1
TABLE OF CONTENTS | ||
Forward-Looking Statements | |
Earnings Release | 4 |
Condensed Consolidated Balance Sheets | |
Condensed Consolidated Statements of Operations | |
Key Performance Metrics | |
Funds From Operations - Detail | |
Portfolio Statistics | |
Office Leasing Activity | |
Office Lease Expirations | |
Top 20 Office Tenants | |
Tenant Industry Diversification | |
Investment Activity | |
Land Inventory | |
Debt Schedule | |
Non-GAAP Financial Measures - Calculations and Reconciliations | |
Non-GAAP Financial Measures - Discussion | |
Cousins Properties | Q3 2018 Supplemental Information | |
FORWARD-LOOKING STATEMENTS | ||
Certain matters contained in this report are “forward-looking statements” within the meaning of the federal securities laws and are subject to uncertainties and risks, as itemized in Item 1A included in the Annual Report on Form 10-K for the year ended December 31, 2017 and in the Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2018. These forward-looking statements include information about possible or assumed future results of the business and our financial condition, liquidity, results of operations, plans, and objectives. They also include, among other things, statements regarding subjects that are forward-looking by their nature, such as, our 2018 guidance and underlying assumptions, business and financial strategy, future financings, future acquisitions and dispositions of land (including ground leases), future acquisitions and dispositions of operating assets, future development and redevelopment opportunities, future fee development opportunities, future issuances and repurchases of common or preferred stock, future distributions, future projected capital expenditures, future changes in interest rates, market and industry tends, and all statements that address operating performance, events, or developments that we expect or anticipate will occur in the future, including statements relating to creating value for stockholders.
Any forward-looking statements are based upon management's beliefs, assumptions, and expectations of our future performance, taking into account information currently available. These beliefs, assumptions, and expectations may change as a result of possible events or factors, not all of which are known. If a change occurs, our business, financial condition, liquidity, and results of operations may vary materially from those expressed in forward-looking statements. Actual results may vary from forward-looking statements due to, but not limited to, the following: the availability and terms of capital, the ability to refinance or repay indebtedness as it matures, the failure of purchase, sale, or other contracts to ultimately close, the failure to achieve anticipated benefits from acquisitions, investments, or dispositions, the potential dilutive effect of common stock or operating partnership unit issuances, the availability of buyers and pricing with respect to the disposition of assets, risks and uncertainties related to national and local economic conditions, the real estate industry, and the commercial real estate markets in which we operate, particularly in Atlanta, Charlotte, Austin, Phoenix, and Tampa where we have high concentrations of our lease revenue, changes to our strategy with regard to non-core holdings that require impairment losses to be recognized, leasing risks, including the ability to obtain new tenants or renew expiring tenants, the ability to lease newly developed and/or recently acquired space, and the risk of declining leasing rates, the adverse change in the financial condition of one or more of our major tenants, volatility in interest rates and insurance rates, competition from other developers or investors, the risks associated with real estate developments (such as zoning approval, receipt of required permits, construction delays, cost overruns, and leasing risk), changes in senior management and the loss of key personnel, the potential liability for uninsured losses, condemnation, or environmental issues, the potential liability for a failure to meet regulatory requirements, the financial condition and liquidity of, or disputes with, joint venture partners, any failure to comply with debt covenants under credit agreements, any failure to continue to qualify for taxation as a real estate investment trust and meet regulatory requirements, potential changes to state, local, or federal regulations applicable to our business, material changes in the dividend rates or the ability to pay dividends on common shares or other securities, potential changes to the tax laws and accounting standards impacting REITs and real estate in general, and those additional risks and factors discussed in reports filed with the Securities and Exchange Commission by the Company.
The words “believes,” “expects,” “anticipates,” “estimates,” “plans,” “may,” “intend,” “will,” or similar expressions are intended to identify forward-looking statements. Although we believe that our plans, intentions, and expectations reflected in any forward-looking statements are reasonable, we can give no assurance that such plans, intentions, or expectations will be achieved. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information, or otherwise, except as required under U.S. federal securities laws.
Cousins Properties | 3 | Q3 2018 Supplemental Information |
EARNINGS RELEASE | ||
COUSINS PROPERTIES REPORTS THIRD QUARTER 2018 RESULTS
Third Quarter Highlights
• | Net income available to common stockholders was $0.05 per share. |
• | Funds From Operations was $0.16 per share. |
• | Same property net operating income on a cash-basis increased 4.4%. |
• | Second generation net rent per square foot on a cash-basis increased 7.6%. |
• | Executed 485,598 square feet of office leases. |
• | Increased the size of 300 Colorado, a new office development in the Austin CBD, by two floors bringing the total to 358,000 square feet. |
• | In October 2018, commenced operations at 858 Spring Street, Phase II of NCR's world headquarters in Midtown Atlanta. |
ATLANTA (October 24, 2018) - Cousins Properties (NYSE:CUZ) today reported its results of operations for the quarter ended September 30, 2018.
Financial Results
Net income available to common stockholders was $19.5 million, or $0.05 per share, for the third quarter of 2018, compared with $12.1 million, or $0.03 per share, for the third quarter of 2017. Net Income available to common stockholders was $56.8 million, or $0.14 per share, for the nine months ended September 30, 2018, compared with $184.9 million, or $0.45 per share, for the nine months ended September 30, 2017. In the second quarter of 2017, the Company recognized a net gain of $119.8 million on the sale of the American Cancer Society Center in Atlanta.
Funds From Operations ("FFO") was $67.5 million, or $0.16 per share, for the third quarter of 2018 compared with $62.3 million, or $0.15 per share, for the third quarter of 2017. FFO was $196.7 million, or $0.46 per share, for the nine months ended September 30, 2018, compared to $195.7 million, or $0.46 per share, for the nine months ended September 30, 2017.
2018 Guidance
Based on third quarter 2018 results, the Company has raised and narrowed its full year 2018 net income guidance from $0.15 to $0.19 per share to $0.16 to $0.19 per share. The Company has also raised and narrowed its full year 2018 FFO guidance from $0.59 to $0.63 per share to $0.60 to $0.63 per share.
The Company leaves unchanged the previously provided assumptions of its 2018 net income and FFO guidance, except for the following update:
• | General and administrative expenses, net of capitalized salaries of $23.5 million to $25.5 million, down from the previous range of $25.5 million to $27.5 million, due to a decrease in long-term incentive compensation based on the Company's stock performance. |
Cousins Properties | 4 | Q3 2018 Supplemental Information |
EARNINGS RELEASE | ||
A reconciliation of projected net income per share to projected FFO per share is provided as follows:
Full Year 2018 Range | |||||||
Low | High | ||||||
Net income per share | $ | 0.16 | $ | 0.19 | |||
Add: Real estate depreciation and amortization | 0.44 | 0.44 | |||||
Funds From Operations per share | $ | 0.60 | $ | 0.63 | |||
The Company's guidance is provided for information purposes based on current plans and assumptions and is subject to change.
Investor Conference Call and Webcast
The Company will conduct a conference call at 11:00 a.m. (Eastern Time) on Thursday, October 25, 2018, to discuss the results of the quarter ended September 30, 2018. The number to call for this interactive teleconference is (877) 247-1056. The live webcast of this call can be accessed on the Company's website, www.cousins.com, through the “Cousins Properties Third Quarter Conference Call” link on the Investor Relations page.
A replay of the conference call will be available for seven days by dialing (877) 344-7529 and entering the passcode 10124642. The playback can also be accessed on the Company's website.
Acting through its operating partnership Cousins Properties, LP, Cousins Properties is a leading fully-integrated real estate investment trust (REIT) with extensive experience in development, acquisition, financing, management, and leasing. Based in Atlanta, the Company actively invests in top-tier urban office assets and opportunistic mixed-use properties in Sunbelt markets.
Cousins Properties | 5 | Q3 2018 Supplemental Information |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
(in thousands, except share and per share amounts)
September 30, 2018 | December 31, 2017 | ||||||
(unaudited) | |||||||
Assets: | |||||||
Real estate assets: | |||||||
Operating properties, net of accumulated depreciation of $384,097 and $275,977 in 2018 and 2017, respectively | $ | 3,499,741 | $ | 3,332,619 | |||
Projects under development | 128,580 | 280,982 | |||||
Land | 4,221 | 4,221 | |||||
3,632,542 | 3,617,822 | ||||||
Cash and cash equivalents | 82,706 | 148,929 | |||||
Restricted cash | 419 | 56,816 | |||||
Notes and accounts receivable, net of allowance for doubtful accounts of $456 and $535 in 2018 and 2017, respectively | 10,400 | 14,420 | |||||
Deferred rents receivable | 76,494 | 58,158 | |||||
Investment in unconsolidated joint ventures | 154,070 | 101,414 | |||||
Intangible assets, net | 155,025 | 186,206 | |||||
Other assets | 31,943 | 20,854 | |||||
Total assets | $ | 4,143,599 | $ | 4,204,619 | |||
Liabilities: | |||||||
Notes payable | $ | 1,065,012 | $ | 1,093,228 | |||
Accounts payable and accrued expenses | 114,229 | 137,909 | |||||
Deferred income | 40,035 | 37,383 | |||||
Intangible liabilities, net of accumulated amortization of $39,332 and $28,960 in 2018 and 2017, respectively | 60,082 | 70,454 | |||||
Other liabilities | 39,786 | 40,534 | |||||
Total liabilities | 1,319,144 | 1,379,508 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Stockholders' investment: | |||||||
Preferred stock, $1 par value, 20,000,000 shares authorized, 6,867,357 shares issued and outstanding in 2018 and 2017 | 6,867 | 6,867 | |||||
Common stock, $1 par value, 700,000,000 shares authorized, 430,724,520 and 430,349,620 shares issued in 2018 and 2017, respectively | 430,725 | 430,350 | |||||
Additional paid-in capital | 3,605,617 | 3,604,776 | |||||
Treasury stock at cost, 10,339,735 and 10,329,082 shares in 2018 and 2017, respectively | (148,473 | ) | (148,373 | ) | |||
Distributions in excess of cumulative net income | (1,124,518 | ) | (1,121,647 | ) | |||
Total stockholders' investment | 2,770,218 | 2,771,973 | |||||
Nonredeemable noncontrolling interests | 54,237 | 53,138 | |||||
Total equity | 2,824,455 | 2,825,111 | |||||
Total liabilities and equity | $ | 4,143,599 | $ | 4,204,619 | |||
Cousins Properties | 6 | Q3 2018 Supplemental Information |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
(unaudited; in thousands, except per share amounts)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues: | |||||||||||||||
Rental property revenues | $ | 115,443 | $ | 109,569 | $ | 342,489 | $ | 336,093 | |||||||
Fee income | 2,519 | 2,597 | 7,211 | 6,387 | |||||||||||
Other | 744 | 993 | 2,836 | 9,593 | |||||||||||
118,706 | 113,159 | 352,536 | 352,073 | ||||||||||||
Expenses: | |||||||||||||||
Rental property operating expenses | 41,579 | 40,688 | 122,501 | 123,715 | |||||||||||
Reimbursed expenses | 955 | 895 | 2,757 | 2,667 | |||||||||||
General and administrative expenses | 3,913 | 7,193 | 18,793 | 21,993 | |||||||||||
Interest expense | 9,551 | 7,587 | 29,043 | 25,851 | |||||||||||
Depreciation and amortization | 45,068 | 47,622 | 135,836 | 152,546 | |||||||||||
Acquisition and transaction costs | — | (677 | ) | 228 | 1,499 | ||||||||||
Other | 93 | 423 | 457 | 1,063 | |||||||||||
101,159 | 103,731 | 309,615 | 329,334 | ||||||||||||
Gain on extinguishment of debt | 93 | 429 | 8 | 2,258 | |||||||||||
Income from continuing operations before unconsolidated joint ventures and gain (loss) on sale of investment properties | 17,640 | 9,857 | 42,929 | 24,997 | |||||||||||
Income from unconsolidated joint ventures | 2,252 | 2,461 | 10,173 | 43,362 | |||||||||||
Income from continuing operations before gain (loss) on sale of investment properties | 19,892 | 12,318 | 53,102 | 68,359 | |||||||||||
Gain (loss) on sale of investment properties | (33 | ) | (33 | ) | 4,912 | 119,729 | |||||||||
Net Income | 19,859 | 12,285 | 58,014 | 188,088 | |||||||||||
Net income attributable to noncontrolling interests | (374 | ) | (218 | ) | (1,210 | ) | (3,181 | ) | |||||||
Net income available to common stockholders | $ | 19,485 | $ | 12,067 | $ | 56,804 | $ | 184,907 | |||||||
Net income per common share — basic and diluted | $ | 0.05 | $ | 0.03 | $ | 0.14 | $ | 0.45 | |||||||
Weighted average shares — basic | 420,385 | 419,998 | 420,279 | 414,123 | |||||||||||
Weighted average shares — diluted | 427,520 | 427,300 | 427,472 | 421,954 | |||||||||||
Cousins Properties | 7 | Q3 2018 Supplemental Information |
KEY PERFORMANCE METRICS | ||
2016 | 2017 1st | 2017 2nd | 2017 3rd | 2017 4th | 2017 | 2018 1st | 2018 2nd | 2018 3rd | 2018 YTD | |||||||||||
Property Statistics | ||||||||||||||||||||
Consolidated Operating Properties | 24 | 25 | 25 | 25 | 22 | 22 | 23 | 23 | 23 | 23 | ||||||||||
Consolidated Rentable Square Feet (in thousands) | 13,024 | 13,249 | 12,477 | 12,466 | 11,428 | 11,428 | 11,936 | 11,944 | 11,944 | 11,944 | ||||||||||
Unconsolidated Operating Properties | 7 | 6 | 4 | 5 | 4 | 4 | 4 | 4 | 4 | 4 | ||||||||||
Unconsolidated Rentable Square Feet (in thousands) | 3,999 | 3,774 | 2,988 | 3,456 | 3,113 | 3,113 | 3,113 | 3,113 | 3,113 | 3,113 | ||||||||||
Total Operating Properties | 31 | 31 | 29 | 30 | 26 | 26 | 27 | 27 | 27 | 27 | ||||||||||
Total Rentable Square Feet (in thousands) | 17,023 | 17,023 | 15,465 | 15,922 | 14,541 | 14,541 | 15,049 | 15,057 | 15,057 | 15,057 | ||||||||||
Office Leasing Activity (1) | ||||||||||||||||||||
Net Leased during the Period (square feet in thousands) | 2,354 | 571 | 341 | 335 | 943 | 2,190 | 330 | 328 | 486 | 1,143 | ||||||||||
Net Rent (per square foot) | $24.52 | $26.10 | $28.58 | $26.57 | $32.73 | $29.41 | $33.35 | $32.40 | $28.46 | $31.00 | ||||||||||
Free rent (per square foot) | (1.26) | (1.21) | (0.91) | (0.83) | (0.39) | (0.75) | (0.55) | (1.00) | (0.94) | (0.84) | ||||||||||
Leasing commissions (per square foot) (2) | (1.78) | (1.93) | (2.78) | (2.32) | (2.40) | (2.32) | (2.67) | (2.49) | (2.40) | (2.50) | ||||||||||
Tenant improvements (per square foot) | (3.91) | (4.78) | (4.66) | (3.46) | (4.49) | (4.43) | (3.07) | (4.50) | (4.29) | (4.00) | ||||||||||
Net Effective Rent (per square foot) | $17.57 | $18.18 | $20.23 | $19.96 | $25.45 | $21.91 | $27.06 | $24.41 | $20.83 | $23.66 | ||||||||||
Change in Second Generation Net Rent | 20.0 | % | 15.8 | % | 28.5 | % | 16.9 | % | 19.7 | % | 19.6 | % | 35.2 | % | 34.2 | % | 25.8 | % | 31.1 | % |
Change in Cash-Basis Second Generation Net Rent | 10.3 | % | 3.3 | % | 13.5 | % | 7.3 | % | 6.3 | % | 6.9 | % | 19.3 | % | 13.1 | % | 7.6 | % | 13.2 | % |
Same Property Information (3) | ||||||||||||||||||||
Percent Leased (period end) | 91.8 | % | 92.1 | % | 93.9 | % | 92.9 | % | 92.6 | % | 92.6 | % | 93.6 | % | 93.5 | % | 94.2 | % | 94.2 | % |
Weighted Average Occupancy | 89.4 | % | 89.9 | % | 90.7 | % | 89.1 | % | 87.7 | % | 89.4 | % | 92.0 | % | 91.9 | % | 91.8 | % | 91.9 | % |
Change in Net Operating Income (over prior year period) | 6.1 | % | 5.5 | % | 6.8 | % | 1.3 | % | 3.6 | % | 4.4 | % | 2.6 | % | 1.3 | % | 2.7 | % | 2.2 | % |
Change in Cash-Basis Net Operating Income (over prior year period) | 8.4 | % | 5.4 | % | 8.6 | % | 2.0 | % | 4.2 | % | 5.3 | % | 9.4 | % | 4.1 | % | 4.4 | % | 5.9 | % |
Development Pipeline | ||||||||||||||||||||
Estimated Project Costs (in thousands) (4) | $512,200 | $529,200 | $463,500 | $402,000 | $490,500 | $490,500 | $271,500 | $358,800 | $362,900 | $362,900 | ||||||||||
Estimated Project Costs (4) / Total Undepreciated Assets | 10.5 | % | 10.6 | % | 9.6 | % | 8.1 | % | 9.9 | % | 9.9 | % | 5.5 | % | 7.2 | % | 7.2 | % | 7.2 | % |
Market Capitalization (5) | ||||||||||||||||||||
Common Stock Price (period end) | $8.51 | $8.27 | $8.79 | $9.34 | $9.25 | $9.25 | $8.68 | $9.69 | $8.89 | $8.89 | ||||||||||
Common Stock/Units Outstanding (period end in thousands) | 401,596 | 426,823 | 426,942 | 426,995 | 426,995 | 426,995 | 427,218 | 427,368 | 427,359 | 427,359 | ||||||||||
Equity Market Capitalization (in thousands) | $3,417,582 | $3,529,826 | $3,752,820 | $3,988,133 | $3,949,704 | $3,949,704 | $3,708,252 | $4,141,196 | $3,799,222 | $3,799,222 | ||||||||||
Debt (in thousands) | 1,632,270 | 1,498,044 | 1,205,632 | 1,286,252 | 1,262,523 | 1,262,523 | 1,262,833 | 1,261,459 | 1,236,891 | 1,236,891 | ||||||||||
Total Market Capitalization (in thousands) | $5,049,852 | $5,027,870 | $4,958,452 | $5,274,385 | $5,212,227 | $5,212,227 | $4,971,085 | $5,402,655 | $5,036,113 | $5,036,113 | ||||||||||
Credit Ratios (5) | ||||||||||||||||||||
Net Debt/Total Market Capitalization | 31.6 | % | 29.1 | % | 24.0 | % | 23.2 | % | 21.4 | % | 21.4 | % | 23.2 | % | 21.3 | % | 22.9 | % | 22.9 | % |
Net Debt/Total Undepreciated Assets | 32.8 | % | 29.4 | % | 24.7 | % | 24.7 | % | 22.5 | % | 22.5 | % | 23.5 | % | 23.1 | % | 22.9 | % | 22.9 | % |
Net Debt/Annualized Adjusted EBITDAre | 5.22 | 4.49 | 3.93 | 4.31 | 3.75 | 3.75 | 3.77 | 3.76 | 3.65 | 3.65 | ||||||||||
Fixed Charges Coverage (Adjusted EBITDAre) | 4.63 | 5.13 | 5.49 | 5.82 | 6.01 | 5.58 | 5.39 | 5.37 | 5.67 | 5.48 | ||||||||||
Cousins Properties | 8 | Q3 2018 Supplemental Information |
KEY PERFORMANCE METRICS | ||
2016 | 2017 1st | 2017 2nd | 2017 3rd | 2017 4th | 2017 | 2018 1st | 2018 2nd | 2018 3rd | 2018 YTD | |||||||||||
Dividend Information (5) | ||||||||||||||||||||
Common Dividend per Share (6) | $0.30 | $0.06 | $0.06 | $0.06 | $0.06 | $0.24 | $0.065 | $0.065 | $0.065 | $0.195 | ||||||||||
Funds From Operations (FFO) Payout Ratio | 46.1 | % | 37.5 | % | 38.0 | % | 40.4 | % | 39.3 | % | 38.8 | % | 42.3 | % | 42.3 | % | 40.5 | % | 41.7 | % |
Funds Available for Distribution (FAD) Payout Ratio | 59.0 | % | 56.4 | % | 52.9 | % | 67.2 | % | 66.8 | % | 60.2 | % | 61.9 | % | 61.2 | % | 59.1 | % | 60.7 | % |
Operations Ratio (5) | ||||||||||||||||||||
Annualized General and Administrative Expenses/Total Undepreciated Assets | 0.53 | % | 0.50 | % | 0.72 | % | 0.58 | % | 0.45 | % | 0.56 | % | 0.55 | % | 0.65 | % | 0.31 | % | 0.50 | % |
Additional Information (5) (in thousands, except per square foot amounts) | ||||||||||||||||||||
In-Place Gross Rent (per square foot) (7) | $32.64 | $33.70 | $33.13 | $34.02 | $34.19 | $34.19 | $34.98 | $35.08 | $35.23 | $35.23 | ||||||||||
Straight Line Rental Revenue | $18,967 | $9,608 | $7,826 | $6,825 | $6,714 | $30,973 | $8,136 | $5,690 | $5,148 | $18,974 | ||||||||||
Above and Below Market Rents Amortization | $7,097 | $1,602 | $1,929 | $1,852 | $1,838 | $7,221 | $1,793 | $1,714 | $1,730 | $5,237 | ||||||||||
Second Generation Capital Expenditures | $46,876 | $10,971 | $7,569 | $15,949 | $18,996 | $53,485 | $11,256 | $11,077 | $15,152 | $37,485 | ||||||||||
(1) See Office Leasing Activity on page 18 for additional detail and explanations.
(2) Effective in the second quarter 2018, the Company began including commissions paid to its internal leasing personnel. Prior period amounts presented have been adjusted from what was previously disclosed for this change.
(3) Same Property Information is derived from the pool of office properties, as defined, in the period originally reported. See Same Property Performance on page 17 and Non-GAAP Financial Measures - Calculations and Reconciliations on page 34 for additional information.
(4) Represents Cousins' share of estimated project costs. See Development Pipeline on page 25 for additional detail.
(5) See Non-GAAP Financial Measures - Calculations and Reconciliations beginning on page 30.
(6) The fourth quarter 2016 dividend was declared and paid one quarter in arrears.
(7) In-place gross rent represents the annualized cash basis base rent including tenant's share of estimated operating expenses, if applicable, as of the end of the period divided by occupied square feet.
Cousins Properties | 9 | Q3 2018 Supplemental Information |
KEY PERFORMANCE METRICS | ||
(1) Office properties only.
Note: See additional information included herein for calculations, definitions, and reconciliations to GAAP financial measures.
Cousins Properties | 10 | Q3 2018 Supplemental Information |
FUNDS FROM OPERATIONS - SUMMARY (1) | ||
(amounts in thousands, except per share amounts) | ||||||||||||||||||||||||||||||
2016 | 2017 1st | 2017 2nd | 2017 3rd | 2017 4th | 2017 | 2018 1st | 2018 2nd | 2018 3rd | 2018 YTD | |||||||||||||||||||||
Net Operating Income | $ | 260,281 | $ | 80,167 | $ | 80,115 | $ | 75,815 | $ | 77,109 | $ | 313,206 | $ | 80,578 | $ | 80,195 | $ | 80,858 | $ | 241,631 | ||||||||||
Land Sales Less Cost of Sales | 3,770 | — | 63 | 4 | — | 67 | 330 | 2,449 | — | 2,779 | ||||||||||||||||||||
Fee Income | 8,347 | 1,936 | 1,854 | 2,597 | 2,245 | 8,632 | 2,894 | 1,798 | 2,519 | 7,211 | ||||||||||||||||||||
Other Income | 5,525 | 6,889 | 5,304 | 1,634 | 2,164 | 15,991 | 1,034 | 1,212 | 915 | 3,161 | ||||||||||||||||||||
Reimbursed Expenses | (3,259 | ) | (865 | ) | (907 | ) | (895 | ) | (860 | ) | (3,527 | ) | (942 | ) | (860 | ) | (955 | ) | (2,757 | ) | ||||||||||
General and Administrative Expenses | (25,592 | ) | (6,182 | ) | (8,618 | ) | (7,193 | ) | (5,530 | ) | (27,523 | ) | (6,809 | ) | (8,071 | ) | (3,913 | ) | (18,793 | ) | ||||||||||
Interest Expense | (41,095 | ) | (12,066 | ) | (10,444 | ) | (9,363 | ) | (9,509 | ) | (41,382 | ) | (11,293 | ) | (11,305 | ) | (11,208 | ) | (33,806 | ) | ||||||||||
Other Expenses | (45,984 | ) | (2,391 | ) | (542 | ) | 196 | (953 | ) | (3,690 | ) | (695 | ) | (365 | ) | (257 | ) | (1,317 | ) | |||||||||||
Depreciation and Amortization of Non-Real Estate Assets | (1,365 | ) | (451 | ) | (465 | ) | (461 | ) | (497 | ) | (1,874 | ) | (473 | ) | (468 | ) | (469 | ) | (1,410 | ) | ||||||||||
FFO (1) | $ | 160,628 | $ | 67,037 | $ | 66,360 | $ | 62,334 | $ | 64,169 | $ | 259,900 | $ | 64,624 | $ | 64,585 | $ | 67,490 | $ | 196,699 | ||||||||||
Weighted Average Shares - Diluted | 256,023 | 411,186 | 427,180 | 427,300 | 427,288 | 423,297 | 427,381 | 427,501 | 427,520 | 427,472 | ||||||||||||||||||||
FFO per Share (1) | $ | 0.63 | $ | 0.16 | $ | 0.16 | $ | 0.15 | $ | 0.15 | $ | 0.61 | $ | 0.15 | $ | 0.15 | $ | 0.16 | $ | 0.46 | ||||||||||
(1) See pages 30 and 33 for reconciliations of Funds from Operations to net income available to common stockholders.
Cousins Properties | 11 | Q3 2018 Supplemental Information |
FUNDS FROM OPERATIONS - DETAIL (1) | ||
(amounts in thousands, except per share amounts) | ||||||||||||||||||||||||||||||
2016 | 2017 1st | 2017 2nd | 2017 3rd | 2017 4th | 2017 | 2018 1st | 2018 2nd | 2018 3rd | 2018 YTD | |||||||||||||||||||||
Net Operating Income | ||||||||||||||||||||||||||||||
Consolidated Properties | ||||||||||||||||||||||||||||||
Hearst Tower | $ | 5,957 | $ | 6,356 | $ | 6,370 | $ | 6,302 | $ | 7,158 | $ | 26,186 | $ | 6,493 | $ | 6,426 | $ | 6,456 | $ | 19,375 | ||||||||||
Northpark (2) | 22,144 | 5,410 | 5,130 | 4,945 | 5,021 | 20,506 | 5,731 | 5,814 | 6,204 | 17,749 | ||||||||||||||||||||
Corporate Center (2) | 5,005 | 4,761 | 5,374 | 5,308 | 5,446 | 20,889 | 5,780 | 5,956 | 5,947 | 17,683 | ||||||||||||||||||||
Hayden Ferry (2) | 3,881 | 5,209 | 5,307 | 5,466 | 5,968 | 21,950 | 5,766 | 5,433 | 5,894 | 17,093 | ||||||||||||||||||||
Fifth Third Center | 17,501 | 4,842 | 4,681 | 4,772 | 4,989 | 19,284 | 4,729 | 4,647 | 4,912 | 14,288 | ||||||||||||||||||||
864 Spring Street | — | — | — | — | 50 | 50 | 4,726 | 4,608 | 4,704 | 14,038 | ||||||||||||||||||||
Buckhead Plaza (2) | 4,186 | 4,418 | 4,143 | 4,389 | 4,566 | 17,516 | 4,330 | 4,382 | 4,367 | 13,079 | ||||||||||||||||||||
Promenade | 14,555 | 4,173 | 4,407 | 4,184 | 3,991 | 16,755 | 4,240 | 4,242 | 4,125 | 12,607 | ||||||||||||||||||||
One Eleven Congress | 3,256 | 3,713 | 3,735 | 4,172 | 3,526 | 15,146 | 4,036 | 4,039 | 4,034 | 12,109 | ||||||||||||||||||||
San Jacinto Center | 3,456 | 4,038 | 4,207 | 3,918 | 3,906 | 16,069 | 3,635 | 3,632 | 3,596 | 10,863 | ||||||||||||||||||||
Colorado Tower | 12,408 | 3,383 | 3,352 | 3,344 | 3,478 | 13,557 | 3,429 | 3,453 | 3,511 | 10,393 | ||||||||||||||||||||
3344 Peachtree | 3,505 | 3,235 | 2,884 | 2,705 | 2,085 | 10,909 | 2,994 | 3,069 | 2,970 | 9,033 | ||||||||||||||||||||
816 Congress | 9,900 | 2,694 | 2,641 | 2,766 | 2,797 | 10,898 | 2,780 | 2,911 | 3,016 | 8,707 | ||||||||||||||||||||
NASCAR Plaza | 2,507 | 2,477 | 2,394 | 2,609 | 2,709 | 10,189 | 2,652 | 2,590 | 2,683 | 7,925 | ||||||||||||||||||||
Tempe Gateway | 1,966 | 2,008 | 2,136 | 1,964 | 1,971 | 8,079 | 1,893 | 2,029 | 1,997 | 5,919 | ||||||||||||||||||||
3350 Peachtree | 2,006 | 2,264 | 2,288 | 2,153 | 1,968 | 8,673 | 1,987 | 1,899 | 1,888 | 5,774 | ||||||||||||||||||||
3348 Peachtree | 1,541 | 1,491 | 1,491 | 1,657 | 1,507 | 6,146 | 1,405 | 1,360 | 1,472 | 4,237 | ||||||||||||||||||||
111 West Rio | — | — | 1,396 | 1,236 | 1,412 | 4,044 | 1,314 | 1,419 | 1,374 | 4,107 | ||||||||||||||||||||
8000 Avalon | — | — | — | 80 | 353 | 433 | 1,357 | 1,350 | 1,144 | 3,851 | ||||||||||||||||||||
The Pointe | 1,227 | 1,146 | 1,146 | 1,069 | 1,207 | 4,568 | 1,236 | 1,170 | 1,179 | 3,585 | ||||||||||||||||||||
Research Park V | 844 | 359 | 916 | 874 | 827 | 2,976 | 1,012 | 1,016 | 1,023 | 3,051 | ||||||||||||||||||||
Meridian Mark Plaza | 3,674 | 989 | 997 | 979 | 1,116 | 4,081 | 920 | 1,006 | 1,049 | 2,975 | ||||||||||||||||||||
Harborview Plaza | 898 | 930 | 931 | 1,035 | 1,074 | 3,970 | 712 | 516 | 319 | 1,547 | ||||||||||||||||||||
Other (3) | 32,487 | 7,095 | 6,580 | 2,954 | 2,650 | 19,279 | — | — | — | — | ||||||||||||||||||||
Subtotal - Consolidated | 152,904 | 70,991 | 72,506 | 68,881 | 69,775 | 282,153 | 73,157 | 72,967 | 73,864 | 219,988 | ||||||||||||||||||||
Unconsolidated Properties (4) | ||||||||||||||||||||||||||||||
Terminus (2) | 14,340 | 3,710 | 3,655 | 3,598 | 3,514 | 14,477 | 3,486 | 3,415 | 3,345 | 10,246 | ||||||||||||||||||||
Gateway Village (2)(5) | 2,450 | 1,751 | 1,756 | 1,805 | 1,735 | 7,047 | 1,968 | 1,770 | 1,873 | 5,611 | ||||||||||||||||||||
Emory University Hospital Midtown Medical Office Tower | 3,970 | 989 | 948 | 961 | 1,015 | 3,913 | 990 | 1,031 | 1,028 | 3,049 | ||||||||||||||||||||
Carolina Square (2) | — | — | — | 47 | 658 | 705 | 928 | 975 | 747 | 2,650 | ||||||||||||||||||||
300 Colorado | — | — | — | — | — | — | 49 | 37 | 1 | 87 | ||||||||||||||||||||
Other (3) | 8,026 | 2,726 | 1,250 | 523 | 412 | 4,911 | — | — | — | — | ||||||||||||||||||||
Subtotal - Unconsolidated | 28,786 | 9,176 | 7,609 | 6,934 | 7,334 | 31,053 | 7,421 | 7,228 | 6,994 | 21,643 | ||||||||||||||||||||
Discontinued Operations (6) | 78,591 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Total Net Operating Income (1) | 260,281 | 80,167 | 80,115 | 75,815 | 77,109 | 313,206 | 80,578 | 80,195 | 80,858 | 241,631 | ||||||||||||||||||||
Sales Less Cost of Sales | ||||||||||||||||||||||||||||||
Land Sales Less Cost of Sales - Consolidated | 3,580 | — | 63 | 4 | — | 67 | — | — | — | — | ||||||||||||||||||||
Land Sales Less Cost of Sales - Unconsolidated (4) | 190 | — | — | — | — | — | 330 | 2,449 | — | 2,779 | ||||||||||||||||||||
Total Sales Less Cost of Sales | 3,770 | — | 63 | 4 | — | 67 | 330 | 2,449 | — | 2,779 | ||||||||||||||||||||
Cousins Properties | 12 | Q3 2018 Supplemental Information |
FUNDS FROM OPERATIONS - DETAIL (1) | ||
(amounts in thousands, except per share amounts) | ||||||||||||||||||||||||||||||
2016 | 2017 1st | 2017 2nd | 2017 3rd | 2017 4th | 2017 | 2018 1st | 2018 2nd | 2018 3rd | 2018 YTD | |||||||||||||||||||||
Fee Income | ||||||||||||||||||||||||||||||
Management Fees (7) | 5,158 | 1,402 | 1,492 | 1,458 | 1,442 | 5,794 | 1,524 | 1,401 | 1,537 | 4,462 | ||||||||||||||||||||
Development Fees | 2,277 | 432 | 318 | 1,062 | 328 | 2,140 | 291 | 271 | 951 | 1,513 | ||||||||||||||||||||
Leasing & Other Fees | 912 | 102 | 44 | 77 | 475 | 698 | 1,079 | 126 | 31 | 1,236 | ||||||||||||||||||||
Total Fee Income | 8,347 | 1,936 | 1,854 | 2,597 | 2,245 | 8,632 | 2,894 | 1,798 | 2,519 | 7,211 | ||||||||||||||||||||
Other Income | ||||||||||||||||||||||||||||||
Termination Fees | 122 | 5,238 | 2,913 | 734 | 385 | 9,270 | 360 | 639 | 276 | 1,275 | ||||||||||||||||||||
Termination Fees - Unconsolidated (4) | 3,000 | 959 | 195 | 132 | 8 | 1,294 | — | — | — | — | ||||||||||||||||||||
Termination Fees - Discontinued Operations (6) | 288 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Interest and Other Income | 928 | 188 | 262 | 258 | 1,540 | 2,248 | 600 | 493 | 468 | 1,561 | ||||||||||||||||||||
Interest and Other Income - Unconsolidated (4) | 1,188 | 504 | 105 | 81 | 231 | 921 | 74 | 80 | 78 | 232 | ||||||||||||||||||||
Interest and Other Income - Discontinued Operations (6) | (1 | ) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
Gain on Extinguishment of Debt | — | — | 1,829 | 429 | — | 2,258 | — | — | 93 | 93 | ||||||||||||||||||||
Total Other Income | 5,525 | 6,889 | 5,304 | 1,634 | 2,164 | 15,991 | 1,034 | 1,212 | 915 | 3,161 | ||||||||||||||||||||
Total Fee and Other Income | 13,872 | 8,825 | 7,158 | 4,231 | 4,409 | 24,623 | 3,928 | 3,010 | 3,434 | 10,372 | ||||||||||||||||||||
Reimbursed Expenses | (3,259 | ) | (865 | ) | (907 | ) | (895 | ) | (860 | ) | (3,527 | ) | (942 | ) | (860 | ) | (955 | ) | (2,757 | ) | ||||||||||
General and Administrative Expenses | (25,592 | ) | (6,182 | ) | (8,618 | ) | (7,193 | ) | (5,530 | ) | (27,523 | ) | (6,809 | ) | (8,071 | ) | (3,913 | ) | (18,793 | ) | ||||||||||
Interest Expense | ||||||||||||||||||||||||||||||
Consolidated Debt | ||||||||||||||||||||||||||||||
Senior Notes, Unsecured ($250M) | — | — | — | (2,353 | ) | (2,489 | ) | (4,842 | ) | (2,489 | ) | (2,490 | ) | (2,488 | ) | (7,467 | ) | |||||||||||||
Term Loan, Unsecured | (386 | ) | (1,288 | ) | (1,564 | ) | (1,655 | ) | (1,691 | ) | (6,198 | ) | (1,858 | ) | (2,088 | ) | (2,205 | ) | (6,151 | ) | ||||||||||
Fifth Third Center | (1,702 | ) | (1,272 | ) | (1,266 | ) | (1,260 | ) | (1,254 | ) | (5,052 | ) | (1,247 | ) | (1,241 | ) | (1,235 | ) | (3,723 | ) | ||||||||||
Promenade | (4,614 | ) | (1,134 | ) | (1,127 | ) | (1,119 | ) | (1,112 | ) | (4,492 | ) | (1,102 | ) | (1,095 | ) | (1,085 | ) | (3,282 | ) | ||||||||||
Colorado Tower | (1,412 | ) | (1,059 | ) | (1,059 | ) | (1,059 | ) | (1,059 | ) | (4,236 | ) | (1,059 | ) | (1,059 | ) | (1,059 | ) | (3,177 | ) | ||||||||||
Senior Notes, Unsecured ($100M) | — | — | (876 | ) | (1,025 | ) | (1,036 | ) | (2,937 | ) | (1,036 | ) | (1,037 | ) | (1,036 | ) | (3,109 | ) | ||||||||||||
816 Congress Avenue | (3,268 | ) | (814 | ) | (810 | ) | (806 | ) | (803 | ) | (3,233 | ) | (799 | ) | (795 | ) | (792 | ) | (2,386 | ) | ||||||||||
Credit Facility, Unsecured | (3,914 | ) | (1,035 | ) | (1,153 | ) | (444 | ) | (418 | ) | (3,050 | ) | (742 | ) | (754 | ) | (754 | ) | (2,250 | ) | ||||||||||
Meridian Mark Plaza | (1,512 | ) | (373 | ) | (372 | ) | (370 | ) | (368 | ) | (1,483 | ) | (366 | ) | (368 | ) | (359 | ) | (1,093 | ) | ||||||||||
Other (3) | (14,540 | ) | (4,356 | ) | (2,514 | ) | (197 | ) | (176 | ) | (7,243 | ) | (175 | ) | (177 | ) | (74 | ) | (426 | ) | ||||||||||
Capitalized | 4,697 | 1,590 | 2,218 | 2,701 | 2,733 | 9,242 | 1,095 | 1,390 | 1,536 | 4,021 | ||||||||||||||||||||
Subtotal - Consolidated | (26,651 | ) | (9,741 | ) | (8,523 | ) | (7,587 | ) | (7,673 | ) | (33,524 | ) | (9,778 | ) | (9,714 | ) | (9,551 | ) | (29,043 | ) | ||||||||||
Unconsolidated Debt (4) | ||||||||||||||||||||||||||||||
Terminus | (4,919 | ) | (1,214 | ) | (1,209 | ) | (1,204 | ) | (1,196 | ) | (4,823 | ) | (1,001 | ) | (995 | ) | (988 | ) | (2,984 | ) | ||||||||||
Emory University Hospital Midtown Medical Office Tower | (1,311 | ) | (324 | ) | (322 | ) | (320 | ) | (319 | ) | (1,285 | ) | (317 | ) | (315 | ) | (314 | ) | (946 | ) | ||||||||||
Carolina Square | — | — | — | (27 | ) | (157 | ) | (184 | ) | (197 | ) | (281 | ) | (355 | ) | (833 | ) | |||||||||||||
Other (3) | (2,193 | ) | (787 | ) | (390 | ) | (225 | ) | (164 | ) | (1,566 | ) | — | — | — | — | ||||||||||||||
Subtotal - Unconsolidated | (8,423 | ) | (2,325 | ) | (1,921 | ) | (1,776 | ) | (1,836 | ) | (7,858 | ) | (1,515 | ) | (1,591 | ) | (1,657 | ) | (4,763 | ) | ||||||||||
Discontinued Operations (6) | (6,021 | ) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
Total Interest Expense | (41,095 | ) | (12,066 | ) | (10,444 | ) | (9,363 | ) | (9,509 | ) | (41,382 | ) | (11,293 | ) | (11,305 | ) | (11,208 | ) | (33,806 | ) | ||||||||||
Cousins Properties | 13 | Q3 2018 Supplemental Information |
FUNDS FROM OPERATIONS - DETAIL (1) | ||
(amounts in thousands, except per share amounts) | ||||||||||||||||||||||||||||||
2016 | 2017 1st | 2017 2nd | 2017 3rd | 2017 4th | 2017 | 2018 1st | 2018 2nd | 2018 3rd | 2018 YTD | |||||||||||||||||||||
Other Expenses | ||||||||||||||||||||||||||||||
Severance | (249 | ) | (28 | ) | — | (73 | ) | (345 | ) | (446 | ) | (195 | ) | 128 | 4 | (63 | ) | |||||||||||||
Partners' share of FFO in consolidated joint ventures | (3,775 | ) | — | — | (4 | ) | (12 | ) | (16 | ) | (144 | ) | (134 | ) | (121 | ) | (399 | ) | ||||||||||||
Property Taxes and Other Holding Costs | (440 | ) | (304 | ) | (140 | ) | (139 | ) | (181 | ) | (764 | ) | (130 | ) | (152 | ) | (148 | ) | (430 | ) | ||||||||||
Loss on Extinguishment of Debt - Consolidated | — | — | — | — | — | — | (85 | ) | — | — | (85 | ) | ||||||||||||||||||
Loss on Extinguishment of Debt - Unconsolidated (4) | (5,180 | ) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
Predevelopment & Other Costs | (943 | ) | (129 | ) | (156 | ) | (265 | ) | (253 | ) | (803 | ) | (50 | ) | (70 | ) | 8 | (112 | ) | |||||||||||
Transaction Costs - Merger | (24,522 | ) | (1,930 | ) | (246 | ) | 677 | (162 | ) | (1,661 | ) | (91 | ) | (137 | ) | — | (228 | ) | ||||||||||||
Transaction Costs - Spin-off | (6,349 | ) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
Impairment Loss | (4,526 | ) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
Total Other Expenses | (45,984 | ) | (2,391 | ) | (542 | ) | 196 | (953 | ) | (3,690 | ) | (695 | ) | (365 | ) | (257 | ) | (1,317 | ) | |||||||||||
Depreciation and Amortization of Non-Real Estate Assets | (1,365 | ) | (451 | ) | (465 | ) | (461 | ) | (497 | ) | (1,874 | ) | (473 | ) | (468 | ) | (469 | ) | (1,410 | ) | ||||||||||
FFO (1) | $ | 160,628 | $ | 67,037 | $ | 66,360 | $ | 62,334 | $ | 64,169 | $ | 259,900 | $ | 64,624 | $ | 64,585 | $ | 67,490 | $ | 196,699 | ||||||||||
Weighted Average Shares - Diluted | 256,023 | 411,186 | 427,180 | 427,300 | 427,288 | 423,297 | 427,381 | 427,501 | 427,520 | 427,472 | ||||||||||||||||||||
FFO per Share (1) | $ | 0.63 | $ | 0.16 | $ | 0.16 | $ | 0.15 | $ | 0.15 | $ | 0.61 | $ | 0.15 | $ | 0.15 | $ | 0.16 | $ | 0.46 | ||||||||||
Note: Amounts may differ slightly from other schedules contained herein due to rounding. | |||||||||||||||||
(1) See Non-GAAP Financial Measures - Calculations and Reconciliations beginning on page 30. | |||||||||||||||||
(2) Contains multiple buildings that are grouped together for reporting purposes. | |||||||||||||||||
(3) Represents properties sold and loans repaid prior to September 30, 2018 that are not considered discontinued operations. | |||||||||||||||||
(4) Unconsolidated amounts include amounts recorded in unconsolidated joint ventures for the respective category multiplied by the Company's ownership interest. The Company does not control the operations of the unconsolidated joint ventures, but believes including these amounts in the categories indicated is meaningful to investors and analysts. | |||||||||||||||||
(5) Through December 1, 2016, the Company received an 11.46% current return on its $11.1 million investment in Gateway Village and, when certain other revenue criteria were met, received additional returns. The Company recognized these amounts as NOI from this venture. After December 1, 2016, net income and cash flows were allocated 50% to each joint venture member. | |||||||||||||||||
(6) Represents properties included in the spin-off in the 2016 merger-spin transaction with Parkway Properties, Inc. | |||||||||||||||||
(7) Management Fees include reimbursement of expenses that are included in the "Reimbursed Expenses" line item. | |||||||||||||||||
Cousins Properties | 14 | Q3 2018 Supplemental Information |
PORTFOLIO STATISTICS | ||
Office Properties | Rentable Square Feet | Financial Statement Presentation | Company's Ownership Interest | End of Period Leased | Weighted Average Occupancy | % of Total Net Operating Income (1) | Property Level Debt ($000) (2) | |||||||||||||||
3Q18 | 2Q18 | 3Q18 | 2Q18 | |||||||||||||||||||
Northpark (3) | 1,539,000 | Consolidated | 100% | 93.1% | 86.4% | 86.6% | 84.8% | 7.6% | $ | — | ||||||||||||
864 Spring Street | 506,000 | Consolidated | 100% | 100.0% | 100.0% | 100.0% | 100.0% | 5.8% | — | |||||||||||||
Buckhead Plaza (3) | 671,000 | Consolidated | 100% | 82.8% | 86.7% | 83.2% | 88.2% | 5.4% | — | |||||||||||||
Promenade | 777,000 | Consolidated | 100% | 89.3% | 93.4% | 90.5% | 94.1% | 5.1% | 99,792 | |||||||||||||
Terminus (3) | 1,226,000 | Unconsolidated | 50% | 88.8% | 92.7% | 87.0% | 87.5% | 4.2% | 99,927 | |||||||||||||
3344 Peachtree | 484,000 | Consolidated | 100% | 92.4% | 92.4% | 91.5% | 91.5% | 3.7% | — | |||||||||||||
3350 Peachtree | 413,000 | Consolidated | 100% | 94.4% | 84.9% | 84.9% | 85.8% | 2.3% | — | |||||||||||||
3348 Peachtree | 258,000 | Consolidated | 100% | 88.0% | 88.0% | 86.6% | 86.0% | 1.8% | — | |||||||||||||
8000 Avalon | 229,000 | Consolidated | 90% | 100.0% | 98.2% | 75.7% | 73.4% | 1.4% | — | |||||||||||||
Emory University Hospital Midtown Medical Office Tower | 358,000 | Unconsolidated | 50% | 99.1% | 99.9% | 99.6% | 99.0% | 1.3% | 34,955 | |||||||||||||
Meridian Mark Plaza | 160,000 | Consolidated | 100% | 100.0% | 100.0% | 100.0% | 100.0% | 1.3% | 23,607 | |||||||||||||
ATLANTA | 6,621,000 | 92.0% | 90.9% | 88.6% | 89.2% | 39.9% | 258,281 | |||||||||||||||
Hearst Tower | 966,000 | Consolidated | 100% | 99.1% | 99.1% | 99.1% | 99.1% | 8.0% | — | |||||||||||||
Fifth Third Center | 692,000 | Consolidated | 100% | 99.8% | 99.7% | 99.7% | 95.8% | 6.1% | 143,739 | |||||||||||||
NASCAR Plaza | 394,000 | Consolidated | 100% | 98.8% | 98.1% | 98.5% | 98.3% | 3.3% | — | |||||||||||||
Gateway Village (3) | 1,061,000 | Unconsolidated | 50% | 99.4% | 99.4% | 99.4% | 99.4% | 2.3% | — | |||||||||||||
CHARLOTTE | 3,113,000 | 99.3% | 99.2% | 99.2% | 98.2% | 19.7% | 143,739 | |||||||||||||||