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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 24, 2019
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

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
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 24, 2019, 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, 2019. 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 24, 2019


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
398870260_q22019supplementcover.jpg

1

TABLE OF CONTENTS





Forward-Looking Statements
Earnings Release
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
398870260_hearsttower.jpg

Cousins Properties
 
Q2 2019 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, 2018 and in the Quarterly Reports on Form 10-Q for the periods ended March 31, 2019 and June 30, 2019. 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 the following: 2019 guidance and underlying assumptions; business and financial strategy; future debt financings; future acquisitions and dispositions of operating assets; future acquisitions and dispositions of land, including ground leases; future development and redevelopment opportunities, including fee development opportunities; future issuances and repurchases of common stock; future distributions; projected capital expenditures; market and industry trends; entry into new markets; future changes in interest rates; the benefits of the merger with TIER REIT, Inc. ("TIER"), including all future financial and operating results, plans, objectives, expectations, and intentions; benefits of the merger with TIER to tenants, employees, stockholders, and other constituents of the combined company; integrating TIER with us; 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 that is 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; changes in national and local economic conditions, the real estate industry, and the commercial real estate markets in which we operate (including supply and demand changes), particularly in Atlanta, Austin, Charlotte, Phoenix, Tampa, and Dallas where we have high concentrations of our lease revenue; changes to our strategy with regard to land and other 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; the failure of a tenant to occupy leased space, and the risk of declining leasing rates; changes in the needs of our tenants brought about by the desire for co-working arrangements, trends toward utilizing less office space per employee, and the effect of telecommuting; 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); cyber security breaches; changes in senior management and 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 rates or the ability to pay dividends on common shares or other securities; potential changes to the tax laws impacting REITs and real estate in general; the ability to successfully integrate our operations and employees in connection with the merger with TIER; the ability to realize anticipated benefits and synergies of the merger with TIER; the amount of the costs, fees, expenses, and charges related to the merger with TIER; and those additional risks and factors discussed in reports filed with the Securities and Exchange Commission (“SEC”) by the Company and TIER, and those additional risks and factors discussed in reports filed with the SEC 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 2019 Supplemental Information

EARNINGS RELEASE


COUSINS PROPERTIES REPORTS SECOND QUARTER 2019 RESULTS

Highlights
Net loss per share was $0.20, net income per share was $0.24 before TIER transaction costs.
Funds From Operations per share was $0.28, Funds From Operations per share was $0.71 before TIER transaction costs.
Same property net operating income on a cash basis increased 5.5%.
Second generation net rent per square foot on a cash basis increased 4.9%.
Executed 1,089,318 square feet of office leases.
Closed a merger with TIER REIT, Inc. ("TIER") in which Cousins acquired TIER in a stock-for-stock transaction.
Completed a one-for-four reverse stock split.
Issued $650 million of senior unsecured notes in a private placement.
Executed a 15-year, 561,000 square foot lease for the proposed combined corporate headquarters of BB&T Corporation and SunTrust Banks, Inc. at Hearst Tower in Uptown Charlotte. The lease contains an option for the combined BB&T and SunTrust to purchase the building for $455.5 million.
Subsequent to quarter end, entered into an agreement to purchase Cousins' partner's 50% interest in Terminus in a transaction that valued the properties at $503 million.
ATLANTA (July 24, 2019) - Cousins Properties (NYSE:CUZ) today reported its results of operations for the quarter ended June 30, 2019.
Financial Results
Net loss available to common stockholders was $22.4 million, or $0.20 per share, for the second quarter of 2019, compared with net income available to common stockholders of $21.3 million, or $0.20 per share, for the second quarter of 2018. Net income available to common stockholders was $12.9 million, or $0.12 per share, for the six months ended June 30, 2019, compared with $37.3 million, or $0.36 per share, for the six months ended June 30, 2018.
Funds From Operations ("FFO") was $31.9 million, or $0.28 per share, for the second quarter of 2019, compared with $64.6 million, or $0.60 per share, for the second quarter of 2018. FFO was $116.4 million, or $1.05 per share, for the six months ended June 30, 2019, compared with $129.2 million, or $1.21 per share, for the six months ended June 30, 2018.
During the second quarter of 2019, the Company recorded $49.8 million in costs associated with the TIER transaction. Net income available to common stockholders excluding transaction costs was $27.4 million, or $0.24 per share, for the second quarter of 2019 and $62.8 million, or $0.57 per share, for the six months ended June 30, 2019. FFO excluding transaction costs was $81.7 million, or $0.71 per share, for the second quarter of 2019 and $166.2 million, or $1.50 per share, for the six months ended June 30, 2019.
2019 Guidance
The Company is adjusting its full year 2019 net income guidance to $1.00 to $1.12 per share ($1.41 to $1.53 excluding transaction costs) from $1.00 to $1.16 per share and its full year 2019 FFO guidance excluding transaction costs to $2.81 to $2.93 from $2.80 to $2.96 per share.


Cousins Properties
4
Q2 2019 Supplemental Information

EARNINGS RELEASE

The Company leaves unchanged the previously provided assumptions of its 2019 net income and FFO guidance, except for the following updates:
Same property net operating income growth of 3.25% to 5.25% on a cash basis, up from the previous range of 3% to 5%.
Gain on land sales of $14.5 million, up from $13.1 million, due to the $1.3 million gain recognized in the second quarter 2019.
General and administrative expenses of $34 million to $36 million, net of capitalized salaries, up from the previous range of $33.5 million to $35.5 million, due to the TIER transaction.
Interest and other expenses, net of capitalized interest, of $66 million to $68 million, up from the previous range of $50.5 million to $52.5 million, due to the TIER transaction.
GAAP straight-line rental revenue of $28.5 million to $30.5 million, up from the previous range of $22.5 million to $24.5 million, due to the TIER transaction.
Above and below market rental revenue of $10 million to $12 million, up from the previous range of $5.5 million to $7.5 million, due to the TIER transaction.
Fee and other income of $32 million to $34 million, up from the previous range of $28 million to $30 million, due to an increase in lease termination fees at Hearst Tower in connection with the BB&T/SunTrust lease.
The acquisition of our partner's interest in Terminus in the fourth quarter of 2019. This acquisition will trigger the consolidation of Terminus 100 and Terminus 200 at fair value and will result in Cousins recognizing a gain on the step up in basis of these properties to fair value.
The disposition of Woodcrest in the fourth quarter of 2019.
A reconciliation of projected net income per share to projected FFO per share is provided as follows:
 
Full Year 2019 Range
 
Low
 
High
Net income per share
$
1.00

 
$
1.12

Add: TIER Transaction costs
0.41

 
0.41

Net income per share before transaction costs
1.41

 
1.53

Add: Real estate depreciation and amortization
2.11

 
2.11

Less: Gain on step up in basis of Terminus 100 and 200
(0.71
)
 
(0.71
)
Funds From Operations per share before transaction costs
$
2.81

 
$
2.93

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 10:00 a.m. (Eastern Time) on Thursday, July 25, 2019, to discuss the results of the quarter ended June 30, 2019. 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 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 10132976. 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 2019 Supplemental Information

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)
 
June 30, 2019
 
December 31, 2018
Assets:
 
 
 
Real estate assets:
 
 
 
Operating properties, net of accumulated depreciation of $500,509 and $421,495 in 2019 and 2018, respectively
$
5,594,814

 
$
3,603,011

Projects under development
287,619

 
24,217

Land
110,212

 
72,563

 
5,992,645

 
3,699,791

Real estate assets and other assets held for sale, net of accumulated depreciation and amortization of $0 in 2019
29,193

 

Cash and cash equivalents
11,885

 
2,547

Restricted cash
2,182

 
148

Notes and accounts receivable
24,139

 
13,821

Deferred rents receivable
96,659

 
83,116

Investment in unconsolidated joint ventures
176,169

 
161,907

Intangible assets, net
283,139

 
145,883

Other assets
60,661

 
39,083

Total assets
$
6,676,672

 
$
4,146,296

Liabilities:
 
 
 
Notes payable
$
1,837,449

 
$
1,062,570

Accounts payable and accrued expenses
188,337

 
110,159

Deferred income
56,477

 
41,266

Intangible liabilities, net of accumulated amortization of $49,034 and $42,473 in 2019 and 2018, respectively
101,735

 
56,941

Other liabilities
123,056

 
54,204

Total liabilities
2,307,054

 
1,325,140

Commitments and contingencies
 
 
 
Equity:
 
 
 
  Stockholders' investment:
 
 
 
Preferred stock, $1 par value, 20,000,000 shares authorized, 1,716,837 shares issued and outstanding in 2019 and 2018
1,717

 
1,717

Common stock, $1 par value, 300,000,000 and 175,000,000 shares authorized in 2019 and 2018, respectively, and 149,347,960 and 107,681,130 shares issued in 2019 and 2018, respectively
149,348

 
107,681

Additional paid-in capital
5,492,648

 
3,934,385

Treasury stock at cost, 2,584,933 shares in 2019 and 2018
(148,473
)
 
(148,473
)
Distributions in excess of cumulative net income
(1,189,567
)
 
(1,129,445
)
Total stockholders' investment
4,305,673

 
2,765,865

Nonredeemable noncontrolling interests
63,945

 
55,291

Total equity
4,369,618

 
2,821,156

Total liabilities and equity
$
6,676,672

 
$
4,146,296



Cousins Properties
6
Q2 2019 Supplemental Information

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited; in thousands, except per share amounts)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Revenues:
 
 
 
 
 
 
 
Rental property revenues
$
134,933

 
$
114,337

 
$
258,798

 
$
228,045

Fee income
7,076

 
1,798

 
15,804

 
4,692

Other
11

 
493

 
151

 
1,093

 
142,020

 
116,628

 
274,753

 
233,830

Expenses:
 
 
 
 
 

 
 

Rental property operating expenses
46,705

 
40,731

 
90,192

 
80,922

Reimbursed expenses
1,047

 
860

 
1,979

 
1,802

General and administrative expenses
8,374

 
8,071

 
19,834

 
14,880

Interest expense
12,059

 
9,714

 
22,879

 
19,492

Depreciation and amortization
50,904

 
45,675

 
96,765

 
90,768

Transaction costs
49,827

 
137

 
49,830

 
228

Other
624

 
44

 
804

 
364

 
169,540

 
105,232

 
282,283

 
208,456

Income from unconsolidated joint ventures
3,634

 
5,036

 
6,538

 
7,921

Gain on sale of investment properties
1,304

 
5,317

 
14,415

 
4,945

Loss on extinguishment of debt

 

 

 
(85
)
Net income (loss)
(22,582
)
 
21,749

 
13,423

 
38,155

Net (income) loss attributable to noncontrolling interests
173

 
(473
)
 
(491
)
 
(836
)
Net income (loss) available to common stockholders
$
(22,409
)
 
$
21,276

 
$
12,932

 
$
37,319

 
 
 
 
 
 
 
 
Net income (loss) per common share - basic and diluted
$
(0.20
)
 
$
0.20

 
$
0.12

 
$
0.36

Weighted average shares — basic
112,926

 
105,073

 
109,049

 
105,056

Weighted average shares — diluted
114,670

 
106,875

 
110,822

 
106,861

 
 
 
 
 
 
 
 
Note: The Company reclassified lease termination fees from other revenues to rental property revenues on the
    condensed consolidated statements of operations as a result of the adoption of Accounting Standards Update
    2016-02, "Leases". The prior period amounts were reclassified to conform to the current period presentation.



Cousins Properties
7
Q2 2019 Supplemental Information

KEY PERFORMANCE METRICS

 
2017
2018 1st
2018 2nd
2018 3rd
2018 4th
2018
2019 1st
2019 2nd
YTD 2019
 
Property Statistics
 
 
 
 
 
 
 
 
 
 
Consolidated Operating Properties
22

23

23

23

23

23

24

33

33

 
Consolidated Rentable Square Feet (in thousands)
11,428

11,936

11,944

11,944

12,203

12,203

12,573

18,372

18,372

 
Unconsolidated Operating Properties
4

4

4

4

4

4

5

5

5

 
Unconsolidated Rentable Square Feet (in thousands)
3,113

3,113

3,113

3,113

3,113

3,113

3,394

3,394

3,394

 
Total Operating Properties
26

27

27

27

27

27

29

38

38

 
Total Rentable Square Feet (in thousands)
14,541

15,049

15,057

15,057

15,316

15,316

15,967

21,766

21,766

 
 
 
 
 
 
 
 
 
 
 
 
Office Leasing Activity (1)
 
 
 
 
 
 
 
 
 
 
Net Leased during the Period (square feet in thousands)
2,190

330

328

486

455

1,597

682

1,089

1,771

 
Net Effective Rent Calculation (per square foot)
 
 
 
 
 
 
 
 
 
 
Net Rent
$29.41
$33.35
$32.40
$28.46
$31.02
$31.01
$27.86
$29.34
$28.77
 
Net Free Rent
(0.75)

(0.55)

(1.00)

(0.94)

(0.86)

(0.85)

(0.49)

(0.52)

(0.51)

 
Leasing Commissions
(2.32)

(2.67)

(2.49)

(2.40)

(2.17)

(2.41)

(1.13)

(2.34)

(1.88)

 
Tenant Improvements
(4.43)

(3.07)

(4.50)

(4.29)

(5.43)

(4.40)

(1.74)

(4.69)

(3.55)

 
Leasing Costs
(7.50)

(6.29)

(7.99)

(7.63)

(8.46)

(7.66)

(3.36)

(7.55)

(5.94)

 
Net Effective Rent
$21.91
$27.06
$24.41
$20.83
$22.56
$23.35
$24.50
$21.79
$22.83
 
Change in Second Generation Net Rent
19.6
%
35.2
%
34.2
%
25.8
%
36.0
%
32.5
%
22.8
%
21.5
%
21.8
%
 
Change in Cash-Basis Second Generation Net Rent
6.9
%
19.3
%
13.1
%
7.6
%
13.1
%
13.2
%
7.1
%
4.9
%
5.5
%
 
 
 
 
 
 
 
 
 
 
 
 
Same Property Information (2)
 
 
 
 
 
 
 
 
 
 
Percent Leased (period end)
92.6
%
93.6
%
93.5
%
94.2
%
94.5
%
94.5
%
94.4
%
93.9
%
93.9
%
 
Weighted Average Occupancy
89.4
%
92.0
%
91.9
%
91.8
%
92.0
%
91.9
%
92.0
%
91.8
%
91.9
%
 
Change in Net Operating Income (over prior year period)
4.4
%
2.6
%
1.3
%
2.7
%
1.8
%
2.1
%
4.3
%
4.5
%
4.4
%
 
Change in Cash-Basis Net Operating Income (over prior year period)
5.3
%
9.4
%
4.1
%
4.4
%
1.2
%
4.7
%
4.0
%
5.5
%
4.8
%
 
 
 
 
 
 
 
 
 
 
 
 
Development Pipeline
 
 
 
 
 
 
 
 
 
 
Estimated Project Costs (in thousands) (3)
$490,500
$271,500
$358,800
$362,900
$245,900
$245,900
$199,900
$427,900
$427,900
 
Estimated Project Costs (3) / Total Undepreciated Assets
9.9
%
5.5
%
7.2
%
7.2
%
4.7
%
4.7
%
3.8
%
5.5
%
5.5
%
 
 
 
 
 
 
 
 
 
 
 
 
Market Capitalization (4)
 
 
 
 
 
 
 
 
 
 
Common Stock Price (period end)
$37.00
$34.72
$38.76
$35.56
$31.60
$31.60
$38.64
$36.17
$36.17
 
Common Stock/Units Outstanding (period end in thousands)
106,749

106,805

106,842

106,840

106,840

106,840

106,890

148,507

148,507

 
Equity Market Capitalization (in thousands)
$3,949,713
$3,708,270
$4,141,196
$3,799,230
$3,376,144
$3,376,144
$4,130,230
$5,371,498
$5,371,498
 
Debt (in thousands)
1,262.523

1,262,833

1,261,459

1,236,891

1,234,016

1,234,016

1,287,164

2,007,663

2,007,663

 
Total Market Capitalization (in thousands)
$5,212,227
$4,971,085
$5,402,655
$5,036,113
$4,610,152
$4,610,152
$5,417,403
$7,379,161
$7,379,161
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Cousins Properties
8
Q2 2019 Supplemental Information

KEY PERFORMANCE METRICS

 
2017
2018 1st
2018 2nd
2018 3rd
2018 4th
2018
2019 1st
2019 2nd
YTD 2019
 
Credit Ratios (4)
 
 
 
 
 
 
 
 
 
 
Net Debt/Total Market Capitalization
21.4
%
23.2
%
21.3
%
22.9
%
26.7
%
26.7
%
23.7
%
27.0
%
27.0
%
 
Net Debt/Total Undepreciated Assets
22.5
%
23.5
%
23.1
%
22.9
%
24.2
%
24.2
%
24.3
%
25.7
%
25.7
%
 
Net Debt/Annualized Adjusted EBITDAre
3.75

3.77

3.76

3.65

3.68

3.68

3.29

5.21

(5) 5.21
(5)
Fixed Charges Coverage (Adjusted EBITDAre)
5.58

5.39

5.37

5.67

5.39

5.46

6.08

5.57

5.81

 
 
 
 
 
 
 
 
 
 
 
 
Dividend Information (4)
 
 
 
 
 
 
 
 
 
 
Common Dividend per Share (6)
$0.96
$0.26
$0.26
$0.26
$0.26
$1.04
$0.29
$0.29
$0.58
 
Funds From Operations (FFO) Payout Ratio before Transaction Costs
38.5
%
42.2
%
42.2
%
40.5
%
38.3
%
40.8
%
36.1
%
52.1
%
44.0
%
 
Funds Available for Distribution (FAD) Payout Ratio
60.2
%
61.9
%
61.2
%
59.1
%
62.7
%
61.2
%
56.4
%
131.6
%
84.7
%
 
 
 
 
 
 
 
 
 
 
 
 
Operations Ratio (4)
 
 
 
 
 
 
 
 
 
 
Annualized General and Administrative Expenses/Total Undepreciated Assets
0.56
%
0.55
%
0.65
%
0.31
%
0.26
%
0.43
%
0.87
%
0.43
%
0.51
%
 
 
 
 
 
 
 
 
 
 
 
 
Additional Information (4) (in thousands, except per square foot amounts)
 
 
 
 
 
 
 
 
 
 
In-Place Gross Rent (per square foot) (7)
$34.19
$34.98
$35.08
$35.23
$36.41
$36.41
$36.95
$36.98
$36.98
 
Straight Line Rental Revenue
$30,973
$8,136
$5,690
$5,148
$7,043
$26,017
$8,732
$6,068
$14,800
 
Above and Below Market Rents Amortization
$7,221
$1,793
$1,714
$1,730
$1,640
$6,877
$1,670
$1,981
$3,651
 
Second Generation Capital Expenditures
$53,485
$11,256
$11,077
$15,152
$19,182
$56,667
$8,074
$40,604
$48,678
 
 
 
 
 
 
 
 
 
 
 
 

 
(1) See Office Leasing Activity on page 19 for additional detail and explanations.
(2) Same Property Information is derived from the pool of office properties, as defined, in the period originally reported. See Same Property Performance on page 18 and Non-GAAP Financial Measures - Calculations and Reconciliations on page 35 for additional information.
(3) Cousins' share of estimated project costs. See Development Pipeline on page 26 for additional detail.
(4) See Non-GAAP Financial Measures - Calculations and Reconciliations beginning on page 31.
(5) Given the timing of the closing of the TIER transaction, the actual calculation of this ratio is temporarily high for the second quarter of 2019 and is expected to decrease when a full quarter of TIER operations is included in EBITDAre. Second quarter EBITDAre, annualized for the calculation, includes 17 days of Legacy TIER operations while the total impact of the TIER transaction is included in net debt as of June 30, 2019.
(6) The fourth quarter 2016 dividend was declared and paid in the first quarter of 2017.
(7) In-place gross rent equals the annualized cash basis base rent including tenant's share of estimated operating expenses, if applicable, as of the end of the period divided by occupied square feet.




Cousins Properties
9
Q2 2019 Supplemental Information

KEY PERFORMANCE METRICS


                                 
398870260_chart-4a701578f34a58adb33.jpg398870260_chart-6cead85a0eb55790b91.jpg 398870260_chart-97d601f68d4657b2a57.jpg
398870260_chart-90d439da6a6057878ea.jpg 398870260_chart-8137542547755472aa6.jpg 398870260_chart-ab65c425d14b59beb24.jpg

         
(1) See note 5 on page 10 for additional detail.
(2) Office properties only.
    
    
Note: See additional information included herein for calculations, definitions, and reconciliations to GAAP financial measures.

Cousins Properties
10
Q2 2019 Supplemental Information

FUNDS FROM OPERATIONS - SUMMARY (1)

 
(amounts in thousands, except per share amounts)
 
2017
2018 1st
2018 2nd
2018 3rd
2018 4th
2018
2019 1st
2019 2nd
YTD 2019
Net Operating Income
$
313,206

$
80,578

$
80,195

$
80,858

$
84,432

$
326,063

$
87,731

$
97,417

$
185,148

Gain on Sales of Undepreciated Investment Properties
67

330

2,449


512

3,291

13,132

1,337

14,469

Fee Income
8,632

2,894

1,798

2,519

2,878

10,089

8,728

7,075

15,803

Other Income
15,991

1,034

1,212

915

517

3,678

748

306

1,054

Reimbursed Expenses
(3,527
)
(942
)
(860
)
(955
)
(1,025
)
(3,782
)
(932
)
(1,047
)
(1,979
)
General and Administrative Expenses
(27,523
)
(6,809
)
(8,071
)
(3,913
)
(3,247
)
(22,040
)
(11,460
)
(8,374
)
(19,834
)
Interest Expense
(41,382
)
(11,293
)
(11,305
)
(11,208
)
(12,080
)
(45,886
)
(12,574
)
(13,692
)
(26,266
)
Other Expenses
(3,690
)
(695
)
(365
)
(257
)
(325
)
(1,642
)
(404
)
(50,699
)
(51,103
)
Depreciation and Amortization of Non-Real Estate Assets
(1,874
)
(473
)
(468
)
(469
)
(462
)
(1,872
)
(456
)
(454
)
(910
)
FFO (1)
$
259,900

$
64,624

$
64,585

$
67,490

$
71,200

$
267,899

$
84,513

$
31,869

$
116,382

TIER transaction costs






3

49,827

49,830

FFO before TIER transaction costs
$
259,900

$
64,624

$
64,585

$
67,490

$
71,200

$
267,899

$
84,516

$
81,696

$
166,212

Weighted Average Shares - Diluted
105,824

106,845

106,875

106,880

106,871

106,868

106,901

114,670

110,822

FFO per Share (1)
$
2.46

$
0.60

$
0.60

$
0.63

$
0.67

$
2.51

$
0.79

$
0.28

$
1.05

FFO per Share before TIER transaction costs
$
2.46

$
0.60

$
0.60

$
0.63

$
0.67

$
2.51

$
0.79

$
0.71

$
1.50




(1) See pages 31 and 34 for reconciliations of Funds From Operations to net income available to common shareholders.

Cousins Properties
11
Q2 2019 Supplemental Information

FUNDS FROM OPERATIONS - DETAIL (1)



 
(amounts in thousands, except per share amounts)
 
2017
2018 1st
2018 2nd
2018 3rd
2018 4th
2018
2019 1st
2019 2nd
YTD 2019
 
 
 
 
 
 
 
 
 
 
Net Operating Income
 
 
 
 
 
 
 
 
 
Consolidated Properties
 
 
 
 
 
 
 
 
 
Spring & 8th (2)
$
50

$
4,726

$
4,608

$
4,704

$
7,412

$
21,450

$
7,218

$
7,385

$
14,603

Corporate Center (2)
20,889

5,780

5,956

5,947

6,263

23,946

6,386

6,785

13,171

Hearst Tower
26,186

6,493

6,426

6,456

6,544

25,919

6,492

6,512

13,004

Hayden Ferry (2)
21,950

5,766

5,433

5,894

6,372

23,465

5,945

6,154

12,099

Northpark (2)
20,506

5,731

5,814

6,204

6,669

24,418

6,463

6,039

12,502

Promenade
16,755

4,240

4,242

4,125

3,895

16,502

4,788

4,708

9,496

One Eleven Congress
15,146

4,036

4,039

4,034

4,109

16,218

4,446

4,515

8,961

Fifth Third Center
19,284

4,729

4,647

4,912

4,842

19,130

4,735

4,503

9,238

Buckhead Plaza (2)
17,516

4,330

4,382

4,367

3,772

16,851

4,047

3,968

8,015

San Jacinto Center
16,069

3,635

3,632

3,596

3,789

14,652

3,665

3,679

7,344

Colorado Tower
13,557

3,429

3,453

3,511

3,380

13,773

3,480

3,483

6,963

3344 Peachtree
10,909

2,994

3,069

2,970

3,149

12,182

3,142

3,328

6,470

816 Congress
10,898

2,780

2,911

3,016

2,949

11,656

3,290

2,879

6,169

NASCAR Plaza
10,189

2,652

2,590

2,683

2,409

10,334

2,538

2,494

5,032

3350 Peachtree
8,673

1,987

1,899

1,888

1,859

7,633

2,011

2,345

4,356

1200 Peachtree






775

2,318

3,093

8000 Avalon
433

1,357

1,350

1,144

1,581

5,432

1,714

1,916

3,630

The Domain (2)







1,881

1,881

Tempe Gateway
8,079

1,893

2,029

1,997

2,015

7,934

2,165

1,757

3,922

3348 Peachtree
6,146

1,405

1,360

1,472

1,483

5,720

1,527

1,499

3,026

111 West Rio
4,044

1,314

1,419

1,374

1,370

5,477

1,381

1,380

2,761

The Pointe
4,568

1,236

1,170

1,179

1,230

4,815

1,255

1,235

2,490

Meridian Mark Plaza
4,081

920

1,006

1,049

874

3,849

1,018

1,163

2,181

Research Park V
2,976

1,012

1,016

1,023

1,015

4,066

1,031

1,023

2,054

Bank of America Plaza







933

933

Briarlake Plaza (2)







852

852

The Terrace (2)







749

749

Burnett Plaza







710

710

Harborview Plaza
3,970

712

516

319

206

1,753

346

553

899

Legacy Union One







450

450

Domain Point (2)







348

348

Woodcrest (2)







274

274

5950 Sherry Lane







220

220

Subtotal - Consolidated
282,153

73,157

72,967

73,864

77,187

297,175

79,858

88,038

167,896

 
 
 
 
 
 
 
 
 
 

Cousins Properties
12
Q2 2019 Supplemental Information

FUNDS FROM OPERATIONS - DETAIL (1)



 
(amounts in thousands, except per share amounts)
 
2017
2018 1st
2018 2nd
2018 3rd
2018 4th
2018
2019 1st
2019 2nd
YTD 2019
Unconsolidated Properties (4)
 
 
 
 
 
 
 
 
 
Terminus (2)
14,477

3,486

3,415

3,345

3,255

13,501

3,670

3,662

7,332

Gateway Village (2)
7,047

1,968

1,770

1,873

1,819

7,430

1,837

1,839

3,676

Carolina Square (2)
705

928

975

747

1,173

3,823

1,097

1,053

2,150

Emory University Hospital Midtown Medical Office Tower
3,913

990

1,031

1,028

975

4,024

1,027

1,036

2,063

Dimensional Place






206

1,770

1,976

Other (3)
4,911

49

37

1

23

110

36

19

55

Subtotal - Unconsolidated
31,053

7,421

7,228

6,994

7,245

28,888

7,873

9,379

17,252

 
 
 
 
 
 
 
 
 
 
Total Net Operating Income (1)
313,206

80,578

80,195

80,858

84,432

326,063

87,731

97,417

185,148

 
 
 
 
 
 
 
 
 
 
Gain on Sales of Undepreciated Investment Properties
 
 
 
 
 
 
 
 
 
Sales Less Cost of Sales - Consolidated
67




512

512

13,132

1,337

14,469

Sales Less Cost of Sales - Unconsolidated (4)

330

2,449



2,779




Total Gain on Sales of Undepreciated Investment Properties
67

330

2,449


512

3,291

13,132

1,337

14,469

 
 
 
 
 
 
 
 
 
 
Fee Income
 
 
 
 
 
 
 
 
 
Management Fees (5)
5,794

1,524

1,401

1,537

1,449

5,911

1,379

1,548

2,927

Development Fees
2,140

291

271

951

1,422

2,935

7,022

5,112

12,134

Leasing & Other Fees
698

1,079

126

31

7

1,243

327

415

742

Total Fee Income
8,632

2,894

1,798

2,519

2,878

10,089

8,728

7,075

15,803

 
 
 
 
 
 
 
 
 
 
Other Income
 
 
 
 
 
 
 
 
 
Termination Fees
9,270

360

639

276

273

1,548

520

190

710

Termination Fees - Unconsolidated (4)
1,294






3

4

7

Interest and Other Income
2,248

600

493

468

161

1,722

140

11

151

Interest and Other Income - Unconsolidated (4)
921

74

80

78

83

315

85

101

186

Gain on Extinguishment of Debt
2,258



93


93




Total Other Income
15,991

1,034

1,212

915

517

3,678

748

306

1,054

 
 
 
 
 
 
 
 
 
 
Total Fee and Other Income
24,623

3,928

3,010

3,434

3,395

13,767

9,476

7,381

16,857

 
 
 
 
 
 
 
 
 
 
Reimbursed Expenses
(3,527
)
(942
)
(860
)
(955
)
(1,025
)
(3,782
)
(932
)
(1,047
)
(1,979
)
 
 
 
 
 
 
 
 
 
 
General and Administrative Expenses
(27,523
)
(6,809
)
(8,071
)
(3,913
)
(3,247
)
(22,040
)
(11,460
)
(8,374
)
(19,834
)
 
 
 
 
 
 
 
 
 
 
Interest Expense
 
 
 
 
 
 
 
 
 
Consolidated Debt
 
 
 
 
 
 
 
 
 
2017 Senior Notes, Unsecured ($250M)
(4,842
)
(2,489
)
(2,490
)
(2,488
)
(2,491
)
(9,958
)
(2,490
)
(2,489
)
(4,979
)
Term Loan, Unsecured
(6,198
)
(1,858
)
(2,088
)
(2,205
)
(2,344
)
(8,495
)
(2,422
)
(2,421
)
(4,843
)
Credit Facility, Unsecured
(3,050
)
(742
)
(754
)
(754
)
(773
)
(3,023
)
(1,289
)
(1,705
)
(2,994
)
Fifth Third Center
(5,052
)
(1,247
)
(1,241
)
(1,235
)
(1,228
)
(4,951
)
(1,221
)
(1,215
)
(2,436
)
Promenade
(4,492
)
(1,102
)
(1,095
)
(1,085
)
(1,078
)
(4,360
)
(1,069
)
(1,060
)
(2,129
)
Colorado Tower
(4,236
)
(1,059
)
(1,059
)
(1,059
)
(1,056
)
(4,233
)
(1,051
)
(1,046
)
(2,097
)
2017 Senior Notes, Unsecured ($100M)
(2,937
)
(1,036
)
(1,037
)
(1,036
)
(1,036
)
(4,145
)
(1,036
)
(1,037
)
(2,073
)
816 Congress Avenue
(3,233
)
(799
)
(795
)
(792
)
(787
)
(3,173
)
(784
)
(779
)
(1,563
)
Meridian Mark Plaza
(1,483
)
(366
)
(368
)
(359
)
(360
)
(1,453
)
(358
)
(357
)
(715
)
2019 Senior Notes, Unsecured ($275M)







(366
)
(366
)

Cousins Properties
13
Q2 2019 Supplemental Information

FUNDS FROM OPERATIONS - DETAIL (1)



 
(amounts in thousands, except per share amounts)
 
2017
2018 1st
2018 2nd
2018 3rd
2018 4th
2018
2019 1st
2019 2nd
YTD 2019
2019 Senior Notes, Unsecured ($250M)







(326
)
(326
)
2019 Senior Notes, Unsecured ($125M)







(160
)
(160
)
Legacy Union One







(98
)
(98
)
Other (3)
(7,243
)
(175
)
(177
)
(74
)
(115
)
(541
)
(115
)
(116
)
(231
)
Capitalized
9,242

1,095

1,390

1,536

881

4,902

1,015

1,116

2,131

Subtotal - Consolidated
(33,524
)
(9,778
)
(9,714
)
(9,551
)
(10,387
)
(39,430
)
(10,820
)
(12,059
)
(22,879
)
 
 
 
 
 
 
 
 
 
 
Unconsolidated Debt (4)
 
 
 
 
 
 
 
 
 
Terminus (2)
(4,823
)
(1,001
)
(995
)
(988
)
(992
)
(3,976
)
(1,038
)
(905
)
(1,943
)
Carolina Square (2)
(184
)
(197
)
(281
)
(355
)
(390
)
(1,223
)
(406
)
(420
)
(826
)
Emory University Hospital Midtown Medical Office Tower
(1,285
)
(317
)
(315
)
(314
)
(311
)
(1,257
)
(310
)
(308
)
(618
)
Other (3)
(1,566
)








Subtotal - Unconsolidated
(7,858
)
(1,515
)
(1,591
)
(1,657
)
(1,693
)
(6,456
)
(1,754
)
(1,633
)
(3,387
)
 
 
 
 
 
 
 
 
 
 
Total Interest Expense
(41,382
)
(11,293
)
(11,305
)
(11,208
)
(12,080
)
(45,886
)
(12,574
)
(13,692
)
(26,266
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Expenses
 
 
 
 
 
 
 
 
 
Severance
(446
)
(195
)
128

4

3

(60
)
(23
)
(23
)
(46
)
Partners' share of FFO in consolidated joint ventures
(16
)
(144
)
(134
)
(121
)
(159
)
(558
)
(171
)
(192
)
(363
)
Property Taxes and Other Holding Costs
(764
)
(130
)
(152
)
(148
)
(153
)
(583
)
(184
)
(209
)
(393
)
Loss on Extinguishment of Debt - Consolidated

(85
)



(85
)



Income Tax Expense







(242
)
(242
)
Predevelopment & Other Costs
(803
)
(50
)
(30
)
8

(16
)
(88
)
(23
)
(206
)
(229
)
Transaction Costs (6)
(1,661
)
(91
)
(177
)


(268
)



Transaction Costs - TIER (6)






(3
)
(49,827
)
(49,830
)
Total Other Expenses
(3,690
)
(695
)
(365
)
(257
)
(325
)
(1,642
)
(404
)
(50,699
)
(51,103
)
 
 
 
 
 
 
 
 
 
 
Depreciation and Amortization of Non-Real Estate Assets
(1,874
)
(473
)
(468
)
(469
)
(462
)
(1,872
)
(456
)
(454
)
(910
)
 
 
 
 
 
 
 
 
 
 
FFO (1)
$
259,900

$
64,624

$
64,585

$
67,490

$
71,200

$
267,899

$
84,513

$
31,869

$
116,382

Weighted Average Shares - Diluted
105,824

106,845

106,875

106,880

106,871

106,868

106,901

114,670

110,822

FFO per Share (1)
$
2.46

$
0.60

$
0.60

$
0.63

$
0.67

$
2.51

$
0.79

$
0.28

$
1.05

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 31.
(2) Contains multiple buildings that are grouped together for reporting purposes.
(3) Primarily represents properties sold and loans repaid prior to June 30, 2019 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) Management Fees include reimbursement of expenses that are included in the "Reimbursed Expenses" line item.
(6) In 2017 and 2018, transaction costs related primarily to the transactions with Parkway Properties, Inc. In 2019, transaction costs relate to the merger with TIER REIT, Inc.

Cousins Properties
14
Q2 2019 Supplemental Information

PORTFOLIO STATISTICS

 
Office Properties
 
Rentable Square Feet
 
Financial Statement Presentation
 
Company's Ownership Interest
 
End of Period Leased
 
Weighted Average Occupancy (1)
 
% of Total
Net Operating
Income (3)
 
Property Level Debt ($000) (4)
 
 
 
 
 
2Q19
 
1Q19 (2)
 
2Q19
 
1Q19 (2)
 
 
 
Spring & 8th (5)
 
765,000

 
Consolidated
 
100%
 
100.0%
 
100.0%
 
100.0%
 
100.0%
 
7.5%
 
$

 
Northpark (5)
 
1,539,000

 
Consolidated
 
100%
 
93.5%
 
92.4%
 
84.9%
 
86.9%
 
6.2%
 

 
Promenade
 
777,000

 
Consolidated
 
100%
 
89.5%
 
91.3%
 
89.1%
 
89.9%
 
4.8%
 
97,437

 
Buckhead Plaza (5)
 
671,000

 
Consolidated
 
100%
 
78.6%
 
82.4%
 
82.3%
 
81.6%
 
4.1%
 

 
Terminus (5)
 
1,226,000

 
Unconsolidated
 
50%
 
90.8%
 
90.8%
 
86.1%
 
87.9%
 
3.8%
 
98,225

 
3344 Peachtree
 
484,000

 
Consolidated
 
100%
 
94.1%
 
94.4%
 
93.1%
 
90.4%
 
3.4%
 

 
3350 Peachtree
 
413,000

 
Consolidated
 
100%
 
94.7%
 
94.7%
 
94.7%
 
88.1%
 
2.4%
 

 
1200 Peachtree
 
370,000

 
Consolidated
 
100%
 
100.0%
 
100.0%
 
100.0%
 
100.0%
 
2.4%
 

 
8000 Avalon
 
229,000

 
Consolidated
 
90%
 
100.0%
 
100.0%
 
100.0%
 
100.0%
 
2.0%
 

 
3348 Peachtree
 
258,000

 
Consolidated
 
100%
 
92.5%
 
92.5%
 
93.3%
 
89.1%
 
1.5%
 

 
Meridian Mark Plaza
 
160,000

 
Consolidated
 
100%
 
100.0%
 
100.0%
 
100.0%
 
100.0%
 
1.2%
 
23,228

 
Emory University Hospital Midtown Medical Office Tower
 
358,000

 
Unconsolidated
 
50%
 
99.6%
 
99.4%
 
97.5%
 
99.1%
 
1.1%
 
34,371

 
ATLANTA
 
7,250,000

 
 
 
 
 
93.0%
 
93.3%
 
90.7%
 
90.6%
 
40.4%
 
253,261

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One Eleven Congress
 
519,000

 
Consolidated
 
100%
 
94.8%
 
94.0%
 
90.2%
 
88.7%
 
4.5%
 

 
San Jacinto Center
 
395,000

 
Consolidated
 
100%
 
96.3%
 
91.4%
 
89.9%
 
91.8%
 
3.8%
 

 
Colorado Tower
 
373,000

 
Consolidated
 
100%
 
100.0%
 
100.0%<