UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



þ☑		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2017~~2019



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

For the transition period from to

Commission file number: 001-11312

COUSINS PROPERTIES ~~INCORPORATED~~INCORPORATED

(Exact name of registrant as specified in its charter)



~~GEORGIA~~ Georgia					58-0869052
(State or other jurisdiction of incorporation or organization)				~~58-0869052~~	(I.R.S. Employer Identification No.)
3344 Peachtree Road NE	Suite 1800	Atlanta	Georgia		30326-4802
(Address of principal executive offices)				~~30326-4802~~	(Zip Code)

~~(404)~~ (404) 407-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1 par value per share	CUZ	New York Stock Exchange	("NYSE")

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ☑ No o☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes þ☑ No o☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filerþ	☑		Accelerated filero	☐
Non-accelerated filero	☐		Smaller reporting companyo	☐
		~~(Do not check if a smaller reporting company)~~	Emerging growth companyo	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o☐ No þ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.



Class		Outstanding at October ~~20, 2017~~16, 2019
Common Stock, $1 par value per share		~~420,020,538~~146,762,271 shares

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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, ~~2016~~2018, and as itemized herein. 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~~ guidance and underlying assumptions;

business and financial strategy;

•~~our ability to obtain~~ future ~~financing;~~debt financings;

•future acquisitions and dispositions of operating ~~assets;~~assets or joint venture interests;

•future acquisitions and dispositions of ~~land;~~land, including ground leases;

•future development and redevelopment opportunities, including fee development opportunities;

•future ~~dispositions~~issuances and repurchases of ~~land and other non-core assets;~~common stock;

•future distributions;

projected ~~operating results;~~capital expenditures;

•market and industry trends;

•entry into new markets;

future ~~distributions;~~

•~~projected capital expenditures;~~

•changes in interest rates;

the ~~impact~~benefits of the ~~transaction involving us, Parkway Properties,~~merger with TIER REIT, Inc. ("~~Parkway"), and Parkway, Inc. ("New Parkway"~~TIER"), including all future financial and operating results, plans, objectives, expectations, and intentions;

benefits of the transactions with TIER to tenants, employees, stockholders, and other constituents of the combined company;

integrating TIER with us; 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;~~

~~impact of the transactions with Parkway and New Parkway on tenants, employees, stockholders, and other constituents of the combined companies; and~~

~~integrating Parkway with us.~~stockholders.

Any forward-looking statements are based upon management's beliefs, assumptions, and expectations of our future performance, taking into account information that is 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~~changes in national and local economic conditions, the real estate industry, and the commercial real estate markets in which we operate (including supply and demand changes), particularly in Atlanta, Austin, Charlotte, ~~Austin,~~Phoenix, Tampa, and ~~Phoenix~~Dallas where we have high concentrations of our ~~annualized~~ lease ~~revenue;~~revenues;

changes to our strategy with regard to land and other non-core holdings that ~~may~~ 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, the failure of a tenant to commence or complete tenant improvements on schedule or to occupy leased space, and the risk of declining leasing rates;

changes in the needs of our tenants brought about by the desire for co-working arrangements, trends toward utilizing less office space per employee, and the effect of telecommuting;

any 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);

cyber security breaches;

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;

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any failure to continue to qualify for taxation as a real estate investment trust and to meet regulatory requirements;

~~risks associated with litigation resulting from the transactions with Parkway and from liabilities or contingent liabilities assumed in the transactions with Parkway;~~

~~risks associated with any errors or omissions in financial or other information of Parkway that has been previously provided to the public;~~

~~Table of Contents~~

~~the ability to successfully integrate our operations and employees in connection with the transactions with Parkway and New Parkway;~~

~~the ability to realize anticipated benefits and synergies of the transactions with Parkway and New Parkway;~~

potential changes to state, local, or federal regulations applicable to our business;

material changes in the ~~dividend~~ rates ~~on securities~~ or the ability to pay dividends on common shares or other securities;

potential changes to the tax laws impacting REITs and real estate in general;

~~significant~~the ability to successfully integrate our operations and employees in connection with the merger with TIER;

the ability to realize anticipated benefits and synergies of the merger with TIER;

the amount of the costs, fees, expenses, and charges related to ~~uninsured losses, condemnation, or environmental issues;~~the merger with TIER; and

those additional risks and factors discussed in reports filed with the Securities and Exchange Commission (“SEC”) by the Company and TIER, and those additional risks and factors discussed in reports filed with the SEC 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.

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts)

	September 30, 2019			December 31, 2018
	(unaudited)
Assets:
Real estate assets:
Operating properties, net of accumulated depreciation of $561,489 and $421,495 in 2019 and 2018, respectively	$	5,532,963		$	3,603,011
Projects under development	370,755			24,217
Land	113,578			72,563
	6,017,296			3,699,791
Real estate assets and other assets held for sale	29,193			—

Cash and cash equivalents	12,396			2,547
Restricted cash	2,268			148
Notes and accounts receivable	28,792			13,821
Deferred rents receivable	101,213			83,116
Investment in unconsolidated joint ventures	186,079			161,907
Intangible assets, net	255,613			145,883
Other assets	71,270			39,083
Total assets	$	6,704,120		$	4,146,296
Liabilities:
Notes payable	$	1,850,817		$	1,062,570
Accounts payable and accrued expenses	225,632			110,159
Deferred income	57,411			41,266
Intangible liabilities, net of accumulated amortization of $56,414 and $42,473 in 2019 and 2018, respectively	89,578			56,941
Other liabilities	131,604			54,204
Total liabilities	2,355,042			1,325,140
Commitments and contingencies
Equity:
Stockholders' investment:
Preferred stock, $1 par value, 20,000,000 shares authorized, 1,716,837 shares issued and outstanding in 2019 and 2018	1,717			1,717
Common stock, $1 par value, 300,000,000 and 175,000,000 shares authorized in 2019 and 2018, respectively, and 149,347,204 and 107,681,130 shares issued in 2019 and 2018, respectively	149,347			107,681
Additional paid-in capital	5,493,265			3,934,385
Treasury stock at cost, 2,584,933 shares in 2019 and 2018	(148,473		)	(148,473		)
Distributions in excess of cumulative net income	(1,211,752		)	(1,129,445		)
Total stockholders' investment	4,284,104			2,765,865
Nonredeemable noncontrolling interests	64,974			55,291
Total equity	4,349,078			2,821,156
Total liabilities and equity	$	6,704,120		$	4,146,296

See accompanying notes.

COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
September 30, 2017 December 31, 2016
(unaudited)
Assets:
Real estate assets:
Operating properties, net of accumulated depreciation of $253,362 and $215,856 in 2017 and 2016, respectively $ 3,490,181
$ 3,432,522
Projects under development 248,242
162,387
Land 4,221
4,221
3,742,644
3,599,130

Cash and cash equivalents 62,167
35,687
Restricted cash 437
15,634
Notes and accounts receivable, net of allowance for doubtful accounts of $626 and $1,167 in 2017 and 2016, respectively 16,291
27,683
Deferred rents receivable 53,483
39,464
Investment in unconsolidated joint ventures 109,222
179,397
Intangible assets, net of accumulated amortization of $99,063 and $53,483 in 2017 and 2016, respectively 211,786
245,529
Other assets 28,170
29,083
Total assets $ 4,224,200
$ 4,171,607
Liabilities:

Notes payable $ 1,095,177
$ 1,380,920
Accounts payable and accrued expenses 160,101
109,278
Deferred income 35,918
33,304
Intangible liabilities, net of accumulated amortization of $25,709 and $12,227 in 2017 and 2016, respectively 76,299
89,781
Other liabilities 39,385
44,084
Total liabilities 1,406,880
1,657,367
Commitments and contingencies

Equity:
Stockholders' investment:
Preferred stock, $1 par value, 20,000,000 shares authorized, 6,867,357 shares issued and outstanding in 2017 and 2016 6,867
6,867
Common stock, $1 par value, 700,000,000 shares authorized, 430,349,620 and 403,746,938 shares issued in 2017 and 2016, respectively 430,350
403,747
Additional paid-in capital 3,604,269
3,407,430
Treasury stock at cost, 10,329,082 shares in 2017 and 2016 (148,373 ) (148,373 )
Distributions in excess of cumulative net income (1,127,813 ) (1,214,114 )
Total stockholders' investment 2,765,300
2,455,557
Nonredeemable noncontrolling interests 52,020
58,683
Total equity 2,817,320
2,514,240
Total liabilities and equity $ 4,224,200
$ 4,171,607

See accompanying notes.

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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(~~unaudited,~~unaudited; in thousands, except per share amounts)


	Three Months Ended					Nine Months Ended						Three Months Ended						Nine Months Ended
	September 30,					September 30,						September 30,						September 30,
	2017			2016		2017			2016			2019			2018			2019			2018
Revenues:
Rental property revenues	$	109,569		$	46,575	$	336,093		$	138,382		$	180,826		$	115,719		$	439,624		$	343,764
Fee income	2,597			1,945		6,387			5,968			7,494			2,519			23,298			7,211
Other	993			153		9,593			570			3			468			154			1,561
	113,159			48,673		352,073			144,920			188,323			118,706			463,076			352,536
Expenses:
Rental property operating expenses	40,688			18,122		123,715			55,451			65,646			41,579			155,838			122,501
Reimbursed expenses	895			795		2,667			2,463			1,290			955			3,269			2,757
General and administrative expenses	7,193			4,368		21,993			17,301			5,852			3,913			25,686			18,793
Interest expense	7,587			5,754		25,851			16,562			14,700			9,551			37,579			29,043
Depreciation and amortization	47,622			16,622		152,546			49,804			82,012			45,068			178,777			135,836
Acquisition and transaction costs	(677		)	1,446		1,499			3,889
Transaction costs												1,048			—			50,878			228
Other	423			173		1,063			681			297			93			1,101			457
	103,731			47,280		329,334			146,151			170,845			101,159			453,128			309,615
Income from unconsolidated joint ventures												3,241			2,252			9,779			10,173
Gain (loss) on sale of investment properties												(27		)	(33		)	14,388			4,912
Gain on extinguishment of debt	429			—		2,258			—			—			93			—			8
Income (loss) from continuing operations before unconsolidated joint ventures and gain (loss) on sale of investment properties	9,857			1,393		24,997			(1,231		)
Income from unconsolidated joint ventures	2,461			1,527		43,362			5,144
Income from continuing operations before gain (loss) on sale of investment properties	12,318			2,920		68,359			3,913
Gain (loss) on sale of investment properties	(33		)	—		119,729			13,944
Income from continuing operations	12,285			2,920		188,088			17,857
Income from discontinued operations	—			8,737		—			24,361
Net income	12,285			11,657		188,088			42,218			20,692			19,859			34,115			58,014
Net income attributable to noncontrolling interests	(218		)	—		(3,181		)	—			(318		)	(374		)	(809		)	(1,210		)
Net income available to common stockholders	$	12,067		$	11,657	$	184,907		$	42,218		$	20,374		$	19,485		$	33,306		$	56,804
Per common share information — basic and diluted:
Income from continuing operations	$	0.03		$	0.01	$	0.45		$	0.08
Income from discontinued operations	—			0.05		—			0.12
Net income	$	0.03		$	0.06	$	0.45		$	0.20

Net income per common share — basic and diluted												$	0.14		$	0.19		$	0.27		$	0.54
Weighted average shares — basic	419,998			210,170		414,123			210,400			146,762			105,096			121,758			105,069
Weighted average shares — diluted	427,300			210,326		421,954			210,528			148,530			106,880			123,529			106,867
Dividends declared per common share	$	0.06		$	0.08	$	0.24		$	0.24

See accompanying notes.

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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

~~Nine Months Ended September 30, 2017 and 2016~~(unaudited; in thousands except per share amounts)

~~(unaudited, in thousands)~~

Preferred
Stock
Common
Stock

Additional
Paid-In
Capital

Treasury
Stock

Distributions in
Excess of
Net Income

Stockholders’
Investment

Nonredeemable
Noncontrolling
Interests

Total
Equity
Balance December 31, 2016 $ 6,867
$ 403,747
$ 3,407,430
$ (148,373 ) $ (1,214,114 ) $ 2,455,557
$ 58,683
$ 2,514,240
Net income —
—
—
—
184,907
184,907
3,181
188,088
Common stock issued pursuant to:
Common stock offering, net of
issuance costs —
25,000
186,774
—
—
211,774
—
211,774
Director stock grants —
121
889
—
—
1,010
—
1,010
Stock based compensation —
282
(1,168 ) —
—
(886 ) —
(886 )
Spin-off of Parkway, Inc. —
—
—
—
545
545
—
545
Common stock redemption by unit holders —
1,203
8,865
—
—
10,068
(10,068 ) —
Amortization of stock options and restricted stock, net of forfeitures —
(3 ) 1,479
—
—
1,476
—
1,476
Contributions from nonredeemable noncontrolling interest —
—
—
—
—
—
1,588
1,588
Distributions to nonredeemable noncontrolling interest —
—
—
—
—
—
(1,364 ) (1,364 )
Common dividends ($0.24 per share) —
—
—
—
(99,151 ) (99,151 ) —
(99,151 )
Balance September 30, 2017 $ 6,867
$ 430,350
$ 3,604,269
$ (148,373 ) $ (1,127,813 ) $ 2,765,300
$ 52,020
$ 2,817,320

Balance December 31, 2015 $ —
$ 220,256
$ 1,722,224
$ (134,630 ) $ (124,435 ) $ 1,683,415
$ —
$ 1,683,415
Net income —
—
—
—
42,218
42,218
—
42,218
Common stock issued pursuant to stock based compensation —
257
76
—
—
333
—
333
Amortization of stock options and restricted stock, net of forfeitures —
(14 ) 1,252
—
—
1,238
—
1,238
Contributions from nonredeemable noncontrolling interests —
—
—
—
—
—
2,525
2,525
Repurchase of common stock —
—
—

(13,743 ) —
(13,743 ) —
(13,743 )
Common dividends ($0.24 per share) —
—
—
—
(50,549 ) (50,549 ) —
(50,549 )
Balance September 30, 2016 $ —
$ 220,499
$ 1,723,552
$ (148,373 ) $ (132,766 ) $ 1,662,912
$ 2,525
$ 1,665,437



Three Months Ended September 30, 2019
	Preferred Stock		Common Stock			Additional Paid-In Capital		Treasury Stock			Distributions in Excess of Net Income			Stockholders’ Investment			Nonredeemable Noncontrolling Interests			Total Equity
Balance June 30, 2019	$	1,717	$	149,348		$	5,492,648	$	(148,473	)	$	(1,189,567	)	$	4,305,673		$	63,945		$	4,369,618
Net income (loss)	—		—			—		—			20,374			20,374			318			20,692
Amortization of stock options and restricted stock, net of forfeitures	—		(1		)	617		—			—			616			—			616
Contributions from nonredeemable noncontrolling interests	—		—			—		—			—			—			1,191			1,191
Distributions to nonredeemable noncontrolling interests	—		—			—		—			—			—			(480		)	(480		)
Common dividends ($0.29 per share)	—		—			—		—			(42,559		)	(42,559		)	—			(42,559		)
Balance September 30, 2019	$	1,717	$	149,347		$	5,493,265	$	(148,473	)	$	(1,211,752	)	$	4,284,104		$	64,974		$	4,349,078

Three Months Ended September 30, 2018
	Preferred Stock		Common Stock			Additional Paid-In Capital		Treasury Stock			Distributions in Excess of Net Income			Stockholders’ Investment			Nonredeemable Noncontrolling Interests			Total Equity
Balance June 30, 2018	$	1,717	$	107,683		$	3,933,248	$	(148,473	)	$	(1,116,640	)	$	2,777,535		$	54,809		$	2,832,344
Net income	—		—			—		—			19,485			19,485			374			19,859
Amortization of stock options and restricted stock, net of forfeitures	—		(2		)	563		—			—			561			—			561
Contributions from nonredeemable noncontrolling interests	—		—			—		—			—			—			252			252
Distributions to nonredeemable noncontrolling interests	—		—			—		—			—			—			(1,198		)	(1,198		)
Common dividends ($0.26 per share)	—		—			—		—			(27,363		)	(27,363		)	—			(27,363		)
Balance September 30, 2018	$	1,717	$	107,681		$	3,933,811	$	(148,473	)	$	(1,124,518	)	$	2,770,218		$	54,237		$	2,824,455

See accompanying notes.

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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited; in thousands except per share amounts)



Nine Months Ended September 30, 2019
	Preferred Stock		Common Stock			Additional Paid-In Capital			Treasury Stock			Distributions in Excess of Net Income			Stockholders’ Investment			Nonredeemable Noncontrolling Interests			Total Equity
Balance December 31, 2018	$	1,717	$	107,681		$	3,934,385		$	(148,473	)	$	(1,129,445	)	$	2,765,865		$	55,291		$	2,821,156
Net income	—		—			—			—			33,306			33,306			809			34,115
Common stock issued in merger	—		41,576			1,556,613			—			—			1,598,189			—			1,598,189
Common stock issued pursuant to stock based compensation	—		91			419			—			—			510			—			510
Amortization of stock options and restricted stock, net of forfeitures	—		(1		)	1,848			—			—			1,847			—			1,847
Nonredeemable noncontrolling interests acquired in merger	—		—			—			—			—			—			5,348			5,348
Contributions from nonredeemable noncontrolling interests	—		—			—			—			—			—			5,271			5,271
Distributions to nonredeemable noncontrolling interests	—		—			—			—			—			—			(1,745		)	(1,745		)
Common dividends ($0.87 per share)	—		—			—			—			(115,613		)	(115,613		)	—			(115,613		)
Balance September 30, 2019	$	1,717	$	149,347		$	5,493,265		$	(148,473	)	$	(1,211,752	)	$	4,284,104		$	64,974		$	4,349,078

Nine Months Ended September 30, 2018
	Preferred Stock		Common Stock			Additional Paid-In Capital			Treasury Stock			Distributions in Excess of Net Income			Stockholders’ Investment			Nonredeemable Noncontrolling Interests			Total Equity
Balance December 31, 2017	$	1,717	$	107,587		$	3,932,689		$	(148,373	)	$	(1,121,647	)	$	2,771,973		$	53,138		$	2,825,111
Net income	—		—			—			—			56,804			56,804			1,210			58,014
Common stock issued pursuant to stock based compensation	—		99			(566		)	(100		)	—			(567		)	—			(567		)
Cumulative effect of change in accounting principle	—		—			—			—			22,329			22,329			—			22,329
Amortization of stock options and restricted stock, net of forfeitures	—		(5		)	1,688			—			—			1,683			—			1,683
Contributions from nonredeemable noncontrolling interests	—		—			—			—			—			—			1,960			1,960
Distributions to nonredeemable noncontrolling interests	—		—			—			—			—			—			(2,071		)	(2,071		)
Common dividends ($0.78 per share)	—		—			—			—			(82,004		)	(82,004		)	—			(82,004		)
Balance September 30, 2018	$	1,717	$	107,681		$	3,933,811		$	(148,473	)	$	(1,124,518	)	$	2,770,218		$	54,237		$	2,824,455

See accompanying notes.

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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(~~unaudited,~~unaudited; in thousands)


	Nine Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	188,088		$	42,218		$	34,115		$	58,014
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of investment properties	(119,729		)	(13,944		)	(14,388		)	(4,912		)
Depreciation and amortization, including discontinued operations	152,546			96,192
Depreciation and amortization							178,777			135,836
Amortization of deferred financing costs and premium/discount on notes payable	(2,543		)	1,063			1,723			1,808
Stock-based compensation expense, net of forfeitures	2,486			1,571			3,209			2,825
Effect of certain non-cash adjustments to rental revenues	(33,379		)	(15,966		)
Effect of non-cash adjustments to revenues							(31,166		)	(24,028		)
Income from unconsolidated joint ventures	(43,362		)	(5,144		)	(9,779		)	(10,173		)
Operating distributions from unconsolidated joint ventures	40,207			5,893			6,125			15,056
Gain on extinguishment of debt	(2,258		)	—			—			(8		)
Changes in other operating assets and liabilities:
Change in other receivables and other assets, net	9,707			1,824			(13,638		)	(435		)
Change in operating liabilities	3,150			5,544
Change in operating liabilities, net							43,387			4,054
Net cash provided by operating activities	194,913			119,251			198,365			178,037
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from investment property sales	171,316			21,088			58,968			—
Property acquisition, development, and tenant asset expenditures	(229,811		)	(122,357		)	(252,034		)	(132,468		)
Purchase of tenant in common interest	(13,382		)	—
Collection of notes receivable	5,161			—
Investment in unconsolidated joint ventures	(13,862		)	(24,918		)	(21,476		)	(43,276		)
Distributions from unconsolidated joint ventures	40,939			4,150			11			2,032
Cash and restricted cash acquired in merger							85,989			—
Change in notes receivable and other assets	(1,348		)	(5,699		)	(71		)	(4,429		)
Change in restricted cash	15,105			(3,667		)
Other							—			(4,261		)
Net cash used in investing activities	(25,882		)	(131,403		)	(128,613		)	(182,402		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from credit facility	589,300			182,800			904,000			—
Repayment of credit facility	(723,300		)	(274,800		)	(824,000		)	—
Proceeds from issuance of notes payable	350,000			270,000
Repayment of notes payable	(493,774		)	(7,239		)	(687,207		)	(28,719		)
Issuance of unsecured senior notes							650,000			—
Payment of deferred financing costs	(2,048		)	(1,604		)	(2,866		)	(6,166		)
Shares withheld for payment of taxes on restricted stock vesting	(701		)	—
Common stock issued, net of expenses	211,598			—
Contributions from noncontrolling interests	1,588			2,525
Contributions from nonredeemable noncontrolling interests							5,271			252
Distributions to nonredeemable noncontrolling interests	(1,364		)	—			(1,745		)	(2,071		)
Repurchase of common stock	—			(13,743		)
Common dividends paid	(73,950		)	(50,549		)	(100,372		)	(79,842		)
Other	100			—			(864		)	(1,709		)
Net cash provided by (used in) financing activities	(142,551		)	107,390
NET INCREASE IN CASH AND CASH EQUIVALENTS	26,480			95,238
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	35,687			2,003
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	62,167		$	97,241

Interest paid, net of amounts capitalized	$	26,927		$	20,792

Significant non-cash transactions:
Transfer from operating properties to real estate assets and other assets held for sale	$	—		$	203,735
Transfer from operating properties to liabilities of real estate assets held for sale	—			106,135
Transfer from investment in unconsolidated joint ventures to operating properties	68,390			—
Transfer from projects under development to operating properties	58,928			—
Common stock dividends declared	25,201			—
Transfer from investment in unconsolidated joint ventures to projects under development	—			5,880
Transfer from land held to projects under development	—			8,099
Change in accrued property acquisition, development, and tenant asset expenditures	(18,081		)	(11,384		)
Net cash used in financing activities							(57,783		)	(118,255		)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH							11,969			(122,620		)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD							2,695			205,745
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD							$	14,664		$	83,125

See accompanying notes.

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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, ~~2017~~2019

(Unaudited)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

Cousins Properties Incorporated (“Cousins”), a Georgia corporation, is a publicly traded (NYSE: CUZ), self-administered, and self-managed real estate investment trust (“REIT”). Cousins conducts substantially all of its operations through Cousins Properties LP ("CPLP"). Cousins owns approximately ~~98%~~99% of CPLP and consolidates CPLP. Cousins TRS Services LLC ("CTRS"), which is wholly owned by CPLP, is a taxable entity which owns and manages its own real estate portfolio and performs certain real estate related services for other parties. Cousins, CPLP, CTRS, and their subsidiaries are hereinafter referred to collectively as "the Company."

The Company develops, acquires, leases, manages, and owns Class A office and mixed-use properties in ~~Sunbelt~~Sun Belt markets with a focus on ~~Arizona, Florida,~~ Georgia, Texas, North Carolina, Arizona, and ~~Texas.~~Florida. Cousins has elected to be taxed as a REIT and intends to, among other things, distribute 100% of its net taxable income to stockholders, thereby eliminating any liability for federal income taxes under current law. Therefore, the results included herein do not include a federal income tax provision for Cousins.

Basis of Presentation

The condensed consolidated financial statements are unaudited and were prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, these financial statements reflect all adjustments necessary (which adjustments are of a normal and recurring nature) for the fair presentation of the Company's financial position as of September 30, ~~2017~~2019 and the results of operations for the three and nine months ended September 30, ~~2017~~2019 and ~~2016.~~2018. The results of operations for the three and nine months ended September 30, ~~2017~~2019 are not necessarily indicative of results expected for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018. The accounting policies employed are substantially the same as those shown in note 2 to the consolidated financial statements included therein.

On June 14, 2019, the Company restated and amended its articles of incorporation to effect a reverse stock split of the issued and outstanding shares of its common and preferred stock pursuant to which (1) each four shares of the Company's issued and outstanding common stock were combined into one share of the Company's common or preferred stock, respectively, and (2) the authorized number of the Company's common stock was proportionally reduced to 175 million shares. Fractional shares of common stock resulting from the reverse stock split were settled in cash. Fractional shares of preferred stock resulting from the reverse stock split were redeemed without payout. Immediately thereafter, the Company further amended its articles of incorporation to increase the number of authorized shares of its common stock from 175 million to 300 million shares. All shares of common stock, stock options, restricted stock units, and per share information presented in the condensed consolidated financial statements have been adjusted to reflect the reverse stock split on a retroactive basis for all periods presented.

For the three and nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, there were no items of other comprehensive income. Therefore, no presentation of comprehensive income is required. Additionally, certain subtotals within the condensed consolidated statements of operations for the three and nine months ended September 30, 2018 were removed to conform to the current period presentation.

On January 1, 2019, the Company began recording lease termination fees in rental property revenues on the condensed consolidated statements of operations as a result of the adoption of Accounting Standards Update ("ASU") 2016-02, "Leases," ("ASC 842"). The prior period amounts, which were included in other revenues, were reclassified to conform to the current period presentation.

The Company evaluates all partnerships, joint ventures, and other arrangements with variable interests to determine if the entity or arrangement qualifies as a variable interest entity ("VIE"), as defined in the Financial Accounting Standard Board's ("FASB") Accounting Standards Codification ("ASC"). If the entity or arrangement qualifies as a VIE and the Company is determined to be the primary beneficiary, the Company is required to consolidate the assets, liabilities, and results of operations of the VIE. At September 30, 2019, the Company had no investments or interests in any VIEs.

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Recently Issued Accounting Standards

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers." Under the new guidance, companies will recognize revenue when the seller satisfies a performance obligation, which would be when the buyer takes control of the good or service. ASU 2015-14, "Revenue from Contracts with Customers," was subsequently issued modifying the effective date to periods beginning after December 15, 2017, with early adoption permitted for periods beginning after December 15, 2016. The standard allows for either "full retrospective" adoption, meaning the standard is applied to all of the periods presented, or "modified retrospective" adoption, meaning the standard is applied only to the most recent period presented in the financial statements. The Company expects to adopt this guidance effective January 1, 2018 and is in the process of analyzing the impact of the adoption of this guidance. Based on the results of this analysis to date, the Company believes that its management, development, and leasing fees from third parties and with its unconsolidated joint ventures, as well as parking revenue, will be impacted by the new standard. The new guidance specifically excludes revenue associated with lease contracts. However, the Company believes that certain non-lease components of revenue from leases may be impacted by the adoption of the new revenue standard beginningOn January 1, 2019, the ~~effective date of~~Company adopted ASC 842, which amended the ~~new leasing~~previous standard (see below). This new guidance could result in different amounts of revenue being recognized and could result in revenue being recognized in different reporting periods than under the current guidance; however, the Company expects that the majority of its non-lease revenues will continue to be recognized during the periods in which services are performed. The Company expects to adopt this guidance using the "modified retrospective" method effective January 1, 2018. The Company is still analyzing potential disclosures that will clearly identify the sources of revenue and the periods over which each is recognized.

~~In February 2016, the FASB issued ASU 2016-02, "Leases," which amends the existing standards~~ for lease accounting by requiring lessees to ~~recognize~~record most leases on their balance sheets and making targeted changes to lessor accounting and reporting. The new standard ~~will require~~requires lessees to record a right-of-use asset and a lease liability for ~~all~~ leases ~~with a term of greater than 12 months~~ and classify such leases as either finance or operating leases based on the principle of whether ~~or not~~ the lease is effectively a financed purchase of the leased asset by the lessee. ~~This~~The classification ~~will determine~~of the leases determines whether the lease expense

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is recognized based on an effective interest method (finance leases) or on a straight-line basis over the term of the lease (operating leases). ~~Leases~~The new standard also revised the treatment of indirect leasing costs and permits the capitalization and amortization of direct leasing costs only. For the three and nine months ended September 30, 2018, the Company capitalized $778,000 and $2.8 million of indirect leasing costs, respectively.

The Company adopted the following optional practical expedients provided in ASC 842:

•no reassessment of any expired or existing contracts to determine if they contain a lease;

•no requirement to write-off any unamortized, previously capitalized, initial direct costs for existing leases;

•no recognition of right-of-use assets for leases with a term of ~~12 months~~one year or ~~less will~~less;

no requirement to separately classify and disclose non-lease components of revenue in lease contracts from the related lease components provided certain conditions are met; and

no requirement to reassess the classification of existing leases as finance leases versus operating leases.

For those leases where the Company is lessee, specifically ground leases, the adoption of ASC 842 required the Company to record a right-of-use asset and a lease liability in the amount of $56.3 million on the condensed consolidated balance sheet. In calculating the right of use asset and lease liability the Company used a weighted average discount rate of 4.49%, which represented the Company's incremental borrowing rate related to the ground lease assets as of January 1, 2019. Ground leases executed before the adoption of ASC 842 are accounted for as operating leases and did not result in a materially different ground lease expense. However, most ground leases executed after the adoption of ASC 842 are expected to be accounted for ~~similar~~as finance leases, which will result in ground lease expense being recorded using the effective interest method instead of the straight-line method over the term of the lease, resulting in higher expense associated with the ground lease in the earlier years of a ground lease when compared to existing guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases, and operating leases. ASU 2016-02 supersedes previous leasing standards. The guidance is effective for the ~~fiscal years beginning after December 15, 2018, with early adoption permitted.~~straight line method. The Company ~~expects to adopt this guidance using~~used the "modified retrospective" method ~~effective January 1, 2019, and is currently assessing the potential impact~~upon adoption of ~~adopting the new guidance.~~

~~In August 2016, the FASB issued ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15")~~ASC 842, which updated ASC Topic 230, "Statement of Cash Flows." ASU 2016-15 clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows to reduce diversity in practice with respect to (i) debt prepayment or debt extinguishment costs, (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (iii) contingent consideration payments made after a business combination, (iv) proceeds from the settlement of insurance claims, (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (vi) distributions received from equity method investees, (vii) beneficial interests in securitization transactions, and (viii) separately identifiable cash flows andpermitted application of the predominance principle. ASU 2016-15 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017, with early adoption permitted. The Company expects to adopt thisnew standard ~~in the fourth quarter of 2018 and expects that~~on the adoption ~~of this standard will change~~date as opposed to the ~~classification of cash flows from~~earliest comparative period presented in its ~~equity method investments.~~financial statements. For additional disclosures, see note 4 "Leases."

In November 2016, the FASB issued ASU 2016-18, "Restricted Cash" ("ASU 2016-18") which updated ASC Topic 230, "Statement of Cash Flows." ASU 2016-18 will require companies to include restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This update is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017, with early adoption permitted. The Company expects to adopt this standard in the fourth quarter of 2018, which will result in a change in the presentation of cash and cash equivalents on the statements of cash flows.

~~Effective~~On January 1, ~~2017,~~2018, the Company adopted, ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting." Under this ASU, the additional paid-in capital pool is eliminated, and an entity recognizes all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement. This ASU also eliminated the requirement to defer recognition of an excess tax benefit until all benefits are realized through a reduction to taxes payable. In the first quarter of 2017, the Company changed the treatment of excess tax benefits as operating cash flows in the statement of cash flows. This ASU also stipulates that cash payments to tax authorities in connection with shares withheld to meet statutory tax withholding requirements be presented as a financing activity in the statement of cash flows. This ASU was adopted prospectively effective January 1, 2017; therefore, prior periods have not been restated to conform to the current period presentation.

In January 2017, the FASB issued ASU 2017-01, "Clarifying the Definition of a Business," which provides a more narrow definition of a business to be used in determining the accounting treatment of an acquisition. As a result, many acquisitions that previously qualified as business combinations will be treated as asset acquisitions. For asset acquisitions, acquisition costs may be capitalized, and the purchase price may be allocated on a relative fair value basis. ASU 2017-01 is effective prospectively for the Company on January 1, 2018, with early adoption permitted. The Company expects that most of its future acquisitions will qualify as asset acquisitions.

~~In February 2017, the FASB issued ASU No.~~ 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets” (“ASU ~~2017-05”~~2017-05"). ~~ASU 2017-05 updates the definition~~As a result of ~~an “in substance nonfinancial asset” and clarifies the derecognition guidance for nonfinancial assets to conform with the new revenue recognition standard.~~ ~~The Company is currently assessing the potential impact that~~ the adoption of ASU 2017-05, ~~will have on its consolidated financial statements.~~ the Company recorded a cumulative effect from change in accounting principle, which credited distributions in excess of cumulative net income by $22.3 million. This ~~ASU is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017. The Company expects~~cumulative effect adjustment resulted from the 2013 transfer of a wholly-owned property to ~~adopt this guidance using the "modified retrospective" method effective January 1, 2018.~~

In May 2017, FASB issued ASU 2017-09, "Scope of Modification Accounting," which amends the scope of modification accounting for share-based payment arrangements and provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity ~~would be required to apply modification accounting under ASC 718. This update is effective for interim and annual reporting periods~~ in fiscal years beginning after December 15, 2017, with early adoption permitted. The Company expects to adopt this standard on January 1, 2018. The Company does not believe that the adoption of this standard will havewhich it had a ~~material impact on its financial statements.~~noncontrolling interest.

2. ~~REAL ESTATE TRANSACTIONS~~MERGER WITH TIER REIT, INC.

On June 15, 2017, the American Cancer Society Center (the “ACS Center”), a 996,000 square foot office building in Atlanta, Georgia that was included in the Company's Atlanta/Office operating segment, was sold for a gross sales price of $166.0 million.

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~~The Company recognized a net gain of $119.8 million on the sale of the ACS Center. The associated debt was repaid on the date of sale.~~

The Company has decided to sell three properties totaling 1,038,000 square feet in Orlando, Florida, and determined that these properties met the criteria for held for sale in October 2017. The Company expects to sell these assets in the fourth quarter of 2017 or first quarter of 2018.

3. ~~TRANSACTIONS WITH PARKWAY PROPERTIES, INC.~~

~~On October 6, 2016,~~14, 2019, pursuant to the Agreement and Plan of Merger dated ~~April 28, 2016 (as amended or supplemented from time to time, the~~March 25, 2019 (the “Merger Agreement”), by and among ~~Cousins, Parkway Properties,~~the Company and TIER REIT, Inc. ~~("Parkway"~~(“TIER”), ~~and subsidiaries of Cousins and Parkway, Parkway~~TIER merged with and into a ~~wholly-owned~~ subsidiary of the Company (the ~~"Merger"~~“Merger”), with this subsidiary continuing as the surviving corporation of the Merger. In accordance with the terms and conditions of the Merger Agreement, each ~~outstanding~~ share of ~~Parkway~~TIER common stock issued and ~~each~~ outstanding ~~share of Parkway limited voting stock~~immediately prior to the Merger, was converted into ~~1.63~~2.98 newly issued pre-reverse split shares of ~~Cousins~~the Company’s common stock ~~or limited voting preferred stock, respectively.~~

~~On October 7, 2016, pursuant to~~with fractional shares being settled in cash. In the Merger, Agreement and the Separation, Distribution and Transition Services Agreement, dated as of October 5, 2016 (the "Separation Agreement"), by and among Cousins, Parkway, Parkway, Inc. ("New Parkway"), and certain other parties thereto, Cousins distributed pro rata to itsformer TIER common ~~and limited voting preferred~~ stockholders ~~including legacy Parkway common and limited voting stockholders, all of the outstanding~~received approximately 166 million pre-reverse split shares of common ~~and limited voting~~ stock ~~respectively,~~ of ~~New Parkway, a newly-formed entity that contained~~ the ~~combined businesses relating~~Company. As discussed in note 1 to the ~~ownership of real properties in Houston, Texas~~condensed consolidated financial statements, immediately following the Merger, the Company completed a 1-for-4 reverse stock split.

The Merger has been accounted for as a business combination with the Company as the accounting acquirer, which requires, among other things, that the assets acquired and certain other businesses of Parkway (the "Spin-Off"). In the Spin-Off, Cousins distributed one share of New Parkway common or limited voting stock for every eight shares of common or limited voting preferred stock of Cousins held of record asliabilities assumed be recognized at their acquisition date fair value. The total value of the ~~close of business~~transaction is based on ~~October 6, 2016. New Parkway became an independent public company.~~

~~As a result of~~ the ~~Spin-Off, the historical results of operations~~closing stock price of the Company's ~~properties that were contributed~~common stock on June 13, 2019, the day immediately prior to ~~New Parkway have been presented as discontinued operations~~the closing of the Merger. Based on the shares issued in the ~~consolidated statements of operations. The following table includes a summary of discontinued operations~~transaction, the total fair value of the ~~Company for~~assets acquired and liabilities assumed in the Merger was $1.6 billion. During the three and nine months ended September 30, ~~2016~~2019, the Company incurred expenses related to the Merger of $1.0 million and $50.9 million, respectively.

Management engaged a third party valuation specialist to assist with valuing the real estate assets acquired and liabilities assumed in the Merger. The third party used cash flow analyses as well as an income approach and a cost approach to determine the fair value of real estate assets acquired. Based on additional information that may become available, subsequent adjustments may be made to the purchase price allocation within the allocation period, which typically does not exceed one year.

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The purchase price was allocated as follows (in thousands):



Real estate assets	$	2,186,719
Real estate assets held for sale	29,193
Cash and cash equivalents	84,042
Restricted cash	1,947
Notes and other receivables	7,447
Investment in unconsolidated joint ventures	349
Intangible assets	142,316
Other assets	10,039
	2,462,052

Notes payable	747,549
Accounts payable and accrued expenses	48,030
Deferred income	8,388
Intangible liabilities	46,579
Other liabilities	7,796
Nonredeemable noncontrolling interests	5,348
	863,690

Total purchase price	$	1,598,362

Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016

Rental property revenues $ 46,046
$ 133,450
Rental property operating expenses (19,638 ) (56,598 )
Other revenues —
288
Interest expense (1,956 ) (5,896 )
Depreciation and amortization (15,221 ) (46,389 )
Acquisition and transaction costs (494 ) (494 )
Income from discontinued operations $ 8,737
$ 24,361

Cash provided by operating activities $ 26,589
$ 43,601
Cash used in investing activities $ (11,130 ) $ (29,242 )
During the three and nine months ended September 30, 2019, the Company recorded revenues of $52.1 million and $61.7 million, respectively, related to the Merger. The following unaudited supplemental pro forma information is based upon the Company's historical condensed consolidated statements of operations, adjusted as if the Merger had occurred on January 1, 2018. The supplemental pro forma information is not necessarily indicative of future results, or of actual results, that would have been achieved had the Merger been consummated at the beginning of the period.



	Three months ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018
	(unaudited, in thousands)
Revenues	$	188,323	$	176,711	$	555,324	$	521,945
Net income	21,740		44,218		110,188		30,829
Net income available to common stockholders	21,410		43,689		108,724		30,466

2019 supplemental pro forma earnings were adjusted to exclude $1.0 million and $50.9 million of transaction costs incurred in the three and nine months ended September 30, 2019, respectively. Supplemental pro forma earnings for the nine months ended September 30, 2018 were adjusted to include this change.

3. TRANSACTIONS WITH NORFOLK SOUTHERN RAILWAY COMPANY

On March 1, 2019, the Company entered into a series of agreements and executed related transactions with Norfolk Southern Railway Company (“NS”) as follows:

Sold land to NS for $52.5 million.

Executed a Development Agreement with NS whereby the Company will receive fees totaling $5 million in consideration for development services for NS’s corporate headquarters that is being constructed on the land sold to NS.

Executed a Consulting Agreement with NS whereby the Company will receive fees totaling $32 million in consideration for consulting services for NS’s corporate headquarters. The Development Agreement and Consulting Agreement are collectively referred to below as the “Fee Agreements.”

Purchased a building from NS (“1200 Peachtree”) for $82 million subject to a three-year market rate lease with NS that covers the entire building.

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The Company sold the land to NS for $5.0 million above its carrying amount, which included $37.0 million of land purchased in 2018, $6.5 million of land purchased in 2019, and $4.0 million of site preparation work. The Company purchased 1200 Peachtree from NS for an amount it determined to be $10.3 million below the building’s fair value.

The Company determined that all contracts and transactions associated with NS should be combined for accounting purposes, and the amounts exchanged under the combined contracts should be allocated to the various components of the overall transaction at fair value or market value as discussed below. The Company determined that the purchase of 1200 Peachtree should be recorded at fair value of $92.3 million (see below for allocation of the purchase price). The Company determined that the lease with NS at the 1200 Peachtree building was at market value under ASC 842. The land sale was accounted for under ASC 610-20 and 0 gain or loss was recorded on the derecognition of this non-financial asset as the fair value was determined to equal the carrying amount. Consideration related to various services provided to NS, and accounted for under ASC 606, was determined to be $52.3 million and represents the negotiated market value for the services agreed to by the Company and NS in the contracts. This amount included non-cash consideration of the $10.3 million discount on the purchase of 1200 Peachtree as well as cash consideration of $5 million from the land sale contract (difference between fair value and contract amount), $5 million from the Development Agreement, and $32 million from the Consulting Agreement. Since all of the agreements and contracts above were executed for the purpose of delivering and constructing a corporate headquarters for NS and all of the services and deliverables are highly interdependent, the Company determined that the services represent a single performance obligation under ASC 606.

The Company determined that control of the services to be provided is being transferred over time and, thus, the Company must recognize the $52.3 million contract price in revenue as it satisfies the performance obligation. The Company determined that the inputs method of measuring progress of satisfying the performance obligation was the most appropriate method of recognizing revenue for the services component. Therefore, the Company began recognizing revenue in the quarter ended March 31, 2019, and will recognize future revenue based upon the time spent by the Company’s employees in providing these services as compared to the total estimated time required to satisfy the performance obligation. During the three and nine months ended September 30, 2019, the Company recognized $5.6 million and $17.2 million, respectively, in fee income in its statements of operations related to the services provided to NS.

The following table summarizes the allocations of the estimated fair value of the assets and liabilities of the 1200 Peachtree discussed above (in thousands):



Tangible assets:
Land and improvements	$	19,495
Building	62,836
Tangible assets	82,331

Intangible assets:
In-place leases	9,969
Intangible assets	9,969

Total assets acquired	$	92,300

4. LEASES

At September 30, 2019, the Company had 5 properties subject to operating ground leases with a weighted average remaining term of 72 years and 2 finance ground leases with a weighted average remaining term of five years. At September 30, 2019, the Company had right-of-use assets of $69.5 million included in operating properties, projects under development, or land on the condensed consolidated balance sheets and a lease liability of $70.1 million included in other liabilities on the condensed consolidated balance sheets. The weighted average discount rate on these ground leases at September 30, 2019 was 4.5%.

Rental payments on these ground leases are adjusted periodically based on either the Consumer Price Index, changes in developed square feet on the underlying leased asset, or on a pre-determined schedule. The monthly payments on a pre-determined schedule are recognized on a straight-line basis over the terms of the respective leases while payments resulting from changes in the Consumer Price Index or future development are reflected in the statement of operations at the time of the change.

For the three and nine months ended September 30, 2019, the Company recognized operating ground lease expense of $1.1 million and $2.8 million, respectively, of which 0 amounts represented variable lease expenses, and recognized interest expense related to finance ground leases of $115,000 and $347,000, respectively. For the three and nine months ended September 30, 2019, the Company paid $478,000 and $1.4 million, respectively, in cash related to operating ground leases and made 0 cash payments related to financing ground leases. At September 30, 2019 and December 31, 2018, respectively, the future minimum payments to be made by consolidated entities for ground leases are as follows (in thousands):

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September 30, 2019
	Operating Ground Leases			Finance Ground Leases
2019	$	818		$	462
2020	3,175			462
2021	2,959			6,562
2022	2,672			162
2023	2,614			162
Thereafter	202,604			3,838
	$	214,842		$	11,648

Discount	(155,027		)	(1,572		)
Lease liability	$	59,815		$	10,076



December 31, 2018
	Operating Ground Leases		Finance Ground Leases
2019	$	2,441	$	462
2020	2,460		462
2021	2,497		6,562
2022	2,497		162
2023	2,497		162
Thereafter	202,603		3,838
	$	214,995	$	11,648

5. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

The ~~Company describes its investments in unconsolidated joint ventures in note 6 of notes to consolidated~~following information summarizes financial ~~statements in its Annual Report on Form 10-K for the year ended December 31, 2016. The following table summarizes balance sheet~~ data and principal activities of the Company's unconsolidated joint ~~ventures~~ventures. The information included in the following table entitled summary of financial position is as of September 30, ~~2017~~2019 and December 31, ~~2016~~2018 (in thousands). The information included in the summary of operations table is for the nine months ended September 30, 2019 and 2018 (in thousands):



	Total Assets				Total Debt				Total Equity						Company’s Investment
SUMMARY OF FINANCIAL POSITION:	2019		2018		2019		2018		2019			2018			2019				2018
Terminus Office Holdings LLC	$	257,554	$	258,060	$	195,290	$	198,732	$	55,502		$	50,539		$	50,781			$	48,571
DC Charlotte Plaza LLLP	184,544		155,530		—		—		93,775			88,922			49,759				46,554
Austin 300 Colorado Project, LP	104,875		51,180		5,488		—		68,054			41,298			36,462				22,335
Carolina Square Holdings LP	114,486		106,187		75,514		74,638		25,860			28,844			15,221				16,840
AMCO 120 WT Holdings, LLC	70,163		36,680		—		—		62,185			31,372			11,966				5,538
HICO Victory Center LP	15,382		15,069		—		—		15,196			14,801			10,264				10,003
Charlotte Gateway Village, LLC	112,768		112,553		—		—		108,176			109,666			7,480				8,225
CL Realty, L.L.C.	4,159		4,169		—		—		4,039			4,183			2,814				2,886
Temco Associates, LLC	1,551		1,482		—		—		1,448			1,379			953				919
TR 208 Nueces Member, LLC	3,176		—		—		—		1,396			—			349				—
EP II LLC	247		247		—		—		165			165			28				30
EP I LLC	461		461		—		—		296			296			2				6
Wildwood Associates	11,105		11,157		—		—		10,998			11,108			(512		)	(1)	(460		)	(1)
Crawford Long - CPI, LLC	29,052		26,429		68,347		69,522		(41,326		)	(44,146		)	(19,723		)	(1)	(21,071		)	(1)
	$	909,523	$	779,204	$	344,639	$	342,892	$	405,764		$	338,427		$	165,844			$	140,376

1013

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	Total Revenues				Net Income (Loss)						Company's Share of Income (Loss)
SUMMARY OF OPERATIONS:	2019		2018		2019			2018			2019			2018
Charlotte Gateway Village, LLC	$	20,368	$	20,043	$	7,510		$	7,792		$	3,755		$	3,896
Terminus Office Holdings LLC	34,964		33,545		4,962			4,424			2,381			2,276
DC Charlotte Plaza LLLP	10,716		—		4,196			—			2,098			—
Crawford Long - CPI, LLC	9,412		9,381		2,821			2,631			1,349			1,254
HICO Victory Center LP	356		282		356			282			197			160
Austin 300 Colorado Project, LP	319		385		152			173			76			86
Temco Associates, LLC	128		128		61			58			35			32
Carolina Square Holdings LP	8,757		7,403		191			5			5			(173		)
AMCO 120 WT Holdings, LLC	5		—		(81		)	(28		)	—			—
EP II LLC	1		—		—			(21		)	(1		)	(15		)
EP I LLC	3		27		—			1			(4		)	(5		)
Wildwood Associates	—		—		(80		)	(1,108		)	(40		)	2,739
CL Realty, L.L.C.	—		—		(129		)	(116		)	(72		)	(71		)
Other	—		—		—			(14		)	—			(6		)
	$	85,029	$	71,194	$	19,959		$	14,079		$	9,779		$	10,173

Total Assets Total Debt Total Equity Company’s Investment
SUMMARY OF FINANCIAL POSITION: 2017 2016 2017 2016 2017 2016 2017 2016
Terminus Office Holdings $ 268,531
$ 268,242
$ 204,390
$ 207,545
$ 50,633
$ 49,476
$ 26,204
$ 25,686

EP I LLC 1,517
78,537
—
58,029
1,269
18,962
738
18,551

EP II LLC 392
67,754
—
44,969
296
21,743
130
17,606

Charlotte Gateway Village, LLC 129,109
119,054
—
—
124,012
116,809
15,397
11,796

HICO Victory Center LP 14,294
14,124
—
—
14,290
13,869
9,695
9,506

Carolina Square Holdings LP 102,370
66,922
62,180
23,741
34,080
34,173
18,843
18,325

CL Realty, L.L.C. 8,287
8,047
—
—
8,156
7,899
2,852
3,644

DC Charlotte Plaza LLLP 39,156
17,940
—
—
34,255
17,073
17,475
8,937

Temco Associates, LLC 4,426
4,368
—
—
4,323
4,253
864
829

Wildwood Associates 16,368
16,351
—
—
16,227
16,314
(1,186 ) (1) (1,143 ) (1)
Crawford Long - CPI, LLC 28,621
27,523
71,690
72,822
(44,787 ) (45,928 ) (21,296 ) (1) (21,866 ) (1)
111 West Rio Building —
59,399
—
12,852
—
32,855
—
52,206

Courvoisier Centre JV, LLC 182,262
172,197
106,500
106,500
68,480
69,479
11,719
11,782

HICO Avalon II, LLC 987
—
—
—
532
—
4,366
—

AMCO 120 WT Holdings, LLC 13,286
10,446
—
—
12,678
9,136
939
184

Other —
—
—
—
—
—
—
345

$ 809,606
$ 930,904
$ 444,760
$ 526,458
$ 324,444
$ 366,113
$ 86,740
$ 156,388

(1) Negative balances are included in deferred income on the balance sheets.

~~The following table summarizes statement of operations information of the Company's unconsolidated joint ventures for the nine months ended September 30, 2017 and 2016 (in thousands):~~

Total Revenues Net Income (Loss) Company's Share of Income (Loss)
SUMMARY OF OPERATIONS: 2017 2016 2017 2016 2017 2016
Terminus Office Holdings $ 33,503
$ 31,630
$ 4,907
$ 3,874
$ 2,453
$ 1,937

EP I LLC 4,094
7,919
44,865
1,417
28,479
1,206

EP II LLC 2,644
3,605
13,023
(1,194 ) 9,768
(1,043 )
Charlotte Gateway Village, LLC 20,125
26,245
7,202
11,077
3,601
1,447

HICO Victory Center LP 320
307
320
300
171
131

Carolina Square Holdings LP 640
—
(100 ) —
19
—

CL Realty, L.L.C. 2,899
327
2,657
105
408
70

DC Charlotte Plaza LLLP 2
47
2
45
1
24

Temco Associates, LLC 144
180
70
83
35
122

Wildwood Associates —
—
(86 ) (106 ) (43 ) (53 )
Crawford Long - CPI, LLC 9,017
9,101
2,285
2,005
1,142
1,003

111 West Rio Building —
—
—
—
(2,592 ) —

Courvoisier Centre JV, LLC 12,701
—
(1,000 ) —
(80 ) —

HICO Avalon II, LLC —
—
(68 ) —
—
—

AMCO 120 WT Holdings, LLC —
—
(22 ) —
—
—

Other —
—
—
—
—
300

$ 86,089
$ 79,361
$ 74,055
$ 17,606
$ 43,362
$ 5,144

On ~~May 3, 2017, EP I LLC and EP II LLC sold the properties that they owned for a combined gross sales price of $199.0 million. After repayment of debt,~~October 1, 2019, the Company ~~received~~purchased its partner's interest in Terminus Office Holdings LLC ("TOH") for $148 million in a ~~distribution~~transaction that valued Terminus 100 and Terminus 200 at $503 million. In the fourth quarter of ~~$70.0 million~~2019, the Company will consolidate TOH and ~~recognized~~record the assets and liabilities at fair value. The Company expects to recognize a gain of ~~$37.9~~approximately $94 million ~~which is recorded~~on this acquisition achieved in ~~income from unconsolidated joint ventures.~~

In June 2017, HICO Avalon II, LLC ("Avalon II"), a joint venture between the Company and Hines Avalon II Investor, LLC ("Hines II") was formed for the purpose of acquiring and potentially developing an office building in Alpharetta, Georgia. Pursuant to the joint venture agreement, all predevelopment expenditures are funded 75% by Cousins and 25% by Hines II. The Company has accounted for its investment in Avalon II using the equity method as the Company does not currently control the activities of the venture. If Avalon II commences construction, subsequent development expenditures will be funded 90% by Cousins and 10% by Hines II. Additionally, Cousins will have control over the operational aspects of the venture, and the Company expects to consolidate the venture at that time.

~~Table of Contents~~

stages.

5.6.INTANGIBLE ASSETS

Intangible assets on the balance sheets as of September 30, ~~2017~~2019 and December 31, ~~2016~~2018 included the following (in thousands):



	2019		2018
In-place leases, net of accumulated amortization of $162,263 and $125,130 in 2019 and 2018, respectively	$	204,023	$	105,964
Above-market tenant leases, net of accumulated amortization of $24,649 and $19,502 in 2019 and 2018, respectively	32,332		20,453
Below-market ground lease, net of accumulated amortization of $828 and $621 in 2019 and 2018, respectively	17,584		17,792
Goodwill	1,674		1,674
	$	255,613	$	145,883

September 30, 2017 December 31, 2016
In-place leases, net of accumulated amortization of $85,806 and $46,899 in 2017 and 2016, respectively $ 158,395
$ 185,251
Above-market tenant leases, net of accumulated amortization of $12,981 and $6,515 in 2017 and 2016, respectively 33,580
40,260
Below-market ground lease, net of accumulated amortization of $276 and $69 in 2017 and 2016, respectively 18,137
18,344
Goodwill 1,674
1,674
$ 211,786
$ 245,529

The ~~following is a summary~~carrying amount of goodwill ~~activity for~~did not change during the nine months ended September 30, ~~2017~~2019 and ~~2016 (in thousands):~~

Nine Months Ended September 30,
2017 2016
Beginning balance $ 1,674
$ 3,647
Allocated to property sales —
(21 )
Ending balance $ 1,674
$ 3,626
2018.

6.7.OTHER ASSETS

Other assets on the balance sheets as of September 30, ~~2017~~2019 and December 31, ~~2016~~2018 included the following (in thousands):



	2019		2018
Predevelopment costs and earnest money	$	33,997	$	8,249
Furniture, fixtures and equipment, leasehold improvements, and other deferred costs, net of accumulated depreciation of $28,082 and $25,193 in 2019 and 2018, respectively	17,355		14,942
Prepaid expenses and other assets	9,603		5,087
Lease inducements, net of accumulated amortization of $2,111 and $1,545 in 2019 and 2018, respectively	5,423		4,961
Line of credit deferred financing costs, net of accumulated amortization of $2,576 and $1,451 in 2019 and 2018, respectively	4,892		5,844
	$	71,270	$	39,083

September 30, 2017 December 31, 2016
Furniture, fixtures and equipment, leasehold improvements, and other deferred costs, net of accumulated depreciation of $24,008 and $23,135 in 2017 and 2016, respectively $ 14,849
$ 15,773
Lease inducements, net of accumulated amortization of $892 and $1,278 in 2017 and 2016, respectively 2,049
2,517
Prepaid expenses and other assets 9,764
8,432
Line of credit deferred financing costs, net of accumulated amortization of $2,905 and $2,264 in 2017 and 2016, respectively 1,428
2,182
Predevelopment costs and earnest money 80
179
$ 28,170
$ 29,083

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8. NOTES PAYABLE

The following table ~~details~~summarizes the terms ~~and amounts~~ of ~~the Company’s outstanding~~ notes payable outstanding at September 30, ~~2017~~2019 and December 31, ~~2016 ($ in~~2018 (in thousands):

~~Table of Contents~~


Description	Interest Rate		Maturity	September 30, 2017			December 31, 2016			Interest Rate	Maturity (1)	2019			2018
2019 Senior Notes, Unsecured										3.95%	2029	$	275,000		$	—
Term Loan, Unsecured	2.43	%	2021	$	250,000		$	250,000		3.22%	2021	250,000			250,000
Senior Notes, Unsecured	3.91	%	2025	250,000			—
2017 Senior Notes, Unsecured										3.91%	2025	250,000			250,000
2019 Senior Notes, Unsecured										3.86%	2028	250,000			—
Fifth Third Center	3.37	%	2026	147,306			149,516			3.37%	2026	141,131			143,497
2019 Senior Notes, Unsecured										3.78%	2027	125,000			—
Colorado Tower	3.45	%	2026	120,000			120,000			3.45%	2026	117,677			119,427
2017 Senior Notes, Unsecured										4.09%	2027	100,000			100,000
Promenade	4.27	%	2022	103,113			105,342			4.27%	2022	96,813			99,238
Senior Notes, Unsecured	4.09	%	2027	100,000			—
816 Congress	3.75	%	2024	83,702			84,872			3.75%	2024	80,415			81,676
Credit Facility, Unsecured										3.07%	2023	80,000			—
Legacy Union One										4.24%	2023	66,000			—
Meridian Mark Plaza	6.00	%	2020	24,162			24,522			6.00%	2020	23,117			23,524
The Pointe	4.01	%	2019	22,620			22,945
Credit Facility, Unsecured	2.33	%	2019	—			134,000
3344 Peachtree	4.75	%	2017	—			78,971
One Eleven Congress	6.08	%	2017	—			128,000
The ACS Center	6.45	%	2017	—			127,508
San Jacinto Center	6.05	%	2017	—			101,000
Two Buckhead Plaza	6.43	%	2017	—			52,000
				1,100,903			1,378,676					$	1,855,153		$	1,067,362
Unamortized premium, net				270			6,792
Unamortized premium												2,335			—
Unamortized loan costs				(5,996		)	(4,548		)			(6,671		)	(4,792		)
Total Notes Payable				$	1,095,177		$	1,380,920				$	1,850,817		$	1,062,570

(1) Weighted average maturity of notes payable outstanding at September 30, 2019 was 6.3 years.

Credit Facility

The Company has a ~~$500 million~~$1 billion senior unsecured line of credit (the "Credit Facility") that matures on ~~May 28, 2019. The Credit Facility may be expanded to $750 million at the election of the Company, subject to the receipt of additional commitments from the lenders and other customary conditions.~~

January 3, 2023. The Credit Facility contains financial covenants that require, among other things, the maintenance of an unencumbered interest coverage ratio of at least ~~2.00;~~1.75; a fixed charge coverage ratio of at least 1.50; a secured leverage ratio of no more than 40%; and an overall leverage ratio of no more than 60%~~; and a minimum shareholders' equity in an amount equal to $1.0 billion, plus a portion of the net cash proceeds from certain equity issuances.~~. The Credit Facility also contains customary representations and warranties and affirmative and negative covenants, as well as customary events of default. The amounts outstanding under the Credit Facility may be accelerated upon the occurrence of any events of default.

The interest rate applicable to the Credit Facility varies according to the ~~Company’s~~Company's leverage ratio, and may, at the election of the Company, be determined based on either (1) the current ~~London Interbank Offered Rate ("LIBOR")~~LIBOR plus a spread of between ~~1.10%~~1.05% and 1.45%, ~~based on leverage~~ or (2) the greater of Bank of America's prime rate, the federal funds rate plus 0.50%, or the one-month LIBOR plus 1.0% (the ~~“Base Rate”~~"Base Rate"), plus a spread of between 0.10% ~~and~~or 0.45%, ~~based on leverage. The Company also pays an annual facility fee on the total commitments under the Credit Facility of between 0.15% and 0.30%~~ based on leverage.

At September 30, ~~2017,~~2019, the Credit Facility's spread over LIBOR was ~~1.1%~~1.05%. The amount that the Company may draw under the Credit Facility is a defined calculation based on the Company's unencumbered assets and other factors. The total available borrowing capacity under the Credit Facility was ~~$499~~$920.0 million at September 30, ~~2017.~~2019.

Term Loan

The Company has a $250 million ~~senior~~ unsecured term loan (the "Term Loan") that matures on December 2, 2021. The Term Loan ~~contains~~has financial covenants consistent with those of the Credit Facility. The interest rate applicable to the Term Loan varies according to the Company’s leverage ratio and may, at the election of the Company, be determined based on either (1) the current ~~London Interbank Offered Rate ("LIBOR")~~LIBOR plus a spread of between 1.20% and 1.70%, based on leverage or (2) the greater of Bank of America's prime rate, the federal funds rate plus 0.50%, or the one-month LIBOR plus ~~1.0%~~1.00% (the “Base Rate”), plus a spread of between 0.00% and 0.75%, based on leverage. At September 30, ~~2017,~~2019, the Term Loan's spread over LIBOR was ~~1.2%~~1.20%.

Table of Contents

Unsecured Senior Notes

~~In April 2017, the~~The Company ~~closed a $350 million private placement~~has unsecured senior notes of ~~senior unsecured notes, which~~$1.0 billion that were funded in ~~two~~5 tranches. The first tranche of $100 million ~~was funded~~is due in ~~April 2017, has a 10-year maturity,~~2027 and has a fixed annual interest rate of 4.09%. The second tranche of $250 million ~~was funded~~is due in ~~July 2017, has an 8-year maturity,~~2025 and has a fixed annual interest rate of 3.91%.

~~Table~~ The third tranche of ~~Contents~~

$125 million is due in 2027 and has a fixed annual interest rate of 3.78%. The fourth tranche of $250 million is due in 2028 and has a fixed annual interest rate of 3.86%. The fifth tranche of $275 million is due in 2029 and has a fixed annual interest rate of 3.95%.

The unsecured senior ~~unsecured~~ notes contain financial covenants that require, among other things, the maintenance of an unencumbered interest coverage ratio of at least ~~2.00;~~1.75; a fixed charge coverage ratio of at least 1.50; an overall leverage ratio of no more than 60%; and a ~~minimum shareholders' equity in an amount equal to $1.9 billion, plus a portion~~secured leverage ratio of ~~the net cash proceeds from certain equity issuances.~~no more than 40%. The senior notes also contain customary representations and warranties and affirmative and negative covenants, as well as customary events of default. ~~The amounts outstanding under the senior notes may be accelerated upon the occurrence of any events of default.~~

~~Fair Value~~Other Debt Information

At September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the ~~aggregate~~ estimated fair ~~values~~value of the ~~Company's~~Company’s notes payable were ~~$1.1~~$1.9 billion and ~~$1.4~~$1.1 billion, respectively, calculated by discounting the debt's remaining contractual cash flows at estimated rates at which similar loans could have been obtained at ~~those respective dates.~~September 30, 2019 and December 31, 2018. The estimate of the current market rate, which is the most significant input in the discounted cash flow calculation, is intended to replicate debt of similar maturity and loan-to-value relationship. These fair value calculations are considered to be Level 2 under the guidelines as set forth in ASC 820 ~~"Fair Value Measurement,"~~ as the Company utilizes market rates for similar type loans from ~~third-party~~third party brokers.

~~Other Information~~

For the three and nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, interest expense was recorded as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Total interest incurred	$	18,918		$	11,087		$	43,928		$	33,064
Interest capitalized	(4,218		)	(1,536		)	(6,349		)	(4,021		)
Total interest expense	$	14,700		$	9,551		$	37,579		$	29,043

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Total interest incurred $ 10,288
$ 8,939
$ 32,360
$ 25,446
Less interest - discontinued operations —
(1,956 ) —
(5,896 )
Interest capitalized (2,701 ) (1,229 ) (6,509 ) (2,988 )
Total interest expense $ 7,587
$ 5,754
$ 25,851
$ 16,562

In April 2017, the Company repaid in full, without penalty, the $128.0 million One Eleven Congress mortgage note and the $101.0 million San Jacinto Center mortgage note. In May 2017, the Company repaid in full, without penalty, the $52.0 million Two Buckhead Plaza mortgage note. In July 2017, the Company repaid in full, without penalty, the $77.9 million 3344 Peachtree mortgage note. In connection with these repayments, the Company recorded gains on extinguishment of debt of $2.3 million, which represented the unamortized premium recorded on the notes at the time of the Merger.

In June 2017, the Company sold the ACS Center. A portion of the proceeds from the sale were used to repay the $127.0 million mortgage note on the associated property, and the Company recorded a loss on extinguishment of debt of $376,000, which represented the remaining unamortized loan costs and other costs associated with repaying the debt.

8. 9. COMMITMENTS AND CONTINGENCIES

Commitments

At September 30, ~~2017,~~2019, the Company had outstanding ~~letters of credit and~~ performance bonds totaling ~~$3.7 million.~~$487,000. As a lessor, the Company had ~~$188.3~~$206.6 million in future obligations under leases to fund tenant improvements and other future construction obligations at September 30, ~~2017.~~2019. As a lessee, the Company had future obligations ~~under ground and other~~for operating leases other than ground leases of ~~$209.5 million~~$333,000 at September 30, ~~2017.~~2019.

Litigation

The Company is subject to various legal proceedings, claims, and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. The Company records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, the Company accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, the Company discloses the nature and estimate of the possible loss of the litigation. The Company does not disclose information with respect to litigation where an unfavorable outcome is considered to be remote or where the estimated loss would not be material. Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business, or financial condition of the Company.

~~Table of Contents~~

9. ~~STOCKHOLDERS' EQUITY~~

~~On September 19, 2017, the Company declared a cash dividend of $0.06 per common share, which was paid October 12, 2017 to shareholders of record on October 2, 2017.~~

During the nine months ended September 30, 2017, certain holders of CPLP units redeemed 1,203,286 units in exchange for shares of the Company's common stock. The aggregate value at the time of these transactions was $10.1 million based upon the value of the Company's common stock at the time of the transactions.

10. STOCK-BASED COMPENSATION

The Company has several types of stock-based compensation - stock options, restricted stock, and restricted stock units (“RSUs”) - which are described in note 13 of the notes to consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018. The expense related to ~~a portion of the stock-based compensation~~stock option and restricted stock awards is fixed. The expense related to ~~other stock-based compensation awards~~RSUs fluctuates from period to period dependent, in part, on the Company's stock price and stock performance relative to its peers. The Company recorded stock-based compensation expense, net of forfeitures, of ~~$3.3 million~~$67,000 and ~~$141,000~~$403,000 for the three months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively, and ~~$7.9~~$6.7 million and ~~$4.8~~$6.4 million for the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively.

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On April 23, 2019, the Company's stockholders approved the Cousins Properties Incorporated 2019 Omnibus Incentive Stock Plan (the "2019 Plan"). The Company also maintains the Cousins Properties Incorporated 2009 Incentive Stock Plan (the "2009 Plan") and the Cousins Properties Incorporated 2005 Restricted Stock Unit Plan (the “RSU Plan”). although no further issuances are permitted under the 2009 plan or RSU Plan. Under the 2009 Plan, during the quarter ended March 31, 2019, the Company made restricted stock grants ~~in 2017~~ of ~~308,289~~65,822 shares to key employees, which vest ratably over a three-year period. Under the RSU Plan, during the quarter ended March 31, 2019, the Company awarded ~~two~~2 types of performance-based RSUs ~~in 2017~~ to key employees based on the following metrics: (1) Total Stockholder Return of the Company, as defined in the RSU Plan, as compared to the companies in the SNL US REIT Office index (“TSR RSUs”), and (2) the ratio of cumulative funds from operations per share to targeted cumulative funds from operations per share (“FFO RSUs”), as defined in the RSU Plan. The performance period for both awards is January 1, ~~2017~~2019 to December 31, ~~2019,~~2021, and the targeted units awarded of TSR RSUs and FFO RSUs was ~~267,013~~65,247 and ~~132,266,~~27,963, respectively. The ultimate payout of these awards can range from 0% to 200% of the targeted number of units depending on the achievement of the market and performance metrics described above. These RSU awards cliff vest on December 31, ~~2019~~2021 and are to be settled in cash with payment dependent on ~~upon~~ attainment of required service, market, and performance criteria. The number of RSUs vesting will be determined by the Compensation Committee, and the payout per unit will be equal to the average closing price on each trading day during the 30-day period ending on December 31, ~~2019.~~2021. The Company expenses an estimate of the fair value of the TSR RSUs over the performance period using a quarterly Monte Carlo valuation. The FFO RSUs are expensed over the vesting period using the fair market value of the Company's stock at the reporting date multiplied by the anticipated number of units to be paid based on the current estimate of what the ratio is expected to be upon vesting. Dividend equivalents on the TSR RSUs and the FFO RSUs will also be paid based upon the percentage vested. The Company expects to make all future grants of restricted stock and restricted stock units under the 2019 Plan.

~~In addition,~~Under the ~~Company granted 166,132 time-vested RSUs to key employees in 2017. The value of each unit is equal to~~2019 Plan, during the fair value of one share of common stock. The vesting period for this award is three years. These RSUs are to be settled in cash with payment dependent upon the attainment of the required service criteria. Dividend equivalents will be paid upon vesting based on the number of RSUs granted with such payments made concurrently with payment of common dividends.

~~During the nine months~~quarter ended ~~September~~June 30, ~~2017,~~2019, the Company issued ~~120,878~~37,166 shares of common stock ~~at fair value~~ to members of its board of directors in lieu of fees and recorded ~~$1.0~~$1.4 million in general and administrative expense related to these issuances.

11. REVENUE RECOGNITIION

The Company categorizes its primary sources of revenue into revenue from contracts with customers and other revenue accounted for as leases under ASC 842 as follows:

Rental property revenues consist of (1) contractual revenues from leases recognized on a straight-line basis over the term of the respective lease; (2) percentage rents recognized once a specified sales target is achieved; (3) parking revenue; (4) termination fees; and (5) the reimbursement of the tenants' share of real estate taxes, insurance, and other operating expenses. The Company's leases typically include renewal options and are classified and accounted for as operating leases. Rental property revenues are accounted for in accordance with the guidance set forth in ASC 842.

Fee income consists of development fees, management fees, and leasing fees earned from unconsolidated joint ventures and from third parties. Fee income is accounted for in accordance with the guidance set forth in ASC 606.

For the three and nine months ended September 30, ~~2017 related~~2019, the Company recognized rental property revenues of $180.8 million and $439.6 million, respectively, of which $53.9 million and $122.8 million, respectively, represented variable rental revenue. For the three and nine months ended September 30, 2018, the Company recognized rental property revenues of $115.7 million and $343.8 million, respectively. For the three and nine months ended September 30, 2019, the Company recognized fee and other revenue of $7.5 million and $23.5 million, respectively. For the three and nine months ended September 30, 2018, the Company recognized fee and other revenue of $3.0 million and $8.8 million, respectively. The following tables set forth the future minimum rents to ~~the issuances.~~be received by consolidated entities under existing non-cancellable leases as of September 30, 2019 and December 31, 2018, respectively (in thousands):



September 30, 2019

2019	$	139,270
2020	572,471
2021	547,573
2022	496,473
2023	455,942
Thereafter	1,954,183
	$	4,165,912

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December 31, 2018

2019	$	328,607
2020	330,477
2021	314,410
2022	280,959
2023	256,233
Thereafter	1,115,490
	$	2,626,176

12. SALE OF AIR RIGHTS

On February 26, 2019, the Company sold air rights that cover 8 acres within Downtown Atlanta for a gross sales price of $13.25 million and recorded a gain of $13.1 million.

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~~11.~~ 13. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, ~~2017~~2019 and ~~2016~~2018 (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Earnings per Common Share - basic:
Numerator:
Net income	$	20,692		$	19,859		$	34,115		$	58,014
Net income attributable to noncontrolling interests in CPLP from continuing operations	(241		)	(326		)	(564		)	(1,023		)
Net income attributable to other noncontrolling interests	(77		)	(48		)	(245		)	(187		)
Net income available to common stockholders	$	20,374		$	19,485		$	33,306		$	56,804

Denominator:
Weighted average common shares - basic	146,762			105,096			121,758			105,069
Net income per common share - basic	$	0.14		$	0.19		$	0.27		$	0.54

Earnings per common share - diluted:
Numerator:
Net income	$	20,692		$	19,859		$	34,115		$	58,014
Net income attributable to other noncontrolling interests	(77		)	(48		)	(245		)	(187		)
Net income available for common stockholders before net income attributable to noncontrolling interests in CPLP	$	20,615		$	19,811		$	33,870		$	57,827

Denominator:
Weighted average common shares - basic	146,762			105,096			121,758			105,069
Add:
Potential dilutive common shares - stock options	24			40			27			54
Weighted average units of CPLP convertible into common shares	1,744			1,744			1,744			1,744
Weighted average common shares - diluted	148,530			106,880			123,529			106,867
Net income per common share - diluted	$	0.14		$	0.19		$	0.27		$	0.54

Anti-dilutive stock options outstanding	—			—			—			2

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Earnings per Common Share - basic:
Numerator:
     Income from continuing operations $ 12,285
$ 2,920
$ 188,088
$ 17,857

Net income attributable to noncontrolling interests in CPLP
from continuing operations (213 ) —
(3,170 ) —

Net income attributable to other noncontrolling interests (5 ) —
(11 ) —

Income from continuing operations available for common stockholders 12,067
2,920
184,907

17,857

Income from discontinued operations —
8,737
—
24,361

         Net income available for common stockholders $ 12,067
$ 11,657
$ 184,907
$ 42,218

Denominator:
Weighted average common shares - basic 419,998
210,170
414,123
210,400

Earnings per common share - basic:
Income from continuing operations available for common
    stockholders
$ 0.03
$ 0.01
$ 0.45
$ 0.08

Income from discontinued operations available for common
    stockholders
—
0.05
—
0.12

Earnings per common share - basic $ 0.03
$ 0.06
$ 0.45
$ 0.20

Earnings per common share - diluted:
Numerator:
     Income from continuing operations $ 12,285
$ 2,920
$ 188,088

$ 17,857

Net income attributable to other noncontrolling interests
    from continuing operations
(5 ) —
(11 ) —

Income from continuing operations available for common stockholders before net income attributable to noncontrolling interests in CPLP 12,280
2,920
188,077

17,857

Income from discontinued operations available for common stockholders —
8,737
—
24,361

Net income available for common stockholders before
     net income attributable to noncontrolling interests in
     CPLP
$ 12,280
$ 11,657
$ 188,077
$ 42,218

Denominator:
Weighted average common shares - basic 419,998
210,170
414,123
210,400

     Add:
Potential dilutive common shares - stock options 328
156
320
128

Weighted average units of CPLP convertible into
    common shares
6,974
—
7,511
—

Weighted average common shares - diluted 427,300
210,326
421,954
210,528

Earnings per common share - diluted:
Income from continuing operations available for common stockholders before net income attributable to noncontrolling interests in CPLP $ 0.03
$ 0.01
$ 0.45
$ 0.08

Income from discontinued operations available for common
    stockholders
—
0.05
—
0.12

Earnings per common share - diluted $ 0.03
$ 0.06
$ 0.45

$ 0.20

Weighted average anti-dilutive stock options outstanding 731
1,103
740
1,110

For the nine months ended September 30, 2018, anti-dilutive stock represents stock options whose exercise price exceeds the average market value of the Company's stock. These anti-dilutive stock options are not included in the current calculation of dilutive weighted average shares but could be dilutive in the future.

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~~12.~~ 14. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - SUPPLEMENTAL INFORMATION

Supplemental information related to the cash flows, including significant non-cash activity affecting the condensed consolidated statement of cash flows, for the nine months ended September 30, 2019 and 2018 is as follows (in thousands):



	2019		2018
Interest paid	$	39,592	$	31,601
Non-Cash Transactions:
Non-cash assets and liabilities assumed in TIER transaction	1,512,373		—
Ground lease right-of-use assets and associated liabilities	56,294		—
Common stock dividends declared and accrued	42,567		27,364
Change in accrued property, acquisition, development, and tenant expenditures	22,599		21,920
Non-cash consideration for property acquisition	10,071		—
Transfers from projects under development to operating properties	—		212,628
Cumulative effect of change in accounting principle	—		22,329
Transfer from investment in unconsolidated joint venture to projects under development	—		7,025

The following table provides a reconciliation of cash, cash equivalents, and restricted cash recorded on the balance sheets to cash, cash equivalents, and restricted cash in the statements of cash flows (in thousands):



	September 30, 2019		December 31, 2018
Cash and cash equivalents	$	12,396	$	2,547
Restricted cash	2,268		148
Total cash, cash equivalents, and restricted cash	$	14,664	$	2,695

15. REPORTABLE SEGMENTS

The Company's segments are based on ~~the Company's~~its method of internal reporting, which classifies operations by property type and geographical area. The segments by property type are: Office and Mixed-Use. The segments by geographical region are: Atlanta, Austin, Charlotte, ~~Orlando,~~Dallas, Phoenix, Tampa, and Other. ~~In conjunction with the Merger~~Included in Other is a property held for sale in Cherry Hill, New Jersey and ~~Spin-Off completed~~properties located in ~~the fourth quarter of 2016, the Company added the Orlando, Phoenix,~~Chapel Hill, Fort Worth, and ~~Tampa segments, and removed the Houston segment.~~Houston. These reportable segments represent an aggregation of operating segments reported to the Chief Operating Decision Maker based on similar economic characteristics that include the type of property and the geographical location. Each segment includes both consolidated operations and the Company's share of unconsolidated joint venture operations.

Company management evaluates the performance of its reportable segments in part based on net operating income (“NOI”). NOI represents rental property revenues, less termination fees, less rental property operating expenses. NOI is not a measure of cash flows or operating results as measured by GAAP, is not indicative of cash available to fund cash needs, and should not be considered an alternative to cash flows as a measure of liquidity. All companies may not calculate NOI in the same manner. The Company considers NOI to be an appropriate supplemental measure to net income as it helps both management and investors understand the core operations of the Company's operating assets. NOI excludes corporate general and administrative expenses, interest expense, depreciation and amortization, impairments, gains/loss on sales of real estate, and other non-operating items.

Segment net income, amount of capital expenditures, and total assets are not presented in the following tables because management does not utilize these measures when analyzing its segments or when making resource allocation decisions. Information on the Company's segments along with a reconciliation of NOI to net income for the three and nine months ended September 30, ~~2017~~2019 and ~~2016~~2018 are as follows (in thousands):

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Three Months Ended September 30, 2017 Office Mixed-Use Total
Net Operating Income:
Atlanta $ 25,247
$ —
$ 25,247
Austin 15,074
—
15,074
Charlotte 15,489
—
15,489
Orlando 3,356
—
3,356
Tampa 7,412
—
7,412
Phoenix 8,667
—
8,667
Other 525
45
570
Total Net Operating Income $ 75,770
$ 45
$ 75,815


Three Months Ended September 30, 2016	Office			Mixed-Use		Total
Three Months Ended September 30, 2019									Office		Mixed-Use		Total
Net Operating Income:
Houston	$	26,408		$	—	$	26,408
Atlanta	22,593			1,753		24,346			$	38,926	$	—	$	38,926
Austin	6,023			—		6,023			29,452		—		29,452
Charlotte	4,905			—		4,905			21,692		—		21,692
Dallas									3,416		—		3,416
Phoenix									8,913		—		8,913
Tampa									8,309		—		8,309
Other	(61		)	—		(61		)	9,266		668		9,934
Total Net Operating Income	$	59,868		$	1,753	$	61,621		$	119,974	$	668	$	120,642



Three Months Ended September 30, 2018	Office		Mixed-Use		Total
Net Operating Income:
Atlanta	$	32,296	$	—	$	32,296
Austin	15,180		—		15,180
Charlotte	15,924		—		15,924
Phoenix	9,265		—		9,265
Tampa	7,446		—		7,446
Other	310		437		747
Total Net Operating Income	$	80,421	$	437	$	80,858



Nine Months Ended September 30, 2019	Office		Mixed-Use		Total
Net Operating Income:
Atlanta	$	115,692	$	—	$	115,692
Austin	63,977		—		63,977
Charlotte	55,550		—		55,550
Dallas	4,086		—		4,086
Phoenix	27,694		—		27,694
Tampa	24,869		—		24,869
Other	11,678		2,244		13,922
Total Net Operating Income	$	303,546	$	2,244	$	305,790



Nine Months Ended September 30, 2018	Office		Mixed-Use		Total
Net Operating Income:
Atlanta	$	96,639	$	—	$	96,639
Austin	45,209		—		45,209
Charlotte	47,197		—		47,197
Phoenix	27,119		—		27,119
Tampa	22,816		—		22,816
Other	1,183		1,468		2,651
Total Net Operating Income	$	240,163	$	1,468	$	241,631

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Nine Months Ended September 30, 2017 Office Mixed-Use Total
Net Operating Income:
Atlanta $ 84,437
$ 3,125
$ 87,562
Austin 44,113
—
44,113
Charlotte 46,117
—
46,117
Orlando 10,464
—
10,464
Tampa 21,700
—
21,700
Phoenix 24,722
—
24,722
Other 1,374
45
1,419
Total Net Operating Income $ 232,927
$ 3,170
$ 236,097

Nine Months Ended September 30, 2016 Office Mixed-Use Total
Net Operating Income:
Houston $ 76,851
$ —
$ 76,851
Atlanta 66,763
5,101
71,864
Austin 16,978
—
16,978
Charlotte 14,485
—
14,485
Other (36 ) —
(36 )
Total Net Operating Income $ 175,041
$ 5,101
$ 180,142

The following reconciles Net Operating Income to Net Income for each of the periods presented (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net Operating Income	$	120,642		$	80,858		$	305,790		$	241,631
Net operating income from unconsolidated joint ventures	(9,037		)	(6,994		)	(26,289		)	(21,643		)
Fee income	7,494			2,519			23,298			7,211
Termination fee income	3,575			276			4,285			1,275
Other income	3			468			154			1,561
Reimbursed expenses	(1,290		)	(955		)	(3,269		)	(2,757		)
General and administrative expenses	(5,852		)	(3,913		)	(25,686		)	(18,793		)
Interest expense	(14,700		)	(9,551		)	(37,579		)	(29,043		)
Depreciation and amortization	(82,012		)	(45,068		)	(178,777		)	(135,836		)
Acquisition and transaction costs	(1,048		)	—			(50,878		)	(228		)
Other expenses	(297		)	(93		)	(1,101		)	(457		)
Income from unconsolidated joint ventures	3,241			2,252			9,779			10,173
Gain (loss) on sale of investment properties	(27		)	(33		)	14,388			4,912
Gain on extinguishment of debt	—			93			—			8
Net Income	$	20,692		$	19,859		$	34,115		$	58,014

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Net Operating Income $ 75,815
$ 61,621
$ 236,097
$ 180,142
Net operating income from unconsolidated joint
ventures (6,934 ) (6,760 ) (23,719 ) (20,359 )
Net operating income from discontinued operations —
(26,408 ) —
(76,852 )
Fee income 2,597
1,945
6,387
5,968
Other income 993
153
9,593
570
Reimbursed expenses (895 ) (795 ) (2,667 ) (2,463 )
General and administrative expenses (7,193 ) (4,368 ) (21,993 ) (17,301 )
Interest expense (7,587 ) (5,754 ) (25,851 ) (16,562 )
Depreciation and amortization (47,622 ) (16,622 ) (152,546 ) (49,804 )
Acquisition and transaction costs 677
(1,446 ) (1,499 ) (3,889 )
Gain on extinguishment of debt 429
—
2,258
—
Other expenses (423 ) (173 ) (1,063 ) (681 )
Income from unconsolidated joint ventures 2,461
1,527
43,362
5,144
Gain (loss) on sale of investment properties (33 ) —
119,729
13,944
Income from discontinued operations —
8,737
—
24,361
Net Income $ 12,285

$ 11,657
$ 188,088
$ 42,218

Revenues by reportable segment, including a reconciliation to total rental property revenues on the condensed consolidated statements of operations, for three and nine months ended September 30, ~~2017~~2019 and ~~2016~~2018 are as follows (in thousands):



Three Months Ended September 30, 2019	Office			Mixed-Use			Total
Revenues:
Atlanta	$	60,486		$	—		$	60,486
Austin	50,614			—			50,614
Charlotte	34,762			—			34,762
Dallas	4,274			—			4,274
Phoenix	12,754			—			12,754
Tampa	14,335			—			14,335
Other	17,290			1,101			18,391
Total segment revenues	194,515			1,101			195,616
Less Company's share of rental property revenues from unconsolidated joint ventures	(13,689		)	(1,101		)	(14,790		)
Total rental property revenues	$	180,826		$	—		$	180,826



Three Months Ended September 30, 2018	Office			Mixed-Use			Total
Revenues:
Atlanta	$	51,248		$	—		$	51,248
Austin	26,493			—			26,493
Charlotte	23,274			—			23,274
Tampa	12,857			—			12,857
Phoenix	12,228			—			12,228
Other	1,104			429			1,533
Total segment revenues	127,204			429			127,633
Less Company's share of rental property revenues from unconsolidated joint ventures	(11,485		)	(429		)	(11,914		)
Total rental property revenues	$	115,719		$	—		$	115,719

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Three Months Ended September 30, 2017	Office			Mixed-Use			Total
Nine Months Ended September 30, 2019										Office			Mixed-Use			Total
Revenues:
Atlanta	$	41,507		$	—		$	41,507		$	177,455		$	—		$	177,455
Austin	25,385			—			25,385			110,521			—			110,521
Charlotte	23,153			143			23,296			85,258			—			85,258
Orlando	6,408			—			6,408
Dallas										5,078			—			5,078
Phoenix										38,562			—			38,562
Tampa	11,815			—			11,815			40,776			—			40,776
Phoenix	11,692			—			11,692
Other	915			—			915			21,416			3,378			24,794
Total segment revenues	120,875			143			121,018			479,066			3,378			482,444
Less Company's share of rental property revenues from unconsolidated joint ventures	(11,306		)	(143		)	(11,449		)	(39,442		)	(3,378		)	(42,820		)
Total rental property revenues	$	109,569		$	—		$	109,569		$	439,624		$	—		$	439,624



Nine Months Ended September 30, 2018	Office			Mixed-Use			Total
Revenues:
Atlanta	$	151,479		$	—		$	151,479
Austin	79,516			—			79,516
Charlotte	69,316			—			69,316
Tampa	37,556			—			37,556
Phoenix	37,147			—			37,147
Other	3,238			997			4,235
Total segment revenues	378,252			997			379,249
Less Company's share of rental property revenues from unconsolidated joint ventures	(34,488		)	(997		)	(35,485		)
Total rental property revenues	$	343,764		$	—		$	343,764

Three Months Ended September 30, 2016 Office Mixed-Use Total
Revenues:
Houston $ 46,046
$ —
$ 46,046
Atlanta 36,693
3,197
39,890
Austin 10,469
—
10,469
Charlotte 6,799
—
6,799
Other (57 ) —
(57 )
Total segment revenues 99,950
3,197
103,147
Less discontinued operations (46,046 ) —
(46,046 )
Less Company's share of rental property revenues from unconsolidated joint ventures (7,329 ) (3,197 ) (10,526 )
Total rental property revenues $ 46,575
$ —
$ 46,575

Nine Months Ended September 30, 2017 Office Mixed-Use Total
Revenues
Atlanta $ 135,319
$ 5,049
$ 140,368
Austin 75,348
—
75,348
Charlotte 68,495
143
68,638
Orlando 19,380
—
19,380
Tampa 34,913
—
34,913
Phoenix 33,689
—
33,689
Other 2,492
—
2,492
Total segment revenues $ 369,636
$ 5,192
$ 374,828
Less Company's share of rental property revenues from unconsolidated joint ventures (33,543 ) (5,192 ) (38,735 )
Total rental property revenues $ 336,093
$ —
$ 336,093

~~Table of Contents~~

Nine Months Ended September 30, 2016 Office Mixed-Use Total
Revenues:
Houston $ 133,450
$ —
$ 133,450
Atlanta 110,915
9,200
120,115
Austin 29,825
—
29,825
Charlotte 19,533
—
19,533
Other (54 ) —
(54 )
Total segment revenues 293,669
9,200
302,869
Less discontinued operations (133,450 ) —
(133,450 )
Less Company's share of rental property revenues from unconsolidated joint ventures (21,837 ) (9,200 ) (31,037 )
Total rental property revenues $ 138,382
$ —
$ 138,382

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview:

Cousins Properties Incorporated ("Cousins") (and collectively, with its subsidiaries, the "Company," "we," "our," or "us") is a publicly traded (NYSE: CUZ), self-administered, and self-managed real estate investment trust, or REIT. Cousins conducts substantially all of its business through Cousins Properties, LP ("CPLP"). Cousins owns approximately 99% of CPLP and consolidates CPLP. CPLP owns Cousins TSR Services LLC, a taxable entity which owns and manages its own real estate portfolio and performs certain real estate related services for other parties. Our ~~core focus~~strategy is ~~on the acquisition, development, leasing, management, and~~to create value for our stockholders through ownership of ~~Class-A~~the premier urban office ~~and mixed-use properties~~portfolio in ~~Sunbelt~~the Sun Belt markets, with a particular focus on ~~Arizona, Florida,~~ Georgia, Texas, North Carolina, Arizona, and ~~Texas.~~Florida. This strategy is based on a disciplined approach to capital allocation that includes strategic acquisitions, selective development projects, and timely dispositions of non-core assets. This strategy is also based on a simple, flexible, and low-leveraged balance sheet that allows us to pursue investment opportunities at the most advantageous points in the cycle. To implement this strategy, we leverage our strong local operating platforms within each of our major markets.

Consistent with this strategy, on June 14, 2019, we merged with TIER REIT, Inc. ("TIER") in a stock-for-stock transaction (the "Merger"). As a result, we acquired interests in nine operating properties containing 5.8 million square feet of space, two office properties under development that are expected to add 620,000 square feet of space upon completion, and seven strategically located land parcels on which up to 2 million square feet of additional space may be developed. As a part of this transaction, we issued $650 million in senior unsecured debt at a weighted average interest rate of 3.88%, which effectively replaced the majority of the TIER debt assumed and repaid by the Credit Facility in the Merger. We believe that this merger creates a company with an attractive portfolio of trophy office assets balanced across the premier Sun Belt markets. We believe that the Merger will enhance our position in our existing markets of Austin and Charlotte, provide a strategic entry into Dallas, and balance our exposure in Atlanta. The Merger is also expected to enhance growth and to provide value-add opportunities as a result of TIER's active and attractive development portfolio and land bank. As of ~~September 30, 2017,~~quarter-end, our portfolio of real estate assets consisted of interests in 3238 operating properties ~~(31~~(37 office and one mixed use), containing ~~15.9~~21.8 million square feet of space, and ~~four~~five projects ~~(three~~(four office and one mixed-use) under active development. We have a comprehensive strategy in place based on a simple platform, trophy assets, and opportunistic investments. This streamlined strategy enables us to maintain a targeted, asset-specific approach to investing where

During the quarter, we seek to leverage our development skills, relationships, market knowledge, and operational expertise. We intend to generate returns and create value for stockholders through the continued lease-up of our portfolio, through the execution of our development pipeline, and through opportunistic investments in office and mixed-use projects within our core markets.

We leased or renewed ~~334,905~~741,000 square feet of office ~~space during the third quarter of 2017.~~space. The weighted average net effective rent of these leases, representing base rent less operating expense reimbursements and leasing costs, was ~~$20.73~~$27.03 per square foot. For those leases that were previously occupied within the past year, net effective rent increased ~~16.9%~~17.2%. Same property net operating income (defined below) for consolidated properties and our share of unconsolidated properties increased by ~~1.3%~~0.3% between the three months ended September 30, ~~2017~~2019 and ~~2016.~~2018.

On June 14, 2019, we restated and amended our articles of incorporation to effect a reverse stock split of the issued and outstanding shares of its common stock pursuant to which, (1) each four shares of our issued and outstanding common stock were combined into one share of our common stock and (2) the authorized number of our common stock was proportionally reduced to 175 million shares. Fractional shares of common stock resulting from the reverse stock split were settled in cash. Fractional shares of preferred stock resulting from the reverse stock split were redeemed without payout. Immediately thereafter, we further amended our articles of incorporation to increase the number of authorized shares of our common stock from 175 million to 300 million shares.

On October 1, 2019, we purchased our partner's interest in Terminus Office Holdings LLC ("TOH") for $148 million in a transaction that valued Terminus 100 and Terminus 200 at $503 million. In the fourth quarter of 2019, we will consolidate TOH and record the assets and liabilities at fair value. We expect to recognize a gain of approximately $94 million on this acquisition achieved in stages.

Results of Operations

General

Our financial results have been significantly affected by the ~~merger~~Merger. In addition, our results have been affected by a series of transactions we entered into on March 1, 2019 with ~~Parkway Properties, Inc.~~Norfolk Southern Railway Company ("~~the Merger"~~NS") whereby we executed an agreement to develop NS's corporate headquarters in Midtown Atlanta and ~~the spin-off of the combined companies' Houston business to Parkway, Inc. (the "Spin-Off")~~purchased 1200 Peachtree, a 370,000 square foot office building in ~~October 2016 (collectively, the "Parkway Transactions").~~Midtown Atlanta, from NS that is 100% leased by NS. Accordingly, our historical financial statements may not be indicative of future operating results.

Rental Property Revenue, Rental Property Operating Expenses, and Net Operating Income

The following table summarizes rental property revenues, rental property operating expenses, and net operating income ("NOI") for each of the periods presented, including our same property portfolio. NOI represents rental property revenue (excluding lease termination fees) less rental property operating expenses. Our same property portfolio is comprised of office properties that have been fully operational in each of the comparable reporting periods. A fully operational property is one that has achieved 90% economic occupancy or has been substantially ~~complete~~completed and owned by us for each of the periods presented. ~~Same property amounts for the 2017 versus 2016 comparison are from properties that have been owned since January 1, 2016 through the end of the current reporting period, excluding dispositions.~~ This information is presented for consolidated properties only and does not include net operating income from our unconsolidated joint ventures.

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	Three Months Ended September 30,								Nine Months Ended September 30,								Three Months Ended September 30,								Nine Months Ended September 30,
	2017		2016		$ Change		% Change		2017		2016		$ Change		% Change		2019		2018		$ Change		% Change		2019		2018		$ Change		% Change
Rental Property Revenues
Same Property	$	35,691	$	33,404	$	2,287	6.8	%	$	106,918	$	100,608	$	6,310	6.3	%	$	112,357	$	107,844	$	4,513	4.2	%	$	334,135	$	320,260	$	13,875	4.3	%
Non-Same Property	73,878		13,171		60,707		460.9	%	229,175		37,774		191,401		506.7	%
Legacy TIER Properties																	52,095		—		52,095		100.0	%	61,746		—		61,746		100.0	%
Other Non-Same Properties																	16,374		7,875		8,499		107.9	%	43,743		23,504		20,239		86.1	%
Total Rental Property Revenues	$	109,569	$	46,575	$	62,994	135.3	%	$	336,093	$	138,382	$	197,711	142.9	%	$	180,826	$	115,719	$	65,107	56.3	%	$	439,624	$	343,764	$	95,860	27.9	%

Rental Property Operating Expenses
Same Property	$	13,486	$	11,494	$	1,992	17.3	%	$	39,449	$	36,194	$	3,255	9.0	%	$	40,882	$	39,550	$	1,332	3.4	%	$	121,799	$	116,885	$	4,914	4.2	%
Non-Same Property	27,202		6,628		20,574		310.4	%	84,266		19,257		65,009		337.6	%
Legacy TIER Properties																	20,012		—		20,012		100.0	%	23,245		—		23,245		100.0	%
Other Non-Same Properties																	4,752		2,029		2,723		134.2	%	10,794		5,616		5,178		92.2	%
Total Rental Property Operating Expenses	$	40,688	$	18,122	$	22,566	124.5	%	$	123,715	$	55,451	$	68,264	123.1	%	$	65,646	$	41,579	$	24,067	57.9	%	$	155,838	$	122,501	$	33,337	27.2	%

Net Operating Income
Same Property NOI	$	22,205	$	21,910	$	295	1.3	%	$	67,469	$	64,414	$	3,055	4.7	%	$	68,426	$	68,018	$	408	0.6	%	$	208,578	$	202,101	$	6,477	3.2	%
Non-Same Property NOI	46,676		6,543		40,133		613.4	%	144,909		18,517		126,392		682.6	%
Legacy TIER Properties																	31,556		—		31,556		100.0	%	37,975		—		37,975		100.0	%
Other Non-Same Properties																	11,623		5,846		5,777		98.8	%	32,948		17,887		15,061		84.2	%
Total NOI	$	68,881	$	28,453	$	40,428	142.1	%	$	212,378	$	82,931	$	129,447	156.1	%	$	111,605	$	73,864	$	37,741	51.1	%	$	279,501	$	219,988	$	59,513	27.1	%

Same property ~~NOI~~rental property revenues increased ~~$295,000 (1.3%) and $3.1 million (4.7%) between~~in the three ~~months ended~~ and nine ~~months ended 2017~~month periods as a result of termination fees at Hearst Tower in connection with the BB&T/SunTrust lease and ~~2016, respectively. The increases were primarily due to increased~~higher occupancy ~~rates~~ at ~~Fifth Third~~Northpark, Corporate Center, and ~~816 Congress, offset by~~Hayden Ferry. Same property rental property operating ~~expense increases in real estate taxes, repairs and maintenance, and parking between the periods.~~

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~~Non-same property revenues and~~ expenses increased ~~between~~in the three and nine month periods primarily ~~from~~as a result of an increase in real estate taxes due to higher assessments of value in the Austin and Charlotte markets.

Revenues and expenses for Legacy TIER properties represent amounts recorded for the properties acquired in the ~~Merger, offset by the sales~~Merger.

Revenues and expenses of ~~the ACS Center~~Other Non-Same Properties increased in ~~the first quarter 2017 and 191 Peachtree in the fourth quarter 2016.~~

~~Other Income~~

~~Other income increased $840,000 and $9.0 million between the~~ the three and nine month periods ~~respectively. These increases are~~primarily as a result of the operations of 1200 Peachtree, which was acquired in the first quarter of 2019, and Spring & 8th, whose final phase commenced operations in the fourth quarter of 2018.

Fee Income

Fee income increased $5.0 million (197%) between the 2019 and 2018 three month periods and increased $16.1 million (223%) between the 2019 and 2018 nine month periods. The increase is primarily driven by ~~lease termination fees at 3350 Peachtree, Nascar Plaza, Hayden Ferry, Fifth Third Center, and Northpark.~~fee income related to the transactions with NS.

General and Administrative Expenses

General and administrative expenses increased ~~$2.8~~$1.9 million ~~(65%~~(50%) between the 2019 and 2018 three month periods and increased ~~$4.7~~$6.9 million ~~(27%~~(37%) between the 2019 and 2018 nine month periods. These increases are primarily driven by long-term compensation expense increases as a result of fluctuations in our common stock price relative to our office peers included in the SNL US Office REIT Index.

Interest Expense

Interest expense, net of amounts capitalized, increased ~~$1.8~~$5.1 million ~~(32%~~(54%) between the 2019 and 2018 three month periods and increased ~~$9.3~~$8.5 million ~~(56%~~(29%) between the 2019 and 2018 nine month periods. The increase in both the three and nine month periods is due to interest incurred on the unsecured senior notes that were issued on June 19, 2019, interest incurred on a mortgage loan assumed in the Merger, and an increase in the average ~~debt~~ outstanding ~~between~~balance on our credit facility.

Depreciation and Amortization



	Three Months Ended September 30,								Nine Months Ended September 30,
	2019		2018		$ Change		% Change		2019		2018		$ Change		% Change
Depreciation and Amortization
Same Property	$	51,595	$	42,074	$	9,521	22.6	%	$	133,426	$	126,907	$	6,519	5.1	%
Legacy TIER Properties	24,973		—		24,973		100.0	%	29,890		—		29,890		100.0	%
Other Non-Same Properties	5,444		2,994		2,450		81.8	%	15,461		8,929		6,532		73.2	%
Total Depreciation and Amortization	$	82,012	$	45,068	$	36,944	82.0	%	$	178,777	$	135,836	$	42,941	31.6	%

Same property depreciation and amortization increased in the three and nine month periods due primarily to the acceleration of amortization of tenant improvements and in-place leases on tenants who terminated their leases at Hearst Tower in connection with the

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BB&T/Suntrust lease. For the nine month period this was partially offset by ~~an increase~~the acceleration of amortization of tenant improvements and in-place leases on tenants who terminated their leases in ~~capitalized interest from increased development projects.~~

~~Depreciation and Amortization~~early 2018.

Depreciation and amortization for Legacy TIER properties represent amounts recorded on the properties acquired in the Merger.

Depreciation and amortization of Other Non-Same Properties increased ~~$31.0 million (186%) between~~in the three ~~month periods,~~ and ~~increased $102.7 million (206%) between the~~ nine month periods primarily ~~from properties~~as a result of depreciation and amortization of 1200 Peachtree, which was acquired in the ~~Merger, offset by decreases from the sales~~first quarter of ~~191 Peachtree~~2019, and Spring & 8th, whose final phase commenced operations in the fourth quarter ~~2016 the ACS Center in the second quarter 2017.~~of 2018.

~~Acquisition and~~ Transaction Costs

~~Acquisition and transaction~~Transaction costs ~~decreased $2.1 million (147%) in~~for the three ~~month periods,~~ and ~~decreased $2.4 million (61%) between the~~ nine ~~month periods. Amounts in all periods represent costs associated with the Merger, and the amount recorded in the three~~ months ended September 30, ~~2017 represents a true-up~~2019 relate to the Merger. These costs include financial advisory, legal, accounting, severance, and other costs of ~~Merger-related accruals. The Company does not believe it will incur significant additional Merger costs.~~combining our operations with TIER.

Income from Unconsolidated Joint Ventures

Income from unconsolidated joint ventures consisted of the Company's share of the following (in thousands):


	Three Months Ended September 30,								Nine Months Ended September 30,									Three Months Ended September 30,											Nine Months Ended September 30,
	2017			2016			$ Change		2017			2016			$ Change			2019			2018			$ Change			% Change		2019			2018			$ Change			% Change
Net operating income	$	6,934		$	6,760		$	174	$	23,719		$	20,359		$	3,360		$	9,037		$	6,994		$	2,043		29.2	%	$	26,289		$	21,643		$	4,646		21.5	%
Termination fee income																		9			—			9			100.0	%	16			—			16			100.0	%
Other income, net	165			72			93		1,868			614			1,254			20			36			(16		)	(44.4	)%	99			83			16			19.3	%
Gain on sale of undepreciated property																		—			—			—			—	%	—			2,779			(2,779		)	(100.0	)%
Depreciation and amortization	(2,862		)	(3,267		)	405		(10,535		)	(9,758		)	(777		)	(4,148		)	(3,119		)	(1,029		)	33.0	%	(11,556		)	(9,554		)	(2,002		)	21.0	%
Interest expense	(1,776		)	(2,038		)	262		(6,022		)	(6,071		)	49			(1,677		)	(1,657		)	(20		)	1.2	%	(5,064		)	(4,763		)	(301		)	6.3	%
Net gain on sale of investment property	—			—			—		34,332			—			34,332
Net loss on sale of investment property																		—			(2		)	2			(100.0	)%	(5		)	(15		)	10			(66.7	)%
Income from unconsolidated joint ventures	$	2,461		$	1,527		$	934	$	43,362		$	5,144		$	38,218		$	3,241		$	2,252		$	989		43.9	%	$	9,779		$	10,173		$	(394	)	(3.9	)%

Net operating income and depreciation and amortization from unconsolidated joint ventures increased ~~$3.4 million (16.5%)~~ between the three and nine month periods primarily due to ~~a change~~the commencement of operations in the ~~partnership structure at Gateway Village whereby we began receiving 50%~~first quarter of ~~cash flows versus a preferred return, effective December 1, 2016, and~~2019 of Dimensional Place, the ~~addition~~office building owned by the DC Charlotte Plaza LLLP joint venture. Gain on sale of ~~Courvoisier Centre which was acquired~~undepreciated property from unconsolidated joint ventures in the ~~Merger. These increases were offset by~~nine month 2018 period relates to the sale of ~~properties owned~~a parcel of land held by ~~EPI, LLC and EPII, LLC ("Emory Point I and II") in~~ the second quarter 2017. Other income increased $1.3 million between the nine month periods primarily as a result of lease termination fees recognized at the Terminus 200 and 111 West Rio buildings and as a result of the sale of mineral rights at CL Realty. The decrease in depreciation and amortization between the three month periods results from the Emory Point I and II sales, offset by increases resulting from the Gateway Village revised structure and the addition of Courvoisier Centre. Depreciation and amortization increased $777,000 between the nine month periods from the Gateway Village revised structure and the addition of Courvoisier. The gain on sale of depreciated property of $34.3 million resulted from the sale of Emory Point I and II in the second quarter 2017, less a $3.5 million loss on the purchase of the remaining 25.4% interest in the 111 West Rio building and the related consolidation of the building immediately following the purchase.Wildwood Associates joint venture.

Gain ~~(Loss)~~ on Sale of Investment Properties

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~~The gain on the sale of investment properties in the nine months ended September 30, 2017 relates primarily to the sale of the American Cancer Society Center (the “ACS Center”).~~ The gain on sale of investment properties infor the nine months ended September 30, ~~2016 relates to~~2019 includes the sale of ~~100 North Point Center East.~~

~~Discontinued Operations~~

~~Discontinued operations in 2016 contains~~ the ~~operations~~Company's air rights that cover approximately eight acres within an area of ~~Post Oak Central and Greenway Plaza (the "Houston Properties"),~~Downtown Atlanta as well as the ~~properties that were included in~~condemnation of land by the Spin-Off. Because we decided to exit the Houston market in connection with the Parkway Transactions, the Spin-Off represented a strategic shift that had a significant impact on our operations. As such, the Spin-OffCity of ~~these properties qualified for discontinued operations treatment. Accordingly, the operations~~Tempe at two of the ~~Houston Properties have been reclassified into discontinued operations for the three and nine months ended September 30, 2016.~~Company's properties.

Funds From Operations

The table below shows Funds from Operations (“FFO”) and the related reconciliation to net income available to common stockholders. We calculate FFO in accordance with the National Association of Real Estate Investment Trusts’ (“NAREIT”) definition, which is net income available to common stockholders (computed in accordance with GAAP), excluding extraordinary items, cumulative effect of change in accounting principle, and gains on sale or impairment losses on depreciable property, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures to reflect FFO on the same basis.

FFO is used by industry analysts and investors as a supplemental measure of a REIT’s operating performance. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Thus, NAREIT created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from GAAP net income. The use of FFO, combined with the required primary GAAP presentations, has been fundamentally beneficial, improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. Company management evaluates operating performance in part based on FFO. Additionally, we use FFO, along with other measures, to assess performance in connection with evaluating and granting incentive compensation to its officers and other key employees. The reconciliation of net income to FFO is as follows for the three and nine months ended September 30, ~~2017~~2019 and ~~2016~~2018 (in thousands, except per share information):

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	Three Months Ended September 30,					Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016		2017			2016			2019			2018			2019			2018
Net Income Available to Common Stockholders	$	12,067		$	11,657	$	184,907		$	42,218		$	20,374		$	19,485		$	33,306		$	56,804
Depreciation and amortization of real estate assets:
Consolidated properties	47,161			16,293		151,169			48,763			81,569			44,599			177,424			134,426
Share of unconsolidated joint ventures	2,862			3,268		10,535			9,758			4,148			3,119			11,556			9,554
Discontinued Operations	—			15,221		—			46,389
Partners' share of real estate depreciation	(4		)	—		(4		)	—			(171		)	(72		)	(366		)	(211		)
(Gain) loss on sale of depreciated properties:
Consolidated properties	36			—		(119,713		)	(13,944		)	48			33			102			(4,912		)
Share of unconsolidated joint ventures	—			—		(34,332		)	—			—			—			5			15
Non-controlling Interests related to unit holders	212			—		3,169			—
Non-controlling interest related to unitholders												241			326			564			1,023
Funds From Operations	$	62,334		$	46,439	$	195,731		$	133,184		$	106,209		$	67,490		$	222,591		$	196,699
Per Common Share — Diluted:
Net Income Available Available to Common Shareholders	$	0.03		$	0.06	$	0.45		$	0.20
Funds from Operations	$	0.15		$	0.22	$	0.46		$	0.63
Net Income Available to Common Stockholders												$	0.14		$	0.19		$	0.27		$	0.54
Funds From Operations												$	0.72		$	0.63		$	1.80		$	1.84
Weighted Average Shares — Diluted	427,300			210,326		421,954			210,528			148,530			106,880			123,529			106,867

Net Operating Income

Company management evaluates the performance of its property portfolio in part based on NOI. NOI represents rental property revenues, less termination fees, less rental property operating expenses. NOI is not a measure of cash flows or operating results as measured by GAAP, is not indicative of cash available to fund cash needs, and should not be considered an alternative to cash flows as a measure of liquidity. All companies may not calculate NOI in the same manner. The Company considers NOI to be an appropriate

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supplemental measure to net income as it helps both management and investors understand the core operations of the Company's operating assets. NOI excludes corporate general and administrative expenses, interest expense, depreciation and amortization, impairments, gains/loss on sales of real estate, and other non-operating items.

The following table reconciles NOI for consolidated properties to ~~Net Income~~net income for each of the periods presented (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016			2019			2018			2019			2018
Net Income	$	12,285		$	11,657		$	188,088		$	42,218
Net income													$	20,692		$	19,859		$	34,115		$	58,014
Fee income	(2,597		)	(1,945		)	(6,387		)	(5,968		)	(7,494		)	(2,519		)	(23,298		)	(7,211		)
Termination fee income													(3,575		)	(276		)	(4,285		)	(1,275		)
Other income	(993		)	(153		)	(9,593		)	(570		)	(3		)	(468		)	(154		)	(1,561		)
Reimbursed expenses	895			795			2,667			2,463			1,290			955			3,269			2,757
General and administrative expenses	7,193			4,368			21,993			17,301			5,852			3,913			25,686			18,793
Interest expense	7,587			5,754			25,851			16,562			14,700			9,551			37,579			29,043
Depreciation and amortization	47,622			16,622			152,546			49,804			82,012			45,068			178,777			135,836
Acquisition and transaction costs	(677		)	1,446			1,499			3,889			1,048			—			50,878			228
Other expenses	423			173			1,063			681			297			93			1,101			457
Income from unconsolidated joint ventures	(2,461		)	(1,527		)	(43,362		)	(5,144		)	(3,241		)	(2,252		)	(9,779		)	(10,173		)
Gain (loss) on sale of investment properties	33			—			(119,729		)	(13,944		)	27			33			(14,388		)	(4,912		)
Gain on extinguishment of debt	(429		)	—			(2,258		)	—			—			(93		)	—			(8		)
Income from discontinued operations	—			(8,737		)	—			(24,361		)
Net Operating Income	$	68,881		$	28,453		$	212,378		$	82,931		$	111,605		$	73,864		$	279,501		$	219,988

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Liquidity and Capital Resources

Our primary short-term and long-term liquidity needs include the following:

property and land acquisitions;

expenditures on development projects;

building improvements, tenant improvements, and leasing costs;

principal and interest payments on indebtedness; and

~~operating partnership distributions and~~ common stock ~~dividends.~~dividends and distributions to outside unitholders of CPLP.

We may satisfy these needs with one or more of the following:

cash and cash equivalents on hand;

net cash from operations;

proceeds from the sale of assets;

borrowings under our ~~Credit Facility;~~credit facility;

proceeds from mortgage notes payable;

proceeds from construction loans;

proceeds from unsecured loans;

proceeds from offerings of ~~debt or~~ equity securities; and

joint venture formations.

As of September 30, ~~2017,~~2019, we had ~~no amounts~~$80.0 million drawn under our Credit Facility ~~and $1.0 million drawn under our letters of credit,~~ with the ability to borrow an additional ~~$499.0 million under our Credit Facility.~~

In April 2017, we closed a $350 million private placement of senior unsecured notes, which were funded in two tranches. The first tranche of $100 million was funded in April 2017, has a 10-year maturity, and has a fixed annual interest rate of 4.09%. The second tranche of $250 million was funded in July 2017, has an 8-year maturity, and has a fixed annual interest rate of 3.91%. We used the proceeds from the private placement to repay mortgages scheduled to mature during 2017.

In April 2017, we repaid in full, without penalty, the $128.0 million One Eleven Congress mortgage note and the $101.0 million San Jacinto Center mortgage note. In May 2017, we repaid in full, without penalty, the $52.0 million Two Buckhead Plaza mortgage note. In July 2017, we repaid in full, without penalty, the $77.9 million 3344 Peachtree mortgage note. We used the proceeds from the sales of the ACS Center, Emory Point I, and Emory Point II to repay the associated mortgages.$920.0 million.

Contractual Obligations and Commitments

The following table sets forth information as of September 30, ~~2017~~2019 with respect to our outstanding contractual obligations and commitments (in thousands):


	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 years		Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 years
Contractual Obligations:
Company debt:
Term Loan	$	250,000	$	—	$	—	$	250,000	$	—
Unsecured Senior Notes	350,000		—		—		—		350,000
Unsecured Credit Facility	—		—		—		—		—
Unsecured credit facility											$	80,000	$	—	$	—	$	80,000	$	—
Unsecured senior notes											1,000,000		—		—		—		1,000,000
Term loan											250,000		—		250,000		—		—
Mortgage notes payable	500,903		8,688		66,925		22,730		402,560		525,153		2,788		45,082		171,316		305,967
Interest commitments (1)	274,381		40,243		78,207		68,437		87,494		456,622		67,663		140,012		103,914		145,033
Ground leases	208,030		2,321		4,642		4,713		196,354		226,698		3,702		12,900		5,523		204,573
Other operating leases	1,429		515		696		218		—		333		188		145		—		—
Total contractual obligations	$	1,584,743	$	51,767	$	150,470	$	346,098	$	1,036,408	$	2,538,806	$	74,341	$	448,139	$	360,753	$	1,655,573
Commitments:
Unfunded tenant improvements and construction obligations	$	188,339	$	171,731	$	16,608	$	—	$	—	$	206,596	$	202,186	$	4,410	$	—	$	—
Letters of credit	1,000		1,000		—		—		—
Performance bonds	2,747		314		1,650		—		783		487		487		—		—		—
Total commitments	$	192,086	$	173,045	$	18,258	$	—	$	783	$	207,083	$	202,673	$	4,410	$	—	$	—


(1)	Interest on variable rate obligations is based on rates effective as of September 30, ~~2017.~~2019.

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In addition, we have several standing or renewable service contracts mainly related to the operation of buildings. These contracts are in the ordinary course of business and are generally one year or less. These contracts are not included in the above table and are usually reimbursed in whole or in part by tenants.

Other Debt Information

Our existing mortgage debt is primarily non-recourse, fixed-rate mortgage notes secured by various real estate assets. Many of our non-recourse mortgages contain covenants which, if not satisfied, could result in acceleration of the maturity of the debt. We expect to either refinance the non-recourse mortgages at maturity or repay the mortgages with proceeds from asset sales, debt, or other capital sources.

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Over 80% of our debt bears interest at a fixed rate. Our variable-interest debt instruments, including our Credit Facility and $250 million term loan, may use London Interbank Offering Rate ("LIBOR") as a benchmark for establishing the rate. LIBOR is the subject of recent regulatory guidance and proposals for reform. These reforms may cause LIBOR to no longer be provided or to perform differently than in the past. If LIBOR is no longer widely available, or otherwise at our option, our Credit Facility and term loan facilities provide for alternate interest rate calculations.

There can be no assurances as to what alternative interest rates may be and whether such interest rate will be more or less favorable than LIBOR and any other unforeseen impacts of the potential discontinuation of LIBOR. The Company intends to continue monitoring the developments with respect to the potential phasing out of LIBOR after 2021 and work with its lenders to ensure any transition away from LIBOR will have minimal impact on its financial condition, but can provide no assurances regarding the impact of the discontinuation of LIBOR.

Future Capital Requirements

~~Over~~To meet capital requirements for future investment activities over the long term, we intend to actively manage our portfolio of properties, generating internal cash flows, and strategically sell ~~assets to generate capital for future investment activities.~~assets. We expect to continue to utilize indebtedness to fund future commitments, if available and under appropriate terms. We may also seek equity capital and capital from joint venture partners to implement our strategy.

Our business model is dependent upon raising or recycling capital to meet obligations and to fund development and acquisition activity. If one or more sources of capital are not available when required, we may be forced to reduce the number of projects we acquire or develop and/or raise capital on potentially unfavorable terms, or we may be unable to raise capital, which could have an adverse effect on our financial position or results of operations.

Cash Flows Summary

We report and analyze our cash flows based on operating activities, investing activities, and financing activities. The following table sets forth the changes in cash flows (in thousands):


	Nine Months Ended September 30,									Nine Months Ended September 30,
	2017			2016			Change			2019			2018			Change
Net cash provided by operating activities	$	194,913		$	119,251		$	75,662		$	198,365		$	178,037		$	20,328
Net cash used in investing activities	(25,882		)	(131,403		)	105,521			(128,613		)	(182,402		)	53,789
Net cash provided by (used in) financing activities	(142,551		)	107,390			(249,941		)
Net cash used in financing activities										(57,783		)	(118,255		)	60,472

The reasons for significant increases and decreases in cash flows between the periods are as follows:

Cash Flows from Operating Activities. Cash flows from operating activities increased ~~$75.7~~$20.3 million between the ~~2017~~2019 and ~~2016~~2018 nine month periods primarily due to net cash received from the commencement of operations at the second and final phase of Spring & 8th in the fourth quarter of 2018, 1200 Peachtree in the first quarter of 2019, and properties acquired in the Merger in the second quarter of 2019, offset by cash paid for transaction costs.

Cash Flows from Investing Activities. Cash flows used in investing activities decreased $53.8 million between the 2019 and 2018 nine month periods primarily due to cash received in the Merger and cash received from the sale of land to NS, offset by an increase in cash used for acquisitions due to the purchase of 1200 Peachtree and cash used for the development of new properties.

Cash Flows from Financing Activities. Cash flows used in financing activities decreased $60.5 million between the 2019 and 2018 nine month periods primarily due to an increase in ~~cash generated from property operations as a result of the Merger and an increase in operating distributions from joint ventures, offset by an increase in cash interest paid between the periods.~~net borrowings during 2019.

~~Cash Flows from Investing Activities.~~ Cash flows from investing activities increased $105.5 million between the 2017 and 2016 nine month periods primarily due to proceeds from the ACS Center sale, offset by an increase in property acquisition, development, and tenant asset expenditures. These increases were also impacted by larger contributions to and increased distributions from unconsolidated joint ventures which are primarily related to the sale of Emory Point I and II.

~~Cash Flows from Financing Activities.~~ Cash flows from financing activities decreased $249.9 million between the 2017 and 2016 nine month periods, primarily due to the repayment of mortgage notes payable and an increase in payments under the credit facility, offset by the proceeds from the common stock equity offering and increase in notes payable between the periods.

Capital Expenditures. We incur costs related to our real estate assets that include acquisition of properties, development of new properties, redevelopment of existing or newly purchased properties, leasing costs for new or replacement tenants, and ongoing property repairs and maintenance.

Capital expenditures for assets we develop or acquire and then hold and operate are included in the property acquisition, development, and tenant asset expenditures line item within investing activities on the condensed consolidated statements of cash flows. Amounts accrued are removed from the table below (accrued capital adjustment) to show the components of these costs on a cash basis. Components of costs included in this line item for the nine months ended September 30, ~~2017~~2019 and ~~2016~~2018 are as follows (in thousands):

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	Nine Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2019			2018
Acquisition of property							$	82,120		$	—
Development	$	144,116		$	69,899		98,331			47,842
Operating — leasing costs	53,809			53,425			31,991			29,359
Operating — building improvements	38,097			2,063			44,670			22,711
Purchase of land held for investment							6,548			—
Capitalized interest	6,509			2,988			6,349			4,021
Capitalized personnel costs	5,361			5,366			4,624			6,615
Change in accrued capital expenditures	(18,081		)	(11,384		)	(22,599		)	21,920
Total property acquisition and development expenditures	$	229,811		$	122,357
Total property acquisition, development, and tenant asset expenditures							$	252,034		$	132,468

Capital expenditures, including capitalized interest, increased $119.6 million between the 2019 and 2018 nine month periods primarily due to anthe purchase of 1200 Peachtree, the purchase of land, and the increase in ~~the number of development~~spending for projects ~~between the periods and an increase in building improvement projects.~~under development. Tenant improvements and leasing costs, as well as related capitalized personnel costs, are a function of the number and size of newly executed leases or renewals of existing leases. The amounts of tenant improvement and leasing costs for our office portfolio on a per square foot basis for the nine months ended September 30, 2019 and 2018 were as follows:


	Nine Months Ended September 30,
	2017	2016	2019	2018
New leases	$6.98	$7.13	$5.77	$8.18
Renewal leases	$4.21	$4.07	$5.82	$5.03
Expansion leases	$6.36	$6.48	$8.16	$7.02

The amounts of tenant improvement and leasing costs on a per square foot basis vary by lease and by market. ~~Given~~During the ~~level~~first quarter of ~~expected leasing and renewal activity, management expects~~2019, the Company executed a new full-building lease at 1200 Peachtree with NS that had lower than average tenant ~~improvements~~improvement and leasing costs. This is partially offset by a new lease with BB&T Corporation that had higher than average leasing costs, ~~per square foot in future periods to remain consistent with those experienced~~executed in the ~~first nine months~~second quarter of ~~2017.~~2019.

Dividends. We paid common dividends of ~~$74.0~~$100.4 million and ~~$50.5~~$79.8 million in the ~~2017~~2019 and ~~2016~~2018 nine month periods, respectively. We funded the common dividends with cash provided by operating activities. We expect to fund our future quarterly common dividends with cash provided by operating activities, also using proceeds from investment property sales, distributions from unconsolidated joint ventures, and indebtedness, if necessary.

On a quarterly basis, we review the amount of the common dividend in light of current and projected future cash flows from the sources noted above and also consider the requirements needed to maintain our REIT status. In addition, we have certain covenants under credit agreements which could limit the amount of common dividends paid. In general, common dividends of any amount can be paid as long as leverage, as defined in our credit agreements, is less than 60% and we are not in default. Certain conditions also apply in which we can still pay common dividends if leverage is above that amount. We routinely monitor the status of our common dividend payments in light of the covenants of our credit agreements.

Off Balance Sheet Arrangements

General. We have a number of off balance sheet joint ventures with varying structures, as described in note 6 of our ~~2016~~2018 Annual Report on Form 10-K and note 45 of this Form 10-Q. The joint ventures in which we have an interest are involved in the ownership, acquisition, and/or development of real estate. A venture will fund capital requirements or operational needs with cash from operations or financing proceeds, if possible. If additional capital is deemed necessary, a venture may request a contribution from the partners, and we will evaluate such request.

Debt. At September 30, ~~2017,~~2019, our unconsolidated joint ventures had aggregate outstanding indebtedness to third parties of ~~$444.8~~$344.6 million. These loans are generally mortgage or construction loans, most of which are non-recourse to us except as described in the paragraph below. In addition, in certain instances, we provide “non-recourse carve-out guarantees” on these non-recourse loans. Certain of these loans have variable interest rates, which creates exposure to the ventures in the form of market risk from interest rate changes.

We guarantee 12.5% of the loan amount related to the Carolina Square construction loan, which has a lending capacity of $79.8 million, and an outstanding balance of ~~$62.2~~$75.5 million as of September 30, ~~2017.~~2019. At September 30, ~~2017,~~2019, we guaranteed ~~$7.8~~$9.4 million of the amount outstanding.

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Critical Accounting Policies

There have been no material changes in the critical accounting policies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Our primary exposure to market risk results from our debt, which bears interest at both fixed and variable rates. We attempt to mitigate this risk by limiting our debt exposure in total and our maturities in any one year and weighting more towards fixed-rate debt in our portfolio. The fixed rate debt obligations limit the risk of fluctuating interest ~~rates, and generally are mortgage loans secured by certain of our real estate assets and senior unsecured loans.~~rates. At September 30, ~~2017~~2019 and December 31, 2018, we had ~~$850.9~~$1.5 billion and $817.4 million of fixed rate debt outstanding at a weighted average interest ~~rate~~rates of 3.89% and 3.86%~~. At December 31, 2016, we had $994.7 million of fixed rate debt outstanding at a weighted average interest rate of 4.87%.~~, respectively. The amount of fixed-rate debt outstanding ~~decreased and the weighted average interest rate decreased~~primarily increased from December 31, ~~2016~~2018 to September 30, ~~2017~~2019 as a result of ~~repayment~~the funding of ~~mortgage notes payable, repayments on our credit facility~~three tranches of Senior Unsecured Notes for a total of $650 million and the ~~issuance of senior unsecured notes at lower rates. See note 7~~assumption of the ~~notes to condensed consolidated financial statements included~~Legacy Union One mortgage note of $66 million, assumed in ~~this Quarterly Report on Form 10-Q for additional information regarding 2017 debt activity.~~the Merger with TIER.

At September 30, ~~2017,~~2019, we had ~~$250.0 million of variable rate debt outstanding, which consisted of a $250.0 million term loan with an interest rate of 2.43%. At December 31, 2016, we had $384.0~~$330 million of variable rate debt outstanding, which consisted of the Credit Facility with an$80 million outstanding ~~balance of $134.0 million~~ at ~~a weighted average~~an interest rate of ~~1.87%~~3.07% and a ~~$250.0~~$250 million term loan with ~~a weighted average~~an interest rate of ~~1.97%~~3.22%. As of December 31, 2018, we had $250 million of variable rate debt outstanding, which consisted of the Credit Facility with no outstanding balance at an interest rate of 3.55% and a $250 million term loan with an interest rate of 3.70%. Based on our average variable rate debt balances infor the nine months ended September 30, ~~2017,~~2019, interest incurred would have increased by ~~$2.5~~$2.6 million ~~in the nine months ended September 30, 2017~~ if these interest rates had been 1% higher.

The following table summarizes our market risk associated with notes payable as of September 30, ~~2017.~~2019. It includes the principal maturing, an estimate of the weighted average interest rates on ~~those expected principal maturity dates~~remaining debt obligations, and the fair values of the Company’s fixed and variable rate notes payable. Fair value was calculated by discounting future principal payments at estimated rates at which similar loans could have been obtained at September 30, ~~2017.~~2019. The information presented below should be read in conjunction with note 78 of ~~the~~ notes to condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. ~~Notes~~We did not have a significant level of notes receivable at September 30, ~~2017 were not material,~~2019, and the table does not include information related to notes receivable.


	Twelve Months Ended September 30,																							Twelve Months Ended September 30,
($ in thousands)	2018			2019			2020			2021			2022			Thereafter			Total			Estimated Fair Value		2020			2021			2022			2023			2024			Thereafter			Total			Estimated Fair Value
Notes Payable:
Fixed Rate	$	8,688		$	33,062		$	33,863		$	11,154		$	11,576		$	752,560		$	850,903		$	855,103	$	33,863		$	11,154		$	11,577		$	160,497		$	8,492		$	1,299,570		$	1,525,153		$	1,594,516
Average Interest Rate	3.95		%	3.95		%	5.28		%	3.73		%	3.73		%	3.80		%	3.86		%
Weighted Average Interest Rate (1)																								3.35		%	3.35		%	3.34		%	3.45		%	3.45		%	3.66		%	3.89		%
Variable Rate	$	—		$	—		$	—		$	—		$	250,000		$	—		$	250,000		$	250,000	$	—		$	—		$	250,000		$	80,000		$	—		$	—		$	330,000		$	335,063
Average Interest Rate (1)	—			—			—		%	—		%	2.43		%	—			2.43		%
Weighted Average Interest Rate (2)																								—			—			3.22		%	3.07		%	—			—			3.18		%

(1) Represents weighted average interest rate for debt projected to be outstanding at the end of the period indicated, based on scheduled principal payments and scheduled maturities. The weighted average interest rate in the Total column represents the weighted average interest rate for fixed rate debt as of September 30, 2019.

(2) Interest rates on variable rate notes payable are equal to the variable rates in effect on September 30, ~~2017.~~

2019. The weighted average interest rate in the Total column represents the weighted average interest rate for variable rate debt as of September 30, 2019.

Item 4. Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management’s control objectives.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer along with the Chief Financial Officer, of the effectiveness, design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon the foregoing, the Chief Executive Officer along with the Chief Financial Officer concluded that our disclosure controls and procedures were effective. In addition, based on such evaluation we have identified no changes in our internal control over financial reporting that occurred during the

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most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

Information regarding legal proceedings is described under the subheading "Litigation" in note 89 to the unaudited condensed consolidated financial statements set forth in this Form 10-Q.

Item 1A. Risk Factors

Risk factors that affect our business and financial results are discussed in Part I, "Item 1A. Risk Factors," of our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018. There have been no material changes in our risk factors from those previously disclosed in our Annual ~~Report.~~Report and our Quarterly Reports other than as set forth below. You should carefully consider the risks described in our Annual Report and below, which could materially affect our business, financial condition or future results. The risks described in our Annual Report and below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.

We may be unable to integrate the business of TIER successfully or realize the anticipated synergies and related benefits of our merger with TIER or do so within the anticipated time frame.

The ongoing integration of the TIER business into our own will require significant management and resources. We may encounter difficulties in the integration process or in realizing any of the expected benefits from the Merger, including the following:

the inability to successfully combine our business and TIER's business in a manner that permits us to achieve the cost savings anticipated to result from the Merger which would result in some anticipated benefits of the Merger not being realized in the time frame currently anticipated or at all;

lost sales and tenants as a result of certain tenants deciding not do do business with us;

the complexities associated with integrating personnel;

the additional complexities of combining two companies with different histories, cultures, regulatory restrictions, markets and customer bases;

our failure to retain key employees;

potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the Merger; and

performance shortfalls as a result of the diversion of management's attention caused by completing the Merger.

For all these reasons, it is possible that the integration process could result in the distraction of our management, the disruption or our ongoing business or inconsistencies in our services, standards, controls, procedures and policies, any of which could adversely affect our ability to maintain relationships with tenants, customers, vendors and employees.

As a result of the Merger, the composition of our Board of Directors has changed.

Concurrent with the closing of the Merger, the Board of Directors has changed and currently consists of ten members, eight of which served on our Board of Directors prior to the Merger and two of which served on TIER's Board of Directors prior to the Merger.

Our future results will suffer if we do not effectively manage our operations following the Merger.

Following the Merger, we may continue to expand our operations through additional acquisitions, development opportunities, and other strategic transactions, some of which involve complex challenges. Our future success will depend, in part, upon our ability to manage our expansion opportunities, which poses substantial challenges for us to integrate new operations into our existing business in an efficient and timely manner, and to successfully monitor our operations, costs, regulatory compliance and service quality, and to maintain other necessary internal controls. We cannot assure you that our expansion or acquisition opportunities will be successful, or that they will realize their expected operating efficiencies, cost savings, revenue enhancements, synergies or other benefits.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

~~We did not make any sales of unregistered securities during the third quarter of 2017.~~

~~We purchased the following common shares during the third quarter of 2017:~~

Total Number of Shares Purchased* Average Price Paid per Share*
July 1 - 31 274,852
$ 8.84
August 1 - 31 —
—
September 1 - 30 220,389
9.35
495,241
$ 9.07

*Activity for the third quarter of 2017 related to the remittances of shares for stock option exercises. For information on our equity compensation plans, see note 13 of our Annual Report on Form 10-K, and note 10 to the unaudited condensed consolidated financial statements set forth in this Form 10-Q. We did not make any sales of unregistered securities during the third quarter of 2019. We did not purchase any common shares during the third quarter of 2019.

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Item 6. Exhibits.




2.1		Agreement and Plan of Merger, dated ~~April 28, 2016,~~March 25, 2019, by and among ~~Parkway Properties, Inc., Parkway Properties LP,~~ the Registrant, Murphy Subsidiary Holdings Corporation, and ~~Clinic Sub Inc,~~TIER REIT, Inc., filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on ~~April 29, 2016,~~March 25, 2019, and incorporated herein by reference.

3.1		Restated and Amended Articles of Incorporation of the Registrant, as amended August 9, 1999, filed as Exhibit 3.1 to the Registrant’s Form 10-Q for the quarter ended June 30, 2002, and incorporated herein by reference.

3.1.1		Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, as amended July 22, 2003, filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on July 23, 2003, and incorporated herein by reference.

3.1.2		Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, as amended December 15, 2004, filed as Exhibit 3(a)(i) to the Registrant’s Form 10-K for the year ended December 31, 2004, and incorporated herein by reference.

3.1.3		Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, as amended May 4, 2010, filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed May 10, 2010, and incorporated herein by reference.

3.1.4		Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, as amended May 9, 2014, filed as Exhibit 3.1.4 to the Registrant's Form 10-Q for the quarter ended June 30, 2014, and incorporated herein by reference.

3.1.5		Articles of Amendment to Restated and Amended Articles of Incorporation of Cousins, as amended October 6, 2016 (incorporated by reference from Exhibit 3.1 ~~to the Registrant's Current Form 8-K filed on October 7, 2016).~~

~~3.1.6~~		~~Articles of Amendment to Restated~~ and ~~Amended Articles of Incorporation of Cousins, as amended October 6, 2016 (incorporated by reference from~~ Exhibit 3.1.1 to the Registrant's Current Form 8-K filed on October 7, 2016).

~~3.2~~3.1.6		Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, filed as Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on June 14, 2019, and incorporated herein by reference.

3.1.7		Articles of Amendment to Restated and Amended Articles of Incorporation of the Registrant, filed as Exhibit 3.2 to the Registrant's Current Report on Form 8-K filed on June 14, 2019, and incorporated herein by reference.

3.2		Bylaws of the Registrant, as amended and restated December 4, 2012, filed as Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on December 7, 2012, and incorporated herein by reference.

~~11.0~~ 4.1	*	~~Computation~~ Master Purchase Agreement, dated as of ~~Per Share Earnings.~~April 19, 2017, by and among the Registrant, Cousins Properties LP, and the purchasers of certain unsecured senior notes (the “Master Note Purchase Agreement”), incorporated herein by reference.

4.2		Cousins Properties Incorporated, Cousins Properties LP, First Supplement to Master Note Purchase Agreement, dated as of June 12, 2019, incorporated herein by reference.

4.3		Guaranty Agreement, dated as of April 19, 2017 (as amended, modified, or supplemented from time to time, the "Guaranty Agreement") incorporated by reference to Exhibit A of Exhibit 4.1 above, incorporated herein by reference.

4.4		Form of Senior Unsecured Notes incorporated by reference to Schedule 1-A and 1-B of Exhibit 4.1 above, incorporated herein by reference.

4.5		Form of Senior Unsecured Notes incorporated by reference to Schedule 1-A, 1-B, and 1-C of Exhibit 4.2 above, incorporated herein by reference.

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

31.2	†	Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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

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

101	†	The following financial information for the Registrant, formatted in XBRL (Extensible Business Reporting Language): (i) the condensed consolidated balance sheets, (ii) the condensed consolidated statements of operations, (iii) the condensed consolidated statements of equity, (iv) the condensed consolidated statements of cash flows, and (v) the notes to condensed consolidated financial statements.



*		~~Data required by ASC 260, “Earnings per Share,” is provided in note 11 to the condensed consolidated financial statements included in this report.~~
†		Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	COUSINS PROPERTIES INCORPORATED
	/s/ Gregg D. Adzema
	Gregg D. Adzema
	Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)

Date: October ~~25, 2017~~23, 2019

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	Page No.
PART I-FINANCIAL INFORMATION	4
Item 1. Financial Statements (Unaudited)	4
CONDENSED CONSOLIDATED BALANCE SHEETS	4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	5
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY	6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	7
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~	8
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2124
Item 3. Quantitative and Qualitative Disclosures About Market Risk	2831
Item 4. Controls and Procedures	2831

PART II. OTHER INFORMATION	2933
Item 1. Legal Proceedings	2933
Item 1A. Risk Factors	2933
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	2933
Item 6. Exhibits	3034
SIGNATURES	3135



	Three Months Ended September 30, 2016			Nine Months Ended September 30, 2016
	Three Months Ended September 30, 2016			Nine Months Ended September 30, 2016
Rental property revenues	$	46,046		$	133,450
Rental property operating expenses	(19,638		)	(56,598		)
Other revenues	—			288
Interest expense	(1,956		)	(5,896		)
Depreciation and amortization	(15,221		)	(46,389		)
Acquisition and transaction costs	(494		)	(494		)
Income from discontinued operations	$	8,737		$	24,361

Cash provided by operating activities	$	26,589		$	43,601
Cash used in investing activities	$	(11,130	)	$	(29,242	)



Nine Months Ended September 30, 2017	Office		Mixed-Use		Total
Net Operating Income:
Atlanta	$	84,437	$	3,125	$	87,562
Austin	44,113		—		44,113
Charlotte	46,117		—		46,117
Orlando	10,464		—		10,464
Tampa	21,700		—		21,700
Phoenix	24,722		—		24,722
Other	1,374		45		1,419
Total Net Operating Income	$	232,927	$	3,170	$	236,097



	Total Number of Shares Purchased*	Average Price Paid per Share*
July 1 - 31	274,852	$	8.84
August 1 - 31	—	—
September 1 - 30	220,389	9.35
	495,241	$	9.07