10-Q

1

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[x]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2003

OR

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

For the transition period from..............to..............

Commission file number 0-3576

COUSINS PROPERTIES INCORPORATED
(Exact name of registrant as specified in its charter)

                  Georgia
  (State or other jurisdiction
of incorporation or organization)     58-0869052
   (IRS Employer
Identification No.)

       2500 Windy Ridge Parkway
                Atlanta, Georgia
(Address of principal executive offices)     
    30339-5683
      (Zip Code)

(770) 955-2200
(Registrant’s telephone number, including area code)

        Indicate by check mark whether the registrant (1) 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 (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes |X|   No     

         Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes |X|   No     

As of July 25, 2003, there were 48,491,130 shares of the registrant’s common stock, par value $1 per share, outstanding.

PART I.  FINANCIAL INFORMATION

Item 1.   Financial Statements

COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
CONSOLIDATED BALANCE SHEETS

($ in thousands, except share and per share amounts)

	June 30, 2003		December 31, 2002
	(Unaudited)
ASSETS
PROPERTIES:
Operating properties, net of accumulated depreciation of $163,308
as of June 30, 2003 and $136,484 as of December 31, 2002	$    700,448		$    619,031
Operating properties held for sale, net of accumulated depreciation
of $6,176 as of June 30, 2003 and $18,616 as of December 31, 2002	23,593		138,298
Land held for investment or future development	16,676		16,632
Projects under construction	107,226		171,135
Residential lots under development	20,758		20,100
Total properties	868,701		965,196
CASH AND CASH EQUIVALENTS, at cost which approximates market	14,379		9,471
NOTES AND OTHER RECEIVABLES	46,727		50,607
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES	175,744		185,516
OTHER ASSETS, including goodwill of $15,696 in 2003 and $15,612 in 2002	40,703		37,287
TOTAL ASSETS	$ 1,146,254		$ 1,248,077
LIABILITIES AND STOCKHOLDERS' INVESTMENT
NOTES PAYABLE	$    524,883		$    669,792
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES	41,465		35,445
DEPOSITS AND DEFERRED INCOME	3,393		3,429
TOTAL LIABILITIES	569,741		708,666
MINORITY INTERESTS	19,260		26,959
DEFERRED GAIN	11,689		103,568
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS' INVESTMENT:
Common stock, $1 par value, authorized 150,000,000 shares;
issued 51,182,712 shares at June 30, 2003 and 50,843,835
shares at December 31, 2002	51,183		50,844
Additional paid-in capital	294,264		288,172
Treasury stock at cost, 2,691,582 shares in 2003 and 2,457,482 shares in 2002	(64,894	)	(59,356	)
Unearned compensation	(2,201	)	(2,647	)
Cumulative undistributed net income	267,212		131,871
TOTAL STOCKHOLDERS' INVESTMENT	545,564		408,884
TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT	$ 1,146,254		$ 1,248,077

See notes to consolidated financial statements.

COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(UNAUDITED)

($ in thousands, except per share amounts)

	Three Months Ended June 30,		Six Months Ended June 30,
	2003	2002	2003	2002
REVENUES:
Rental property revenues	$  34,813	$  36,919	$  89,802	$70,220
Development income	908	972	1,672	2,158
Management fees	2,187	2,288	4,292	4,642
Leasing and other fees	1,234	696	2,345	1,853
Residential lot and outparcel sales	1,612	521	5,540	4,556
Interest and other	1,526	1,114	2,581	2,249
	42,280	42,510	106,232	85,678
INCOME FROM UNCONSOLIDATED JOINT VENTURES	7,663	6,601	14,160	13,631
COSTS AND EXPENSES:
Rental property operating expenses	11,152	10,180	21,609	19,962
General and administrative expenses	7,644	6,965	14,858	14,301
Depreciation and amortization	13,142	11,863	27,866	22,402
Residential lot and outparcel cost of sales	1,368	444	4,599	3,414
Interest expense	8,396	9,015	17,652	17,009
Loss on debt extinguishment	--	--	--	3,501
Property taxes on undeveloped land	218	174	403	350
Other	846	1,049	1,751	1,810
	42,766	39,690	88,738	82,749
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES	7,177	9,421	31,654	16,560
PROVISION FOR INCOME TAXES FROM OPERATIONS	537	117	786	1,103
INCOME FROM CONTINUING OPERATIONS BEFORE
GAIN ON SALE OF INVESTMENT PROPERTIES	6,640	9,304	30,868	15,457
GAIN ON SALE OF INVESTMENT PROPERTIES, NET OF
APPLICABLE INCOME TAX PROVISION	90,956	1,042	91,959	2,072
INCOME FROM CONTINUING OPERATIONS	97,596	10,346	122,827	17,529
DISCONTINUED OPERATIONS, NET OF APPLICABLE
INCOME TAXES:
Income from discontinued operations	2,892	2,366	5,255	4,458
Gain on sale of investment properties, net of minority interest	43,012	--	43,012	--
	45,904	2,366	48,267	4,458
NET INCOME	$143,500	$  12,712	$171,094	$21,987
BASIC NET INCOME PER SHARE:
Income from continuing operations	$      2.02	$       .21	$      2.55	$     .35
Discontinued operations	.95	.05	1.00	.09
Basic net income per share	$      2.97	$       .26	$      3.55	$     .44
DILUTED NET INCOME PER SHARE:
Income from continuing operations	$      1.99	$       .20	$      2.51	$     .35
Discontinued operations	.93	.05	.98	.09
Diluted net income per share	$      2.92	$       .25	$      3.49	$     .44
CASH DIVIDENDS DECLARED PER SHARE	$       .37	$       .37	$       .74	$     .74
WEIGHTED AVERAGE SHARES	48,267	49,617	48,201	49,493
DILUTED WEIGHTED AVERAGE SHARES	49,228	50,621	48,993	50,447

See notes to consolidated financial statements.

COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(UNAUDITED)

($ in thousands)

	2003		2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Income from continuing operations before gain on sale
of investment properties	$   30,868		$   15,457
Adjustments to reconcile income from continuing operations before gain on sale
of investment properties to net cash provided by operating activities:
Depreciation and amortization	27,866		22,402
Amortization of unearned compensation	241		299
Stock appreciation right expense	--		34
Cash charges to expense accrual for stock appreciation rights	--		(288	)
Effect of recognizing rental revenues on a straight-line basis	(465	)	(656	)
Residential lot and outparcel cost of sales	3,904		2,741
Non-cash income tax benefit from stock options	688		--
Changes in other operating assets and liabilities:
Change in other receivables	2,020		185
Change in accounts payable and accrued liabilities	(2,584	)	(1,829	)
Net cash provided by operating activities of continuing operations	62,538		38,345
Net cash provided by operating activities of discontinued operations	6,455		6,986
CASH FLOWS FROM INVESTING ACTIVITIES:
Gain on sale of investment properties, net of applicable income tax provision	91,959		2,072
Gain on sale of investment properties held for sale	43,012		--
Gain attributable to minority partner	2,273		--
Adjustments to reconcile gain on sale of investment properties, net of
applicable income tax provision to net cash provided by sales activities:
Cost of sales	116,731		--
Deferred income recognized	(91,959	)	(2,062	)
Property acquisition and development expenditures	(42,991	)	(36,193	)
Distributions in excess of income from unconsolidated joint ventures	31,225		8,114
Investment in unconsolidated joint ventures, including interest
capitalized to equity investments	(21,453	)	(3,075	)
Investment in notes receivable, net	(816	)	(652	)
Change in other assets, net	(2,177	)	(1,983	)
Net cash provided by (used in) investing activities	125,804		(33,779	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of credit facility	(240,411	)	(184,497	)
Proceeds from credit facility	98,861		119,426
Common stock sold, net of expenses	5,948		8,350
Common stock repurchases	(5,538	)	--
Dividends paid	(35,753	)	(36,792	)
Proceeds from other notes payable	211		150,000
Repayment of other notes payable	(3,570	)	(69,728	)
Distribution to minority partner	(9,637	)	--
Net cash used in financing activities	(189,889	)	(13,241	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	4,908		(1,689	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	9,471		10,556
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$   14,379		$     8,867

See notes to consolidated financial statements.

COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2003
(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 (“REIT”), 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 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 June 30, 2003 and results of operations for the three and six month periods ended June 30, 2003 and 2002. Results of operations for the interim 2003 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 (“GAAP”) 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 consolidated 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, 2002. The accounting policies employed by the Company are the same as those shown in Note 1 to the Consolidated Financial Statements included in such Form 10-K.

2.   SUPPLEMENTAL INFORMATION CONCERNING CASH FLOWS

        Interest paid (net of $3,425,000 and $3,130,000 capitalized in 2003 and 2002, respectively) and income taxes refunded were as follows for the six months ended June 30, 2003 and 2002 ($ in thousands):

	2003	2002
Interest paid	$17,858	$16,954
Income taxes refunded	$        --	$  1,168

        During the six months ended June 30, 2003, approximately $106,773,000 was transferred from Projects Under Construction to Operating Properties and approximately $2,374,000 was transferred from Operating Properties to Other Assets. Also in the six months ended June 30, 2003, an adjustment of the performance accelerated restricted stock granted in 2000 (see Note 6 of “Notes to Consolidated Financial Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002) was made and approximately $7,000 of Common Stock and approximately $198,000 of Additional Paid-In-Capital were transferred to Unearned Compensation.

3.   NOTES PAYABLE AND INTEREST EXPENSE

        The following table summarizes the terms of the debt outstanding at June 30, 2003 ($ in thousands):

Description	Rate	Term/ Amortization Period (Years)	Final Maturity	Balance at June 30, 2003
Credit facility (a maximum of $275,000),	Floating based
unsecured	on LIBOR	3/N/A	8/31/04	$  17,608
Note secured by Company's interest in
CSC Associates, L.P.	6.958	10/20	3/01/12	147,299
101 Second Street mortgage note	8.33	10/30	4/19/10	87,628
333 John Carlyle/1900 Duke Street mortga	7.00	10/25	11/01/11	48,195
101 Independence Center mortgage note	8.22	11/25	12/01/07	44,430
The Avenue East Cobb mortgage note	8.39	10/30	8/01/10	38,076
333/555 North Point Center East mortgage	7.00	10/30	11/01/11	31,696
Presidential MarketCenter mortgage note	7.65	10/30	5/02/11	27,543
Meridian Mark Plaza mortgage note	8.27	10/28	10/01/10	24,783
Perimeter Expo mortgage note	8.04	10/30	8/15/05	19,635
600 University Park Place mortgage note	7.38	10/30	8/10/11	13,750
Lakeshore Park Plaza mortgage note	6.78	10/30	11/01/08	9,977
Northside/Alpharetta I mortgage note	7.70	8/28	1/01/06	9,808
Other miscellaneous notes	Various	Various	Various	4,455
				$524,883

        For the three and six months ended June 30, 2003, interest expense was recorded as follows ($ in thousands):

	Three Months	Six Months
Interest Expensed:
Continuing operations	$  8,396	$17,652
Discontinued operations	538	1,071
Interest Capitalized	1,858	3,425
	$10,792	$22,148

        During the six months ended June 30, 2003, interest was capitalized related to the Company’s projects under construction which had an average balance of approximately $99 million.

4.   EARNINGS PER SHARE (“EPS”)

        Basic EPS is calculated as net income available to common stockholders divided by the weighted average number of common shares outstanding during the period. Diluted EPS is calculated as net income available to common stockholders divided by the diluted weighted average number of common shares outstanding during the period. Diluted weighted average number of common shares is calculated to reflect the potential dilution that would occur if stock options or other contracts to issue common stock were exercised and resulted in additional common shares outstanding. The income amounts used in the Company’s EPS calculations are the same for both basic and diluted EPS.

        Weighted average shares and diluted weighted average shares are as follows (in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2003	2002	2003	2002
Weighted average shares	48,267	49,617	48,201	49,493
Dilutive potential common shares	961	1,004	792	954
Diluted weighted average shares	49,228	50,621	48,993	50,447
Anti-dilutive options not included	752	892	880	935

5.   STOCK-BASED EMPLOYEE COMPENSATION

        The Company has several stock-based employee compensation plans which are described fully in Note 6 of “Notes to Consolidated Financial Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002. The Company has elected to account for its plans under Accounting Principles Board (“APB”) No. 25, “Accounting for Stock Issued to Employees,” which requires the recording of compensation expense for some, but not all, stock-based compensation, rather than the alternative accounting permitted by Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation.” No stock-based employee compensation cost was reflected in net income for options granted under the plans, as all options granted had an exercise price equal to the market value of the underlying common stock on the date of grant. Stock-based employee compensation cost was reflected in net income for stock appreciation rights and restricted stock grants issued under the plans.

        In December 2002, SFAS No. 148 “Accounting for Stock-Based Compensation-Transition and Disclosure,” was issued. SFAS No. 148 amends SFAS No. 123 to provide alternative methods for transition for an entity that changes to the fair value based method of accounting for stock-based employee compensation. It also amends the disclosure provisions of SFAS No. 123 to require prominent disclosure in both interim and annual financial statements about the pro forma effects on reported net income with respect to stock-based employee compensation. The Company adopted this standard effective December 31, 2002. For purposes of the pro forma disclosures, the Company has computed the value of all stock awards and stock options granted during the three and six months ended June 30, 2003 and 2002 using the Black-Scholes option valuation model with the following weighted average assumptions and results. No assumptions are reflected for the three months ended June 30, 2003, as no options were granted during that period.

	Three Months Ended June 30,			Six Months Ended June 30,
	2003	2002		2003		2002
Assumptions
Risk-free interest rate	-	5.40%		3.95%		5.28%
Assumed dividend yield	-	5.60%		6.16%		6.02%
Assumed lives of option
awards	-	8 year	s	8 year	s	8 year	s
Assumed volatility	-	0.192		0.190		0.194
Results
Weighted average fair value
of options granted	-	$  3.31		$  2.02		$  2.76

        The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions. In the opinion of the Company’s management, because the Company’s stock-based compensation awards have characteristics significantly different from traded options and because changes in the subjective assumptions can materially affect the fair value estimate, the results obtained from the valuation model do not necessarily provide a reliable single measure of the value of its stock-based compensation awards.

        If the Company had accounted for its stock-based compensation awards in 2003 and 2002 in accordance with SFAS No. 123, pro forma results would have been as follows ($ in thousands, except per share amounts):

	Three Months Ended June 30,				Six Months Ended June 30,
	2003		2002		2003		2002
Net income, as reported	$143,500		$12,712		$171,094		$      21,987
Add: Stock-based employee
compensation expense included
in reported net income, net of
related tax effects	149		127		219		324
Deduct: Total stock-based employee
compensation expense determined
under fair-value-based method for
all awards, net of related tax effects	(601	)	(724	)	(1,064	)	(1,509	)
Pro forma net income	$143,048		$12,115		$170,249		$      20,802
Net income per share:
Basic - as reported	$2.97		$.26		$3.55		$            .44
Basic - pro forma	$2.96		$.24		$3.53		$            .42
Diluted - as reported	$2.92		$.25		$3.49		$            .44
Diluted - pro forma	$2.91		$.24		$3.47		$            .41

6.   RECOGNITION OF DEFERRED GAIN

        In 1998, the Company and Prudential Insurance Company of America (“Prudential”) formed several joint ventures (see Note 5,“CP Venture LLC, CP Venture Two LLC and CP Venture Three LLC,” to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002). The Company contributed operating properties with a fair value of $230 million to CP Venture Two LLC and in return received an indirect 11.5% ownership interest in this entity and an 88.5% indirect interest in CP Venture Three LLC, which held $230 million of cash contributed by Prudential for the future development of properties. The Company did not initially recognize the gain attributable to the contribution of the properties, since the consideration received (interests in two ventures) did not meet the initial and continuing investment criteria necessary for the full accrual method of profit recognition set forth in SFAS No. 66, “Accounting for Sales of Real Estate.”

        In May 2003, CP Venture Three LLC sold Mira Mesa MarketCenter (“Mira Mesa”), a 480,000 square foot retail center in San Diego, California. Cash proceeds of approximately $74 million were distributed from the venture entities to the Company as a result of the sale. In accordance with the provisions of SAFA No. 66, the distribution of these unrestricted cash proceeds allowed for 88.5% of the gain on the initial transaction to be recognized under the full accrual method. Accordingly, a gain of $90.0 million was recognized in the quarter ended June 30, 2003. The remaining deferred gain of $11.7 million relates to the portion of the initial gain attributable to the 11.5% ownership interest the Company continues to hold in CP Venture Two LLC, the venture that owns the propeties the Company initially contributed. This portion of the gain is being recognized as the underlying assets of CP Venture Two LLC are liquidated (either through sales of the properties or through depreciation).

7.   NEW ACCOUNTING PRONOUNCEMENTS

        In April 2002, SFAS No. 145, “Rescission of SFAS Nos. 4, 44 and 64, Amendment of SFAS No. 13, and Technical Corrections,” was issued. SFAS No. 145, among other things, eliminates the requirement that all gains and losses from the extinguishment of debt be aggregated and, if material, classified as an extraordinary item. However, a gain or loss arising from such an event or transaction would continue to be classified as an extraordinary item if the event or transaction is both unusual in nature and infrequent in occurrence per the criteria in APB No. 30, “Reporting the Results of Operations – Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions.” As part of the transition guidance, although net income would not be affected, gains and losses from debt extinguishment in prior periods that do not meet the criteria in APB No. 30 cannot be treated as extraordinary items for all periods presented. At January 1, 2003, upon adoption of SFAS No. 145, the Company reclassified the extraordinary loss recognized in the first quarter of 2002 to Loss on Debt Extinguishment (included in recurring operations) in the accompanying Statements of Income. This loss on extinguishment of debt is related to the Company’s $150 million mortgage note payable for CSC Associates, L.P. obtained in February 2002 (see Note 4 of “Notes to Consolidated Financial Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002).

        In January 2003, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 46 (“FIN 46”), “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51.” The interpretation addresses consolidation by business enterprises of variable interest entities. FIN 46 is applicable to all variable interest entities created or entered into after January 31, 2003. It is applicable to the existing variable interest entities for the Company’s quarter ended September 30, 2003. The Company does not believe it has any significant variable interest entities and therefore does not anticipate that adoption of FIN 46 will have a material impact on the Company’s financial condition or results of operations.

        In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity.” This statement requires an issuer to classify certain instruments as liabilities (or assets in some circumstances) and is effective for financial instruments entered into or modified after May 31, 2003 and for existing financial instruments in the third quarter 2003. The Company does not have any financial instruments within the scope of this statement and does not expect this statement to have an impact on the Company’s financial condition or results of operations.

8.   DISCONTINUED OPERATIONS

        In August 2001, SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” was issued, which the Company adopted effective January 1, 2002. SFAS No. 144 addresses financial accounting and reporting for the impairment of long-lived assets and long-lived assets to be disposed of. SFAS No. 144 also requires that the gains and losses from the disposition of certain real estate assets and the related historical operating results be included in a separate line item, Discontinued Operations, in the Consolidated Statements of Income for all periods presented. In the normal course of business, the Company recycles invested capital by disposing of existing assets and redeploying the proceeds in order to enhance total returns to stockholders.

        In the fourth quarter of 2002, the Company sold Salem Road Station (“Salem Road”), a 67,000 square foot retail neighborhood center. The Company reclassified the results of operations for Salem Road to Income from Discontinued Operations in the accompanying 2002 Consolidated Statements of Income.

        In the first quarter of 2003, the Company determined that AT&T Wireless Services Headquarters, a 222,000 rentable square foot office building, and Cerritos Corporate Center – Phase II, a 105,000 rentable square foot office building (collectively called “Cerritos”), met the criteria of qualifying dispositions in accordance with SFAS No. 144. The Company sold Cerritos in a single transaction to an unrelated third party in the second quarter of 2003.

        In the second quarter of 2003, the Company determined that Mira Mesa and Presidential MarketCenter (“Presidential”), a 374,000 square foot retail center in Atlanta, Georgia, met the criteria of qualifying dispositions. Mira Mesa was sold to an unrelated third party in the second quarter of 2003. The Company anticipates selling Presidential in the third quarter of 2003.

        The Company reclassified the carrying amounts of Cerritos, Mira Mesa and Presidential to Operating Properties Held for Sale in the accompanying December 31, 2002 Consolidated Balance Sheet. Additionally, the results of operations for Cerritos, Mira Mesa and Presidential were reclassified to Income from Discontinued Operations in the accompanying Consolidated Statements of Income for all periods presented. The gain on sale from Mira Mesa and Cerritos is also included in Discontinued Operations in the accompanying Consolidated Statements of Income.

        The following table details the adjustments made to the Consolidated Statements of Income ($ in thousands):

	Three Months Ended June 30, 2003				Three Months Ended June 30, 2002
	Mira Mesa	Presidential	Cerritos	Total	Mira Mesa	Presidential	Cerritos	Salem Road	Total
Rental property revenues	$1,150	$1,261	$2,680	$5,091	$1,926	$1,207	$3,171	$189	$6,493
Rental property operating expenses	205	289	748	1,242	370	287	1,140	41	1,838
Depreciation and amortization	48	228	--	276	387	232	808	57	1,484
Interest expense	--	538	--	538	--	542	--	--	542
Minority interest	143	--	--	143	228	--	--	--	228
Provision for income taxes	--	--	--	--	--	--	--	35	35
Income from discontinued
operations	$   754	$   206	$1,932	$2,892	$   941	$   146	$1,223	$  56	$2,366

	Six Months Ended June 30, 2003				Six Months Ended June 30, 2002
	Mira Mesa	Presidential	Cerritos	Total	Mira Mesa	Presidential	Cerritos	Salem Road	Total
Rental property revenues	$3,030	$2,468	$5,617	$11,115	$3,577	$2,385	$6,251	$380	$12,593
Rental property operating expenses	585	546	1,661	2,792	743	552	2,190	80	3,565
Depreciation and amortization	493	459	676	1,628	768	468	1,615	114	2,965
Interest expense	--	1,071	--	1,071	--	1,080	--	--	1,080
Minority interest	369	--	--	369	454	--	--	--	454
Provision for income taxes	--	--	--	--	--	--	--	71	71
Income from discontinued
operations	$1,583	$   392	$3,280	$5,255	$1,612	$   285	$2,446	$115	$4,458

        The components of gain on sale of investment properties for discontinued operations are as follows ($ in thousands):

	2003
	Mira Mesa	Cerritos	Total
Gain on sale of investment properties, net
of minority interest	$34,062	$8,950	$43,012

9.   SUBSEQUENT EVENTS

        Mirant Corporation (“Mirant”) currently leases its headquarters building from a joint venture in which the Company is a 50% partner, 285 Venture, LLC (the “JV”). The JV contributed 1.2% and 1.0% of the sum of the Company’s consolidated revenues and income from unconsolidated joint ventures for the year ended December 31, 2002 and the six months ended June 30, 2003, respectively. On July 14, 2003, Mirant issued a press release indicating that it has filed for reorganization under Chapter 11 of the United States Bankruptcy Code of 1978, as amended. The release indicates that no plan of reorganization has yet been developed, and that the treatment of existing creditor and stockholder interests is uncertain at such time. It is possible that in the bankruptcy, Mirant’s lease with the JV could be rejected. If this occurs, and if the JV is not able to re-lease this space on comparable terms, the rejection of the lease could have an adverse impact on the Company’s results of operations.

        On July 24, 2003, the Company issued 4,000,000 shares of 7.75% Series A Cumulative Redeemable Preferred Stock (liquidation preference of $25.00 per share). The net proceeds from this issuance of approximately $96.5 million will be used to repay outstanding indebtedness under the Company’s unsecured credit facility and for general corporate purposes. The stock may be redeemed at the Company’s option at $25.00 per share plus all accrued and unpaid dividends to the date of redemption on or after July 24, 2008.

10.   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 investment or future development. The Land Division also develops single-family residential communities which are parceled into lots and sold to various home builders. The Company’s reportable segments are broken down based on the 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 management of the Company evaluates the 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 (“NAREIT”) definition of FFO, which is net income (computed in accordance with GAAP), excluding extraordinary items, cumulative effect of change in accounting principle and gains or losses from sales of depreciable property, plus depreciation and amortization or impairment of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. The Company changed its method of calculating FFO in the first quarter 2003 to agree with NAREIT’s definition, and FFO for prior reporting periods has been restated. The restatement of FFO for prior periods, including a reconciliation of FFO to both net income and to the Company’s prior definition of funds from operations, is included in Funds From Operations Reconciliation – Ten Year Summary, which was included in the Company’s Current Report on Form 8-K dated May 5, 2003.

        FFO is used by industry analysts, investors and the Company as a supplemental measure of an equity REIT’s operating performance. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Thus, NAREIT created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from GAAP net income. The Company believes that the use of FFO, combined with the required primary GAAP presentations, has been fundamentally beneficial, improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. In addition to Company management evaluating the operating performance of its reportable segments based on FFO results, management uses FFO and FFO per share, along with other measures, to assess performance in connection with evaluating and granting incentive compensation to its officers and employees.

        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 June 30, 2003	Office Division		Retail Division		Land Division	Unallocated and Other		Total
Rental property revenues - continuing (100%)	$ 28,686		$   6,112		$     --	$        15		$   34,813
Rental property revenues - discontinued (100%)	2,680		2,411		--	--		5,091
Rental property revenues (JV)	20,040		678		--	--		20,718
Development income, management
fees and leasing and other fees (100%)	3,932		317		80	--		4,329
Development income, management
fees and leasing and other fees (JV)	--		--		--	--		--
Other income (100%)	--		--		1,612	1,526		3,138
Other income (JV)	--		--		1,261	--		1,261
Total revenues	55,338		9,518		2,953	1,541		69,350
Rental property operating expenses - continuing (100%)	9,210		1,950		--	(8	)	11,152
Rental property operating expenses - discontinued (100%)	748		494		--	--		1,242
Rental property operating expenses (JV)	6,037		157		--	--		6,194
Other expenses - continuing (100%)	4,931		1,779		2,300	10,064		19,074
Other expenses - discontinued (100%)	--		--		--	681		681
Other expenses (JV)	--		--		36	3,406		3,442
Provision for income taxes from operations
- continuing (100%)	--		--		--	537		537
Total expenses	20,926		4,380		2,336	14,680		42,322
Consolidated funds from operations	34,412		5,138		617	(13,139	)	27,028
Depreciation and amortization - continuing (100%)	(9,673	)	(2,866	)	--	(1	)	(12,540	)
Depreciation and amortization - discontinued (100%)	--		(276	)	--	--		(276	)
Depreciation and amortization (JV)	(4,458	)	(222	)	--	--		(4,680	)
Gain on sale of investment properties, net
of applicable income tax provision (100%)	8,950		34,062		--	90,956		133,968
Net income	$ 29,231		$ 35,836		$   617	$ 77,816		$ 143,500

Six Months Ended June 30, 2003	Office Division		Retail Division		Land Division	Unallocated and Other		Total
Rental property revenues - continuing (100%)	$   76,361		$   13,399		$       --	$        42		$      89,802
Rental property revenues - discontinued (100%)	5,617		5,498		--	--		11,115
Rental property revenues (JV)	39,370		1,340		547	--		41,257
Development income, management
fees and leasing and other fees (100%)	7,399		724		186	--		8,309
Development income, management
fees and leasing and other fees (JV)	--		--		--	--		--
Other income (100%)	--		--		5,540	2,581		8,121
Other income (JV)	--		--		1,808	--		1,808
Total revenues	128,747		20,961		8,081	2,623		160,412
Rental property operating expenses -
continuing (100%)	18,109		3,507		--	(7	)	21,609
Rental property operating expenses -
discontinued (100%)	1,661		1,131		--	--		2,792
Rental property operating expenses (JV)	12,196		362		--	--		12,558
Other expenses - continuing (100%)	9,432		3,726		6,365	20,913		40,436
Other expenses - discontinued (100%)	--		--		--	1,440		1,440
Other expenses (JV)	--		--		69	6,615		6,684
Provision for income taxes from operations
- continuing (100%)	--		--		--	786		786
Total expenses	41,398		8,726		6,434	29,747		86,305
Consolidated funds from operations	87,349		12,235		1,647	(27,124	)	74,107
Depreciation and amortization - continuing (100%)	(20,671	)	(6,020	)	--	(2	)	(26,693	)
Depreciation and amortization - discontinued (100%)	(676	)	(952	)	--	--		(1,628	)
Depreciation and amortization (JV)	(8,739	)	(373	)	--	--		(9,112	)
Gain on sale of investment properties, net
of applicable income tax provision (100%)	9,412		34,603		--	90,956		134,971
Impairment loss on depreciable property (JV)	(551	)	--		--	--		(551	)
Net income	$   66,124		$   39,493		$  1,647	$ 63,830		$    171,094
Total assets	$ 783,068		$ 222,779		$53,238	$ 87,169		$ 1,146,254
Investment in unconsolidated joint ventures	$ 128,307		$   15,955		$31,482	$        --		$    175,744

Reconciliation to Consolidated Revenues

	Three Months Ended June 30,		Six Months Ended June 30,
	2003	2002	2003	2002
Rental property revenues - continuing (100%)	$34,813	$36,919	$  89,802	$70,220
Development income, management fees
and leasing and other fees (100%)	4,329	3,956	8,309	8,653
Residential lot and outparcel sales	1,612	521	5,540	4,556
Interest and other	1,526	1,114	2,581	2,249
Total consolidated revenues	$42,280	$42,510	$106,232	$85,678

Three Months Ended June 30, 2002	Office Division		Retail Division		Land Division	Unallocated and Other		Total
Rental property revenues - continuing  (100%)	$ 30,310		$   6,584		$     --	$        25		$ 36,919
Rental property revenues - discontinued  (100%)	3,171		3,322		--	--		6,493
Rental property revenues (JV)	19,304		632		--	--		19,936
Development income, management
fees and leasing and other fees  (100%)	3,467		414		75	--		3,956
Development income, management
fees and leasing and other fees (JV)	--		--		--	--		--
Other income  (100%)	--		--		521	1,114		1,635
Other income (JV)	--		--		408	--		408
Total revenues	56,252		10,952		1,004	1,139		69,347
Rental property operating expenses
- continuing  (100%)	8,584		1,595		--	1		10,180
Rental property operating expenses -
discontinued  (100%)	1,140		698		--	--		1,838
Rental property operating expenses (JV)	5,730		150		--	--		5,880
Other expenses - continuing  (100%)	5,241		1,539		978	10,421		18,179
Other expenses - discontinued  (100%)	--		--		--	770		770
Other expenses (JV)	--		--		11	3,293		3,304
Provision for income taxes from operations
- continuing  (100%)	--		--		--	117		117
Provision for income taxes from operations
- discontinued  (100%)	--		--		--	35		35
Total expenses	20,695		3,982		989	14,637		40,303
Consolidated funds from operations	35,557		6,970		15	(13,498	)	29,044
Depreciation and amortization - continuing  (100%)	(8,744	)	(2,584	)	--	(3	)	(11,331	)
Depreciation and amortization - discontinued  (100%)	(808	)	(676	)	--	--		(1,484	)
Depreciation and amortization (JV)	(4,325	)	(234	)	--	--		(4,559	)
Gain on sale of investment properties, net
of applicable income tax provision  (100%)	473		569		--	--		1,042
Net income	$ 22,153		$   4,045		$     15	$(13,501	)	$ 12,712

Six Months Ended June 30, 2002	Office Division		Retail Division		Land Division	Unallocated and Other		Total
Rental property revenues - continuing (100%)	$   58,066		$   12,101		$       --	$        53		$      70,220
Rental property revenues - discontinued (100%)	6,251		6,342		--	--		12,593
Rental property revenues (JV)	38,217		1,261		--	--		39,478
Development income, management
fees and leasing and other fees (100%)	7,613		793		247	--		8,653
Development income, management
fees and leasing and other fees (JV)	--		--		--	--		--
Other income (100%)	--		--		4,556	2,249		6,805
Other income (JV)	--		--		1,452	--		1,452
Total revenues	110,147		20,497		6,255	2,302		139,201
Rental property operating expenses
- continuing (100%)	16,944		3,013		--	5		19,962
Rental property operating expenses
- discontinued (100%)	2,190		1,375		--	--		3,565
Rental property operating expenses (JV)	11,479		321		--	--		11,800
Other expenses - continuing (100%)	10,165		3,110		4,454	23,716		41,445
Other expenses - discontinued (100%)	--		--		--	1,534		1,534
Other expenses (JV)	--		--		25	6,641		6,666
Provision for income taxes from operations
- continuing (100%)	--		--		--	1,103		1,103
Provision for income taxes from operations
- discontinued (100%)	--		--		--	71		71
Total expenses	40,778		7,819		4,479	33,070		86,146
Consolidated funds from operations	69,369		12,678		1,776	(30,768	)	53,055
Depreciation and amortization - continuing (100%)	(16,564	)	(4,775	)	--	(3	)	(21,342	)
Depreciation and amortization - discontinued (100%)	(1,615	)	(1,350	)	--	--		(2,965	)
Depreciation and amortization (JV)	(8,356	)	(477	)	--	--		(8,833	)
Gain on sale of investment properties, net
of applicable income tax provision (100%)	947		1,125		--	--		2,072
Net income	$   43,781		$     7,201		$  1,776	$(30,771	)	$      21,987
Total assets	$ 850,205		$ 262,914		$28,004	$ 76,846		$ 1,217,969
Investment in unconsolidated joint ventures	$ 151,837		$   16,556		$11,965	$        --		$    180,358

28

PART I. FINANCIAL INFORMATION

Item 2.      Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three
                  and Six Months Ended June 30, 2003 and 2002                                                                                                       

Critical Accounting Policies:

        There has been no material change in the Company’s critical accounting policies from that disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

Results of Operations:

        Rental Property Revenues and Operating Expenses. Rental property revenues decreased approximately $2,106,000 in the three month 2003 period and increased approximately $19,582,000 in the six month 2003 period as compared to the comparable periods of 2002. Rental property revenues from the Company’s office portfolio decreased approximately $1,624,000 in the three month 2003 period and increased approximately $18,295,000 in the six month 2003 period. Rental property revenues from 55 Second Street, which became partially operational for financial reporting purposes in February 2002, decreased approximately $1,629,000 in the three month 2003 period and increased approximately $19,181,000 for the six month 2003 period. In the six month 2003 period, Cable & Wireless Internet Services, Inc. paid a $20 million termination fee to terminate its lease on 158,000 square feet at 55 Second Street. The Company is actively marketing this space to be re-leased. The San Francisco market continues to be a difficult leasing market, and there is no guarantee that the space will be re-leased in the near future. Due to these uncertainties, the Company cannot currently estimate the results of its efforts to re-lease 55 Second Street and the resulting impact on rental property revenues for the remainder of 2003 and beyond. Rental property revenues decreased approximately $1,718,000 and $2,616,000 in the three and six month 2003 periods, respectively, from 101 Second Street, as its average economic occupancy decreased from 97% in 2002 to 84% in 2003, which contributed to the three month 2003 decrease and partially offset the 2003 increase in rental property revenues. In August 2002, the Company entered into a termination agreement with Arthur Andersen which terminated its 148,000 square foot lease at 101 Second Street (approximately 106,000 square feet of this space has been released as of July 25, 2003; See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002). Additionally, rental property revenues decreased approximately $299,000 in the six month 2003 period from One Georgia Center, as its average economic occupancy decreased from 88% in 2002 to 79% in 2003 for the six month periods. Rental property revenues from 333 John Carlyle increased approximately $606,000 and $629,000 in the three and six month 2003 periods, respectively, due to a termination fee of $550,000 recognized from a tenant in the second quarter 2003. Rental property revenues from 555 North Point Center East increased approximately $534,000 and $264,000 in the three and six month 2003 periods, respectively, due to an increase in termination fees of approximately $595,000 in the second quarter 2003. The increase in rental property revenues at 555 North Point Center East was partially offset by a decrease in average economic occupancy at this property from 92% in 2002 to 65% in 2003 for the six month periods. Partially offsetting the decrease in the three month 2003 period and contributing to the increase in the six month 2003 period was an increase in rental property revenues of approximately $294,000 and $432,000 in the three and six month 2003 periods, respectively, from The Points at Waterview, as its average economic occupancy increased from 49% in 2002 to 84% in 2003 for the six month periods.

        Rental property revenues from the Company’s retail portfolio decreased approximately $472,000 in the three month 2003 period and increased approximately $1,298,000 in the six month 2003 period. Rental property revenues from The Avenue of the Peninsula decreased approximately $339,000 in the three month 2003 period and increased approximately $729,000 in the six month 2003 period. The three month 2003 period decrease was primarily due to an increase in reserves for tenant receivables and the six month 2003 increase was primarily due to the recognition of termination fees of approximately $841,000 and an increase in percentage rents in the first quarter 2003, partially offset by an increase in reserves. Rental property revenues from Perimeter Expo increased approximately $240,000 in the six month 2003 period, primarily due to an increase in its average economic occupancy from 92% in 2002 to 94% in 2003 for the six month periods. Also contributing to the increase in rental property revenues from the retail portfolio in the six month 2003 period was an increase of approximately $331,000 from The Avenue East Cobb, primarily due to an increase in termination fees of approximately $140,000 and an increase in its average economic occupancy from 96% in 2002 to 97% in 2003 for the six month periods. Additionally, rental property revenues decreased approximately $452,000 and $142,000 from The Avenue Peachtree City for the three and six month 2003 periods, respectively, primarily due to the receipt in 2002 of termination fees of approximately $719,000. This decrease in rental property revenues at The Avenue Peachtree City was partially offset by an increase in its average economic occupancy from 73% in 2002 to 96% in 2003 for the six month periods, as the space for which the aforementioned termination fee was recognized in 2002 was re-leased.

        Rental property operating expenses increased approximately $972,000 and $1,647,000 in the three and six month 2003 periods, respectively, due primarily to 55 Second Street becoming partially operational for financial reporting purposes in February 2002 and to approximately $300,000 of legal fees incurred at The Avenue of the Peninsula in conjunction with a lawsuit, which was settled.

        Development Income. Development income decreased approximately $64,000 and $486,000 in the three and six month 2003 periods, respectively. Development and tenant construction fees decreased approximately $45,000 and $320,000 in the three and six month 2003 periods, respectively, from Crawford Long – CPI, LLC, as construction of the Emory Crawford Long Medical Office Tower was substantially completed in February 2002.

        Management Fees. Management fees decreased approximately $101,000 and $350,000 in the three and six month 2003 periods, respectively. Approximately $225,000 of the six month 2003 decrease related to Cousins Properties Services LP (“CPS”) due to decreased contracts for third party office building management services.

        Leasing and Other Fees. Leasing and other fees increased approximately $538,000 and $492,000 in the three and six month 2003 periods, respectively. Leasing and other fees increased approximately $604,000 and $691,000 in the three and six month 2003 periods, respectively, from CPS, due to significant leasing activity at the third party office buildings CPS manages. Also contributing to the increase was an increase of approximately $194,000 and $178,000 in the three and six month 2003 periods, respectively, from Wildwood Associates, mainly due to a large sub-lease at the 3200 Windy Hill Road building. The increase in leasing and other fees was partially offset by a decrease of approximately $268,000 in both the three and six month 2003 periods from leasing that occurred at the Ten Peachtree Place Associates joint venture in 2002.

        Residential Lot and Outparcel Sales and Cost of Sales. Residential lot and outparcel sales increased approximately $1,091,000 and $984,000 in the three and six month 2003 periods, respectively. Residential lots sold increased from 5 lots in the three month 2002 period to 23 lots in the three month 2003 period and from 96 lots in the six month 2002 period to 99 lots in the six month 2003 period.

        Residential lot and outparcel cost of sales increased approximately $924,000 and $1,185,000 in the three and six month 2003 periods, respectively. Cost of sales increased disproportionately to the sales increases due to fluctuations between 2002 and 2003 of the gross profit percentages used to calculate the cost of lot sales in certain of the residential developments. Additionally, a profit adjustment was recognized in the six month 2002 period for the final lot sales within a residential development.

        Interest and Other. Interest and other increased approximately $412,000 and $332,000 in the three and six month 2003 periods, respectively. This increase was mainly due to an increase in the fair value of warrants owned by the Company due to increases in the stock price of the underlying company who issued the warrants.

        Income from Unconsolidated Joint Ventures. (All amounts reflect the Company’s share of joint venture income.) Income from unconsolidated joint ventures increased approximately $1,062,000 and $529,000 in the three and six month 2003 periods, respectively.

        Income from Wildwood Associates decreased approximately $364,000 and $1,012,000 in the three and six month 2003 periods, respectively. This decrease is partially due to an impairment loss of approximately $551,000 recognized in the first quarter 2003 on property within Wildwood Office Park that was sold in the second quarter 2003. Also contributing to the decrease in income from Wildwood Associates was a decrease in average economic occupancy at the 2300 Windy Ridge Parkway Building from 99% in 2002 to 86% in 2003. The decrease in income from Wildwood Associates was partially offset by the reversal of an allowance for bad debts of approximately $378,000.

        Income from Temco Associates increased approximately $652,000 and $153,000 in the three and six month 2003 periods, respectively. During the second quarter 2003 and the first quarter 2002, approximately 98 acres and 559 acres, respectively, of the option related to the fee simple interest were exercised and simultaneously sold. CREC’s share of the gain on these tract sales was approximately $430,000 and $371,000, respectively. Residential lots sold at Bentwater, which is owned by Temco Associates, decreased from 79 lots in the three month 2002 period to 74 lots in the three month 2003 period and increased from 180 lots in the six month 2002 period to 193 lots in the six month 2003 period. Lot sales, net of costs of sales, also increased due to fluctuations between 2002 and 2003 of the gross profit percentages used to calculate the cost of lot sales.

        Income from CL Realty, LLC (“CL Realty”) increased approximately $177,000 and $158,000 in the three and six month 2003 periods, respectively. During the second quarter 2003, CL Realty commenced development activities at six new residential communities that are expected to add over 6,000 lots to the development pipeline over a ten year period. CL Realty sold 53 of these lots at its Hidden Lakes and Summer Creek developments in Texas during the second quarter 2003.

        Income from Ten Peachtree Place Associates increased approximately $427,000 and $540,000 in the three and six month 2003 periods, respectively, as the average economic occupancy of Ten Peachtree Place for the six month period increased from 15% in 2002 to 71% in 2003.

        Income from CSC Associates, L.P. increased approximately $107,000 and $301,000 in the three and six month 2003 periods, respectively, primarily due to an increase in rental revenues from a tenant whose increase in rental rate did not require straight-lining under SFAS No. 13.

        Income from CPI/FSP I, L.P. increased approximately $220,000 in the six month 2003 period. Austin Research Park – Buildings III and IV became fully operational for financial reporting purposes in March 2002.

        Income from Crawford Long – CPI, LLC increased approximately $178,000 in the six month 2003 period, as the Emory Crawford Long Medical Office Tower became partially operational for financial reporting purposes in February 2002.

        General and Administrative Expenses. General and administrative expenses increased approximately $679,000 and $557,000 in the three and six month 2003 periods, respectively. The increase in general and administrative expenses was primarily due to an increase in salaries and related benefits due to increased personnel and an increase in legal expense. Partially offsetting the increase in general and administrative expenses was an increase of approximately $224,000 and $574,000 in the three and six month 2003 periods, respectively, in capitalized salaries, primarily related to salaries for development and leasing personnel due to an increase in the number of projects under development in 2003.

        Depreciation and Amortization. Depreciation and amortization increased approximately $1,279,000 and $5,464,000 in the three and six month 2003 periods, respectively, due to 55 Second Street becoming partially operational for financial reporting purposes and to write-offs of unamortized tenant improvements and leasing commissions related to certain tenants who effected early terminations of their lease obligations.

        Interest Expense. Interest expense decreased approximately $619,000 in the three month 2003 period and increased approximately $643,000 in the six month 2003 period. Interest expense before capitalization increased to approximately $10,254,000 and $21,077,000 in the three and six month 2003 periods, respectively, from approximately $10,248,000 and $20,139,000 in the three and six month 2002 periods, respectively. Interest expense increased approximately $833,000 in the six month 2003 period due to the refinancing of Bank of America Plaza (see Note 4 of “Notes to Consolidated Financial Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002). Partially offsetting the six month 2003 increase in interest expense and contributing to the three month 2003 decrease in interest expense was an increase of approximately $625,000 and $295,000 in the three and six month 2003 periods, respectively, in interest capitalized to projects under development (a reduction of interest expense) due to increased weighted average expenditures on projects under development in 2003.

        Loss on Debt Extinguishment. Loss on debt extinguishment decreased approximately $3,501,000 in the six month 2003 period due to the refinancing of Bank of America Plaza in February 2002 (see Note 7 contained in this report).

        Other Expenses. Other expenses decreased approximately $203,000 and $59,000 in the three and six month 2003 periods, respectively. The decrease in other expense is mainly due to a decrease of approximately $570,000 and $682,000 in minority interest expense in the three and six month 2003 periods, respectively. This decrease is mainly due to a decrease in the partner’s share of the results of operations of 101 Second Street and 55 Second Street due to decreased rental revenues at those properties. The decrease in other expenses was partially offset by an increase of approximately $349,000 and $587,000 in predevelopment expense in the three and six month 2003 periods, respectively.

        Provision for Income Taxes from Operations. The provision for income taxes from operations increased approximately $420,000 in the three month 2003 period and decreased approximately $317,000 in the six month 2003 period. The changes in the provision for income taxes from operations was primarily due to an increase in the three month 2003 and a decrease in the six month 2003 income before income taxes and gain on sale of investment properties from CREC and its subsidiaries. The fluctuations were primarily due to changes in income from residential lot sales, net of cost of sales, income from Temco Associates, development fees and general and administrative expenses.

        Gain on Sale of Investment Properties. In May 2003, CP Venture III, of which the Company owns 88.5%, sold Mira Mesa for $87 million and recognized a gain on this sale, net of minority interest, of approximately $34 million. In June 2003, the Company sold Cerritos for approximately $79 million, recognizing a gain on this sale of approximately $9 million. These gains are included in discontinued operations on the Consolidated Statements of Income (see Note 8).

        The Company’s share of the cash proceeds from the sale of Mira Mesa also triggered the recognition of approximately $90.0 million of the Company’s deferred gain associated with the original formation of CP Venture LLC (see Note 6 contained in this report and Note 5 of “Notes to Consolidated Financial Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002). This deferred gain, recorded in 1998 when the Company contributed properties to CP Venture LLC, was being amortized into income ratably over 30 years. The deferred gain remaining on the Consolidated Balance Sheet at June 30, 2003 will continue to be amortized into income as the properties originally contributed to CP Venture LLC are depreciated or upon sale of these properties.

        The remaining gain in the three and six month 2003 periods and the gain on sale in the three and six month 2002 periods represented the aforementioned ratable amortization of deferred gain related to CP Venture LLC.

        Discontinued Operations. See Note 8 contained in this report for a discussion of the components of Discontinued Operations.

Liquidity and Capital Resources:

         Financial Condition.

        At June 30, 2003, notes payable included the following ($ in thousands):

	Company	Share of Unconsolidated Joint Ventures	Total
Floating Rate Credit Facility
and Floating Rate Debt	$  18,660	$    6,063	$  24,723
Other Debt
(primarily non-recourse
fixed rate mortgages)	506,223	282,202	788,425
	$524,883	$288,265	$813,148

        As shown above, the Company’s debt (including its pro rata share of unconsolidated joint venture debt) was $813.1 million or 38% of total market capitalization (shares outstanding multiplied by stock price at June 30, 2003 plus debt) at June 30, 2003. Bank covenants related to the Company’s credit facility specifically exclude debt related to Charlotte Gateway Village, L.L.C. (“Gateway”), as it is fully secured by the underlying property and non-recourse to the borrower and is fully amortized by rental payments under a long-term lease to Bank of America. As of June 30, 2003, the Company’s share of the Gateway debt totaled $88.7 million. The Company’s debt (including its pro rata share of unconsolidated joint venture debt) to total market capitalization is lower excluding the Gateway debt. The Company believes that providing information on the Company’s share of joint venture debt is useful for investors and analysts to understand obligations and contingencies of the Company. The Company’s debt to market capitalization (excluding its share of unconsolidated joint venture debt) was 28% at June 30, 2003.

        The Company had $17.6 million drawn on its $275 million unsecured revolving credit facility as of June 30, 2003 compared to $159.2 million drawn at December 31, 2002. Additionally, at June 30, 2003, the Company had $84.7 million allocated to estimated development commitments, as compared to an allocation of $131.5 million at December 31, 2003. Except as described above, there has been no material change in the Company’s contractual obligations and commitments from that disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

        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, proceeds from the Company’s recent preferred stock offering (see Note 9 contained in this report) 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. In July 2003, the Company filed an additional shelf registration statement to add an additional $1 million of availability and add preferred stock as a registered security. As described in Note 9 contained in this report, in July 2003, the Company issued $100 million of preferred stock. As of August 8, 2003, approximately $33 million remained available for issuance under the shelf registration statement.

        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 the Company’s common or preferred stock.

        Cash Flows. Net cash provided by operating activities of continuing operations increased approximately $24.2 million in the six month 2003 period as compared to the six month 2002 period. Income from continuing operations before gain on sale of investment properties increased approximately $15.4 million which contributed to the increase in net cash provided by operating activities. Depreciation and amortization increased approximately $5.5 million due to 55 Second Street becoming partially operational for financial reporting purposes and to the write-offs of unamortized tenant improvements and leasing commissions related to certain tenants who effected early terminations of their lease obligations. Also contributing to the increase in net cash provided by operating activities was an increase of approximately $1.2 million in residential lot and outparcel cost of sales and an increase of approximately $1.1 million in changes in other operating assets and liabilities.

        Net cash provided by investing activities increased approximately $159.6 million in the six month 2003 period from net cash used in investing activities. This increase was primarily due to an increase in net cash provided by sales activities of approximately $162.0 million due to the sales of Mira Mesa and Cerritos in the second quarter 2003. Also contributing to the increase in net cash provided by investing activities was an increase of approximately $23.1 million in distributions in excess of income from unconsolidated joint ventures, consisting of an increase in distributions of approximately $23.6 million and an increase in income of approximately $0.5 million. The increase in distributions was mainly due to distributions of approximately $26.3 million from Crawford Long — CPI, LLC. In May 2003, Crawford Long – CPI, LLC, in which the Company is a 50% partner, obtained non-recourse financing of $55 million, with an interest rate of 5.9% and a maturity of June 1, 2013. The proceeds from this financing were distributed to the partners. Also contributing to the increase in distributions was an increase of approximately $1.6 million from CSC Associates, and partially offsetting the increase in distributions was a decrease of approximately $3.2 million from Wildwood Associates. Partially offsetting the increase in net cash provided by investing activities was an increase of approximately $6.8 million in property acquisition and development expenditures, as a result of increased development activity in 2003, and an increase of approximately $18.4 million in investment in unconsolidated joint ventures. Contributions to CL Realty, LLC increased approximately $16.4 million, to fund the Company’s portion of land acquisition costs in connection with three new residential developments in Texas. Contributions to Ten Peachtree Place Associates increased approximately $3.6 million to pay for re-leasing costs at Ten Peachtree Place. These increases in contributions were partially offset by a decrease in contributions to Crawford Long – CPI, LLC of approximately $1.6 million, as development of this property was substantially completed in February 2002.

        Net cash used in financing activities increased approximately $176.6 million in the six month 2003 period. The increase is mainly due to a decrease of approximately $149.8 million in proceeds from other notes payable, due to the February 2002 refinancing of Bank of America Plaza (see Note 4 of “Notes to Consolidated Financial Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002). Also contributing to the increase in net cash used in financing activities was a $76.5 million increase in net repayments of the Company’s credit facility and an increase of $9.6 million due to a distribution to a minority partner. An increase of approximately $5.5 million in common stock repurchases and a decrease in common stock sold, net of expenses, of approximately $2.4 million also contributed to the increase in net cash used by financing activities. Partially offsetting the increase in net cash used in financing activities was a decrease in repayment of other notes payable of approximately $66.2 million due to the aforementioned refinancing of Bank of America and a decrease of approximately $1.0 million in dividends paid due to repurchases of common stock by the Company.

Item 3.   Quantitative and Qualitative Disclosure About Market Risk

        There has been no material change 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, 2002.

Item 4.   Controls and Procedures

        Disclosure controls and procedures are the Company’s controls and other procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

        As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision of the Chief Executive Officer and Chief Financial Officer and with the participation of the Company’s management, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company’s periodic Securities and Exchange Commission filings. No significant changes were made in the Company’s internal controls during the second quarter of 2003 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

PART II.   OTHER INFORMATION

Item 1.   Legal Proceedings

        The Company is subject to routine actions for negligence and other claims and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance and all of which collectively are not expected to have a material impact on the financial condition or results of operations of the Company.

Item 4.   Submission of Matters to a Vote of Security Holders

        For the results of the Company’s Annual Meeting of Stockholders held on May 6, 2003, see Item 4 of Part II of the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2003.

Item 5. Other Information

        The Company uses non-GAAP financial measures in its filings and other public disclosures. These non-GAAP financial measures are defined below. For oral presentations, reconciliations to the most directly comparable GAAP measure may be accessed through the “Quarterly Disclosures” link and the “Supplemental SEC Information” link on the Investor Relations page of the Company’s Web site, www.cousinsproperties.com.

        The following is a list of non-GAAP financial measures that the Company commonly uses and a description for each measure of (1) the reasons that management believes the measure is useful to investors, and (2) if material, any additional uses of the measure by management of the Company.

        “Funds From Operations” (“FFO”) is a supplemental operating performance measure used in the real estate industry. Effective January 1, 2003, the Company adopted the National Association of Real Estate Investment Trusts’ (“NAREIT”) definition of FFO, which is net income (computed in accordance with accounting principles generally accepted in the United States (“GAAP”)), excluding extraordinary items, cumulative effect of change in accounting principle and gains or losses from sales of depreciable property, plus depreciation and amortization or impairment of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis.

        FFO is used by industry analysts and investors as a supplemental measure of an equity REIT’s operating performance. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Thus, NAREIT created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from GAAP net income. The use of FFO, combined with the required primary GAAP presentations, has been fundamentally beneficial, improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. Company management evaluates the operating performance of its reportable segments and of its divisions based on FFO. Additionally, the Company uses FFO and FFO per share, along with other measures, to assess performance in connection with evaluating and granting incentive compensation to its officers and employees.

        “Rental Property Revenues Less Rental Property Operating Expenses” is used by industry analysts, investors and Company management to measure operating performance of the Company’s properties. Like FFO, Rental Property Revenues Less Rental Property Operating Expenses excludes certain components from Net Income in order to provide results that are more closely related to a property’s results of operations. Certain items, such as interest expense, while included in FFO and Net Income, do not affect the operating performance of a real estate asset and are often incurred at the corporate level as opposed to the property level. As a result, management uses only those income and expense items that are incurred at the property level to evaluate a property’s performance. Depreciation and amortization are also excluded from this item for the reasons described under FFO above. Additionally, appraisals of real estate are based on the value of an income stream before interest and depreciation.

        “Same-Property Growth” represents the percentage change in Same-Property Revenues Less Operating Expenses for properties that have been fully operational for two consecutive reporting periods. Same-Property Revenues Less Operating Expenses is similar to Rental Property Revenues Less Rental Property Operating Expenses, but excludes lease termination fees, which are generally one-time payments that may distort results of operations for comparable periods, straight-line rents and inter-company activities. While seasonal items such as percentage rents may distort comparisons of one quarter to the previous quarter, annual comparisons are not distorted by seasonality. Same-Property Growth allows analysts, investors and management to analyze continuing operations and evaluate the growth trend of the Company’s portfolio.

        “2^nd Generation Tenant Improvements and Leasing Costs and Building Capital Expenditures” is used in the valuation and analysis of real estate. Because the Company develops and acquires properties, in addition to operating existing properties, its property acquisition and development expenditures included in the Statements of Cash Flows includes both initial costs associated with developing and acquiring investment assets and those expenditures necessary for operating and maintaining existing properties at historical performance levels. The latter costs are referred to as second generation costs and are useful in evaluating the economic performance of the asset and in valuing the asset. Accordingly, the Company discloses the portion of its property acquisition and development expenditures that pertain to second generation space in its operating properties.

        “Adjusted Debt” is defined as the Company’s debt and the Company’s pro rata share of unconsolidated joint venture debt, excluding debt related to Charlotte Gateway Village, L.L.C. (“Gateway”). The Company excludes Gateway debt as it is fully secured by the underlying property and non-recourse to the borrower and is fully amortized by rental payments under a long-term lease to Bank of America. The Gateway debt is also excluded from debt and coverage ratios for purposes of the bank covenants pertaining to the Company’s credit facility. This measure is useful as a measure of the Company’s ability to meet its debt obligations and to raise additional debt.

        “Interest Expense Coverage Ratio” is defined as the ratio of FFO plus consolidated interest expense (“Consolidated FFO Before Interest”) divided by consolidated interest expense. Consolidated interest expense is the sum of the Company’s interest expense plus its share of interest expense for unconsolidated joint ventures. The Company’s share of interest expense for Gateway has been excluded in accordance with the discussion under “Adjusted Debt” above. This measure is useful as a measure of the Company’s ability to meet its debt obligations and to raise additional debt.

        “Fixed Charge Coverage Ratio” is defined as Consolidated FFO Before Interest divided by fixed charges. Fixed charges is the sum of interest expense, principal amortization under mortgage notes payable and ground lease rental payments. Fixed charges include the Company’s share of fixed charges for unconsolidated joint ventures, with Gateway expenses excluded, as discussed above. This measure is useful as a measure of the Company’s ability to meet its debt obligations and to raise additional debt.

Item 6.   Exhibits and Reports on Form 8-K

(a) Exhibits

3.1               Restated and Amended Articles of Incorporation of the Registrant, as amended
              through July 22, 2003.

3.2               Bylaws of the Registrant, as amended April 29, 1993 (incorporated by reference
              from the Company's quarterly report on Form 10-Q of the quarter ended June 30,
              2002).

4.1               Dividend Reinvestment Plan as restated as of March 27, 1995, filed in the
              Registrant's Form S-3 dated March 27, 1995, and incorporated herein by
              reference.

4.2               Articles of Amendment of Restated and Amended Articles of Incorporation of
              the Registrant, filed as Exhibit 4.1 to the Registrant's Current Report on
              Form 8-K on July 22, 2003, and incorporated herein by reference.

10.1               Cousins Properties Incorporated 1999 Incentive Stock Plan, approved by the
              Stockholders on May 4, 1999, filed as Exhibit A to the Registrant's Proxy
              Statement dated March 29, 1999; as amended and restated, approved by the
              Stockholders on December 28, 2000, filed as Exhibit A to the Registrant's Proxy
              Statement dated December 1, 2000; as amended and restated, approved by the
              Stockholders on May 1, 2001, filed as Annex B in the Registrant's Proxy
              Statement dated March 30, 2001; and as amended and restated, approved by the
              Stockholders on May 7, 2002, filed as Annex A in the Registrant's Proxy
              Statement dated March 29, 2002; and as amended and restated, approved by
              the Stockholders on May 6, 2003, filed as Annex A in the Registrant's Proxy
              Statement dated March 25, 2003, and incorporated herein by reference.

11               Computation of Per Share Earnings.*

31.1               Certification Pursuant to Form of Rule 13a-14(a), as adopted pursuant to Section
              302 of the Sarbanes-Oxley Act of 2002.

31.2               Certification Pursuant to Form of Rule 13a-14(a), as adopted pursuant to Section
              302 of the Sarbanes-Oxley Act of 2002

32.1               Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
              Section 906 of the Sarbanes-Oxley Act of 2002.

32.2               Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
              Section 906 of the Sarbanes-Oxley Act of 2002.

* Data required by SFAS No. 128, “Earnings Per Share,” is provided in Note 4 to the consolidated financial statements in this report.

                                    (b)           Reports on Form 8-K

The following Current Reports on Form 8-K were furnished or filed during the quarter ended June 30, 2003:

On May 5, 2003, the Company furnished a Current Report on Form 8-K dated May 5, 2003, pursuant to Item 12 of Form 8-K, “Disclosure of Results of Operations and Financial Condition,” for the quarter ended March 31, 2003.

On June 24, 2003, the Company filed a Current Report on Form 8-K dated December 31, 2002, relating to certain non-GAAP financial measures appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

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




/s/ Tom G. Charlesworth                                           
Tom G. Charlesworth
Executive Vice President, Chief Financial Officer
and Chief Investment Officer
(Duly Authorized Officer and Principal Financial Officer)

August 11, 2003

EX-3.(I)

ARTICLES OF AMENDMENT

TO

RESTATED ARTICLES OF INCORPORATION

OF

COUSINS PROPERTIES INCORPORATED

1.

        The name of the corporation is Cousins Properties Incorporated (the “Corporation”). The Corporation is organized under the laws of the State of Georgia.

2.

        Pursuant to Section 14-2-1003 of the Georgia Business Corporation Code, as amended, these Articles of Amendment (the “Amendment”) amend the Corporation’s Restated and Amended Articles of Incorporation, as amended (the “Articles of Incorporation”).

3.

        The Amendment is to add the following as a new Article 4.C of the Articles of Incorporation, to set forth the terms, as determined by the Board of Directors of the Corporation, of a series of the Corporation’s Preferred Stock:

C.     7 ¾% Series A Cumulative Redeemable Preferred Stock.

(1)         Designation and Number. A series of Preferred Stock, designated the “7 ¾% Series A Cumulative Redeemable Preferred Stock” (the “Series A Preferred Stock”), is hereby established. The number of shares of Series A Preferred Stock hereby authorized shall be 4,000,000.

(2)         Rank. The Series A Preferred Stock shall, with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Corporation, rank (a) senior to all classes or series of the Corporation’s common stock and to any other class or series of the Corporation’s capital stock other than any class or series referred to in clauses (b) and (c) of this sentence; (b) on a parity with any class or series of the Corporation’s capital stock, the terms of which specifically provide that such class or series ranks on a parity with the Series A Preferred Stock with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Corporation; and (c) junior to any class or series of the Corporation’s capital stock the terms of which specifically provide that such class or series ranks senior to the Series A Preferred Stock with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Corporation. The term “capital stock” shall include all classes and series of preferred and common stock but shall not include convertible debt securities.

      (3)     Dividends.

    (a)        Holders of the then outstanding Series A Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of funds legally available for the payment of dividends, cumulative cash dividends at a rate of 7 ¾% of the $25.00 liquidation preference per share per annum (equivalent to a fixed annual amount of $1.9375 per share per annum). Such dividends shall be cumulative from the first date on which any shares of Series A Preferred Stock are issued and shall be payable when, as and if declared by the Board of Directors, quarterly in arrears on or before February 15, May 15, August 15 and November 15 of each year commencing on November 15, 2003 (each, a “Dividend Payment Date”), or, if any such day is not a business day, then on the next succeeding business day, but in such a case no interest or additional dividends or other sums shall accrue on the amount so payable from the Dividend Payment Date to such next succeeding business day. The quarterly period between Dividend Payment Dates is referred to herein as a “dividend period” and the dividend which shall accrue in respect of any full dividend period shall be $0.484375 per share regardless of the actual number of days in such full dividend period. The first dividend will be for greater than a full quarter and will cover the period from July 24, 2003 to November 15, 2003. Such dividend and any dividend payable on the Series A Preferred Stock for any partial dividend period will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as they appear in the stock records of the Corporation at the close of business on the applicable record date, which shall be the first day of the calendar month in which the applicable Dividend Payment Date falls or on such other date designated by the Board of Directors as the record date for the payment of dividends on the Series A Preferred Stock that is not more than 30 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”).

    (b)        No dividends on Series A Preferred Stock shall be declared by the Board of Directors or paid or set apart for payment by the Corporation (i) at such time as the terms and provisions of any contractual agreement of the Corporation, including any agreement relating to its outstanding indebtedness, (1) prohibits such declaration, payment or setting apart for payment, or (2) provides that such declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or (ii) if such declaration or payment shall be restricted or prohibited by law.

    (c)        Notwithstanding the foregoing, dividends on the Series A Preferred Stock shall accrue whether or not: (i) the terms and provisions of Section C.3(b) above or any agreement relating to the Corporation’s outstanding indebtedness at any time prohibit the then current payment of dividends, (ii) the Corporation has earnings, (iii) there are funds legally available for the payment of such dividends and (iv) such dividends are declared by the Board of Directors. Accrued but unpaid dividends on the Series A Preferred Stock will accumulate as of the Dividend Payment Date on which they first become payable.

    (d)        Except as provided in Section C.(3)(e) below, no dividends will be declared or paid or set apart for payment, and no distributions will be declared, on any common stock of the Corporation or any series of Preferred Stock ranking, as to dividends, on a parity with or junior to the Series A Preferred Stock (other than a dividend in shares of the Corporation’s common stock or in any other class of shares of capital stock of the Corporation ranking junior to the Series A Preferred Stock as to dividends and upon liquidation) for any period unless full cumulative dividends on the Series A Preferred Stock for all dividend periods ending on or prior to the date of such declaration, payment or setting apart have been, or contemporaneously are, (i) declared and paid or (ii) declared and a sum sufficient for the payment thereof is set apart for such payment.

    (e)        When dividends are not paid in full (and a sum sufficient for such full payment is not so set apart) upon the Series A Preferred Stock and the shares of any other series of Preferred Stock ranking on a parity as to dividends with the Series A Preferred Stock, all dividends declared upon the Series A Preferred Stock and any other series of Preferred Stock ranking on a parity as to dividends with the Series A Preferred Stock shall be declared pro rata so that the amount of dividends declared per share of Series A Preferred Stock and such other series of Preferred Stock shall in all cases bear to each other the same ratio that accrued dividends per share on the Series A Preferred Stock and such other series of Preferred Stock (which shall not include any accrual in respect of unpaid dividends for prior dividend periods if such shares of Preferred Stock do not have a cumulative dividend) bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on Series A Preferred Stock which may be in arrears.

    (f)        Except as provided in the immediately preceding paragraph, no dividends (other than in common stock or other shares of capital stock of the Corporation ranking junior to the Series A Preferred Stock as to dividends and upon liquidation) shall be declared or paid or set aside for payment, nor shall any other distribution be declared or made, upon the common stock or any other shares of capital stock of the Corporation ranking junior to or on a parity with the Series A Preferred Stock as to dividends or upon liquidation, nor shall any common stock of the Corporation, or any other shares of capital stock of the Corporation ranking junior to or on a parity with the Series A Preferred Stock as to dividends or upon liquidation be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such shares) by the Corporation (except (1) by conversion into or exchange for other shares of capital stock of the Corporation ranking junior to the Series A Preferred Stock as to dividends and upon liquidation or (2) for the redemption, purchase or acquisition by the Corporation of any shares of capital stock that have become Excess Shares pursuant to Article 11 of these Articles of Incorporation) (either such action, an “Event”), unless full cumulative dividends on the Series A Preferred Stock for all dividend periods ending on or prior to the date of the Event have been, or contemporaneously are, (i) declared and paid or (ii) declared and a sum sufficient for the payment thereof is set apart for such payment.

    (g)        Any dividend payment made on Series A Preferred Stock shall first be credited against the earliest accrued but unpaid dividend due with respect to such shares which remains payable. Holders of the Series A Preferred Stock shall not be entitled to any dividend, whether payable in cash, property or securities, in excess of full cumulative dividends on the Series A Preferred Stock as described above.

      (4)     Liquidation Preference.

    (a)        Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, the holders of Series A Preferred Stock then outstanding will be entitled to be paid, out of the assets of the Corporation legally available for distribution to its shareholders after payment or provision for payment of all debts and other liabilities of the Corporation, in cash or property at its fair market value as determined by the Board of Directors, a liquidation preference of $25.00 per share of Series A Preferred Stock, plus an amount equal to any accrued and unpaid dividends per share to the date of payment, before any distribution of assets is made to holders of common stock of the Corporation or any other class or series of capital stock of the Corporation that ranks junior to the Series A Preferred Stock as to liquidation rights.

    (b)        In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, the available assets of the Corporation are insufficient to pay the amount of the liquidating distributions on all outstanding Series A Preferred Stock and the corresponding amounts payable on all shares of other classes or series of capital stock of the Corporation ranking on a parity with the Series A Preferred Stock in the distribution of assets, then the holders of the Series A Preferred Stock and all other such classes or series of capital stock of the Corporation shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to which such holders of Series A Preferred Stock would otherwise be respectively entitled.

    (c)        After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series A Preferred Stock will have no right or claim to any of the remaining assets of the Corporation.

    (d)        Written notice of any such liquidation, dissolution or winding up of the Corporation, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be given by first class mail, postage pre-paid, not less than 30 nor more than 60 days prior to the payment date stated therein, to each record holder of the Series A Preferred Stock at the respective addresses of such holders as the same shall appear on the stock transfer records of the Corporation.

    (e)        None of (i) the consolidation, combination or merger of the Corporation with or into any other corporation, trust or entity, or of any other corporation, trust or entity with or into the Corporation, (ii) the sale, lease or conveyance of all or substantially all of the assets, property or business of the Corporation, or (iii) any statutory share exchange, shall be deemed to constitute a liquidation, dissolution or winding up of the Corporation.

      (5)     Redemption.

    (a)        Right of Optional Redemption; Application of “Excess Share” Provision. The Series A Preferred Stock shall have no stated maturity date and is not redeemable prior to July 24, 2008. However, for the purpose of ensuring that the Corporation remains a qualified REIT for federal income tax purposes, in accordance with the Articles of Incorporation, outstanding shares of Series A Preferred Stock are at all times, together with all other shares of capital stock of the Corporation held by a shareholder of the Corporation in excess of the specified ownership limitations contained in the Articles of Incorporation, subject in all respects to the provisions of Article 11 of the Articles of Incorporation, including, without limitation, the provisions contained therein regarding Excess Shares.

        On and after July 24, 2008, the Corporation, at its option and upon not less than 30 nor more than 60 days’ prior written notice, may redeem the Series A Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends thereon to the date fixed for redemption (except as provided in Section C.(5)(c) below), without interest. If less than all of the outstanding Series A Preferred Stock is to be redeemed, the Series A Preferred Stock to be redeemed shall be selected pro rata (as nearly as may be practicable without creating fractional shares) or by any other equitable method determined by the Corporation.

    (b)        Limitations on Redemption and Repurchase. Unless full cumulative dividends for all past dividend periods on all Series A Preferred Stock shall have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for payment, no shares of Series A Preferred Stock shall be redeemed unless all outstanding shares of Series A Preferred Stock are simultaneously redeemed, and the Corporation shall not purchase or otherwise acquire directly or indirectly any Series A Preferred Stock (except by exchange for shares of capital stock of the Corporation ranking junior to the Series A Preferred Stock as to dividends and upon liquidation); provided, however, that the foregoing is subject in all respects to Article 11 of the Articles of Incorporation, including the purchase by the Corporation of Excess Shares, in order to ensure that the Corporation remains qualified as a REIT for federal income tax purposes.

        Except as specifically prohibited herein, and subject to applicable law, the Corporation may from time to time conduct open market or private purchases of the Series A Preferred Stock or other securities.

    (c)        Payment of Dividends in Connection with Redemption If a redemption date falls after a Dividend Record Date and prior to the corresponding Dividend Payment Date, each holder of Series A Preferred Stock at the close of business on such Dividend Record Date shall be entitled to the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the redemption of such shares before such Dividend Payment Date. Except as provided in Section C.5(a) above and this Section C.5(c), the Corporation will make no payment or allowance for unpaid dividends, whether or not in arrears, on Series A Preferred Stock which are redeemed.

    (d)        Procedures for Redemption.

                (i)        Notice of redemption will be (A) given by publication in the New York Times, the Wall Street Journal, or other newspaper of similar general circulation in the City of New York, such publication to be made once a week for two successive weeks commencing not less than 30 nor more than 60 days prior to the redemption date, and (B) mailed by the Corporation, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, addressed to the respective holders of record of the Series A Preferred Stock to be redeemed at their respective addresses as they appear on the stock transfer records of the Corporation. No failure to give such notice or any defect thereto or in the mailing thereof shall affect the validity of the proceedings for the redemption of any shares of Series A Preferred Stock except as to the holder to whom notice was defective or not given.

                (ii)        In addition to any information required by law or by the applicable rules of any exchange upon which Series A Preferred Stock may be listed or admitted to trading, such notice shall state: (A) the redemption date; (B) the redemption price; (C) the aggregate number of shares of Series A Preferred Stock to be redeemed and the number to remain outstanding after the redemption; (D) the place or places where the Series A Preferred Stock are to be surrendered for payment of the redemption price; and (E) that dividends on the shares of Series A Preferred Stock to be redeemed will cease to accrue on such redemption date. If less than all of the shares of Series A Preferred Stock held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number of Series A Preferred Stock held by such holder to be redeemed.

                (iii)        If notice of redemption of any Series A Preferred Stock has been given and if the funds necessary for such redemption have been set apart by the Corporation in trust for the benefit of the holders of any Series A Preferred Stock so called for redemption, then from and after the redemption date, dividends will cease to accrue on such Series A Preferred Stock, such Series A Preferred Stock shall no longer be deemed outstanding and all rights of the holders of such shares will terminate, except the right to receive the redemption price.

                (iv)        Holders of Series A Preferred Stock to be redeemed shall surrender such Series A Preferred Stock at the place designated in such notice and, upon surrender in accordance with said notice of the certificates for Series A Preferred Stock so redeemed (properly endorsed or assigned for transfer, if the Corporation shall so require and the notice shall so state), such Series A Preferred Stock shall be redeemed by the Corporation at the redemption price plus any accrued and unpaid dividends payable upon such redemption. In case less than all the shares of Series A Preferred Stock represented by any such certificate are redeemed, a new certificate or certificates shall be issued representing the unredeemed shares of Series A Preferred Stock without cost to the holder thereof.

                (v)        The deposit of funds with a bank or trust corporation for the purpose of redeeming Series A Preferred Stock shall be irrevocable except that:

                (A)        the Corporation shall be entitled to receive from such bank or trust corporation the interest or other earnings, if any, earned on any money so deposited in trust, and the holders of any shares redeemed shall have no claim to such interest or other earnings; and

                (B)        any balance of monies so deposited by the Corporation and unclaimed by the holders of the Series A Preferred Stock entitled thereto at the expiration of two years from the applicable redemption dates shall be repaid, together with any interest or other earnings thereon, to the Corporation, and after any such repayment, the holders of the shares entitled to the funds so repaid to the Corporation shall look only to the Corporation for payment without interest or other earnings.

    (e)        Excess Share Provisions. The Series A Preferred Stock is subject to the provisions of Article 11 of the Articles of Incorporation, including, without limitation, the provision for the redemption of Excess Shares.

    (f)        Status of Redeemed Shares. Any shares of Series A Preferred Stock that shall at any time have been redeemed as provided herein shall, after such redemption, have the status of authorized but unissued shares of Preferred Stock, without designation as to series until such shares are thereafter designated as part of a particular series by the Board of Directors.

      (6)     Voting Rights.

    (a)        Holders of the Series A Preferred Stock will not have any voting rights, except as set forth below or as otherwise from time to time required by law.

    (b)        Whenever dividends on any Series A Preferred Stock shall be in arrears for six or more quarterly periods (a “Preferred Dividend Default”), the size of the Board of Directors shall automatically increase by two directors and the holders of such Series A Preferred Stock (voting separately as a class with the holders of all other series of Preferred Stock, if any, ranking on a parity with the Series A Preferred Stock as to dividends or upon liquidation (“Parity Preferred”) upon which like voting rights have been conferred and are exercisable) will be entitled to vote for the election of such additional members of the Board of Directors (the “Preferred Directors”) (i) at a special meeting called by the holders of record of at least 20% of the Series A Preferred Stock or the holders of 20% of any other series of such Parity Preferred so in arrears (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of shareholders) or at the next annual meeting of shareholders, and (ii) at each subsequent annual meeting until all dividends accumulated on such Series A Preferred Stock for the past dividend periods shall have been fully declared and paid or declared and a sum sufficient for the payment thereof set aside for payment.

    (c)        If and when all accumulated dividends on the Series A Preferred Stock shall have been declared and paid in full or declared and set aside for payment in full, the holders of the Series A Preferred Stock shall be divested of the voting rights set forth in Section C.(6)(b) hereof (subject to revesting in the event of each and every Preferred Dividend Default) and, if all accumulated dividends have been paid in full or declared and set aside for payment in full on all other series of Parity Preferred upon which like voting rights have been conferred and are exercisable, the term of office of each Preferred Director so elected shall terminate. Any Preferred Director may be removed at any time with or without cause by the vote of, and shall not be removed otherwise than by the vote of, the holders of record of a majority of the outstanding Series A Preferred Stock when they have the voting rights set forth in Section C.(6)(b) hereof (voting separately as a class with all other series of Parity Preferred upon which like voting rights have been conferred and are exercisable). The Preferred Directors shall each be entitled to one vote per director on any matter. So long as a Preferred Dividend Default shall continue, any vacancy in the office of a Preferred Director may be filled by written consent of the Preferred Director remaining in office, or if none remains in office, by a vote of the holders of record of a majority of the outstanding Series A Preferred Stock when they have the voting rights set forth in Section C.(6)(b) hereof (voting separately as a class with all other series of Parity Preferred upon which like voting rights have been conferred and are exercisable).

    (d)        So long as any shares of Series A Preferred Stock remain outstanding, the Corporation shall not, without the affirmative vote of the holders of at least two-thirds of the Series A Preferred Stock outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting separately as a class): (i) authorize or create, or increase the authorized or issued amount of, any class or series of capital stock of the Corporation ranking senior to the Series A Preferred Stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up, or reclassify any authorized shares of capital stock of the Corporation into any such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares, or (ii) amend, alter or repeal the provisions of the Articles of Incorporation, whether by merger, consolidation or otherwise, so as to materially and adversely affect any right, preference, privilege or voting power of the Series A Preferred Stock or the holders thereof; provided, however, that with respect to the occurrence of any event set forth in Section C.(6)(d)(ii) above, so long as any shares of the Series A Preferred Stock remain outstanding with the terms thereof materially unchanged, taking into account that upon the occurrence of an event the Corporation may not be the surviving entity, the occurrence of any such event shall not be deemed to materially and adversely affect any right, preference, privilege or voting power of the Series A Preferred Stock or the holders thereof, and provided, further, that (i) any increase in the amount of the authorized common stock of the Corporation or Preferred Stock or the creation or issuance of any other series of common stock of the Corporation or Preferred Stock ranking on a parity with or junior to the Series A Preferred Stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up, and (ii) any change to the number or classification of the Board of Directors, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers and provided, further, that any amendment to Article 11 of the Articles of Incorporation relating to Excess Shares, the Limit or any other matter described therein of any type or nature shall in no event be deemed to materially and adversely affect such rights, preferences, privileges or voting powers so long as after such amendment, any single “Person” may “Own” (each as defined in Article 11 of the Articles of Incorporation prior to or after such amendment) 3.9% of the value of the outstanding shares of capital stock of the Corporation without violating the Limit.

        On any matter on which the holders of the Series A Preferred Stock shall be entitled to vote (as provided herein or by applicable law), including any action by written consent, each share of Series A Preferred Stock shall have one vote per share, except that when shares of any other series of preferred stock shall have the right to vote with the Series A Preferred Stock as a single class on any matter, then the Series A Preferred Stock and such other series shall have with respect to such matters one vote per $25.00 of stated liquidation preference.

    (e)        The foregoing voting provisions will not apply, and the Series A Preferred Stock will not be entitled to vote, after any notice of redemption is mailed to the holders and a sum sufficient to redeem the shares of Series A Preferred Stock has been deposited with a bank, trust company or other financial institution under an irrevocable obligation to pay the redemption price of the holders of such Series A Preferred Stock upon surrender of such shares.

(7)         Conversion. The Series A Preferred Stock is not convertible into or exchangeable for any other property or securities of the Corporation, except that shares of the Series A Preferred Stock may automatically become Excess Shares in accordance with Article 11 of the Articles of Incorporation in order to ensure that the Corporation remains qualified as a REIT for federal income tax purposes.

4.

        This Amendment was adopted on July 17, 2003.

5.

        This Amendment was duly adopted by the Corporation’s Board of Directors without shareholder approval, as such approval was not required.

        IN WITNESS WHEREOF, Cousins Properties Incorporated has caused these Articles of Amendment to be executed and sealed by its duly authorized officer this 22^nd day of July, 2003.

                                                                     COUSINS PROPERTIES INCORPORATED




                                                                     By:  /s/ James A. Fleming          
                                                                            James A. Fleming
                                                                            Senior Vice President


                                                                            [Corporate Seal]

ARTICLES OF AMENDMENT TO

RESTATED ARTICLES OF INCORPORATION

OF

COUSINS PROPERTIES INCORPORATED

        Cousins Properties Incorporated, a corporation organized and existing under the laws of the State of Georgia, hereby certifies as follows:

        1.      The name of the corporation is Cousins Properties Incorporated (the “Corporation”).

        2.      Pursuant to Section 14-2-1003 of the Georgia Business Corporation Code, these Articles of Incorporation amend the Restated Articles of Incorporation of the Corporation, as amended (the “Articles of Amendment”). These Articles of Amendment were duly adopted by the shareholders of the Corporation in accordance with the provisions of Section 14-2-1003 of the Georgia Business Corporation Code on May 4, 1999.

        3.      The Restated Articles of Incorporation of the Corporation as heretofore amended or supplemented are hereby further amended by amending paragraph A. to Article 4 to increase the number of shares of Common Stock, $1 par value per share, authorized for issuance from 50 million to 150 million shares. Paragraph A. to Article 4 shall hereafter read in its entirety as follows:

“A. The Corporation shall have the authority to issue 150 million shares of Common Stock, $1 par value per share. Each share of Common Stock shall have one vote on each matter submitted to a vote of the shareholders of the Corporation. The holders of shares of Common Stock shall be entitled to receive, in proportion to the number of shares of Common Stock held, the net assets of the Corporation upon dissolution after any preferential amounts required to be paid or distributed to holders of outstanding shares of Preferred Stock, if any, are so paid or distributed.”

        IN WITNESS WHEREOF, Cousins Properties Incorporated has caused this Articles of Amendment to be executed, its corporate seal to be affixed, and its seal and execution thereof to be attested, all by its duly authorized officers this 9th day of August, 1999.

	COUSINS PROPERTIES INCORPORATED
[CORPORATE SEAL]
	By:  /s/ Tom G. Charlesworth                                                      Name: Tom G. Charlesworth                                                  Title: Senior Vice Pres
Attest:
By:   /s/ Jack A. Lahue            Name: Jack A. Lahue       Title: Asst. Secretary

ARTICLES OF AMENDMENT TO

RESTATED ARTICLES OF INCORPORATION

OF

COUSINS PROPERTIES INCORPORATED

        Cousins Properties Incorporated, a corporation organized and existing under the laws of the State of Georgia, hereby certifies as follows:

        1.        The name of the corporation is Cousins Properties Incorporated (the “Corporation”).

        2.        Pursuant to Section 14-2-1007 of the Georgia Business Corporation Code, these Articles of Incorporation amend the Restated Articles of Incorporation of the Corporation (the “Articles of Amendment”). These Articles of Amendment were duly adopted by the shareholders of the Corporation in accordance with the provisions of Section 14-2-1003 of the Georgia Business Corporation Code on April 21, 1998.

        3.        The Restated Articles of Incorporation of the Corporation as heretofore amended or supplemented are hereby further amended by adding the following paragraph F. to Article 11:

“F. Nothing in these Articles of Incorporation shall preclude settlement of any transaction entered into through the facilities of the New York Stock Exchange.”

        IN WITNESS WHEREOF, Cousins Properties Incorporated has caused this Articles of Amendment to be executed, its corporate seal to be affixed, and its seal and execution thereof to be attested, all by its duly authorized officers this 12 day of May, 1998.

	COUSINS PROPERTIES INCORPORATED
[CORPORATE SEAL]
	By:   /s/ Daniel M. DuPree                                            President and Chief Operating Officer
Attest:
By:   /s/ Tom G. Charlesworth           Secretary

ARTICLES OF RESTATEMENT AND AMENDMENT TO

RESTATED ARTICLES OF INCORPORATION

OF

COUSINS PROPERTIES INCORPORATED

        Cousins Properties Incorporated, a corporation organized and existing under the laws of the State of Georgia, hereby certifies as follows:

        1.        The name of the corporation is Cousins Properties Incorporated (the “Corporation”).

        2.        Pursuant to Section 14-2-1007 of the Georgia Business Corporation Code, these Articles of Incorporation restate and amend the Restated Articles of Incorporation of the Corporation (the “Articles of Restatement and Amendment”). These Articles of Restatement and Amendment were duly adopted by the shareholders of the Corporation in accordance with the provisions of Section 14-2-1003 of the Georgia Business Corporation Code on April 29, 1997.

        3.        The Restated Articles of Incorporation of the Corporation as heretofore amended or supplemented are hereby restated and further amended to read in their entirety as follows:

RESTATED AND AMENDED

ARTICLES OF INCORPORATION

OF

COUSINS PROPERTIES INCORPORATED

1.

The name of the Corporation is:
COUSINS PROPERTIES INCORPORATED

2.

        The Corporation shall have perpetual duration.

3.

        The purposes of the Corporation shall be to engage in and carry on the businesses of buying, leasing and otherwise acquiring lands and interests in lands of every kind and description and wheresoever situated; buying, leasing and otherwise acquiring and constructing and erecting, or contracting for the construction and erection of buildings and structures in and on said lands for any uses or purposes; holding, owning, improving, developing, maintaining, operating, letting, leasing, mortgaging, selling or otherwise disposing of such property or any part thereof; equipping, furnishing and operating apartments, apartment houses, hotels, apartment hotels, restaurants, office buildings, shopping centers, warehouses or any other buildings or structures of whatsoever kind; to loan its funds to any person, firm or corporation, either with or without security; and to conduct any other businesses and engage in any other activities not specifically prohibited to corporations for profit under the laws of the State of Georgia, and the Corporation shall have all powers necessary to conduct such businesses and engage in such activities, including, but not limited to, the powers enumerated in the Georgia Business Corporation Code or any amendment thereto.

4.

(A) The Corporation shall have the authority to issue 50 million shares of Common Stock, $1 par value per share. Each share of Common Stock shall have one vote on each matter submitted to a vote of the shareholders of the Corporation. The holders of shares of Common Stock shall be entitled to receive, in proportion to the number of shares of Common Stock held, the net assets of the Corporation upon dissolution after any preferential amounts required to be paid or distributed to holders of outstanding shares of Preferred Stock, if any, are so paid or distributed.

(B) The Corporation shall have the authority to issue 20 million shares of Preferred Stock, $1.00 par value per share. The Preferred Stock may be issued from time to time by the Board of Directors as shares of one or more series. The description of shares of each series of Preferred Stock, including any designations, preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption shall be as set forth in resolutions adopted by the Board of Directors, and articles of amendment shall be filed with the Georgia Secretary of State as required by law to be filed with respect to issuance of such Preferred Stock, prior to the issuance of any shares of such series.

The Board of Directors is expressly authorized, at any time, by adopting resolutions providing for the issuance of, or providing for a change in the number of, shares of any particular series of Preferred Stock and, if and to the extent from time to time required by law, by filing articles of amendment that are effective without shareholder action, to increase or decrease the number of shares included in each series of Preferred Stock, but not below the number of shares then issued, and to set in any one or more respects the designations, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or terms and conditions of redemption relating to the shares of each such series (provided, however, that no such issuance or designation shall result in any holder of shares of Common Stock being in violation of the Limit provided for in Article 11.A.(1) or any Prior Owner being in violation of Article 11.A.(3), as applicable, or otherwise resulting in the Corporation failing to qualify as a REIT). Notwithstanding the foregoing, the Board of Directors shall not be authorized to change the right of holders of Common Stock of the Corporation to vote one vote per share on all matters submitted for shareholder action. The authority of the Board of Directors with respect to each series of Preferred Stock shall include, but not be limited to, setting or changing the following:

(1) the dividend rate, if any, on shares of such series, the times of payment and the date from which dividends shall be accumulated, if dividends are to be cumulative;

(2) whether the shares of such series shall be redeemable and, if so, the redemption price and the terms and conditions of such redemption;

(3) the obligation, if any, of the Corporation to redeem shares of such series pursuant to a sinking fund or otherwise;

(4) whether shares of such series shall be convertible into, or exchangeable for, shares of stock of any other class, classes or series, or any other security, and, if so, the terms and conditions of such conversion or exchange, including the price or prices or the rate or rates of conversion or exchange and the terms of adjustment, if any;

(5) whether the shares of such series shall have voting rights, in addition to the voting rights provided by law, and, if so, the extent of such voting rights;

(6) the rights of the shares of such series in the event of voluntary or involuntary liquidation, dissolution or winding-up of the Corporation;

(7) restrictions on transfer to preserve the status of the Corporation as a REIT; and

(8) any other relative rights, powers, preferences, qualifications, limitations or restrictions thereof relating to such series.

5.

        Shares of stock of the Corporation may be issued by the Corporation for such consideration as shall be fixed from time to time by the Board of Directors.

6.

        No shareholder shall have any preemptive right to subscribe for or to purchase any shares of stock or other securities issued by the Corporation.

7.

        Subject to the provisions of applicable law and the rights of the holders of the outstanding shares of Preferred Stock, if any, the holders of shares of Common Stock shall be entitled to receive, when and as declared by the Board of Directors of the Corporation, out of the assets of the Corporation legally available therefor, dividends or other distributions, whether payable in cash, property or securities of the Corporation.

8.

        The Corporation shall have the full power to purchase and otherwise acquire, and dispose of its own shares and securities granted by the laws of the State of Georgia. Shares of the Corporation’s Common Stock acquired by the Corporation shall be treasury shares and may be resold or otherwise disposed of by the Corporation for such consideration as shall be determined by the Board of Directors, unless or until the Board of Directors shall by resolution provide that any or all treasury shares so acquired shall constitute authorized, but unissued shares.

9.

(C) In addition to any affirmative vote required by law, by any other provision of these Restated and Amended Articles of Incorporation or by the Bylaws of the Corporation,

(1) any merger or consolidation of the Corporation with or into any other corporation;

(2) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets of the Corporation;

(3) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation; or

(4) any reclassification of securities of the Corporation or recapitalization or reorganization of the Corporation; shall require the affirmative vote of the holders of at least two-thirds of the then outstanding shares of Common Stock of the Corporation.

(D) Any amendment of or addition to these Restated and Amended Articles of Incorporation or the Bylaws of the Corporation which would have the effect of amending, altering, changing or repealing this Article shall require the affirmative vote of the holders of at least two-thirds of the then outstanding shares of Common Stock of the Corporation.

10.

        No Director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of duty of care or other duty as a Director, except for liability (i) for any appropriation, in violation of his duties, of any business opportunity of the Corporation, (ii) for acts or omissions which involve intentional misconduct or a knowing violation of law, (iii) for the types of liabilities set forth in Section 14-2-832 of the Georgia Business Corporation Code, or (iv) for any transaction from which the Director derived an improper personal benefit. If the Georgia Business Corporation Code is amended to authorize corporate action further eliminating or limiting the personal liability of Directors, then the liability of a Director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Georgia Business Corporation Code, as amended. Neither the amendment nor repeal of this Article 10 nor the adoption of any provision of these Restated and Amended Articles of Incorporation inconsistent with this Article shall eliminate or adversely affect any right or protection of a Director of the Corporation existing immediately prior to such amendment, repeal or adoption.

11.

(E) So long as the Corporation desires to qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), and subject to the terms and provisions of this Article,

(1) After December 31, 1986, shares of stock of the Corporation shall not be transferable to any Person (as defined in C., below) if such transfer would cause such person to be the Owner (as defined in C., below) of more than 3.9% in value of the outstanding shares, which shall include both Common Stock and Preferred Stock, of the Corporation (the “Limit”). After December 31, 1986, any transfer of shares either (a) on the books of the Corporation or (b) between stockholders or (c) among accounts of a record stockholder (each of (a) (b) and (c) is referred to as a “Record Transfer”) which would cause an accumulation of shares by any Person in excess of the Limit and therefore violate the prohibition of this A.(1), shall be void, and the intended beneficial transferee (the “Record Transferee”) of such shares shall acquire no rights in such shares.

(2) Except for Persons who were Owners of shares in excess of the Limit as of the close of business on December 31, 1986 (“Prior Owners”), no Person shall at any time be the Owner of shares in excess of the Limit. The Board of Directors, in the exercise of its sole and absolute discretion, may exempt from the operation of A.(1) and A.(2) certain specified shares of stock of the Corporation proposed to be transferred to a Person who has provided the Board of Directors with such evidence, undertakings and assurances as the Board of Directors may require that such transfer to such Person of the specified shares of stock will not prevent the continued qualification of the Corporation as a REIT under the Code and the regulations thereunder. The Board of Directors may, but shall not be required to, condition the grant of any such exemption upon the obtaining of an opinion of counsel, a ruling from the Internal Revenue Service, assurances from one or more third parties as to future acquisitions of shares, or such other assurances as the Board of Directors may deem to be satisfactory.

(3) After the close of business on December 31, 1986, no Prior Owner shall at any time become the Owner of any shares not Owned as of the close of business on December 31, 1986, except for shares received pursuant to pro rata stock splits, stock dividends or similar transactions, shares acquired pursuant to stock plans approved by the shareholders of the Corporation and shares acquired from a Person whose shares are attributed to such Prior Owner for purposes of determining whether the Corporation satisfies the requirement imposed on REITs under Section 856(a)(6) of the Code; provided, however, that a Prior Owner may become the Owner of shares not Owned as of the close of business on December 31, 1986 and not acquired in accordance with the first clause of this sentence (collectively, “Additional Shares”) if immediately after the transaction in which such Prior Owner becomes the Owner of such Additional Shares, such Prior Owner will not Own a percentage of the value of the outstanding shares, which shall include both Common Stock and Preferred Stock, of the Corporation greater than the percentage of the value of the outstanding shares of the Corporation Owned by such Prior Owner as of the close of business on December 31, 1986, excluding, for the purpose of calculating such Prior Owner’s Ownership percentage after such transaction, shares acquired by such Prior Owner since December 31, 1986 in transactions permitted under the first clause of this sentence. Any Record Transfer which would result in a transfer of shares to a Prior Owner after December 31, 1986, in violation of this A.(3), shall be void, and the Record Transferee shall acquire no rights in such shares.

(4) If, notwithstanding the provisions hereof at any time after December 31, 1986, there is a Record Transfer in violation of the provisions hereof to a Person which, absent the prohibitions in A.(1), would have become an Owner of shares of the Corporation in excess of the Limit, or there is a Record Transfer in violation of the provisions hereof to a Prior Owner after December 31, 1986, which, absent the prohibitions of A.(3), would have resulted in a Prior Owner becoming the Owner of shares not Owned as of the close of business on December 31, 1986, those shares of the Corporation which are a part of the most recent Record Transfer and which are in excess of the Limit or are to or for the benefit of a Prior Owner after December 31, 1986, as the case may be, including for this purpose shares deemed Owned through attribution, shall constitute “Excess Shares.”

(5) Excess Shares shall have the following characteristics:

(a) Excess Shares shall be deemed to have been transferred to the Corporation as trustee (the “Trustee”) of a trust (the “Trust”) for the exclusive benefit of such Person or Persons to whom the Excess Shares shall later be transferred pursuant to (b) or (e) below;

(b) Subject to the Corporation’s rights described in (e) below, an interest in the Trust (representing the number of Excess Shares held by the Trust attributable to the Record Transferee as a result of the Record Transfer that is void under A.(1) or A.(3) shall be freely transferable by the Record Transferee (i) at a price which does not exceed the price paid by the Record Transferee for the Excess Shares in connection with the Record Transfer, or (ii) if the shares become Excess Shares in a transaction otherwise than for value (e.g. by gift, devise or descent) at a price which does not exceed the Market Price on the date of the Record Transfer (in either case, the “Record Transfer Price”), provided, however, that the Excess Shares held in the Trust attributable to the Record Transferee would not constitute Excess Shares in the hands of the transferee of the interest in the Trust. Upon such transfer, the Excess Shares attributable to the Record Transferee shall be removed from the Trust and transferred to the transferee of the interest in the Trust and shall no longer be Excess Shares, and the Record Transferee’s interest in the Trust shall be extinguished;

(c) Excess Shares shall not have any voting rights, and shall not be considered for the purpose of any stockholder vote or determining a quorum at the annual meeting or any special meeting of stockholders, but shall continue to be reflected as issued and outstanding stock of the Corporation;

(d) No dividends or other distributions shall be paid with respect to Excess Shares; any dividends paid in error to a Record Transferee prior to the discovery by the Corporation that the Record Transfer is void under A.(1) or A.(3) will be payable back to the Corporation upon demand; and

(e) Excess Shares shall be deemed to have been offered for sale to the Corporation or its designee at the lesser of the Record Transfer Price or the Market Price on the date of acceptance of the offer. The Corporation shall have the right to accept such offer for a period of ninety (90) days from (i) the date of the Record Transfer which, absent the provisions of A.(1) or A.(3), would have made the Record Transferee the holder of Excess Shares, if the Corporation has been given notice pursuant to B.(2) that such Record Transfer creates Excess Shares as of the date of such Record Transfer or (ii) the date the Board of Directors determines in good faith that a Record Transfer which, absent the provisions of A.(1) or A.(3 ), would have made the Record Transferee the holder of Excess Shares has taken place, if the Corporation does not receive such notice pursuant to B.(2). Prior to any transfer of an interest in the Trust pursuant to A.(5)(b), notice of the transfer must be given to the Corporation by the Record Transferee, and the Corporation must (i) waive in writing its right to accept the offer described in this A.(5)(e) and (ii) make a good faith determination that the Excess Shares held in the Trust attributable to the Record Transferee would not constitute Excess Shares in the hands of the transferee of the interest in the Trust.

(6) If, notwithstanding the provisions of A.(1) and A.(3), (i) any Person acquires shares in excess of the Limit or (ii) any Prior Owner acquires additional shares after December 31, 1986, in violation of the provisions hereof, and the Corporation would have qualified as a REIT but for the fact that more than 50% in value of its shares are held by five or fewer individuals in the last half of the taxable year in violation of the requirements of the Code, then that Person, and any legal entities which constitute that Person, shall be jointly and severally liable for and shall pay to the Corporation, on an after-tax basis, an amount equal to all taxes, penalties and interest imposed, and all costs (plus interest of 15% per annum from the date such costs are incurred) incurred by the Corporation, as a result of the Corporation losing its REIT qualification (the “Indemnity”). For purposes of the preceding sentence, the amount of taxes shall include the taxes that would be payable if the Corporation, immediately after losing its REIT qualification, sold all of its properties for cash at their fair market value (“Built-In Gain Tax”), regardless of whether the Corporation actually engages in any such sales. Should the loss of REIT qualification occur as described above, then the Corporation may seek to have its qualification restored for the next taxable year, but shall not be required to do so. If the Corporation is unable to requalify for the succeeding year as a result of the prohibited share acquisitions, the Indemnity shall be applicable until the Corporation is again able to elect to be taxed as a REIT. Even if the Corporation is again able to elect to be taxed as a REIT, however, the Indemnity shall nevertheless include the full amount of the Built-In Gain Tax, even if the Corporation is allowed to pay any such taxes at the time any properties are sold during the ten-year period following the Corporation’s requalification as a REIT. If more than one Person has acquired shares in excess of the Limit or is a Prior Owner who has improperly acquired additional shares after December 31,1986, prior to or at the time of the loss of REIT qualification, then all such Persons and Prior Owners, together with all legal entities which constitute any of them, shall be jointly and severally liable, with right of contribution, for the Indemnity. However, the foregoing sentence shall not require that the Corporation proceed against any one or several of such Persons or Prior Owners or the legal entities which constitute them.

(7) All certificates evidencing ownership of shares of the Corporation shall bear a conspicuous legend describing the restrictions set forth in this Article. Stickers bearing such legend will be distributed to record holders of shares of the Corporation’s Common Stock within 30 days after the effective date of this Article 11. Such stickers shall be affixed by the holders to the certificates evidencing ownership of their shares.

B.     (1) If the Board of Directors or its designees shall at any time determine in good faith that a Record Transfer has taken place in violation of A.(1) or A.(3) or that a Person intends to acquire or has attempted to acquire Ownership of any shares of the Corporation in violation of A.(1) or A.(3), the Board of Directors or its designees shall take such action as it deems advisable to refuse to give effect or to prevent such transfer or acquisition, including but not limited to refusing to give effect to such transfer or acquisition on the books of the Corporation or instituting proceedings to enjoin such transfer or acquisition.

(2) Any Person who acquires or attempts to acquire shares in violation of A.(1) or A.(3), or who becomes the Record Transferee of shares which, under A.(4), become Excess Shares in the hands of that Person, is obliged immediately to give written notice thereof to the Corporation and to give to the Corporation such other information as the Corporation may reasonably require of such Person (a) with respect to the Ownership of outstanding shares held directly or by attribution by such Person, and (b) such other information as may be necessary to determine the Corporation’s status under the Code.

(3) The Corporation has the right to request information similar to that described in (2) immediately above if it determines, in good faith, that a Person is attempting to acquire shares in violation of A.(1) and A.(3) or that a Record Transfer has been made which has resulted in Excess Shares.

C. For the purpose of the determination to be made under this Article,

(1) A Person shall be considered to “Own”, be the “Owner” or have “Ownership” of shares if he is treated as owner of such shares for purposes of determining whether the Corporation satisfies the requirements imposed on REITs under Section 856(a)(6) of the Code.

(2) “Person” includes an individual, corporation, partnership, estate, trust (including a trust qualified under Section 401(a) or 501 (c)(17) of the Code), association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity and also includes a group as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, but does not include an underwriter which participates in a public offering of the Corporation’s common stock for a period of seven days following the purchase by such underwriter of the Corporation’s common stock. “Person” does not include an organization that qualifies under Section 501(c)(3) of the Code that is not a private foundation within the meaning of Section 509(a) of the Code.

(3) “Market Price” for Excess Shares shall be the average of the high and low prices as reported on the New York Stock Exchange composite tape if the shares are listed or admitted for trading on the New York Stock Exchange, or as reported by The Nasdaq Stock Market if the shares are designated as national market system securities and are not listed or admitted for trading on the New York Stock Exchange, for the trading day immediately preceding the relevant date.

(4) In the case of an ambiguity in the application of any of the provisions of (1) and (2) above, the Board of Directors or a committee thereof shall have the power to determine for purposes of this Article on the basis of information known to it (i) whether any Person Owns shares, (ii) whether any two or more individuals, corporations, partnerships, estates, trusts, associations or joint stock companies or other entities constitute a Person, and (iii) whether any of the entities of (ii) above constitute a group.

D. If any provision of this Article or any application of any such provision is determined to be invalid by any Federal or state court having jurisdiction over the issues, the validity of the remaining provisions shall not be affected and other applications of such provision shall be affected only to the extent necessary to comply with the determination of such court.

E. Nothing contained in this Article shall limit the authority of the Board of Directors to take such other action as it deems necessary or advisable to protect the Corporation and the interests of its stockholders by preservation of the Corporation’s status as a REIT under the Code.

        IN WITNESS WHEREOF, Cousins Properties Incorporated has caused these Restated and Amended Articles of Incorporation to be executed, its corporate seal to be affixed, and its seal and execution thereof to be attested, all by its duly authorized officers this 5th day of May, 1997.

	COUSINS PROPERTIES INCORPORATED
[CORPORATE SEAL]
	By:  /s/ Daniel M. DuPree                                                 President
Attest
By:   /s/ Tom G. Charlesworth          Secretary

EX-31

Exhibit 31.1

CERTIFICATION

I, Thomas D. Bell, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cousins Properties Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have:

a)         Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)         Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c)         Disclosed in this report any changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)         All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)         Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 11, 2003

   /s/ Thomas D. Bell, Jr.              
Thomas D. Bell, Jr.
President, Chief Executive Officer
      and Vice Chairman of the Board

EX-31

Exhibit 31.2

CERTIFICATION

I, Tom G. Charlesworth, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cousins Properties Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have:

a)         Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)         Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c)         Disclosed in this report any changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)         All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)         Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 11, 2003

   /s/ Tom G. Charlesworth          
Tom G. Charlesworth
Executive Vice President, Chief Financial Officer
      and Chief Investment Officer

EX-32

Exhibit 32.1

        CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

               Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with the Quarterly Report on Form 10-Q of Cousins Properties Incorporated (the “Corporation”) for the quarterly period ended June 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the President and Chief Executive Officer of the Corporation and the Vice Chairman of the Board, certifies that to his knowledge:

              (1)        The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

              (2)        The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ Thomas D. Bell, Jr.       
Thomas D. Bell, Jr.
President, Chief Executive Officer
    and Vice Chairman of the Board

August 11, 2003

               A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Cousins Properties Incorporated and will be retained by Cousins Properties Incorporated and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32

Exhibit 32.2

        CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

               Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with the Quarterly Report on Form 10-Q of Cousins Properties Incorporated (the “Corporation”) for the quarterly period ended June 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the Executive Vice President, Chief Financial Officer and Chief Investment Officer of the Corporation, certifies that to his knowledge:

               (1)        The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

               (2)        The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ Tom G. Charlesworth          
Tom G. Charlesworth
Executive Vice President, Chief Financial Officer
    and Vice Chairman of the Board

August 11, 2003

               A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Cousins Properties Incorporated and will be retained by Cousins Properties Incorporated and furnished to the Securities and Exchange Commission or its staff upon request.