CUZ Cousins Properties Inc

Cousins Properties Incorporated (NYSE:CUZ):

Highlights:

• FFO Before Non-Cash Impairment and Separation Charges totaled $0.16 per share.
• Completed leasing totaling 491,000 square feet, reaching 2,994,000 square feet for 2010, a full year increase of 41% for office, 18% for retail and 16% for industrial.
• Sold $27.7 million of non-strategic assets for a 2010 total of $172.8 million.
• Invested $14.9 million in a new partnership owning four Publix-anchored shopping centers.
• Returned to an all cash dividend at an annualized rate of $0.18 per share.

Cousins Properties Incorporated (NYSE:CUZ) today reported its results of operations for the quarter and year ended December 31, 2010. Funds from Operations Available to Common Stockholders (“FFO”) was $10.0 million, or $0.10 per share, for the fourth quarter of 2010 compared with $7.3 million, or $0.07 per share, for the fourth quarter of 2009. FFO was $32.8 million, or $0.32 per share, for the year ended December 31, 2010 compared with $(92.0) million, or $(1.40) per share, for the same period in 2009.

Net Loss Available to Common Stockholders (“Net Loss Available”) was $8.9 million, or $0.09 per share, for the fourth quarter of 2010 compared with $7.8 million, or $0.08 per share, for the fourth quarter of 2009. Net Loss Available was $27.5 million, or $0.27 per share, for the year ended December 31, 2010 compared with Net Income Available of $14.4 million, or $0.22 per share, for the same period in 2009.

“The fourth quarter and year end results demonstrate the continued success of our strategic efforts to lease vacant space, sell non-core assets and improve our balance sheet,” said Larry Gellerstedt, CEO of Cousins. “I’m also pleased that we are beginning to find attractive investment opportunities; we look forward to carrying this momentum into 2011.”

FFO Before Non-Cash Impairment and Separation Charges (reconciled to FFO and Net Loss Available below) was $16.5 million, or $0.16 per share, for the fourth quarter of 2010. FFO Before Non-Cash Impairment, Swap Termination and Separation Charges (reconciled to FFO and Net Loss Available below) for the year ended December 31, 2010 was $49.4 million, or $0.49 per share.

        Three Months Ended       Year Ended December 31, 2010 December 31, 2010 $ (000 )     Per Share $ (000 )     Per Share        

FFO Before Non-Cash Impairment, Swap Termination and Separation Charges

$ 16,476 $ 0.16 $ 49,361 $ 0.49   Impairment on Padre Island (2,000 ) (2,000 ) Impairment on Handy Road Associates (1,968 ) (1,968 ) Impairment on Pine Mountain Builders (1,517 ) (1,517 ) Impairment on Creekside Oaks (229 ) (229 ) Impairment on 60 North Market - (586 ) Swap Termination Payment - (9,235 ) Separation Charges   (742 )   (1,045 ) Total   (6,456 )       (0.06 )   (16,580 )       (0.16 )   FFO $ 10,020       $ 0.10   $ 32,781       $ 0.32    

Net Loss Available Before Non-Cash Impairment, Swap Termination and Separation Charges

($2,474 ) ($0.02 ) ($10,900 ) ($0.11 )

Non-Cash Impairment, Swap Termination and Separation Charges

  (6,456 )       (0.06 )   (16,580 )       (0.16 )   Net Loss Available   ($8,930 )       ($0.09 )   ($27,480 )       ($0.27 )  

Fourth Quarter Activity:

• Invested $14.9 million in a joint venture with Watkins Retail Group that owns four Publix-anchored shopping centers in Florida and Tennessee.
• Sold 624 acres at the Summer Creek Ranch residential project in Texas (50% Cousins ownership) for $20.3 million, generating a gain for Cousins of approximately $3.4 million. Cousins’ previously impaired its investment in this venture by $3.0 million. This sale generated a $410,000 gain over the pre-impaired cost basis.
• Sold 8995 Westside Parkway, a 51,000-square-foot office building in Atlanta, Georgia, for $3.2 million, generating a gain of approximately $700,000.
• Sold 19 residential condominium units, leaving five units remaining for sale at year end.
• Modified and extended the mortgage loan secured by Terminus 100, reducing the principal balance by $40 million and the interest rate from 6.13% to 5.25%, extending the maturity to January 1, 2023 and eliminating the Company’s $5 million guarantee.
• Obtained a new mortgage loan secured by The Avenue East Cobb for $36.6 million at a fixed rate of 4.52% that matures in 2017. This loan replaced a $34.7 million loan at a fixed rate of 8.39% that matured earlier in 2010.
• Recorded impairments of $5.7 million on four residential investments.
• Recorded $742,000 of separation expenses related to staff reductions and retirement.
• Recovered $1.2 million in previously expensed predevelopment costs.

Subsequent to Quarter End:

• Entered into a contract to sell Jefferson Mill Business Park Building A, with an expected closing in the first quarter of 2011.
• Sold two residential condominium units and put two units under contract, leaving one residential condominium unit available for sale company wide.

As of December 31, 2010, the office portfolio increased to 91% leased from 87% leased compared with December 31, 2009; retail climbed to 86% from 84% and industrial increased to 96% from 51%.

The Condensed Consolidated Statements of Operations, 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 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 “Supplemental Information” and “SEC Filings” links on the “Investor Information & Filings” link of 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, February 8, 2011, to discuss the results of the quarter ended December 31, 2010. The number to call for this interactive teleconference is (212) 231-2938. A replay of the conference call will be available for 14 days by dialing (402) 977-9140 and entering the passcode 21507316. The replay can be accessed on the Company’s website, www.cousinsproperties.com, through the “Q4 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 and retail 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 OPERATIONS (Unaudited, in thousands, except per share amounts)                   Three Months Ended

December 31,

Years Ended

December 31,

2010 2009 2010 2009 REVENUES: Rental property revenues $ 36,475 $ 34,112 $ 143,472 $ 139,504 Fee income 8,179 8,080 33,420 33,806 Multi-family residential unit sales 9,716 20,428 34,442 30,841 Residential lot and outparcel sales 1,178 395 15,943 7,421 Other   689     79     1,229     2,972     56,237     63,094     228,506     214,544     COSTS AND EXPENSES: Rental property operating expenses 13,801 16,122 58,973 63,382 Multi-family residential unit cost of sales 7,749 17,072 27,017 25,629 Residential lot and outparcel cost of sales 779 291 10,699 5,023 General and administrative expenses 9,501 5,402 36,149 33,948 Separation expenses 742 163 1,045 3,257 Reimbursed general and administrative expenses 3,773 3,269 15,304 15,506 Depreciation and amortization 17,501 12,922 59,111 53,350 Interest expense 8,411 9,610 37,180 39,888 Impairment loss 1,968 - 2,554 40,512 Other   (319 )   5,442     5,170     13,143     63,906     70,293     253,202     293,638     LOSS ON EXTINGUISHMENT OF DEBT AND INTEREST RATE SWAPS   -     (2,766 )   (9,827 )   (2,766 )  

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

(7,669 ) (9,965 ) (34,523 ) (81,860 )   BENEFIT (PROVISION) FOR INCOME TAXES FROM OPERATIONS (28 ) 3,065 1,079 (4,341 )   INCOME (LOSS) FROM UNCONSOLIDATED JOINT VENTURES: Equity in net income (loss) from unconsolidated joint ventures 2,000 1,698 9,493 (17,639 ) Impairment loss on investment in unconsolidated joint ventures   -     -     -     (51,058 )   2,000     1,698     9,493     (68,697 )  

LOSS FROM CONTINUING OPERATIONS BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES

(5,697 ) (5,202 ) (23,951 ) (154,898 )   GAIN (LOSS) ON SALE OF INVESTMENT PROPERTIES   63     (4 )   1,938     168,637     INCOME (LOSS) FROM CONTINUING OPERATIONS (5,634 ) (5,206 ) (22,013 ) 13,739   INCOME FROM DISCONTINUED OPERATIONS: Income from discontinued operations 11 1,266 2,754 3,163 Gain on extinguishment of debt - - - 12,498 Gain (loss) on sale of investment properties   654     (6 )   7,226     147     665     1,260     9,980     15,808     NET INCOME (LOSS) (4,969 ) (3,946 ) (12,033 ) 29,547 NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS   (734 )   (611 )   (2,540 )   (2,252 )   NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST (5,703 ) (4,557 ) (14,573 ) 27,295   DIVIDENDS TO PREFERRED STOCKHOLDERS   (3,227 )   (3,225 )   (12,907 )   (12,907 )   NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ (8,930 ) $ (7,782 ) $ (27,480 ) $ 14,388     PER COMMON SHARE INFORMATION - BASIC AND DILUTED: Loss from continuing operations attributable to controlling interest $ (0.09 ) $ (0.09 ) $ (0.37 ) $ (0.02 ) Income from discontinued operations   0.01     0.01     0.10     0.24   Net income (loss) available to common stockholders - basic and diluted $ (0.09 ) $ (0.08 ) $ (0.27 ) $ 0.22     WEIGHTED AVERAGE SHARES - BASIC AND DILUTED   102,761     99,155     101,440     65,495                 COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES FUNDS FROM OPERATIONS FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2010 AND 2009 (Unaudited, in thousands, except per share amounts)                   Three Months Ended Years Ended December 31, December 31, 2010 2009 2010 2009   Net Income (Loss) Available to Common Stockholders $ (8,930 ) $ (7,782 ) $ (27,480 ) $ 14,388 Depreciation and amortization: Consolidated properties 17,501 12,922 59,111 53,350 Discontinued properties - 606 845 2,483 Share of unconsolidated joint ventures 2,586 2,276 9,683 8,800 Depreciation of non-real estate assets: Consolidated properties (414 ) (639 ) (1,884 ) (3,366 ) Discontinued properties - (4 ) (5 ) (16 ) Share of unconsolidated joint ventures (5 ) (12 ) (22 ) (46 ) (Gain) loss on sale of investment properties: Consolidated (63 ) 4 (1,938 ) (168,637 ) Discontinued properties (654 ) 6 (7,226 ) (147 ) Share of unconsolidated joint ventures - - - (12 ) Gain (loss) on sale of undepreciated investment properties   (1 )   (61 )   1,697     1,243     Funds From Operations Available to Common Stockholders $ 10,020   $ 7,316   $ 32,781   $ (91,960 )     Per Common Share - Basic and Diluted:   Net Income (Loss) Available $ (.09 ) $ (.08 ) $ (.27 ) $ .22     Funds From Operations $ .10   $ .07   $ .32   $ (1.40 )   Weighted Average Shares - Basic and Diluted   102,761     99,155     101,440     65,495      

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 along with other measures, to assess performance in connection with evaluating and granting incentive compensation to its officers and other key employees.

Management believes that FFO before non-cash impairment, swap termination and separation charges provides analysts and investors with appropriate information related to its core operations and for comparability of the results of its operations with other real estate companies.

              COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands, except share and per share amounts)             December 31, 2010 2009   ASSETS PROPERTIES:

Operating properties, net of accumulated depreciation of $274,925 and $233,091 in 2010 and 2009, respectively

$ 898,119 $ 1,006,760 Land held for investment or future development 123,879 137,233 Residential lots 63,403 62,825 Multi-family units held for sale   2,994     28,504   Total properties 1,088,395 1,235,322   CASH AND CASH EQUIVALENTS 7,599 9,464 RESTRICTED CASH 15,521 3,585

NOTES AND OTHER RECEIVABLES, net of allowance for doubtful accounts of $6,287 and $5,734 in 2010 and 2009, respectively

48,395 49,678 INVESTMENT IN UNCONSOLIDATED JOINT VENTURES 167,108 146,150 OTHER ASSETS   44,264     47,353     TOTAL ASSETS $ 1,371,282   $ 1,491,552     LIABILITIES AND EQUITY NOTES PAYABLE $ 509,509 $ 590,208 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 32,388 56,577 DEFERRED GAIN 4,216 4,452 DEPOSITS AND DEFERRED INCOME   18,029     7,465   TOTAL LIABILITIES 564,142 658,702   COMMITMENTS AND CONTINGENT LIABILITIES   REDEEMABLE NONCONTROLLING INTERESTS 14,289 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, 250,000,000 shares authorized, 106,961,959 and 103,352,382 shares issued in 2010 and 2009, respectively

106,962 103,352 Additional paid-in capital 684,551 662,216 Treasury stock at cost, 3,570,082 shares in 2010 and 2009 (86,840 ) (86,840 ) Accumulated other comprehensive loss on derivative instruments - (9,517 ) Distributions in excess of net income (loss)   (114,196 )   (51,402 )   TOTAL STOCKHOLDERS’ INVESTMENT 760,079 787,411   Nonredeemable noncontrolling interests   32,772     32,848   TOTAL EQUITY   792,851     820,259     TOTAL LIABILITIES AND EQUITY $ 1,371,282   $ 1,491,552