-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BVAb0hy1Yc144lzcBc3cIFRQ6lG7m5Rin3t+fE+qpU+t+unC/EWLLMNMDeFAPIVd tGmNkwYnJcwrN/4xGNg6pQ== 0000025232-97-000002.txt : 19970222 0000025232-97-000002.hdr.sgml : 19970222 ACCESSION NUMBER: 0000025232-97-000002 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 ITEM INFORMATION: Changes in control of registrant FILED AS OF DATE: 19970218 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COUSINS PROPERTIES INC CENTRAL INDEX KEY: 0000025232 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 580869052 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-03576 FILM NUMBER: 97536849 BUSINESS ADDRESS: STREET 1: 2500 WINDY RIDGE PKWY STE 1600 CITY: MARIETTA STATE: GA ZIP: 30067 BUSINESS PHONE: 7709552200 MAIL ADDRESS: STREET 1: 2500 WINDY RIDGE PARKWAY STREET 2: SUITE 1600 CITY: ATLANTA STATE: GA ZIP: 30339-5683 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A Amendment No. 1 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: December 5, 1996 (Date of Earliest Event Reported) Commission file number 0-3576 COUSINS PROPERTIES INCORPORATED A GEORGIA CORPORATION I.R.S. EMPLOYER IDENTIFICATION NO. 58-0869052 2500 WINDY RIDGE PARKWAY ATLANTA, GEORGIA 30339-5683 TELEPHONE: 770-955-2200 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements of Business Acquired. The financial statements required by Item 7(a) relating to the One Independence Center Acquisition described in Item 2 of Form 8-K dated December 5, 1996 are attached hereto as Exhibit A and incorporated herein by this reference. (b) Pro Forma Financial Information. The unaudited pro forma financial information required by Item 7(b) relating to the One Independence Center Acquisition described in Item 2 of Form 8-K dated December 5, 1996 is attached hereto as Exhibit B and incorporated herein by this reference. (c) Exhibits. Exhibit No. Description ------- ----------- A Financial statements required by Item 7(a). B Pro forma financial information required by Item 7(b). C Consent of Independent Auditors SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. COUSINS PROPERTIES INCORPORATED Registrant /s/ Kelly H. Barrett________________________ Kelly H. Barrett Vice President and Controller (Authorized Officer) (Principal Accounting Officer) February 17, 199 INDEX TO EXHIBITS Exhibit Description Page ------- ----------- ---- A Financial statements required by Item 7(a) 5 B Pro forma financial information required by Item 7(b) 10 C Consent of Independent Auditors 16 EXHIBIT A ONE INDEPENDENCE CENTER STATEMENTS OF EXCESS OF REVENUE OVER SPECIFIC OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1995 AND THE NINE MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED) Report of Independent Auditors To the Stockholders Cousins Properties Incorporated We have audited the accompanying Statement of Excess of Revenues Over Specific Operating Expenses of One Independence Center for the year ended December 31, 1995. This statement is the responsibility of One Independence Center's management. Our responsibility is to express an opinion on this statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement. An audit also includes assessing the basis of accounting used and significant estimates made by management, as well as evaluating the overall presentation of the statement. We believe that our audit provides a reasonable basis for our opinion. The accompanying statement has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in the accompanying Note 1 and is not intended to be a complete presentation of the revenue and expenses of One Independence Center. In our opinion, the Statement of Excess of Revenues Over Specific Operating Expenses referred to above presents fairly, in all material respects, the excess of revenues over specific operating expenses as described in Note 1 of One Independence Center for the year ended December 31, 1995 in conformity with generally accepted accounting principles. ERNST & YOUNG LLP Dallas, Texas January 8, 1997 ONE INDEPENDENCE CENTER STATEMENTS OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1995 AND THE NINE MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED) (in thousands)
1995 1996 ---- ---- (unaudited) Revenues Rental revenues . ................................ $10,083 $8,109 Other property revenues .......................... 907 704 Interest income on required reserves ............. 58 40 ------- ------ 11,048 8,853 ------- ------ Specific Operating Expenses Costs and operating .............................. 3,424 2,483 Management fees .................................. 330 285 Interest on bonds assumed ........................ 109 63 General and administrative ....................... 249 145 ------- ------ 4,112 2,976 ------- ------ Excess of Revenues Over Specific Operating Expenses .................... $ 6,936 $ 5,877 ======= =======
See accompanying notes. ONE INDEPENDENCE CENTER NOTES TO THE STATEMENTS OF EXCESS REVENUES OVER SPECIFIC OPERATING EXPENSES YEAR ENDED DECEMBER 31, 1995 AND THE NINE MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED) 1. Organization and Basis of Presentation The Statements of Excess of Revenues Over Specific Operating Expenses (the Statements) for the year ended December 31, 1995 and the nine months ended September 30, 1996 relate to the operations of One Independence Center, an office building located in Charlotte, North Carolina. The office building was acquired from an unaffiliated party by Cousins Properties Incorporated (Cousins) on December 5, 1996. Cousins assumed the rights and obligations of the prior owners under a lease on the underground parking garage, leased from the City of Charlotte. Ownership of the garage reverts to Cousins at the end of the lease term. To finance the garage, the municipality issued tax-exempt revenue bonds, amortizing over 15 years (Bonds). The Bonds require that certain cash reserves be maintained. During the Bonds term, lease payments are equal to the greater of the debt service on the Bonds or net revenues, as defined, from the parking operations. The Bonds bear interest at 65% of prime and require annual sinking fund installments of $375,000 through 2000. For eight years beyond the Bonds term, the lease payments are equal to the net revenues, as defined, from the parking operations. The accompanying statements have been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for real estate acquired. The statements are not intended to be a complete presentation of income and expenses of One Independence Center for the year ended December 31, 1995 and the nine months ended September 30, 1996, as certain adjustments to recognize rental revenue on the straight-line basis over the period of the related lease agreement and certain costs such as depreciation, amortization, mortgage interest, professional fees and other costs not considered comparable to the future operations of One Independence Center have been excluded. 2. Summary of Significant Accounting Policies Rental Revenues Rental revenues consist of lease payments earned from tenants under lease agreements terminating in 1997 through 2008, and also include tenant expense reimbursements of $3,043,000 and $2,453,000 for 1995 and 1996, respectively. Other property revenues includes $300,000 and $225,000 of ground lease income and $556,000 and $472,000 of parking income for 1995 and 1996, respectively. Capitalization Policy Ordinary repairs and maintenance are expensed as incurred; major replacements and betterments are capitalized. Use of Estimtes The preparation of the Statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the Statements and accompanying notes. Actual results could differ from those estimates. Unaudited Interim Statement The Statement of Excess Revenues Over Specific Operating Expenses for the nine months ended September 30, 1996 is unaudited. In the opinion of management, all adjustments necessary for a fair presentation of such Statement have been included. The results of operations for the period are not necessarily indicative of the One Independence Center future results of operations. 3. Related Party Transactions Management fees of $330,000 and $285,000 and leasing commissions of $74,000 and $54,000 in 1995 and 1996, respectively, were paid to affiliates of the prior owners under property management contracts. 4. Operating Leases The land under the parking garage is leased to the City of Charlotte for a remaining term of 21 years as of December 31, 1995 or 8 years after the Bonds are paid in full. Annual rental revenue is $300,000 for the first 15 years beginning in 1984 through November 30, 1998 and $25,000 thereafter. Minimum future rentals receivable from operating properties and land leased to others, excluding contingent rentals, under noncancellable leases are as follows (in thousands): 1996 $ 7,519 1997 6,983 1998 6,261 1999 6,024 2000 6,071 Thereafter 41,272 ------- $74,130 ======= 5. Concentration of Credit Risk The property was 96% leased at December 31, 1995, with one tenant occupying 68% of the property. Under a portion of this tenant's lease, the tenant is to pay monthly rentals of $114,000 increasing annually up to $119,000 until November 2000, plus the tenant's pro rata share of certain operating expenses in excess of a negotiated base. Under the remainder of the lease, the tenant is to pay monthly base rentals of $372,000 increasing annually by 2% each year until August 2008, plus the tenant's pro rata share of certain operating expenses. EXHIBIT B COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES PRO FORMA CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1996 (UNAUDITED) (in thousands, except per share amounts) The unaudited pro forma consolidated balance sheet is presented as if the December 5, 1996 acquisition of One Independence Center had occurred as of September 30, 1996. The unaudited pro forma consolidated balance sheet is not necessarily indicative of what the actual financial position would have been at September 30, 1996 nor does it purport to represent the future financial position of Cousins Properties Incorporated and Consolidated Entities ("the Company"). COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES PRO FORMA CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1996 (UNAUDITED) (in thousands, except per share amounts)
Pro Forma Company Acquisition Company Historical Adjustments (A) Pro Forma ---------- --------------- --------- ASSETS - ------ PROPERTIES: Operating properties .................... $171,842 $51,134 $222,976 Land held for investment or future development .. 24,284 -- 24,284 Projects under construction ............. 104,470 -- 104,470 Residential lots under development ...... 15,120 -- 15,120 Less: accumulated depreciation ......... (19,134) -- (19,134) -------- ------- -------- Total properties ....................... 296,582 51,134 347,716 -------- ------- -------- CASH AND CASH EQUIVALENTS ............... 132 (132) -- NOTES AND OTHER RECEIVABLES ............. 53,027 48 53,075 INVESTMENT IN UNCONSOLIDATED JOINT VENTURES ......................... 134,268 -- 134,268 OTHER ASSETS ............................ 8,789 -- 8,789 -------- ------- -------- TOTAL ASSETS ......................... $492,798 $51,050 $543,848 ======== ======= ======== LIABILITIES AND STOCKHOLDERS' INVESTMENT NOTES PAYABLE ........................... $186,460 $50,800 $237,260 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES ............................ 19,008 250 19,258 MINORITY INTERESTS IN CONSOLIDATED ENTITIES ............................... 9 -- 9 DEPOSITS AND DEFERRED INCOME ............ 333 -- 333 -------- ------- -------- TOTAL LIABILITIES .................... 205,810 51,050 256,860 -------- ------- -------- STOCKHOLDERS' INVESTMENT: Common stock ........................... 28,771 -- 28,771 Additional paid-in capital ............. 162,132 -- 162,132 Cumulative undistributed net income .... 96,085 -- 96,085 -------- ------- -------- TOTAL STOCKHOLDERS' INVESTMENT .......... 286,988 -- 286,988 -------- ------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT ............................. $492,798 $51,050 $543,848 ======== ======= ========
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES PRO FORMA CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (in thousands, except per share amounts) The unaudited consolidated statements of income are presented as if the Company acquired One Independence Center as of the beginning of each period presented. In Management's opinion, all adjustments necessary to present fairly the effects of the property acquisition have been made. The unaudited pro forma consolidated statements of income are not necessarily indicative of what the actual results of operations of the Company would have been assuming the Company had acquired the properties as of the beginning of each period presented, nor do they purport to represent the results of operations for future periods. COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED) (in thousands, except per share amounts)
One Additional Company Independence Pro Forma Company Historical Center Adjustments Pro Forma ---------- ------------ ----------- --------- REVENUES: Rental property revenues ......... $21,827 $8,806 $ 428 (B) $31,061 Development and construction fees. 1,380 -- -- 1,380 Management fees .................. 1,959 -- -- 1,959 Leasing and other fees ........... 1,362 -- -- 1,362 Residential lot and outparcels sales .......................... 9,688 -- -- 9,688 Interest and other ............... 3,974 47 -- 4,021 ------- ------ ------- ------- 40,190 8,853 428 49,471 ------- ------ ------- ------- INCOME FROM UNCONSOLIDATED JOINT VENTURES .................. 12,926 -- -- 12,926 ------- ------ ------- ------- COSTS AND EXPENSES: Rental property operating expenses 4,946 2,768 -- 7,714 General and administrative expenses 6,581 145 -- 6,726 Depreciation and amortization .... 4,729 -- 1,990 (C) 6,719 Leasing and other commissions .... 41 -- -- 41 Stock appreciation right expense . 440 -- -- 440 Residential lot and outparcel cost of sales ........................ 9,522 -- -- 9,522 Interest expense ................. 3,959 63 3,057 (D) 7,079 Property taxes on undeveloped land 901 -- -- 901 Other ............................ 992 -- -- 992 ------- ------ ------- ------- 32,111 2,976 4,047 40,134 ------- ------ ------- ------- INCOME FROM OPERATIONS BEFORE INCOME TAXES AND GAIN ON SALE OF INVESTMENT PROPERTIES ........ 21,005 5,877 (4,619) 22,263 PROVISION (BENEFIT) FOR INCOME TAXES FROM OPERATIONS ........... (864) -- -- (864) ------- ------ ------- ------- INCOME FROM OPERATIONS BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES ...................... 21,869 5,877 (4,619) 23,127 GAIN ON SALE OF INVESTMENT PROPERTIES, NET OF APPLICABLE INCOME TAX PROVISION ............ 1,017 -- -- 1,017 ------- ------ ------- ------- NET INCOME ....................... $22,886 $5,877 $(4,619) $24,144 ======= ====== ======= ======= NET INCOME PER SHARE ............. $ .80 $ -- $ -- $ .85 ======= ====== ======= ======= WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING .............. 28,431 -- -- 28,431 ======= ====== ======= =======
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1995 (UNAUDITED) (in thousands, except per share amounts)
One Additional Company Independence Pro Forma Company Historical Center Adjustments Pro Forma ---------- ------------ ----------- --------- REVENUES: Rental property revenues ......... $19,348 $10,939 $ 571 (B) $30,858 Development and construction fees. 3,515 -- -- 3,515 Management fees .................. 2,213 -- -- 2,213 Leasing and other fees ........... 2,156 -- -- 2,156 Residential lot and outparcels sales 9,040 -- -- 9,040 Interest and other ............... 4,764 109 -- 4,873 ------- ------- ------- ------- 41,036 11,048 571 52,655 ------- ------- ------- ------- INCOME FROM UNCONSOLIDATED JOINT VENTURES ................... 14,113 -- -- 14,113 COSTS AND EXPENSES: Rental property operating expenses 4,681 3,754 -- 8,435 General and administrative expenses 7,648 249 -- 7,897 Depreciation and amortization ..... 4,516 -- 2,653 (C) 7,169 Leasing and other commissions ..... 20 -- -- 20 Stock appreciation right expense .. 1,298 -- -- 1,298 Residential lot and outparcel cost of sales ......................... 8,407 -- -- 8,407 Interest expense .................. 687 109 4,070 (D) 4,806 Property taxes on undeveloped land 977 -- -- 977 Other ............................. 1,688 -- -- 1,688 ------- ------- ------- ------- 29,922 4,112 6,723 40,757 ------- ------- ------- ------- INCOME FROM OPERATIONS BEFORE INCOME TAXES AND GAIN ON SALE OF INVESTMENT PROPERTIES ..... 25,227 6,936 (6,152) 26,011 PROVISION FOR INCOME TAXES BEFORE OPERATIONS ................. 747 -- -- 747 ------- ------- ------- ------- INCOME FROM OPERATIONS BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES ........................ 24,480 6,936 (6,152) 25,264 GAIN ON SALE OF INVESTMENT PROPERTIES, NET OF APPLICABLE INCOME TAX PROVISION .............. 1,862 -- -- 1,862 ------- ------- ------- ------- NET INCOME ......................... $26,342 $ 6,936 $(6,152) $27,126 ======= ======= ======= ======= NET INCOME PER SHARE ............... $ .94 $ -- $ -- $ .97 ======= ======= ======= ======= WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING ................ 27,983 -- -- 27,983 ====== ======= ======= ======
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES NOTES AND ASSUMPTIONS TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENTS OF INCOME (A) Reflects the December 5, 1996 acquisition of One Independence Center and the related assumption of a mortgage note payable. (B) To recognize rental revenue on the straight-line basis over the period of the related lease agreements. (C) To record depreciation expense for the building and amortization expense for tenant improvements. (D) To record interest expense associated with borrowings under the loan and amortization expense of deferred financing costs. EXHIBIT C CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation of our report dated January 8, 1997, with respect to the Statement of Excess of Revenues Over Specific Operating Expenses of One Independence Center included in this Form 8-K/A, into the Company's previously filed Registration Statement (Form S-3 No. 33-60350) pertaining to the Dividend Reinvestment Plan of Cousins Properties Incorporated and in the related Prospectus, in the Registration Statement (Form S-8 No. 33- 56787) pertaining to the 1989 Stock Option Plan of Cousins Properties Incorporated and in the related Prospectus, in the Registration Statement (Form S-8 No 33-41927) pertaining to the 1989 Stock Option Plan, 1987 Restricted Stock Plan for Outside Directors and Incentive Stock Option Plan of Cousins Properties Incorporated and in the related Prospectus, and in the Registration Statement (Form S-3 No. 333-12031). ERNST & YOUNG LLP Dallas, Texas February 17, 1997 - -16- -----END PRIVACY-ENHANCED MESSAGE-----