-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OfOEXSn9qSX+zqHuuI5R3OPSHwMN/4k4Gn3noXtMf1VWWOWuhU38I26rkieGCf3F NN60UDfbJK372+LiaE6hig== 0000025232-98-000018.txt : 19980515 0000025232-98-000018.hdr.sgml : 19980515 ACCESSION NUMBER: 0000025232-98-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980514 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: SEC FILE NUMBER: 000-03576 FILM NUMBER: 98619149 BUSINESS ADDRESS: STREET 1: 2500 WINDY RIDGE PKWY STE 1600 CITY: ATLANTA STATE: GA ZIP: 30339-5683 BUSINESS PHONE: 7709552200 MAIL ADDRESS: STREET 1: 2500 WINDY RIDGE PARKWAY STREET 2: SUITE 1600 CITY: ATLANTA STATE: GA ZIP: 30339-5683 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended March 31, 1998 Commission file number 0-3576 COUSINS PROPERTIES INCORPORATED A GEORGIA CORPORATION I.R.S. EMPLOYER IDENTIFICATION NO. 58-0869052 2500 WINDY RIDGE PARKWAY ATLANTA, GEORGIA 30339-5683 TELEPHONE: 770-955-2200 Registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and has been subject to such filing requirements for the past 90 days. At April 30, 1998, 31,529,344 shares of common stock of the Registrant were outstanding.
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES CONSOLIDATED BALANCE SHEETS ($ in thousands, except per share amounts) March 31, December 31, 1998 1997 --------- ------------ (Unaudited) ASSETS - ------ Operating properties, net of accumulated depreciation of $36,826 as of March 31, 1998 and $33,369 as of December 31, 1997 $332,608 $318,901 Land held for investment or future development 16,206 27,948 Projects under construction 84,235 54,778 Residential lots under development 12,457 14,942 -------- -------- Total properties 445,506 416,569 CASH AND CASH EQUIVALENTS, at cost which approximates market 2,121 32,694 NOTES AND OTHER RECEIVABLES 38,882 38,464 INVESTMENT IN UNCONSOLIDATED JOINT VENTURES 125,609 120,198 OTHER ASSETS 9,857 9,814 -------- -------- TOTAL ASSETS $621,975 $617,739 ======== ======== LIABILITIES AND STOCKHOLDERS' INVESTMENT - ---------------------------------------- NOTES PAYABLE $230,186 $226,348 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 19,223 20,332 DEPOSITS AND DEFERRED INCOME 389 385 -------- -------- TOTAL LIABILITIES 249,798 247,065 -------- -------- COMMITMENTS AND CONTINGENT LIABILITIES STOCKHOLDERS' INVESTMENT: Common stock, $1 par value, authorized 50,000,000 shares; issued 31,528,348 shares at March 31, 1998 and 31,472,178 shares at December 31, 1997 31,528 31,472 Additional paid-in capital 235,721 234,237 Cumulative undistributed net income 104,928 104,965 -------- -------- TOTAL STOCKHOLDERS' INVESTMENT 372,177 370,674 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $621,975 $617,739 ======== ======== The accompanying notes are an integral part of these consolidated balance sheets.
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (UNAUDITED) ($ in thousands, except per share amounts) 1998 1997 ------- ------- REVENUES: Rental property revenues $16,134 $15,255 Development income 792 974 Management fees 890 834 Leasing and other fees 534 137 Residential lot and outparcel sales 4,457 2,261 Interest and other 1,047 830 ------- ------- 23,854 20,291 ------- ------- INCOME FROM UNCONSOLIDATED JOINT VENTURES 4,581 3,582 ------- ------- COSTS AND EXPENSES: Rental property operating expenses 3,834 3,709 General and administrative expenses 3,072 3,259 Depreciation and amortization 3,598 3,429 Stock appreciation right expense (credit) 198 (131) Residential lot and outparcel cost of sales 4,179 1,946 Interest expense 2,812 3,656 Property taxes on undeveloped land 222 259 Other 15 479 ------- ------- 17,930 16,606 ------- ------- INCOME FROM OPERATIONS BEFORE INCOME TAXES AND GAIN ON SALE OF INVESTMENT PROPERTIES 10,505 7,267 (BENEFIT) PROVISION FOR INCOME TAXES FROM OPERATIONS (18) 39 ------- ------- INCOME BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES 10,523 7,228 GAIN ON SALE OF INVESTMENT PROPERTIES, NET OF APPLICABLE INCOME TAX PROVISION 771 2,396 ------- ------- NET INCOME $11,294 $ 9,624 ======= ======= WEIGHTED AVERAGE SHARES 31,496 28,995 ======= ======= BASIC NET INCOME PER SHARE $ 36 $ .33 ======= ======= ADJUSTED WEIGHTED AVERAGE SHARES 31,962 29,399 ======= ======= DILUTED NET INCOME PER SHARE $ .35 $ .33 ======= ======= CASH DIVIDENDS DECLARED PER SHARE $ .36 $ .31 ======= ======= 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, 1998 AND 1997 (UNAUDITED) ($ in thousands) 1998 1997 ------- ------- CASH FLOWS FROM OPERATING ACTIVITIES: Income before gain on sale of investment properties $10,523 $ 7,228 Adjustments to reconcile income before gain on sale of investment properties to net cash provided by operating activities: Depreciation and amortization 3,598 3,429 Stock appreciation right expense (credit) 198 (131) Cash charges to expense accrual for stock appreciation rights (24) (520) Effect of recognizing rental revenues on a straight-line basis (79) (121) Income from unconsolidated joint ventures (4,581) (3,582) Operating distributions from unconsolidated joint ventures 7,259 8,904 Residential lot and outparcel cost of sales 4,037 1,793 Changes in other operating assets and liabilities: Change in other receivables (545) 2,576 Change in accounts payable and accrued liabilities 589 (7,008) ------- ------- Net cash provided by operating activities 20,975 12,568 ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Gain on sale of investment properties, net of applicable income tax provision 771 2,396 Adjustments to reconcile gain on sale of investment properties to net cash provided by sales activities: Cost of sales 839 287 Property acquisition and development expenditures (39,082) (16,202) Investment in unconsolidated joint ventures, including interest capitalized to equity investments (11,089) (15) Non-operating distributions from unconsolidated joint ventures 3,000 14,600 Investment in notes receivable -- (1,656) Change in other assets, net (221) (46) Collection of notes receivable 187 1 ------- ------- Net cash used in investing activities (45,595) (635) ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from line of credit 13,162 35,237 Dividends paid (11,331) (8,965) Repayment of line of credit (8,023) (38,422) Common stock sold, net of expenses 1,540 4,370 Repayment of other notes payable (1,301) (1,085) ------- ------- Net cash used in financing activities (5,953) (8,865) ------- ------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (30,573) 3,068 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 32,694 1,598 ------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,121 $ 4,666 ======= ======= The accompanying notes are an integral part of these consolidated statements.
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1998 (UNAUDITED) 1. BASIS OF PRESENTATION - -------------------------- The Consolidated Financial Statements include the accounts of Cousins Properties Incorporated ("Cousins") and its majority and wholly-owned affiliates, 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, 1998, and results of operations for the three month periods ended March 31, 1998 and 1997. Results of operations for the interim 1998 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/A for the year ended December 31, 1997. The accounting policies employed are the same as those shown in Note 1 to the Consolidated Financial Statements included in such Form 10-K/A. 2. SUPPLEMENTAL INFORMATION CONCERNING CASH FLOWS - --------------------------------------------------- Interest (net of $1,471,000 and $590,000 capitalized in 1998 and 1997, respectively) and income taxes paid were as follows for the three months ended March 31, 1998 and 1997 ($ in thousands): 1998 1997 ------ ------ Interest paid $2,610 $3,579 Income taxes paid $ 110 -- During the three months ended March 31, 1998, approximately $17,163,000 was transferred from Projects Under Construction to Operating Properties and approximately $14,115,000 was transferred from Land Held for Investment or Future Development to Projects Under Construction. At March 31, 1998, cash and cash equivalents included approximately $901,000 from a property sale held in escrow pending reinvestment in a tax-deferred exchange and approximately $1,126,000 which is restricted under a municipal bond indenture. 3. NOTES PAYABLE AND INTEREST EXPENSE - --------------------------------------- At March 31, 1998 and December 31, 1997, notes payable included the following ($ in thousands):
March 31, 1998 December 31, 1997 ----------------------------------- ------------------------------------- Share of Share of Unconsolidated Unconsolidated Company Joint Ventures Total Company Joint Ventures Total -------- -------------- -------- ------- -------------- -------- Floating Rate Lines of Credit $ 5,137 $ -- $ 5,137 $ -- $ -- $ -- Other Debt (primarily non-recourse fixed rate mortgages) 225,049 132,748 357,797 226,348 133,446 359,794 -------- -------- -------- -------- -------- -------- $230,186 $132,748 $362,934 $226,348 $133,446 $359,794 ======== ======== ======== ======== ======== ========
In March 1998, Wildwood Associates received a commitment for the financing of the 4200 Wildwood Parkway Building which is expected to close in June 1998. The $44 million non-recourse mortgage note payable has an interest rate of 6.78% and term of fifteen years. In addition, Cousins LORET Venture, L.L.C. expects to close on the $70 million non-recourse financing of The Pinnacle in May 1998 and be fully funded by December 1998. This non-recourse mortgage note payable has an interest rate of 7.11% and term of twelve years. For the three months ended March 31, 1998, interest expense was recorded as follows ($ in thousands): Share of Unconsolidated Company Joint Ventures Total ------- -------------- ------ Interest Expensed $2,812 $2,116 $4,928 Interest Capitalized 1,471 485 1,956 ------ ------ ------ $4,283 $2,601 $6,884 ====== ====== ====== During the first quarter of 1998, interest was capitalized related to the Company's and the Company's share of unconsolidated joint venture projects under construction which had an average balance of approximately $105 million. 4. EARNINGS PER SHARE DATA ---------------------------- Weighted average shares and adjusted weighted average shares are as follows (in thousands): March 31, March 31, 1998 1997 --------- --------- Weighted average shares 31,496 28,995 Dilutive potential common shares 468 404 ------ ------ Adjusted weighted average shares 31,962 29,399 ====== ====== Anit-dilutive options not included 565 -- ====== ====== 5. THE SHOPS AT PALOS VERDES - ------------------------------ In February 1998, the Company purchased The Shops at Palos Verdes, located in Rolling Hills Estates, California, in the greater Los Angeles metropolitan area. This 355,000 square foot center includes existing retail space and a parking deck. The Company plans to reposition and remerchandise the project into an approximately 380,000 square foot open-air, high-end specialty center. The Company purchased the center and parking deck for approximately $18 million. The center is expected to be completed in the fourth quarter of 1999 at a total cost of approximately $65 million. 6. CARLYLE I - -------------- In January 1998, the Company purchased the land for, and commenced construction of, Carlyle I, an approximately 150,000 rentable square foot office building in Alexandria, Virginia. The Company purchased the one acre site for approximately $5.3 million. The office building is expected to be completed in second quarter of 1998 at a total cost of approximately $30 million. 7. BRAD COUS GOLF VENTURE, LTD. - --------------------------------- Effective January 31, 1998, Cousins formed Brad Cous Golf Venture, Ltd., a limited partnership with the W.C. Bradley Co., each as 50% partners, for the purpose of developing and owning The Shops at World Golf Village, an approximate 80,000 square foot retail center located adjacent to the PGA Hall of Fame in St. Augustine, Florida. The center is expected to be completed in fourth quarter of 1998 at a total cost of approximately $12.2 million (Cousins' share is $6.1 million). 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, 1998 and 1997. Results of Operations: - ---------------------- Rental Property Revenues and Operating Expenses. Rental property revenues were approximately $879,000 higher in 1998. Rental property revenues from the Company's office portfolio decreased approximately $58,000 primarily due to a decrease of approximately $225,000 in 101 Independence Center caused by a decrease in the economic occupancy of this office building to 93% in 1998 from 100% in 1997. 101 Independence Center was 96% leased as of March 31, 1998. This decrease was partially offset by an increase of approximately $131,000 from 200 North Point Center East, which became partially operational for financial reporting purposes in November 1996 and therefore was in the lease-up phase in the first quarter of 1997. Rental property revenues from the Company's retail portfolio increased approximately $611,000 in 1998. The increase is due partially to increases in Greenbrier MarketCenter ($190,000) and Los Altos MarketCenter ($170,000), as these centers which became partially operational for financial reporting purposes in October 1996 and November 1996, respectively, were in the lease-up phase in the first quarter of 1997. Rental property revenues also increased approximately $222,000 due to an expansion in April 1997 of Presidential MarketCenter, approximately $100,000 due to the completion in May 1997 of Mansell Crossing Phase II, and approximately $185,000 from Abbotts Bridge Station which became partially operational for financial reporting purposes in February 1998. The increase in rental property revenues was partially offset by a decrease in rental property revenues of approximately $226,000 from Lovejoy Station and $242,000 from Rivermont Station which were sold in July 1997. Rental property revenues from the Company's medical office portfolio increased approximately $330,000 in 1998 due to Presbyterian Medical Plaza at University, which became partially operational for financial reporting purposes in July 1997 and was 100% leased and occupied as of January 1, 1998. Rental property operating expenses increased approximately $125,000, which increase was primarily related to the increased occupancy and expansion of certain of the retail centers and Presbyterian Medical Plaza at University becoming operational as discussed above. Development Income. Development income was approximately $182,000 lower in 1998. The decrease was due to approximately $685,000 of development income recognized in 1997 from a retail center in Cuyahoga Falls, Ohio. No similar income was recognized in 1998. Development fees recognized from Wildwood Associates related to the development of the 4200 Wildwood Parkway Building also decreased approximately $163,000. These decreases were partially offset by development fees recognized from two unconsolidated joint ventures; $265,000 from the Cousins LORET Venture, L.L.C. ("Cousins LORET") (see Note 5 of "Notes to Consolidated Financial Statements" in the Company's annual report on Form 10-K/A for the year ended December 31, 1997) and $121,000 from the Brad Cous Golf Venture, Ltd. (See Note 6). Also partially offsetting the aforementioned decreases was additional development income recognized from the Dusseldorf project of approximately $115,000, and an increase of approximately $103,000 in development fees recognized from the fee development of Total Systems' corporate headquarters in Columbus, Georgia. Leasing and Other Fees. Leasing and other fees increased approximately $397,000 in 1998. The increase was due to approximately $432,000 in leasing fees related to the lease-up of the 4200 Wildwood Parkway Building. Residential Lot and Outparcel Sales and Cost of Sales. Residential lot and outparcel sales increased approximately $2,196,000 in 1998. The increase was primarily due to an increase in residential lot sales from 26 lots in 1997 to 84 lots in 1998, which increased residential lot sales recognized by approximately $2,480,000. Partially offsetting the aforementioned increase was a decrease in outparcel sales recognized by CREC and one of its subsidiaries to $800,000 in 1998 from $1,084,000 in 1997; there were two outparcel sales in each year. Residential lot and outparcel cost of sales increased approximately $2,233,000 in 1998 due to increases in residential lot sales discussed above. Interest and Other Income. Interest and other income increased approximately $217,000 in 1998. The increase was primarily due to an increase in interest income recognized from temporary investments. In the three months ended March 31, 1998, the Company recognized interest income on temporary investments made with the remaining proceeds from the December 1997 common stock offering of 2,150,000 shares (see Note 6 of "Notes to Consolidated Financial Statements" in the Company's annual report on Form 10-K/A for the year ended December 31, 1997). No similar amounts were invested in the three months ended March 31, 1997. Income from Unconsolidated Joint Ventures. (All amounts reflect the Company's share of joint venture income.) Income from unconsolidated joint ventures decreased approximately $999,000 in 1998. Income from CSC Associates, L.P. increased approximately $382,000 in 1998 primarily due to the increase in rental income at NationsBank Plaza from a tenant whose increase in rental rate did not require straight-lining under Statement of Financial Accounting Standards No. 13, and the continued lease-up of the building. Income from Haywood Mall Associates increased approximately $259,000 in 1998 due to continued lease-up of the expansion of Haywood Mall. Income from Wildwood Associates increased approximately $221,000 in 1998. Income before depreciation, amortization and interest expense was favorably impacted by approximately $160,000 due to the continued lease-up of the 2300 Windy Ridge Parkway, 2500 Windy Ridge Parkway and 3200 Windy Hill Road Buildings. Also an increase in capitalized interest expense of approximately $98,000 favorably impacted the 1998 results. Partially offsetting the increase in income from Wildwood Associates was an increase in interest expense of approximately $243,000 primarily due to the completion of the financing of the 4100 and 4300 Wildwood Parkway Buildings on March 20, 1997. Income from Cousins LORET increased approximately $123,000. Two Live Oak Center, a 278,000 rentable square foot office building owned by Cousins LORET, became partially operational for financial reporting purposes in October 1997 (see Note 5 of "Notes to Consolidated Financial Statements' in the Company's annual report on Form 10-K/A for the year ended December 31, 1997). General and Administrative Expenses. General and administrative expenses decreased approximately $187,000 in 1998. The decrease was primarily due to an increase in salaries and overhead being capitalized to a higher level of projects under development in 1998. Depreciation and Amortization. Depreciation and amortization increased approximately $169,000 in 1998. The increase was due to certain retail centers becoming operational, as well as the expansion of certain retail centers, and Presbyterian Medical Plaza at University becoming operational as discussed above. Stock Appreciation Right Expense (Credit). The credit to stock appreciation expense decreased approximately $329,000 to an expense of $198,000 in 1998. This non-cash item is primarily related to an increase in the Company's stock price, which was $29.3125 and $30.875 at December 31, 1997 and March 31, 1998, respectively; and $28.125 and $27.25 at December 31, 1996, and March 31, 1997, respectively. Interest Expense. Interest expense decreased approximately $844,000 in 1998. Interest expense before capitalization increased approximately $36,000 to $4,283,000 in 1998 from $4,247,000 in 1997 due to higher debt levels. Offsetting this increase was an increase of approximately $881,000 in interest capitalized to projects under development (a reduction of interest expense) to $1,471,000 in 1998 from $590,000 in 1997. Other Expenses. Other expenses decreased approximately $464,000 in 1998 due to a decrease in predevelopment expense. Gain on Sale of Investment Properties. Gain on sale of investment properties decreased approximately $1,625,000 in 1998. The 1998 gain included the following: the February 1998 sale of 43 acres of land adjacent to Lawrenceville MarketCenter (a retail center formerly owned by the Company) ($.2 million gain) and the March 1998 sale of 6 acres of land at the Company's North Point development ($.6 million gain). The 1997 gain was from the January 1997 sale of 28 acres of land at the Company's North Point development ($2.4 million gain). Liquidity and Capital Resources: - -------------------------------- Financial Condition. The Company's debt (including its pro rata share of unconsolidated joint venture debt) was 27% of total market capitalization at March 31, 1998. 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 lines of credit (increasing those lines of credit as required), long-term non-recourse financing on the Company's unleveraged projects; other financings; and the sale of common stock, warrants to purchase common stock and debt securities under a $200 million shelf registration statement the Company filed with the Securities and Exchange Commission in September 1996, of which approximately $132 million remains available at March 31, 1998. Also, see Note 3 where two of the Company's unconsolidated joint ventures have outstanding commitments for two non-recourse mortgage note payables of $44 million and $70 million, respectively (Company's share $22 million and $35 million, respectively). 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 shareholders. The Company's consideration of these alternatives is part of its ongoing strategic planning process. There can be no assurance that any such alternative, if undertaken and consummated, would not materially adversely affect the Company or the market price of Cousins' Common Stock. Cash Flows. Net cash provided by operating activities increased approximately $8.4 million in 1998. Operating distributions from unconsolidated joint ventures decreased $1.6 million due primarily to decreases of $2.3 million in distributions from Wildwood Associates. The decrease in the distributions from Wildwood Associates was due to a portion of the proceeds from the $30 million financing of the 4100 and 4300 Wildwood Parkway Buildings in March 1997 being distributed to each partner ($4.5 million) which was the operating distribution for the entire calendar year 1997. In the first quarter of 1998, only $2.2 million was distributed from Wildwood Associates which was approximately one-half of the operating distribution forecast for calendar year 1998. An increase of $3.3 million in income before gain on sale of investment properties also favorably impacted net cash provided by operating activities. Residential lot and outparcel cost of sales increased $2.2 million due to increases in the number of residential lots sold in 1998. Cash flows from operating activities were positively impacted by changes in other operating assets and liabilities, an increase of $4.5 million. Net cash used in investing activities increased approximately $45.0 million in 1998 primarily due to an increase of $22.9 million in property acquisition and development expenditures, as a result of the Company having a higher level of projects under development. Non-operating distributions from unconsolidated joint ventures decreased $11.6 million primarily due to distributions from Wildwood Associates of $10 million in January 1997 from the proceeds of the financing of the 3200 Wildwood Plaza Building completed in December 1996 and $2.5 million from the proceeds of the financing of the 4100 and 4300 Wildwood Parkway Buildings in March 1997. The Company also received a $2.1 million distribution from Norfolk Hotel Associates in 1997. In 1998, the Company received a distribution from Wildwood Associates of $3.0 million which was a partial prepayment of the proceeds anticipated to be distributed to each partner from the $44 million financing of the 4200 Wildwood Parkway Building expected to close in June 1998 (see Note 3). Investment in unconsolidated joint ventures increased approximately $11.1 million primarily due to contributions to Cousins LORET of approximately $10.8 million which are being used to fund the development of The Pinnacle. Net cash used in financing activities decreased approximately $2.9 million in 1998, which was primarily attributable to a decrease of $8.3 million in the net amount drawn on the Company's line of credit. The Company paid its line of credit down to $0 at December 31, 1997 with proceeds from its December 1997 common stock offering of 2,150,000 shares. Partially offsetting the decrease was a decrease of approximately $2.8 million in the proceeds received from common stock sold, net of expenses. An increase in the dividends paid per share to $.36 in 1998 from $.31 in 1997 and an increase in the number of shares outstanding also partially contributed to the decrease as dividends paid increased approximately $2.4 million. Supplemental Financial Information: Depreciation and amortization expense included the following components for the three months ended March 31, 1998 ($ in thousands): Share of Unconsolidated Company Joint Ventures Total ------- -------------- ------ Furniture, fixtures and equipment $ 120 $ -- $ 120 Deferred financing costs -- 3 3 Goodwill and related business acquisition costs 77 10 87 Real estate related: Building (including tenant first generation) 3,194 2,515 5,709 Tenant second generation 207 215 422 ------ ------ ------ $3,598 $2,743 $6,341 ====== ====== ====== Exclusive of new developments and purchases of furniture, fixtures and equipment, the Company had the following capital expenditures during the three months ended March 31, 1998, including its share of unconsolidated joint ventures ($ in thousands): Office Retail Total Second generation related costs $ 98 $ -- $ 98 Building improvements -- -- -- ---- ---- ---- $ 98 $ -- $ 98 ==== ==== ==== 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 21, 1998. (b) Not applicable. (c) The following proposals were adopted by the stockholders of the Company: (i) The election of six Directors.
The vote on the above was: For Against Abstained ---------- ------- --------- Richard W. Courts, II 25,154,726 -- 78,331 Thomas G. Cousins 25,153,814 -- 79,243 Terence C. Golden 25,154,249 -- 78,808 Boone A. Knox 25,154,456 -- 78,601 William Porter Payne 25,154,811 -- 78,246 Richard E. Salomon 25,154,456 -- 78,601
(ii) A proposal to amend the Restated and Amended Articles of Incorporation so as to confirm that the provisions of the Articles do not preclude settlement of transactions entered into through the New York Stock Exchange. The vote on the above proposal was: For 24,812,980 Against 11,992 Abstained 408,084 (iii) A proposal to amend the 1995 Stock Incentive Plan so as to increase the number of shares of stock reserved for use under such plan by 1 million shares. The vote on the above proposal was: For 22,857,118 Against 2,365,014 Abstained 10,926 Item 6. Exhibits and Reports on Form 8-K - -------------------------------------------------- (a) Exhibits -------- 3.1 Articles of Amendment to Restated Articles of Incorporation 27 Financial Data Schedule SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. COUSINS PROPERTIES INCORPORATED Registrant /s/ Kelly H. Barrett ------------------------------------- Kelly H. Barrett Senior Vice President - Finance (Authorized Officer) (Principal Accounting Officer) May 13, 1998 EX-27 2
5 3-MOS DEC-31-1998 MAR-31-1998 2,121 0 38,882 0 0 0 482,332 36,826 621,975 19,612 230,186 0 0 31,528 0 621,975 0 23,854 0 17,930 0 0 2,812 10,505 10,523 0 0 0 0 11,294 .36 .35
EX-1 3 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 Article 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 12th day of May, 1998. COUSINS PROPERTIES INCORPORATED [CORPORATE SEAL] By: /s/ Daniel M. DuPree ------------------------------------- President and Chief Operating Officer Attest: /s/ Tom G. Charlesworth Secretary -----END PRIVACY-ENHANCED MESSAGE-----