ATLANTA--(BUSINESS WIRE)--
Cousins Properties Incorporated (NYSE:CUZ) today reported its results of
operations for the three and nine months ended September 30, 2009. 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 $7.3
million, or $0.12 per share, before certain separation and non-cash
impairment and valuation charges discussed below for the third quarter
of 2009, compared with FFO of $20.9 million, or $0.39 per share, for the
third quarter of 2008. FFO was $38.6 million, or $0.70 per share, before
such charges for the nine months ended September 30, 2009, compared with
$50.9 million, or $0.95 per share, for the same period in 2008.
Net Income (Loss) Available to Common Stockholders ("Net Income (Loss)
Available") was ($7.8) million, or ($0.13) per share, before such
separation and non-cash impairment and valuation charges for the quarter
ended September 30, 2009, compared with Net Income Available of $7.0
million, or $0.13 per share, for the third quarter of 2008. Net Income
Available was $160.0 million, or $2.89 per share, before such charges
for the nine months ended September 30, 2009, compared with $11.7
million, or $0.22 per share, for the same period in 2008. During the
second quarter of 2009, the Company recorded $88.3 million of separation
and non-cash impairment and valuation charges.
The Company recorded $48.5 million of non-cash impairment charges during
the third quarter of 2009. These charges consisted of the following:
-- Impairment charge on investment in Terminus 200, LLC - $38.9 million,
-- Impairment charge on investment in Glenmore Garden Villas LLC - $4.9
million,
-- Impairment charge on airplane - $4.0 million,
-- Company share of impairment charge on property owned by Temco
Associates, LLC - $631,000
The impairment charges on Terminus 200, LLC and the airplane were
previously disclosed in September 2009.
After such separation and non-cash impairment and valuation charges, FFO
was a loss of $41.9 million, or $0.70 per share, for the third quarter
of 2009 and a loss of $99.3 million, or $1.79 per share, for the nine
months ended September 30, 2009. Net Loss Available, after such
separation and non-cash charges, was $57.1 million, or $0.95 per share,
for the third quarter of 2009 and Net Income Available was $22.2
million, or $0.40 per share, for the nine months ended September 30,
2009.
A reconciliation of FFO and Net Income (Loss) Available before certain
separation and non-cash impairment and valuation charges is as follows:
3rd Quarter 2009 Nine Months 2009
$(000) Per Share $(000) Per Share
FFO Before Certain Charges $ 7,314 $ 0.12 $ 38,599 $ 0.70
Certain Separation and Non-Cash
Impairment and Valuation
Charges:
Terminus 200 Impairment (38,947 ) (0.65 ) (38,947 ) (0.70 )
Glenmore Garden Villas (4,935 ) (0.08 ) (6,065 ) (0.11 )
Impairment
Airplane impairment (4,012 ) (0.07 ) (4,012 ) (0.07 )
Temco Impairment (631 ) (0.01 ) (631 ) (0.01 )
Impairment charge on 10 - 0.00 (34,900 ) (0.63 )
Terminus
Impairment charges on - 0.00 (27,000 ) (0.49 )
Investments in Joint Ventures
Valuation allowance on deferred - 0.00 (15,907 ) (0.29 )
tax asset
Write-off of predevelopment - 0.00 (3,100 ) (0.06 )
expenses
Separation charges (724 ) (0.01 ) (3,094 ) (0.06 )
Other reserves and impairments - 0.00 (4,219 ) (0.07 )
Total (49,249 ) (0.82 ) (137,875 ) (2.49 )
FFO $ (41,935 ) $ (0.70 ) $ (99,276 ) $ (1.79 )
Net Income (Loss) Available $ (7,839 ) $ (0.13 ) $ 160,045 $ 2.89
Before Certain Charges
Certain Separation and Non-Cash
Impairment and Valuation (49,249 ) (0.82 ) (137,875 ) (2.49 )
Charges
Net Income (Loss) Available $ (57,088 ) $ (0.95 ) $ 22,170 $ 0.40
Third quarter highlights of the Company included the following:
-- Completed an offering of 46 million shares of common stock. Net proceeds
from the offering were $318.6 million, which were used to reduce
indebtedness.
-- Sold all of the completed units of The Brownstones at Habersham, a
townhome project it acquired from a bank in the second quarter.
Recognized gains on the sale of these units of $1.5 million.
At September 30, 2009, the Company's portfolio of operational office
buildings was 87% leased, its portfolio of operational retail centers
was 83% leased and its operational industrial buildings were 44% leased.
"In the third quarter, our team made significant strides in improving
our balance sheet and cost structure to make us more competitive in the
current environment," said Larry Gellerstedt, CEO of Cousins. "Raising
over $300 million in common equity dramatically reduced our leverage
thereby creating more financial flexibility for future opportunities. We
also made some difficult but necessary decisions to reduce our expenses
in the quarter. We expect that the combination of these actions will
make us a leaner but stronger organization focused on maximizing the
value of our assets for our shareholders."
The Condensed Consolidated Statements of Income, 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 (Loss) 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 Thursday, November 5, 2009, to discuss the results of the quarter
ended September 30, 2009. The number to call for this interactive
teleconference is (212) 231-2900. A replay of the conference call will
be available for 14 days by dialing (402) 977-9140 and entering the
passcode 21439816. The replay can be accessed on the Company's website, www.cousinsproperties.com,
through the "Q3 2009 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, general and local economic conditions (including the current
general recession and state of the credit markets), local real estate
conditions (including the overall condition of the residential and
condominium markets), the activity of others developing competitive
projects, the risks associated with development projects (such as delay,
cost overruns and leasing/sales risk of new properties), the cyclical
nature of the real estate industry, the financial condition of existing
tenants, interest rates, the Company's ability to obtain favorable
financing or zoning, environmental matters, the effects of terrorism,
the ability of the Company to close properties under contract 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, 2008 and the Company's Current Report on Form 8-K filed on
September 14, 2009. The words "believes," "expects," "anticipates,"
"estimates" and 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 these
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.
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
REVENUES:
Rental property revenues $ 38,632 $ 38,337 $ 113,236 $ 109,344
Fee income 9,510 21,736 25,726 37,096
Multi-family residential 9,228 5,459 10,413 5,459
unit sales
Residential lot and 1,150 3,747 7,026 6,746
outparcel sales
Interest and other 675 991 2,946 3,291
59,195 70,270 159,347 161,936
COSTS AND EXPENSES:
Rental property operating 17,402 14,641 49,874 42,663
expenses
General and administrative 9,180 12,975 28,546 32,382
expenses
Separation expenses 724 45 3,094 351
Reimbursed general and 3,979 4,006 12,237 11,745
administrative expenses
Depreciation and 13,868 13,272 42,305 37,148
amortization
Multi-family residential 7,372 4,715 8,557 4,715
unit cost of sales
Residential lot and 979 1,917 4,732 3,695
outparcel cost of sales
Interest expense 10,793 8,705 31,783 22,347
Impairment loss 4,012 - 40,512 -
Other 1,723 1,975 7,701 4,279
70,032 62,251 229,341 159,325
GAIN ON EXTINGUISHMENT OF - - 12,498 -
DEBT
INCOME (LOSS) FROM
CONTINUING OPERATIONS BEFORE
TAXES, INCOME (LOSS) FROM (10,837 ) 8,019 (57,496 ) 2,611
UNCONSOLIDATED JOINT
VENTURES AND GAIN ON SALE OF
INVESTMENT PROPERTIES
(PROVISION) BENEFIT FOR (54 ) (916 ) (7,406 ) 4,477
INCOME TAXES FROM OPERATIONS
INCOME (LOSS) FROM
UNCONSOLIDATED JOINT
VENTURES:
Equity in net income (loss)
from unconsolidated joint (19,926 ) 3,497 (19,337 ) 8,553
ventures
Impairment loss on
investment in (22,928 ) - (51,058 ) -
unconsolidated joint
ventures
(42,854 ) 3,497 (70,395 ) 8,553
INCOME (LOSS) FROM
CONTINUING OPERATIONS BEFORE (53,745 ) 10,600 (135,297 ) 15,641
GAIN ON SALE OF INVESTMENT
PROPERTIES
GAIN ON SALE OF INVESTMENT
PROPERTIES, NET OF 406 1,387 168,641 10,391
APPLICABLE INCOME TAX
PROVISION
INCOME (LOSS) FROM (53,339 ) 11,987 33,344 26,032
CONTINUING OPERATIONS
DISCONTINUED OPERATIONS, NET
OF APPLICABLE INCOME TAX
PROVISION:
Income (loss) from 3 (431 ) (4 ) (1,179 )
discontinued operations
Gain on sale of investment 7 - 153 -
properties
10 (431 ) 149 (1,179 )
NET INCOME (LOSS) (53,329 ) 11,556 33,493 24,853
NET INCOME ATTRIBUTABLE TO (531 ) (766 ) (1,641 ) (1,688 )
NONCONTROLLING INTERESTS
NET INCOME (LOSS)
ATTRIBUTABLE TO CONTROLLING (53,860 ) 10,790 31,852 23,165
INTEREST
DIVIDENDS TO PREFERRED (3,228 ) (3,812 ) (9,682 ) (11,437 )
STOCKHOLDERS
NET INCOME (LOSS) AVAILABLE $ (57,088 ) $ 6,978 $ 22,170 $ 11,728
TO COMMON STOCKHOLDERS
PER COMMON SHARE INFORMATION
- BASIC:
Income (loss) from $ (0.95 ) $ 0.13 $ 0.40 $ 0.24
continuing operations
Loss from discontinued - - - (0.02 )
operations
Basic net income (loss)
available to common $ (0.95 ) $ 0.13 $ 0.40 $ 0.22
stockholders
PER COMMON SHARE INFORMATION
- DILUTED:
Income (loss) from $ (0.95 ) $ 0.13 $ 0.40 $ 0.24
continuing operations
Loss from discontinued - - - (0.02 )
operations
Diluted net income (loss)
available to common $ (0.95 ) $ 0.13 $ 0.40 $ 0.22
stockholders
DIVIDENDS DECLARED PER $ 0.15 $ 0.37 $ 0.65 $ 1.11
COMMON SHARE
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
FUNDS FROM OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(Unaudited, in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Net Income (Loss) Available $ (57,088 ) $ 6,978 $ 22,170 $ 11,728
to Common Stockholders
Depreciation and
amortization:
Consolidated properties 13,868 13,272 42,305 37,148
Discontinued properties - 138 - 486
Share of unconsolidated 2,192 1,621 6,524 4,485
joint ventures
Depreciation of furniture,
fixtures and equipment and
amortization of specifically
identifiable intangible
assets:
Consolidated properties (833 ) (989 ) (2,739 ) (2,720 )
Discontinued properties - (6 ) - (19 )
Share of unconsolidated (10 ) (27 ) (34 ) (78 )
joint ventures
Gain on sale of investment
properties, net of
applicable
income tax provision:
Consolidated (406 ) (1,387 ) (168,641 ) (10,391 )
Discontinued properties (7 ) - (153 ) -
Share of unconsolidated - - (12 ) -
joint ventures
Gain on sale of
undepreciated investment 349 1,331 1,304 10,223
properties
Funds From Operations
Available to Common $ (41,935 ) $ 20,931 $ (99,276 ) $ 50,862
Stockholders
Per Common Share - Basic:
Net Income (Loss) Available $ (0.95 ) $ 0.13 $ 0.40 $ 0.22
Funds From Operations $ (0.70 ) $ 0.40 $ (1.79 ) $ 0.96
Weighted Average 59,969 52,945 55,318 52,919
Shares-Basic
Per Common Share - Diluted:
Net Income (Loss) Available $ (0.95 ) $ 0.13 $ 0.40 $ 0.22
Funds From Operations $ (0.70 ) $ 0.39 $ (1.79 ) $ 0.95
Weighted Average 59,969 53,365 55,318 53,532
Shares-Diluted
The table above shows Funds From Operations Available to Common Stockholders
("FFO") and the related reconciliation to Net Income (Loss) Available to Common
Stockholders ("Net Income (Loss) Available") 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
(Unaudited, in thousands, except share and per share amounts)
September 30, December 31,
2009 2008
ASSETS
PROPERTIES:
Operating properties, net of accumulated
depreciation of $223,692 and $182,050 in 2009 and $ 1,006,735 $ 853,450
2008, respectively
Projects under development - 172,582
Land held for investment or future development 137,619 115,862
Residential lots under development 62,136 59,197
Multi-family units held for sale 43,818 70,658
Total properties 1,250,308 1,271,749
CASH AND CASH EQUIVALENTS 119,596 82,963
RESTRICTED CASH 4,861 3,636
NOTES AND OTHER RECEIVABLES,net of allowance for
doubtful accounts of $4,012 and $2,764 in 2009 and 48,123 51,267
2008, respectively
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES 145,835 200,850
OTHER ASSETS 60,701 83,330
TOTAL ASSETS $ 1,629,424 $ 1,693,795
LIABILITIES AND STOCKHOLDERS' INVESTMENT
NOTES PAYABLE $ 700,700 $ 942,239
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 77,328 65,026
DEFERRED GAIN 4,508 171,838
DEPOSITS AND DEFERRED INCOME 7,163 6,485
TOTAL LIABILITIES 789,699 1,185,588
COMMITMENTS AND CONTINGENT LIABILITIES
REDEEMABLE NONCONTROLLING INTERESTS 12,583 3,945
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 74,827 74,827
shares issued and outstanding in 2009 and 2008
7.50% Series B cumulative redeemable preferred
stock, $25 liquidation preference; 3,791,000 94,775 94,775
shares issued and outstanding in 2009 and 2008
Common stock, $1 par value, 150,000,000 shares
authorized, 102,539,783 and 54,922,173 shares 102,540 54,922
issued in 2009 and 2008, respectively
Additional paid-in capital 656,963 368,829
Treasury stock at cost, 3,570,082 shares in 2009 (86,840 ) (86,840 )
and 2008
Accumulated other comprehensive loss on (13,233 ) (16,601 )
derivative instrument
Distributions in excess of net income (34,713 ) (23,189 )
TOTAL STOCKHOLDERS' INVESTMENT 794,319 466,723
Nonredeemable noncontrolling interests 32,823 37,539
TOTAL EQUITY 827,142 504,262
TOTAL LIABILITIES AND EQUITY $ 1,629,424 $ 1,693,795
Source: Cousins Properties Incorporated
Contact: Cousins Properties Incorporated
James A. Fleming
Executive Vice President and
Chief Financial Officer
404-407-1150
jimfleming@cousinsproperties.com
or
Cameron Golden
Director of Investor Relations and
Corporate Communications
404-407-1984
camerongolden@cousinsproperties.com
Web site address:www.cousinsproperties.com