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
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