CUZ Cousins Properties Inc

Cousins Properties Incorporated (NYSE:CUZ) today reported its results of operations for the three and nine months ended September 30, 2008. 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 Available to Common Stockholders (�FFO�) was $20.9 million, or $0.41 per share, for the third quarter of 2008 compared with FFO of $7.3 million, or $0.14 per share, for the third quarter of 2007. FFO was $50.9 million, or $0.98 per share, for the nine months ended September 30, 2008, compared with $41.2 million, or $0.77 per share, for the same period in 2007. Net Income Available to Common Stockholders (�Net Income Available�) was $7.0 million, or $0.14 per share, for the third quarter of 2008 compared with Net Income Available of $7.8 million, or $0.15 per share, for the third quarter of 2007. Net Income Available was $11.7 million, or $0.23 per share, for the nine months ended September 30, 2008, compared with $22.7 million, or $0.43 per share, for the same period in 2007. Third quarter highlights of the Company included the following: Sold two outparcels ground leased by Red Robin and Men�s Wearhouse at The Avenue Carriage Crossing for $3.25 million, generating FFO of approximately $1.6 million. Through its CL Realty and Temco joint ventures, sold three land tracts for $5.3 million, generating gains of $3.3 million. The Company�s share of these gains, representing pre-tax FFO, is approximately $1.7 million. Through its 50 Biscayne joint venture, sold all of the remaining 120 residential units for $30.3 million. At quarter end, this venture held only seven unsold commercial units, three of which closed in October 2008. Commenced closings of units at its 10 Terminus Place residential project. The Company recognized approximately $744,000 of pre-tax gain on closings of nine of the 137 units. Received a pre-tax fee of approximately $13.5 million from a development contract, partially offset by a commission of approximately $3.4 million. Celebrated the grand opening of Tiffany Springs MarketCenter, a 584,000-square-foot power center in Kansas City, Missouri. This center was 87% leased at September 30, 2008. Entered into an $18.4 million mortgage loan secured by its Lakeshore Park Plaza office building. This non-recourse loan matures August 1, 2012 and bears interest at 5.89%. Other highlights subsequent to quarter-end: Sold its 3100 Windy Hill Road office building for $12.5 million, recognizing a gain on sale of approximately $2.5 million. Entered into two $75 million interest rate swaps on floating-rate LIBOR-based borrowings at 2.995% and 2.69% for two years. At September 30, 2008, the Company�s portfolio of operational office buildings was 94% leased (98% after the sale of the 3100 Windy Hill Road office building), its portfolio of operational retail centers was 91% leased and its operational industrial buildings were 40% leased. At September 30, 2008, the Company and its joint ventures had seven office and retail projects under development and redevelopment totaling 3.8 million Company-owned square feet, and two multi-family projects under development that will ultimately contain 208 units. The Company estimates its share of the total unfunded costs of these projects will be approximately $162.1 million and expects completion of these projects throughout the next three years. In addition, the Company and its joint ventures had 24 residential communities in which approximately 2,000 completed lots are in inventory and an additional 8,300 lots are available for future development and/or sale. �Given the economic conditions, our team continued to think creatively and delivered good results in the third quarter,� said Tom Bell, Chairman and CEO of Cousins. �While the current economic recession and constipated credit markets continue to make our business difficult, we believe the downturn will ultimately lead to strong, value-creating development and acquisition opportunities for Cousins.� 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 Thursday, November 6, 2008, to discuss the results of the quarter ended September 30, 2008. The number to call for this interactive teleconference is (303) 262-2053. A replay of the conference call will be available for 14 days by dialing (303) 590-3000 and entering the passcode 11120303#. The replay can be accessed on the Company�s Web site, www.cousinsproperties.com, through the �Q3 2008 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. Celebrating its 50th anniversary in 2008, Cousins Properties Incorporated is a leading diversified real estate company with extensive experience in development, acquisition, financing, management and leasing. Based in Atlanta, the Company actively invests in office, multi-family, retail, industrial and land development projects. Since its founding, Cousins has developed 20 million square feet of office space, 20 million square feet of retail space, more than 4,000 multi-family units and more than 60 single-family neighborhoods. The Company is a fully integrated equity real estate investment trust (REIT) and trades on the New York Stock Exchange under the symbol CUZ. For more, please visit 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 risk. These include, but are not limited to, general and local economic conditions (including the current general recession and state of the credit markets), local real estate conditions (including the overall condition of the residential markets), 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 Part I, Item 1A of the Company�s Annual Report on Form 10-K for the year ended December 31, 2007. 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 FUNDS FROM OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 (Unaudited, in thousands, except per share amounts) � � � � Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007 � Net Income Available to Common Stockholders $ 6,978 $ 7,849 $ 11,728 $ 22,651 Depreciation and amortization: Consolidated properties 13,272 10,380 37,148 28,109 Discontinued properties 138 174 486 672 Share of unconsolidated joint ventures 1,621 1,133 4,485 3,303 Depreciation of furniture, fixtures and equipment and amortization of specifically identifiable intangible assets: Consolidated properties (989 ) (752 ) (2,720 ) (1,999 ) Discontinued properties (6 ) (7 ) (19 ) (19 ) Share of unconsolidated joint ventures (27 ) (1 ) (78 ) (1 ) Gain on sale of investment properties, net of applicable income tax provision: Consolidated (1,387 ) (355 ) (10,391 ) (4,857 ) Discontinued properties - (9,872 ) - (18,014 ) Share of unconsolidated joint ventures - (1,232 ) - (1,198 ) Gain on sale of undepreciated investment properties 1,331 � (1 ) 10,223 � 12,539 � � Funds From Operations Available to Common Stockholders $ 20,931 � $ 7,316 � $ 50,862 � $ 41,186 � � � Per Common Share - Basic: Net Income Available $ .14 � $ .15 � $ .23 � $ .44 � Funds From Operations $ .41 � $ .14 � $ .99 � $ .80 � Weighted Average Shares-Basic 51,209 � 51,690 � 51,182 � 51,744 � � Per Common Share - Diluted: Net Income Available $ .14 � $ .15 � $ .23 � $ .43 � Funds From Operations $ .41 � $ .14 � $ .98 � $ .77 � Weighted Average Shares-Diluted 51,652 � 52,778 � 51,797 � 53,214 � � � 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 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. � FFO is used by industry analysts, investors and the Company 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. In addition to Company management evaluating the operating performance of its reportable segments based on FFO results, management uses FFO and FFO per share, along with other measures, to assess performance in connection with evaluating and granting incentive compensation to key employees. COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited, in thousands, except per share amounts) � � � � � Three Months Ended September 30, Nine Months Ended September 30, 2008 � 2007 2008 � 2007 REVENUES: Rental property revenues $ 38,337 $ 30,659 $ 109,344 $ 80,275 Fee income 21,736 10,513 37,096 28,439 Multi-family residential sales 5,459 20 5,459 20 Residential lot and outparcel sales 3,747 4,551 6,746 7,453 Interest and other 991 � � 439 � 3,291 � � 4,939 � 70,270 � � 46,182 � 161,936 � � 121,126 � � COSTS AND EXPENSES: Rental property operating expenses 14,641 12,303 42,663 33,111 General and administrative expenses 13,020 9,862 32,733 31,514 Reimbursed general and administrative expenses 4,006 4,857 11,745 13,499 Depreciation and amortization 13,272 10,380 37,148 28,109 Multi-family residential cost of sales 4,715 23 4,715 (24 ) Residential lot and outparcel cost of sales 1,917 3,344 3,695 5,684 Interest expense 8,705 3,265 22,347 3,796 Loss on extinguishment of debt - 446 - 446 Other 1,975 � � 1,054 � 4,279 � � 2,172 � 62,251 � � 45,534 � 159,325 � � 118,307 � � INCOME FROM CONTINUING OPERATIONS BEFORE TAXES, MINORITY INTEREST AND INCOME FROM UNCONSOLIDATED JOINT VENTURES 8,019 648 2,611 2,819 � (PROVISION) BENEFIT FOR INCOME TAXES FROM OPERATIONS (916 ) 1,806 4,477 3,906 � MINORITY INTEREST IN INCOME (LOSS) OF CONSOLIDATED SUBSIDIARIES (766 ) 286 (1,688 ) (1,418 ) � INCOME (LOSS) FROM UNCONSOLIDATED JOINT VENTURES 3,497 � � (898 ) 8,553 � � 6,911 � � INCOME FROM CONTINUING OPERATIONS BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES 9,834 1,842 13,953 12,218 � GAIN ON SALE OF INVESTMENT PROPERTIES, NET OF APPLICABLE INCOME TAX PROVISION 1,387 � � 355 � 10,391 � � 4,857 � � INCOME FROM CONTINUING OPERATIONS 11,221 2,197 24,344 17,075 � DISCONTINUED OPERATIONS, NET OF APPLICABLE INCOME TAX PROVISION: Income (loss) from discontinued operations (431 ) (408 ) (1,179 ) (1,001 ) Gain on sale of investment properties - � � 9,872 � - � � 18,014 � (431 ) � 9,464 � (1,179 ) � 17,013 � � NET INCOME 10,790 11,661 23,165 34,088 � DIVIDENDS TO PREFERRED STOCKHOLDERS (3,812 ) � (3,812 ) (11,437 ) � (11,437 ) � NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 6,978 � � $ 7,849 � $ 11,728 � � $ 22,651 � � PER COMMON SHARE INFORMATION - BASIC: Income (loss) from continuing operations $ 0.14 $ (0.03 ) $ 0.25 $ 0.11 Income (loss) from discontinued operations 0.00 � � 0.18 � (0.02 ) � 0.33 � Basic net income available to common stockholders $ 0.14 � � $ 0.15 � $ 0.23 � � $ 0.44 � � PER COMMON SHARE INFORMATION - DILUTED: Income (loss) from continuing operations $ 0.14 $ (0.03 ) $ 0.25 $ 0.11 Income (loss) from discontinued operations 0.00 � � 0.18 � (0.02 ) � 0.32 � Diluted net income available to common stockholders $ 0.14 � � $ 0.15 � $ 0.23 � � $ 0.43 � � CASH DIVIDENDS DECLARED PER COMMON SHARE $ 0.37 � � $ 0.37 � $ 1.11 � � $ 1.11 � � WEIGHTED AVERAGE SHARES 51,209 � � 51,690 � 51,182 � � 51,744 � � DILUTED WEIGHTED AVERAGE SHARES 51,652 � � 51,690 � 51,797 � � 53,214 �