CUZ Cousins Properties Inc

Cousins Properties Incorporated (NYSE:CUZ) today reported its results of operations for the three and six months ended June 30, 2007. All per share amounts are reported on a diluted basis; basic per share data is included in the Condensed Consolidated Statements of Income accompanying this release. Funds from Operations to Common Stockholders (�FFO�) was $9.4 million, or $0.18 per share, for the second quarter of 2007 compared with FFO of $13.9 million, or $0.27 per share, for the second quarter of 2006, after a supplemental adjustment to exclude loss on extinguishment of debt. FFO was $33.9 million, or $0.63 per share, for the six months ended June 30, 2007. This compares to FFO of $33.1 million, or $0.64 per share, for the six months ended June 30, 2006, after a supplemental adjustment to exclude loss on extinguishment of debt. Loss on extinguishment of debt was $2.8 million, or $0.05 per share, for the second quarter and six months ended June 30, 2006 and relates to the contribution of a property to a venture with a third party, which property was subject to a mortgage loan. Net Income Available to Common Stockholders (�Net Income Available�) was $395,000, or $0.01 per share, for the second quarter of 2007 compared with Net Loss Available of $3.5 million, or $(0.07) per share, for the second quarter of 2006. Net Income Available was $14.8 million, or $0.28 per share, for the six months ended June 30, 2007 compared with $4.9 million, or $0.09 per share, for the six months ended June 30, 2006. Second quarter highlights of the Company included the following: Commenced construction of Terminus 200, a 25-story, 565,000 square-foot office building at its Terminus project in the Buckhead district of Atlanta. Commenced construction of 10 Terminus Place, a 32-story, 142-unit condominium tower in the Buckhead district of Atlanta. Purchased 47 acres of land in Lancaster, Texas for a future industrial project with our joint venture partner, Seefried Industrial Properties. Repurchased 250,000 shares of common stock. Other developments subsequent to quarter-end: Purchased land and commenced construction of Tiffany Springs MarketCenter, a 680,000 square-foot power center in Kansas City, Missouri, anchored by Target, JCPenney, Best Buy, The Home Depot and Sports Authority. Sold 3301 Windy Ridge Parkway for $16.1 million. Through a joint venture, CP Venture Two LLC, sold Mansell Crossing- Phase II for $20.9 million. The Company�s share of these proceeds is $2.2 million. At June 30, 2007, the Company�s portfolio of operational office buildings was 86% leased, its portfolio of operational retail centers was 93% leased and its operational industrial building was 100% leased. At June 30, 2007, the Company and its joint ventures had eleven retail, office and industrial projects under development and redevelopment totaling 6.2 million Company-owned square feet, and two condominium projects under development containing a total of 671 units. The Company estimates the total cost of these projects will be approximately $1.4 billion and expects completion of these projects throughout the next four years. In addition, the Company and its joint ventures had 24 residential communities under development in which approximately 10,800 lots are available for future development and/or sale. �Except for the declining residential market, the second quarter provided good news for our long-term shareholders, as we continue to fill our development pipeline and create more value in our existing projects. In addition to starting Terminus 200, the third building at our landmark Terminus project in Atlanta, we have made significant progress in leasing at One Ninety One Peachtree Tower and more recently, entered the Kansas City market with Tiffany Springs MarketCenter,� said Tom Bell, chairman and CEO of Cousins Properties. The Condensed Consolidated Statements of Income, Condensed 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 (404) 407-1972. The Company will conduct a conference call at 10:00 a.m. (Eastern Time) on Friday, August 10, 2007, to discuss the results of the quarter ended June 30, 2007. The number to call for this interactive teleconference is (913)�981-4904. A replay of the conference call will be available for 14 days by dialing (719) 457-0820 and entering the passcode 4896428. The Company will also provide an online Web simulcast and rebroadcast of its second quarter 2007 earnings release conference call. The live broadcast will be available through the �Q2 2007 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 7.6 million square feet of office space, 5.3 million square feet of retail space, 2.0 million square feet of industrial space, two for-sale multi-family projects under development containing 671 units, 24 residential communities under development, over 9,100 acres of strategically located land tracts, 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 14.3 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 those described in Item 1A of the Company�s Annual Report on Form 10-K for the year ended December 31, 2006. 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. � COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited, in thousands, except per share amounts) � Three Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 REVENUES: Rental property revenues $ 25,499 $ 23,580 $ 49,629 $ 45,852 Fee income 9,860 7,755 17,926 16,136 Multi-family residential unit sales - 15,136 - 21,715 Residential lot and outparcel sales 1,476 3,129 2,902 7,634 Interest and other � 840 � � 90 � � 4,519 � � 452 � � 37,675 � � 49,690 � � 74,976 � � 91,789 � � COSTS AND EXPENSES: Rental property operating expenses 11,341 8,589 21,358 16,915 General and administrative expenses 15,604 13,476 30,294 27,051 Depreciation and amortization 8,721 7,655 18,082 15,340 Multi-family residential unit cost of sales - 12,377 - 17,735 Residential lot and outparcel cost of sales 1,085 2,298 2,293 5,501 Interest expense 531 4,880 531 8,494 Loss on extinguishment of debt - 2,764 - 2,764 Other � 758 � � 481 � � 1,118 � � 935 � � 38,040 � � 52,520 � � 73,676 � � 94,735 � � INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES, MINORITY INTEREST AND INCOME FROM UNCONSOLIDATED JOINT VENTURES (365 ) (2,830 ) 1,300 (2,946 ) � BENEFIT (PROVISION) FOR INCOME TAXES FROM OPERATIONS 1,073 (1,926 ) 2,100 (4,296 ) � MINORITY INTEREST IN INCOME OF CONSOLIDATED SUBSIDIARIES (842 ) (1,313 ) (1,704 ) (2,391 ) � INCOME FROM UNCONSOLIDATED JOINT VENTURES � 4,101 � � 8,404 � � 7,809 � � 20,527 � � INCOME FROM CONTINUING OPERATIONS BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES 3,967 2,335 9,505 10,894 � GAIN ON SALE OF INVESTMENT PROPERTIES, NET OF APPLICABLE INCOME TAX PROVISION � 40 � � 61 � � 4,480 � � 866 � � INCOME FROM CONTINUING OPERATIONS 4,007 2,396 13,985 11,760 � DISCONTINUED OPERATIONS, NET OF APPLICABLE INCOME TAX PROVISION: Income (loss) from discontinued operations 200 (2,202 ) 278 451 Gain on sale of investment properties � - � � 135 � � 8,164 � � 326 � � 200 � � (2,067 ) � 8,442 � � 777 � � NET INCOME 4,207 329 22,427 12,537 � DIVIDENDS TO PREFERRED STOCKHOLDERS � (3,812 ) � (3,812 ) � (7,625 ) � (7,625 ) � NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ 395 � $ (3,483 ) $ 14,802 � $ 4,912 � � PER SHARE INFORMATION - BASIC: Income (loss) from continuing operations $ 0.01 $ (0.03 ) $ 0.13 $ 0.08 Income (loss) from discontinued operations � 0.00 � � (0.04 ) � 0.16 � � 0.02 � Basic net income (loss) available to common stockholders $ 0.01 � $ (0.07 ) $ 0.29 � $ 0.10 � � PER SHARE INFORMATION - DILUTED: Income (loss) from continuing operations $ 0.01 $ (0.03 ) $ 0.12 $ 0.08 Income (loss) from discontinued operations � 0.00 � � (0.04 ) � 0.16 � � 0.01 � Diluted net income (loss) available to common stockholders $ 0.01 � $ (0.07 ) $ 0.28 � $ 0.09 � � CASH DIVIDENDS DECLARED PER COMMON SHARE $ 0.37 � $ 0.37 � $ 0.74 � $ 0.74 � � WEIGHTED AVERAGE SHARES � 51,825 � � 50,385 � � 51,772 � � 50,377 � � DILUTED WEIGHTED AVERAGE SHARES � 53,306 � � 50,385 � � 53,440 � � 52,019 � � COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES FUNDS FROM OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006 (Unaudited, in thousands, except per share amounts) � Three Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 � Net Income (Loss) Available to Common Stockholders $ 395 $ (3,483 ) $ 14,802 $ 4,912 Depreciation and amortization: Consolidated properties 8,721 7,655 18,082 15,340 Discontinued properties (14 ) 6,034 145 9,172 Share of unconsolidated joint ventures 1,089 2,016 2,170 4,078 Depreciation of furniture, fixtures and equipment and amortization of specifically identifiable intangible assets: Consolidated properties (758 ) (868 ) (1,259 ) (1,689 ) Share of unconsolidated joint ventures - (4 ) - (8 ) Gain on sale of investment properties, net of applicable income tax provision: Consolidated (40 ) (61 ) (4,480 ) (866 ) Discontinued properties - (135 ) (8,164 ) (326 ) Share of unconsolidated joint ventures (10 ) (1 ) 34 (1,054 ) Gain (loss) on sale of undepreciated investment properties � - � � (5 ) � 12,540 � � 735 � � Funds From Operations Available to Common Stockholders, as defined $ 9,383 $ 11,148 $ 33,870 $ 30,294 � Loss on extinguishment of debt � - � � 2,764 � � - � � 2,764 � � Funds From Operations Available to Common Stockholders, Excluding Loss on Extinguishment of Debt $ 9,383 � $ 13,912 � $ 33,870 � $ 33,058 � � � Per Common Share - Basic: Net Income (Loss) Available $ .01 � $ (.07 ) $ .29 � $ .10 � Funds From Operations $ .18 � $ .22 � $ .65 � $ .60 � Funds From Operations, Excluding Loss on Extinguishment of Debt $ .18 � $ .28 � $ .65 � $ .66 � Weighted Average Shares-Basic � 51,825 � � 50,385 � � 51,772 � � 50,377 � � Per Common Share - Diluted: Net Income (Loss) Available $ .01 � $ (.07 ) $ .28 � $ .09 � Funds From Operations $ .18 � $ .21 � $ .63 � $ .58 � Funds From Operations, Excluding Loss on Extinguishment of Debt $ .18 � $ .27 � $ .63 � $ .64 � Weighted Average Shares-Diluted � 53,306 � � 52,031 � � 53,440 � � 52,019 � 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 loss incurred on debt transferred to a venture during the second quarter of 2006. The Company views the mark-to-market debt adjustment as a component of the transaction and therefore should be excluded from the FFO calculation. 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 in part 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.