Cousins Properties Incorporated (NYSE:CUZ):
Highlights
- Funds From Operations (FFO), before
non-cash impairment charges, was $0.16 per share.
- Purchased Promenade, a
775,000-square-foot Class A office building in midtown
Atlanta.
- Sold remaining operating industrial
properties.
- Implemented an aggressive strategy to
monetize the land portfolio.
Cousins Properties Incorporated (NYSE:CUZ) today reported its
results of operations for the quarter ended December 31, 2011.
“Cousins had a very strong finish to the year with solid
operating results, significant leasing momentum, the sale of our
remaining industrial buildings, and an attractive value creation
opportunity in Promenade,” said Larry Gellerstedt, CEO of Cousins.
“Consistent with our strategy to simplify our platform, we have
made the decision to more aggressively monetize our land portfolio.
We intend to recycle this capital into our core businesses of
office, retail and opportunistic development.”
Portfolio Activity
- Leased or renewed 266,000 square feet
of office space and 122,000 square feet of retail space.
Transaction Activity
- Purchased Promenade for $134.7
million.
- Sold King Mill Distribution
Park—Building 3 for $28.2 million.
- Sold Lakeside Ranch Business
Park—Building 20 and related undeveloped land for $44.0
million.
- Sold 3.8 acres at North Point for $2.8
million.
- Sold 187 residential lots, including
all remaining lots at Tillman Hall and 79 of the remaining 109 lots
at Creekside Oaks.
- Subsequent to year end, entered into a
contract to sell its interests in 18 residential projects held by
its CL Realty and Temco joint ventures to affiliates of Forestar
Group Inc., its partner in the ventures, for $23.5 million.
Financial Results
FFO was ($110.2) million, or ($1.06) per share, for the fourth
quarter of 2011 compared with $10.0 million, or $0.10 per share,
for the fourth quarter of 2010. FFO was ($76.9) million, or ($0.74)
per share, for the year ended December 31, 2011, compared with
$32.8 million, or $0.32 per share, for the same period in 2010.
FFO before non-cash impairment charges (reconciled to FFO below)
was $16.1 million, or $0.16 per share, for the fourth quarter of
2011. FFO before non-cash impairment charges (reconciled to FFO
below) was $53.2 million, or $0.51 per share, for the year ended
December 31, 2011.
Net loss available to common stockholders was ($129.0) million,
or ($1.24) per share, for the fourth quarter of 2011 compared with
net loss available of ($8.9) million, or ($0.09) per share, for the
fourth quarter of 2010. Net loss available was ($141.3) million, or
($1.36) per share, for the year ended December 31, 2011, compared
with ($27.5) million, or ($0.27) per share, for the same period in
2010.
Impairment Charges
The Company recently made the decision to more aggressively
liquidate most of its commercial and residential land holdings, as
well as certain non-core operating assets. The capital generated
from these sales will be re-deployed into high-quality income
producing assets. The accelerated sales, when completed, will
eliminate approximately $5 million in annual carry costs, over $100
million in remaining capital commitments, and leave the Company
with a more focused platform. Furthermore, the assets to be
monetized are encumbered by only $2.1 million of debt, enabling the
Company to recycle the vast majority of the proceeds into new
investments.
As a result of this change, the Company recorded non-cash
impairment charges of $126.3 million, or $1.22 per share, on
certain commercial and residential land holdings and
pre-development assets, and $7.6 million, or $0.07 per share, on
operating properties in the fourth quarter of 2011. For the year
ended December 31, 2011, the Company incurred $130.1 million in
impairment charges, or $1.25 per share, on commercial and
residential land holdings, pre-development assets and other
investments and $7.6 million of such charges, or $0.07 per share,
on operating properties.
With respect to the non-cash impairment charges discussed above,
the Company recorded $104.3 million and $107.8 million for the
quarter and year ended December 31, 2011, respectively, in the
caption “Impairment Losses” on its statements of operations. The
Company recorded $937,000 in the caption “Other Expenses” on its
statements of operations. The Company recorded $28.1 million and
$28.4 million, for the quarter and year ended December 31, 2011,
respectively, within its unconsolidated joint ventures in the
caption “Equity in Net Income from Unconsolidated Joint Ventures”
on its statements of operations. The Company recorded $608,000 in
the caption “Impairment Loss on Investment in Unconsolidated Joint
Ventures” on its statements of operations.
The impact of the impairment charges on FFO is summarized
below:
Three Months Ended Year Ended December 31,
2011 December 31, 2011 ($000) Per Share ($000) Per
Share FFO Before Non-Cash Impairment Charges $ 16,111 $ 0.16
$ 53,196 $ 0.51 Commercial and Residential Land Impairment
Losses (125,376 ) (1.21 ) (125,626 ) (1.21 ) Predevelopment Asset
Write-off (937 ) (0.01 ) (937 ) (0.01 ) Investment in Verde Realty,
LLC Impairment Loss - -
(3,508 ) (0.03 ) FFO $ (110,202 ) $ (1.06 ) $
(76,875 ) $ (0.74 )
Investor Conference Call and Webcast
The Company will conduct a conference call at 11:00 a.m.
(Eastern Time) on Wednesday, February 22, 2012, to discuss the
results of the quarter ended December 31, 2011. The number to call
for this interactive teleconference is (212) 271-4651.
A replay of the conference call will be available for 14 days by
dialing (402) 977-9140 and entering the passcode 21575231. The
replay can be accessed on the Company’s website,
www.cousinsproperties.com, through the “Q4 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 Consolidated Statements of Operations, 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 real estate development and acquisitions;
the availability of buyers and adequate pricing if the Company
intends to liquidate certain assets; 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, 2011. 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
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in
thousands, except per share amounts)
Three Months Ended
December 31,
Years Ended December 31, 2011 2010 2011
2010 REVENUES: Rental property revenues
$
35,136 $ 32,917
$ 135,573 $ 130,522 Fee income
3,092 3,206
13,821 14,444 Third party management and
leasing revenues
5,268 4,973
19,359 18,976
Multi-family residential unit sales
- 9,716
4,664
34,442 Residential lot and outparcel sales
2,605 1,178
3,015 15,943 Other
515 689
2,032 1,229
46,616 52,679
178,464
215,556
COSTS AND EXPENSES:
Rental property operating expenses
14,143 12,649
55,918 53,750 Third party management and leasing expenses
4,171 4,099
16,585 17,393 Multi-family residential
unit cost of sales
- 7,749
2,487 27,017 Residential
lot and outparcel cost of sales
2,588 779
2,891
10,699 General and administrative expenses
6,338 7,565
24,166 28,517 Interest expense
6,281 8,411
27,784 37,180 Reimbursed expenses
1,459 1,648
6,208 6,297 Depreciation and amortization
13,559
16,000
50,174 53,313 Impairment losses
104,255 1,968
107,763 2,554 Separation expenses
4 742
197
1,045 Other
2,112 (357 )
4,436 4,416
154,910
61,253
298,609
242,181
LOSS ON EXTINGUISHMENT OF DEBT AND
INTEREST RATE SWAPS - -
(74 ) (9,827 )
LOSS FROM CONTINUING OPERATIONS BEFORE
TAXES, UNCONSOLIDATED JOINT VENTURES AND SALE OF INVESTMENT
PROPERTIES
(108,294 ) (8,574 )
(120,219 ) (36,452
)
(PROVISION) BENEFIT FOR INCOME TAXES FROM
OPERATIONS (31 ) (28 )
186 1,079
INCOME (LOSS) FROM UNCONSOLIDATED JOINT VENTURES: Equity in
net income (loss) from unconsolidated joint ventures
(25,159
) 2,000
(17,691 ) 9,493 Impairment loss on
investment in unconsolidated joint ventures
(608
) -
(608 ) -
(25,767 ) 2,000
(18,299 ) 9,493
LOSS FROM CONTINUING OPERATIONS BEFORE
GAIN ON SALE OF INVESTMENT PROPERTIES
(134,092 ) (6,602 )
(138,332 ) (25,880
)
GAIN ON SALE OF INVESTMENT PROPERTIES
3,317 63
3,494
1,938
LOSS FROM CONTINUING OPERATIONS
(130,775 ) (6,539 )
(134,838 ) (23,942
)
INCOME FROM DISCONTINUED OPERATIONS: Income from
discontinued operations
467 916
2,852 4,683 Gain on
sale of investment properties
6,082 654
8,519 7,226
6,549 1,570
11,371
11,909
NET LOSS (124,226
) (4,969 )
(123,467 ) (12,033 )
NET INCOME
ATTRIBUTABLE TO NONCONTROLLING INTERESTS (1,504
) (734 )
(4,958 ) (2,540
)
NET LOSS ATTRIBUTABLE TO CONTROLLING INTEREST
(125,730 ) (5,703 )
(128,425 ) (14,573
)
DIVIDENDS TO PREFERRED STOCKHOLDERS
(3,227 ) (3,227 )
(12,907
) (12,907 )
NET LOSS AVAILABLE TO COMMON
STOCKHOLDERS $ (128,957 ) $ (8,930 )
$ (141,332 ) $ (27,480 )
PER COMMON
SHARE INFORMATION - BASIC AND DILUTED: Loss from continuing
operations attributable to controlling interest
$
(1.31 ) $ (0.10 )
$ (1.47 ) $
(0.39 ) Income from discontinued operations
0.06
0.02
0.11 0.12
Net loss available to common stockholders
$
(1.24 ) $ (0.09 )
$ (1.36 ) $
(0.27 )
WEIGHTED AVERAGE SHARES - BASIC AND
DILUTED 103,712 102,761
103,651 101,440
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES FUNDS
FROM OPERATIONS (Unaudited, in thousands, except per share
amounts)
Three Months Ended
Years Ended December 31, December 31,
2011 2010 2011 2010
Net Loss Available to Common Stockholders $
(128,957 ) $ (8,930 ) $
(141,332 ) $ (27,480 )
Depreciation and amortization: Consolidated properties 13,559
16,000 50,174 53,313 Discontinued properties 219 1,501 3,887 6,643
Share of unconsolidated joint ventures 2,566 2,586 10,356 9,683
Depreciation of non-real estate assets: Consolidated properties
(365 ) (414 ) (1,688 ) (1,884 ) Discontinued properties - - - (5 )
Share of unconsolidated joint ventures (5 ) (5 ) (20 ) (22 )
Impairment loss on depreciable investment property 7,632 - 7,632 -
Gain on sale of investment properties: Consolidated properties
(3,317 ) (63 ) (3,494 ) (1,938 ) Discontinued properties, net of
noncontrolling interests (4,792 ) (654 ) (5,648 ) (7,226 ) Share of
unconsolidated joint ventures
-
-
-
- Gain (loss) on sale of undepreciated investment properties
3,258 (1 ) 3,258 1,697
Funds From Operations Available to Common
Stockholders $ (110,202 ) $
10,020 $ (76,875 ) $
32,781 Per Common Share - Basic and
Diluted: Net Loss Available $ (1.24
) $ (.09 ) $ (1.36
) $ (.27 ) Funds From
Operations $ (1.06 ) $ .10
$ (.74 ) $ .32
Weighted Average Shares - Basic 103,712
102,761 103,651
101,440 Weighted Average Shares -
Diluted 103,712 102,761
103,655 101,440
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,
impairment losses on depreciable investment property 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 CONSOLIDATED BALANCE SHEETS (in thousands,
except share and per share amounts)
December 31, 2011 2010
ASSETS
(Unaudited)
PROPERTIES:
Operating properties, net of accumulated
depreciation of $289,473 and $274,925 in 2011 and 2010,
respectively
$ 884,652 $ 898,119 Projects under development
11,325 - Land held for investment
54,132 123,879
Residential lots
13,195 63,403 Other
637
2,994 Total properties
963,941
1,088,395
CASH AND CASH EQUIVALENTS 4,858
7,599
RESTRICTED CASH 4,929 15,521
NOTES AND OTHER RECEIVABLES, net
of allowance for doubtful accounts of $5,100 and $6,287 in 2011 and
2010, respectively
48,500 48,395
INVESTMENT IN UNCONSOLIDATED JOINT
VENTURES 160,587 167,108
OTHER ASSETS
52,720 44,264
TOTAL
ASSETS $ 1,235,535 $ 1,371,282
LIABILITIES AND
EQUITY
NOTES PAYABLE $ 539,442 $ 509,509
ACCOUNTS
PAYABLE AND ACCRUED LIABILITIES 36,075 32,388
DEFERRED GAIN 3,980 4,216
DEPOSITS AND DEFERRED
INCOME 15,880 18,029
TOTAL LIABILITIES 595,377 564,142
COMMITMENTS AND CONTINGENT LIABILITIES REDEEMABLE
NONCONTROLLING INTERESTS 2,763 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, 107,272,078 and 106,961,959 shares issued in
2011 and 2010, respectively
107,272 106,962 Additional paid-in capital
687,835
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
(274,177 )
(114,196 )
TOTAL STOCKHOLDERS’ INVESTMENT
603,692 760,079 Nonredeemable noncontrolling
interests
33,703 32,772
TOTAL
EQUITY 637,395 792,851
TOTAL LIABILITIES AND EQUITY $
1,235,535 $ 1,371,282
Cousins Properties (NYSE:CUZ)
Historical Stock Chart
From Sep 2024 to Oct 2024
Cousins Properties (NYSE:CUZ)
Historical Stock Chart
From Oct 2023 to Oct 2024