Cousins Properties Reports Results for Second Quarter 2003.Business Editors ATLANTA--(BUSINESS WIRE)--Aug. 4, 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 per share increased 1,068% to $2.92 for the second quarter of 2003 and 693% to $3.49 for the six months ended June June: see month. 30, 2003, due primarily to gains on sales of properties -- 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 decreased 4% to $0.55 for the second quarter of 2003 and increased 44% to $1.51 for the six months ended June 30, 2003 -- 91% occupancy level for total portfolio at June 30, 2003 Cousins Properties Incorporated today reported its results of operations for the second quarter and six months ended June 30, 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 1,068% to $2.92 per share for the second quarter of 2003 from $0.25 per share for the second quarter of 2002. Net Income increased 1,029% to $143.5 million for the second quarter of 2003 from $12.7 million for the second quarter of 2002. For the six months ended June 30, 2003, Net Income per share increased 693% to $3.49 per share from $0.44 per share for the same period last year. Net Income increased 678% to $171.1 million for the six months ended June 30, 2003, from $22.0 million for the same period last year. Funds From Operations ("FFO FFO See: Funds from operations ") per share decreased 4% to $0.55 per share for the second quarter of 2003 from $0.57 per share for the second quarter of 2002. FFO decreased 7% to $27.0 million for the second quarter of 2003 from $29.0 million for the second quarter of 2002. For the six months ended June 30, 2003, FFO per share increased 44% to $1.51 from $1.05 for the same period last year. FFO increased 40% to $74.1 million for the six months ended June 30, 2003, from $53.1 million for the same period last year. Net Income increased significantly during the second quarter and six months ended June 30, 2003, in part due to the sales of Mira Mesa MarketCenter and Cerritos Cer·ri·tos A city of southern California, a suburb of Los Angeles. Population: 52,600. Corporate Center which generated a combined gain on sale of $43.0 million. The receipt by the Company of its share of cash proceeds from the Mira Mesa MarketCenter sale triggered recognition of approximately $90.0 million of the Company's deferred gain associated with the original formation of CP Venture. This deferred gain, originally recorded on the balance sheet in 1998 when the Company contributed properties to the venture, was being amortized into income ratably over thirty years. The deferred gain remaining on the balance sheet will continue to be amortized into income as the properties originally contributed to the venture are depreciated Depreciated may refer to:
The loss of operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. from properties sold and the loss of income from tenants due to early terminations of lease obligations negatively affected Net Income and FFO in the second quarter and the six months ended June 30, 2003. This decrease in Net Income and FFO was offset by the recognition of 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 $1.4 million from nine tenants in the second quarter of 2003 and $22.5 million from 17 tenants in the six months ended June 30, 2003, compared to $1.4 million and $1.6 million received in the second quarter and six months of 2002, respectively. An increase in depreciation and amortization negatively affected Net Income by $1.3 million in the second quarter and $5.5 million in the six months ended June 30, 2003, primarily due to accelerating the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of unamortized tenant improvements and related costs for the lease terminations mentioned above and increased depreciation from 55 Second Street, which became partially operational in February February: see month. 2002. Increases in residential lot sales, including the Company's share of residential lot sales in unconsolidated joint ventures, positively affected Net Income and FFO by $1.0 million in the second quarter of 2003, reflecting the Company's increased involvement in residential development activities. Net Income and FFO were also positively affected in the second quarter and six months ended June 30, 2003, by Emory Emory may refer to:
Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time. In the context of project financing, interest that is paid by additional borrowing. on projects under construction, partially offset by an increase in the Company's provision for income taxes. The Company incurred a loss on 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. in the first quarter of 2002, which reduced Net Income and FFO for the six months ended June 30, 2002, by $3.5 million. Additional increases in FFO and Net Income for the six months ended June 30, 2003, were due to decreases in minority interest expense and in the Company's provision for income taxes, partially offset by an increase in net interest expense, in part because 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 Crawford Long Medical Office Tower projects was no longer subject to capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. . At June 30, 2003, Cousins' portfolio of operational office and medical office buildings was 90% leased and its operational retail centers were 96% leased resulting in a 91% overall leased level. Tom Bell, president and chief executive officer of Cousins, said, "The second quarter brought a number of notable events, including the sale of three 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). assets - the two Cerritos office buildings and Mira Mesa MarketCenter. These sales are a great example of our strategy of creating and harvesting value, where we take advantage of opportunities in the marketplace to realize the value created through development. We expect to 'harvest' more value in the second half of the year with the sale of Presidential MarketCenter and Perimeter The boundary of a system or network, which defines the inside and outside. It is typically determined by firewalls and addresses. See DMZ. Expo, which are currently under contract. The recognition of a large component of the CP Venture gain this quarter underscores the point that we have created significant value in multiple assets and transactions in recent years." Mr. Bell continued, "We continue with our efforts toward additional value creation and, in that connection, we are experiencing tremendous leasing success 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 . This retail project under construction is now 87% committed and slated to open in mid-September n. 1. the middle part of September. Noun 1. mid-September - the middle part of September period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue . We believe this speaks well for the potential for additional quality retail development. I would also note that the lot sales for the Land Division continued to impress during the second quarter and the division's new projects in Paulding County, Georgia Paulding County is a county located in the U.S. state of Georgia. As of the 2000 census, the population is 81,678. The 2006 Census Estimate shows a population of 121,530 [1]. The county seat is Dallas, Georgia6. and Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. and Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation). Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the are progressing on schedule." Mr. Bell added, "The office market continues to be a challenge. One of our larger tenants, Mirant Mirant Services LLC, an Atlanta-based energy company, produces and sells electricity in the United States, the Caribbean, and the Philippines. The company was spun-off from parent, Southern Company, on April 2, 2001. , has filed bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most . They occupy all of the 1155 Perimeter Center West building, a 362,000 square foot building in which we have a 50% interest. We do not know whether they will terminate Terminate (terminat.exe) was a shareware modem terminal and host program for MS-DOS and compatible operating systems developed from the early to the late 1990s by the Dane Bo Bendtsen. The last release (5. our lease, a right that they have in bankruptcy. Obviously, any such termination would have a negative impact on Net Income and FFO. Notwithstanding the office market weakness to date, we have been able to maintain a 90% leased level in our office portfolio - well above average for our core markets. Thus far, however, we have not seen any significant signs of recovery in our primary office markets." The Consolidated Statements of Income and 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, are attached to this press release. More detailed information on the quarterly and six month Net Income and FFO results is included in the "Net Income and Funds From Operations-Supplemental Detail and Reconciliations" schedule which is included along with other supplemental information 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. , dated August 5, 2003, and 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") and which can be viewed through the "Quarterly Disclosures" 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. Cousins Properties Incorporated, headquartered in 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. , 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 13.9 million square feet of office and medical office space, 2.7 million square feet of retail 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 August 5, 2003, to discuss the results of the second quarter and first six months of 2003. The number to call for this interactive teleconference is (913) 981-5533. A replay of the conference call will be available until August 19, 2003, by dialing (719) 457-0820 and entering the passcode, 483026. The Company will provide an online Web simulcast and rebroadcast of its second 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 August 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, the activity of others developing competitive projects, the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. nature of the real estate industry, the financial condition of existing tenants, 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 or zoning, environmental matters, the effects of terrorism, the failure of assets under contract for sale to ultimately close 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," "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 CONSOLIDATED ENTITIES
NET INCOME AND FUNDS FROM OPERATIONS BASIC RECONCILIATION
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2003 2002 2003 2002
-------- -------- -------- --------
Consolidated Net Income $143,500 $12,712 $171,094 $21,987
Depreciation and
amortization:
Consolidated properties 13,142 11,863 27,866 22,402
Discontinued properties 276 1,484 1,628 2,965
Unconsolidated joint
ventures 4,689 4,561 9,129 8,838
Depreciation of furniture,
fixtures and equipment and
amortization of
specifically identifiable
intangible assets:
Consolidated properties (602) (532) (1,173) (1,060)
Unconsolidated joint
ventures (9) (2) (17) (5)
Gain on sale of investment
properties, net of
applicable income tax
provision (133,968) (1,042) (134,971) (2,072)
Impairment loss on
depreciable property:
Unconsolidated joint
ventures - - 551 -
-------- -------- -------- --------
Consolidated Funds From
Operations $27,028 $29,044 $74,107 $53,055
======== ======== ======== ========
Weighted Average Shares 48,267 49,617 48,201 49,493
======== ======== ======== ========
Per Share - Basic:
Consolidated Net Income $2.97 $.26 $3.55 $.44
======== ======== ======== ========
Consolidated Funds From
Operations $.56 $.59 $1.54 $1.07
======== ======== ======== ========
Diluted Weighted Average
Shares 49,228 50,621 48,993 50,447
======== ======== ======== ========
Per Share - Diluted:
Consolidated Net Income $2.92 $.25 $3.49 $.44
======== ======== ======== ========
Consolidated Funds From
Operations $.55 $.57 $1.51 $1.05
======== ======== ======== ========
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 January: see month. 1, 2003, the Company adopted the National Association of Real Estate Investment Trusts' ("NAREIT NAREIT National Association of Real Estate Investment Trusts ") definition of FFO, which is net income (computed 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 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 $3,501,000 loss on early extinguishment of debt and treated it as an extraordinary item in accordance with GAAP. Extraordinary items are not deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). in calculating FFO. As of January 1, 2003, the Company adopted Statement of Financial Accounting Standards No. 145 ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 145"), which no longer characterizes such costs as extraordinary and which requires prior periods to be restated. FFO for the six months ended June 30, 2002, has accordingly been restated. Adoption of SFAS No. 145 had no effect on Net Income.
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(UNAUDITED)
($ in thousands, except per share amounts)
Three Months Six Months
Ended June 30, Ended June 30,
------------------- -------------------
2003 2002 2003 2002
-------- -------- -------- --------
REVENUES:
Rental property revenues $34,813 $36,919 $89,802 $70,220
Development income 908 972 1,672 2,158
Management fees 2,187 2,288 4,292 4,642
Leasing and other fees 1,234 696 2,345 1,853
Residential lot and
outparcel sales 1,612 521 5,540 4,556
Interest and other 1,526 1,114 2,581 2,249
-------- -------- -------- --------
42,280 42,510 106,232 85,678
-------- -------- -------- --------
INCOME FROM UNCONSOLIDATED
JOINT VENTURES 7,663 6,601 14,160 13,631
-------- -------- -------- --------
COSTS AND EXPENSES:
Rental property operating
expenses 11,152 10,180 21,609 19,962
General and
administrative expenses 7,644 6,965 14,858 14,301
Depreciation and
amortization 13,142 11,863 27,866 22,402
Residential lot and
outparcel cost of sales 1,368 444 4,599 3,414
Interest expense 8,396 9,015 17,652 17,009
Loss on debt
extinguishment - - - 3,501
Property taxes on
undeveloped land 218 174 403 350
Other 846 1,049 1,751 1,810
-------- -------- -------- --------
42,766 39,690 88,738 82,749
-------- -------- -------- --------
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME
TAXES 7,177 9,421 31,654 16,560
PROVISION FOR INCOME TAXES
FROM OPERATIONS 537 117 786 1,103
-------- -------- -------- --------
INCOME FROM CONTINUING
OPERATIONS BEFORE GAIN ON
SALE OF INVESTMENT
PROPERTIES 6,640 9,304 30,868 15,457
GAIN ON SALE OF INVESTMENT
PROPERTIES, NET OF
APPLICABLE INCOME TAX
PROVISION 90,956 1,042 91,959 2,072
-------- -------- -------- --------
INCOME FROM CONTINUING
OPERATIONS 97,596 10,346 122,827 17,529
-------- -------- -------- --------
DISCONTINUED OPERATIONS,
NET OF APPLICABLE INCOME
TAXES:
Income from discontinued
operations 2,892 2,366 5,255 4,458
Gain on sale of
investment properties,
net of minority interest 43,012 - 43,012 -
-------- -------- -------- --------
45,904 2,366 48,267 4,458
-------- -------- -------- --------
NET INCOME $143,500 $12,712 $171,094 $21,987
======== ======== ======== ========
BASIC NET INCOME PER SHARE:
Income from continuing
operations $2.02 $.21 $2.55 $.35
Discontinued operations .95 .05 1.00 .09
-------- -------- -------- --------
Basic net income per
share $2.97 $.26 $3.55 $.44
======== ======== ======== ========
DILUTED NET INCOME PER
SHARE:
Income from continuing
operations $1.99 $.20 $2.51 $.35
Discontinued operations .93 .05 .98 .09
-------- -------- -------- --------
Diluted net income per
share $2.92 $.25 $3.49 $.44
======== ======== ======== ========
CASH DIVIDENDS DECLARED PER
SHARE $.37 $.37 $.74 $.74
======== ======== ======== ========
WEIGHTED AVERAGE SHARES 48,267 49,617 48,201 49,493
======== ======== ======== ========
DILUTED WEIGHTED AVERAGE
SHARES 49,228 50,621 48,993 50,447
======== ======== ======== ========
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