot lifestyle
and power center. Opened the first phase of The Avenue Webb Gin, a
381,000-square-foot specialty retail center in Gwinnett County,
Georgia. Acquired the first 1,600 acres of the planned 3,000 acre
Blalock Lakes development, a residential community in Coweta
County, Georgia, that will include private hunting, equestrian,
fishing, swim and tennis facilities in a controlled access
community. Executed a contract to sell 12 ground leased outparcels
at the Company�s North Point property for an aggregate price of $24
million. The aggregate gain on the sale of these outparcels is
estimated to be $20 million and these gains will be included in the
Company�s calculation of FFO upon closing. The Company expects to
close seven parcels in the fourth quarter of 2006 and five in the
first quarter of 2007. Other developments subsequent to
quarter-end: Sold The Avenue of the Peninsula, a 373,000 square
foot specialty retail center in Rolling Hills Estates, California,
for approximately $96 million. At September 30, 2006, the Company�s
portfolio of operational office buildings was 87% leased, and its
portfolio of operational retail centers was 93% leased. At
September 30, 2006, the Company and its joint ventures had nine
retail, office and industrial projects under development and
redevelopment totaling 5.8 million Company-owned square feet, and
one condominium project under development containing a total of 529
units. The Company estimates the total cost of these projects will
be $1.1 billion and expects completion of these projects throughout
the next four years. In addition, the Company had 23 residential
communities under development directly or through investments in
unconsolidated entities in which approximately 11,400 lots remain
to be developed and/or sold. �Summer can be a slow time in the real
estate business, but that was certainly not the case here at
Cousins. We were able to close several significant transactions,
including two record-setting office building sales and an important
trophy tower acquisition in downtown Atlanta, while also signing
downtown�s largest office lease this year and opening our fourth
Atlanta-area Avenue project,� said Tom Bell, president and CEO of
Cousins. �During the quarter, we also started Blalock Lakes � a
unique Atlanta-area residential project with more than 1,500 acres
of land preserved for game and wildlife that is already seeing
tremendous buyer demand � and we signed a lease for more than half
of our first Dallas-area industrial building." �From the
value-capturing transactions to our pending headquarters move
downtown, this is turning out to be an important year for our
company,� Bell added. �We expect the fourth quarter to continue
that trend.� 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)
857-2503. The Company will conduct a conference call at 2:00 p.m.
(Eastern time) on Tuesday, November 7, 2006, to discuss the results
of the quarter ended September 30, 2006. The number to call for
this interactive teleconference is (913)�981-5520. A replay of the
conference call will be available for 14 days by dialing (719)
457-0820 and entering the pass code 1316543. The Company will also
provide an online Web simulcast and rebroadcast of its third
quarter 2006 earnings release conference call. The live broadcast
will be available through the �Q3 2006 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 14 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, multi-family, retail, industrial and
land development projects. The Company�s portfolio consists of
interests in 6.9 million square feet of office space, 4.6 million
square feet of retail space, 2.0 million square feet of industrial
space, a 529 unit for-sale multi-family project under development,
over 9,000 acres of strategically located land tracts for sale or
future development, and significant land holdings for development
of single-family residential communities. The Company also provides
leasing and management services to third-party investors; its
client-services portfolio comprises 14.9 million square feet of
office and retail space. The Company 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 its 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, the
ability of the Company to close properties under contract and other
risks detailed from time to time in the Company�s filings with the
Securities and Exchange Commission, including the Company�s Annual
Report on Form 10-K for the year ended December 31, 2005. 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. The
estimated value creation of $132 million for Frost Bank Tower and
the Company�s share of Bank of America Plaza is calculated as
estimated GAAP gain of $187 million less accumulated depreciation
of $60 million, plus the effect of straight-lined rents receivable
and income tax effect of $5 million. �Value Creation� is defined as
the value or sales price of a property less any applicable closing
costs and less the GAAP cost of the property before deducting
accumulated depreciation and excluding any straight-line rent
receivable, all as of the measurement date. Where the ownership
entity is a venture, the Company�s share of these items is used in
these calculations. Value Creation is useful in determining the
economic gain or loss inherent in a property. For example, to the
extent that GAAP depreciation is recorded against an asset when the
asset has in fact appreciated, it is helpful to eliminate this
portion of the GAAP gain in order to reflect the true economic
gain. As such, Value Creation is useful to investors as a measure
of a company�s ability to create value by developing or acquiring
an investment which has a fair market value in excess of the cost
incurred by the company to create the investment. Company
management considers Value Creation a key objective and core
competency of the Company and uses this as an additional measure in
assessing performance of the Company and its officers and
employees. COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES FUNDS
FROM OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,
2006 AND 2005 (Unaudited, in thousands, except per share amounts) �
� Three Months Ended Nine Months Ended September 30, September 30,
2006� 2005� 2006� 2005� � Net Income Available to Common
Stockholders $ 174,455� $ 9,923� $ 179,367� $ 21,914� Depreciation
and amortization: Consolidated properties 7,834� 7,238� 29,479�
23,581� Discontinued properties 1,221� 1,334� 4,088� 3,954� Share
of unconsolidated joint ventures 2,932� 2,045� 7,010� 6,873�
Depreciation of furniture, fixtures and equipment and amortization
of specifically identifiable intangible assets: Consolidated
properties (702) (730) (2,391) (2,094) Share of unconsolidated
joint ventures (4) (4) (12) (74) Gain on sale of investment
properties, net of applicable income tax provision: Consolidated
(244) (796) (1,110) (13,201) Discontinued properties (54,068)
(1,070) (54,394) (1,107) Share of unconsolidated joint ventures
(133,192) (1,633) (134,246) (1,945) Gain on sale of undepreciated
investment properties 179� 732� 914� 13,010� � Funds From
Operations Available to Common Stockholders, as defined (1,589)
17,039� 28,705� 50,911� � Loss on extinguishment of debt 15,443� -�
18,207� -� � Funds From Operations Available to Common
Stockholders, Excluding Loss on Extinguishment of Debt $ 13,854� $
17,039� $ 46,912� $ 50,911� � � Per Common Share - Basic: Net
Income Available $ 3.45� $ .20� $ 3.56� $ .44� Funds From
Operations $ (.03) $ .34� $ .57� $ 1.02� Funds From Operations,
Excluding Loss on Extinguishment of Debt $ .27� $ .34� $ .93� $
1.02� Weighted Average Shares-Basic 50,630� 50,079� 50,436� 49,932�
� Per Common Share - Diluted: Net Income Available $ 3.33� $ .19� $
3.44� $ .42� Funds From Operations $ (.03) $ .33� $ .55� $ .98�
Funds From Operations, Excluding Loss on Extinguishment of Debt $
.26� $ .33� $ .90� $ .98� Weighted Average Shares-Diluted 52,428�
52,013� 52,106� 51,759� The table above shows Funds From Operations
Available to Common Stockholders (�FFO�) and the related
reconciliation to Net Income (Loss) Available to Common
Stockholders ("Net Income Available") for Cousins Properties
Incorporated and Subsidiaries. The Company calculated 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. The Company presented
Funds From Operations Available to Common Stockholders, Excluding
Loss on Extinguishment of Debt to exclude the effect of the losses
incurred during the second and third quarters of 2006. The Company
views those losses as components of the sale or exchange of real
estate and therefore believes they should be excluded from the FFO
calculation. See further detail within Discussion of Non-GAAP
Financial Measures herein. 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, from GAAP
net income. 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 June 30, Nine Months Ended June 30, September 30, September
30, 2006� 2005� 2006� 2005� REVENUES: Rental property revenues $
21,772� $ 21,476� $ 72,420� $ 63,533� Fee income 3,431� 4,801�
12,353� 12,622� Multi-family residential unit sales 1,026� 4,986�
22,741� 4,986� Residential lot and outparcel sales 4,572� 10,946�
12,206� 17,006� Interest and other 400� 883� 3,944� 2,036� 31,201�
43,092� 123,664� 100,183� � COSTS AND EXPENSES: Rental property
operating expenses 9,167� 8,502� 28,255� 24,569� General and
administrative expenses 9,095� 8,943� 28,932� 25,836� Depreciation
and amortization 7,834� 7,238� 29,479� 23,581� Multi-family
residential unit cost of sales 1,346� 4,274� 19,081� 4,274�
Residential lot and outparcel cost of sales 3,425� 8,350� 8,926�
12,492� Interest expense 2,625� 1,675� 11,119� 6,559� Loss on
extinguishment of debt 15,443� -� 18,207� -� Other 414� 266� 1,349�
694� 49,349� 39,248� 145,348� 98,005� � INCOME (LOSS) FROM
CONTINUING OPERATIONS BEFORE TAXES AND INCOME FROM UNCONSOLIDATED
JOINT VENTURES (18,148) 3,844� (21,684) 2,178� � PROVISION FOR
INCOME TAXES FROM OPERATIONS (7) (2,021) (4,301) (3,947) � MINORITY
INTEREST IN INCOME OF CONSOLIDATED SUBSIDIARIES (899) (560) (3,290)
(1,349) � INCOME FROM UNCONSOLIDATED JOINT VENTURES 142,355�
10,008� 162,882� 20,791� � INCOME FROM CONTINUING OPERATIONS BEFORE
GAIN ON SALE OF INVESTMENT PROPERTIES 123,301� 11,271� 133,607�
17,673� � GAIN ON SALE OF INVESTMENT PROPERTIES, NET OF APPLICABLE
INCOME TAX PROVISION 244� 796� 1,110� 13,201� � INCOME FROM
CONTINUING OPERATIONS 123,545� 12,067� 134,717� 30,874� �
DISCONTINUED OPERATIONS, NET OF APPLICABLE INCOME TAX PROVISION:
Income from discontinued operations 654� 598� 1,693� 1,370� Gain on
sale of investment properties 54,068� 1,070� 54,394� 1,107� 54,722�
1,668� 56,087� 2,477� � NET INCOME 178,267� 13,735� 190,804�
33,351� � DIVIDENDS TO PREFERRED STOCKHOLDERS (3,812) (3,812)
(11,437) (11,437) � NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $
174,455� $ 9,923� $ 179,367� $ 21,914� � PER SHARE INFORMATION -
BASIC: Income from continuing operations $ 2.37� $ 0.17� $ 2.45� $
0.39� Income from discontinued operations 1.08� 0.03� 1.11� 0.05�
Net income available to common stockholders $ 3.45� $ 0.20� $ 3.56�
$ 0.44� � PER SHARE INFORMATION - DILUTED: Income from continuing
operations $ 2.29� $ 0.16� $ 2.36� $ 0.38� Income from discontinued
operations 1.04� 0.03� 1.08� 0.05� Net income available to common
stockholders $ 3.33� $ 0.19� $ 3.44� $ 0.42� � CASH DIVIDENDS
DECLARED PER COMMON SHARE $ 0.37� $ 0.37� $ 1.11� $ 1.11� �
WEIGHTED AVERAGE SHARES - BASIC 50,630� 50,079� 50,436� 49,932� �
WEIGHTED AVERAGE SHARES - DILUTED 52,428� 52,013� 52,106� 51,759�
Cousins Properties Incorporated (NYSE:CUZ) today reported its
results of operations for the three and nine months ended September
30, 2006. 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. Funds from Operations to Common
Stockholders ("FFO") was $13.9 million, or $0.26 per share, for the
third quarter of 2006, after a supplemental adjustment to exclude
loss on extinguishment of debt. This compares to FFO of $17.0
million, or $0.33 per share, for the third quarter of 2005. FFO was
$46.9 million, or $0.90 per share, for the nine months ended
September 30, 2006, after a supplemental adjustment to exclude loss
on extinguishment of debt. This compares to FFO of $50.9 million,
or $0.98 per share, for the nine months ended September 30, 2005.
Loss on extinguishment of debt was $15.4 million, or $0.29 per
share, for the third quarter and $18.2 million, or $0.35 per share,
for the nine months ended September 30, 2006. The third quarter
amount relates to defeasance costs on a mortgage loan repaid upon a
property sale, and the year-to-date amount also includes an
adjustment to mark to market the debt associated with a property
contributed to a venture. Net Income Available to Common
Stockholders ("Net Income Available") was $174.5 million, or $3.33
per share, for the third quarter of 2006 compared with Net Income
Available of $9.9 million, or $0.19 per share, for the third
quarter of 2005. Net Income Available was $179.4 million, or $3.44
per share, for the nine months ended September 30, 2006 compared
with $21.9 million, or $0.42 per share, for the nine months ended
September 30, 2005. Third quarter highlights of the Company
included the following: -- Sold Frost Bank Tower, a
531,000-square-foot office building in Austin, Texas, for $188
million, or $354 per square foot. GAAP gains and Value Creation on
this transaction were $54 million and $44 million, respectively. --
Through CSC Associates, sold Bank of America Plaza, a 1.25
million-square-foot office building in Atlanta, for $436 million,
or $348 per square foot. The Company's share of GAAP gains and
Value Creation on this transaction were $133 million and $88
million, respectively. -- Purchased all the interests in 191
Peachtree Tower, a 1.2 million-square-foot office building in
downtown Atlanta, for $153 million, or $127 per square foot. --
Executed a 274,000-square-foot lease with the American Cancer
Society at Inforum in downtown Atlanta. This space will be the
Society's international headquarters. -- Through a joint venture
with Seefried Properties, Inc., acquired 85 acres of land north of
DFW International Airport in Flower Mound, Texas, for development
of Lakeside Ranch Business Park, a 1.7 million-square-foot
industrial project. The Company also executed a 355,000-square-foot
lease with Home Depot Supply at the first building in Lakeside
Ranch. -- Through a joint venture with Faison Enterprises, Inc.,
acquired approximately 100 acres of land in Murfreesboro,
Tennessee, closed a $131 million construction loan and began
construction of Phase I and II of The Avenue Murfreesboro, an
805,000-square-foot lifestyle and power center. -- Opened the first
phase of The Avenue Webb Gin, a 381,000-square-foot specialty
retail center in Gwinnett County, Georgia. -- Acquired the first
1,600 acres of the planned 3,000 acre Blalock Lakes development, a
residential community in Coweta County, Georgia, that will include
private hunting, equestrian, fishing, swim and tennis facilities in
a controlled access community. -- Executed a contract to sell 12
ground leased outparcels at the Company's North Point property for
an aggregate price of $24 million. The aggregate gain on the sale
of these outparcels is estimated to be $20 million and these gains
will be included in the Company's calculation of FFO upon closing.
The Company expects to close seven parcels in the fourth quarter of
2006 and five in the first quarter of 2007. Other developments
subsequent to quarter-end: -- Sold The Avenue of the Peninsula, a
373,000 square foot specialty retail center in Rolling Hills
Estates, California, for approximately $96 million. At September
30, 2006, the Company's portfolio of operational office buildings
was 87% leased, and its portfolio of operational retail centers was
93% leased. At September 30, 2006, the Company and its joint
ventures had nine retail, office and industrial projects under
development and redevelopment totaling 5.8 million Company-owned
square feet, and one condominium project under development
containing a total of 529 units. The Company estimates the total
cost of these projects will be $1.1 billion and expects completion
of these projects throughout the next four years. In addition, the
Company had 23 residential communities under development directly
or through investments in unconsolidated entities in which
approximately 11,400 lots remain to be developed and/or sold.
"Summer can be a slow time in the real estate business, but that
was certainly not the case here at Cousins. We were able to close
several significant transactions, including two record-setting
office building sales and an important trophy tower acquisition in
downtown Atlanta, while also signing downtown's largest office
lease this year and opening our fourth Atlanta-area Avenue
project," said Tom Bell, president and CEO of Cousins. "During the
quarter, we also started Blalock Lakes - a unique Atlanta-area
residential project with more than 1,500 acres of land preserved
for game and wildlife that is already seeing tremendous buyer
demand - and we signed a lease for more than half of our first
Dallas-area industrial building." "From the value-capturing
transactions to our pending headquarters move downtown, this is
turning out to be an important year for our company," Bell added.
"We expect the fourth quarter to continue that trend." 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) 857-2503. The Company will conduct a
conference call at 2:00 p.m. (Eastern time) on Tuesday, November 7,
2006, to discuss the results of the quarter ended September 30,
2006. The number to call for this interactive teleconference is
(913) 981-5520. A replay of the conference call will be available
for 14 days by dialing (719) 457-0820 and entering the pass code
1316543. The Company will also provide an online Web simulcast and
rebroadcast of its third quarter 2006 earnings release conference
call. The live broadcast will be available through the "Q3 2006
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 14 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, multi-family, retail, industrial and
land development projects. The Company's portfolio consists of
interests in 6.9 million square feet of office space, 4.6 million
square feet of retail space, 2.0 million square feet of industrial
space, a 529 unit for-sale multi-family project under development,
over 9,000 acres of strategically located land tracts for sale or
future development, and significant land holdings for development
of single-family residential communities. The Company also provides
leasing and management services to third-party investors; its
client-services portfolio comprises 14.9 million square feet of
office and retail space. The Company 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 its 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, the
ability of the Company to close properties under contract and other
risks detailed from time to time in the Company's filings with the
Securities and Exchange Commission, including the Company's Annual
Report on Form 10-K for the year ended December 31, 2005. 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. The
estimated value creation of $132 million for Frost Bank Tower and
the Company's share of Bank of America Plaza is calculated as
estimated GAAP gain of $187 million less accumulated depreciation
of $60 million, plus the effect of straight-lined rents receivable
and income tax effect of $5 million. "Value Creation" is defined as
the value or sales price of a property less any applicable closing
costs and less the GAAP cost of the property before deducting
accumulated depreciation and excluding any straight-line rent
receivable, all as of the measurement date. Where the ownership
entity is a venture, the Company's share of these items is used in
these calculations. Value Creation is useful in determining the
economic gain or loss inherent in a property. For example, to the
extent that GAAP depreciation is recorded against an asset when the
asset has in fact appreciated, it is helpful to eliminate this
portion of the GAAP gain in order to reflect the true economic
gain. As such, Value Creation is useful to investors as a measure
of a company's ability to create value by developing or acquiring
an investment which has a fair market value in excess of the cost
incurred by the company to create the investment. Company
management considers Value Creation a key objective and core
competency of the Company and uses this as an additional measure in
assessing performance of the Company and its officers and
employees. -0- *T COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
FUNDS FROM OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER
30, 2006 AND 2005 (Unaudited, in thousands, except per share
amounts) Three Months Ended Nine Months Ended September 30,
September 30, ------------------ ------------------ 2006 2005 2006
2005 --------- -------- --------- -------- Net Income Available to
Common Stockholders $174,455 $9,923 $179,367 $21,914 Depreciation
and amortization: Consolidated properties 7,834 7,238 29,479 23,581
Discontinued properties 1,221 1,334 4,088 3,954 Share of
unconsolidated joint ventures 2,932 2,045 7,010 6,873 Depreciation
of furniture, fixtures and equipment and amortization of
specifically identifiable intangible assets: Consolidated
properties (702) (730) (2,391) (2,094) Share of unconsolidated
joint ventures (4) (4) (12) (74) Gain on sale of investment
properties, net of applicable income tax provision: Consolidated
(244) (796) (1,110) (13,201) Discontinued properties (54,068)
(1,070) (54,394) (1,107) Share of unconsolidated joint ventures
(133,192) (1,633) (134,246) (1,945) Gain on sale of undepreciated
investment properties 179 732 914 13,010 --------- --------
--------- -------- Funds From Operations Available to Common
Stockholders, as defined (1,589) 17,039 28,705 50,911 Loss on
extinguishment of debt 15,443 - 18,207 - --------- --------
--------- -------- Funds From Operations Available to Common
Stockholders, Excluding Loss on Extinguishment of Debt $13,854
$17,039 $46,912 $50,911 --------- -------- --------- -------- Per
Common Share - Basic: Net Income Available $3.45 $.20 $3.56 $.44
--------- -------- --------- -------- Funds From Operations $(.03)
$.34 $.57 $1.02 --------- -------- --------- -------- Funds From
Operations, Excluding Loss on Extinguishment of Debt $.27 $.34 $.93
$1.02 --------- -------- --------- -------- Weighted Average
Shares-Basic 50,630 50,079 50,436 49,932 --------- --------
--------- -------- Per Common Share - Diluted: Net Income Available
$3.33 $.19 $3.44 $.42 --------- -------- --------- -------- Funds
From Operations $(.03) $.33 $.55 $.98 --------- -------- ---------
-------- Funds From Operations, Excluding Loss on Extinguishment of
Debt $.26 $.33 $.90 $.98 --------- -------- --------- --------
Weighted Average Shares-Diluted 52,428 52,013 52,106 51,759
--------- -------- --------- -------- *T The table above shows
Funds From Operations Available to Common Stockholders ("FFO") and
the related reconciliation to Net Income (Loss) Available to Common
Stockholders ("Net Income Available") for Cousins Properties
Incorporated and Subsidiaries. The Company calculated 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. The Company presented
Funds From Operations Available to Common Stockholders, Excluding
Loss on Extinguishment of Debt to exclude the effect of the losses
incurred during the second and third quarters of 2006. The Company
views those losses as components of the sale or exchange of real
estate and therefore believes they should be excluded from the FFO
calculation. See further detail within Discussion of Non-GAAP
Financial Measures herein. 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, from GAAP
net income. 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. -0- *T COUSINS PROPERTIES INCORPORATED
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except per share amounts) Three Months
Ended Nine Months Ended June 30, June 30, September 30, September
30, ------------------ ------------------ 2006 2005 2006 2005
--------- -------- --------- -------- REVENUES: Rental property
revenues $21,772 $21,476 $72,420 $63,533 Fee income 3,431 4,801
12,353 12,622 Multi-family residential unit sales 1,026 4,986
22,741 4,986 Residential lot and outparcel sales 4,572 10,946
12,206 17,006 Interest and other 400 883 3,944 2,036 ---------
-------- --------- -------- 31,201 43,092 123,664 100,183 COSTS AND
EXPENSES: Rental property operating expenses 9,167 8,502 28,255
24,569 General and administrative expenses 9,095 8,943 28,932
25,836 Depreciation and amortization 7,834 7,238 29,479 23,581
Multi-family residential unit cost of sales 1,346 4,274 19,081
4,274 Residential lot and outparcel cost of sales 3,425 8,350 8,926
12,492 Interest expense 2,625 1,675 11,119 6,559 Loss on
extinguishment of debt 15,443 - 18,207 - Other 414 266 1,349 694
--------- -------- --------- -------- 49,349 39,248 145,348 98,005
--------- -------- --------- -------- INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES AND INCOME FROM UNCONSOLIDATED JOINT
VENTURES (18,148) 3,844 (21,684) 2,178 PROVISION FOR INCOME TAXES
FROM OPERATIONS (7) (2,021) (4,301) (3,947) MINORITY INTEREST IN
INCOME OF CONSOLIDATED SUBSIDIARIES (899) (560) (3,290) (1,349)
INCOME FROM UNCONSOLIDATED JOINT VENTURES 142,355 10,008 162,882
20,791 --------- -------- --------- -------- INCOME FROM CONTINUING
OPERATIONS BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES 123,301
11,271 133,607 17,673 GAIN ON SALE OF INVESTMENT PROPERTIES, NET OF
APPLICABLE INCOME TAX PROVISION 244 796 1,110 13,201 ---------
-------- --------- -------- INCOME FROM CONTINUING OPERATIONS
123,545 12,067 134,717 30,874 DISCONTINUED OPERATIONS, NET OF
APPLICABLE INCOME TAX PROVISION: Income from discontinued
operations 654 598 1,693 1,370 Gain on sale of investment
properties 54,068 1,070 54,394 1,107 --------- -------- ---------
-------- 54,722 1,668 56,087 2,477 --------- -------- ---------
-------- NET INCOME 178,267 13,735 190,804 33,351 DIVIDENDS TO
PREFERRED STOCKHOLDERS (3,812) (3,812) (11,437) (11,437) ---------
-------- --------- -------- NET INCOME AVAILABLE TO COMMON
STOCKHOLDERS $174,455 $9,923 $179,367 $21,914 --------- --------
--------- -------- PER SHARE INFORMATION - BASIC: Income from
continuing operations $2.37 $0.17 $2.45 $0.39 Income from
discontinued operations 1.08 0.03 1.11 0.05 --------- --------
--------- -------- Net income available to common stockholders
$3.45 $0.20 $3.56 $0.44 --------- -------- --------- -------- PER
SHARE INFORMATION - DILUTED: Income from continuing operations
$2.29 $0.16 $2.36 $0.38 Income from discontinued operations 1.04
0.03 1.08 0.05 --------- -------- --------- -------- Net income
available to common stockholders $3.33 $0.19 $3.44 $0.42 ---------
-------- --------- -------- CASH DIVIDENDS DECLARED PER COMMON
SHARE $0.37 $0.37 $1.11 $1.11 --------- -------- --------- --------
WEIGHTED AVERAGE SHARES - BASIC 50,630 50,079 50,436 49,932
--------- -------- --------- -------- WEIGHTED AVERAGE SHARES -
DILUTED 52,428 52,013 52,106 51,759 --------- -------- ---------
-------- *T
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