-----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, FJsj7aYgo4xXhZono7OOk692VKsxcotAuRjYb77QJAjRI3mzhLpSaJ73jtI2yJxA o+jVsP+4FT9tTeVbfp0tbQ== 0000025232-01-500024.txt : 20020410 0000025232-01-500024.hdr.sgml : 20020410 ACCESSION NUMBER: 0000025232-01-500024 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011114 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-03576 FILM NUMBER: 1786253 BUSINESS ADDRESS: STREET 1: 2500 WINDY RIDGE PKWY STE 1600 CITY: ATLANTA STATE: GA ZIP: 30339-5683 BUSINESS PHONE: 7709552200 MAIL ADDRESS: STREET 1: 2500 WINDY RIDGE PARKWAY STREET 2: SUITE 1600 CITY: ATLANTA STATE: GA ZIP: 30339-5683 10-Q 1 f93001.txt FORM 10-Q - 9/30/01 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended September 30, 2001 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 Registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and has been subject to such filing requirements for the past 90 days. At October 31, 2001, 49,887,967 shares of common stock of the Registrant were outstanding. COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES CONSOLIDATED BALANCE SHEETS ($ in thousands, except share amounts) September 30, December 31, 2001 2000 ------------- ------------ (Unaudited) ASSETS - ------ PROPERTIES: Operating properties, net of accumulated depreciation of $94,984 as of September 30, 2001 and $70,032 as of December 31, 2000 $ 766,232 $ 772,359 Land held for investment or future development 33,407 15,218 Projects under construction 116,376 93,870 Residential lots under development 7,785 3,001 ---------- ---------- Total properties 923,800 884,448 CASH AND CASH EQUIVALENTS, at cost which approximates market 500 1,696 NOTES AND OTHER RECEIVABLES 40,824 40,640 INVESTMENT IN UNCONSOLIDATED JOINT VENTURES 187,860 175,471 OTHER ASSETS 35,380 13,497 ---------- ---------- TOTAL ASSETS $1,188,364 $1,115,752 ========== ========== LIABILITIES AND STOCKHOLDERS' INVESTMENT - ---------------------------------------- NOTES PAYABLE $ 559,399 $ 485,085 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 29,462 31,185 DEPOSITS AND DEFERRED INCOME 2,522 2,538 ---------- ---------- TOTAL LIABILITIES 591,383 518,808 ---------- ---------- DEFERRED GAIN 108,736 111,858 ---------- ---------- MINORITY INTERESTS 26,616 30,619 ---------- ---------- COMMITMENTS AND CONTINGENT LIABILITIES STOCKHOLDERS' INVESTMENT: Common stock, $1 par value, authorized 150,000,000 shares; issued 49,882,479 shares at September 30, 2001 and 49,364,477 shares at December 31, 2000 49,882 49,364 Additional paid-in capital 270,959 259,659 Treasury stock, at cost, 681,000 shares in 2001 and 153,600 shares in 2000 (17,465) (4,990) Unearned compensation (3,812) (4,690) Cumulative undistributed net income 162,065 155,124 ---------- ---------- TOTAL STOCKHOLDERS' INVESTMENT 461,629 454,467 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $1,188,364 $1,115,752 ========== ========== The accompanying notes are an integral part of these consolidated balance sheets. COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 (UNAUDITED) (In thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------ 2001 2000 2001 2000 ------- ------- -------- -------- REVENUES: Rental property revenues ........... $37,064 $30,216 $108,177 $ 80,465 Development income ................. 1,715 1,048 4,977 3,221 Management fees .................... 2,104 1,219 5,549 3,670 Leasing and other fees ............. 1,413 139 3,703 1,254 Residential lot and outparcel sales 1,653 3,011 5,560 8,921 Interest and other ................. 1,408 1,702 4,532 4,299 ------- ------- -------- -------- 45,357 37,335 132,498 101,830 ------- ------- -------- -------- INCOME FROM UNCONSOLIDATED JOINT VENTURES ........................... 5,804 5,360 16,949 13,644 ------- ------- -------- -------- COSTS AND EXPENSES: Rental property operating expenses . 11,276 8,340 31,957 22,948 General and administrative expenses 7,266 4,915 20,129 14,375 Depreciation and amortization ...... 11,242 8,711 32,864 23,152 Stock appreciation right (credit) expense .......................... (128) 318 (265) 684 Residential lot and outparcel cost of sales ......................... 1,464 2,102 4,817 7,269 Interest expense ................... 6,845 4,474 20,566 7,969 Property taxes on undeveloped land . 140 254 481 177 Other .............................. 1,011 1,534 3,063 2,764 ------- ------- -------- -------- 39,116 30,648 113,612 79,338 ------- ------- -------- -------- INCOME FROM OPERATIONS BEFORE INCOME TAXES AND GAIN ON SALE OF INVESTMENT PROPERTIES ............. 12,045 12,047 35,835 36,136 (BENEFIT) PROVISION FOR INCOME TAXES FROM OPERATIONS .................... (311) (621) (1,024) (745) ------- ------- -------- -------- INCOME BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES ............. 12,356 12,668 36,859 36,881 GAIN ON SALE OF INVESTMENT PROPERTIES, NET OF APPLICABLE INCOME TAX PROVISION ......................... 1,031 1,028 20,453 10,895 ------- ------- -------- -------- NET INCOME ........................... $13,387 $13,696 $ 57,312 $ 47,776 ======= ======= ======== ======== WEIGHTED AVERAGE SHARES .............. 49,386 48,688 49,248 48,529 ======= ======= ======== ======== BASIC NET INCOME PER SHARE ........... $ .27 $ .28 $ 1.16 $ .98 ======= ======= ======== ======== DILUTED WEIGHTED AVERAGE SHARES ...... 50,445 50,100 50,349 49,741 ======= ======= ======== ======== DILUTED NET INCOME PER SHARE ......... $ .27 $ .27 $ 1.14 $ .96 ======= ======= ======== ======== CASH DIVIDENDS DECLARED PER SHARE .... $ .34 $ .30 $ 1.02 $ .90 ======= ======= ======== ======== The accompanying notes are an integral part of these consolidated statements. COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 (UNAUDITED) ($ in thousands) 2001 2000 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Income before gain on sale of investment properties .................................. $ 36,859 $ 36,881 Adjustments to reconcile income before gain on sale of investment properties to net cash provided by operating activities: Depreciation and amortization, net of minority interest's share ............... 32,768 22,236 Amortization of unearned compensation ..... 787 -- Stock appreciation right (credit) expense . (265) 684 Cash charges to expense accrual for stock appreciation rights ..................... (389) (435) Effect of recognizing rental revenues on a straight-line basis ................... (2,005) (1,806) Income from unconsolidated joint ventures . (16,949) (13,644) Operating distributions from unconsolidated joint ventures .......................... 18,916 24,080 Residential lot and outparcel cost of sales 3,719 6,587 Change in other operating assets and liabilities: Change in other receivables ........... 728 (993) Change in accounts payable and accrued liabilities ......................... (4,547) 9,298 -------- -------- Net cash provided by operating activities ....... 69,622 82,888 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Gain on sale of investment properties, net of applicable income tax provision .......... 20,453 10,895 Adjustments to reconcile gain on sale of investment properties to net cash provided by sales activities: Cost of sales ............................. 35,910 17,510 Deferred income recognized ................ (3,095) (3,084) Non-cash gain on disposition of leasehold interests ..................... (236) -- Property acquisition and development expenditures ................................ (112,142) (127,089) Investment in unconsolidated joint ventures, including interest capitalized to equity investments ................................. (26,379) (26,369) Collection of notes receivable, net ........... 1,934 1,761 Net cash paid in acquisition of business ...... (2,126) -- Change in other assets, net ................... (8,514) (3,897) -------- -------- Net cash used in investing activities ........... (94,195) (130,273) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from credit facility ................. 209,493 194,284 Repayment of credit facility .................. (175,961) (262,347) Proceeds from other notes payable ............. 45,000 154,500 Dividends paid ................................ (50,371) (43,619) Common stock sold, net of expenses ............ 11,909 10,558 Common stock repurchases ...................... (12,475) -- Repayment of other notes payable .............. (4,218) (5,902) -------- -------- Net cash provided by financing activities ....... 23,377 47,474 -------- -------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ................................... (1,196) 89 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,696 1,473 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD ...... $ 500 $ 1,562 ======== ======== The accompanying notes are an integral part of these consolidated statements. COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2001 (UNAUDITED) 1. BASIS OF PRESENTATION - -------------------------- The Consolidated Financial Statements include the accounts of Cousins Properties Incorporated ("Cousins"), its majority owned partnerships and wholly owned subsidiaries, Cousins Real Estate Corporation ("CREC") and its subsidiaries and CREC II Inc. ("CREC II") and its subsidiaries. All of the entities included in the Consolidated Financial Statements are hereinafter referred to collectively as the "Company." Cousins has elected to be taxed as a real estate investment trust and intends to distribute 100% of its federal taxable income to stockholders, thereby eliminating any liability for future corporate federal income taxes. Therefore, the results included herein do not include a federal income tax provision for Cousins. However, CREC and its subsidiaries and CREC II and its subsidiaries are taxed separately from Cousins as regular corporations. Accordingly, the Consolidated Statements of Income include a (benefit) provision for CREC and CREC II's income taxes. The Consolidated Financial Statements were prepared by the Company without audit, but in the opinion of management reflect all adjustments necessary (which adjustments are of a normal and recurring nature) for the fair presentation of the Company's financial position as of September 30, 2001 and results of operations for the three and nine month periods ended September 30, 2001 and 2000. Results of operations for the interim 2001 periods are not necessarily indicative of results expected for the full year. While certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, the Company believes that the disclosures herein are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2000. The accounting policies employed are the same as those shown in Note 1 to the Consolidated Financial Statements included in such Form 10-K. On October 2, 2000, a 3-for-2 stock split effected in the form of a 50% stock dividend was awarded to stockholders of record on September 15, 2000. All prior period shares outstanding and per share amounts have been restated for the effect of the stock dividend. Certain 2000 amounts have been reclassified to conform with the 2001 presentation. 2. SUPPLEMENTAL INFORMATION CONCERNING CASH FLOWS - --------------------------------------------------- Interest (net of $7,129,000 and $12,647,000 capitalized in 2001 and 2000, respectively) and income taxes paid (net of refunds of $27,000 in 2000) were as follows for the nine months ended September 30, 2001 and 2000 ($ in thousands): 2001 2000 ------- ------ Interest paid $21,576 $6,644 Income taxes paid $ 272 $2,840 During the nine months ended September 30, 2001, approximately $37,326,000 was transferred from Projects Under Construction to Operating Properties. 3. NOTES PAYABLE AND INTEREST EXPENSE - ---------------------------------------
At September 30, 2001 and December 31, 2000, notes payable included the following ($ in thousands): September 30, 2001 December 31, 2000 ------------------------------------ --------------------------------------- Share of Share of Unconsolidated Unconsolidated Company Joint Ventures Total Company Joint Ventures Total -------- -------------- -------- -------- -------------- -------- Floating Rate Line of Credit and Construction Loan $207,828 $ 82,151 $289,979 $174,296 $ 70,309 $244,605 Other Debt (primarily non-recourse fixed rate mortgages) 351,571 182,515 534,086 310,789 185,983 496,772 -------- -------- -------- -------- -------- -------- $559,399 $264,666 $824,065 $485,085 $256,292 $741,377 ======== ======== ======== ======== ======== ========
For the three and nine months ended September 30, 2001, interest expense was recorded as follows ($ in thousands): Three Months Ended Nine Months Ended September 30, 2001 September 30, 2001 ------------------------------------ ------------------------------------ Share of Share of Unconsolidated Unconsolidated Company Joint Ventures Total Company Joint Ventures Total ------- -------------- ------- ------- -------------- ------- Interest Expensed $6,845 $4,199 $11,044 $20,566 $12,671 $33,237 Interest Capitalized 2,399 234 2,633 7,129 1,186 8,315 ------ ------ ------- ------- ------- ------- $9,244 $4,433 $13,677 $27,695 $13,857 $41,552 ====== ====== ======= ======= ======= =======
In May 2001, the Company completed the financing of Presidential MarketCenter. This $28 million non-recourse mortgage note payable has an interest rate of 7.65% and a maturity of May 2, 2011. In July 2001, the Company completed the financing of 600 University Park Place. This $14 million non-recourse mortgage note payable has an interest rate of 7.38% and a maturity of August 10, 2011. In August 2001, the Company amended and extended its credit facility. The amount available under the new credit facility is $275 million, the expiration date is August 31, 2004, and the interest rate is tied to the London Interbank Offering Rate. Additionally, the Company syndicated the credit facility which increased the number of participating banks from two to eight. Subsequent to September 30, 2001, the Company completed the financing of 333 John Carlyle and 1900 Duke Street. This $49 million non-recourse mortgage note payable has an interest rate of 7% and a maturity of November 1, 2011. Additionally, the Company completed the financing of 333 and 555 North Point Center East. This $31.5 million non-recourse mortgage note payable has an interest rate of 7% and a maturity of November 1, 2011. During the nine months ended September 30, 2001, interest was capitalized related to the Company's and the Company's share of unconsolidated joint venture projects under construction which had an average balance of approximately $209 million. 4. EARNINGS PER SHARE DATA - --------------------------- Weighted average shares and diluted weighted average shares are as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, ------------------ ----------------- 2001 2000 2001 2000 ------ ------ ------ ------ Weighted average shares 49,386 48,688 49,248 48,529 Dilutive potential common shares 1,059 1,412 1,101 1,212 ------ ------ ------ ------ Diluted weighted average shares 50,445 50,100 50,349 49,741 ====== ====== ====== ====== Anti-dilutive options not included 990 6 990 10 ====== ====== ====== ====== 5. RECENT ACCOUNTING PRONOUNCEMENTS - ------------------------------------ In July 2001, the Financial Accounting Standards Board issued Statement No. 141, "Business Combinations" ("SFAS 141") and Statement No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). SFAS 141 eliminates pooling of interests accounting and requires all business combinations initiated after June 30, 2001 to be accounted for using the purchase method. SFAS 142 eliminates the amortization of goodwill and certain other intangible assets and requires that goodwill be evaluated for impairment by applying a fair value-based test. The Company will adopt the standard effective January 1, 2002 for previous acquisitions, and the Company adopted the standard effective June 30, 2001 for prospective acquisitions. Amortization of goodwill was approximately $181,000 and $473,000 in the three and nine month 2001 periods, respectively. The Company expects to complete its first fair-value based impairment tests by June 30, 2002. 6. COMMON STOCK REPURCHASES - ---------------------------- During September 2001, the Company repurchased 527,400 shares of its outstanding common stock for an aggregate purchase price of $12,474,994. 7. REPORTABLE SEGMENTS - ----------------------- The Company has three reportable segments: Office Division, Retail Division and Land Division. The Office Division and Retail Division develop, lease and manage office buildings and retail centers, respectively. The Land Division owns various tracts of strategically located land which are being held for future development. The Land Division also develops single-family residential communities which are parceled into lots and sold to various home builders. The management of the Company evaluates performance of its reportable segments based on Funds From Operations ("FFO"). The Company calculates its FFO using the National Association of Real Estate Investment Trusts definition of FFO adjusted to (i) eliminate the recognition of rental revenues on a straight-line basis, (ii) reflect stock appreciation right expense on a cash basis and (iii) recognize certain fee income as cash is received rather than when recognized in the financial statements. The Company believes its FFO presentation more properly reflects its operating results. The Company revised its method of allocating costs to its reportable segments in the third quarter of 2001. Prior period reportable segments have not been restated as it is impractical to do so. The Company's reportable segments are broken down based on what type of product the division provides. The divisions are managed separately because each product they provide has separate and distinct development issues, leasing and/or sales strategies and management issues. The notations (100%) and (JV) used in the following tables indicate wholly owned and unconsolidated joint ventures, respectively, and all amounts are in thousands.
Three Months Ended Office Retail Land Unallocated September 30, 2001 Division Division Division and Other Total - ------------------ -------- -------- -------- --------- ----- Rental property revenues (100%) $28,334 $8,249 $ -- $ 73 $36,656 Rental property revenues (JV) 17,159 620 -- 15 17,794 Development income, management fees and leasing and other fees (100%) 4,956 194 82 -- 5,232 Development income, management fees and leasing and other fees (JV) -- -- -- -- - Other income (100%) -- -- 1,653 1,408 3,061 Other income (JV) -- -- 438 - 438 -------------------------------------------------------- Total revenues 50,449 9,063 2,173 1,496 63,181 -------------------------------------------------------- Rental property operating expenses (100%) 9,499 2,146 -- (18) 11,627 Rental property operating expenses (JV) 4,962 124 -- 7 5,093 Other expenses (100%) 5,428 1,809 1,979 7,171 16,387 Other expenses (JV) 3,392 71 1 - 3,464 -------------------------------------------------------- Total expenses 23,281 4,150 1,980 7,160 36,571 -------------------------------------------------------- Gain on sale of undepreciated investment properties -- -- -- -- -- -------------------------------------------------------- Consolidated funds from operations 27,168 4,913 193 (5,664) 26,610 -------------------------------------------------------- Depreciation and amortization (100%) (8,263) (2,668) -- (1) (10,932) Depreciation and amortization (JV) (3,833) (239) -- -- (4,072) Effect of the recognition of rental revenues on a straight-line basis (100%) 408 -- -- -- 408 Effect of the recognition of rental revenues on a straight-line basis (JV) 197 -- -- 197 Adjustment to reflect stock appreciation right expense on an accrual basis -- -- -- 145 145 Gain on sale of investment properties, net of applicable income tax provision 475 556 -- -- 1,031 -------------------------------------------------------- Net income 16,152 2,562 193 (5,520) 13,387 -------------------------------------------------------- Provision for income taxes from operations -- -- -- (311) (311) -------------------------------------------------------- Income from operations before taxes $16,152 $2,562 $ 193 $(5,831) $13,076 ========================================================
Nine Months Ended Office Retail Land Unallocated September 30, 2001 Division Division Division and Other Total - ------------------ -------- -------- -------- --------- ----- Rental property revenues (100%) $ 81,129 $ 24,797 $ -- $ 256 $ 106,182 Rental property revenues (JV) 52,942 1,822 -- 14 54,778 Development income, management fees and leasing and other fees (100%) 13,048 925 256 -- 14,229 Development income, management fees and leasing and other fees (JV) 1,050 -- -- -- 1,050 Other income (100%) -- -- 5,560 4,532 10,092 Other income (JV) -- -- 1,330 25 1,355 ---------------------------------------------------------- Total revenues 148,169 27,544 7,146 4,827 187,686 ---------------------------------------------------------- Rental property operating expenses (100%) 26,180 6,648 -- 42 32,870 Rental property operating expenses (JV) 15,563 453 -- 7 16,023 Other expenses (100%) 15,184 5,905 6,380 21,105 48,574 Other expenses (JV) 12,413 211 25 21 12,670 ---------------------------------------------------------- Total expenses 69,340 13,217 6,405 21,175 110,137 ---------------------------------------------------------- Gain on sale of undepreciated investment properties -- -- -- -- -- ---------------------------------------------------------- Consolidated funds from operations 78,829 14,327 741 (16,348) 77,549 ---------------------------------------------------------- Depreciation and amortization (100%) (24,347) (7,447) -- (4) (31,798) Depreciation and amortization (JV) (11,499) (665) -- -- (12,164) Effect of the recognition of rental revenues on a straight-line basis (100%) 1,995 -- -- -- 1,995 Effect of the recognition of rental revenues on a straight-line basis (JV) 623 -- -- -- 623 Adjustment to reflect stock appreciation right expense on an accrual basis -- -- -- 654 654 Gain on sale of investment properties, net of applicable income tax provision 1,660 18,784 9 -- 20,453 ---------------------------------------------------------- Net income 47,261 24,999 750 (15,698) 57,312 ---------------------------------------------------------- Benefit for income taxes from operations -- -- -- (1,024) (1,024) ---------------------------------------------------------- Income from operations before taxes $ 47,261 $ 24,999 $ 750 $(16,722) $ 56,288 ========================================================== Total assets $839,371 $263,890 $17,892 $67,211 $1,188,364 ========================================================== Investment in unconsolidated joint ventures $161,009 $ 17,032 $ 9,819 $ -- $ 187,860 ==========================================================
Reconciliation to Consolidated Revenues Three Months Ended Nine Months Ended September 30, September 30, --------------------- --------------------- 2001 2000 2001 2000 ------- ------- -------- -------- Rental property revenues (100%) $36,656 $29,841 $106,182 $ 78,659 Effect of the recognition of rental revenues on a straight-line basis (100%) 408 375 1,995 1,806 Development income, management fees and leasing and other fees 5,232 2,406 14,229 8,145 Residential lot and outparcel sales 1,653 3,011 5,560 8,921 Interest and other 1,408 1,702 4,532 4,299 --------------------- --------------------- Total consolidated revenues $45,357 $37,335 $132,498 $101,830 ===================== =====================
Three Months Ended Office Retail Land Unallocated September 30, 2000 Division Division Division and Other Total - ------------------ -------- -------- -------- --------- ----- Rental property revenues (100%) $21,805 $8,011 $ -- $ 25 $29,841 Rental property revenues (JV) 16,927 561 -- -- 17,488 Development income, management fees and leasing and other fees (100%) 2,280 78 48 -- 2,406 Development income, management fees and leasing and other fees (JV) 1,725 -- -- -- 1,725 Other income (100%) -- -- 3,011 1,702 4,713 Other income (JV) -- 54 7 26 87 -------------------------------------------------------- Total revenues 42,737 8,704 3,066 1,753 56,260 -------------------------------------------------------- Rental property operating expenses (100%) 7,148 2,006 -- 1 9,155 Rental property operating expenses (JV) 4,656 135 -- -- 4,791 Other expenses (100%) 3,361 1,880 2,591 4,666 12,498 Other expenses (JV) 1,181 68 10 3,953 5,212 -------------------------------------------------------- Total expenses 16,346 4,089 2,601 8,620 31,656 -------------------------------------------------------- Gain on sale of undepreciated investment properties -- -- -- -- -- -------------------------------------------------------- Consolidated funds from operations 26,391 4,615 465 (6,867) 24,604 -------------------------------------------------------- Depreciation and amortization (100%) (6,108) (2,084) -- (1) (8,193) Depreciation and amortization (JV) (3,637) (201) -- -- (3,838) Effect of the recognition of rental revenues on a straight-line basis (100%) 375 -- -- -- 375 Effect of the recognition of rental revenues on a straight-line basis (JV) (99) -- -- -- (99) Adjustment to reflect stock appreciation right expense on an accrual basis -- -- -- (181) (181) Gain on sale of investment properties, net of applicable income tax provision 473 555 -- -- 1,028 -------------------------------------------------------- Net income 17,395 2,885 465 (7,049) 13,696 -------------------------------------------------------- Benefit for income taxes from operations -- -- -- (621) (621) -------------------------------------------------------- Income from operations before taxes $17,395 $2,885 $ 465 $(7,670) $13,075 ========================================================
Nine Months Ended Office Retail Land Unallocated September 30, 2000 Division Division Division and Other Total - ------------------ -------- -------- -------- --------- ----- Rental property revenues (100%) $ 58,015 $ 20,579 $ -- $ 65 $ 78,659 Rental property revenues (JV) 48,828 1,702 -- -- 50,530 Development income, management fees and leasing and other fees (100%) 7,689 302 154 -- 8,145 Development income, management fees and leasing and other fees (JV) 3,376 -- -- -- 3,376 Other income (100%) -- 1,075 7,846 4,299 13,220 Other income (JV) -- 54 73 58 185 ---------------------------------------------------------- Total revenues 117,908 23,712 8,073 4,422 154,115 ---------------------------------------------------------- Rental property operating expenses (100%) 19,320 5,102 -- -- 24,422 Rental property operating expenses (JV) 13,505 422 -- -- 13,927 Other expenses (100%) 9,936 6,198 7,318 8,943 32,395 Other expenses (JV) 2,246 68 41 12,035 14,390 ---------------------------------------------------------- Total expenses 45,007 11,790 7,359 20,978 85,134 ---------------------------------------------------------- Gain on sale of undepreciated investment properties -- -- 564 -- 564 ---------------------------------------------------------- Consolidated funds from operations 72,901 11,922 1,278 (16,556) 69,545 ---------------------------------------------------------- Depreciation and amortization (100%) (16,366) (5,158) -- (3) (21,527) Depreciation and amortization (JV) (11,060) (593) -- -- (11,653) Effect of the recognition of rental revenues on a straight-line basis (100%) 1,806 -- -- -- 1,806 Effect of the recognition of rental revenues on a straight-line basis (JV) (477) -- -- -- (477) Adjustment to reflect stock appreciation right expense on an accrual basis -- -- -- (249) (249) Gain on sale of investment properties, net of applicable income tax provision 1,418 8,913 -- -- 10,331 ---------------------------------------------------------- Net income 48,222 15,084 1,278 (16,808) 47,776 ---------------------------------------------------------- Benefit for income taxes from operations -- -- -- (745) (745) ---------------------------------------------------------- Income from operations before taxes $ 48,222 $ 15,084 $ 1,278 $(17,553) $ 47,031 ========================================================== Total assets $689,177 $282,907 $12,034 $46,396 $1,030,514 ========================================================== Investment in unconsolidated joint ventures $143,335 $ 16,890 $ 7,445 $ -- $ 167,670 ==========================================================
PART I. FINANCIAL INFORMATION - ------------------------------ Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations for the Three and Nine Months Ended September 30, 2001 and 2000 Results of Operations: - ---------------------- Rental Property Revenues and Operating Expenses. Rental property revenues increased approximately $6,848,000 and $27,712,000 in the three and nine month 2001 periods, respectively. Rental property revenues from the Company's office portfolio increased approximately $6,562,000 and $23,303,000 in the three and nine month 2001 periods, respectively. The December 2000 acquisitions of One Georgia Center and The Points at Waterview increased rental property revenues by approximately $1,780,000 and $692,000, respectively, in the three month 2001 period and $5,284,000 and $2,799,000, respectively, in the nine month 2001 period. Four office buildings, 555 North Point Center East, 101 Second Street, 600 University Park Place and 1900 Duke Street, which became partially operational in February 2000, April 2000, June 2000 and October 2000, respectively, contributed approximately $46,000, $269,000, $351,000 and $849,000, respectively, to the increase in the three month 2001 period and approximately $913,000, $5,028,000, $1,406,000 and $2,250,000, respectively, to the increase in the nine month 2001 period. Additionally, rental property revenues from Inforum increased approximately $502,000 and $1,773,000 in the three and nine month 2001 periods, respectively, as the average economic occupancy increased from 85% for the nine month 2000 period to 98% for the nine month 2001 period. Rental property revenues increased approximately $115,000 and $634,000 in the three and nine month 2001 periods, respectively, from AT&T Wireless Services Headquarters. Furthermore, rental property revenues increased approximately $1,026,000 and $1,218,000 in the three and nine month 2001 periods, respectively, from Cerritos Corporate Center - Phase II, which became fully operational for financial reporting purposes in June 2001. Rental property revenues from 333 John Carlyle increased ___ approximately $181,000 and $422,000 in the three and nine month 2001 periods, respectively, as the average economic occupancy increased from 88% for the nine month 2000 period to 93% for the nine month 2001 period. Rental property revenues from 615 Peachtree Street increased approximately $128,000 and $430,000 in the three and nine month 2001 periods, respectively, as the average economic occupancy increased from 79% in the nine month 2000 period to 95% in the nine month 2001 period. Rental property revenues from Northside/Alpharetta II increased approximately $127,000 and $414,000 in the three and nine month 2001 periods, respectively, as the average economic occupancy increased from 59% in the nine month 2000 period to 70% in nine month 2001 period, and rental revenues from Meridian Mark Plaza increased approximately $105,000 and $317,000 in the three and nine month 2001 periods, respectively, as average economic occupancy increased from 91% in the nine month 2000 period to 94% in the nine month 2001 period. Additionally, rental property revenues from 3301 Windy Ridge Parkway increased approximately $230,000 in the nine month 2001 period due to the renewal of the existing lease for 100% of the building at a higher rental rate. Rental property revenues from the Company's retail portfolio increased approximately $238,000 and $4,218,000 in the three and nine month 2001 periods, respectively. Rental property revenues increased approximately $606,000 and $3,647,000 in the three and nine month 2001 periods, respectively, from Mira Mesa MarketCenter, and approximately $337,000 and $2,821,000 in the three and nine month 2001 periods, respectively, from The Avenue of the Peninsula, both of which became partially operational for financial reporting purposes in May 2000. Rental property revenues increased approximately $668,000 and $1,090,000 in the three and nine month 2001 periods, respectively, from The Avenue Peachtree City, which became partially operational for financial reporting purposes in April 2001. Rental property revenues increased approximately $151,000 and $543,000 in the three and nine month 2001 periods, respectively, from The Avenue East Cobb, and approximately $177,000 and $548,000 in the three and nine month 2001 periods, respectively, from Salem Road Station, which properties became partially operational for financial reporting purposes in September 1999 and October 2000, respectively. Rental property revenues also increased approximately $200,000 and $508,000 in the three and nine month 2001 periods, respectively, from Presidential MarketCenter as an additional phase of the center became partially operational in October 2000, and as the average economic occupancy of the original center increased from 88% in 2000 to 93% in 2001. The increase in rental property revenues was partially offset by the sale of Colonial Plaza MarketCenter in February 2001, which decreased rental property revenues by approximately $1,742,000 and $4,216,000 in the three and nine month 2001 periods, respectively. Additionally, the sale of Laguna Niguel Promenade in March 2000 decreased rental property revenues by approximately $595,000 in the nine month 2001 period. Rental property operating expenses increased approximately $2,936,000 and $9,009,000 in the three and nine month periods, respectively, due to the aforementioned office buildings and retail centers being either leased up or becoming partially operational for financial reporting purposes and the aforementioned acquisitions of One Georgia Center and The Points at Waterview. The increases in rental property operating expenses were partially offset by the aforementioned sales of Colonial Plaza MarketCenter and Laguna Niguel Promenade. Development Income. Development income increased approximately $667,000 and $1,756,000 in the three and nine month 2001 periods, respectively. Development income increased approximately $172,000 and $376,000 in the three and nine month 2001 periods, respectively, from the third party development of The Arboretum. Additionally, development income increased approximately $252,000 and $1,173,000 in the three and nine month 2001 periods, respectively, from Cousins Properties Services LP ("CPS," formerly Cousins Stone LP until name was changed effective August 6, 2001). Effective March 1, 2001, the Company purchased the remaining 25% interest in CPS, at which point the Company consolidated the operations of CPS, which had previously been accounted for using the equity method of accounting and therefore recognized as joint venture income. Development income also increased approximately $150,000 and $216,000 in the three and nine month 2001 periods, respectively, from the third party development of Winrock, and increased approximately $409,000 in the nine month 2001 period from the third party development of the Turner Tower. Tenant construction fees of approximately $75,000 and $300,000 in the three and nine month 2001 periods, respectively, from the Crawford Long joint venture medical office building and tenant construction fees of approximately $433,000 in both the three and nine month 2001 periods from a tenant at Inforum also contributed to the increase in development income. The increase was partially offset by a decrease in development income of approximately $300,000 and $692,000 in the three and nine month 2001 periods, respectively, from Charlotte Gateway Village, LLC, as construction of Gateway Village has been substantially completed, and a decrease of approximately $192,000 and $449,000 in the three and nine month 2001 periods, respectively, from 285 Venture, LLC, as construction of 1155 Perimeter Center West has been substantially completed. Management Fees. Management fees increased approximately $885,000 and $1,879,000 in the three and nine month 2001 periods, respectively. The increase in management fees was mainly due to the aforementioned consolidation of CPS, which contributed approximately $934,000 and $2,023,000 to the increase in the three and nine month 2001 periods, respectively. The increase was also due to an increase in management fees of approximately $131,000 for the nine month 2001 period from 1155 Perimeter Center West, which became partially operational for financial reporting purposes in December 2000. The increase was partially offset by a decrease in management fees of approximately $151,000 and $506,000 in the three and nine month 2001 periods, respectively, due to the disposition of the medical office third party management division in October 2000. Leasing and Other Fees. Leasing and other fees increased approximately $1,274,000 and $2,449,000 in the three and nine month 2001 periods, respectively. Leasing and other fees increased approximately $1,137,000 and $2,503,000 in the three and nine month 2001 periods, respectively, due to the aforementioned consolidation of CPS. Leasing and other fees also increased approximately $161,000 in the nine month 2001 period from Charlotte Gateway Village, LLC from the leasing of the retail space at Gateway Village. The increase in the nine month 2001 period was partially offset by a decrease of approximately $405,000 from the aforementioned disposition of the medical office third party management division in October 2000. This division recognized a fee of approximately $330,000 in the second quarter of 2000 for representing the owners of a third party managed property in the sale of that property. Residential Lot and Outparcel Sales and Cost of Sales. Residential lot and outparcel sales decreased approximately $1,358,000 and $3,361,000 in the three and nine month 2001 periods, respectively. The decrease in the three month 2001 period was due to a decrease in residential lots sold from 67 lots in 2000 to 29 lots in 2001, which decreased residential lot sales by approximately $1,358,000. The decrease in the nine month 2001 period was partially due to a decrease in residential lots sold from 182 lots in 2000 to 104 lots in 2001, which decreased residential lot sales by approximately $2,286,000. Also contributing to the decrease in the nine month 2001 period were two outparcel sales recognized by a subsidiary of CREC in 2000 totaling approximately $1,075,000, as compared to no outparcel sales in 2001. Residential lot and outparcel cost of sales decreased approximately $638,000 and $2,452,000 in the three and nine month 2001 periods, respectively. Residential lot cost of sales decreased approximately $638,000 and $1,760,000 in the three and nine month 2001 periods, respectively, due to the aforementioned decrease in the number of lots sold. The decrease in cost of sales was less than the corresponding decrease in sales in the three and nine month 2001 periods due to an increase in the gross profit percentages used to calculate the cost of sales on residential lot sales in certain of the residential developments. The decrease in residential lot and outparcel cost of sales was also due to a decrease in outparcel cost of sales of approximately $692,000 in the nine month 2001 period due to the aforementioned outparcel sales in 2000. Interest and Other Income. Interest and other income decreased approximately $294,000 and increased approximately $233,000 in the three and nine month 2001 periods, respectively. Approximately $654,000 of the increase in the nine month 2001 period was due to interest income recognized beginning in the third quarter of 2000 from the additional interest income on the 650 Massachusetts Avenue mortgage notes (see Note 3 of "Notes to Consolidated Financial Statements" in the Company's Annual Report on Form 10-K for the year ended December 31, 2000). A decrease of approximately $234,000 and $286,000 in the three and nine month 2001 periods, respectively, from the Gateway Village mezzanine loan also contributed to the decrease in the three month 2001 period and partially offset the increase in the nine month 2001 period. The Gateway Village mezzanine loan bears an interest rate tied to the London Interbank Offering Rate, which decreased in the nine month 2001 period as compared to the nine month 2000 period. Income from Unconsolidated Joint Ventures. (All amounts reflect the Company's share of joint venture income.) Income from unconsolidated joint ventures increased approximately $444,000 and $3,305,000 in the three and nine month 2001 periods, respectively. Income from Wildwood Associates increased approximately $356,000 and $1,139,000 in the three and nine month 2001 periods, respectively. Income before depreciation, amortization and interest expense from the 3200 Windy Hill Road Building increased approximately $210,000 and $562,000 in the three and nine month 2001 periods, respectively, due to the renewal of a significant tenant's lease at a higher rental rate. Additionally, income before depreciation, amortization and interest expense from the 2300 Windy Ridge Parkway Building increased by approximately $172,000 in the nine month 2001 period, as average economic occupancy increased from 99% in 2000 to 100% in 2001. Interest expense decreased approximately $160,000 in the nine month 2001 period due to reduced mortgage note payable balances, which also contributed to the increase in income from Wildwood Associates. Income from 285 Venture, LLC increased approximately $495,000 and $1,396,000 in the three and nine month 2001 periods, respectively, as the average economic occupancy at 1155 Perimeter Center West increased from 18% for the nine month 2000 period to 100% for the nine month 2001 period. Income from Cousins LORET, L.L.C. increased approximately $99,000 and $367,000 in the three and nine month 2001 periods, respectively. The increase was mainly due to an increase in average economic occupancy at The Pinnacle from 91% for the nine month 2000 period to 98% for the nine month 2001 period. Income from Temco Associates increased approximately $440,000 and $1,272,000 in the three and nine month 2001 periods, respectively, partially due to profits recognized from 200 lot sales in the nine month 2001 period at the Bentwater residential development. The first quarter of 2001 was the first period in which profits from lot sales were recognized. Additionally, approximately 147 and 232 acres of land were sold for gross profits of approximately $273,000 and $633,000 in the three and nine month 2001 periods, respectively, as compared to no land sales in the same periods of 2000. Income from CSC Associates, L.P. increased approximately $190,000 in the nine month 2001 period as average economic occupancy at Bank of America Plaza increased from 98% for the nine month 2000 period to 100% for the nine month 2001 period. Income from Charlotte Gateway Village, LLC decreased approximately $578,000 and $390,000 in the three and nine month 2001 periods, respectively, due to the Company recognizing its 11.46% current preferred return on its equity beginning in the third quarter of 2000. Income from CPS decreased approximately $544,000 and $978,000 in the three and nine month 2001 periods, respectively, due to the aforementioned consolidation of CPS on March 1, 2001. General and Administrative Expenses. General and administrative expenses increased approximately $2,351,000 and $5,754,000 in the three and nine month 2001 periods, respectively. The increase was partially attributable to the aforementioned consolidation of CPS. Also partially contributing to the increase in general and administrative expenses was a decrease in general and administrative expenses capitalized to projects under development due to a lower level of projects under development in 2001. Depreciation and Amortization. Depreciation and amortization increased approximately $2,531,000 and $9,712,000 in the three and nine month 2001 periods, respectively, due to the aforementioned office buildings and retail centers becoming either leased up or partially operational for financial reporting purposes and the aforementioned acquisitions of One Georgia Center and The Points at Waterview. The increase in depreciation and amortization was partially offset by the aforementioned sales of Colonial Plaza MarketCenter and Laguna Niguel Promenade. Stock Appreciation Right (Credit) Expense. Stock appreciation right (credit) expense decreased approximately $446,000 from an expense of $318,000 in the three month 2000 period to a credit of $128,000 in the three month 2001 period and decreased approximately $949,000 from an expense of $684,000 in the nine month 2000 period to a credit of $265,000 in the nine month 2001 period. This non-cash item is primarily related to the Company's stock price, which was $27.9375, $26.85 and $24.75 at December 31, 2000, June 30, 2001 and September 30, 2001, respectively; and $22.625, $25.667 and $28.7083 at December 31, 1999, June 30, 2000 and September 30, 2000, respectively. Interest Expense. Interest expense increased approximately $2,371,000 and $12,597,000 in the three and nine month 2001 periods, respectively. Interest expense before capitalization increased to approximately $9,244,000 and $27,695,000 in the three and nine month 2001 periods, respectively, from approximately $7,464,000 and $20,616,000 in the three and nine month 2000 periods, respectively, due to higher average debt levels. Also contributing to this increase in interest expense was a decrease of approximately $591,000 and $5,518,000 in the three and nine month periods, respectively, in interest capitalized to projects under development (a reduction of interest expense) to approximately $2,399,000 and $7,129,000 in the three and nine month 2001 periods, respectively, from approximately $2,990,000 and $12,647,000 in the three and nine month 2000 periods, respectively, due to a lower level of projects under development in 2001. Property Taxes on Undeveloped Land. Property taxes on undeveloped land increased approximately $304,000 in the nine month 2001 period due to the reversal in 2000 of estimated amounts accrued for anticipated reassessments of the Company's North Point and Wildwood land holdings. The final reassessments, after appeal, were lower than the anticipated reassessments, and the accrual was reduced. Other Expense. Other expense decreased approximately $523,000 and increased approximately $299,000 in the three and nine month 2001 periods, respectively. The decrease was partially due to decreased minority interest expense in the three month 2001 period of approximately $233,000 and increased minority interest expense in the nine month 2001 period of approximately $194,000 mainly due to fluctuations in the minority interest's current cash flow participation in 101 Second Street, which became partially operational for financial reporting purposes in April 2000. Additionally, predevelopment expense decreased approximately $290,000 and increased approximately $105,000 in the three and nine month 2001 periods, respectively. Gain on Sale of Investment Properties. Gain on sale of investment properties increased approximately $9,558,000 in the nine month 2001 period. The 2001 gain included the following: the February 2001 sale of Colonial Plaza MarketCenter ($17.1 million), the February 2001 disposition of leasehold interests in Summit Green ($.2 million) and the amortization of deferred gain from CP Venture LLC ($3.1 million). The 2000 gain included the following: the March 2000 sale of Laguna Niguel Promenade ($7.2 million), the April 2000 sale of a tract of land at North Point ($.6 million) and the amortization of deferred gain from CP Venture LLC ($3.0 million). Liquidity and Capital Resources: - -------------------------------- Financial Condition. The Company's adjusted debt (including its pro rata share of unconsolidated joint venture debt) was 38% of total market capitalization at September 30, 2001. Adjusted debt is defined as the Company's debt and the Company's pro rata share of unconsolidated joint venture debt as disclosed in Note 4 of "Notes to Consolidated Financial Statements" in the Company's annual report on Form 10-K for the year ended December 31, 2000, excluding the Charlotte Gateway Village, LLC debt as it is fully exculpated debt which is supported by a long-term lease to Bank of America Corporation. In August 2001, the Company amended and increased its credit facility to $275 million, which expires August 31, 2004 (see Note 3). The Company had $207.8 million drawn on this credit facility as of September 30, 2001. The Company has development and acquisition projects in various planning stages. The Company currently intends to finance these projects, as well as the completion of projects currently under construction, using its existing credit facility (increasing the credit facility as required), long-term non-recourse financing on the Company's unleveraged projects, joint ventures, project sales and other financings as market conditions warrant. In September 1996, the Company filed a shelf registration statement with the Securities and Exchange Commission ("SEC") for the offering from time to time of up to $200 million of common stock, warrants to purchase common stock and debt securities, of which approximately $132 million remains available at September 30, 2001. The Company from time to time evaluates opportunities and strategic alternatives, including but not limited to joint ventures, mergers and acquisitions and new private or publicly-owned entities created to hold existing assets and acquire new assets. These alternatives may also include sales of single or multiple assets when the Company perceives opportunities to capture value and redeploy proceeds or distribute proceeds to stockholders. The Company's consideration of these alternatives is part of its ongoing strategic planning process. There can be no assurance that any such alternative, if undertaken and consummated, would not materially adversely affect the Company or the market price of Cousins' common stock. Cash Flows. Net cash provided by operating activities decreased approximately $13.3 million in 2001. Changes in other operating assets and liabilities decreased approximately $12.1 million. Operating distributions from unconsolidated joint ventures decreased approximately $5.2 million, which contributed to the decrease in net cash provided by operating activities. Operating distributions decreased approximately $2.9 million from Wildwood Associates, $1.8 million from Temco Associates and $2.4 million from CPS. Partially offsetting the decrease in operating distributions was an increase in operating distributions from 285 Venture, LLC of approximately $1.6 million and CSC Associates, L.P. of approximately $.9 million. Income from unconsolidated joint ventures increased approximately $3.3 million, which also contributed to the decrease in net cash provided by operating activities. Further contributing to the decrease in net cash provided by operating activities was a decrease in residential lot and outparcel cost of sales of approximately $2.9 million. Depreciation and amortization increased approximately $10.5 million, which partially offset the decrease in net cash provided by operating activities. Net cash used in investing activities decreased approximately $36.1 million in 2001. Net cash provided by sales activities increased approximately $27.7 million, which contributed to the decrease in net cash used in investing activities, due primarily to the sale of Colonial Plaza MarketCenter in February 2001. The decrease in net cash used in investing activities was also partially due to a decrease of approximately $14.9 million in property acquisition and development expenditures, as a result of the Company having a lower level of projects under development. Change in other assets, net, increased approximately $4.6 million, which partially offset the aforementioned decrease in net cash used in investing activities. Net cash paid in acquisition of business, which resulted from the acquisition of the remaining 25% interest in CPS, further offset the decrease in net cash used in investing activities by approximately $2.1 million. Net cash provided by financing activities decreased approximately $24.1 million in 2001, which was primarily attributable to a decrease of approximately $109.5 million in proceeds from other notes payable. The Company completed the $90 million financing of 101 Second Street in April 2000, the $39 million financing of The Avenue East Cobb in July 2000 and the $25.5 million financing of Meridian Mark Plaza in August 2000. The Company completed the $28 million financing of Presidential MarketCenter in May 2001 and the $14 million financing of 600 University Park Place in July 2001. An increase in the dividends paid per share to $1.02 in 2001 from $.90 in 2000 and an increase in the number of shares outstanding also contributed to the decrease in net cash provided by financing activities, as dividends paid increased approximately $6.8 million. The Company repurchased 527,400 shares of its outstanding common stock in September 2001, which contributed approximately $12.5 million to the decrease in net cash provided by financing activities. Partially offsetting the decrease was an increase of approximately $101.6 million in the net amount drawn on the Company's credit facility. Common stock sold, net of expenses, increased by approximately $1.4 million and repayment of other notes payable decreased by approximately $1.7 million, both of which further partially offset the decrease in net cash provided by financing activities. Quantitative and Qualitative Disclosure About Market Risk: - ---------------------------------------------------------- There have been no significant changes in the Company's market risk related to its notes payable and notes receivable from that disclosed in the Company's annual report on Form 10-K for the year ended December 31, 2000.
Supplemental Financial Information: - ----------------------------------- Depreciation and amortization expense included the following components for the three and nine months ended September 30, 2001 ($ in thousands): Three Months Ended Nine Months Ended September 30, 2001 September 30, 2001 ----------------------------------- ----------------------------------- Share of Share of Unconsolidated Unconsolidated Company Joint Ventures Total Company Joint Ventures Total ------- -------------- ------- ------- -------------- ------- Furniture, fixtures and equipment $ 300 $ 1 $ 301 $ 973 $ 49 $ 1,022 Deferred financing costs - - - - 1 1 Goodwill and related business acquisition costs 222 - 222 530 - 530 Real estate related: Building (including tenant first generation) 9,619 3,823 13,442 28,514 11,420 39,934 Tenant second generation 1,173 167 1,340 2,956 542 3,498 ------- ------ ------- ------- ------- ------- $11,314 $3,991 $15,305 $32,973 $12,012 $44,985 ======= ====== ======= ======= ======= =======
Exclusive of new developments and purchases of furniture, fixtures and equipment, the Company had the following capital expenditures during the three and nine months ended September 30, 2001, including its share of unconsolidated joint ventures ($ in thousands): Three Months Ended Nine Months Ended September 30, 2001 September 30, 2001 ---------------------------- ----------------------------- Office Retail Total Office Retail Total ------ ------ ----- ------ ------ ----- Second generation related costs $1,231 $47 $1,278 $2,279 $280 $2,559 Building improvements 473 6 479 1,699 7 1,706 ------ --- ------ ------ ---- ------ $1,704 $53 $1,757 $3,978 $287 $4,265 ====== === ====== ====== ==== ======
PART II. OTHER INFORMATION - --------------------------- Item 6. Reports on Form 8-K ------------------- (b) Reports on Form 8-K ------------------- There have been no reports on Form 8-K filed by the Registrant during the quarter ended September 30, 2001. 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 thereunto duly authorized. COUSINS PROPERTIES INCORPORATED Registrant /s/ Kelly H. Barrett________________________ ------------------------------------------------- Kelly H. Barrett Senior Vice President and Chief Financial Officer (Authorized Officer) (Principal Financial and Accounting Officer) November 14, 2001 -----END PRIVACY-ENHANCED MESSAGE-----