Cousins Properties Reports Results for Second Quarter and Six Months Ended June 30, 2006.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. -- 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 its results of operations for the three and six months ended June June: see month. 30, 2006. 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 Consolidated Statements of Income accompanying this release. 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. to Common Stockholders ("FFO FFO See: Funds from operations ") was $13.9 million, or $0.27 per share, for the second quarter of 2006, after a supplemental adjustment to exclude loss on 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. of debt. This compares to FFO of $17.6 million, or $0.34 per share, for the second quarter of 2005. FFO was $33.1 million, or $0.64 per share, for the six months ended June 30, 2006, after a supplemental adjustment to exclude loss on extinguishment of debt. This compares to FFO of $33.9 million, or $0.66 per share, for the six months ended June 30, 2005. Loss on extinguishment of debt was $2.8 million, or $0.05 per share, for the second quarter and six months ended June 30, 2006 and relates to the contribution of a property subject to a mortgage loan to a venture with a third party. Net Loss Available to Common Stockholders was $3.5 million, or $0.07 per share, for the second quarter of 2006 compared with Net Income Available to Common Stockholders ("Net Income Available") of $6.5 million, or $0.13 per share, for the second quarter of 2005. Net Income Available was $4.9 million, or $0.09 per share, for the six months ended June 30, 2006 compared with $12.0 million, or $0.23 per share, for the six months ended June 30, 2005. In addition to the loss on extinguishment of debt, Net Income Available for the second quarter and six months ended June 30, 2006 includes a $3.5 million ($0.07 per share) non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. to depreciation and amortization expense related to the termination of a lease at one of the Company's retail properties. Second quarter highlights of the Company included the following: --Formed a venture with The Prudential Prudential is the name of two different companies and buildings named after them: Companies:
--Closed 90 of the 94 units at 905 Juniper juniper, any tree or shrub of the genus Juniperus, aromatic evergreens of the family Cupressaceae (cypress family), widely distributed over the north temperate zone. Many are valuable as a source of lumber and oil. project and recognized $2.8 million in pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta profits for the quarter, resulting in a total pre-tax profit for the project to date of $8.3 million. --Executed a lease expansion with CB Richard Ellis CB Richard Ellis Group, Inc. NYSE: CBG is a multinational real estate corporation currently based in Los Angeles, California, U.S.A.. On December 20, 2006, the corporation, also known as CBRE, completed acquisition of Trammell Crow Co. in a transaction valued at $2. , Inc. and new leases with Cumulus Media Cumulus Media, Inc. (also known as Cumulus Broadcasting) NASDAQ: CMLS is a large owner of radio stations in markets in the United States with 307 stations in 61 markets as of December 31, 2005. Inc., Wilmington Trust Wilmington Trust (NYSE: WL) was founded on July 8, 1903) as a banking, trust, and safe deposit company by DuPont president T. Coleman du Pont. He opened the business in the dining room and parlor of a former private residence at 915 Market Street in Wilmington, Delaware with a Corp. and Riverside Advisors at Terminus Terminus (tûr`mĭnəs), in ancient Rome, both the boundary markers between properties and the name of the god who watched over boundaries. 100. --Commenced construction of the first building, a 459,000 square foot cross-dock industrial building, at Jefferson Jefferson, uninc. city (1990 pop. 25,782), Fairfax co., N Va. It is a residential suburb of Washington, D.C. Mill Business Park, in Jackson County, Georgia Jackson County is a county located in the U.S. state of Georgia. The population in 2000 was 41,589. Explosive growth is evident with a population of 52,292 in the 2005 Census estimates [1]. This makes Jackson County the fastest growing county in the Athens Metro. . --Commenced construction of the 379,000 square foot second phase of the initial industrial building at King Mill Distribution Park. Other developments subsequent to quarter-end: --Executed contracts to sell Bank of America Plaza There are several buildings in the United States called Bank of America Plaza:
See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). gains, tax gains and Value Creation are expected to be $175 million, $193 million and $120 million, respectively. --Executed a contract to acquire One Ninety One Peachtree Peachtree can be several things:
As defined by the Central Atlanta Progress (CAP) organization, the area measures approximately 4 mi², and was home to 23,300 as of 2006. . --Through a joint venture with Faison Enterprises, Inc., acquired approximately 100 acres of land in Murfreesboro, Tennessee Murfreesboro is a city in Rutherford County, Tennessee, United States. According to the 2007 census estimate the city had a total population of 92,559. It is the county seat of Rutherford CountyGR6. , and began construction of The Avenue Murfreesboro Avenue Murfreesboro is an open-air regional lifestyle shopping center in Murfreesboro, Tennessee in rapidly growing suburban Rutherford County, Tennessee, just southeast of Nashville, Tennessee. Anchors
--Through a joint venture with Seefried Properties, Inc., purchased 64 acres of land in Dallas, Texas “Dallas” redirects here. For other uses, see Dallas (disambiguation). The City of Dallas (pronounced [ˈdæl.əs] or [ˈdæl. for the first two buildings in an industrial project of up to 1.7 million square feet. --Purchased a 103,000 square foot office project located on 9.5 acres in Sandy Springs, Georgia Sandy Springs (formerly Hammond) is a newly incorporated city, as of December 2005, and a suburb of Atlanta, Georgia. Located in Fulton County, Georgia, just south of Roswell, it is named for the sandy springs that still exist in the city as a protected historic site. for investment and a potential future redevelopment. --Acquired approximately 1,750 acres in Coweta County, Georgia Coweta County is a county located in the U.S. state of Georgia. As of 2000, the population was 89,215. The 2006 Census Estimate placed the population at 115,291 [1]. The county seat is Newnan, Georgia6. for the development of a residential community that will include private hunting, equestrian equestrian a rider of horses. , fishing, swim and tennis facilities in a controlled access community. At June 30, 2006, the Company's portfolio of operational office buildings was 86% leased, consistent with the percentage at March 31, 2006, and its portfolio of operational retail centers was 93% leased compared with 95% at March 31, 2006. At June 30, 2006, the Company and its joint ventures had six retail, office and industrial projects under development totaling 3.1 million Company-owned square feet, and one condominium condominium In modern property law, individual ownership of one dwelling unit within a multidwelling building. Unit owners have undivided ownership interest in the land and those portions of the building shared in common. project under development containing a total of 529 units. The Company estimates the total cost of these projects will be $643.8 million and expects completion of these projects throughout the next three years. In addition, the Company had 24 residential communities under development directly or through investments in unconsolidated entities in which approximately 11,600 lots remain to be developed and/or sold. "This is a tremendous time for Cousins and our shareholders. We are filling our pipeline at an unprecedented pace with outstanding projects in every division," said Tom Bell, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Cousins. "The first seven months of 2006 have been very exciting. We have reached agreement to acquire one of the finest office buildings in the South for a very attractive price and agreed to sell one of the finest for a record price. We have moved our industrial division into a new market and started construction on Cousins' largest Avenue project to date." "The fact that our office building contracts set pricing records for Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. and Texas, is once again a demonstration of our ability to create value throughout the development and ownership process. Despite the inconsistent - but expected - short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. financial results related to these sales, 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. shareholders of Cousins know value creation is the truest measure of their company's performance," Bell added. "I am confident our dedicated team will execute at the same high level during the second half of 2006." The Consolidated Statements of Income, Consolidated Balance Sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. 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: Funds From Operations, which reconciles Net Income Available to FFO, are attached to this press release. More detailed information on Net Income Available and FFO results is included in the "Net Income and Funds From Operations-Supplemental Detail" schedule which is included along with other supplemental information in the Company's Current Report on 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. , which the Company is furnishing to the Securities and Exchange Commission ("SEC"), and which can be viewed through the "Quarterly Disclosures" and "SEC Filings" links 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 at (770) 857-2503. The Company will conduct a conference call at 3:00 p.m. (Eastern time) on Tuesday, August 8, 2006, to discuss the results of the quarter ended June 30, 2006. The number to call for this interactive teleconference is (913) 981-5520. A replay of the conference call will be available for 14 days by dialing (719) 457-0820 and entering the pass code 1834689. The Company will also provide an online Web simulcast and rebroadcast of its second quarter 2006 earnings release conference call. The live broadcast will be available through the "Q2 2006 Cousins Properties Incorporated Earnings Conference Call" link on the Investor Relations page of the Company's Web site, as well as at www.streetevents.com and www.earnings.com. The rebroadcast will be available on the Investor Relations page of the Company's Web site for 14 days. 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, multi-family, retail, industrial and land development projects. The Company's portfolio consists of interests in 7.4 million square feet of office space, 3.8 million square feet of retail space, 1.3 million square feet of industrial space, over 9,000 acres of strategically located land tracts for sale or future development, and significant land holdings for development of single-family residential communities. The Company also provides leasing and management services to third-party investors; its client-services portfolio comprises 13.1 million square feet of office and retail space. The Company 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 its 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 and local economic conditions, local real estate conditions, the activity of others developing competitive projects, the risks associated with development projects (such as delay, cost overruns Noun 1. cost overrun - excess of cost over budget; "the cost overrun necessitated an additional allocation of funds in the budget" cost - the total spent for goods or services including money and time and labor and leasing/sales risk of new properties), 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 ability of the Company to close properties under contract and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2005. 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. The estimated value creation of $120 million for Frost Bank Tower and the Company's share of Bank of America Plaza is calculated as estimated GAAP gain of $175 million less accumulated depreciation accumulated depreciation The total amount of depreciation that has been recorded for an asset since its date of acquisition. For example, a computer with a 5-year estimated life that was purchased for $2,000 would have accumulated depreciation of $800 [( of $59 million, plus the effect of straight-lined rents receivable and ground lease payables Payables Related: Accounts payable of $4 million. "Value Creation" is defined as the value or sales price of a property less any applicable 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, and less the GAAP cost of the property before deducting accumulated depreciation and excluding any straight-line rent receivable, all as of the measurement date. Where the ownership entity is a venture, the Company's share of these items is used in these calculations. Value Creation is useful in determining the economic gain or loss inherent in a property. For example, to the extent that GAAP depreciation is recorded against an asset when the asset has in fact appreciated, it is helpful to eliminate this portion of the GAAP gain in order to reflect the true economic gain. As such, Value Creation is useful to investors as a measure of a company's ability to create value by developing or acquiring an investment which has a fair market value in excess of the cost incurred by the company to create the investment. Company management considers Value Creation a key objective and core competency A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except per share amounts)
Three Months Six Months
Ended Ended
June 30, June 30,
-----------------------------------
2006 2005 2006 2005
-------- -------- -------- --------
REVENUES:
Rental property revenues $30,604 $24,580 $61,769 $48,436
Fee income 4,185 3,969 8,922 7,821
Multi-family residential unit
sales 15,136 - 21,715 -
Residential lot and outparcel
sales 3,128 4,449 7,634 6,060
Interest and other 55 414 17 719
-------- -------- -------- --------
53,108 33,412 100,057 63,036
COSTS AND EXPENSES:
Rental property operating expenses 11,746 9,723 22,774 18,835
General and administrative
expenses 9,906 8,217 19,837 16,893
Depreciation and amortization 13,689 9,523 24,512 18,895
Multi-family residential unit cost
of sales 12,377 - 17,735 -
Residential lot and outparcel cost
of sales 2,297 3,023 5,501 4,142
Interest expense 4,879 2,103 8,493 4,884
Loss on extinguishment of debt 2,764 - 2,764 -
Other 482 386 935 428
-------- -------- -------- --------
58,140 32,975 102,551 64,077
-------- -------- -------- --------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES AND
INCOME FROM UNCONSOLIDATED
JOINT VENTURES (5,032) 437 (2,494) (1,041)
PROVISION FOR INCOME TAXES FROM
OPERATIONS (1,926) (1,057) (4,296) (1,926)
MINORITY INTEREST IN INCOME OF
CONSOLIDATED SUBSIDIARIES (1,313) (397) (2,391) (789)
INCOME FROM UNCONSOLIDATED JOINT
VENTURES 8,404 5,608 20,527 10,783
-------- -------- -------- --------
INCOME FROM CONTINUING OPERATIONS
BEFORE GAIN ON SALE OF
INVESTMENT PROPERTIES 133 4,591 11,346 7,027
GAIN ON SALE OF INVESTMENT
PROPERTIES, NET OF APPLICABLE
INCOME TAX PROVISION 60 5,578 866 12,405
-------- -------- -------- --------
INCOME FROM CONTINUING OPERATIONS 193 10,169 12,212 19,432
DISCONTINUED OPERATIONS, NET OF
APPLICABLE INCOME TAX PROVISION:
Income from discontinued
operations - 109 - 147
Gain on sale of investment
properties 136 - 326 37
-------- -------- -------- --------
136 109 326 184
-------- -------- -------- --------
NET INCOME 329 10,278 12,538 19,616
DIVIDENDS TO PREFERRED
STOCKHOLDERS (3,813) (3,812) (7,625) (7,625)
-------- -------- -------- --------
NET INCOME (LOSS) AVAILABLE TO
COMMON STOCKHOLDERS $(3,484) $6,466 $4,913 $11,991
-------- -------- -------- --------
PER SHARE INFORMATION - BASIC:
Income (loss) from continuing
operations $(0.07) $0.13 $0.09 $0.24
Income from discontinued
operations 0.00 0.00 0.01 0.00
-------- -------- -------- --------
Net income (loss) available to
common stockholders $(0.07) $0.13 $0.10 $0.24
-------- -------- -------- --------
PER SHARE INFORMATION - DILUTED:
Income (loss) from continuing
operations $(0.07) $0.13 $0.09 $0.23
Income from discontinued
operations 0.00 0.00 0.00 0.00
-------- -------- -------- --------
Net income (loss) available to
common stockholders $(0.07) $0.13 $0.09 $0.23
-------- -------- -------- --------
CASH DIVIDENDS DECLARED PER COMMON
SHARE $0.37 $0.37 $0.74 $0.74
-------- -------- -------- --------
WEIGHTED AVERAGE SHARES - BASIC 50,385 49,924 50,377 49,856
-------- -------- -------- --------
WEIGHTED AVERAGE SHARES - DILUTED 52,385 51,586 52,377 51,591
-------- -------- -------- --------
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
FUNDS FROM OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2006 AND 2005
(Unaudited, in thousands, except per share amounts)
Three Months Six Months
Ended Ended
June 30, June 30,
----------------- -----------------
2006 2005 2006 2005
-------- -------- -------- --------
Net Income (Loss) Available to
Common Stockholders $(3,483) $6,466 $4,912 $11,991
Depreciation and amortization:
Consolidated properties 13,689 9,523 24,512 18,895
Discontinued properties - 31 - 68
Share of unconsolidated joint
ventures 2,016 2,285 4,078 4,828
Depreciation of furniture, fixtures
and equipment and amortization
of specifically identifiable
intangible assets:
Consolidated properties (868) (686) (1,689) (1,364)
Share of unconsolidated joint
ventures (4) (4) (8) (70)
Gain on sale of investment
properties, net of applicable
income tax provision:
Consolidated (61) (5,578) (866) (12,405)
Discontinued properties (135) - (326) (37)
Share of unconsolidated joint
ventures (1) 36 (1,054) (312)
Gain (loss) on sale of
undepreciated investment
properties (5) 5,512 735 12,278
-------- -------- -------- --------
Funds From Operations Available
to Common Stockholders, as
defined $11,148 $17,585 $30,294 $33,872
Loss on extinguishment of debt 2,764 - 2,764 -
-------- -------- -------- --------
Funds From Operations Available to
Common Stockholders, Excluding
Loss on Extinguishment of Debt $13,912 $17,585 $33,058 $33,872
-------- -------- -------- --------
Per Common Share - Basic:
Net Income (Loss) Available $(.07) $.13 $.10 $.24
-------- -------- -------- --------
Funds From Operations $.22 $.35 $.60 $.68
-------- -------- -------- --------
Funds From Operations, Excluding
Loss on Extinguishment of Debt $.28 $.35 $.66 $.68
-------- -------- -------- --------
Weighted Average Shares-Basic 50,385 49,924 50,377 49,856
-------- -------- -------- --------
Per Common Share - Diluted:
Net Income (Loss) Available $(.07) $.13 $.09 $.23
-------- -------- -------- --------
Funds From Operations $.21 $.34 $.58 $.66
-------- -------- -------- --------
Funds From Operations, Excluding
Loss on Extinguishment of Debt $.27 $.34 $.64 $.66
-------- -------- -------- --------
Weighted Average Shares-Diluted 52,031 51,586 52,019 51,591
-------- -------- -------- --------
The table above shows Funds From Operations Available to Common
Stockholders ("FFO") and the related reconciliation to Net Income
(Loss) Available to Common Stockholders ("Net Income Available") for
Cousins Properties Incorporated and Subsidiaries. The Company
calculated FFO in accordance with the National Association of Real
Estate Investment Trusts' ("NAREIT") definition, which is net income
available to common stockholders (computed in accordance with
accounting principles generally accepted in the United States
("GAAP")), excluding extraordinary items, cumulative effect of change
in accounting principle and gains or losses from sales of depreciable
property, plus depreciation and amortization of real estate assets,
and after adjustments for unconsolidated partnerships and joint
ventures to reflect FFO on the same basis. The Company presented Funds
From Operations Available to Common Stockholders, Excluding Loss on
Extinguishment of Debt to exclude the effect of the loss incurred on
debt transferred to a venture during the second quarter of 2006. The
Company views the mark-to-market debt loss as a component of the
transaction and therefore should be excluded from the FFO calculation.
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. Management believes that 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.
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