CUZ Cousins Properties Inc

Cousins Properties Incorporated (NYSE:CUZ):

Highlights

• Funds From Operations (FFO) of $0.14 per share.
• Leased or renewed 787,000 square feet of office and retail.
• Commenced Mahan Village retail development.

Cousins Properties Incorporated (NYSE:CUZ) today reported its results of operations for the quarter ended September 30, 2011.

“We were very pleased with our third quarter operating performance,” said Larry Gellerstedt, CEO of Cousins. “Our team continues to deliver strong results, particularly on the leasing front, as we continue to simplify the platform and seek attractive value creation opportunities.”

Portfolio Activity

• Leased or renewed 420,000 square feet of office space and 367,000 square feet of retail space.
• Office portfolio remained 91% leased and Retail portfolio increased to 89% leased.

Transaction Activity

• Commenced construction of Mahan Village, a 147,000-square-foot, Publix-anchored shopping center in Tallahassee, Florida.
• Sold One Georgia Center, a 376,000-square-foot office building in Atlanta, Georgia, for $48.6 million, generating a gain, net of noncontrolling interest, of $1.2 million.
• Sold 126 residential lots for net gains of $519,000.
• Subsequent to quarter end, placed King Mill Distribution Park Building 3, a 796,000-square-foot industrial building in Atlanta, Georgia, under contract for sale. This transaction is expected to close in the fourth quarter.

Financial Results

FFO was $14.3 million, or $0.14 per share, for the third quarter of 2011 compared with $886,000, or $0.01 per share, for the third quarter of 2010. FFO was $33.3 million, or $0.32 per share, for the nine months ended September 30, 2011, compared with $22.8 million, or $0.23 per share, for the same period in 2010.

Net income available to common stockholders was $188,000, or $0.00 per share, for the third quarter of 2011 compared with net loss available of ($8.4) million, or ($0.08) per share, for the third quarter of 2010. Net loss available was ($12.4) million, or ($0.12) per share, for the nine months ended September 30, 2011, compared with ($18.6) million, or ($0.18) per share, for the same period in 2010.

Investor Conference Call and Webcast

The Company will conduct a conference call at 11:00 a.m. (Eastern Time) on Thursday, November 3, 2011, to discuss the results of the quarter ended September 30, 2011. 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 21539337. The replay can be accessed on the Company’s website, www.cousinsproperties.com, through the “Q3 2011 Cousins Properties Incorporated Earnings Conference Call” link on the Investor Relations page.

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 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 or changes in Company business and financial strategy; leasing risks; potential acquisitions, new investments and/or dispositions; the failure of purchase, sale or other contracts to ultimately close; 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 per share amounts)           Three Months Ended

September 30,

Nine Months Ended

September 30,

2011 2010 2011 2010 REVENUES: Rental property revenues $ 35,268 $ 33,840 $ 104,094 $ 100,630 Fee income 3,909 3,966 10,729 11,238 Third party management and leasing revenues 5,398 4,724 14,091 14,003 Multi-family residential unit sales - 6,637 4,664 24,726 Residential lot and outparcel sales 165 630 410 14,765 Other   448     245     1,517     540     45,188     50,042     135,505     165,902     COSTS AND EXPENSES: Rental property operating expenses 14,968 14,150 42,705 42,029 Third party management and leasing expenses 4,241 4,122 12,414 13,294 Multi-family residential unit cost of sales - 5,190 2,487 19,268 Residential lot and outparcel cost of sales 158 549 303 9,920 General and administrative expenses 4,295 6,172 17,828 20,952 Interest expense 6,601 8,702 21,503 28,769 Reimbursed expenses 1,866 1,392 4,749 4,649 Depreciation and amortization 12,891 13,115 38,310 39,094 Impairment losses - - 3,508 586 Separation expenses 15 202 193 303 Other   790     909     2,324     4,773     45,825     54,503     146,324     183,637     LOSS ON EXTINGUISHMENT OF DEBT   (74 )   (9,235 )   (74 )   (9,827 )   LOSS FROM CONTINUING OPERATIONS BEFORE TAXES, UNCONSOLIDATED JOINT VENTURES AND SALE OF INVESTMENT PROPERTIES (711 ) (13,696 ) (10,893 ) (27,562 )   (PROVISION) BENEFIT FOR INCOME TAXES FROM OPERATIONS 180 (25 ) 217 1,107   INCOME FROM UNCONSOLIDATED JOINT VENTURES   2,660     2,179     7,468     7,493     INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES 2,129 (11,542 ) (3,208 ) (18,962 )   GAIN ON SALE OF INVESTMENT PROPERTIES   59     58     177     1,875     INCOME (LOSS) FROM CONTINUING OPERATIONS 2,188 (11,484 ) (3,031 ) (17,087 )   INCOME FROM DISCONTINUED OPERATIONS: Income from discontinued operations 597 452 1,353 3,451 Gain on sale of investment properties   2,821     6,572     2,437     6,572     3,418     7,024     3,790     10,023     NET INCOME (LOSS) 5,606 (4,460 ) 759 (7,064 ) NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS   (2,192 )   (696 )   (3,454 )   (1,806 )   NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST 3,414 (5,156 ) (2,695 ) (8,870 )   DIVIDENDS TO PREFERRED STOCKHOLDERS   (3,226 )   (3,226 )   (9,680 )   (9,680 )   NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ 188   $ (8,382 ) $ (12,375 ) $ (18,550 )   PER COMMON SHARE INFORMATION - BASIC AND DILUTED: Loss from continuing operations attributable to controlling interest $ (0.03 ) $ (0.15 ) $ (0.16 ) $ (0.28 ) Income from discontinued operations   0.03     0.07     0.04     0.10   Net income (loss) available to common stockholders $ 0.00   $ (0.08 ) $ (0.12 ) $ (0.18 )     WEIGHTED AVERAGE SHARES - BASIC AND DILUTED   103,715     101,893     103,631     100,995     DIVIDENDS DECLARED PER COMMON SHARE $ 0.045   $ 0.09   $ 0.135   $ 0.27           COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES FUNDS FROM OPERATIONS (Unaudited, in thousands, except per share amounts)     Three Months Ended Nine Months Ended September 30, September 30, 2011 2010 2011 2010  

Net Income (Loss) Available to Common Stockholders

$ 188 $ (8,382 ) $ (12,375 ) $ (18,550 ) Depreciation and amortization: Consolidated properties 12,891 13,115 38,310 39,094 Discontinued properties 478 881 1,973 3,361 Share of unconsolidated joint ventures 2,444 2,349 7,790 7,097

Depreciation of furniture, fixtures and equipment:

Consolidated properties (388 ) (441 ) (1,323 ) (1,470 ) Discontinued properties - - - (5 ) Share of unconsolidated joint ventures (5 ) (5 ) (15 ) (17 ) Gain on sale of investment properties: Consolidated (59 ) (58 ) (177 ) (1,875 )

Discontinued properties, net of noncontrolling interest

(1,240 ) (6,572 ) (856 ) (6,572 ) Gain (loss) on sale of undepreciated investment properties   -     (1 )   -     1,698     Funds From Operations Available to Common Stockholders $ 14,309   $ 886   $ 33,327   $ 22,761       Per Common Share - Basic and Diluted:   Net Income (Loss) Available $ .00   $ (.08 ) $ (.12 ) $ (.18 )   Funds From Operations $ .14   $ .01   $ .32   $ .23     Weighted Average Shares - Basic   103,715     101,893     103,631     100,995   Weighted Average Shares - Diluted   103,718     101,893     103,642     100,995    

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.

  COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts)       September 30, 2011 December 31, 2010

ASSETS

(Unaudited) PROPERTIES: Operating properties, net of accumulated depreciation of $286,399 and $274,925 in 2011 and 2010, respectively $ 826,015 $ 898,119 Projects under development 8,646 - Land held for investment or future development 115,521 123,879 Residential lots 63,835 63,403 Other   738     2,994   Total properties 1,014,755 1,088,395   CASH AND CASH EQUIVALENTS 5,634 7,599 RESTRICTED CASH 5,514 15,521 NOTES AND OTHER RECEIVABLES, net of allowance for doubtful accounts of $5,423 and $6,287 in 2011 and 2010, respectively 50,610 48,395 INVESTMENT IN UNCONSOLIDATED JOINT VENTURES 181,947 167,108 OTHER ASSETS   35,916     44,264     TOTAL ASSETS $ 1,294,376   $ 1,371,282    

LIABILITIES AND EQUITY

NOTES PAYABLE $ 462,134 $ 509,509 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 30,732 32,388 DEFERRED GAIN 4,039 4,216 DEPOSITS AND DEFERRED INCOME   16,766     18,029   TOTAL LIABILITIES 513,671 564,142   COMMITMENTS AND CONTINGENT LIABILITIES   REDEEMABLE NONCONTROLLING INTERESTS 9,386 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, 107,283,665 and 106,961,959 shares issued in 2011 and 2010, respectively 107,284 106,962 Additional paid-in capital 686,108 684,551 Treasury stock at cost, 3,570,082 shares in 2011 and 2010 (86,840 ) (86,840 ) Distributions in excess of cumulative net income   (140,553 )   (114,196 )   TOTAL STOCKHOLDERS’ INVESTMENT 735,601 760,079   Nonredeemable noncontrolling interests   35,718     32,772   TOTAL EQUITY   771,319     792,851     TOTAL LIABILITIES AND EQUITY $ 1,294,376   $ 1,371,282