Cousins Properties Incorporated (NYSE:CUZ):
Highlights
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Funds From Operations for the fourth quarter were $0.18 per share, up
from $0.14 in the prior year.
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Same property net operating income for the fourth quarter was up 3.7%
over the prior year.
Cousins Properties Incorporated (NYSE:CUZ) today reported its results of
operations for the quarter and year ended December 31, 2013.
“Our fourth quarter performance demonstrates a successful finish to a
transformative year at Cousins,” said Larry Gellerstedt, President and
Chief Executive Officer of Cousins. “Our team executed exceptionally
well in 2013, producing strong financial results and further positioning
the company in high-growth Sunbelt markets while maintaining a solid
balance sheet.”
Portfolio Activity
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Leased or renewed 442,000 square feet of office and retail space
during the fourth quarter.
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Same property occupancy for the fourth quarter was 90.4%, up from
89.0% in the prior year.
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Cash-basis second generation net effective rent for the fourth quarter
was up 11.3% over the prior year.
Transaction Activity
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Sold the Inhibitex office building for $8.3 million prior to the
allocation of free rent credits, generating a gain of $3.0 million.
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Commenced construction on Emory Point Phase II, which will consist of
307 apartments and 43,000 square feet of retail space with a total
projected cost of $73.3 million.
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Closed a construction loan on Emory Point Phase II, which will provide
up to $46.0 million at a floating rate of LIBOR plus 1.85% and a term
of 3 years with two one-year extension options.
Financial Results
FFO was $34.3 million, or $0.18 per share, for the fourth quarter of
2013 compared with $14.2 million, or $0.14 per share, for the fourth
quarter of 2012. FFO was $77.1 million, or $0.53 per share, for the year
ended December 31, 2013, compared with $66.5 million, or $0.64 per
share, for the same period in 2012.
Net income available to common stockholders was $2.1 million, or $0.01
per share, for the fourth quarter of 2013, compared with net income
available of $30.1 million, or $0.29 per share, for the fourth quarter
of 2012. Net income available was $109.1 million, or $0.76 per share,
for the year ended December 31, 2013, compared with $32.8 million, or
$0.32 per share, for the same period in 2012.
Investor Conference Call and Webcast
The Company will conduct a conference call at 11:00 a.m. (Eastern Time)
on Friday, February 14, 2014, to discuss the results of the quarter
ended December 31, 2013. The number to call for this interactive
teleconference is (212) 231-2915.
A replay of the conference call will be available for 14 days by dialing
(402) 977-9140 and entering the passcode 21703342. The replay can be
accessed on the Company's website, www.cousinsproperties.com,
through the “Q4 2013 Cousins Properties Incorporated Earnings Conference
Call” link on the Investor Relations page.
Cousins Properties Incorporated is a leading fully-integrated real
estate investment trust (REIT) with extensive experience in development,
acquisition, financing, management, and leasing. Based in Atlanta, the
Company actively invests in top-tier urban office assets and
opportunistic mixed-use developments in Sunbelt markets.
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) 407-1898.
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; the failure of purchase, sale, or
other contracts to ultimately close; the failure to achieve anticipated
benefits from acquisitions or dispositions; the potential dilutive
effect of common stock offerings; the availability of buyers and
adequate pricing with respect to the disposition of assets; risks
related to the geographic concentration of our portfolio; risks and
uncertainties related to national and local economic conditions, the
real estate industry in general, and the commercial real estate markets
in particular; changes to the Company's strategy with regard to land and
other non-core holdings that require impairment losses to be recognized;
the effect of the sale of the Company's third party management and
leasing business; leasing risks, including the ability to obtain new
tenants or renew expiring tenants, and the ability to lease newly
developed and/or recently acquired space; the 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 zoning approval, receipts of
required permits, construction delays, cost overruns, and leasing risk);
the loss of key personnel; the potential liability for uninsured losses,
condemnation, or environmental issues; the 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; 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, 2013. 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.
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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(unaudited; in thousands, except per share amounts)
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Three Months Ended December 31,
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Year Ended December 31,
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2013
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2012
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2013
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2012
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Revenues:
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Rental property revenues
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$
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76,620
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$
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30,486
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$
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194,420
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$
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114,208
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Fee income
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1,959
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4,812
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10,891
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17,797
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Other
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941
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1,036
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5,430
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4,841
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79,520
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36,334
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210,741
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136,846
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Costs and expenses:
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Rental property operating expenses
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35,386
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13,892
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90,498
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50,329
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Reimbursed expenses
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850
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3,095
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5,215
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7,063
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General and administrative expenses
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4,684
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5,685
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21,940
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23,208
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Interest expense
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7,384
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5,997
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21,709
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23,933
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Impairment losses
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-
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-
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-
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488
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Depreciation and amortization
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31,590
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10,658
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76,277
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39,424
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Separation expenses
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-
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1,118
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520
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1,985
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Acquisition and related costs
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57
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299
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7,484
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793
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Other
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436
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803
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3,693
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5,144
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80,387
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41,547
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227,336
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152,367
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Loss on extinguishment of debt
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-
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-
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-
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(94
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)
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Loss from continuing operations before taxes, unconsolidated
joint ventures, and sale of investment properties
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(867
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)
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(5,213
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)
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(16,595
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)
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(15,615
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)
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Benefit (provision) for income taxes from operations
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26
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30
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23
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(91
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)
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Income from unconsolidated joint ventures
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1,463
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25,042
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67,325
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39,258
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Income from continuing operations before gain on sale of
investment properties
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622
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19,859
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50,753
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23,552
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Gain (loss) on sale of investment properties
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(72
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)
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3,907
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61,288
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4,053
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Income from continuing operations
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550
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23,766
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112,041
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27,605
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Income from discontinued operations:
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Income from discontinued operations
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577
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1,799
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3,299
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1,907
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Gain on sale of investment properties
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2,938
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10,200
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11,489
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18,407
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3,515
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11,999
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14,788
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20,314
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Net income
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4,065
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35,765
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126,829
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47,919
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Net income attributable to noncontrolling interests
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(167
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)
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(2,450
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(5,068
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)
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(2,191
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Net income attributable to controlling interests
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3,898
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33,315
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121,761
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45,728
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Preferred share original issuance costs
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-
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-
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(2,656
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-
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Dividends to preferred stockholders
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(1,777
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(3,227
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(10,008
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(12,907
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Net income available to common stockholders
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$
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2,121
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$
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30,088
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$
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109,097
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$
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32,821
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Per common share information — basic and diluted:
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Income (loss) from continuing operations attributable to controlling
interest
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$
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(0.01
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$
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0.17
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$
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0.66
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$
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0.12
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Income from discontinued operations
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$
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0.02
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$
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0.12
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$
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0.10
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$
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0.20
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Net income available to common stockholders
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$
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0.01
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$
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0.29
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$
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0.76
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$
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0.32
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Weighted average shares — basic
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189,665
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104,109
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144,255
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104,117
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Weighted average shares — diluted
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189,853
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104,132
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144,420
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104,125
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Dividends declared per common share
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$
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0.045
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$
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0.045
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$
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0.180
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$
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0.180
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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
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FUNDS FROM OPERATIONS
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(unaudited; in thousands, except per share amounts)
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Three Months Ended December 31,
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Year Ended December 31,
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2013
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2012
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2013
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2012
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Net Income Available to Common Stockholders
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$
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2,121
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$
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30,088
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$
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109,097
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$
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32,821
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Depreciation and amortization of real estate assets:
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Consolidated properties
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31,401
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10,426
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75,524
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38,349
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Discontinued properties
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495
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1,097
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3,083
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13,479
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Share of unconsolidated joint ventures
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2,985
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2,584
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13,434
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10,215
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Impairment loss on depreciable investment property, net of amounts
attributable to noncontrolling interests
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—
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1,558
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—
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11,748
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Gain on sale of depreciated properties:
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Consolidated properties
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96
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(158
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(60,587
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(334
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Discontinued properties
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(2,893
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(10,125
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(6,469
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(10,948
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Share of unconsolidated joint ventures
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77
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(23,153
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)
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(60,345
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(30,662
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Other
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7
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1,850
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3,397
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1,824
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Funds From Operations Available to Common Stockholders
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$
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34,289
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$
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14,167
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$
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77,134
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$
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66,492
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Per Common Share — Basic and Diluted:
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Net Income Available
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$
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0.01
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$
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0.29
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$
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0.76
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$
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0.32
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Funds From Operations
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$
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0.18
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$
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0.14
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$
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0.53
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$
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0.64
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Weighted Average Shares — Basic
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189,665
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104,109
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144,255
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104,117
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Weighted Average Shares — Diluted
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189,853
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104,132
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144,420
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104,125
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The table above shows Funds From Operations Available to Common
Stockholders (“FFO”) and the related reconciliation to Net Income
Available to Common Stockholders 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 (loss)
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, impairment losses on depreciable investment
property and after adjustments for unconsolidated partnerships and
joint ventures to reflect FFO on the same basis.
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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 operating
performance in part based on FFO. Additionally, the Company uses
FFO along with other measures, to assess performance in connection
with evaluating and granting incentive compensation to its
officers and other key employees.
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Net effective rent represents base rent less operating expense
reimbursements and leasing costs.
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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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(in thousands, except share and per share amounts)
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December 31, 2013
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December 31, 2012
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(unaudited)
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Assets:
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Real estate assets:
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Operating properties, net of accumulated depreciation of $235,707
and $255,128 in 2013 and 2012, respectively
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$
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1,828,437
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$
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669,652
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Projects under development, net of accumulated depreciation of $0
and $183 in 2013 and 2012, respectively
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21,681
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25,209
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Land
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35,053
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42,187
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Other
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-
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151
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1,885,171
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737,199
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Operating properties and related assets held for sale, net of
accumulated depreciation of $21,444 and $2,947 in 2013 and 2012,
respectively
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24,554
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1,866
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Cash and cash equivalents
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|
975
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|
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176,892
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Restricted cash
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|
2,810
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|
|
|
2,852
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|
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Notes and accounts receivable, net of allowance for doubtful
accounts of $1,827 and $1,743 in 2013 and 2012, respectively
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11,778
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|
|
|
9,972
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|
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Deferred rents receivable
|
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|
39,969
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|
|
|
39,378
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|
|
|
Investment in unconsolidated joint ventures
|
|
|
107,082
|
|
|
|
97,868
|
|
|
|
Intangible assets, net of accumulated amortization of $37,544 and
$15,153 in 2013 and 2012, respectively
|
|
|
170,973
|
|
|
|
33,280
|
|
|
|
Other assets
|
|
|
29,894
|
|
|
|
24,935
|
|
|
|
|
Total assets
|
|
$
|
2,273,206
|
|
|
$
|
1,124,242
|
|
|
Liabilities:
|
|
|
|
|
|
|
Notes payable
|
|
$
|
630,094
|
|
|
$
|
425,410
|
|
|
|
Accounts payable and accrued expenses
|
|
|
76,668
|
|
|
|
34,751
|
|
|
|
Deferred income
|
|
|
25,754
|
|
|
|
11,888
|
|
|
|
Intangible liabilities, net of accumulated amortization of $6,323
and $13,986 in 2013 and 2012, respectively
|
|
|
66,476
|
|
|
|
7,520
|
|
|
|
Other liabilities
|
|
|
15,242
|
|
|
|
1,720
|
|
|
|
|
Total liabilities
|
|
|
814,234
|
|
|
|
481,289
|
|
|
Commitments and contingencies
|
|
|
-
|
|
|
|
-
|
|
|
Equity:
|
|
|
|
|
|
|
Stockholders' investment:
|
|
|
|
|
|
|
Preferred stock, 20,000,000 shares authorized, $1 par value:
|
|
|
|
|
|
|
|
7.75% Series A cumulative redeemable preferred stock, $25
liquidation preference; 0 and 2,993,090 shares issued and
outstanding in 2013 and 2012, respectively
|
|
|
-
|
|
|
|
74,827
|
|
|
|
|
7.50% Series B cumulative redeemable preferred stock, $25
liquidation preference; 3,791,000 shares issued and outstanding in
2013 and 2012
|
|
|
94,775
|
|
|
|
94,775
|
|
|
|
Common stock, $1 par value, 250,000,000 shares authorized,
193,236,454 and 107,660,080 shares issued in 2013 and 2012,
respectively
|
|
|
193,236
|
|
|
|
107,660
|
|
|
|
Additional paid-in capital
|
|
|
1,420,951
|
|
|
|
690,024
|
|
|
|
Treasury stock at cost, 3,570,082 shares in 2013 and 2012
|
|
|
(86,840
|
)
|
|
|
(86,840
|
)
|
|
|
Distributions in excess of cumulative net income
|
|
|
(164,721
|
)
|
|
|
(260,104
|
)
|
|
|
|
Total stockholders' investment
|
|
|
1,457,401
|
|
|
|
620,342
|
|
|
|
Nonredeemable noncontrolling interests
|
|
|
1,571
|
|
|
|
22,611
|
|
|
|
|
Total equity
|
|
|
1,458,972
|
|
|
|
642,953
|
|
|
|
|
Total liabilities and equity
|
|
$
|
2,273,206
|
|
|
$
|
1,124,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
|
|
SAME PROPERTY INFORMATION
|
|
(unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Net Operating Income - Consolidated Properties
|
|
|
|
|
|
|
|
|
|
Rental property revenues
|
|
$
|
76,620
|
|
|
$
|
30,486
|
|
|
$
|
194,420
|
|
|
$
|
114,208
|
|
|
Rental property expenses
|
|
|
(35,386
|
)
|
|
|
(13,892
|
)
|
|
|
(90,498
|
)
|
|
|
(50,329
|
)
|
|
Net Operating Income - Consolidated Properties
|
|
|
41,234
|
|
|
|
16,594
|
|
|
|
103,922
|
|
|
|
63,879
|
|
|
Net Operating Income - Discontinued Operations
|
|
|
|
|
|
|
|
|
|
Rental property revenues
|
|
|
1,742
|
|
|
|
5,825
|
|
|
|
10,552
|
|
|
|
33,918
|
|
|
Rental property expenses
|
|
|
(666
|
)
|
|
|
(1,775
|
)
|
|
|
(4,157
|
)
|
|
|
(10,936
|
)
|
|
Net Operating Income - Discontinued Operations
|
|
|
1,076
|
|
|
|
4,050
|
|
|
|
6,395
|
|
|
|
22,982
|
|
|
Net Operating Income - Unconsolidated Joint Ventures
|
|
|
6,196
|
|
|
|
5,509
|
|
|
|
27,763
|
|
|
|
23,596
|
|
|
Total Net Operating Income
|
|
$
|
48,506
|
|
|
$
|
26,153
|
|
|
$
|
138,080
|
|
|
$
|
110,457
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Income:
|
|
|
|
|
|
|
|
|
|
Same Property
|
|
$
|
15,157
|
|
|
$
|
14,611
|
|
|
$
|
60,621
|
|
|
$
|
57,942
|
|
|
Non-Same Property
|
|
|
33,349
|
|
|
|
11,542
|
|
|
|
77,459
|
|
|
|
52,515
|
|
|
Net Operating Income
|
|
$
|
48,506
|
|
|
$
|
26,153
|
|
|
$
|
138,080
|
|
|
$
|
110,457
|
|
|
|
|
|
|
|
|
|
|
|
|
This schedule shows same property net operating income and the
related reconciliation to rental property revenues and rental
property expenses. Net Operating Income is used by industry
analysts, investors and Company management to measure operating
performance of the Company's properties. Net Operating Income, which
is rental property revenues less rental property operating expenses,
excludes certain components from net income in order to provide
results that are more closely related to a property's results of
operations. Certain items, such as interest expense, while included
in FFO and net income, do not affect the operating performance of a
real estate asset and are often incurred at the corporate level as
opposed to the property level. As a result, management uses only
those income and expense items that are incurred at the property
level to evaluate a property's performance. Depreciation and
amortization are also excluded from Net Operating Income. Same
Property Net Operating Income includes those office properties that
have been fully operational in each of the comparable reporting
periods. A fully operational property is one that has achieved 90%
economic occupancy for each of the two periods presented or has been
substantially complete and owned by the Company for each of the two
periods presented and the preceding year. Same Property Net
Operating Income allows analysts, investors and management to
analyze continuing operations and evaluate the growth trend of the
Company's portfolio.
|
Copyright Business Wire 2014