Cousins Reports Results for Quarter and Year Ended December 31, 2012

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Cousins Reports Results for Quarter and Year Ended December 31, 2012

ATLANTA--(BUSINESS WIRE)-- Cousins Properties Incorporated (NYS: CUZ) :

Highlights

  • Funds From Operations for the fourth quarter was $0.14 per share. Before special items, FFO for the quarter was $0.15 per share.
  • Sold $250.8 million in operating assets during the fourth quarter.
  • Sold $26.5 million in land during the fourth quarter.
  • Subsequent to quarter end, purchased Post Oak Central in Houston for $232.6 million and completed transactions at Terminus 100 and 200 in Atlanta that resulted in a 50% ownership interest in both buildings.

Cousins Properties Incorporated (NYS: CUZ) today reported its results of operations for the quarter and year ended December 31, 2012.

"Cousins had an exceptional quarter and year, with solid operating performance and significant progress toward our strategic objectives," said Larry Gellerstedt, CEO of Cousins. "We are thrilled to kick-off 2013 with the off-market acquisition of Post Oak Central in Houston, a 1.3 million-square-foot, Class-A office asset in the heart of the Galleria submarket. This investment not only serves as an attractive entry into a target market, it provides a rare combination of substantial in-place yield and significant future development opportunity."

Portfolio Activity

  • Leased or renewed 184,000 square feet of office space and 106,000 square feet of retail space.
  • The office and retail portfolios finished the quarter 91% and 90% leased, respectively, on a same property basis.

Transaction Activity

  • Sold The Avenue Forsyth for $119.0 million, generating $105.7 million in net proceeds to the Company.
  • Sold the Company's interest in Palisades West for $64.8 million.
  • Sold The Avenue Webb Gin for $59.6 million.
  • Sold the 615 Peachtree land parcel for $11.0 million.
  • Sold the Terminus land parcels for $10.5 million.
  • Sold Cosmopolitan Center for $7.0 million.
  • Liquidated the Company's investment in Verde Realty for $5.4 million.
  • Sold the remaining King Mill land parcel for $4.2 million.
  • For the year, the Company sold $401.2 million in operating properties, land and other non-core assets.

Transactions Subsequent to Year End

  • Purchased the remaining 80% interest in Terminus 200 from a fund managed by Morgan Stanley Real Estate Investing in a transaction that valued the property at $164.0 million, or $290 per square foot.
  • Formed a 50/50 joint venture with institutional investors advised by J.P. Morgan Asset Management for both Terminus 100 and Terminus 200, neighboring Class-AA office towers in Atlanta's Buckhead submarket. Terminus 100 was attributed a value of $209.2 million, or $320 per square foot; Terminus 200 was attributed a value of $164.0 million, or $290 per square foot.
  • Purchased a 100% interest in Post Oak Central, a Class-A office complex in the Galleria submarket of Houston from institutional investors advised by J.P. Morgan Asset Management, for $232.6 million, or $182 per square foot.

Financial Results

FFO was $14.2 million, or $0.14 per share, for the fourth quarter of 2012 compared with ($110.2) million, or ($1.06) per share, for the fourth quarter of 2011. FFO was $66.5 million, or $0.64 per share, for the year ended December 31, 2012, compared with ($76.9) million, or ($0.74) per share, for the same period in 2011.

Net income available to common stockholders was $30.1 million, or $0.29 per share, for the fourth quarter of 2012 compared with net loss available of ($129.0) million, or ($1.24) per share, for the fourth quarter of 2011. Net income available was $32.8 million, or $0.32 per share, for the year ended December 31, 2012, compared with net loss available of ($141.3) million, or ($1.36) per share, for the same period in 2011.

The Company recorded separation expenses in the fourth quarter of 2012 of $1.1 million in connection with the strategic re-organization the Company previously announced in the third quarter of 2012. The Company also recognized an additional $75,000 gain on the previously completed sale of Cousins Properties Services during the fourth quarter of 2012. The following table reconciles FFO to FFO before these special items for the three months ended December 31, 2012:

    
ActualPer
($000)  Share
 
FFO$14,167$0.14
Severance/reorganization expenses1,1180.01
Gain on sale of Cousins Properties Services (75)   (0.00)
FFO before special items$15,210   $0.15 
 

Investor Conference Call and Webcast

The Company will conduct a conference call at 11:00 a.m. (Eastern Time) on Thursday, February 14, 2013, to discuss the results of the quarter and year ended December 31, 2012. The number to call for this interactive teleconference is (212) 231-2905.

A replay of the conference call will be available for 14 days by dialing (402) 977-9140 and entering the passcode 21645972. The replay can be accessed on the Company's website, www.cousinsproperties.com, through the "Q4 2012 Cousins Properties Incorporated Earnings Conference Call" link on the Investor Relations page.

Cousins Properties Incorporated is a leading diversified real estate company with extensive experience in development, acquisition, financing, management and leasing. Based in Atlanta, the Company actively invests in office and retail projects. Since its founding in 1958, Cousins has developed 20 million square feet of office space and 20 million square feet of retail space. Cousins has built and maintained an industry-wide reputation for innovative and sustainable developments, premium management services and top quality leadership. The Company creates and maintains value in real estate assets for the benefit of shareholders, and partners. Cousins Properties is a fully integrated equity real estate investment trust (REIT) and trades on the New York Stock Exchange under the symbol CUZ.

The Consolidated Statements of Comprehensive Income, Consolidated Balance Sheets and a schedule entitled Funds From Operations, which reconciles Net Income (Loss) Available to FFO, and a schedule entitled Same Property Information, which reconciles same property net operating income to rental property revenues and rental property expenses, are attached to this press release. More detailed information on Net Income (Loss) 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, which the Company is furnishing to the Securities and Exchange Commission ("SEC"), and, which can be viewed through the "Supplemental Information" and "SEC Filings" links on the "Investor Information & Filings" link of the Investor Relations page of the Company's website at www.cousinsproperties.com. This information may also be obtained by calling the Company's Investor Relations Department at (404) 407-1984.

Certain matters discussed in this news release are "forward-looking statements" within the meaning of the federal securities laws and are subject to uncertainties and risk. These include, but are not limited to, the availability and terms of capital and financing; the ability to refinance indebtedness as it matures; failure of purchase, sale or other contracts to ultimately close; the availability of buyers and adequate pricing with respect to the disposition of assets; risks and uncertainties related to national and local economic conditions, the real estate industry in general and in specific markets, and the commercial markets in particular; market conditions and changes to the Company's strategy with regard to land and other non-core holdings that require impairment losses to be recognized; the effects of the sale of the Company's third party management business; leasing risks, including the ability to obtain new tenants or renew expiring tenants on favorable terms, and the ability to lease newly developed, recently acquired or current vacant space; financial condition of existing tenants; volatility in interest rates and insurance rates; the availability of sufficient investment opportunities; competition from other developers or investors; the risks associated with real estate developments and acquisitions (such as construction delays, cost overruns and leasing risk); loss of key personnel; potential liability for uninsured losses, condemnation or environmental issues; potential liability for a failure to meet regulatory requirements; the financial condition and liquidity of, or disputes with, joint venture partners; any failure to comply with debt covenants under credit agreements; and any failure to continue to qualify for taxation as a real estate investment trust and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission, including those described in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2012. The words "believes," "expects," "anticipates," "estimates," "plans," "may," "intend," "will" or 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 such 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, except as required under U.S. federal securities laws.

 
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share amounts)
     

Three Months Ended
December 31,

Year Ended
December 31,
2012201120122011
REVENUES:
Rental property revenues$33,394$27,486$125,609$105,596
Fee income4,8123,09217,79713,821
Land sales4002,6052,6163,015
Other 644  460  2,256  6,614 
 39,250  33,643  148,278  129,046 
 
COSTS AND EXPENSES:
Rental property operating expenses14,98211,27354,51844,912
Reimbursed expenses3,0951,4597,0636,207
Land cost of sales872,5881,4202,891
General and administrative expenses5,6846,33823,20824,166
Interest expense5,9976,28123,93327,784
Depreciation and amortization11,7199,26743,55934,580
Impairment losses-96,623488100,131
Separation expenses1,11841,985197
Other 1,016  2,100  4,517  6,861 
 43,698  135,933  160,691  247,729 
 
LOSS ON EXTINGUISHMENT OF DEBT -  -  (94) (74)
 

LOSS FROM CONTINUING OPERATIONS BEFORE TAXES, UNCONSOLIDATED JOINT VENTURES AND SALE OF INVESTMENT PROPERTIES

(4,448)(102,290)(12,507)(118,757)
 
BENEFIT (PROVISION) FOR INCOME TAXES FROM OPERATIONS30(31)(91)186
 
INCOME (LOSS) FROM UNCONSOLIDATED JOINT VENTURES 25,042  (25,767) 39,258  (18,299)
 

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES

20,624(128,088)26,660(136,870)
 
GAIN ON SALE OF INVESTMENT PROPERTIES 3,907  3,317  4,053  3,494 
 
INCOME (LOSS) FROM CONTINUING OPERATIONS24,531(124,771)30,713(133,376)
 
INCOME (LOSS) FROM DISCONTINUED OPERATIONS:
Income (loss) from discontinued operations1,034(5,537)(1,201)1,390
Gain on sale of discontinued operations 10,200  6,082  18,407  8,519 
 11,234  545  17,206  9,909 
 
NET INCOME (LOSS)35,765(124,226)47,919(123,467)
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS (2,450) (1,504) (2,191) (4,958)
 
NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST33,315(125,730)45,728(128,425)
 
DIVIDENDS TO PREFERRED STOCKHOLDERS (3,227) (3,227) (12,907) (12,907)
 
NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS$30,088 $(128,957)$32,821 $(141,332)
 
PER COMMON SHARE INFORMATION - BASIC AND DILUTED:
Income (loss) from continuing operations attributable to controlling interest$0.18$(1.25)$0.15$(1.46)
Income (loss) from discontinued operations 0.11  0.01 $0.17 $0.10 
Net income (loss) available to common stockholders$0.29 $(1.24)$0.32 $(1.36)
 
WEIGHTED AVERAGE SHARES - BASIC 104,109  103,712  104,117  103,651 
WEIGHTED AVERAGE SHARES - DILUTED 104,132  103,712  104,125  103,651 Read Full Story

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