-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, TSExmNY8bwPVvdiY652RCu/anDQPnNxGY5rly5cWmoqOAQbzkE/AYXOPcXQibGKG V4DLDzfY9VfP7DfjmP6LEw== 0000025232-95-000016.txt : 19950511 0000025232-95-000016.hdr.sgml : 19950511 ACCESSION NUMBER: 0000025232-95-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950510 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COUSINS PROPERTIES INC CENTRAL INDEX KEY: 0000025232 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 580869052 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-03576 FILM NUMBER: 95536115 BUSINESS ADDRESS: STREET 1: 2500 WINDY RIDGE PKWY STE 1600 CITY: MARIETTA STATE: GA ZIP: 30067 BUSINESS PHONE: 4049552200 MAIL ADDRESS: STREET 1: 2500 WINDY RIDGE PARKWAY STREET 2: SUITE 1600 CITY: ATLANTA STATE: GA ZIP: 30339-5683 10-Q 1 SECURITIES AND EXCHANGE COMMISSION FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended March 31, 1995 Commission file number 0-3576 COUSINS PROPERTIES INCORPORATED A GEORGIA CORPORATION I.R.S. EMPLOYER IDENTIFICATION NO. 58-0869052 2500 WINDY RIDGE PARKWAY ATLANTA, GEORGIA 30339-5683 TELEPHONE: 404-955-2200 Registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and has been subject to such filing requirements for the past 90 days. At April 30, 1995, 27,881,070 shares of common stock of the Registrant were outstanding. COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES CONSOLIDATED BALANCE SHEETS ($ in thousands, except per share amounts) DECEMBER 31, MARCH 31, 1994 1995 ------------ --------- (Unaudited) ASSETS PROPERTIES: Operating properties $104,576 $105,008 Land held for investment or future development 27,353 28,828 Projects under construction 8,711 26,824 Residential lots under development 8,602 11,550 Less: accumulated depreciation (12,112) (13,061) ------- ------- Total properties 137,130 159,149 CASH AND CASH EQUIVALENTS, at cost which approximates market 3,407 152 NOTES AND OTHER RECEIVABLES 52,571 51,823 INVESTMENT IN UNCONSOLIDATED JOINT VENTURES 130,838 136,589 OTHER ASSETS 6,871 5,912 -------- -------- TOTAL ASSETS $330,817 $353,625 ======== ======== LIABILITIES AND STOCKHOLDERS' INVESTMENT NOTES PAYABLE $ 41,799 $ 65,923 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 11,144 10,255 MINORITY INTERESTS IN CONSOLIDATED ENTITIES 3,631 3,690 DEPOSITS AND DEFERRED INCOME 1,345 1,426 -------- -------- TOTAL LIABILITIES 57,919 81,294 -------- -------- STOCKHOLDERS' INVESTMENT Common stock, $1 par value, authorized 50,000,000 shares; issued 27,863,741 shares at December 31, 1994 and 27,881,070 shares at March 31, 1995 27,864 27,881 Additional paid-in capital 147,495 147,729 Cumulative undistributed net income 97,539 96,721 -------- -------- TOTAL STOCKHOLDERS' INVESTMENT 272,898 272,331 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $330,817 $353,625 ======== ========
The accompanying notes are an integral part of these consolidated balance sheets. COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1995 (UNAUDITED) ($ in thousands, except per share amounts)
1994 1995 ------ ------ REVENUES: Rental revenues $2,543 $4,434 Development and construction fees 207 295 Management fees 508 541 Leasing and other fees 514 714 Residential lot and outparcel sales - 838 Interest and other 1,735 1,178 ------ ------ 5,507 8,000 INCOME FROM UNCONSOLIDATED JOINT VENTURES 3,241 3,374 COSTS AND EXPENSES: Rental property operating expenses 741 1,075 General and administrative expenses 2,113 1,982 Depreciation and amortization 813 1,096 Leasing and other commissions 13 - Stock appreciation right expense (credit) 107 (198) Residential lot and outparcel cost of sales - 800 Interest expense 14 163 Property taxes on undeveloped land 148 227 Other 50 173 ------ ------ 3,999 5,318 ------ ------ INCOME FROM OPERATIONS BEFORE INCOME TAXES AND GAIN ON SALE OF INVESTMENT PROPERTIES 4,749 6,056 PROVISION (BENEFIT) FOR INCOME TAXES FROM OPERATIONS (49) 183 ------ ------ INCOME BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES 4,798 5,873 GAIN ON SALE OF INVESTMENT PROPERTIES, NET OF APPLICABLE INCOME TAX PROVISION - - ------ ------ NET INCOME $4,798 $5,873 ====== ====== INCOME PER SHARE: From operations before gain on sale of investment properties $ .17 $ .21 From gain on sale of investment properties, net of applicable income tax provision - - ------ ------ NET INCOME PER SHARE $ .17 $ .21 ====== ====== CASH DIVIDENDS DECLARED PER SHARE $ .22 $ .24 ====== ======
The accompanying notes are an integral part of these consolidated statements. COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1995 (UNAUDITED) ($ in thousands)
1994 1995 ------- ------- CASH FLOWS FROM OPERATING ACTIVITIES: Income from operations before gain on sale of investment properties $ 4,798 $ 5,873 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization, net of minority interests' share 813 1,055 Stock appreciation right expense (credit) 107 (198) Cash charges to expense accrual for stock appreciation rights (40) (21) Rental revenue recognized on straight-line basis in excess of rental revenue specified in lease agreements (61) (33) Deferred income received 222 258 Deferred income recognized (63) (196) Income from unconsolidated joint ventures (3,241) (3,374) Operating distributions from unconsolidated joint ventures 3,776 3,380 Residential lot and outparcel cost of sales - 765 Changes in other operating assets and liabilities: Change in other receivables (240) 674 Change in accounts payable and accrued liabilities (1,296) 1,306 ------- ------- Net cash provided by operating activities 4,775 9,489 ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Investment in unconsolidated joint ventures (659) (5,756) Non-operating distributions from unconsolidated joint ventures 586 - Property acquisition and development expenditures (8,307) (25,509) Principal payments received on government agency securities 290 15 Investment in notes receivable (28,031) - Collection of notes receivable 4,782 91 Change in other assets, net (176) 810 ------- ------- Net cash used in investing activities (31,515) (30,349) ------ ------- CASH FLOWS FROM FINANCING ACTIVITIES: Dividends paid (6,125) (6,691) Proceeds from lines of credit 2,700 24,682 Repayment of line of credit (848) (513) Common stock issued pursuant to stock option plan 56 172 Proceeds from other notes payable 16 - Repayment of other notes payable (13) (45) ------- ------- Net cash (used in) provided by financing activities (4,214) 17,605 ------- ------- NET DECREASE IN CASH AND CASH EQUIVALENTS (30,954) (3,255) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 31,684 3,407 ------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 730 $ 152 ======= =======
The accompanying notes are an integral part of these consolidated statements. COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1995 (UNAUDITED) 1. BASIS OF PRESENTATION The Consolidated Financial Statements include the accounts of Cousins Properties Incorporated ("Cousins") and its majority owned partnerships, as well as Cousins Real Estate Corporation ("CREC") 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 are taxed separately from Cousins as a regular corporation. Accordingly, the Consolidated Statements of Income include a provision (benefit) for CREC's income taxes. The Consolidated Financial Statements were prepared by the Company without audit, but in the opinion of management reflect all adjustments necessary for the fair presentation of the Company's financial position as of March 31, 1995, and results of operations for the three month periods ended March 31, 1994 and 1995. Results of operations for the interim 1995 period 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 generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, the Company believes that the disclosures herein are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1994. The accounting policies employed are the same as those shown in Note 1 to the Consolidated Financial Statements on Form 10-K. 2. SUPPLEMENTAL INFORMATION CONCERNING CASH FLOWS Interest (net of $340,000 and $724,000 capitalized in 1994 and 1995, respectively) and income taxes paid were as follows for the three months ended March 31, 1994 and 1995 ($ in thousands):
1994 1995 ---- ---- Interest paid $ - $183 Income taxes paid $ 6 $ -
3. COSTS CAPITALIZED AND FEES ELIMINATED IN CONSOLIDATION Development, construction, and leasing fees received by CREC and its subsidiaries from Cousins and Cousins' majority owned joint ventures are eliminated in consolidation. Costs related to planning, development, leasing and construction of properties (including related general and administrative expenses) are capitalized. The table below shows the fees eliminated, the internal costs capitalized related to these fees, and the additional internal costs capitalized by CREC to its own residential developments for the three months ended March 31, 1994 and 1995 ($ in thousands):
1994 1995 ----- ------ Fees eliminated in consolidation $ 583 $1,020 Internal costs capitalized to projects on which fees were eliminated 263 646 Internal costs capitalized to CREC residential developments 35 101
4. DEVELOPMENT ACTIVITIES COLONIAL PLAZA In February 1995, the Company purchased Colonial Plaza Mall, a regional mall located on 49 acres of land in suburban north central Orlando, Florida for $10 million. The Company has commenced the demolition of this mall and begun construction of Colonial Plaza, a 543,000 square foot retail power center. MANSELL CROSSING-PHASE II In February 1995, North Point Market Associates, L.P. ("NPMA") pursuant to a tax-free exchange, swapped the proceeds which had been escrowed from a September 1994 land sale ($3.0 million) into the purchase of the land for Mansell Crossing-Phase II. The purchase price of this 13 acre site was $3.3 million. Mansell Crossing-Phase II is a 100,000 square foot retail power center expansion adjacent to the Company's other North Point properties. 5. NOTES PAYABLE AND INTEREST EXPENSE At December 31, 1994 and March 31, 1995, the composition of notes payable were as follows ($ in thousands):
December 31, 1994 March 31, 1995 ------------------------------------ ------------------------------------ Share of Share of Consolidated Unconsolidated Consolidated Unconsolidated Entities Joint Ventures Total Entities Joint Ventures Total ------------ -------------- -------- ------------ -------------- -------- Fixed Rate Mortgages (non-recourse) $ 1,168 $72,650 $ 73,818 $ 1,123 $72,427 $ 73,550 Floating Rate Lines of Credit 40,631 6,905 47,536 64,800 6,455 71,255 ------- ------- -------- ------- ------- -------- -------- $41,799 $79,555 $121,354 $ 65,923 $78,882 $144,805 ======= ======= ======== ======= ======= ========
During the first quarter of 1995, interest related to approximately $54 million of floating rate debt was capitalized to projects under construction. For the three months ended March 31, 1995, interest expense was recorded as follows ($ in thousands):
Share of Consolidated Unconsolidated Entities Joint Ventures Total ------------ -------------- ----- Interest Expensed $163 $1,731 $1,894 Interest Capitalized 724 - 724 ---- ------ ------ $887 $1,731 $2,618 ==== ====== ======
PART I. FINANCIAL INFORMATION Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations for the Three Months Ended March 31, 1994 and 1995. RESULTS OF OPERATIONS: RENTAL PROPERTY REVENUES AND OPERATING EXPENSES. Rental property revenues were approximately $1,891,000 higher in 1995. The increase was primarily due to rental property revenues from two retail power centers, North Point Market-Phase I ($974,000) and Presidential Market-Phase I ($383,000) which became operational in May 1994 and December 1994, respectively. Perimeter Expo, which was still in the lease-up phase during the first quarter of 1994, also contributed to the increase ($238,000). In addition, $89,000 of the increase was due to revenue from 13 acres of the Georgia Highway 400 land being ground leased to free standing users. During the first quarter of 1994, revenue was being recognized from only 7 acres of the Georgia 400 land. Rental property revenues were also favorably impacted ($91,000 increase) from the lease-up of the First Union Tower. Rental property operating expenses increased $334,000, which increase is primarily related to the occupancy of the three retail power centers in 1994. LEASING AND OTHER FEES. Leasing and other fees were approximately $200,000 higher in 1995 due primarily to leasing fee income received from the leasing of the NationsBank Plaza. RESIDENTIAL LOT AND OUTPARCEL SALES AND COST OF SALES. Residential lot and outparcel sales in 1995 include approximately $313,000 of sales of residential lots by CREC and approximately $525,000 from the sale of an outparcel site in Presidential Market-Phase I by a subsidiary of CREC. The related cost of sales were $305,000 and $495,000, respectively. No similar sales occurred in the first quarter of 1994. INTEREST AND OTHER REVENUE. Interest and other revenue was approximately $557,000 lower in 1995. The decrease was primarily due to repayment of $39.9 million of 9.1% mortgage notes upon their maturity in June 1994 ($896,000 decrease). Additionally, interest income decreased due to lower cash balances in 1995 ($151,000 decrease). These two decreases were partially offset by interest income recognized on the 650 Massachusetts Avenue mortgage notes acquired in March 1994 ($533,000 increase). INCOME FROM UNCONSOLIDATED JOINT VENTURES. (All amounts reflect the Company's share of joint venture income.) Income from unconsolidated joint ventures increased approximately $133,000 in 1995. Income from Haywood Mall Associates increased $238,000 in 1995 due to the venture's prepayment of its outstanding debt through equity contributions of $10 million from each partner on April 29, 1994. Income from CSC Associates, L.P. increased $114,000 as leases at NationsBank Plaza executed in 1994 impacted operating results in 1995. Income from unconsolidated joint ventures in 1994 was favorably impacted by $238,000 from outparcel and other land sales at several of the Company's other joint ventures. There were no similar sales in 1995. GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses decreased approximately $131,000 in 1995. This decrease was primarily due to an increase in costs capitalized to projects under development ($747,000 in 1995 versus $299,000 in 1994). The decrease was partially offset by increases related to personnel increases due to the Company's continued expansion. DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased approximately $283,000 in 1995. This increase is due primarily to three retail power centers, Perimeter Expo, North Point Market-Phase I and Presidential Market-Phase I, becoming operational in December 1993, May 1994 and December 1994, respectively ($361,000 increase). STOCK APPRECIATION RIGHT EXPENSE. This non-cash item is primarily related to the Company's stock price, which was $16.50 and $16.75 at December 31, 1993 and March 31, 1994, respectively; and $17.375 and $16.625 at December 31, 1994 and March 31, 1995, respectively. INTEREST EXPENSE. Interest expense increased approximately $149,000 in 1995. In 1995, interest expense before capitalization increased to $887,000 due to higher debt levels, but the increase was partially offset by increased capitalization because of a higher level of projects under development. INCOME TAXES. The provision (benefit) for income taxes from operations increased approximately $232,000 from a benefit of $49,000 to a provision of $183,000. The increase in the provision for income taxes from operations is due primarily to an increase in CREC and its subsidiaries' net income before income taxes from a net loss of $145,000 in 1994 to net income of $444,000 in 1995. The increase in CREC and its subsidiaries' net income before income taxes was due to an increase in intercompany development and leasing fees recognized, and decreased intangible amortization. Intercompany fee income is eliminated in consolidation, but the tax effect is not. FINANCIAL CONDITION: Major investment activity during the first quarter of 1995 included $25.5 million of property acquisition and development investments, primarily in projects under construction (See Note 4 of "Notes to Consolidated Financial Statements"). The Company also made $5.8 million of contributions during the first quarter of 1995 to certain of its joint ventures including $3.6 million to Haywood Mall Associates to fund the expansion of the mall and $2.0 million to CC-JM II Associates (see Note 5 of "Notes to Consolidated Financial Statements" in the Company's annual report on Form 10-K for the year ended December 31, 1994).The source of cash for these investments was primarily the Company's line of credit. The Company has development projects in various stages. The Company currently intends to finance these projects, as well as the completion of projects currently under construction, using its existing lines of credit and increasing those lines of credit as required. Additionally, the Company is in the process of arranging approximately $50 million of fixed rate non-recourse financing secured by its North Point Market and Perimeter Expo retail power center projects. SUPPLEMENTAL FINANCIAL INFORMATION: Depreciation and amortization expense include the following components for the three months ended March 31, 1995 ($ in thousands):
Share of Consolidated Unconsolidated Entities Joint Ventures Total ------------ -------------- ------ General and administrative $ 105 $ 39 $ 144 Deferred financing costs - 20 20 Goodwill and related business acquisition costs 57 8 65 Real estate related: Building (including tenant first generation) 897 1,958 2,855 Tenant second generation 37 131 168 ------ ------ ------ $1,096 $2,156 $3,252 ====== ====== ======
Exclusive of new developments, the Company had the following capital expenditures during the three months ended March 31, 1995, including its share of unconsolidated joint ventures ($ in thousands):
Office Retail Other Total ------ ------ ----- ----- Second generation related costs $57 $ - $ - $ 57 Building improvements - - - - Furniture, fixtures and equipment 11 - 61 72 --- --- --- ---- $68 $ - $61 $129 === === === ====
PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders (a) The Company's Annual Meeting of Stockholders was held on April 28, 1995. (b) Not applicable. (c) The following proposals were adopted by the stockholders of the Company: (i) A proposal to amend the 1987 Restricted Stock Option Plan so as to allow the outside Directors to elect to receive all or part of their compensation in the form of shares of stock of the Company. The vote on the above proposal was: For 20,368,116 Against 624,554 Abstained 416,666 (ii) The election of six Directors. The vote on the above was:
For Against Abstained ---------- ------- --------- Bennett A. Brown 21,398,252 - 11,084 Richard W. Courts, II 21,398,252 - 11,084 Thomas G. Cousins 21,397,982 - 11,354 Henry C. Goodrich 21,396,638 - 12,698 Boone A. Knox 21,398,152 - 11,184 Richard E. Salomon 21,398,252 - 11,084
(iii) The appointment of Arthur Andersen LLP as the Company's independent auditors for the year ending December 31, 1995. The vote on the above was: For 21,348,460 Against 34,460 Abstained 26,416 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 27 Financial Data Schedule (b) There were no reports on Form 8-K filed by the Registrant during the fiscal quarter ended March 31, 1995. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. COUSINS PROPERTIES INCORPORATED Registrant /s/ Peter A. Tartikoff ---------------------------------------------- Peter A. Tartikoff Senior Vice President - Finance (Authorized Officer) (Principal Financial Officer) May 10, 1995 EX-27 2
5 3-MOS DEC-31-1995 MAR-31-1995 152 0 51,823 0 0 0 172,210 13,061 353,625 0 20,145 27,881 0 0 244,450 353,625 0 8,000 0 5,318 0 0 163 6,056 183 5,873 0 0 0 5,873 .21 .21
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