TRANSACTIONS WITH PARKWAY PROPERTIES, INC.

On October 6, 2016, Parkway Properties, Inc. ("Parkway") merged with and into a wholly-owned subsidiary of the Company (the "Merger"), with this subsidiary continuing as the surviving corporation of the Merger. The Company incurred $188,000, $1.7 million, and $24.5 million in expenses related to the Merger during the years ended December 31, 2018, 2017, and 2016, respectively. The Merger accounted for $68.7 million of consolidated revenue and $9.0 million in consolidated net income as reported for 2016.

On October 7, 2016, Cousins distributed pro rata to its common and limited voting preferred stockholders, including legacy Parkway common and limited voting stockholders, all of the outstanding shares of common and limited voting stock, respectively, of Parkway, Inc. ("New Parkway"), a newly-formed entity that included the combined businesses relating to the ownership of real properties in Houston, Texas and certain other businesses of Parkway (the "Spin-Off"). New Parkway became an independent public company.

The following unaudited supplemental pro forma information presented for the year ended December 31, 2016, is based upon the Company's historical consolidated statements of operations, adjusted as if the Merger had occurred on January 1, 2015. This supplemental pro forma information is not necessarily indicative of future results, or of actual results, that would have been achieved had the transactions been consummated at the beginning of the period (unaudited, in thousands, except per share amounts).



Revenues	$	732,117
Income from continuing operations	179,625
Net income	174,117
Net income available to common stockholders	166,375
Per share information:
Basic	$	0.42
Diluted	$	0.41

As a result of the Spin-Off, the historical results of operations of the Company's properties that were contributed to New Parkway have been presented as discontinued operations in the consolidated statements of operations and comprehensive income. The above pro forma information is presented prior to the discontinued operations reclassification. Discontinued operations include transaction costs of $6.3 million incurred in 2016 as a result of the Spin-Off. The following table includes a summary of discontinued operations of the Company for the year ended December 31, 2016 (in thousands).



Rental property revenues	$	136,927
Rental property operating expenses	(58,336		)
Other revenues	288
Interest expense	(6,022		)
Depreciation and amortization	(47,345		)
Other expenses	(6,349		)
Income from discontinued operations	$	19,163

Cash provided by operating activities	$	42,604
Cash used in investing activities	$	30,067