Cousins Properties Incorporated (NYSE:CUZ) today reported its
results of operations for the quarter ended March 31, 2010. 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 $14.0 million, or $0.14 per share, for the first quarter of
2010 compared with FFO of $7.6 million, or $0.15 per share, for the
first quarter of 2009.
Net Loss Available to Common Stockholders was $(1.6) million, or
$(0.02) per share, for the first quarter of 2010 compared with Net
Income Available to Common Stockholders of $160.6 million, or $3.13
per share, for the first quarter of 2009. During the first quarter
of 2009, the Company recognized approximately $167 million of
deferred gain related to a joint venture that holds several retail
properties.
First quarter 2010 highlights of the Company included the
following:
- Sold nine outparcels at three
retail centers, generating FFO of approximately $4.7 million.
- Closed 19 units at its 10
Terminus Place condominium project, generating FFO of approximately
$2.2 million.
- Sold Glenmore Garden Villas in
Charlotte, North Carolina, generating FFO of approximately
$369,000.
- Sold 53 acres of land at
Jefferson Mill Business Park, generating FFO of approximately
$328,000.
- Increased the percent leased of
Lakeside Ranch Business Park to 77% upon execution of a lease with
Owens & Minor for 223,000 square feet.
- Executed or renewed leases
covering approximately 232,000 square feet of office space and
162,000 square feet of retail space.
- Amended its Credit and Term
Facilities to provide more financial flexibility.
Other highlights subsequent to quarter end included the
following:
- Restructured its interest in
Terminus 200 in a transaction that reduced its ownership from 50%
to 20% and simultaneously extended the construction loan.
- Executed a lease for the top
five floors of Terminus 200.
- Executed a 459,000 square foot
lease with a Fortune 1000 Company at Jefferson Mill Business Park,
bringing this building to 100% leased.
- Sold 44 acres of land at King
Mill Distribution Park.
At March 31, 2010, the Company’s portfolio of operational office
buildings was 88% leased, its portfolio of operational retail
centers was 85% leased and its operational industrial buildings
were 64% leased. After the Jefferson Mill Business Park lease
discussed above, the percentage leased of the Company’s operational
industrial buildings increased to 85%.
“We made good progress during the quarter in selling outparcels
and non-core assets in order to improve our overall financial
position,” said Larry Gellerstedt, CEO of Cousins. “We have also
been rewarded in our leasing efforts in spite of the struggling
economy, showing improvement in the leasing percentages of each of
our product types. We are pleased with these trends and will work
diligently throughout the year to ensure that they continue.”
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 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 2:00 p.m. (Eastern
Time) on Tuesday, May 11, 2010, to discuss the results of the
quarter ended March 31, 2010. The number to call for this
interactive teleconference is (212) 231-2901. A replay of the
conference call will be available for 14 days by dialing (402)
977-9140 and entering the passcode 21463750. The replay can be
accessed on the Company’s website, www.cousinsproperties.com,
through the “Q1 2010 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, availability and terms of capital
and financing; national and local economic conditions; the real
estate industry in general and in specific markets; the potential
for recognition of additional impairments due to continued adverse
market and economic conditions; leasing risks; the financial
condition of existing tenants; competition from other developers or
investors; the risks associated with development projects; rising
interest and insurance rates; the availability of sufficient
development or investment opportunities; environmental matters; the
financial condition and liquidity of, or disputes with, joint
venture partners; any failure to comply with debt covenants under
credit agreements; any failure to continue to qualify for taxation
as a real estate investment trust 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, 2009. The words “believes,” “expects,” “anticipates,”
“estimates,” “plans,” “may,” “intend,” “will” or 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 such 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, except as
required under U.S. federal securities laws.
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited, in
thousands, except per share amounts)
Three Months
Ended March 31, 2010 2009 REVENUES: Rental
property revenues
$ 37,213 $ 37,509 Fee income
8,338 8,044 Multi-family residential unit sales
10,146 - Residential lot and outparcel sales
13,819
2,548 Interest and other
124 986
69,640 49,087
COSTS
AND EXPENSES: Rental property operating expenses
15,184
17,313 Multi-family residential unit cost of sales
7,970 -
Residential lot and outparcel cost of sales
9,096 1,730
General and administrative expenses
9,950 9,418 Separation
expenses
68 344 Reimbursed general and administrative
expenses
4,418 4,228 Depreciation and amortization
13,895 13,056 Interest expense
9,781 10,430 Other
1,328 1,546
71,690
58,065
LOSS ON EXTINGUISHMENT OF
DEBT (592 ) -
LOSS FROM CONTINUING OPERATIONS
BEFORE TAXES, UNCONSOLIDATED JOINT VENTURES AND SALE OF INVESTMENT
PROPERTIES
(2,642 ) (8,978 )
BENEFIT FOR INCOME TAXES
FROM OPERATIONS 1,146 3,941
INCOME FROM
UNCONSOLIDATED JOINT VENTURES 2,920
1,820
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES
1,424 (3,217 )
GAIN ON SALE OF INVESTMENT
PROPERTIES 756 167,434
INCOME FROM CONTINUING OPERATIONS 2,180
164,217
LOSS FROM DISCONTINUED OPERATIONS
- (7 )
NET INCOME 2,180
164,210
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
(526 ) (412 )
NET INCOME
ATTRIBUTABLE TO CONTROLLING INTEREST 1,654 163,798
DIVIDENDS TO PREFERRED STOCKHOLDERS
(3,227 ) (3,227 )
NET INCOME (LOSS)
AVAILABLE TO COMMON STOCKHOLDERS $ (1,573
) $ 160,571
NET INCOME (LOSS) PER
COMMON SHARE - BASIC AND DILUTED $ (0.02 )
$ 3.13
DIVIDENDS DECLARED PER COMMON SHARE
$ 0.09 $ 0.25
WEIGHTED
AVERAGE SHARES - BASIC AND DILUTED 100,069
51,350
COUSINS PROPERTIES INCORPORATED AND
SUBSIDIARIES FUNDS FROM OPERATIONS FOR THE THREE
MONTHS ENDED MARCH 31, 2010 AND 2009 (Unaudited, in thousands,
except per share amounts)
Three
Months Ended March 31, 2010 2009
Net Income (Loss) Available to Common Stockholders $
(1,573 ) $ 160,571 Depreciation and
amortization: Consolidated properties 13,895 13,056 Share of
unconsolidated joint ventures 2,294 2,158 Depreciation of
furniture, fixtures and equipment: Consolidated properties (571 )
(968 ) Share of unconsolidated joint ventures (6 ) (10 ) Gain on
sale of investment properties: Consolidated (756 ) (167,434 ) Share
of unconsolidated joint ventures - (28 ) Gain on sale of
undepreciated investment properties 697 209
Funds From Operations Available to Common
Stockholders $ 13,980 $
7,554 Per Common Share - Basic and
Diluted: Net Income (Loss) Available $
(.02 ) $ 3.13 Funds
From Operations $ .14 $ .15
Weighted Average Shares 100,069
51,350
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 (loss) 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 (In thousands, except
share and per share amounts)
March 31, 2010
December 31, 2009 (Unaudited)
ASSETS
PROPERTIES:
Operating properties, net of
accumulated depreciation of $246,129 and $233,091 in 2010 and 2009,
respectively
$ 991,762 $ 1,006,760 Land held for investment or
future development
135,313 137,233 Residential lots
62,894 62,825 Multi-family units held for sale
21,295 28,504 Total properties
1,211,264 1,235,322
CASH AND CASH EQUIVALENTS
30,349 9,464
RESTRICTED CASH 3,128 3,585
NOTES AND OTHER
RECEIVABLES, net of allowance for doubtful accounts of $6,400
and $5,734 in 2010 and 2009, respectively
45,775 49,678
INVESTMENT IN UNCONSOLIDATED JOINT
VENTURES 145,352 146,150
OTHER ASSETS
49,609 47,353
TOTAL
ASSETS $ 1,485,477 $ 1,491,552
LIABILITIES AND EQUITY
NOTES PAYABLE $ 580,979 $ 590,208
ACCOUNTS
PAYABLE AND ACCRUED LIABILITIES 61,688 56,577
DEFERRED GAIN 4,393 4,452
DEPOSITS AND DEFERRED
INCOME 9,615 7,465
TOTAL LIABILITIES 656,675 658,702
COMMITMENTS AND CONTINGENT LIABILITIES REDEEMABLE
NONCONTROLLING INTERESTS 12,689 12,591
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 2010 and 2009
74,827 74,827
7.50% Series B cumulative
redeemable preferred stock, $25 liquidation preference; 3,791,000
shares issued and outstanding in 2010 and 2009
94,775 94,775
Common stock, $1 par value,
150,000,000 shares authorized, 104,436,442 and 103,352,382 shares
issued in 2010 and 2009, respectively
104,436 103,352 Additional paid-in capital
667,597
662,216 Treasury stock at cost, 3,570,082 shares in 2010 and 2009
(86,840 ) (86,840 ) Accumulated other comprehensive
loss on derivative instruments
(9,549 ) (9,517 )
Distributions in excess of net income
(61,956
) (51,402 )
TOTAL STOCKHOLDERS’
INVESTMENT 783,290 787,411 Nonredeemable
noncontrolling interests
32,823 32,848
TOTAL EQUITY 816,113
820,259
TOTAL LIABILITIES AND EQUITY $
1,485,477 $ 1,491,552
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