CUZ Cousins Properties Inc

Cousins Properties Incorporated (NYSE:CUZ) today reported its results of operations for the three months and year ended December 31, 2009. 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”) for the fourth quarter of 2009 was $11.5 million, or $0.11 per share, before separation and non-cash impairment and valuation charges discussed below, compared with FFO of $10.2 million, or $0.20 per share, for the fourth quarter of 2008. FFO was $50.1 million, or $0.77 per share, before such charges for the year ended December 31, 2009, compared with $61.0 million, or $1.18 per share, for the same period in 2008.

Net Income (Loss) Available to Common Stockholders (“Net Income (Loss) Available”) was $(3.6) million, or $(0.04) per share, before such separation and non-cash impairment and valuation charges for the fourth quarter of 2009 compared with $(4.1) million, or $(0.08) per share, for the fourth quarter of 2008. Net Income Available was $156.4 million, or $2.39 per share, before such charges for the year ended December 31, 2009, compared with $7.6 million, or $0.15 per share, for the same period in 2008. The Company recorded $137.9 million of separation and non-cash impairment and valuation charges during the second and third quarters of 2009 and $4.2 million of such charges during the fourth quarter of 2009.

Including the separation and non-cash impairment and valuation charges, FFO was $7.3 million, or $0.07 per share, for the fourth quarter of 2009 and a loss of $(92.0) million, or $(1.40) per share, for the year ended December 31, 2009. Net Loss Available, after such separation and non-cash charges, was $(7.8) million, or $(0.08) per share, for the fourth quarter of 2009 and Net Income Available was $14.4 million, or $0.22 per share, for the year ended December 31, 2009.

A reconciliation of FFO and Net Income (Loss) Available before separation and non-cash impairment and valuation charges is as follows:

            Quarter Ended Year Ended December 31, 2009 December 31, 2009 $(000)   Per Share $(000)   Per Share   FFO Before Certain Charges $11,496 $0.11 $50,095 $0.77  

Separation and Non-Cash Impairment and Valuation Charges:

Impairment on Terminus 200 - - (38,947 ) (0.60 ) Impairment on 10 Terminus - - (34,900 ) (0.53 ) Impairment on Investments at Temco and CL Realty - - (30,250 ) (0.46 ) Valuation Allowance on Deferred Tax Asset - - (15,907 ) (0.24 ) Write-off of Predevelopment Projects (4,017 ) (0.04 ) (7,117 ) (0.11 ) Impairment on Glenmore Garden Villas - - (6,065 ) (0.09 ) Impairment on Airplane - - (4,012 ) (0.06 ) Separation Charges (163 ) - (3,257 ) (0.05 ) Impairment on Note Receivable -     -   (1,600 )   (0.03 ) Total (4,180 )   (0.04 ) (142,055 )   (2.17 )   FFO $7,316     $0.07   ($91,960 )   ($1.40 )                           Net Income (Loss) Available Before Certain Charges ($3,602 ) ($0.04 ) $156,443 $2.39

Separation and Non-Cash Impairment and Valuation Charges

(4,180 )   (0.04 ) (142,055 )   (2.17 )   Net Income (Loss) Available ($7,782 )   ($0.08 ) $14,388     $0.22    

Fourth quarter highlights of the Company included the following:

• Closed the sale of 35 units at 10 Terminus and 23 residential units at 60 North Market and recognized approximately $3.4 million of income and FFO from these closings.
• Executed or renewed leases covering approximately 190,000 square feet of office space and 191,000 square feet of retail space.
• Increased the Briggs & Stratton Corporation industrial lease at King Mill Distribution Park by 156,000 square feet and extended the term on its existing 521,000-square-foot lease to March 2015.

At December 31, 2009, the Company’s portfolio of operational office buildings was 87% leased, its portfolio of operational retail centers was 84% leased and its operational industrial buildings were 51% leased.

“2009 was a challenging year for most companies, and Cousins was not immune from the effects of the difficult economic conditions,” said Larry Gellerstedt, CEO of Cousins. “In the midst of this environment, Cousins ended the year in a better position. Compared with a year ago, we have a stronger balance sheet and a leaner organization combined with a team that is focused on executing the fundamentals of our business – leasing, sales and generating fees. This focus explains the positive momentum we generated in sales of condominium units in the fourth quarter and our success in maintaining or increasing occupancy at our office, retail and industrial centers. In 2010, we expect to continue to strengthen our existing assets and explore the additional opportunities presented by this economy.”

The Condensed Consolidated Statements of Income, Condensed Consolidated Balance Sheets and a schedule entitled Funds From Operations, which reconciles Net Income (Loss) Available to FFO, are attached to this press release. More detailed information on Net Income (Loss) Available and FFO results is included in the “Net Income (Loss) 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 website at www.cousinsproperties.com. This information may also be obtained by calling the Company’s Investor Relations Department at (404) 407-1984.

The Company will conduct a conference call at 10:00 a.m. (Eastern Time) on Tuesday, February 9, 2010, to discuss the results of the quarter ended December 31, 2009. The number to call for this interactive teleconference is (212) 231-2921. A replay of the conference call will be available for 14 days by dialing (402) 977-9140 and entering the passcode 21455300. The replay can be accessed on the Company’s website, www.cousinsproperties.com, through the “Q4 2009 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 website for 14 days.

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, and land development projects. Since its founding in 1958, Cousins has developed 20 million square feet of office space, 20 million square feet of retail space, more than 3,500 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 and condominium 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, 2008 and the Company’s Current Report on Form 8-K filed on September 14, 2009. 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, 2009 2008 2009 2008 REVENUES: Rental property revenues $ 36,553 $ 38,050 $ 149,789 $ 147,394 Fee income 8,080 10,566 33,806 47,662 Multi-family residential unit sales 20,428 2,985 30,841 8,444 Residential lot and outparcel sales 395 247 7,421 6,993 Interest and other   79     867     3,025     4,158     65,535     52,715     224,882     214,651     COSTS AND EXPENSES: Rental property operating expenses 16,691 13,944 66,565 56,607 General and administrative expenses 5,402 8,616 33,948 40,988 Separation expenses 163 825 3,257 1,186 Reimbursed general and administrative expenses 3,269 4,534 15,506 16,279 Depreciation and amortization 13,528 15,777 55,833 52,925 Multi-family residential unit cost of sales 17,072 2,615 25,629 7,330 Residential lot and outparcel cost of sales 291 81 5,023 3,776 Interest expense 9,610 10,804 41,393 33,151 Impairment loss - 2,100 40,512 2,100 Other   5,442     1,770     13,143     6,049     71,468     61,066     300,809     220,391     GAIN (LOSS) ON EXTINGUISHMENT OF DEBT AND INTEREST RATE SWAP   (2,766 )   -     9,732     -    

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES, UNCONSOLIDATED JOINT VENTURES AND SALE OF INVESTMENT PROPERTIES

(8,699 ) (8,351 ) (66,195 ) (5,740 )   BENEFIT (PROVISION) FOR INCOME TAXES FROM OPERATIONS 3,065 4,293 (4,341 ) 8,770   INCOME (LOSS) FROM UNCONSOLIDATED JOINT VENTURES: Equity in net income (loss) from unconsolidated joint ventures 1,698 1,168 (17,639 ) 9,721 Impairment loss on investment in unconsolidated joint ventures   -     -     (51,058 )   -     1,698     1,168     (68,697 )   9,721    

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES

(3,936 ) (2,890 ) (139,233 ) 12,751   GAIN (LOSS) ON SALE OF INVESTMENT PROPERTIES   (4 )   408     168,637     10,799     INCOME (LOSS) FROM CONTINUING OPERATIONS (3,940 ) (2,482 ) 29,404 23,550   DISCONTINUED OPERATIONS Income (loss) from discontinued operations - 82 (4 ) (1,097 ) Gain (loss) on sale of investment properties   (6 )   2,472     147     2,472     (6 )   2,554     143     1,375     NET INCOME (LOSS) (3,946 ) 72 29,547 24,925 NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS   (611 )   (690 )   (2,252 )   (2,378 )   NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST (4,557 ) (618 ) 27,295 22,547   DIVIDENDS TO PREFERRED STOCKHOLDERS   (3,225 )   (3,520 )   (12,907 )   (14,957 )   NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ (7,782 ) $ (4,138 ) $ 14,388   $ 7,590     PER COMMON SHARE INFORMATION - BASIC: Income (loss) from continuing operations $ (0.08 ) $ (0.13 ) $ 0.22 $ 0.12 Income (loss) from discontinued operations   -     0.05     -     0.03   Basic net income (loss) available to common stockholders $ (0.08 ) $ (0.08 ) $ 0.22   $ 0.15     PER COMMON SHARE INFORMATION - DILUTED: Income (loss) from continuing operations $ (0.08 ) $ (0.13 ) $ 0.22 $ 0.12 Income (loss) from discontinued operations   -     0.05     -     0.03   Diluted net income (loss) available to common stockholders $ (0.08 ) $ (0.08 ) $ 0.22   $ 0.15     DIVIDENDS DECLARED PER COMMON SHARE $ 0.09   $ 0.25   $ 0.74   $ 1.36           COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES FUNDS FROM OPERATIONS FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2009 AND 2008 (Unaudited, in thousands, except per share amounts)     Three Months Ended Years Ended December 31, December 31, 2009 2008 2009 2008   Net Income (Loss) Available to Common Stockholders $ (7,782 ) $ (4,138 ) $ 14,388 $ 7,590 Depreciation and amortization: Consolidated properties 13,528 15,777 55,833 52,925 Discontinued properties - - - 486 Share of unconsolidated joint ventures 2,276 2,010 8,800 6,495

Depreciation of furniture, fixtures and equipment and amortization of specifically identifiable intangible assets:

Consolidated properties (643 ) (1,004 ) (3,382 ) (3,724 ) Discontinued properties - - - (19 ) Share of unconsolidated joint ventures (12 ) (1 ) (46 ) (79 )

(Gain) loss on sale of investment properties, net of applicable income tax provision:

Consolidated 4 (408 ) (168,637 ) (10,799 ) Discontinued properties 6 (2,472 ) (147 ) (2,472 ) Share of unconsolidated joint ventures - - (12 ) - Gain (loss) on sale of undepreciated investment properties   (61 )   388     1,243     10,611     Funds From Operations Available to Common Stockholders $ 7,316   $ 10,152   $ (91,960 ) $ 61,014       Per Common Share - Basic: Net Income (Loss) Available $ (.08 ) $ (.08 ) $ .22   $ .15   Funds From Operations $ .07   $ .20   $ (1.40 ) $ 1.19   Weighted Average Shares-Basic   99,155     51,377     65,495     51,331     Per Common Share - Diluted: Net Income (Loss) Available $ (.08 ) $ (.08 ) $ .22   $ .15   Funds From Operations $ .07   $ .20   $ (1.40 ) $ 1.18   Weighted Average Shares-Diluted   99,155     51,377     65,495     51,728      

The table above shows Funds From Operations Available to Common Stockholders (“FFO”) and the related reconciliation to Net Income (Loss) Available to Common Stockholders 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 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 operating performance in part 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 key employees.

    COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands, except share and per share amounts)     December 31, 2009 2008

ASSETS

PROPERTIES:

Operating properties, net of accumulated depreciation of $233,091 and $182,050 in 2009 and 2008, respectively

$ 1,006,760 $ 853,450 Projects under development - 172,582 Land held for investment or future development 137,233 115,862 Residential lots 62,825 59,197 Multi-family units held for sale 28,504 70,658 Total properties 1,235,322 1,271,749   CASH AND CASH EQUIVALENTS 9,464 82,963 RESTRICTED CASH 3,585 3,636

NOTES AND OTHER RECEIVABLES, net of allowance for doubtful accounts of $5,734 and $2,764 in 2009 and 2008, respectively

49,678 51,267 INVESTMENT IN UNCONSOLIDATED JOINT VENTURES 146,150 200,850 OTHER ASSETS 47,353 83,330   TOTAL ASSETS $ 1,491,552 $ 1,693,795  

LIABILITIES AND STOCKHOLDERS’ INVESTMENT

NOTES PAYABLE $ 590,208 $ 942,239 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 56,577 65,026 DEFERRED GAIN 4,452 171,838 DEPOSITS AND DEFERRED INCOME 7,465 6,485   TOTAL LIABILITIES 658,702 1,185,588   COMMITMENTS AND CONTINGENT LIABILITIES   REDEEMABLE NONCONTROLLING INTERESTS 12,591 3,945   STOCKHOLDERS’ INVESTMENT: Preferred stock, 20,000,000 shares authorized, $1 par value:

7.75% Series A cumulative redeemable preferred stock, $25 liquidation preference; 2,993,090 shares issued and outstanding in 2009 and 2008

74,827 74,827

7.50% Series B cumulative redeemable preferred stock, $25 liquidation preference; 3,791,000 shares issued and outstanding in 2009 and 2008

94,775 94,775

Common stock, $1 par value, 150,000,000 shares authorized, 103,352,382 and 54,922,173 shares issued in 2009 and 2008, respectively

103,352 54,922 Additional paid-in capital 662,216 368,829 Treasury stock at cost, 3,570,082 shares in 2009 and 2008 (86,840) (86,840) Accumulated other comprehensive loss on derivative instrument (9,517) (16,601) Distributions in excess of net income (51,402) (23,189)   TOTAL STOCKHOLDERS’ INVESTMENT 787,411 466,723   Nonredeemable noncontrolling interests 32,848 37,539 TOTAL EQUITY 820,259 504,262   TOTAL LIABILITIES AND EQUITY $ 1,491,552 $ 1,693,795