COUSINS PROPERTIES REPORTS RECORD FOURTH QUARTER, 1996 RESULTS.ATLANTA--(BUSINESS WIRE)--Feb. 18, 1997-- 21% INCREASE IN FFO FFO See: Funds from operations PER SHARE FOR FOURTH QUARTER 19% INCREASE IN FFO PER SHARE FOR 1996 Cousins Properties Incorporated (NYSE NYSE See: New York Stock Exchange :CUZ CUZ Because cuz Cousin CUZ Cuzco, Peru - Tte Velazco Astete (Airport Code) ), the Atlanta Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. based office and real estate development company, today reported results for the fourth quarter and year ended December December: see month. 31, 1996. For the fourth quarter, Funds From Operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. (FFO) rose to $11.5 million from $9.4 million for the fourth quarter of 1995. On a per share basis, FFO increased 21% to $0.40 from $0.33 for the year-earlier quarter. Net income for the quarter increased to $18.1 million from $5.4 million for the year-earlier period. On a per share basis, net income rose 232% to $0.63 from $0.19 for the same period in 1995. During the fourth quarter, the Company recognized a gain of $11.8 million on the sale of investment properties, including the previously announced sale of the Lawrenceville Lawrenceville is the name of several places:
For 1996, FFO rose 22% to $44.2 million from $36.3 million for 1995. On a per share basis, FFO increased 19% to $1.55 for 1996, from $1.30 for 1995. Net income for the year increased 56% to $41.0 million from $26.3 million for 1995. On a per share basis, net income rose 53% to $1.44 from $0.94 for 1995. Daniel Daniel, book of the Bible Daniel, book of the Bible. It combines "court" tales, perhaps originating from the 6th cent. B.C., and a series of apocalyptic visions arising from the time of the Maccabean emergency (167–164 B.C. M. DuPree, President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of Cousins, said "1996 was another record year for Cousins Properties, reinforcing the strength of our markets and continuing our long record of growth through opportunistic opportunistic /op·por·tu·nis·tic/ (op?er-tldbomacn-is´tik) 1. denoting a microorganism which does not ordinarily cause disease but becomes pathogenic under certain circumstances. 2. investment in and development of real estate. Growth in FFO was a result of 10 new office and retail projects which became operational in 1996, with a total of 2.6 million square feet. We developed eight of these properties and acquired two, continuing to diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. our portfolio geographically and balancing the mix of property types. The fourth quarter sale of our Lawrenceville MarketCenter, a 500,000 square foot retail project in suburban Atlanta, at an attractive valuation confirms our ability to create value through development and also demonstrates continuing institutional investor Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. interest in our retail product. We used the proceeds from this transaction in a tax-deferred tax-de·ferred adj. 1. Of or relating to an investment that is not liable to taxation until income is withdrawn or an appointed date is reached. 2. exchange to purchase a major office building in Charlotte, North Carolina “Charlotte” redirects here. For other uses, see Charlotte (disambiguation). Charlotte is the largest city in the state of North Carolina and the 20th largest city in the United States. , establishing our presence there. "We're we're Contraction of we are. we're we are very proud of our consistent return to shareholders; in 1996, shareholders realized a total return on their investment of 46%. The three-year total return to shareholders is approximately 100%. In the past three years we have grown FFO per share by 85%. Based on our strong growth in 1996 and the properties we currently have under development, the Board of Directors voted in the fourth quarter to increase the dividend 15% to $0.31 per share, or $1.24 per share on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis. Since 1993 we have increased our dividend 41%, while reducing our payout ratio Payout Ratio The percentage of earnings paid out in dividends. It is calculated by dividing dividends per share by earnings per share. Notes: The payout ratio indicates how well earnings support the dividend payments: the lower the ratio, the more secure the dividend. to 72%." Significant events in 1996 included: -- The opening of new projects representing an investment of more than $173 million including: - 4100 and 4300 Wildwood Wildwood, city (1990 pop. 4,484), Cape May co., SE N.J., on an island off Cape May; settled 1882, inc. as a city 1911. It has large commercial fisheries and is a popular summer seaside resort with many vintage motels and other buildings from the 1940s–60s. Parkway in Atlanta, office buildings containing 250,000 square feet which are 100% leased to Georgia-Pacific
Georgia-Pacific LLC. is an American pulp and paper company based in Atlanta, Georgia, and is one of the world's leading manufacturers and distributors of tissue, pulp, paper, packaging, Corporation. - 200 North Point Center East in Atlanta, an office building with 129,000 square feet which is currently 90% leased. - Six new retail centers having in excess of 1.3 million square feet in geographically diverse locations including Orlando Orlando, city, United States Orlando (ôrlăn`dō), city (1990 pop. 164,693), seat of Orange co., central Fla., in a lake region; inc. 1875. In a citrus fruit and farm area, it is one of the world's most visited vacation spots. , Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and and Chesapeake, Virginia Chesapeake is an independent city located in the South Hampton Roads region of eastern Virginia in the United States. One of the Seven Cities of Hampton Roads, Chesapeake was formed in 1963 by a political consolidation of the City of South Norfolk with the former Norfolk County, ; and entry in the California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). retail market with the development of the Los Altos Los Altos (lôs ăl`tōs, lŏs), residential city (1990 pop. 26,303), Santa Clara co., W Calif.; inc. 1952. There is diversified light manufacturing. MarketCenter with 157,000 square feet. The combined occupancy for these centers is 99%. -- The sale of the Lawrenceville MarketCenter through a $34.3 million tax-deferred exchange. -- Strategic acquisitions of One Independence Center in Charlotte, North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. , a 522,000 square foot office building and adjacent parking deck, for $70.6 million; and a 147,000 square foot office building at 615 Peachtree Street Peachtree Street is the main north-south street of Atlanta, Georgia. The city grew up around this one street, and many of its historical and municipal buildings are or were located along it. in Atlanta. -- The purchase of the medical office building development and management operations of The Lea Richmond Richmond, cities, United States Richmond. 1 City (1990 pop. 87,425), Contra Costa co., W Calif., on San Pablo Bay, an inlet of San Francisco Bay; inc. 1905. Company and The Richmond Development Company, forming Cousins/Richmond, a division of Cousins based in Atlanta, and launching Cousins into dynamic medical office building sector. -- Completion of $224 million of long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. , non-recourse project financing at attractive rates while maintaining our debt to market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. ratio at under 30%. Projects that were begun in 1996 included: Office: -- 4200 Wildwood Parkway, 250,000 square feet, Atlanta -- 333 North Point Center East, 129,000 square feet, Atlanta Medical Office: -- Presbyterian Medical Center at University, 67,000 square feet, Charlotte, North Carolina Retail MarketCenters: -- Los Altos MarketCenter, 157,000 square feet, Long Beach, California -- Expansions of North Point MarketCenter and Presidential MarketCenter, both in Atlanta The Company's portfolio of office buildings was 96% occupied at December 31, 1996, while its retail MarketCenters had a combined occupancy of 99%, excluding projects in development. DuPree added, "The Atlanta market is now attracting substantial new development because of strong job growth, favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. market economics as well as pent-up pent-up adj. Not given expression; repressed: pent-up emotions. pent-up Adjective not released; repressed: demand for Class "A" office space and Cousins has a significant share of this business. Development in this market continues to be demand driven as opposed to capital driven and the market does not show any signs of getting out of balance in terms of the mix of projects coming into the market or excessive supply. "We're extremely optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about 1997 and beyond with our recent entry into the California retail market, the retail and office projects we have under development, and the exciting opportunities we see in the medical office building sector. Our strategy for growth continues to be to grow all our businesses primarily through development and opportunistic acquisitions, including affiliations with talented people and companies with development capabilities. This strategy gives us a good pipeline of development opportunities and allows us to select those projects where we can create value through our expertise." Cousins Properties is an Atlanta-based, fully integrated equity real estate investment trust that develops, owns, manages, leases and acquires commercial properties. The Company owns, either solely or through joint ventures, a portfolio of well-located, high quality office, retail, medical office, and residential developments, and owns or has options to acquire several thousand acres of strategically located undeveloped land. Currently, the portfolio consists of 28 properties totaling 8.2 million square feet. Certain matters discussed in this news release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the federal securities laws and are subject to uncertainties and risks, including, but not limited to, general economic conditions, local real estate conditions, interest rates, Cousins' ability to obtain favorable financing, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission, including the Form 10-Q Form 10-Q See 10-Q. for the Quarter ended March 31, 1996. -0-
Accompanying Materials
Financial Highlights
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
FUNDS FROM OPERATIONS
FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 1995 AND 1996
(UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended Years Ended
December 31, December 31,
------------------ ---------------
1995 1996 1995 1996
-------- -------- ------- -------
Income before gain on sale of
investment properties $ 5,313 $ 6,343 $24,480 $28,212
Depreciation and amortization 3,587 5,041 13,381 17,256
Amortization of deferred financing
costs and depreciation of furniture,
fixtures and equipment (139) (109) (592) (362)
Elimination of the recognition of
rental revenues on a straight-line
basis (173) 291 (1,053) (311)
Adjustment to reflect stock appreciation
right expense on a cash basis 776 (48) 1,166 (567)
Deferred income received net of deferred
income recognized -- -- (1,127) --
------- ------- ------- ------
Consolidated Funds From Operations $ 9,364 $11,518 $36,255 $44,228
======= ======= ======= =======
Weighted Average Shares Outstanding 28,109 28,784 27,983 28,520
======= ======= ======= =======
Consolidated Funds From Operations
Per Share $ .33 $ .40 $ 1.30 $ 1.55
======= ======= ======= =======
The table above shows Funds From Operations ("FFO") for Cousins
Properties Incorporated and Consolidated Entities and its
unconsolidated joint ventures. On a consolidated basis, FFO includes
the Company's FFO and the Company's share of FFO of its
unconsolidated joint ventures, but excludes the Company's share of
distributions from such ventures. The Company calculates its FFO
using the National Association of Real Estate Investment Trusts
("NAREIT") definition of FFO adjusted to (i) eliminate the
recognition of rental revenues on a straight-line basis, (ii) reflect
stock appreciation right expense on a cash basis and (iii) recognize
certain fee income as cash is received rather than when recognized in
the financial statements. The Company believes its FFO presentation
more properly reflects its operating results.
Management believes the Company's FFO is not directly comparable
to other REITs which own a portfolio of mature income producing
properties because the Company develops projects through a
development and leaseup phase before they reach their targeted cash
flow returns. Furthermore, the Company eliminates in consolidation
fee income for developing and leasing projects owned by consolidated
entities, while capitalizing a smaller amount of related internal
costs. In addition, unlike many REITs, the Company has considerable
land holdings which provide a strong base for future FFO growth as
land is developed or sold in future years. Property taxes on the
land, which are expensed currently, reduce current FFO.
As indicated above, the Company does not include straight-lined
rents in its FFO, as it could under the NAREIT definition of FFO.
Furthermore, most of the Company's leases are also escalated
periodically based on the Consumer Price Index, which unlike fixed
escalations, do not require rent to be straight-lined; under NAREIT's
definition straight-lining of rents produces higher FFO in the early
years of a lease and lower FFO in the later years of a lease.
FFO is used by industry analysts as a supplemental measure of an
equity REIT's performance. FFO should not be considered an
alternative to net income or other measurements under generally
accepted accounting principles as an indicator of operating
performance; or to cash flows from operating, investing, or financing
activities as a measure of liquidity.
Supplemental detail FFO information is available from the Company
upon request.
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED
ENTITIES CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 1995 AND 1996
($ in thousands, except per share amounts)
Three Months Years
Ended Ended
December 31, December 31,
--------------- --------------
1995 1996 1995 1996
---- ---- ---- ----
(Unaudited) (Audited)
REVENUES:
Rental property revenues $ 5,481 $11,285 $19,348 $33,112
Development and construction fees 210 280 3,515 1,660
Management fees 565 842 2,213 2,801
Leasing and other fees 413 196 2,156 1,558
Residential lot and outparcels sales 1,445 4,457 9,040 14,145
Interest and other 1,183 1,282 4,764 5,256
------- ------- ------- -------
9,297 18,342 41,036 58,532
------- ------- ------- -------
INCOME FROM UNCONSOLIDATED JOINT
VENTURES 3,777 4,278 14,113 17,204
------- ------- ------- -------
COSTS AND EXPENSES:
Rental property operating expenses 1,454 2,670 4,681 7,616
General and administrative expenses 1,829 2,499 7,648 9,080
Depreciation and amortization 1,308 2,490 4,516 7,219
Leasing and other commissions 2 27 20 68
Stock appreciation right expense 805 1,714 1,298 2,154
Residential lot and outparcel cost of
sales 1,322 4,154 8,407 13,676
Interest expense 310 2,587 687 6,546
Property taxes on undeveloped land 237 400 977 1,301
Other 550 575 1,688 1,567
------- ------- ------- -------
7,817 17,116 29,922 49,227
------- ------- ------- -------
INCOME FROM OPERATIONS BEFORE INCOME
TAXES AND GAIN ON SALE OF INVESTMENT
PROPERTIES 5,257 5,504 25,227 26,509
PROVISION (BENEFIT) FOR INCOME TAXES
FROM OPERATIONS (56) (839) 747 (1,703)
------- ------- ------- -------
INCOME BEFORE GAIN ON SALE OF
INVESTMENT PROPERTIES 5,313 6,343 24,480 28,212
GAIN ON SALE OF INVESTMENT PROPERTIES,
NET OF APPLICABLE INCOME TAX PROVISION 116 11,787 1,862 12,804
------- ------- ------- -------
NET INCOME $ 5,429 $18,130 $26,342 $41,016
======= ======= ======= =======
WEIGHTED AVERAGE SHARES OUTSTANDING 28,109 28,784 27,983 28,520
======= ======= ======= =======
INCOME PER SHARE:
From operations before gain on sale
of investment properties $ .19 $ .22 $ .87 $ .99
From gain on sale of investment
properties, net of applicable
income tax provision -- .41 .07 .45
------- ------- ------- -------
NET INCOME PER SHARE $ .19 $ .63 $ .94 $ 1.44
======= ======= ======= =======
CASH DIVIDENDS DECLARED PER SHARE $ .27 $ .31 $ .99 $ 1.12
======= ======= ======= =======
CONTACT: Cousins Properties Incorporated, Atlanta Peter A. Tartikoff Mark B. Riley Sr. Vice President and CFO See Chief Financial Officer. VP, Investor Relations Investor relations The process by which the corporation communicates with its investors. (770) 857-2384 (770) 857-2507 |
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