Cousins Reports Results for the Second Quarter of 2013

Cousins Reports Results for the Second Quarter of 2013

Accelerates Earnings Call to July 30 at 8 a.m. ET

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


Highlights

  • Funds From Operations for the quarter was $0.12 per share, $0.14 per share before preferred stock redemption charges.
  • Same property net operating income for the quarter increased 4.7% over prior year.
  • Leased or renewed 413,000 square feet of office and retail space.
  • Acquired 816 Congress, a 435,000-square-foot Class-A office tower in downtown Austin, Texas.
  • Commenced construction of Colorado Tower, a 371,000-square-foot Class-A office tower in downtown Austin, Texas.

Cousins Properties Incorporated (NYS: CUZ) today reported its results of operations for the quarter ended June 30, 2013.

"It was another solid quarter, highlighted by the 816 Congress acquisition and the commencement of Colorado Tower in Austin," said Larry Gellerstedt, President and Chief Executive Officer of Cousins. "We were also pleased with our leasing progress, particularly at Promenade and 2100 Ross, where our re-positioning efforts continue to drive results."

Portfolio Activity

  • Leased or renewed 367,000 square feet of office space and 46,000 square feet of retail space.
  • The office and retail portfolios finished the quarter 90% occupied on a same property basis, up from 87% in the prior year.

Transaction Activity

  • Completed a public offering of 16.5 million shares of common stock at $10.45 per share, generating net proceeds of $165.1 million.
  • Redeemed all outstanding shares of the Company's Series A Cumulative Redeemable Preferred Stock for approximately $75 million.
  • Acquired 816 Congress, a Class-A office tower in downtown Austin, Texas, for $102.4 million, after adjusting for rent credits.
  • Commenced construction of Colorado Tower, a Class-A office tower in downtown Austin, Texas for an estimated total cost of $126.1 million.
  • Refinanced the mortgage on Emory University Hospital Midtown Medical Office Tower, lowering the interest rate to 3.5% from 5.9%.
  • Sold all remaining land at the Company's Jefferson Mill project for $2.9 million.
  • Entered into a contract to sell Tiffany Springs MarketCenter.
  • Entered into a contract to sell The Avenue Murfreesboro.

Financial Results

FFO was $14.2 million, or $0.12 per share, for the second quarter of 2013 compared with $13.2 million, or $0.13 per share, for the second quarter of 2012. FFO was $25.6 million, or $0.23 per share, for the six months ended June 30, 2013, compared with $26.6 million, or $0.26 per share, for the same period in 2012.

Net loss available to common stockholders was ($5.6) million, or ($0.05) per share, for the second quarter of 2013, compared with net income available of $6.4 million, or $0.06 per share, for the second quarter of 2012. Net income available was $47.6 million, or $0.43 per share, for the six months ended June 30, 2013, compared to net loss available of ($6.7) million, or ($0.06) per share, for the same period in 2012.

In connection with the redemption of the Series A preferred stock in the second quarter of 2013, net income available was reduced by $2.7 million, or $0.02 per share. This amount represents the original issuance costs associated with the preferred stock. FFO before the effect of this reduction was $0.14 per share.

Investor Conference Call and Webcast

The Company will conduct a conference call at 8 a.m. (Eastern Time) on Tuesday, July 30, 2013, to discuss the results of the quarter ended June 30, 2013. The number to call for this interactive teleconference is (212) 231-2917.

A replay of the conference call will be available for 14 days by dialing (402) 977-9140 and entering the passcode 21669478. The replay can be accessed on the Company's website, www.cousinsproperties.com, through the "Q2 2013 Cousins Properties Incorporated Earnings Conference Call" link on the Investor Relations page.

Cousins Properties Incorporated is a fully integrated, self-administered and self-managed real estate investment trust (REIT). The Company, based in Atlanta, GA, primarily invests in Class-A office towers located in high growth Sunbelt markets, with a focus on Georgia, Texas and North Carolina.

The Consolidated Statements of Operations, Consolidated Balance Sheets, 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

June 30,

Six Months Ended

June 30,

2013201220132012
REVENUES:
Rental property revenues$38,729$28,922$73,477$57,221
Fee income2,9312,7866,5115,642
Land sales4335351,3961,484
Other 2,065  253  2,668  1,526 
 44,158  32,496  84,052  65,873 
 
COSTS AND EXPENSES:
Rental property operating expenses18,57612,52134,40624,370
Reimbursed expenses1,3591,3573,2682,732
General and administrative expenses4,5525,64410,62212,267
Land cost of sales4334161,396980
Interest expense4,2415,8759,17612,143
Depreciation and amortization15,4509,78327,24019,796
Separation expenses-79-292
Other 631  566  1,358  1,246 
 45,242  36,241  87,466  73,826 
 
LOSS ON EXTINGUISHMENT OF DEBT -  -  -  (94)
 

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

(1,084)(3,745)(3,414)(8,047)
 
PROVISION FOR INCOME TAXES FROM OPERATIONS(1)(33)(2)(60)
 
INCOME FROM UNCONSOLIDATED JOINT VENTURES 1,132  9,762  2,784  11,948 
 

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

475,984(632)3,841
 
GAIN ON SALE OF INVESTMENT PROPERTIES 406  29  57,583  86 
 
INCOME FROM CONTINUING OPERATIONS4536,01356,9513,927
 
INCOME (LOSS) FROM DISCONTINUED OPERATIONS:
Income (loss) from discontinued operations2803,543593(5,811)
Gain on sale of discontinued operations 86  674  181  760 
 366  4,217  774  (5,051)
 
NET INCOME (LOSS)81910,23057,725(1,124)
 
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS (515) (602) (1,022) 867 
 
NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST3049,62856,703(257)
 
PREFERRED SHARE ORIGINAL ISSUANCE COSTS(2,656)-(2,656)-
 
DIVIDENDS TO PREFERRED STOCKHOLDERS (3,227) (3,227) (6,454) (6,454)
 
NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS$(5,579)$6,401 $47,593 $(6,711)
 
PER COMMON SHARE INFORMATION - BASIC AND DILUTED:
Income (loss) from continuing operations attributable to controlling interest$(0.05)$0.02$0.42$(0.01)
Income (loss) from discontinued operations 0.00 $0.04 $0.01 $(0.05)
Net income (loss) available to common stockholders (0.05)$0.06 $0.43 $(0.06)
 
WEIGHTED AVERAGE SHARES - BASIC 118,661  104,165  111,430  104,082 
WEIGHTED AVERAGE SHARES - DILUTED 118,661  104,165  111,593  104,082 
DIVIDENDS PER COMMON SHARE$0.045 $0.045 $0.09 $0.09 
 
 
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
FUNDS FROM OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(Unaudited, in thousands, except per share amounts)
    
Three Months EndedSix Months Ended
June 30,June 30,
2013201220132012
 
Net Income (Loss) Available to Common Stockholders$(5,579)$6,401$47,593$(6,711)
Depreciation and amortization of real estate assets:
Consolidated properties15,2629,56026,86919,209
Discontinued properties5242,9671,0337,210
Share of unconsolidated joint ventures4,1672,4957,3715,156

Impairment loss on depreciable investment property net of amounts attributable to noncontrolling interests

---10,190
Gain on sale of depreciated properties:
Consolidated(130)(59)(57,066)(116)
Discontinued properties(86)(674)(181)(760)
Share of unconsolidated joint ventures-(7,509)-(7,509)
Other -  (29) -  (29)
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