Cousins Properties Incorporated Reports Record First Quarter Results.ATLANTA--(BUSINESS WIRE)--April 29, 1998-- First Quarter Summary - 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. per share increased 25% to $0.55. - Office portfolio occupancy of 97%; retail portfolio occupancy of 96%. - $546 million of projects under development or in pre-development. Cousins Properties Incorporated (NYSE NYSE See: New York Stock Exchange :CUZ CUZ Because cuz Cousin CUZ Cuzco, Peru - Tte Velazco Astete (Airport Code) ), one of the largest diversified diversified (di·verˑ·s real estate development companies in the U.S., today reported record Funds From Operations (FFO FFO See: Funds from operations ) for the first quarter ended March 31, 1998. FFO per share increased 25% during the quarter to $0.55 from $0.44 for the year- earlier quarter. FFO rose 35% to $17.2 million from $12.8 million for the first quarter of 1997. Net income for the quarter increased 17% to $11.3 million, or $0.36 per share, from $9.6 million, or $0.33 per share, for the year-earlier period. All per share amounts reported are basic with diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. per share information included in the financial information accompanying this release. 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, "We're we're Contraction of we are. we're we are extremely pleased to report another record quarter for Cousins Properties. Our financial performance reflects increased FFO from both new and existing projects, a reduction in interest expense as a result of our December December: see month. 1997 stock offering, and a reduction in pre-development expense as several projects are now under development. "We have announced a number of significant projects in the past six months, continuing our strategy to create value through development and 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. acquisitions. We also have expanded into new geographic markets as we continue our long-held objective 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 both geographically and by property type. Our most recent venture is a major office building in San Francisco's financial district, the first new development in that market in 10 years. Groundbreaking ceremonies were April 24 on this $100 million office project. Closer to home, we are completing pre-development for a new `Avenue' concept specialty retail center in East Cobb East Cobb refers to the section of Cobb County, GA bounded by Cherokee County and the City of Mountain Park to the north, Fulton County and the Chattahoochee River to the East, Bell Ferry Road, Interstate 75, Interstate 575, and the Marietta city limits to the west, and Interstate 285 and County, one of metropolitan Atlanta's fastest growing markets. With the current pipeline of developments under construction, slated for construction later this year, as well as those that will be fully stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. by year end, we are very optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about our prospects for 1998 and beyond. "At March 31, 1998, our portfolio of office projects was 97% leased, while our retail portfolio was 96% leased, excluding projects in development. We have recently signed a number of leases which have added to our overall high leasing levels and also indicate the strong demand for quality projects in our target cities and submarkets." Recent Highlights Office Division - The Pinnacle pinnacle (pĭn`ĭkəl), minor architectural motif of vertical tapering shape, usually crowning a pier, buttress, or gable. Although sometimes it appears in Renaissance design, as in the Certosa di Pavia, it is almost exclusively a medieval , a 424,000 s.f. Class A office building in Atlanta's Buckhead submarket sub·mar·ket n. A geographic, economic, or specialized subdivision of a market. adj. Being below what is usual in a particular market: submarket wages; submarket interest rates. signed a lease for 22,000 s.f., approximately 5% of the total space, with Balentine & Co., a financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. company, bringing the project to 39% leased. With other commitments currently being finalized See finalization. , the building will be approximately 50% pre-leased. - 333 North Point Center East, a 128,000 s.f. office project in Northwest Atlanta executed leases bringing that building to 81% leased. With other commitments currently being finalized, the building will be 96% leased. - Grandview II, a 150,000 s.f. office building in Birmingham's south suburbs scheduled for delivery in the second quarter of this year 82% pre-leased. - 4200 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, a 250,000 s.f. office building in Atlanta's northwest suburbs executed a lease with GE Power Systems for 100% of the building. Wildwood Office Park, consisting of eight buildings, is 99% leased. - Announced Carlyle I, a 150,000 square foot Class A office building in Alexandria, Virginia Alexandria is an independent city in the Commonwealth of Virginia. As of the 2000 census, the city had a total population of 128,284. Located along the Western bank of the Potomac River, Alexandria is approximately 6 miles (9.6 kilometers) south of downtown Washington, DC. , at the Carlyle project, a master planned environment on 76 acres that will include office, retail and residential space. The building is 58% pre-leased to A.T. Kearney. Retail Division - Acquired The Shops at Palos Verdes Palos Verdes is often used to refer to a group of coastal cities on the Palos Verdes Peninsula in the Los Angeles/South Bay area of California. This affluent bedroom community is known for its dramatic views, good schools [1] extensive horse trails [2] , a 355,000 square foot shopping center shopping center, a concentration of retail, service, and entertainment enterprises designed to serve the surrounding region. The modern shopping center differs from its antecedents—bazaars and marketplaces—in that the shops are usually amalgamated into in Rolling Hills Estates, California Rolling Hills Estates is a city in Los Angeles County, California, United States. The population was 7,676 at the 2000 census. On the northern side of the Palos Verdes Peninsula, facing Torrance, Rolling Hills Estates is mostly residential, although it does feature a cluster . Cousins plans to re-develop the project into an approximately 380,000 s.f. open-air, high-end specialty center resulting in a total investment of approximately $65 million. - Opened Abbotts Bridge Station, an $11 million upscale neighborhood shopping center in the fast-growing northern Atlanta suburbs. At March 31, the center was 97% leased. - Started construction on The Shops at World Golf Village in St. Augustine, Florida, a $12 million joint venture with W.C. Bradley Co. to develop an 80,000 s.f. retail center. The project is currently 39% pre-leased. - Continued construction of Laguna Niguel Promenade promenade Public place where people walk (or, in the past, rode) at leisure for pleasure, exercise, or display. Promenades are pedestrian avenues pleasingly landscaped or commanding a view, often located along waterfronts and in parks. Vehicular traffic may or may not be restricted. , a 155,000 s.f. upscale retail shopping center in prosperous Laguna Niguel, 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). , with delivery scheduled for the second quarter of 1998. This center is currently 77% pre-leased. Medical Office Division - Meridian Meridian (mərĭd`ēən), city (1990 pop. 41,036), seat of Lauderdale co., E Miss., near the Ala. line; settled 1831, inc. 1860. Mark Plaza, a $27 million medical office building located adjacent to Atlanta's Northside, Scottish Rite Scottish rite n. A ceremonial rite in a Masonic system. and St. Joseph's Hospital complexes. The building will be completed in the third quarter of 1998 and is 73% pre-leased which is well ahead of the original lease-up schedule. Cousins Properties Incorporated is one of the largest diversified real estate development companies in the U.S. Based in Atlanta, the Company has extensive experience in the real estate industry including the development, acquisition, financing, management and leasing of properties. The property types that Cousins actively invests in include office, retail, medical office and land development projects. The Company's portfolio consists of 8.2 million square feet of office space, 3.2 million square feet of retail space and .2 million square feet of medical office space and over 400 acres of land for future commercial development. Cousins is a fully integrated equity real estate investment trust (REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). ) that has been public since 1962 and trades on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol "CUZ." 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 fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. 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. Accompanying Materials Financial Highlights -0-
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
FUNDS FROM OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
(In thousands, except per share amounts)
1998 1997
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Income before gain on sale of
investment properties $ 10,523 $ 7,228
Depreciation and amortization 6,341 6,023
Amortization of deferred financing
costs and depreciation of furniture,
fixtures and equipment (123) (100)
Elimination of the recognition of
rental revenues on a
straight-line basis 313 308
Adjustment to reflect stock
appreciation right expense on
a cash basis 174 (651)
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Consolidated Funds From Operations $ 17,228 $ 12,808
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Weighted Average Shares 31,496 28,995
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Consolidated Funds From Operations
Per Share - Basic $ 0.55 $ 0.44
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Adjusted Weighted Average Shares 31,962 29,399
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Consolidated Funds From Operations
Per Share - Diluted $ 0.54 $ 0.44
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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 NAREIT National Association of Real Estate Investment Trusts ") 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 lease-up 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 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 The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting as an indicator of operating performance; or to cash flows from operating, investing, or financing activities as a measure of liquidity. Supplemental detailed FFO information is available from the Company upon request. -0-
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
(In thousands, except per share amounts)
1998 1997
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REVENUES:
Rental property revenues $16,134 $15,255
Development income 792 974
Management fees 890 834
Leasing and other fees 534 137
Residential lot and outparcel sales 4,457 2,261
Interest and other 1,047 830
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23,854 20,291
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INCOME FROM UNCONSOLIDATED JOINT VENTURES 4,581 3,582
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COSTS AND EXPENSES:
Rental property operating expenses 3,834 3,709
General and administrative expenses 3,072 3,259
Depreciation and amortization 3,598 3,429
Stock appreciation right expense (credit) 198 (131)
Residential lot and outparcel cost of sales 4,179 1,946
Interest expense 2,812 3,656
Property taxes on undeveloped land 222 259
Other 15 479
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17,930 16,606
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INCOME FROM OPERATIONS BEFORE INCOME TAXES
AND GAIN ON SALE OF INVESTMENT PROPERTIES 10,505 7,267
(BENEFIT) PROVISION FOR INCOME TAXES FROM
OPERATIONS (18) 39
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INCOME BEFORE GAIN ON SALE OF INVESTMENT
PROPERTIES 10,523 7,228
GAIN ON SALE OF INVESTMENT PROPERTIES,
NET OF APPLICABLE INCOME TAX PROVISION 771 2,396
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NET INCOME $11,294 $9,624
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WEIGHTED AVERAGE SHARES 31,496 28,995
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INCOME PER SHARE:
From operations before gain on sale of
investment properties $ .34 $.25
From gain on sale of investment properties,
net of applicable income tax provision .02 .08
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BASIC NET INCOME PER SHARE $ .36 $ .33
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ADJUSTED WEIGHTED AVERAGE SHARES 31,962 29,399
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DILUTED NET INCOME PER SHARE $ .35 $ .33
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CASH DIVIDENDS DECLARED PER SHARE $ .36 $.31
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CONTACT: Cousins Properties, Atlanta Peter A. Tartikoff, 770/857-2384 or Mark B. Riley, 770/857-2507 http://www.cousins-cuz.com |
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