Cousins Properties Reports Results for First Quarter 2003.Business Editors ATLANTA--(BUSINESS WIRE)--May 5, 2003 Cousins Properties Incorporated (NYSE NYSE See: New York Stock Exchange :CUZ CUZ Because cuz Cousin CUZ Cuzco, Peru - Tte Velazco Astete (Airport Code) ) -- Net Income Increased 217% to $0.57 Per Share for the First 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. Increased 102% to $0.97 Per Share for the First Quarter -- Portfolio 92% Leased at March 31, 2003 Cousins Properties Incorporated (NYSE:CUZ) today reported improved operating results for the first quarter ended March 31, 2003. 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. Net Income per share increased 217% to $0.57 per share for the first quarter of 2003 from $0.18 per share for the first quarter of 2002. Net Income increased 198% to $27.6 million for the first quarter of 2003 from $9.3 million a year ago. Funds From Operations ("FFO FFO See: Funds from operations ") per share increased 102% to $0.97 per share for the first quarter of 2003 from $0.48 per share for the first quarter of 2002. FFO increased 96% to $47.1 million for the first quarter of 2003 from $24.0 million a year ago. FFO and Net Income were positively impacted by an increase in rental property revenues of approximately $22.0 million, largely due to lease termination fees termination fee The one-time charge for terminating or transferring an individual retirement account. If a financial institution charges a termination fee, the fee must be spelled out in the original agreement that is signed when the account is opened. of $21.1 million, $20 million of which is attributable to the termination of the Cable & Wireless lease at the 55 Second Street property in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden . The remaining termination fees are attributable to the termination of leases for seven other tenants. FFO and Net Income were negatively impacted by a decrease in development income and management and leasing fees, but were positively impacted by a decrease in the Company's provision for income taxes from operations. Increased interest expense of approximately $1.3 million contributed to the decrease in FFO and Net Income, in part because the interest that had been capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. to the 55 Second Street and Emory Emory may refer to:
In the first quarter of 2002, the Company expensed approximately $3.5 million of early debt extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. costs. Under accounting rules in effect at that time, this was categorized cat·e·go·rize tr.v. cat·e·go·rized, cat·e·go·riz·ing, cat·e·go·riz·es To put into a category or categories; classify. cat as an extraordinary item and, as such, did not reduce FFO. In April of 2002 the Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). issued Statement of Financial Accounting Standards No. 145 ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 145"). Under the new rules, effective January January: see month. 1, 2003, the Company was required to adopt SFAS No. 145 which no longer allows the characterization A rather long and fancy word for analyzing a system or process and measuring its "characteristics." For example, a Web characterization would yield the number of current sites on the Web, types of sites, annual growth, etc. of early debt extinguishment costs as extraordinary and which requires prior periods to be restated. FFO for the first quarter of 2002 has accordingly been restated downward by approximately $3.5 million. Adoption of SFAS No. 145 had no effect on Net Income. Net Income for the first quarter of 2003 as compared to Net Income for the first quarter of 2002 was negatively impacted by an increase in depreciation and amortization of approximately $4.2 million as the corresponding undepreciated tenant improvements and related costs of the eight lease terminations mentioned above were written off during the period and depreciation increased for 55 Second Street, which became partially operational for financial reporting purposes in February February: see month. 2002. At March 31, 2003, Cousins' portfolio of operational office buildings was 91% leased; its operational retail centers were 97% leased; and its operational medical office buildings were 88% leased, resulting in a 92% overall leased level. Tom Bell, president and chief executive officer of Cousins, said, "The first quarter saw a continuance The adjournment or postponement of an action pending in a court to a later date of the same or another session of the court, granted by a court in response to a motion made by a party to a lawsuit. of the difficult office market, but our aggressive leasing efforts allowed us to sign several significant leases, including an additional 214,000-square-foot lease with Coca-Cola Enterprises Coca-Cola Enterprises NYSE: CCE is the largest bottler by volume in the Coca-Cola System. It is the anchor bottler for North America and parts of Europe. The company is the bottler of Coca-Cola and its other soft drink products, and in some areas a few other soft drink at 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. Plaza and a 52,000-square-foot anchor lease with Frost Bank at Congress at Fourth in downtown Austin. Nationally known seafood seafood Edible aquatic animals excluding mammals, but including both freshwater and ocean creatures. Seafood includes bony and cartilaginous fishes, crustaceans, mollusks, edible jellyfish, sea turtles, frogs, sea urchins, and sea cucumbers. restaurant, McCormick & Schmick's, has also signed a lease at Congress at Fourth, marking the restaurant's first Austin location and bringing the project to 46% leased. We also have significant leasing momentum on the retail side at The Avenue West Cobb Avenue West Cobb is an open-air regional lifestyle shopping center in suburban Marietta, Georgia outside Atlanta, Georgia. Anchors none Notable Stores
List of shopping malls in Georgia , reaching 70% committed at our 206,000-square-foot specialty center, which is under-construction in suburban Atlanta. Our Land Division is also very active, with several new projects underway in Texas through the CL Realty realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. venture, as well as The Georgian community in Paulding County Paulding County is the name of several counties in the United States of America:
Mr. Bell continued, "The quarter also brought some significant management announcements, including the return of Dan DuPree as vice chairman to oversee our development activities. We also bolstered bol·ster n. A long narrow pillow or cushion. tr.v. bol·stered, bol·ster·ing, bol·sters 1. To support or prop up with or as if with a long narrow pillow or cushion. 2. our finance and retail teams with key executive additions. We believe these changes enhance the Company's ability to prosper through the economic down cycle and be in position to take advantage of growth opportunities as they arise." The Company announced during the fourth quarter of 2001 that its Board of Directors adopted a plan authorizing the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of up to 5 million shares of the Company's common stock. During the first quarter of 2003, the Company repurchased approximately 234,000 shares under this plan at an average price of $23.66 per share. Since 1999 the Company has repurchased approximately 2.7 million shares at a split adjusted average price of $23.44 per share. A schedule, entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: Net Income and Funds From Operations Basic Reconciliation, which reconciles Net Income to FFO is attached to this press release, as are the Consolidated Statements of Income. More detailed information on the quarterly Net Income and FFO results is included in the "Net Income and Funds From Operations-Supplemental Detail and Reconciliations" schedule which can be viewed along with other supplemental information included in the Company's 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. furnished fur·nish tr.v. fur·nished, fur·nish·ing, fur·nish·es 1. To equip with what is needed, especially to provide furniture for. 2. to the Securities and Exchange Commission ("SEC") or through the "Quarterly Press Release and Supplemental Information" link on the Investor Relations Investor relations The process by which the corporation communicates with its investors. page of the Company's Web site at www.cousinsproperties.com. This information may also be obtained by calling the Company's Investor Relations Department, (770) 857-2449. FFO reported in this press release and the supplemental information provided by the Company for the first quarter of 2003 are calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the National Association of Real Estate Investment Trusts ("NAREIT NAREIT National Association of Real Estate Investment Trusts ") definition of FFO. The Company will follow this definition in the future. Prior to 2003, the Company reported FFO based upon NAREIT's definition with certain modifications, including the elimination of straight line rents and the reporting of stock appreciation right expense on a cash basis. The Company believes that at this time the use of NAREIT's definition is more consistent with current rules of the SEC, including new Regulation G, and that uniformity in the industry is generally beneficial. A schedule reconciling Net Income with FFO calculated pursuant to NAREIT's definition and with FFO as previously reported by the Company for the past 10 years is part of the supplemental information included in the Company's Form 8-K furnished to the SEC and also is available through the "Quarterly Press Release and Supplemental Information" and "Supplemental SEC Information" links on the Investor Relations page of the Company's Web site. 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, 3.3 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. The Company will conduct a conference call at 11:00 a.m. (Eastern time) on May 5, 2003, to discuss the results of the first quarter 2003. The number to call for this interactive teleconference is (913) 981-5508. A replay of the conference call will be available through this source until May 19, 2003, by dialing (719) 457-0820 and entering the passcode, 404253. The Company will provide an online Web simulcast and rebroadcast of its first quarter 2003 earnings release conference call. The live broadcast of Cousins' quarterly conference call will be available through the Investor Relations page of the Company's Web site at www.cousinsproperties.com, at www.streetevents.com and at www.companyboardroom.com on May 5, 2003, beginning at 11:00 a.m. (Eastern time). The rebroadcast will be available on the Investor Relations page of the Company's Web site at www.cousinsproperties.com. 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 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
NET INCOME AND FUNDS FROM OPERATIONS
FOR THE QUARTERS ENDED MARCH 31, 2003 AND 2002
(UNAUDITED)
(In thousands, except per share amounts)
2003 2002
------- -------
Consolidated Net Income $27,594 $9,274
Depreciation and amortization:
Consolidated properties 15,400 11,156
Discontinued properties 676 864
Unconsolidated joint ventures 4,440 4,277
Depreciation of furniture, fixtures and
equipment and amortization of specifically
identifiable intangible assets:
Consolidated properties (571) (528)
Unconsolidated joint ventures (8) (3)
Gain on sale of investment properties,
net of applicable income tax provision (1,003) (1,029)
Impairment loss on depreciable property:
Unconsolidated joint ventures 551 -
------- -------
Consolidated Funds From Operations $47,079 $24,011
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Weighted Average Shares 48,135 49,367
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Per Share - Basic:
Consolidated Net Income $.57 $.19
======= =======
Consolidated Funds From Operations $.98 $.49
======= =======
Diluted Weighted Average Shares 48,780 50,406
======= =======
Per Share - Diluted:
Consolidated Net Income $.57 $.18
======= =======
Consolidated Funds From Operations $.97 $.48
======= =======
The table above shows Funds From Operations ("FFO") and the related reconciliation to Net Income for Cousins Properties Incorporated and Consolidated Entities and its unconsolidated joint ventures. Effective January 1, 2003, the Company adopted the National Association of Real Estate Investment Trusts' ("NAREIT") definition of FFO, which is net income (computed in accordance with accounting principles generally accepted in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ")), excluding extraordinary items, cumulative effect of change in accounting principle and gains or losses from sales of depreciable depreciable Of, relating to, or being a long-term tangible asset that is subject to depreciation. property, plus depreciation and amortization or impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. Prior year FFO has been restated to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" NAREIT's definition of FFO. Prior to 2003, the Company reported FFO based upon NAREIT's definition with certain modifications, including the elimination of straight line rents and reporting stock appreciation rights on a cash basis. A schedule reconciling net income with FFO reported by the Company and FFO calculated pursuant to NAREIT's definition for the past ten years is available through the "Supplemental SEC Information" link on the Company's Web site at www.cousinsproperties.com. 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. 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 the operating performance of its reportable segments and of its divisions 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 employees. In the first quarter 2002, the Company incurred a $3,501,000 loss on early extinguishment of debt and treated it as an extraordinary item in accordance with GAAP. Extraordinary items are not deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). in calculating FFO. As of January 1, 2003, the Company adopted Statement of Financial Accounting Standards No. 145 ("SFAS No. 145"), which no longer characterizes such costs as extraordinary and which requires prior periods to be restated. FFO for the first quarter of 2002 has accordingly been restated. Adoption of SFAS No. 145 had no effect on Net Income.
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(UNAUDITED)
(In thousands, except per share amounts)
Three Months
Ended March 31,
-----------------
2003 2002
------- -------
REVENUES:
Rental property revenues $58,076 $36,130
Development income 764 1,186
Management fees 2,105 2,354
Leasing and other fees 1,111 1,157
Residential lot and outparcel sales 3,928 4,035
Interest and other 1,055 1,135
------- -------
67,039 45,997
------- -------
INCOME FROM UNCONSOLIDATED JOINT VENTURES 6,497 7,030
------- -------
COSTS AND EXPENSES:
Rental property operating expenses 11,094 10,420
General and administrative expenses 7,214 7,295
Depreciation and amortization 15,400 11,156
Stock appreciation right expense - 41
Residential lot and outparcel cost of sales 3,231 2,970
Interest expense 9,789 8,532
Loss on debt extinguishment - 3,501
Property taxes on undeveloped land 185 176
Other 1,131 987
------- -------
48,044 45,078
------- -------
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES 25,492 7,949
PROVISION FOR INCOME TAXES FROM OPERATIONS 249 986
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INCOME FROM CONTINUING OPERATIONS BEFORE
GAIN ON SALE OF INVESTMENT PROPERTIES 25,243 6,963
GAIN ON SALE OF INVESTMENT PROPERTIES, NET OF
APPLICABLE INCOME TAX PROVISION 1,003 1,029
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INCOME FROM CONTINUING OPERATIONS 26,246 7,992
------- -------
INCOME FROM DISCONTINUED OPERATIONS 1,348 1,282
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NET INCOME $27,594 $9,274
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BASIC NET INCOME PER SHARE:
Income from continuing operations $.54 $.16
Income from discontinued operations .03 .03
------- -------
Basic net income per share $.57 $.19
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DILUTED NET INCOME PER SHARE:
Income from continuing operations $.54 $.16
Income from discontinued operations .03 .02
------- -------
Diluted net income per share $.57 $.18
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CASH DIVIDENDS DECLARED PER SHARE $.37 $.37
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WEIGHTED AVERAGE SHARES 48,135 49,367
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DILUTED WEIGHTED AVERAGE SHARES 48,780 50,406
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