Cousins Properties Reports Results for First Quarter 2002.Business Editors ATLANTA--(BUSINESS WIRE)--May 1, 2002 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. for 2002 increased 4% to $0.53 per share; 94% occupancy level for total portfolio Cousins Properties Incorporated (NYSE NYSE See: New York Stock Exchange :CUZ CUZ Because cuz Cousin CUZ Cuzco, Peru - Tte Velazco Astete (Airport Code) ) today reported improved operating results for the first quarter ended March 31, 2002. All per share amounts are reported on a 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. basis; basic per share data is included in the financial tables accompanying this release. FFO FFO See: Funds from operations per share increased 4% to $0.53 per share for the first quarter of 2002 from $0.51 per share for the first quarter of 2001. FFO increased 4% to $26.6 million for the first quarter of 2002 from $25.5 million a year ago. Increases in rental property revenues from properties that had been under development but became partially or fully operational as well as the continued strong performance of existing properties contributed to the positive results for the first quarter ended March 31, 2002. Increased profits from residential lot sales also contributed to the positive results. The overall positive results for the first quarter were partially offset by increases in interest expense, general and administrative expenses and the provision for income taxes. Income before gain on sale of investment properties and extraordinary loss for the first quarter of 2002 was $11.7 million compared with $13.0 million for the same period last year. Income before gain on sale of investment properties and extraordinary loss was $0.23 per share for the first quarter of 2002 compared with $0.26 per share for the same period last year. For the three months ended March 31, Cousins recognized gain Recognized Gain The amount of gain reported for income tax purposes. Notes: You can defer recognizing some gains until the following year(s). See also: Capital Gain, Capital Loss, Deferred Income Tax, Drought Sale, Exempt Income, Exemption, Gain, Recognized Loss on sale of investment properties of $1.0 million, or $0.02 per share, in 2002 and $18.3 million, or $0.37 per share in 2001. The $18.3 million gain on sale of investment properties for the three months ended March 31, 2001 included the February February: see month. 2001 sale of Colonial Plaza For the hotel in New York City, see . Plaza (IPA /'plaθa/ or /'plasa/ MarketCenter, an approximately 480,000 square foot power center in Orlando, Florida The city of Orlando is a major city in central Florida and is the county seat of Orange County, Florida. According to the 2000 census, the city population was 185,951. A 2006 U.S. . Colonial Plaza MarketCenter was sold for $54.0 million, which was approximately $10.8 million over the cost of the center. Including depreciation recapture depreciation recapture See recapture of depreciation. of approximately $6.2 million, the net gain on the sale was approximately $17.0 million. Tom Bell, president and chief executive officer of Cousins, said, "We are pleased with our performance for the quarter given the difficult development environment in which we are now operating. The opening of two successful projects, Emory Emory may refer to:
An extension and/or increase in amount of existing debt. of the Bank of America Plaza There are several buildings in the United States called Bank of America Plaza:
On February 22, 2002, CSC (Card Security Code) A three- or four-digit number printed on the back of credit cards for security purposes. Called "Card Verification Value" (CVV) by Visa, "Card Validation Code" (CVC) by MasterCard and "Card Identification (CID) by American Express and Discover, Associates, L.P. ("CSC"), the partnership between Cousins and Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. Corporation that owns the Bank of America Plaza office building, completed a $150 million refinancing of the Bank of America Plaza. CSC then loaned the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of this non-recourse mortgage note payable to Cousins under a non-recourse loan with the same terms secured by Cousins' partnership interest in CSC. Through this transaction Cousins generated incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. proceeds of $80 million after the repayment in full of the existing mortgage note of $65 million on March 15, 2002, and payments of a prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. premium of $2.9 million and closing costs Closing Costs The numerous expenses (over and above the price of the property) that buyers and sellers normally incur to complete a real estate transaction. Costs incurred include loan origination fee, discount points, appraisal fee, title search, title insurance, survey, taxes, of $1.8 million. The stated interest rate of the $150 million non-recourse mortgage note payable that matures March 1, 2012 is 6.9575% and the effective interest rate on the $80 million of incremental proceeds only is 7.9281%, taking into account the prepayment premium for the original mortgage note. The prepayment premium of $2.9 million, along with the unamortized balance of closing costs of $0.6 million paid by Cousins related to the original mortgage note, were expensed as an Extraordinary Loss in the accompanying Consolidated Statements of Income. At May 1, 2002, Cousins' portfolio of operational office buildings was 95% leased; its operational retail centers were 93% leased; and its operational medical office buildings were 90% leased. Cousins Properties Incorporated, headquartered in Atlanta, 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 interests in 13.3 million square feet of office space, 3.1 million square feet of retail space and .9 million square feet of medical office space, and more than 300 acres of strategically located 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." For more information on the Company, please visit Cousins' web site at www.cousinsproperties.com. Included with this press release are Consolidated Statements of Income and Funds From Operations. Supplemental financial and property information, including Funds From Operations Supplemental Detail, a Portfolio Listing and a Development Pipeline schedule are available on the Company's web site, www.cousinsproperties.com, or via fax by calling the Company's Investor Relations Investor relations The process by which the corporation communicates with its investors. Department, 770/857-2449. The Company will conduct a conference call at 11:00 a.m (Eastern time) on May 2, 2002, to discuss the results of the first quarter of 2002. The number to call for this interactive teleconference is 913/981-5509. A replay of the conference call will be available until May 16, 2002, by dialing 719/457-0820 and entering the passcode, 486638. The Company will provide an online Web simulcast Simulcast is a portmanteau of "simultaneous broadcast", and refers to programs or events broadcast across more than one medium, or more than one service on the same medium, at the same time. and rebroadcast of its first quarter 2002 earnings release conference call. The live broadcast of Cousins' quarterly conference call will be available online at www.cousinsproperties.com, www.streetevents.com and www.companyboardroom.com on May 2, 2002, beginning at 11:00 a.m. (Eastern time). The online replay will be available at these sites for 14 days. 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, the Company's 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 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. filed on March 9, 2001. The words "believes," "expects," "estimates" and similar expressions are intended to identify forward-looking statements. 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 CONSOLIDATED ENTITIES
FUNDS FROM OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
(UNAUDITED)
(In thousands, except per share amounts)
2002 2001
-------- --------
Income before gain on sale of investment
properties and extraordinary loss $11,746 $13,022
Depreciation and amortization 16,298 14,629
Amortization of deferred financing costs
and depreciation of furniture, fixtures
and equipment (525) (398)
Elimination of the recognition of rental
revenues on a straight-line basis (926) (1,526)
Adjustment to reflect stock appreciation
right expense on a cash basis (15) (261)
-------- --------
Consolidated Funds From Operations $26,578 $25,466
======== ========
Weighted Average Shares 49,367 49,100
======== ========
Consolidated Funds From Operations Per
Share - Basic $.54 $.52
======== ========
Diluted Weighted Average Shares 50,406 50,228
======== ========
Consolidated Funds From Operations Per
Share - Diluted $.53 $.51
======== ========
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 straight-line adj. 1. Lying in a straight line. 2. Relating to a device whose linkage produces or copies motion in straight lines. 3. basis and (ii) reflect stock appreciation right expense on a cash basis. 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 Straight´-lined` a. 1. Having straight lines. 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. FFO Supplemental Detail is available from the Company upon request or at the Company's web site at www.cousinsproperties.com.
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
(UNAUDITED)
(In thousands, except per share amounts)
2002 2001
-------- --------
REVENUES:
Rental property revenues $39,401 $35,656
Development income 1,186 1,626
Management fees 2,354 1,471
Leasing and other fees 1,157 621
Residential lot and outparcel sales 4,035 2,388
Interest and other 1,135 1,595
-------- --------
49,268 43,357
-------- --------
INCOME FROM UNCONSOLIDATED JOINT VENTURES 7,030 5,505
-------- --------
COSTS AND EXPENSES:
Rental property operating expenses 11,509 10,614
General and administrative expenses 7,295 6,101
Depreciation and amortization 12,020 10,583
Stock appreciation right expense (credit) 41 (258)
Residential lot and outparcel cost of sales 2,970 1,999
Interest expense 8,532 7,171
Property taxes on undeveloped land 176 168
Other 987 402
-------- --------
43,530 36,780
-------- --------
INCOME FROM OPERATIONS BEFORE INCOME TAXES,
GAIN ON SALE OF INVESTMENT PROPERTIES AND
EXTRAORDINARY LOSS 12,768 12,082
PROVISION (BENEFIT) FOR INCOME TAXES FROM
OPERATIONS 1,022 (940)
-------- --------
INCOME BEFORE GAIN ON SALE OF INVESTMENT
PROPERTIES AND EXTRAORDINARY LOSS 11,746 13,022
GAIN ON SALE OF INVESTMENT PROPERTIES, NET
OF APPLICABLE INCOME TAX PROVISION 1,029 18,345
-------- --------
INCOME BEFORE EXTRAORDINARY LOSS 12,775 31,367
EXTRAORDINARY LOSS 3,501 -
-------- --------
NET INCOME $9,274 $31,367
======== ========
WEIGHTED AVERAGE SHARES 49,367 49,100
======== ========
BASIC NET INCOME PER SHARE:
Income before extraordinary loss $.26 $.64
Extraordinary loss .07 -
-------- --------
Basic net income per share $.19 $.64
======== ========
DILUTED WEIGHTED AVERAGE SHARES 50,406 50,228
======== ========
DILUTED NET INCOME PER SHARE:
Income before extraordinary loss $.25 $.62
Extraordinary loss .07 -
-------- --------
Diluted net income per share $.18 $.62
======== ========
CASH DIVIDENDS DECLARED PER SHARE $.37 $.34
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