CUZ Cousins Properties Inc

Cousins Properties Incorporated (NYSE:CUZ):

Highlights

• Funds From Operations (FFO) before a non-cash impairment charge was $0.11 per share.
• Finalized exit from residential condominium business.
• Sold Jefferson Mill Business Park Building A.
• Selected as the master developer for the multi-modal transit hub in Downtown Atlanta.
• Continued progress on predevelopment of Emory Point mixed use project.

Cousins Properties Incorporated (NYSE:CUZ) today reported its results of operations for the quarter ended March 31, 2011.

“The first quarter results demonstrate the continued success of our strategic efforts to lease vacant space and sell non-core assets as we simplify the platform,” said Larry Gellerstedt, CEO of Cousins. “Our leasing pipeline remains solid, and we’re excited to be returning to an offensive mode as we move closer to starting our Emory Point project and continue to seek additional value creation opportunities.”

Portfolio Activity

• Leased or renewed 113,000 square feet of office space and 165,000 square feet of retail space during the quarter.
• Office portfolio increased to 92% leased, compared with 88% in the prior-year period.
• Retail portfolio increased to 87% leased, compared with 85% in the prior-year period.
• Industrial portfolio remained 96% leased, compared with 64% in the prior-year period.

Disposition Activity

• Sold Jefferson Mill Business Park Building A for $22.0 million.
• Sold final residential condominium units at 10 Terminus Place for net gains of $2.2 million in the first quarter of 2011.
• Sold 61 lots and 20 acres of residential land for net gains of $246,000 in the first quarter of 2011.

Financial Results

FFO was $8.1 million, or $0.08 per share, for the first quarter of 2011 compared with $14.0 million, or $0.14 per share, for the first quarter of 2010.

Net loss available to common stockholders (net loss available) was ($7.9 million), or ($0.08) per share, for the first quarter of 2011 compared with net loss available of ($1.6 million), or ($0.02) per share, for the first quarter of 2010.

FFO and net loss available for the first quarter of 2011 were affected by a $3.5 million non-cash impairment charge on the Company’s passive investment in a non-traded real estate investment trust. The Company’s initial investment in this industrial/multifamily REIT was made in 2003 and the basis as of December 31, 2010, was $9.4 million. FFO and net loss available before this charge was $0.11 and ($0.04) per share, respectively.

Investor Conference Call and Webcast

The Company will conduct a conference call at 11:00 a.m. (Eastern Time) on Thursday, May 5, 2011, to discuss the results of the quarter ended March 31, 2011. 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 21521383. The replay can be accessed on the Company’s website, www.cousinsproperties.com, through the “Q1 2011 Cousins Properties Incorporated Earnings Conference Call” link on the Investor Relations page, as well as at http://www.videonewswire.com/event.asp?id=78870. 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.

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.

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, 2010. 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 share and per share amounts)       Three Months Ended March 31, 2011     2010 REVENUES: Rental property revenues $ 36,148 $ 34,773 Fee income 3,385 3,544 Third party management and leasing revenues 4,088 4,794 Multi-family residential unit sales 4,657 10,146 Residential lot and outparcel sales 165 13,819 Other   513     124     48,956     67,200     COSTS AND EXPENSES: Rental property operating expenses 14,248 14,531 Third party management and leasing expenses 4,093 4,958 Multi-family residential unit cost of sales 2,500 7,970 Residential lot and outparcel cost of sales 69 9,096 General and administrative expenses 7,400 8,017 Interest expense 7,544 9,781 Reimbursed expenses 1,512 1,859 Depreciation and amortization 13,475 13,176 Impairment loss 3,508 - Separation expenses 101 68 Other   862     862     55,312     70,318     LOSS ON EXTINGUISHMENT OF DEBT   -     (592 )  

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

(6,356 ) (3,710 )   BENEFIT FOR INCOME TAXES FROM OPERATIONS 64 1,146   INCOME FROM UNCONSOLIDATED JOINT VENTURES   2,496     2,920    

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

(3,796 ) 356   GAIN ON SALE OF INVESTMENT PROPERTIES   59     756     INCOME (LOSS) FROM CONTINUING OPERATIONS (3,737 ) 1,112   INCOME (LOSS) FROM DISCONTINUED OPERATIONS: Income from discontinued operations 72 1,068 Loss on sale of investment properties   (384 )   -     (312 )   1,068     NET INCOME (LOSS) (4,049 ) 2,180 NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS   (581 )   (526 )   NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST (4,630 ) 1,654   DIVIDENDS TO PREFERRED STOCKHOLDERS   (3,227 )   (3,227 )   NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ (7,857 ) $ (1,573 )   PER COMMON SHARE INFORMATION - BASIC AND DILUTED: Loss from continuing operations attributable to controlling interest $ (0.07 ) $ (0.03 ) Income from discontinued operations   -     0.01   Net loss available to common stockholders - basic and diluted $ (0.08 ) $ (0.02 )     WEIGHTED AVERAGE SHARES - BASIC AND DILUTED   103,515     100,069     COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES FUNDS FROM OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010 (Unaudited, in thousands, except per share amounts)       Three Months Ended March 31, 2011     2010   Net Loss Available to Common Stockholders $ (7,857 ) $ (1,573 ) Depreciation and amortization: Consolidated properties 13,475 13,176 Discontinued properties 64 719 Share of unconsolidated joint ventures 2,683 2,294 Depreciation of furniture, fixtures and equipment: Consolidated properties (563 ) (567 ) Discontinued properties - (4 ) Share of unconsolidated joint ventures (5 ) (6 ) (Gain) loss on sale of investment properties: Consolidated (59 ) (756 ) Discontinued properties 384 - Gain on sale of undepreciated investment properties   -     697     Funds From Operations Available to Common Stockholders $ 8,122   $ 13,980       Per Common Share - Basic and Diluted:   Net Loss Available $ (.08 ) $ (.02 )   Funds From Operations $ .08   $ .14     Weighted Average Shares-Basic   103,515     100,069   Weighted Average Shares-Diluted   103,530     100,069    

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 certain 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 (in thousands, except share and per share amounts)       March 31, 2011     December 31, 2010

ASSETS

(Unaudited) PROPERTIES:

Operating properties, net of accumulated depreciation of $286,547 and $274,925 in 2011 and 2010, respectively

$ 870,723 $ 898,119 Land held for investment or future development 123,885 123,879 Residential lots 63,698 63,403 Other   738     2,994   Total properties 1,059,044 1,088,395   CASH AND CASH EQUIVALENTS 5,097 7,599 RESTRICTED CASH 15,854 15,521

NOTES AND OTHER RECEIVABLES, net of allowance for doubtful accounts of $5,728 and $6,287 in 2011 and 2010, respectively

48,414 48,395 INVESTMENT IN UNCONSOLIDATED JOINT VENTURES 165,119 167,108 OTHER ASSETS   41,925     44,264     TOTAL ASSETS $ 1,335,453   $ 1,371,282    

LIABILITIES AND EQUITY

NOTES PAYABLE $ 496,823 $ 509,509 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 26,455 32,388 DEFERRED GAIN 4,157 4,216 DEPOSITS AND DEFERRED INCOME   17,978     18,029   TOTAL LIABILITIES 545,413 564,142   COMMITMENTS AND CONTINGENT LIABILITIES   REDEEMABLE NONCONTROLLING INTERESTS 8,953 14,289   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 2011 and 2010

74,827 74,827

7.50% Series B cumulative redeemable preferred stock, $25 liquidation preference; 3,791,000 shares issued and outstanding in 2011 and 2010

94,775 94,775

Common stock, $1 par value, 250,000,000 shares authorized, 107,201,480 and 106,961,959 shares issued in 2011 and 2010, respectively

107,201 106,962 Additional paid-in capital 685,028 684,551 Treasury stock at cost, 3,570,082 shares in 2011 and 2010 (86,840 ) (86,840 ) Distributions in excess of cumulative net income   (126,706 )   (114,196 )   TOTAL STOCKHOLDERS’ INVESTMENT 748,285 760,079   Nonredeemable noncontrolling interests   32,802     32,772   TOTAL EQUITY   781,087     792,851     TOTAL LIABILITIES AND EQUITY $ 1,335,453   $ 1,371,282