CUZ Cousins Properties Inc

Cousins Properties Incorporated (NYSE:CUZ) today reported its results of operations for the three months and year ended December 31, 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 $7.3 million, or $0.14 per share, for the fourth quarter of 2007 compared with FFO of $27.6 million, or $0.52 per share, for the fourth quarter of 2006. FFO was $48.4 million, or $0.92 per share, for the year ended December 31, 2007 compared with FFO of $74.5 million, or $1.42 per share, for the year ended December 31, 2006, after a supplemental adjustment to exclude loss on extinguishment of debt. Loss on extinguishment of debt was $18.2 million, or $0.35 per share, for the year ended December 31, 2006 and relates to defeasance costs on a mortgage loan repaid upon a property sale and an adjustment to mark-to-market the debt associated with a property contributed to a venture. For the fourth quarter of 2007, the Company generated a Net Loss Available to Common Stockholders of $5.0 million or $0.10 per share, as compared to Net Income Available to Common Stockholders (�Net Income Available�) of $38.1 million, or $0.72 per share, for the fourth quarter of 2006. Net Income Available was $17.7 million, or $0.34 per share, for the year ended December 31, 2007 compared with $217.4 million, or $4.14 per share, for the year ended December 31, 2006. Net Income Available for the year ended December 31, 2007 decreased as a result of the recognition of approximately $222.1 million in prior year gains on the sale of six operating properties in 2006. Fourth quarter highlights of the Company included the following: Celebrated the grand opening of The Avenue Murfreesboro, an 810,000 square foot open air retail center in suburban Nashville. Formed a joint venture with Prudential to construct Terminus 200, a 565,000 square foot office building in the Buckhead district of Atlanta, and closed a $138 million construction loan to finance the project. Closed 280 units at 50 Biscayne, its 529-unit condominium project in Miami. Closed a $180 million, non-recourse, 5-year mortgage loan on Terminus 100. Closed an $83 million, non-recourse, 3-year mortgage loan on San Jose MarketCenter. Repurchased 628,500 shares of Company common stock. Other developments subsequent to year-end: Executed a 260,000 square foot lease renewal and expansion with Deloitte & Touche at One Ninety One Peachtree Tower. At December 31, 2007, the Company�s portfolio of operational office buildings was 92% leased, its portfolio of operational retail centers was 91% leased and its operational industrial building was 52% leased. At December 31, 2007, the Company and its joint ventures had 10 retail, office and industrial projects under development and redevelopment totaling 5.6 million Company-owned square feet, and three multi-family projects under development containing a total of 737 units, of which 280 were closed by year-end and 35 were closed in January 2008. The Company estimates the total cost of these projects will be approximately $1.3 billion and expects completion of these projects throughout the next three years. In addition, the Company and its joint ventures had 24 residential communities under various stages of development in which approximately 1,800 completed lots are in inventory and an additional 8,700 lots are available for future development and/or sale. �Last year provided an interesting contrast between better than expected results on the leasing side and worse than expected declines in the land and residential markets. One large positive from 2007 is the work our team did to manage our capital base, recasting our $500 million credit facility and financing several stabilized projects to ensure the Company is well capitalized heading into 2008,� said Tom Bell, chairman and CEO of Cousins Properties. �Given the difficult economic outlook for this year, we are focused on leasing our existing and under-development projects and preparing to move quickly should good investment opportunities become available during the downturn. Over our 50 years, Cousins has weathered many cycles and I believe we are well positioned to handle this one.� 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 Tuesday, February 12, 2008, to discuss the results of the quarter ended December 31, 2007. The number to call for this interactive teleconference is (800) 240-2134. A replay of the conference call will be available for 14 days by dialing (303) 590-3000 and entering the passcode 11106004#. The replay can be accessed on the Company�s Web site, www.cousinsproperties.com, through the �4Q 2007 Cousins Properties Incorporated Earnings Conference Call� link on the Investor Relations page, 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 7.7 million square feet of office space, 4.8 million square feet of retail space, 2.0 million square feet of industrial space, 737 for-sale units in three under-development multi-family projects, 24 residential communities under various stages of development, approximately 9,000 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 12.0 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 (including the overall condition of the residential market), 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 Years ended December 31, December 31, 2007 2006 2007 2006 � REVENUES: Rental property revenues $ 32,376 $ 23,639 $ 112,669 $ 88,996 Fee income 7,875 12,008 36,314 35,465 Multi-family residential unit sales - 393 20 23,134 Residential lot and outparcel sales 2,496 5,078 9,949 17,284 Interest and other 1,490 � 542 � 6,429 � 1,373 � 44,237 � 41,660 � 165,381 � 166,252 � � COSTS AND EXPENSES: Rental property operating expenses 13,265 10,274 47,196 35,243 General and administrative expenses 12,797 18,556 57,810 58,592 Depreciation and amortization 11,861 9,537 40,490 31,504 Multi-family residential unit cost of sales (100 ) 322 (124 ) 19,403 Residential lot and outparcel cost of sales 2,125 3,825 7,809 12,751 Interest expense 5,020 - 8,816 11,119 Loss on extinguishment of debt - - 446 18,207 Other 650 � 1,460 � 2,822 � 2,809 � 45,618 � 43,974 � 165,265 � 189,628 � � INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES, MINORITY INTEREST AND INCOME FROM UNCONSOLIDATED JOINT VENTURES (1,381 ) (2,314 ) 116 (23,376 ) � BENEFIT (PROVISION) FOR INCOME TAXES FROM OPERATIONS 517 108 4,423 (4,193 ) � MINORITY INTEREST IN INCOME OF CONSOLIDATED SUBSIDIARIES (238 ) (840 ) (1,656 ) (4,130 ) � INCOME (LOSS) FROM UNCONSOLIDATED JOINT VENTURES (815 ) 10,201 � 6,096 � 173,083 � � INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES (1,917 ) 7,155 8,979 141,384 � GAIN ON SALE OF INVESTMENT PROPERTIES, NET OF APPLICABLE INCOME TAX PROVISION 678 � 1,902 � 5,535 � 3,012 � � INCOME (LOSS) FROM CONTINUING OPERATIONS (1,239 ) 9,057 14,514 144,396 � DISCONTINUED OPERATIONS, NET OF APPLICABLE INCOME TAX PROVISION: � Income (loss) from discontinued operations (8 ) 729 313 1,800 Gain on sale of investment properties 81 � 32,101 � 18,095 � 86,495 � 73 � 32,830 � 18,408 � 88,295 � � NET INCOME (LOSS) (1,166 ) 41,887 32,922 232,691 � DIVIDENDS TO PREFERRED STOCKHOLDERS (3,813 ) (3,813 ) (15,250 ) (15,250 ) � NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ (4,979 ) $ 38,074 � $ 17,672 � $ 217,441 � � PER COMMON SHARE INFORMATION - BASIC: Income (loss) from continuing operations $ (0.10 ) $ 0.10 $ (0.01 ) $ 2.55 Income from discontinued operations 0.00 � 0.64 � 0.35 � 1.74 � Net income (loss) available to common stockholders $ (0.10 ) $ 0.74 � $ 0.34 � $ 4.29 � � PER COMMON SHARE INFORMATION - DILUTED: Income (loss) from continuing operations $ (0.10 ) $ 0.10 $ (0.01 ) $ 2.46 Income from discontinued operations 0.00 � 0.62 � 0.35 � 1.68 � Net income (loss) available to common stockholders $ (0.10 ) $ 0.72 � $ 0.34 � $ 4.14 � � CASH DIVIDENDS DECLARED PER COMMON SHARE $ 0.37 � $ 3.77 � $ 1.48 � $ 4.88 � � WEIGHTED AVERAGE SHARES - BASIC 51,588 � 51,306 � 51,705 � 50,655 � � WEIGHTED AVERAGE SHARES - DILUTED 51,588 � 53,286 � 51,705 � 52,513 � COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES FUNDS FROM OPERATIONS FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2007 AND 2006 (Unaudited, in thousands, except per share amounts) � � � Three Months Ended Years Ended December 31, December 31, 2007 2006 2007 2006 � Net Income (Loss) Available to Common Stockholders $ (4,979 ) $ 38,074 $ 17,672 $ 217,441 Depreciation and amortization: Consolidated properties 11,861 9,537 40,490 31,504 Discontinued properties - 586 152 12,186 Share of unconsolidated joint ventures 1,274 1,821 4,576 8,831 Depreciation of furniture, fixtures and equipment and amortization of specifically identifiable intangible assets: � Consolidated properties (775 ) (520 ) (2,793 ) (2,911 ) Share of unconsolidated joint ventures (4 ) - (5 ) (12 ) Gain on sale of investment properties, net of applicable income tax provision: � Consolidated (678 ) (1,902 ) (5,535 ) (3,012 ) Discontinued properties (81 ) (32,101 ) (18,095 ) (86,495 ) Share of unconsolidated joint ventures 11 (1,372 ) (1,186 ) (135,618 ) Gain on sale of undepreciated investment properties 622 � 13,434 � 13,161 � 14,348 � � Funds From Operations Available to Common Stockholders, as defined $ 7,251 $ 27,557 $ 48,437 $ 56,262 � Certain loss on extinguishment of debt - � - � - � 18,207 � � Funds From Operations Available to Common Stockholders, Excluding Loss on Extinguishment of Debt $ 7,251 � $ 27,557 � $ 48,437 � $ 74,469 � � � Per Common Share - Basic: Net Income (Loss) Available $ (.10 ) $ .74 � $ .34 � $ 4.29 � Funds From Operations $ .14 � $ .54 � $ .94 � $ 1.11 � Funds From Operations, Excluding Loss on Extinguishment of Debt $ .14 � $ .54 � $ .94 � $ 1.47 � Weighted Average Shares-Basic 51,588 � 51,306 � 51,705 � 50,655 � � Per Common Share - Diluted: Net Income (Loss) Available $ (.10 ) $ .72 � $ .34 � $ 4.14 � Funds From Operations $ .14 � $ .52 � $ .92 � $ 1.07 � Funds From Operations, Excluding Loss on Extinguishment of Debt $ .14 � $ .52 � $ .92 � $ 1.42 � Weighted Average Shares-Diluted 52,401 � 53,286 � 52,932 � 52,513 � � 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 and to defeasance costs on a mortgage loan repaid upon a property sale in the third quarter of 2006.��The Company views the debt adjustments as components of the transactions and therefore believe they 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 key employees.