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Section 1: 8-K (8-K)

Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 25, 2018
Cousins Properties Incorporated
(Exact name of registrant as specified in its charter)

Georgia
(State or other jurisdiction of incorporation)

001-11312
(Commission File Number)

58-0869052
(IRS Employer Identification Number)


3344 Peachtree Road NE, Suite 1800, Atlanta, Georgia 30326-4802
(Address of principal executive offices)

Registrant’s telephone number, including area code: (404) 407-1000

Former Address
(191 Peachtree Street, Suite 500, Atlanta, Georgia 30308-1740)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o




Item 2.02. Results of Operations and Financial Condition
On July 25, 2018, Cousins Properties Incorporated (the “Company”) issued a Press Release and Quarterly Information Package containing information about the Company’s financial condition and results of operations for the quarter ended June 30, 2018. A copy of the Company’s Press Release and Quarterly Information Package is attached hereto as Exhibit 99.1. The information contained in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” with the Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.


Item 9.01. Financial Statements and Exhibits.

(c)    Exhibits

Exhibit Number        Exhibit Description


        




 





Signatures


Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: July 25, 2018


COUSINS PROPERTIES INCORPORATED

By:
/s/ Gregg D. Adzema
Gregg D. Adzema
Executive Vice President and Chief Financial Officer




(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
394355582_q22018supplementcover.jpg

1

TABLE OF CONTENTS





Forward-Looking Statements
Earnings Release
4
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Operations

Funds From Operations - Detail
Portfolio Statistics
Office Leasing Activity
Office Lease Expirations
Top 20 Office Tenants
Tenant Industry Diversification
Investment Activity
Land Inventory
Debt Schedule
Non-GAAP Financial Measures - Calculations and Reconciliations
Non-GAAP Financial Measures - Discussion
394355582_corpctrtowerii3.jpg

Cousins Properties
 
Q2 2018 Supplemental Information

FORWARD-LOOKING STATEMENTS

Certain matters contained in this report are “forward-looking statements” within the meaning of the federal securities laws and are subject to uncertainties and risks, as itemized in Item 1A included in the Annual Report on Form 10-K for the year ended December 31, 2017 and in the Quarterly Report on Form 10-Q for the three and six months ended June 30, 2018. These forward-looking statements include information about possible or assumed future results of the business and our financial condition, liquidity, results of operations, plans, and objectives. They also include, among other things, statements regarding subjects that are forward-looking by their nature, such as, our 2018 guidance and underlying assumptions, business and financial strategy, future financings, future acquisitions and dispositions of land, future acquisitions and dispositions of operating assets, future development and redevelopment opportunities, future dispositions of non-core assets, future issuances and repurchases of common or preferred stock, projected operating results, market and industry trends, future distributions, future projected capital expenditures, future interest rates, and all statements that address operating performance, events, or developments that we expect or anticipate will occur in the future, including statements relating to creating value for stockholders.
Any forward-looking statements are based upon management's beliefs, assumptions, and expectations of our future performance, taking into account information currently available. These beliefs, assumptions, and expectations may change as a result of possible events or factors, not all of which are known. If a change occurs, our business, financial condition, liquidity, and results of operations may vary materially from those expressed in forward-looking statements. Actual results may vary from forward-looking statements due to, but not limited to, the following: the availability and terms of capital, the ability to refinance or repay indebtedness as it matures, the failure of purchase, sale, or other contracts to ultimately close, the failure to achieve anticipated benefits from acquisitions, investments, or dispositions, the potential dilutive effect of common stock or operating partnership unit issuances, the availability of buyers and pricing with respect to the disposition of assets, risks and uncertainties related to national and local economic conditions, the real estate industry, and the commercial real estate markets in which we operate, particularly in Atlanta, Charlotte, Austin, Phoenix, and Tampa where we have high concentrations of our lease revenue, changes to our strategy with regard to non-core holdings that require impairment losses to be recognized, leasing risks, including the ability to obtain new tenants or renew expiring tenants, the ability to lease newly developed and/or recently acquired space, and the risk of declining leasing rates, the adverse change in the financial condition of one or more of our major tenants, volatility in interest rates and insurance rates, competition from other developers or investors, the risks associated with real estate developments (such as zoning approval, receipt 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 meet regulatory requirements, potential changes to state, local, or federal regulations applicable to our business, material changes in the dividend rates or the ability to pay dividends on common shares or other securities, potential changes to the tax laws and accounting standards impacting REITs and real estate in general, and those additional risks and factors discussed in reports filed with the Securities and Exchange Commission by the Company.
The words “believes,” “expects,” “anticipates,” “estimates,” “plans,” “may,” “intend,” “will,” or similar expressions are intended to identify forward-looking statements. Although we believe that our plans, intentions, and expectations reflected in any forward-looking statements are reasonable, we can give no assurance that such plans, intentions, or expectations will be achieved. We undertake 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
3
Q2 2018 Supplemental Information

EARNINGS RELEASE


COUSINS PROPERTIES REPORTS SECOND QUARTER 2018 RESULTS
Second Quarter Highlights
Net income available to common stockholders was $0.05 per share.
Funds From Operations was $0.15 per share.
Same property net operating income on a cash-basis increased 4.1%.
Second generation net rent per square foot on a cash-basis increased 13.1%.
Executed 327,680 square feet of office leases.
Commenced development of 10000 Avalon, a 251,000 square foot office building in Atlanta, Georgia. Cousins has a 90% ownership interest in the project and its share of total estimated project costs is $87.3 million.
Sold five acres of land at the Company's Wildwood project in Atlanta, Georgia and recognized a gain of $2.4 million.
Increased long-term incentive compensation accrual based on the Company's stock performance, incurring incremental general and administrative expense of $1.8 million.
ATLANTA (July 25, 2018) - Cousins Properties (NYSE:CUZ) today reported its results of operations for the quarter ended June 30, 2018.
Financial Results
Net income available to common stockholders was $21.3 million, or $0.05 per share, for the second quarter of 2018, compared with $168.1 million, or $0.40 per share, for the second quarter of 2017. Net Income available to common stockholders was $37.3 million, or $0.09 per share, for the six months ended June 30, 2018, compared with $172.8 million, or $0.42 per share, for the six months ended June 30, 2017. In the second quarter of 2017, the Company recognized a net gain of $119.8 million on the sale of the American Cancer Society Center.
Funds From Operations ("FFO") was $64.6 million, or $0.15 per share, for the second quarter of 2018, compared with $66.4 million, or $0.16 per share, for the second quarter of 2017. FFO was $129.2 million, or $0.30 per share, for the six months ended June 30, 2018, compared to $133.4 million, or $0.32 per share, for the six months ended June 30, 2017.
2018 Guidance
The Company's 2018 net income and FFO guidance remains unchanged. This guidance reflects management's view of current and future market conditions, as well as the earnings impact of events referenced in this release and corresponding conference call. The Company also leaves unchanged the previously provided assumptions of its 2018 net income and FFO guidance, except for the following updates:
Gain on land sales of $2.8 million, up from $0 due to gains recognized in the six months ended June 30, 2018.
Interest and other expenses of $47 million to $49 million, net of capitalized interest, up from the previous range of $46 million to $48 million.
General and administrative expenses, net of capitalized salaries of $25.5 million to $27.5 million, up from the previous range of $24 million to $26 million, due to an increase in long-term incentive compensation based on the Company's stock performance.

Cousins Properties
4
Q2 2018 Supplemental Information

EARNINGS RELEASE


A reconciliation of projected net income per share to projected FFO per share is provided as follows:
 
Full Year 2018 Range
 
Low
 
High
Net income per share
$
0.15

 
$
0.19

Add: Real estate depreciation and amortization
0.44

 
0.44

Funds From Operations per share
$
0.59

 
$
0.63

The Company's guidance is provided for information purposes based on current plans and assumptions and is subject to change.
Investor Conference Call and Webcast
The Company will conduct a conference call at 11:00 a.m. (Eastern Time) on Thursday, July 26, 2018, to discuss the results of the quarter ended June 30, 2018. The number to call for this interactive teleconference is (877) 247-1056. The live webcast of this call can be accessed on the Company's website, www.cousins.com, through the “Cousins Properties Second Quarter 2018 Conference Call” link on the Investor Relations page.
A replay of the conference call will be available for seven days by dialing (877) 344-7529 and entering the passcode 10121611. The playback can also be accessed on the Company's website.
Acting through its operating partnership Cousins Properties, LP, Cousins Properties 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 properties in Sunbelt markets.

Cousins Properties
5
Q2 2018 Supplemental Information

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)
 
June 30, 2018
 
December 31, 2017
 
(unaudited)
 
 
Assets:
 
 
 
Real estate assets:
 
 
 
Operating properties, net of accumulated depreciation of $347,681 and $275,977 in 2018 and 2017, respectively
$
3,513,203

 
$
3,332,619

Projects under development
115,158

 
280,982

Land
4,221

 
4,221

 
3,632,582

 
3,617,822

 
 
 
 
Cash and cash equivalents
110,232

 
148,929

Restricted cash
328

 
56,816

Notes and accounts receivable, net of allowance for doubtful accounts of $362 and $535 in 2018 and 2017, respectively
12,364

 
14,420

Deferred rents receivable
71,576

 
58,158

Investment in unconsolidated joint ventures
143,201

 
101,414

Intangible assets, net
164,753

 
186,206

Other assets
31,216

 
20,854

Total assets
$
4,166,252

 
$
4,204,619

Liabilities:
 
 
 
Notes payable
$
1,089,264

 
$
1,093,228

Accounts payable and accrued expenses
98,562

 
137,909

Deferred income
39,884

 
37,383

Intangible liabilities, net of accumulated amortization of $36,058 and $28,960 in 2018 and 2017, respectively
63,356

 
70,454

Other liabilities
42,842

 
40,534

Total liabilities
1,333,908

 
1,379,508

Commitments and contingencies
 
 
 
Equity:
 
 
 
Stockholders' investment:
 
 
 
Preferred stock, $1 par value, 20,000,000 shares authorized, 6,867,357 shares issued and outstanding in 2018 and 2017
6,867

 
6,867

Common stock, $1 par value, 700,000,000 shares authorized, 430,733,698 and 430,349,620 shares issued in 2018 and 2017, respectively
430,734

 
430,350

Additional paid-in capital
3,605,047

 
3,604,776

Treasury stock at cost, 10,339,735 and 10,329,082 shares in 2018 and 2017, respectively
(148,473
)
 
(148,373
)
Distributions in excess of cumulative net income
(1,116,640
)
 
(1,121,647
)
Total stockholders' investment
2,777,535

 
2,771,973

Nonredeemable noncontrolling interests
54,809

 
53,138

Total equity
2,832,344

 
2,825,111

Total liabilities and equity
$
4,166,252

 
$
4,204,619



Cousins Properties
6
Q2 2018 Supplemental Information

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited; in thousands, except per share amounts)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
Revenues:
 
 
 
 
 
 
 
Rental property revenues
$
113,698

 
$
114,007

 
$
227,046

 
$
226,524

Fee income
1,798

 
1,854

 
4,692

 
3,791

Other
1,132

 
3,174

 
2,092

 
8,600

 
116,628

 
119,035

 
233,830

 
238,915

Expenses:
 

 
 

 
 

 
 

Rental property operating expenses
40,731

 
41,501

 
80,922

 
83,026

Reimbursed expenses
860

 
907

 
1,802

 
1,772

General and administrative expenses
8,071

 
8,618

 
14,880

 
14,828

Interest expense
9,714

 
8,523

 
19,492

 
18,264

Depreciation and amortization
45,675

 
50,040

 
90,768

 
104,924

Acquisition and transaction costs
137

 
246

 
228

 
2,177

Other
44

 
236

 
364

 
612

 
105,232

 
110,071

 
208,456

 
225,603

Gain (loss) on extinguishment of debt

 
1,829

 
(85
)
 
1,829

Income from continuing operations before unconsolidated joint ventures and loss on sale of investment properties
11,396

 
10,793

 
25,289

 
15,141

Income from unconsolidated joint ventures
5,036

 
40,320

 
7,921

 
40,901

Income from continuing operations before gain on sale of investment properties
16,432

 
51,113

 
33,210

 
56,042

Gain on sale of investment properties
5,317

 
119,832

 
4,945

 
119,761

Net income
21,749

 
170,945

 
38,155

 
175,803

Net income attributable to noncontrolling interests
(473
)
 
(2,856
)
 
(836
)
 
(2,963
)
Net income available to common stockholders
$
21,276

 
$
168,089

 
$
37,319

 
$
172,840

Net income per common share — basic and diluted
$
0.05

 
$
0.40

 
$
0.09

 
$
0.42

Weighted average shares — basic
420,294

 
419,402

 
420,225

 
411,137

Weighted average shares — diluted
427,501

 
427,180

 
427,444

 
419,227


Cousins Properties
7
Q2 2018 Supplemental Information

KEY PERFORMANCE METRICS

 
2016
2017 1st
2017 2nd
2017 3rd
2017 4th
2017
2018 1st
2018 2nd
2018 YTD
Property Statistics
 
 
 
 
 
 
 
 
 
Consolidated Operating Properties
25

26

26

26

23

23

24

24

24

Consolidated Rentable Square Feet (in thousands)
13,024

13,249

12,477

12,466

11,428

11,428

11,936

11,944

11,944

Unconsolidated Operating Properties
8

7

5

6

5

5

5

5

5

Unconsolidated Rentable Square Feet (in thousands)
3,999

3,774

2,988

3,456

3,113

3,113

3,113

3,113

3,113

Total Operating Properties
33

33

31

32

28

28

29

29

29

Total Rentable Square Feet (in thousands)
17,023

17,023

15,465

15,922

14,541

14,541

15,049

15,057

15,057

 
 
 
 
 
 
 
 
 
 
Office Leasing Activity (1)
 
 
 
 
 
 
 
 
 
Net Leased during the Period (square feet in thousands)
2,354

571

341

335

943

2,190

330

328

657

Net Rent (per square foot)
$24.52
$26.10
$28.58
$26.57
$32.73
$29.41
$33.35
$32.40
$32.88
Free rent (per square foot)
(1.26)

(1.21)

(0.91)

(0.83)

(0.39)

(0.75)

(0.55)

(1.00)

(0.77)

Leasing commissions (per square foot) (2)
(1.78)

(1.93)

(2.78)

(2.32)

(2.40)

(2.32)

(2.67)

(2.49)

(2.59)

Tenant improvements (per square foot)
(3.91)

(4.78)

(4.66)

(3.46)

(4.49)

(4.43)

(3.07)

(4.50)

(3.78)

Net Effective Rent (per square foot)
$17.57
$18.18
$20.23
$19.96
$25.45
$21.91
$27.06
$24.41
$25.74
Change in Second Generation Net Rent
20.0
%
15.8
%
28.5
%
16.9
%
19.7
%
19.6
%
35.2
%
34.2
%
34.8
%
Change in Cash-Basis Second Generation Net Rent
10.3
%
3.3
%
13.5
%
7.3
%
6.3
%
6.9
%
19.3
%
13.1
%
17.1
%
 
 
 
 
 
 
 
 
 
 
Same Property Information (3)
 
 
 
 
 
 
 
 
 
Percent Leased (period end)
91.8
%
92.1
%
93.9
%
92.9
%
92.6
%
92.6
%
93.6
%
93.5
%
93.5
%
Weighted Average Occupancy
89.4
%
89.9
%
90.7
%
89.1
%
87.7
%
89.4
%
92.0
%
91.9
%
92.0
%
Change in Net Operating Income (over prior year period)
6.1
%
5.5
%
6.8
%
1.3
%
3.6
%
4.4
%
2.6
%
1.3
%
2.0
%
Change in Cash-Basis Net Operating Income (over prior year period)
8.4
%
5.4
%
8.6
%
2.0
%
4.2
%
5.3
%
9.4
%
4.1
%
6.7
%
 
 
 
 
 
 
 
 
 
 
Development Pipeline
 
 
 
 
 
 
 
 
 
Estimated Project Costs (in thousands) (4)
$512,200
$529,200
$463,500
$402,000
$490,500
$490,500
$271,500
$358,800
$358,800
Estimated Project Costs (4) / Total Undepreciated Assets
10.5
%
10.6
%
9.6
%
8.1
%
9.9
%
9.9
%
5.5
%
7.2
%
7.2
%
 
 
 
 
 
 
 
 
 
 
Market Capitalization (5)
 
 
 
 
 
 
 
 
 
Common Stock Price (period end)
$8.51
$8.27
$8.79
$9.34
$9.25
$9.25
$8.68
$9.69
$9.69
Common Stock/Units Outstanding (period end in thousands)
401,596

426,823

426,942

426,995

426,995

426,995

427,218

427,368

427,368

Equity Market Capitalization (in thousands)
$3,417,582
$3,529,826
$3,752,820
$3,988,133
$3,949,704
$3,949,704
$3,708,252
$4,141,196
$4,141,196
Debt (in thousands)
1,632,270

1,498,044

1,205,632

1,286,252

1,262,523

1,262,523

1,262,833

1,261,459

1,261,459

Total Market Capitalization (in thousands)
$5,049,852
$5,027,870
$4,958,452
$5,274,385
$5,212,227
$5,212,227
$4,971,085
$5,402,655
$5,402,655
 
 
 
 
 
 
 
 
 
 
Credit Ratios (5)
 
 
 
 
 
 
 
 
 
Net Debt/Total Market Capitalization
31.6
%
29.1
%
24.0
%
23.2
%
21.4
%
21.4
%
23.2
%
21.3
%
21.3
%
Net Debt/Total Undepreciated Assets
32.8
%
29.4
%
24.7
%
24.7
%
22.5
%
22.5
%
23.5
%
23.1
%
23.1
%
Net Debt/Annualized Adjusted EBITDAre
5.22

4.49

3.93

4.31

3.75

3.75

3.77

3.76

3.76

Fixed Charges Coverage (Adjusted EBITDAre)
4.63

5.13

5.49

5.82

6.01

5.58

5.39

5.37

5.38


Cousins Properties
8
Q2 2018 Supplemental Information

KEY PERFORMANCE METRICS

 
2016
2017 1st
2017 2nd
2017 3rd
2017 4th
2017
2018 1st
2018 2nd
2018 YTD
 
 
 
 
 
 
 
 
 
 
Dividend Information (5)
 
 
 
 
 
 
 
 
 
Common Dividend per Share (6)
$0.30
$0.06
$0.06
$0.06
$0.06
$0.24
$0.065
$0.065
$0.13
Funds From Operations (FFO) Payout Ratio
46.1
%
37.5
%
38.0
%
40.4
%
39.3
%
38.8
%
42.3
%
42.3
%
42.3
%
Funds Available for Distribution (FAD) Payout Ratio
59.0
%
56.4
%
52.9
%
67.2
%
66.8
%
60.2
%
61.9
%
61.2
%
61.5
%
 
 
 
 
 
 
 
 
 
 
Operations Ratios (5)
 
 
 
 
 
 
 
 
 
Annualized General and Administrative Expenses/Total Undepreciated Assets
0.53
%
0.50
%
0.72
%
0.58
%
0.45
%
0.56
%
0.55
%
0.65
%
0.60
%
 
 
 
 
 
 
 
 
 
 
Additional Information (5) (in thousands)
 
 
 
 
 
 
 
 
 
Straight Line Rental Revenue
$18,967
$9,608
$7,826
$6,825
$6,714
$30,973
$8,136
$5,690
$13,826
Above and Below Market Rents Amortization
$7,097
$1,602
$1,929
$1,852
$1,838
$7,221
$1,793
$1,714
$3,507
Second Generation Capital Expenditures
$46,876
$10,971
$7,569
$15,949
$18,996
$53,485
$11,256
$11,077
$22,333
 
 
 
 
 
 
 
 
 
 

 
(1) See Office Leasing Activity on page 18 for additional detail and explanations.
(2) Effective in the second quarter 2018, the Company began including commissions paid to its internal leasing personnel. Prior period amounts presented have been adjusted from what was previously disclosed for this change.
(3) Same Property Information is derived from the pool of office properties, as defined, in the period originally reported. See Same Property Performance on page 17 and Non-GAAP Financial Measures - Calculations and Reconciliations on page 34 for additional information.
(4) Represents Cousins' share of estimated project costs. See Development Pipeline on page 25 for additional detail.
(5) See Non-GAAP Financial Measures - Calculations and Reconciliations beginning on page 30.
(6) The fourth quarter 2016 dividend was declared and paid one quarter in arrears.


Cousins Properties
9
Q2 2018 Supplemental Information

KEY PERFORMANCE METRICS


                                 
394355582_chart-f9738f30d2da5844b14.jpg394355582_chart-a67a3118f4df5aeabf4.jpg 394355582_chart-f295f4e967405031b5e.jpg
394355582_chart-915ab3791f3b5383a0b.jpg 394355582_chart-ae5591b14a415cafa79.jpg 394355582_chart-a03ae96a78c45ec3ac8.jpg

          

(1) Office properties only.
    
Note: See additional information included herein for calculations, definitions, and reconciliations to GAAP financial measures.

Cousins Properties
10
Q2 2018 Supplemental Information

FUNDS FROM OPERATIONS - SUMMARY (1)

 
(amounts in thousands, except per share amounts)
 
2016
2017 1st
2017 2nd
2017 3rd
2017 4th
2017
2018 1st
2018 2nd
2018 YTD
Net Operating Income
$
260,281

$
80,167

$
80,115

$
75,815

$
77,109

$
313,206

$
80,578

$
80,195

$
160,773

Land Sales Less Cost of Sales
3,770


63

4


67

330

2,449

2,779

Fee Income
8,347

1,936

1,854

2,597

2,245

8,632

2,894

1,798

4,692

Other Income
5,525

6,889

5,304

1,634

2,164

15,991

1,034

1,212

2,246

Reimbursed Expenses
(3,259
)
(865
)
(907
)
(895
)
(860
)
(3,527
)
(942
)
(860
)
(1,802
)
General and Administrative Expenses
(25,592
)
(6,182
)
(8,618
)
(7,193
)
(5,530
)
(27,523
)
(6,809
)
(8,071
)
(14,880
)
Interest Expense
(41,095
)
(12,066
)
(10,444
)
(9,363
)
(9,509
)
(41,382
)
(11,293
)
(11,305
)
(22,598
)
Other Expenses
(45,984
)
(2,391
)
(542
)
196

(953
)
(3,690
)
(695
)
(365
)
(1,060
)
Depreciation and Amortization of Non-Real Estate Assets
(1,365
)
(451
)
(465
)
(461
)
(497
)
(1,874
)
(473
)
(468
)
(941
)
FFO (1)
$
160,628

$
67,037

$
66,360

$
62,334

$
64,169

$
259,900

$
64,624

$
64,585

$
129,209

Weighted Average Shares - Diluted
256,023

411,186

427,180

427,300

427,288

423,297

427,381

427,501

427,444

FFO per Share (1)
$
0.63

$
0.16

$
0.16

$
0.15

$
0.15

$
0.61

$
0.15

$
0.15

$
0.30




(1) See pages 30 and 33 for reconciliations of Funds from Operations to net income available to common stockholders.

Cousins Properties
11
Q2 2018 Supplemental Information

FUNDS FROM OPERATIONS - DETAIL (1)



 
(amounts in thousands, except per share amounts)
 
2016
2017 1st
2017 2nd
2017 3rd
2017 4th
2017
2018 1st
2018 2nd
2018 YTD
 
 
 
 
 
 
 
 
 
 
Net Operating Income
 
 
 
 
 
 
 
 
 
Consolidated Properties
 
 
 
 
 
 
 
 
 
Hearst Tower
$
5,957

$
6,356

$
6,370

$
6,302

$
7,158

$
26,186

$
6,493

$
6,426

$
12,919

Corporate Center (2)
5,005

4,761

5,374

5,308

5,446

20,889

5,780

5,956

11,736

Northpark (2)
22,144

5,410

5,130

4,945

5,021

20,506

5,731

5,814

11,545

Hayden Ferry (2)
3,881

5,209

5,307

5,466

5,968

21,950

5,766

5,433

11,199

Fifth Third Center
17,501

4,842

4,681

4,772

4,989

19,284

4,729

4,647

9,376

864 Spring Street




50

50

4,726

4,608

9,334

Promenade
14,555

4,173

4,407

4,184

3,991

16,755

4,240

4,242

8,482

One Eleven Congress
3,256

3,713

3,735

4,172

3,526

15,146

4,036

4,039

8,075

San Jacinto Center
3,456

4,038

4,207

3,918

3,906

16,069

3,635

3,632

7,267

Colorado Tower
12,408

3,383

3,352

3,344

3,478

13,557

3,429

3,453

6,882

3344 Peachtree
3,505

3,235

2,884

2,705

2,085

10,909

2,994

3,069

6,063

816 Congress Avenue
9,900

2,694

2,641

2,766

2,797

10,898

2,780

2,911

5,691

One Buckhead Plaza
2,817

3,097

2,806

3,071

2,760

11,734

2,785

2,797

5,582

NASCAR Plaza
2,507

2,477

2,394

2,609

2,709

10,189

2,652

2,590

5,242

Tempe Gateway
1,966

2,008

2,136

1,964

1,971

8,079

1,893

2,029

3,922

3350 Peachtree
2,006

2,264

2,288

2,153

1,968

8,673

1,987

1,899

3,886

Two Buckhead Plaza
1,369

1,321

1,337

1,318

1,806

5,782

1,545

1,585

3,130

111 West Rio


1,396

1,236

1,412

4,044

1,314

1,419

2,733

3348 Peachtree
1,541

1,491

1,491

1,657

1,507

6,146

1,405

1,360

2,765

8000 Avalon



80

353

433

1,357

1,350

2,707

The Pointe
1,227

1,146

1,146

1,069

1,207

4,568

1,236

1,170

2,406

Research Park V
844

359

916

874

827

2,976

1,012

1,016

2,028

Meridian Mark Plaza
3,674

989

997

979

1,116

4,081

920

1,006

1,926

Harborview Plaza
898

930

931

1,035

1,074

3,970

712

516

1,228

Other (3)
32,487

7,095

6,580

2,954

2,650

19,279




Subtotal - Consolidated
152,904

70,991

72,506

68,881

69,775

282,153

73,157

72,967

146,124

 
 
 
 
 
 
 
 
 
 
Unconsolidated Properties (4)
 
 
 
 
 
 
 
 
 
Terminus 200
6,754

1,798

1,749

1,769

1,663

6,979

1,755

1,880

3,635

Gateway Village (2)(5)
2,450

1,751

1,756

1,805

1,735

7,047

1,968

1,770

3,738

Terminus 100
7,586

1,912

1,906

1,829

1,851

7,498

1,731

1,535

3,266

Emory University Hospital Midtown Medical Office Tower
3,970

989

948

961

1,015

3,913

990

1,031

2,021

Carolina Square



47

658

705

928

975

1,903

300 Colorado






49

37

86

Other (3)
8,026

2,726

1,250

523

412

4,911




Subtotal - Unconsolidated
28,786

9,176

7,609

6,934

7,334

31,053

7,421

7,228

14,649

 
 
 
 
 
 
 
 
 
 
Discontinued Operations (6)
78,591









 
 
 
 
 
 
 
 
 
 
Total Net Operating Income (1)
260,281

80,167

80,115

75,815

77,109

313,206

80,578

80,195

160,773

 
 
 
 
 
 
 
 
 
 
Sales Less Cost of Sales
 
 
 
 
 
 
 
 
 
Land Sales Less Cost of Sales - Consolidated
3,580


63

4


67




Land Sales Less Cost of Sales - Unconsolidated (4)
190






330

2,449

2,779

Total Sales Less Cost of Sales
3,770


63

4


67

330

2,449

2,779


Cousins Properties
12
Q2 2018 Supplemental Information

FUNDS FROM OPERATIONS - DETAIL (1)



 
(amounts in thousands, except per share amounts)
 
2016
2017 1st
2017 2nd
2017 3rd
2017 4th
2017
2018 1st
2018 2nd
2018 YTD
 
 
 
 
 
 
 
 
 
 
Fee Income
 
 
 
 
 
 
 
 
 
Management Fees (7)
5,158

1,402

1,492

1,458

1,442

5,794

1,524

1,401

2,925

Development Fees
2,277

432

318

1,062

328

2,140

291

271

562

Leasing & Other Fees
912

102

44

77

475

698

1,079

126

1,205

Total Fee Income
8,347

1,936

1,854

2,597

2,245

8,632

2,894

1,798

4,692

 
 
 
 
 
 
 
 
 
 
Other Income
 
 
 
 
 
 
 
 
 
Termination Fees
122

5,238

2,913

734

385

9,270

360

639

999

Termination Fees - Unconsolidated (4)
3,000

959

195

132

8

1,294




Termination Fees - Discontinued Operations (6)
288









Interest and Other Income
928

188

262

258

1,540

2,248

600

493

1,093

Interest and Other Income - Unconsolidated (4)
1,188

504

105

81

231

921

74

80

154

Interest and Other Income - Discontinued Operations (6)
(1
)








Gain on Extinguishment of Debt


1,829

429


2,258




Total Other Income
5,525

6,889

5,304

1,634

2,164

15,991

1,034

1,212

2,246

 
 
 
 
 
 
 
 
 
 
Total Fee and Other Income
13,872

8,825

7,158

4,231

4,409

24,623

3,928

3,010

6,938

 
 
 
 
 
 
 
 
 
 
Reimbursed Expenses
(3,259
)
(865
)
(907
)
(895
)
(860
)
(3,527
)
(942
)
(860
)
(1,802
)
 
 
 
 
 
 
 
 
 
 
General and Administrative Expenses
(25,592
)
(6,182
)
(8,618
)
(7,193
)
(5,530
)
(27,523
)
(6,809
)
(8,071
)
(14,880
)
 
 
 
 
 
 
 
 
 
 
Interest Expense
 
 
 
 
 
 
 
 
 
Consolidated Debt
 
 
 
 
 
 
 
 
 
Senior Notes, Unsecured ($250M)



(2,353
)
(2,489
)
(4,842
)
(2,489
)
(2,490
)
(4,979
)
Term Loan, Unsecured
(386
)
(1,288
)
(1,564
)
(1,655
)
(1,691
)
(6,198
)
(1,858
)
(2,088
)
(3,946
)
Fifth Third Center
(1,702
)
(1,272
)
(1,266
)
(1,260
)
(1,254
)
(5,052
)
(1,247
)
(1,241
)
(2,488
)
Promenade
(4,614
)
(1,134
)
(1,127
)
(1,119
)
(1,112
)
(4,492
)
(1,102
)
(1,095
)
(2,197
)
Colorado Tower
(1,412
)
(1,059
)
(1,059
)
(1,059
)
(1,059
)
(4,236
)
(1,059
)
(1,059
)
(2,118
)
Senior Notes, Unsecured ($100M)


(876
)
(1,025
)
(1,036
)
(2,937
)
(1,036
)
(1,037
)
(2,073
)
816 Congress Avenue
(3,268
)
(814
)
(810
)
(806
)
(803
)
(3,233
)
(799
)
(795
)
(1,594
)
Credit Facility, Unsecured
(3,914
)
(1,035
)
(1,153
)
(444
)
(418
)
(3,050
)
(742
)
(754
)
(1,496
)
Meridian Mark Plaza
(1,512
)
(373
)
(372
)
(370
)
(368
)
(1,483
)
(366
)
(368
)
(734
)
The Pointe
(171
)
(176
)
(178
)
(177
)
(176
)
(707
)
(175
)
(177
)
(352
)
Other (3)
(14,369
)
(4,180
)
(2,336
)
(20
)

(6,536
)



Capitalized
4,697

1,590

2,218

2,701

2,733

9,242

1,095

1,390

2,485

Subtotal - Consolidated
(26,651
)
(9,741
)
(8,523
)
(7,587
)
(7,673
)
(33,524
)
(9,778
)
(9,714
)
(19,492
)
 
 
 
 
 
 
 
 
 
 
Unconsolidated Debt (4)
 
 
 
 
 
 
 
 
 
Terminus 100
(3,368
)
(831
)
(827
)
(824
)
(818
)
(3,300
)
(625
)
(621
)
(1,246
)
Terminus 200
(1,551
)
(383
)
(382
)
(380
)
(378
)
(1,523
)
(376
)
(374
)
(750
)
Emory University Hospital Midtown Medical Office Tower
(1,311
)
(324
)
(322
)
(320
)
(319
)
(1,285
)
(317
)
(315
)
(632
)
Carolina Square



(27
)
(157
)
(184
)
(197
)
(281
)
(478
)
Other (3)
(2,193
)
(787
)
(390
)
(225
)
(164
)
(1,566
)



Subtotal - Unconsolidated
(8,423
)
(2,325
)
(1,921
)
(1,776
)
(1,836
)
(7,858
)
(1,515
)
(1,591
)
(3,106
)

Cousins Properties
13
Q2 2018 Supplemental Information

FUNDS FROM OPERATIONS - DETAIL (1)



 
(amounts in thousands, except per share amounts)
 
2016
2017 1st
2017 2nd
2017 3rd
2017 4th
2017
2018 1st
2018 2nd
2018 YTD
 
 
 
 
 
 
 
 
 
 
Discontinued Operations (6)
(6,021
)








 
 
 
 
 
 
 
 
 
 
Total Interest Expense
(41,095
)
(12,066
)
(10,444
)
(9,363
)
(9,509
)
(41,382
)
(11,293
)
(11,305
)
(22,598
)
 
 
 
 
 
 
 
 
 
 
Other Expenses
 
 
 
 
 
 
 
 
 
Severance
(249
)
(28
)

(73
)
(345
)
(446
)
(195
)
128

(67
)
Partners' share of FFO in consolidated joint ventures
(3,775
)


(4
)
(12
)
(16
)
(144
)
(134
)
(278
)
Property Taxes and Other Holding Costs
(440
)
(304
)
(140
)
(139
)
(181
)
(764
)
(130
)
(152
)
(282
)
Loss on Extinguishment of Debt - Consolidated






(85
)

(85
)
Loss on Extinguishment of Debt - Unconsolidated (4)
(5,180
)








Predevelopment & Other
(943
)
(129
)
(156
)
(265
)
(253
)
(803
)
(50
)
(70
)
(120
)
Transaction Costs - Merger
(24,522
)
(1,930
)
(246
)
677

(162
)
(1,661
)
(91
)
(137
)
(228
)
Transaction Costs - Spin-off
(6,349
)








Impairment Loss
(4,526
)








Total Other Expenses
(45,984
)
(2,391
)
(542
)
196

(953
)
(3,690
)
(695
)
(365
)
(1,060
)
 
 
 
 
 
 
 
 
 
 
Depreciation and Amortization of Non-Real Estate Assets
(1,365
)
(451
)
(465
)
(461
)
(497
)
(1,874
)
(473
)
(468
)
(941
)
 
 
 
 
 
 
 
 
 
 
FFO (1)
$
160,628

$
67,037

$
66,360

$
62,334

$
64,169

$
259,900

$
64,624

$
64,585

$
129,209

Weighted Average Shares - Diluted
256,023

411,186

427,180

427,300

427,288

423,297

427,381

427,501

427,444

FFO per Share (1)
$
0.63

$
0.16

$
0.16

$
0.15

$
0.15

$
0.61

$
0.15

$
0.15

$
0.30

Note: Amounts may differ slightly from other schedules contained herein due to rounding.
(1) See Non-GAAP Financial Measures - Calculations and Reconciliations beginning on page 30.
(2) Contains multiple buildings that are grouped together for reporting purposes.
(3) Represents properties sold and loans repaid prior to June 30, 2018 that are not considered discontinued operations.
(4) Unconsolidated amounts include amounts recorded in unconsolidated joint ventures for the respective category multiplied by the Company's ownership interest. The Company does not control the operations of the unconsolidated joint ventures, but
      believes including these amounts in the categories indicated is meaningful to investors and analysts.
(5) Through December 1, 2016, the Company received an 11.46% current return on its $11.1 million investment in Gateway Village and, when certain other revenue criteria were met, received additional returns. The Company recognized these amounts as
      NOI from this venture. After December 1, 2016, net income and cash flows were allocated 50% to each joint venture member.
(6) Primarily represents Greenway Plaza and Post Oak Central.
(7) Management Fees include reimbursement of expenses that are included in the "Reimbursed Expenses" line item.

Cousins Properties
14
Q2 2018 Supplemental Information

PORTFOLIO STATISTICS

 
Office Properties
 
Rentable Square Feet
 
Financial Statement Presentation
 
Company's Ownership Interest
 
End of Period Leased
 
Weighted Average Occupancy
 
% of Total
Net Operating
Income (1)
 
Property Level Debt ($000) (2)
 
 
 
 
 
2Q18
 
1Q18
 
2Q18
 
1Q18
 
 
 
Northpark (3)
 
1,539,000

 
Consolidated
 
100%
 
86.4%
 
86.0%
 
84.8%
 
82.5%
 
7.3%
 
$

 
864 Spring Street
 
506,000

 
Consolidated
 
100%
 
100.0%
 
100.0%
 
100.0%
 
100.0%
 
5.7%
 

 
Promenade
 
777,000

 
Consolidated
 
100%
 
93.4%
 
94.2%
 
94.1%
 
94.1%
 
5.3%
 
100,560

 
3344 Peachtree
 
484,000

 
Consolidated
 
100%
 
92.4%
 
92.4%
 
91.5%
 
91.5%
 
3.8%
 

 
One Buckhead Plaza
 
461,000

 
Consolidated
 
100%
 
84.8%
 
88.7%
 
87.3%
 
88.8%
 
3.5%
 

 
3350 Peachtree
 
413,000

 
Consolidated
 
100%
 
84.9%
 
86.2%
 
85.8%
 
86.2%
 
2.4%
 

 
Terminus 100
 
660,000

 
Unconsolidated
 
50%
 
89.3%
 
90.1%
 
81.9%
 
86.2%
 
1.9%
 
61,229

 
Terminus 200
 
566,000

 
Unconsolidated
 
50%
 
96.6%
 
94.1%
 
94.1%
 
93.7%
 
2.3%
 
39,250

 
Two Buckhead Plaza
 
210,000

 
Consolidated
 
100%
 
91.0%
 
91.0%
 
90.0%
 
84.7%
 
2.0%
 

 
8000 Avalon
 
229,000

 
Consolidated
 
90%
 
98.2%
 
96.8%
 
73.4%
 
70.9%
 
1.7%
 

 
3348 Peachtree
 
258,000

 
Consolidated
 
100%
 
88.0%
 
87.1%
 
86.0%
 
87.1%
 
1.7%
 

 
Emory University Hospital Midtown Medical Office Tower
 
358,000

 
Unconsolidated
 
50%
 
99.9%
 
99.9%
 
99.0%
 
99.9%
 
1.3%
 
35,146

 
Meridian Mark Plaza
 
160,000

 
Consolidated
 
100%
 
100.0%
 
100.0%
 
100.0%
 
100.0%
 
1.3%
 
23,730

 
ATLANTA
 
6,621,000

 
 
 
 
 
90.9%
 
91.1%
 
89.2%
 
88.7%
 
40.2%
 
259,915

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hearst Tower
 
966,000

 
Consolidated
 
100%
 
99.1%
 
99.1%
 
99.1%
 
99.0%
 
8.0%
 

 
Fifth Third Center
 
692,000

 
Consolidated
 
100%
 
99.7%
 
99.7%
 
95.8%
 
95.8%
 
5.8%
 
144,490

 
NASCAR Plaza
 
394,000

 
Consolidated
 
100%
 
98.1%
 
98.7%
 
98.3%
 
98.7%
 
3.2%
 

 
Gateway Village (3)
 
1,061,000

 
Unconsolidated
 
50%
 
99.4%
 
99.4%
 
99.4%
 
99.4%
 
2.3%
 

 
CHARLOTTE
 
3,113,000

 
 
 
 
 
99.2%
 
99.3%
 
98.2%
 
98.2%
 
19.3%
 
144,490

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One Eleven Congress
 
519,000

 
Consolidated
 
100%
 
86.3%
 
86.4%
 
86.5%
 
87.0%
 
5.0%
 

 
San Jacinto Center
 
395,000

 
Consolidated
 
100%
 
94.3%
 
94.3%
 
93.0%
 
93.0%
 
4.5%
 

 
Colorado Tower
 
373,000

 
Consolidated
 
100%
 
100.0%
 
100.0%
 
100.0%
 
100.0%
 
4.3%
 
119,214

 
816 Congress
 
435,000

 
Consolidated
 
100%
 
98.6%
 
97.7%
 
95.2%
 
95.2%
 
3.6%
 
81,977

 
Research Park V
 
173,000

 
Consolidated
 
100%
 
97.1%
 
97.1%
 
97.1%
 
97.1%
 
1.3%
 

 
AUSTIN
 
1,895,000

 
 
 
 
 
94.5%
 
94.3%
 
93.5%
 
93.6%
 
18.7%
 
201,191

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hayden Ferry (3)
 
789,000

 
Consolidated
 
100%
 
96.3%
 
96.0%
 
89.8%
 
91.9%
 
6.8%
 

 
Tempe Gateway
 
264,000

 
Consolidated
 
100%
 
96.7%
 
98.6%
 
94.2%
 
90.2%
 
2.5%
 

 
111 West Rio
 
225,000