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~~March 31, 2020



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~~April 23, 2020
Common Stock, $1 par value per share		~~420,020,538~~148,539,690 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~~2019, 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 of the transaction involving us, Parkway Properties, Inc. ("Parkway"),~~ and ~~Parkway, Inc. ("New Parkway"), including future financial and operating results, plans, objectives, expectations, and intentions;~~

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, particularly in Atlanta, Austin, Charlotte, ~~Austin,~~Phoenix, Tampa, and ~~Phoenix~~Dallas where we have high concentrations of our ~~annualized~~ lease ~~revenue;~~revenues, including the impact of high unemployment, volatility in the public equity and debt markets, and international economic and other conditions;

the impact of a public health crisis, including the COVID-19 pandemic, and the governmental and third party response to such a crisis, which may affect our key personnel, our major tenants, and the costs of operating our assets;

the impact of social distancing, shelter-in-place, border closings, travel restrictions, remote work requirements, and similar governmental and private measures taken to combat the spread of the COVID-19 pandemic on our operations and our tenants;

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, changes in the Board of Directors, 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;

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any failure to comply with debt covenants under credit agreements;

any failure to continue to qualify for taxation as a real estate investment trust and 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 costs related to uninsured losses, condemnation, or environmental issues;~~ and

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

Table of Contents

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)

	March 31, 2020			December 31, 2019
	(unaudited)
Assets:
Real estate assets:
Operating properties, net of accumulated depreciation of $633,654 and $577,139 in 2020 and 2019, respectively	$	5,740,337		$	5,669,324
Projects under development	368,414			410,097
Land	97,354			116,860
	6,206,105			6,196,281
Real estate assets and other assets held for sale, net of accumulated depreciation and amortization of $61,093 in 2019	—			360,582

Cash and cash equivalents	124,632			15,603
Restricted cash	1,947			2,005
Notes and accounts receivable	28,533			23,680
Deferred rents receivable	109,458			102,314
Investment in unconsolidated joint ventures	128,916			133,884
Intangible assets, net	240,286			257,649
Other assets	62,057			59,449
Total assets	$	6,901,934		$	7,151,447
Liabilities:
Notes payable	$	1,944,034		$	2,222,975
Accounts payable and accrued expenses	144,984			209,904
Deferred income	55,290			52,269
Intangible liabilities, net of accumulated amortization of $61,084 and $55,798 in 2020 and 2019, respectively	77,819			83,105
Other liabilities	120,809			134,128
Liabilities of real estate assets held for sale, net of accumulated amortization of $7,771 in 2019	—			21,231
Total liabilities	2,342,936			2,723,612
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	—			1,717
Common stock, $1 par value, 300,000,000 shares authorized, 151,124,621 and 149,347,382 shares issued in 2020 and 2019, respectively	151,125			149,347
Additional paid-in capital	5,538,875			5,493,883
Treasury stock at cost, 2,584,933 shares in 2020 and 2019	(148,473		)	(148,473		)
Distributions in excess of cumulative net income	(1,006,820		)	(1,137,200		)
Total stockholders' investment	4,534,707			4,359,274
Nonredeemable noncontrolling interests	24,291			68,561
Total equity	4,558,998			4,427,835
Total liabilities and equity	$	6,901,934		$	7,151,447

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
	September 30,					September 30,						March 31,
	2017			2016		2017			2016			2020			2019
Revenues:
Rental property revenues	$	109,569		$	46,575	$	336,093		$	138,382		$	189,129		$	123,865
Fee income	2,597			1,945		6,387			5,968			4,732			8,728
Other	993			153		9,593			570			37			140
	113,159			48,673		352,073			144,920			193,898			132,733
Expenses:
Rental property operating expenses	40,688			18,122		123,715			55,451			64,538			43,487
Reimbursed expenses	895			795		2,667			2,463			521			932
General and administrative expenses	7,193			4,368		21,993			17,301			5,652			11,460
Interest expense	7,587			5,754		25,851			16,562			15,904			10,820
Depreciation and amortization	47,622			16,622		152,546			49,804			71,614			45,861
Acquisition and transaction costs	(677		)	1,446		1,499			3,889
Transaction costs												365			3
Other	423			173		1,063			681			566			180
	103,731			47,280		329,334			146,151			159,160			112,743
Gain on extinguishment of debt	429			—		2,258			—
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			3,425			2,904
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
Gain on sales of investments in unconsolidated joint ventures												46,230			—
Gain on investment property transactions												90,916			13,111
Net income	12,285			11,657		188,088			42,218			175,309			36,005
Net income attributable to noncontrolling interests	(218		)	—		(3,181		)	—			(366		)	(664		)
Net income available to common stockholders	$	12,067		$	11,657	$	184,907		$	42,218		$	174,943		$	35,341
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												$	1.19		$	0.34
Net income per common share — diluted												$	1.18		$	0.34
Weighted average shares — basic	419,998			210,170		414,123			210,400			147,424			105,127
Weighted average shares — diluted	427,300			210,326		421,954			210,528			148,561			106,901
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 March 31, 2020
	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, 2019	$	1,717		$	149,347		$	5,493,883		$	(148,473	)	$	(1,137,200	)	$	4,359,274		$	68,561		$	4,427,835
Net income (loss)	—			—			—			—			174,943			174,943			366			175,309
Common stock issued pursuant to stock based compensation	—			60			(1,325		)	—			—			(1,265		)	—			(1,265		)
Common stock issued pursuant to unitholder redemption	(1,717		)	1,719			45,032			—			—			45,034			(45,034		)	—
Amortization of stock options and restricted stock, net of forfeitures	—			(1		)	1,285			—			—			1,284			—			1,284
Contributions from nonredeemable noncontrolling interests	—			—			—			—			—			—			1,036			1,036
Distributions to nonredeemable noncontrolling interests	—			—			—			—			—			—			(638		)	(638		)
Common dividends ($0.30 per share)	—			—			—			—			(44,563		)	(44,563		)	—			(44,563		)
Balance March 31, 2020	$	—		$	151,125		$	5,538,875		$	(148,473	)	$	(1,006,820	)	$	4,534,707		$	24,291		$	4,558,998

Three Months Ended March 31, 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	—			—			—			—			35,341			35,341			664			36,005
Common stock issued pursuant to stock based compensation	—			50			(954		)	—			—			(904		)	—			(904		)
Amortization of stock options and restricted stock, net of forfeitures	—			—			607			—			—			607			—			607
Contributions from nonredeemable noncontrolling interests	—			—			—			—			—			—			2,581			2,581
Distributions to nonredeemable noncontrolling interests	—			—			—			—			—			—			(724		)	(724		)
Common dividends ($0.29 per share)	—			—			—			—			(30,492		)	(30,492		)	—			(30,492		)
Balance March 31, 2019	$	1,717		$	107,731		$	3,934,038		$	(148,473	)	$	(1,124,596	)	$	2,770,417		$	57,812		$	2,828,229

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,
2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 188,088
$ 42,218
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of investment properties (119,729 ) (13,944 )
Depreciation and amortization, including discontinued operations 152,546
96,192
Amortization of deferred financing costs and premium/discount on notes payable (2,543 ) 1,063
Stock-based compensation expense, net of forfeitures 2,486
1,571
Effect of certain non-cash adjustments to rental revenues (33,379 ) (15,966 )
Income from unconsolidated joint ventures (43,362 ) (5,144 )
Operating distributions from unconsolidated joint ventures 40,207
5,893
Gain on extinguishment of debt (2,258 ) —
Changes in other operating assets and liabilities:
Change in other receivables and other assets, net 9,707
1,824
Change in operating liabilities 3,150
5,544
Net cash provided by operating activities 194,913
119,251
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from investment property sales 171,316
21,088
Property acquisition, development, and tenant asset expenditures (229,811 ) (122,357 )
Purchase of tenant in common interest (13,382 ) —
Collection of notes receivable 5,161
—
Investment in unconsolidated joint ventures (13,862 ) (24,918 )
Distributions from unconsolidated joint ventures 40,939
4,150
Change in notes receivable and other assets (1,348 ) (5,699 )
Change in restricted cash 15,105
(3,667 )
Net cash used in investing activities (25,882 ) (131,403 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from credit facility 589,300
182,800
Repayment of credit facility (723,300 ) (274,800 )
Proceeds from issuance of notes payable 350,000
270,000
Repayment of notes payable (493,774 ) (7,239 )
Payment of deferred financing costs (2,048 ) (1,604 )
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
Distributions to nonredeemable noncontrolling interests (1,364 ) —
Repurchase of common stock —
(13,743 )
Common dividends paid (73,950 ) (50,549 )
Other 100
—
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 )



	Three Months Ended March 31,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	175,309		$	36,005
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sales of investments in unconsolidated joint ventures	(46,230		)	—
Gain on investment properties transactions	(90,916		)	(13,111		)
Depreciation and amortization	71,614			45,861
Amortization of deferred financing costs and premium/discount on notes payable	(216		)	615
Stock-based compensation expense, net of forfeitures	1,284			607
Effect of non-cash adjustments to revenues	(13,602		)	(11,933		)
Income from unconsolidated joint ventures	(3,425		)	(2,904		)
Operating distributions from unconsolidated joint ventures	1,829			2,536
Changes in other operating assets and liabilities:
Change in other receivables and other assets, net	(13,661		)	(1,720		)
Change in operating liabilities, net	(69,022		)	(11,455		)
Net cash provided by operating activities	12,964			44,501
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from investment property sales	433,875			57,676
Proceeds from sales of investments in unconsolidated joint ventures	53,104			—
Property acquisition, development, and tenant asset expenditures	(67,983		)	(122,785		)
Investment in unconsolidated joint ventures	(1,238		)	(5,566		)
Change in notes receivable and other assets	26			(23		)
Net cash provided by (used in) investing activities	417,784			(70,698		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from credit facility	280,500			160,000
Repayment of credit facility	(532,000		)	(103,600		)
Repayment of notes payable	(26,849		)	(2,710		)
Contributions from nonredeemable noncontrolling interests	1,036			2,581
Distributions to nonredeemable noncontrolling interests	(638		)	(724		)
Common dividends paid	(42,561		)	(27,326		)
Other	(1,265		)	(1,093		)
Net cash provided by (used in) financing activities	(321,777		)	27,128
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	108,971			931
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD	17,608			2,695
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	126,579		$	3,626

See accompanying notes.

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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~September 30, 2017~~March 31, 2020

(Unaudited)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

: Cousins Properties Incorporated (“Cousins”), a Georgia corporation, is a 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%~~over 99% of CPLP and consolidates CPLP. CPLP owns 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,~~(collectively, the "Company") develop, acquire, lease, manage, and ~~owns~~own 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. As of March 31, 2020, the Company's portfolio of real estate assets consisted of interests in 19.0 million square feet of office space and 310,000 square feet of mixed-use space.

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~~March 31, 2020 and the results of operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016.~~2019. The results of operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 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.~~2019. 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 and preferred 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, preferred 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~~March 31, 2020 and ~~2016,~~2019, there were no items of other comprehensive income. Therefore, no presentation of comprehensive income is required.

~~Recently Issued~~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

~~In May 2014,~~ Codification ("ASC"). If the ~~FASB issued ASU 2014-09, "Revenue from Contracts with Customers." Under~~entity or arrangement qualifies as a VIE and the ~~new guidance, companies will recognize revenue when~~Company is determined to be the ~~seller satisfies a performance obligation, which would be when~~primary beneficiary, the ~~buyer takes control~~Company is required to consolidate the assets, liabilities, and results of operations 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,VIE. At March 31, 2020, 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 beginning January 1, 2019, the effective date of the new leasing 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 most leases on their balance sheets and making targeted changes to lessor accounting and reporting. The new standard will require 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 financehad no investments 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 classification will determine whether the lease expense~~

~~Table of Contents~~

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 with a term of 12 months or less will be accounted for similar 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. The Company expects to adopt this guidance using the "modified retrospective" method effective January 1, 2019, and is currently assessing the potential impact 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") 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 and 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 this standard in the fourth quarter of 2018 and expects that the adoption of this standard will change the classification of cash flows from its equity method investments.

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 January 1, 2017, 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”). ASU 2017-05 updates the definition 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.~~ This ASU is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017. The Company expects 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 have a material impact on its financial statements.any VIEs.

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~~with fractional shares being settled in cash. In the Merger, former TIER common stockholders received approximately 166 million pre-reverse split shares of common stock ~~respectively.~~of the Company. As discussed in note 1 to the condensed consolidated financial statements, immediately following the Merger, the Company completed a 1-for-4 reverse stock split.

~~On October 7, 2016, pursuant~~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 liabilities assumed be recognized at their acquisition date fair value. The total value of the

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transaction is based on the closing stock price of the Company's common stock on June 13, 2019, the day immediately prior to the closing of the Merger. Based on the shares issued in the transaction, the total fair value of the assets acquired and liabilities assumed in the Merger was $1.6 billion. During the three months ended March 31, 2020 and 2019, the Company incurred expenses related to the Merger of $365,000 and $3,000, 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.

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



Real estate assets	$	2,202,712
Real estate assets held for sale	21,395
Cash and cash equivalents	84,042
Restricted cash	1,947
Notes and other receivables	6,524
Investment in unconsolidated joint ventures	331
Intangible assets	141,184
Other assets	9,954
	2,468,089

Notes payable	747,549
Accounts payable and accrued expenses	53,054
Deferred income	8,131
Intangible liabilities	47,988
Other liabilities	7,676
Nonredeemable noncontrolling interests	5,329
	869,727

Total purchase price	$	1,598,362

During the three months ended March 31, 2020, the Company recorded revenues of $51.0 million related to assets acquired in 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 on January 1, 2018.



	Three Months Ended March 31, 2019
Revenues	$	185,765
Net income	26,165
Net income available to common stockholders	25,870

Supplemental pro forma earnings were adjusted to exclude $3,000 of transaction costs incurred in the three months ended March 31, 2019.

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.

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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 ~~Separation, Distribution~~“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.

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 ~~Transition Services~~$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. 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, ~~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 its common and limited voting preferred stockholders, including legacy Parkway common and limited voting stockholders,$32 million from the Consulting Agreement. Since all of the ~~outstanding shares~~agreements and contracts above were executed for the purpose of ~~common~~delivering and ~~limited voting stock, respectively,~~constructing a corporate headquarters for NS and all of ~~New Parkway,~~the services and deliverables are highly interdependent, the Company determined that the services represent a ~~newly-formed entity~~single performance obligation under ASC 606.

The Company determined that ~~contained~~control of the ~~combined businesses relating~~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 ~~ownership~~total estimated time required to satisfy the performance obligation. During the three months ended March 31, 2020 and 2019, the Company recognized $3.7 million and $6.6 million, respectively, in fee income in its condensed consolidated statements of ~~real properties~~operations related to the services provided to NS. As of March 31, 2020 and December 31, 2019, the Company had deferred income included in ~~Houston, Texas~~the consolidated balance sheet of $9.9 million and ~~certain other businesses~~$11.3 million, respectively, related to NS.

4. REAL ESTATE TRANSACTIONS

During March 2020, the Company sold Hearst Tower, a 966,000 square foot office building in Charlotte, North Carolina that was included in the Company's Charlotte/Office operating segment, for a gross purchase price of ~~Parkway (the "Spin-Off"). In~~$455.5 million. This transaction was triggered by the ~~Spin-Off, Cousins distributed one share~~exercise of ~~New Parkway common or limited voting stock for every eight shares~~a purchase option by the building's primary lessee. The Company recognized a gain of ~~common or limited voting preferred stock~~$90.9 million on the sale of ~~Cousins held of record~~Hearst Tower.

During February 2020, as ~~of the close of business on October 6, 2016. New Parkway became an independent public company.~~

~~As a result of the Spin-Off, the historical results of operations~~part of the Company's ~~properties~~strategy in regards to disposal of non-core assets, the Company sold Woodcrest, a 386,000 square foot office property in Cherry Hill, New Jersey that ~~were contributed to New Parkway have been presented as discontinued operations~~was included in the ~~consolidated statements~~Company's Other/Office operating segment, for a gross purchase price of ~~operations.~~$25.3 million. The ~~following table includes a summary~~Company acquired Woodcrest in the Merger with TIER and did not record any gain or loss on the sale of ~~discontinued operations of~~Woodcrest.

During February 2019, the Company sold air rights that cover 8 acres in Downtown Atlanta for ~~the three~~a gross sales price of $13.3 million and ~~nine months ended September 30, 2016 (in thousands):~~

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 )
recorded a gain of $13.1 million.

4. 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~~March 31, 2020 and December 31, ~~2016~~2019 (in thousands). The information included in the summary of operations table is for the three months ended March 31, 2020 and 2019 (in thousands):

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	Total Assets				Total Debt				Total Equity						Company’s Investment
SUMMARY OF FINANCIAL POSITION:	2020		2019		2020		2019		2020			2019			2020				2019
DC Charlotte Plaza LLLP	$	179,082	$	179,694	$	—	$	—	$	92,162		$	90,373		$	48,807			$	48,058
Austin 300 Colorado Project, LP	140,520		112,630		42,226		21,430		68,145			68,101			37,239				36,846
AMCO 120 WT Holdings, LLC	79,703		77,377		—		—		74,908			70,696			14,146				13,362
Carolina Square Holdings LP	102,523		114,483		76,074		75,662		24,735			25,184			13,816				14,414
HICO Victory Center LP	15,543		16,045		—		—		15,479			15,353			10,460				10,373
Charlotte Gateway Village, LLC	—		109,675		—		—		—			106,651			—				6,718
Wildwood Associates	—		11,061		—		—		—			10,978			—				(521		)	(1)
Crawford Long - CPI, LLC	30,069		28,459		67,543		67,947		(39,215		)	(40,250		)	(18,708		)	(1)	(19,205		)	(1)
Other	8,899		8,879		—		—		7,353			7,318			4,448				4,113
	$	556,339	$	658,303	$	185,843	$	165,039	$	243,567		$	354,404		$	110,208			$	114,158

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



	Total Revenues				Net Income (Loss)						Company's Share of Income (Loss)
SUMMARY OF OPERATIONS:	2020		2019		2020			2019			2020			2019
Charlotte Gateway Village, LLC	$	6,572	$	6,743	$	3,296		$	2,524		$	1,647		$	1,262
DC Charlotte Plaza LLLP	5,276		410		1,789			410			750			205
Crawford Long - CPI, LLC	3,343		3,129		1,035			889			497			424
Carolina Square Holdings LP	3,706		3,294		530			170			254			58
HICO Victory Center LP	126		130		126			130			63			62
Austin 300 Colorado Project, LP	98		126		44			72			22			36
Terminus Office Holdings LLC	—		11,797		—			1,831			—			880
AMCO 120 WT Holdings, LLC	138		—		(509		)	(10		)	(141		)	—
Other	196		32		61			(39		)	333			(23		)
	$	19,455	$	25,661	$	6,372		$	5,977		$	3,425		$	2,904

(1) Negative ~~balances~~bases are included in deferred income on the condensed consolidated balance sheets.

In March 2020, the Company sold its interest in Charlotte Gateway Village, LLC ("Gateway"), which owned a 1.1 million square foot office building in Charlotte, North Carolina, to its partner for a gross purchase price of $52.2 million. The ~~following table summarizes statement of operations information~~sale was triggered by the exercise of the ~~Company's unconsolidated joint ventures~~partner's purchase option and the proceeds from this sale represent a 17% internal rate of return 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~~Company on its invested capital, as stipulated in the ~~properties that they owned for a combined gross sales price of $199.0 million. After repayment of debt, the~~partnership agreement. The Company ~~received a distribution of $70.0 million and~~ recognized a gain of ~~$37.9~~$44.9 million ~~which is recorded~~on the sale of its interest in ~~income from unconsolidated joint ventures.~~

Gateway.

In ~~June 2017, HICO Avalon II, LLC ("Avalon II"), a~~February 2020, as part of its strategy in regards to disposal of non-core assets, the Company sold its remaining interest in the Wildwood Associates joint venture, ~~between~~which owned a 6.3 acre parcel of land in Atlanta, to its venture partner for a gross purchase price of $900,000. The Company recognized a gain of $1.3 million on the ~~Company and Hines Avalon II Investor, LLC ("Hines II") was formed for~~sale of its interest in Wildwood Associates, which included elimination of the ~~purpose of acquiring and potentially developing an office building~~remaining negative basis 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~~of $520,000.

In April 2020, the Carolina Square Holdings LP joint venture executed an amendment for its ~~investment in Avalon II using~~associated construction loan, extending the ~~equity method as~~maturity date from May 2020 to May 2021 and reducing 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 controlspread over ~~the operational aspects of the venture, and the Company expects~~LIBOR from 1.90% to ~~consolidate the venture at that time.~~

~~Table of Contents~~

1.25%.

5.6.INTANGIBLE ASSETS

Intangible assets on the balance sheets as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019 included the following (in thousands):



	2020		2019
In-place leases, net of accumulated amortization of $178,757 and $163,867 in 2020 and 2019, respectively	$	187,870	$	202,760
Above-market tenant leases, net of accumulated amortization of $28,892 and $26,487 in 2020 and 2019, respectively	33,295		35,699
Below-market ground lease, net of accumulated amortization of $966 and $897 in 2020 and 2019, respectively	17,447		17,516
Goodwill	1,674		1,674
	$	240,286	$	257,649

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~~three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016 (in thousands):~~2019.

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

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7.OTHER ASSETS

Other assets on the condensed consolidated balance sheets as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019 included the following (in thousands):



	2020		2019
Predevelopment costs and earnest money	$	19,491	$	25,586
Furniture, fixtures and equipment, leasehold improvements, and other deferred costs, net of accumulated depreciation of $30,039 and $29,131 in 2020 and 2019, respectively	17,890		17,791
Prepaid expenses and other assets	15,036		5,924
Lease inducements, net of accumulated amortization of $2,563 and $2,333 in 2020 and 2019, respectively	5,500		5,632
Line of credit deferred financing costs, net of accumulated amortization of $3,328 and $2,952 in 2020 and 2019, respectively	4,140		4,516
	$	62,057	$	59,449

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

7. 8. NOTES PAYABLE

The following table ~~details~~summarizes the terms ~~and amounts~~ of ~~the Company’s outstanding~~ notes payable outstanding at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019 ($ in thousands):

~~Table of Contents~~


Description	Interest Rate		Maturity	September 30, 2017			December 31, 2016			Interest Rate	Maturity (1)	2020			2019
Unsecured Notes:
Credit Facility, Unsecured										2.04%	2023	$	—		$	251,500
Term Loan, Unsecured	2.43	%	2021	$	250,000		$	250,000		2.19%	2021	250,000			250,000
Senior Notes, Unsecured	3.91	%	2025	250,000			—
2019 Senior Notes, Unsecured										3.95%	2029	275,000			275,000
2017 Senior Notes, Unsecured										3.91%	2025	250,000			250,000
2019 Senior Notes, Unsecured										3.86%	2028	250,000			250,000
2019 Senior Notes, Unsecured										3.78%	2027	125,000			125,000
2017 Senior Notes, Unsecured										4.09%	2027	100,000			100,000
												1,250,000			1,501,500
Secured Mortgage Notes:
Fifth Third Center	3.37	%	2026	147,306			149,516			3.37%	2026	139,522			140,332
Terminus 100										5.25%	2023	117,375			118,146
Colorado Tower	3.45	%	2026	120,000			120,000			3.45%	2026	116,486			117,085
Promenade	4.27	%	2022	103,113			105,342			4.27%	2022	95,152			95,986
Senior Notes, Unsecured	4.09	%	2027	100,000			—
816 Congress	3.75	%	2024	83,702			84,872			3.75%	2024	79,554			79,987
Terminus 200										3.79%	2023	75,654			76,079
Legacy Union One										4.24%	2023	66,000			66,000
Meridian Mark Plaza	6.00	%	2020	24,162			24,522			6.00%	2020	—			22,978
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					689,743			716,593
Unamortized premium, net				270			6,792
												$	1,939,743		$	2,218,093

Unamortized premium												10,323			11,239
Unamortized loan costs				(5,996		)	(4,548		)			(6,032		)	(6,357		)
Total Notes Payable				$	1,095,177		$	1,380,920				$	1,944,034		$	2,222,975

(1) Weighted average maturity of notes payable outstanding at March 31, 2020 was 5.7 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.

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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~~Offering Rate ("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,~~March 31, 2020, 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 million~~$1.0 billion at ~~September 30, 2017.~~March 31, 2020.

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,~~March 31, 2020, the Term Loan's spread over LIBOR was ~~1.2%~~1.20%.

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~~

Mortgage Notes

On February 3, 2020, the ~~senior notes may be accelerated upon~~Company prepaid in full, without penalty, the ~~occurrence of any events of default.~~$23.0 million Meridian Mark Plaza mortgage note.

~~Fair Value~~Other Debt Information

At ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, the ~~aggregate~~ estimated fair ~~values~~value of the ~~Company's~~Company’s notes payable were ~~$1.1~~$2.0 billion and ~~$1.4~~$2.3 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.~~March 31, 2020 and December 31, 2019. 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~~March 31, 2020 and ~~2016,~~2019, interest expense was recorded as follows (in thousands):



	2020			2019
Total interest incurred	$	21,213		$	11,835
Interest capitalized	(5,309		)	(1,015		)
Total interest expense	$	15,904		$	10,820

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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 recorded9. OTHER LIABILITIES

Other liabilities on the ~~notes at~~condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019 included the ~~time of the Merger.~~following (in thousands):

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.



	2020		2019
Ground lease liability	$	59,277	$	59,379
Prepaid rent	30,841		33,428
Security deposits	12,900		13,545
Restricted stock unit liability	6,169		16,592
Other liabilities	11,622		11,184
	$	120,809	$	134,128

8. 10. COMMITMENTS AND CONTINGENCIES

Commitments

At ~~September 30, 2017,~~March 31, 2020, the Company had outstanding ~~letters of credit and~~ performance bonds totaling ~~$3.7~~$1.1 million. As a lessor, the Company had ~~$188.3~~$237.1 million in future obligations under leases to fund tenant improvements and other future construction obligations at ~~September 30, 2017. As a lessee, the Company had future obligations under ground and other operating leases of $209.5 million at September 30, 2017.~~March 31, 2020.

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.

Contingencies

~~Table~~Recent events related to the COVID-19 pandemic and the actions taken to contain it have created substantial uncertainty for all businesses, including the Company. The Company’s financial statements as of ~~Contents~~

9. ~~STOCKHOLDERS' EQUITY~~

~~On September 19, 2017,~~and for 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~~three months ended ~~September 30, 2017, certain holders of CPLP units redeemed 1,203,286 units~~March 31, 2020 have been prepared in ~~exchange for shares of the Company's common stock. The aggregate value at the time~~light of these ~~transactions was $10.1 million based upon~~circumstances. We have continued to follow 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~~policies described in ~~note 13 of notes to consolidated financial statements~~our footnotes in the ~~Company's~~Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016. The expense~~2019, including those related to ~~a portion~~impairment and estimates of the likelihood of collectibility of amounts due from tenants. While the results of our current analysis did not result in any impairments or material valuation adjustments to amounts due from tenants as of March 31, 2020, circumstances related to the COVID-19 pandemic may result in recording impairments or material valuation adjustments to amounts due from tenants in future periods.

While the Company has not been obligated contractually or by law to provide its tenants with rent relief related to COVID-19, it will recognize any associated rent reductions in the period during which those obligations occur. Otherwise any COVID-19 related changes in negotiated rents or leasing terms will be accounted for as lease modifications and the Company will recognize the effects over time.

11. STOCKHOLDERS' EQUITY

In the first quarter of 2020, the Company issued 1.7 million shares of common stock in connection with the redemption of 1.7 million limited partnership units in CPLP. Each of the redeemed limited partnership units in CPLP was "paired" with a share of limited voting preferred stock with a par value of $1 per share. The shares of limited voting preferred stock were automatically redeemed by Cousins without consideration when their paired limited partnership unit in CPLP was redeemed. Holders of limited voting preferred stock are entitled to one vote on the following matters only: the election of directors, any proposed amendment of the Company's Articles of Incorporation, any merger or other business combination of the Company, any sale of substantially all of the Company's assets, and any liquidation of the Company. Holders of limited voting preferred stock are not entitled to any dividends or distributions and the limited voting preferred stock is not convertible into or exchangeable for any other property or securities of the Company.

Table of Contents

As of March 31, 2020, the Company had 0 preferred stock outstanding.

12. STOCK-BASED COMPENSATION

The Company has several types of stock-based compensation — stock options, restricted stock, and restricted stock units (“RSUs”).

The Company's compensation expense for the three months ended March 31, 2020 relates to restricted stock and RSUs awarded in 2017, 2018, 2019, and 2020. Restricted stock and the 2020 RSUs are equity-classified awards for which the compensation expense per share is fixed. The 2018 and 2019 RSUs are liability-classified awards for which the expense ~~related to other stock-based compensation awards~~ fluctuates from period to period dependent, in part, on both the Company's stock price and on the Company's stock performance relative to its peers. ~~The Company recorded~~For the three months ended March 31, 2020 and 2019, stock-based compensation expense, net of forfeitures, ~~of $3.3 million and $141,000 for~~was recorded as follows (in thousands):



	2020			2019
Equity-classified awards	$	1,284		$	607
Liability-classified awards	(1,020		)	4,921
Total stock-based compensation expense, net of forfeitures	$	264		$	5,528

On April 23, 2019, the ~~three months ended September 30, 2017 and 2016, respectively, and $7.9 million and $4.8 million for~~Company's stockholders approved the ~~nine months ended September 30, 2017 and 2016, respectively.~~

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~~2019 Plan, during the three months ended March 31, 2020, the Company made restricted stock grants ~~in 2017~~ of ~~308,289~~71,421 shares to key employees, which vest ratably over a three-year period. ~~Under~~Also under the ~~RSU~~2019 Plan, during the three months ended March 31, 2020, 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~~2019 Plan, as compared to the companies in the SNL US REIT Office index (“~~TSR~~Market-based RSUs”), and (2) the ratio of cumulative funds from operations (“FFO”) per share to targeted cumulative ~~funds from operations~~FFO per share (“~~FFO~~Performance-based RSUs”), as defined in the ~~RSU~~2019 Plan. The ~~performance~~measurement period for both awards is January 1, ~~2017~~2020 to December 31, ~~2019,~~2022, and the targeted units awarded of ~~TSR~~Market-based RSUs and ~~FFO~~Performance-based RSUs was ~~267,013~~71,038 and ~~132,266,~~30,447, respectively. The ultimate ~~payout~~settlement 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~~2022 and are to be settled in ~~cash~~the Company’s common stock with ~~payment~~settlement 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.~~Committee. The Company expenses an estimate of the fair value of the ~~TSR~~Market-based RSUs, calculated using a Monte Carlo valuation at grant date, ratably over the ~~performance~~vesting period, ~~using a quarterly Monte Carlo valuation.~~adjusting for forfeitures when they occur. The ~~FFO~~Performance-based 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~~Company’s share price on the ~~TSR RSUs and~~grant date. The expense is recognized ratably over the ~~FFO RSUs will also be paid based upon the percentage vested.~~

~~In addition, the Company granted 166,132 time-vested RSUs to key employees in 2017. The value of each unit is equal to 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~~and adjusted each quarter based on the number of shares expected to vest and for forfeitures when they occur. Dividend equivalents on the Market-based RSUs and the Performance-based RSUs will also be settled in shares of the Company’s common stock based upon the number of units vested.

The company’s stock compensation for stock options, restricted stock, and RSUs granted ~~with such payments made concurrently with payment~~in 2018 and 2019 is described in note 15 of ~~common dividends.~~

~~During~~ the ~~nine months ended September 30, 2017, the Company issued 120,878 shares of common stock at fair value~~notes to ~~members of its board of directors in lieu of fees, and recorded $1.0 million in general and administrative expense~~consolidated financial statements in the ~~nine months~~Company's Annual Report on Form 10-K for the year ended ~~September 30, 2017 related to the issuances.~~December 31, 2019.

13. REVENUE RECOGNITION

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 months ended March 31, 2020 and 2019, the Company recognized rental property revenues of $189.1 million and $123.9 million, respectively, of which $54.1 million and $32.6 million, respectively, represented variable rental revenue. For the three months ended March 31, 2020 and 2019, the Company recognized fee and other revenue of $4.8 million and $8.9 million, respectively.

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~~11.~~ 14. 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~~March 31, 2020 and ~~2016~~2019 (in thousands):



	Three Months Ended March 31,
	2020			2019
Earnings per Common Share - basic:
Numerator:
Net income	$	175,309		$	36,005
Net income attributable to noncontrolling interests in CPLP from continuing operations	(302		)	(588		)
Net income attributable to other noncontrolling interests	(64		)	(76		)
Net income available to common stockholders	$	174,943		$	35,341

Denominator:
Weighted average common shares - basic	147,424			105,127
Net income per common share - basic	$	1.19		$	0.34

Earnings per common share - diluted:
Numerator:
Net income	$	175,309		$	36,005
Net income attributable to other noncontrolling interests	(64		)	(76		)
Net income available for common stockholders before allocation of net income attributable to noncontrolling interests in CPLP	$	175,245		$	35,929

Denominator:
Weighted average common shares - basic	147,424			105,127
Add:
Potential dilutive common shares - stock options	15			30
Potential dilutive common shares - restricted stock units, less shares assumed purchased at market price	2			—
Weighted average units of CPLP convertible into common shares	1,120			1,744
Weighted average common shares - diluted	148,561			106,901
Net income per common share - diluted	$	1.18		$	0.34

Antidilutive restricted stock units, less share assumed purchased at market price	3			—

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 three months ended March 31, 2020, 3,000 restricted stock units, less shares assumed purchased at market price, were not included in the diluted weighted average common shares because they would have been antidilutive for the period presented. These restricted stock units could be dilutive in the future.

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~~12.~~ 15. 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 three months ended March 31, 2020 and 2019 is as follows (in thousands):



	2020		2019
Interest paid	$	27,288	$	31,601
Non-Cash Activity:
Transfers from projects under development to operating properties	95,185		—
Common stock dividends declared and accrued	44,563		30,492
Transfer from land held and other assets to projects under development	29,121		—
Change in accrued property, acquisition, development, and tenant expenditures	13,845		11,085
Ground lease right-of-use assets and associated liabilities	—		56,294
Non-cash consideration for property acquisition	—		10,071

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



	March 31, 2020		December 31, 2019
Cash and cash equivalents	$	124,632	$	15,603
Restricted cash	1,947		2,005
Total cash, cash equivalents, and restricted cash	$	126,579	$	17,608

16. 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 in Cherry Hill, New Jersey that was sold in February 2020 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~~March 31, 2020 and ~~2016~~2019 are as follows (in thousands):


Three Months Ended September 30, 2017	Office		Mixed-Use		Total
Three Months Ended March 31, 2020							Office		Mixed-Use			Total
Net Operating Income:
Atlanta	$	25,247	$	—	$	25,247	$	44,855	$	(60	)	$	44,795
Austin	15,074		—		15,074		29,294		—			29,294
Charlotte	15,489		—		15,489		22,113		—			22,113
Orlando	3,356		—		3,356
Dallas							3,639		—			3,639
Phoenix							9,793		—			9,793
Tampa	7,412		—		7,412		8,144		—			8,144
Phoenix	8,667		—		8,667
Other	525		45		570		9,128		876			10,004
Total Net Operating Income	$	75,770	$	45	$	75,815	$	126,966	$	816		$	127,782

Three Months Ended September 30, 2016 Office Mixed-Use Total
Net Operating Income:
Houston $ 26,408
$ —
$ 26,408
Atlanta 22,593
1,753
24,346
Austin 6,023
—
6,023
Charlotte 4,905
—
4,905
Other (61 ) —
(61 )
Total Net Operating Income $ 59,868
$ 1,753
$ 61,621

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Three Months Ended March 31, 2019	Office		Mixed-Use		Total
Net Operating Income:
Atlanta	$	37,399	$	—	$	37,399
Austin	15,948		—		15,948
Charlotte	15,808		—		15,808
Phoenix	9,491		—		9,491
Tampa	7,988		—		7,988
Other	230		867		1,097
Total Net Operating Income	$	86,864	$	867	$	87,731

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 March 31,
	2020			2019
Net Operating Income	$	127,782		$	87,731
Net operating income from unconsolidated joint ventures	(6,035		)	(7,873		)
Fee income	4,732			8,728
Termination fee income	2,844			520
Other income	37			140
Reimbursed expenses	(521		)	(932		)
General and administrative expenses	(5,652		)	(11,460		)
Interest expense	(15,904		)	(10,820		)
Depreciation and amortization	(71,614		)	(45,861		)
Transaction costs	(365		)	(3		)
Other expenses	(566		)	(180		)
Income from unconsolidated joint ventures	3,425			2,904
Gain on sales of investments in unconsolidated joint ventures	46,230			—
Gain on investment property transactions	90,916			13,111
Net Income	$	175,309		$	36,005

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~~March 31, 2020 and ~~2016~~2019 are as follows (in thousands):



Three Months Ended March 31, 2020	Office			Mixed-Use			Total
Revenues:
Atlanta	$	65,877		$	35		$	65,912
Austin	48,747			—			48,747
Charlotte	34,537			—			34,537
Dallas	4,471			—			4,471
Phoenix	13,159			—			13,159
Tampa	14,112			—			14,112
Other	16,494			1,262			17,756
Total segment revenues	197,397			1,297			198,694
Less Company's share of rental property revenues from unconsolidated joint ventures	(8,268		)	(1,297		)	(9,565		)
Total rental property revenues	$	189,129		$	—		$	189,129

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Three Months Ended March 31, 2019	Office			Mixed-Use			Total
Revenues:
Atlanta	$	57,468		$	—		$	57,468
Austin	28,092			—			28,092
Charlotte	23,386			—			23,386
Tampa	12,971			—			12,971
Phoenix	13,003			—			13,003
Other	546			1,181			1,727
Total segment revenues	135,466			1,181			136,647
Less Company's share of rental property revenues from unconsolidated joint ventures	(11,601		)	(1,181		)	(12,782		)
Total rental property revenues	$	123,865		$	—		$	123,865

Three Months Ended September 30, 2017 Office Mixed-Use Total
Revenues:
Atlanta $ 41,507
$ —
$ 41,507
Austin 25,385
—
25,385
Charlotte 23,153
143
23,296
Orlando 6,408
—
6,408
Tampa 11,815
—
11,815
Phoenix 11,692
—
11,692
Other 915
—
915
Total segment revenues 120,875
143
121,018
Less Company's share of rental property revenues from unconsolidated joint ventures (11,306 ) (143 ) (11,449 )
Total rental property revenues $ 109,569
$ —
$ 109,569

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

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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 over 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 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,~~March 31, 2020, our portfolio of real estate assets consisted of interests in 3235 operating properties ~~(31~~(34 office and one ~~mixed use)~~mixed-use), containing ~~15.9~~19.4 million square feet of space, and ~~four~~six projects ~~(three~~(five office and one mixed-use) under active development.

During the first quarter of 2020 we completed sales of three operating office properties. We ~~have~~sold Hearst Tower, a ~~comprehensive strategy~~966,000 square foot office building in ~~place based~~Charlotte, North Carolina for gross proceeds of $455.5 million, recognizing a gain of $90.9 million on the sale. We sold our interest in Charlotte Gateway Village, LLC, which owned a ~~simple platform, trophy assets,~~1.1 million square foot office building in Charlotte, North Carolina, to our venture partner for a gross purchase price of $52.2 million, recognizing a gain of $44.9 million on the sale. We sold Woodcrest, a non-strategic asset in Cherry Hill, New Jersey, for $25.3 million. We acquired Woodcrest in the Merger with TIER and ~~opportunistic investments. This streamlined strategy enables us to maintain a targeted, asset-specific approach to investing where~~did not record any gain or loss on its sale.

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~~476,000 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~~$25.01 per square foot. For those leases that were previously occupied within the past year, net effective rent increased ~~16.9%~~26.9%. Same property net operating income (defined below) for consolidated properties and our share of unconsolidated properties increased by ~~1.3%~~3.2% between the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016.~~2019.

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 and preferred stock were combined into one share of our common stock or preferred stock, as applicable, 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 a regular basis we review and, as appropriate, revise our corporate contingency plan, which addresses the steps necessary to respond to an unexpected interruption of business, including the unavailability of our corporate office space. In light of the increasing reports regarding the threat presented by COVID-19, and in accordance with the advice of the CDC, we confirmed our readiness to adjust to teleworking if appropriate. Throughout the month of March, our tenants widely adopted teleworking for their office employees, as we increased our janitorial cleaning protocols in our buildings. The rental obligations under our space leases have not been materially affected by the COVID-19 pandemic to date, and any requests for rent adjustments are addressed on a case-by-case basis. We also have worked closely with essential vendors, including the contractors and others involved in our development projects, to assess potential impact of appropriate and necessary distancing measures upon our operations and our development delivery timelines.

Although the impact to our business of the COVID-19 pandemic has not been severe to date, the long-term impact of the pandemic on our tenants and the world-wide economy is uncertain and will depend on the scope, severity, and duration of the pandemic. A prolonged

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economic downturn resulting from the pandemic could adversely affect many of our tenants, which could, in turn, adversely impact our business, financial condition, and results of operations.

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.


	Three Months Ended September 30,								Nine Months Ended September 30,								Three Months Ended March 31,
	2017		2016		$ Change		% Change		2017		2016		$ Change		% Change		2020		2019		$ Change			% Change
Rental Property Revenues
Same Property	$	35,691	$	33,404	$	2,287	6.8	%	$	106,918	$	100,608	$	6,310	6.3	%	$	114,383	$	113,468	$	915		0.8	%
Non-Same Property	73,878		13,171		60,707		460.9	%	229,175		37,774		191,401		506.7	%
Legacy TIER Properties																	51,011		—		51,011			100.0	%
Other Non-Same Properties																	23,735		10,397		13,338			128.3	%
Total Rental Property Revenues	$	109,569	$	46,575	$	62,994	135.3	%	$	336,093	$	138,382	$	197,711	142.9	%	$	189,129	$	123,865	$	65,264		52.7	%

Rental Property Operating Expenses
Same Property	$	13,486	$	11,494	$	1,992	17.3	%	$	39,449	$	36,194	$	3,255	9.0	%	$	38,233	$	40,342	$	(2,109	)	(5.2	)%
Non-Same Property	27,202		6,628		20,574		310.4	%	84,266		19,257		65,009		337.6	%
Legacy TIER Properties																	18,980		—		18,980			100.0	%
Other Non-Same Properties																	7,325		3,145		4,180			132.9	%
Total Rental Property Operating Expenses	$	40,688	$	18,122	$	22,566	124.5	%	$	123,715	$	55,451	$	68,264	123.1	%	$	64,538	$	43,487	$	21,051		48.4	%

Net Operating Income
Same Property NOI	$	22,205	$	21,910	$	295	1.3	%	$	67,469	$	64,414	$	3,055	4.7	%	$	74,722	$	72,593	$	2,129		2.9	%
Non-Same Property NOI	46,676		6,543		40,133		613.4	%	144,909		18,517		126,392		682.6	%
Legacy TIER Properties																	31,956		—		31,956			100.0	%
Other Non-Same Properties																	15,069		7,265		7,804			107.4	%
Total NOI	$	68,881	$	28,453	$	40,428	142.1	%	$	212,378	$	82,931	$	129,447	156.1	%	$	121,747	$	79,858	$	41,889		52.5	%

Same property ~~NOI increased $295,000 (1.3%) and $3.1 million (4.7%) between~~rental property operating expenses decreased in the three ~~months ended and nine months ended 2017 and 2016, respectively. The increases were~~month period primarily due to ~~increased occupancy rates~~a settlement that resulted in the recovery of previously incurred legal expenses at ~~Fifth Third Center and 816 Congress, offset by operating expense increases in real estate taxes, repairs and maintenance, and parking between the periods.~~3344 Peachtree.

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~~Non-same property revenues~~Revenues and expenses ~~increased between~~for Legacy TIER properties represent amounts recorded for the ~~three and nine month periods primarily from~~ properties acquired in the ~~Merger, offset by~~Merger.

Revenues and expenses of Other Non-Same Properties increased in the ~~sales~~three month period primarily as a result of the ~~ACS Center in the first quarter 2017 and 191~~addition of 1200 Peachtree in ~~the fourth quarter 2016.~~March 2019 and of Terminus, which was consolidated in October 2019 when we purchased our partner's interest in Terminus Office Holdings LLC ("TOH").

~~Other~~Fee Income

~~Other~~Fee income ~~increased $840,000 and $9.0~~decreased $4.0 million (46%) between the ~~the~~2020 and 2019 three ~~and nine~~ month ~~periods, respectively. These increases are~~period. The decrease 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~~decreased $5.8 million ~~(65%~~(51%) between the 2020 and 2019 three month ~~periods, and increased $4.7 million (27%) between the nine month periods.~~period. These ~~increases~~decreases are primarily driven by long-term compensation expense ~~increases~~decreases as a result of fluctuations in our common stock price ~~relative to~~for our ~~office peers included in the SNL US Office REIT Index.~~liability-classified awards.

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Interest Expense

Interest expense, net of amounts capitalized, increased ~~$1.8~~$5.1 million ~~(32%~~(47%) between the 2020 and 2019 three month periods. The increase in the three month periods ~~and increased $9.3 million (56%) between~~is due to interest incurred on the ~~nine month periods due to~~unsecured senior notes that were issued on June 19, 2019 and an increase in the average ~~debt~~ outstanding ~~between the periods, offset by an increase in capitalized interest from increased development projects.~~balance on our credit facility.

Depreciation and Amortization



	Three Months Ended March 31,
	2020		2019		$ Change			% Change
Depreciation and Amortization
Same Property	$	40,353	$	41,209	$	(856	)	(2.1	)%
Legacy TIER Properties	24,483		—		24,483			100.0	%
Other Non-Same Properties	6,571		4,196		2,375			56.6	%
Non-Real Estate Assets	207		456		(249		)	(54.6	)%
Total Depreciation and Amortization	$	71,614	$	45,861	$	25,753		56.2	%

Depreciation and amortization ~~increased $31.0 million (186%) between~~for Legacy TIER properties represent amounts recorded on the ~~three month periods, and increased $102.7 million (206%) between the nine month periods primarily from~~ properties acquired in the ~~Merger, offset by decreases from the sales~~Merger.

Depreciation and amortization of ~~191 Peachtree in the fourth quarter 2016 the ACS Center in the second quarter 2017.~~

~~Acquisition and Transaction Costs~~

~~Acquisition and transaction costs decreased $2.1 million (147%)~~Other Non-Same Properties increased in the three month periods primarily as a result of addition of 1200 Peachtree in March 2019 and ~~decreased $2.4 million (61%) between~~of Terminus, which was consolidated in the ~~nine month periods. Amounts~~October 2019 when we purchased our partner's interest in ~~all periods represent~~TOH.

Transaction Costs

Transaction costs ~~associated with the Merger, and the amount recorded in~~for the three months ended ~~September 30, 2017 represents a true-up~~March 31, 2020 and 2019 primarily 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 March 31,
	2017			2016			$ Change		2017			2016			$ Change			2020			2019			$ Change			% Change
Net operating income	$	6,934		$	6,760		$	174	$	23,719		$	20,359		$	3,360		$	6,035		$	7,873		$	(1,838	)	(23.3	)%
Termination fee income																		1			3			(2		)	(66.7	)%
Other income, net	165			72			93		1,868			614			1,254			68			36			32			88.9	%
Depreciation and amortization	(2,862		)	(3,267		)	405		(10,535		)	(9,758		)	(777		)	(2,347		)	(3,254		)	907			(27.9	)%
Interest expense	(1,776		)	(2,038		)	262		(6,022		)	(6,071		)	49			(650		)	(1,754		)	1,104			(62.9	)%
Net gain on sale of investment property	—			—			—		34,332			—			34,332			318			—			318			100.0	%
Income from unconsolidated joint ventures	$	2,461		$	1,527		$	934	$	43,362		$	5,144		$	38,218		$	3,425		$	2,904		$	521		17.9	%

Net operating income, depreciation and amortization, and interest expense from unconsolidated joint ventures ~~increased $3.4 million (16.5%)~~decreased between the ~~nine~~three month periods primarily due to ~~a change~~the consolidation of Terminus in ~~the partnership structure at Gateway Village whereby~~October 2019 when we began receiving 50% of cash flows versus a preferred return, effective December 1, 2016, and the addition of Courvoisier Centre which was acquired in the Merger. These increases were offset by the sale of properties owned 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%purchased our partner's interest in ~~the 111 West Rio building and the related consolidation of the building immediately following the purchase.~~TOH.

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

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Investments in Unconsolidated Joint Ventures

The gain on sales of investments in unconsolidated joint ventures for the three months ended March 31, 2020 includes the sale of ~~investment properties~~our interests in the ~~nine months ended September 30, 2017 relates primarily to~~Wildwood Associates and Gateway Village joint ventures. The capitalization rate of Gateway Village was not a determinant of the sales price as, per the joint venture agreement, our interest was valued at a 17% internal rate of return on our invested capital. There was no capitalization rate associated with the sale of our interest in the ~~American Cancer Society Center (the “ACS Center”).~~ Wildwood Associates joint venture as the underlying asset was land.

Gain on Investment Property Transactions

The gain on ~~sale of~~ investment ~~properties in~~property transactions for the ~~nine~~three months ended ~~September 30, 2016 relates to~~March 31, 2020 includes the sale of ~~100 North Point Center East.~~

~~Discontinued Operations~~

~~Discontinued operations in 2016 contains~~Hearst Tower. The combined sales prices of the ~~operations of Post Oak Central~~Hearst Tower and ~~Greenway Plaza (the "Houston Properties"), the properties that were included in the Spin-Off. Because we decided to exit the Houston market in connection with the Parkway Transactions, the Spin-Off~~Woodcrest dispositions represented a ~~strategic shift that had a significant impact on our operations. As such,~~weighted average capitalization rate of 5.1%. Capitalization rates are calculated by dividing projected annualized NOI by the Spin-Off of these properties qualified for discontinued operations treatment. Accordingly, the operations of the Houston Properties have been reclassified into discontinued operations for the three and nine months ended September 30, 2016.sales price.

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

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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~~March 31, 2020 and ~~2016~~2019 (in thousands, except per share information):


												Three Months Ended March 31,
	Three Months Ended September 30,					Nine Months Ended September 30,						2020							2019
	2017			2016		2017			2016			Dollars			Weighted Average Common Shares	Per Share Amount			Dollars			Weighted Average Common Shares	Per Share Amount
Net Income Available to Common Stockholders	$	12,067		$	11,657	$	184,907		$	42,218		$	174,943		147,424	$	1.19		$	35,341		105,127	$	0.34
Noncontrolling interest related to unitholders												302			1,120	(0.01		)	588			1,744	—
Conversion of stock options												—			15	—			—			30	—
Conversion of unvested restricted stock units												—			2	—			—			—	—

Net Income — Diluted												175,245			148,561	1.18			35,929			106,901	0.34
Depreciation and amortization of real estate assets:
Consolidated properties	47,161			16,293		151,169			48,763			71,406			—	0.48			45,405			—	0.42
Share of unconsolidated joint ventures	2,862			3,268		10,535			9,758			2,347			—	0.02			3,254			—	0.03
Discontinued Operations	—			15,221		—			46,389
Partners' share of real estate depreciation	(4		)	—		(4		)	—			(149		)	—	—			(96		)	—	—
(Gain) loss on sale of depreciated properties:
Consolidated properties	36			—		(119,713		)	(13,944		)	(90,916		)	—	(0.61		)	21			—	—
Share of unconsolidated joint ventures	—			—		(34,332		)	—			(318		)	—	—			—			—	—
Non-controlling Interests related to unit holders	212			—		3,169			—
Investments in unconsolidated joint ventures												(44,894		)	—	(0.31		)	—			—	—
Funds From Operations	$	62,334		$	46,439	$	195,731		$	133,184		$	112,721		148,561	$	0.76		$	84,513		106,901	$	0.79
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
Weighted Average Shares — Diluted	427,300			210,326		421,954			210,528

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.

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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 March 31,
	2017			2016			2017			2016			2020			2019
Net Income	$	12,285		$	11,657		$	188,088		$	42,218
Net income													$	175,309		$	36,005
Fee income	(2,597		)	(1,945		)	(6,387		)	(5,968		)	(4,732		)	(8,728		)
Termination fee income													(2,844		)	(520		)
Other income	(993		)	(153		)	(9,593		)	(570		)	(37		)	(140		)
Reimbursed expenses	895			795			2,667			2,463			521			932
General and administrative expenses	7,193			4,368			21,993			17,301			5,652			11,460
Interest expense	7,587			5,754			25,851			16,562			15,904			10,820
Depreciation and amortization	47,622			16,622			152,546			49,804			71,614			45,861
Acquisition and transaction costs	(677		)	1,446			1,499			3,889
Transaction costs													365			3
Other expenses	423			173			1,063			681			566			180
Income from unconsolidated joint ventures	(2,461		)	(1,527		)	(43,362		)	(5,144		)	(3,425		)	(2,904		)
Gain (loss) on sale of investment properties	33			—			(119,729		)	(13,944		)
Gain on extinguishment of debt	(429		)	—			(2,258		)	—
Income from discontinued operations	—			(8,737		)	—			(24,361		)
Gain on sale of investments in unconsolidated joint ventures													(46,230		)	—
Gain on investment property transactions													(90,916		)	(13,111		)
Net Operating Income	$	68,881		$	28,453		$	212,378		$	82,931		$	121,747		$	79,858

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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.

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,~~March 31, 2020, we had ~~no amounts drawn~~available to us the entire $1.0 billion borrowing capacity under our Credit Facility and ~~$1.0~~$124.6 million ~~drawn under~~of cash and cash equivalents. While we expect to have sufficient liquidity to meet our ~~letters~~obligations for the foreseeable future, the COVID-19 outbreak and associated responses could adversely impact our future cash flows and financial condition.

Table of ~~credit, with the ability to borrow an additional $499.0 million under our Credit Facility.~~Contents

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.

Contractual Obligations and Commitments

The following table sets forth information as of ~~September 30, 2017~~March 31, 2020 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 (1)											$	—	$	—	$	—	$	—	$	—
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		689,743		11,850		118,769		332,242		226,882
Interest commitments ~~(1)~~(2)	274,381		40,243		78,207		68,437		87,494		417,824		61,740		114,325		98,543		143,216
Ground leases	208,030		2,321		4,642		4,713		196,354		224,400		3,567		12,283		5,391		203,159
Other operating leases	1,429		515		696		218		—		342		187		155		—		—
Total contractual obligations	$	1,584,743	$	51,767	$	150,470	$	346,098	$	1,036,408	$	2,582,309	$	77,344	$	495,532	$	436,176	$	1,573,257
Commitments:
Unfunded tenant improvements and construction obligations	$	188,339	$	171,731	$	16,608	$	—	$	—	$	237,100	$	192,464	$	44,636	$	—	$	—
Letters of credit	1,000		1,000		—		—		—
Performance bonds	2,747		314		1,650		—		783		1,102		1,095		7		—		—
Total commitments	$	192,086	$	173,045	$	18,258	$	—	$	783	$	238,202	$	193,559	$	44,643	$	—	$	—


(1)	As of March 31, 2020, the entire $1.0 billion borrowing capacity was available to us under our Credit Facility.


(2)	Interest on variable rate obligations is based on rates effective as of ~~September 30, 2017.~~March 31, 2020.

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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.

85% 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 and in July 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. 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 variable-interest debt instruments, including 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 rates 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

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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,									Three Months Ended March 31,
	2017			2016			Change			2020			2019			Change
Net cash provided by operating activities	$	194,913		$	119,251		$	75,662		$	12,964		$	44,501		$	(31,537	)
Net cash used in investing activities	(25,882		)	(131,403		)	105,521
Net cash provided by (used in) investing activities										417,784			(70,698		)	488,482
Net cash provided by (used in) financing activities	(142,551		)	107,390			(249,941		)	(321,777		)	27,128			(348,905		)

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~~decreased $31.5 million between the ~~2017~~2020 and ~~2016 nine~~2019 three month periods primarily due to ~~an increase in cash generated from property operations as~~ a ~~result of the Merger and an increase~~larger decrease in operating ~~distributions from joint ventures,~~liabilities, specifically accrued property taxes and accrued interest, in 2020. This is partially offset by an increase in net cash received from operations of properties acquired in the Merger in June 2019, of 1200 Peachtree, which was acquired in March 2019, and of Terminus, which was consolidated in the October 2019 when we purchased our partner's interest ~~paid between the periods.~~in TOH.

Cash Flows from Investing Activities. Cash flows from investing activities increased ~~$105.5~~$488.5 million between the ~~2017~~2020 and ~~2016 nine~~2019 three month periods primarily due to ~~proceeds~~cash received from the ~~ACS Center sale, offset by an increase~~sales of the Hearst Tower and Woodcrest operating properties, combined with the sales of our interests in ~~property acquisition, development,~~the Gateway Village and ~~tenant asset expenditures. These increases were also impacted by larger contributions to and increased distributions from unconsolidated~~Wildwood Associates joint ~~ventures which are primarily related to the sale of Emory Point I and II.~~ventures.

Cash Flows from Financing Activities. Cash flows from financing activities decreased ~~$249.9~~$348.9 million between the ~~2017~~2020 and ~~2016 nine~~2019 three month periods primarily due to ~~the repayment~~a decrease in net borrowings on our Credit Facility in 2020, which has no outstanding balance as 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.~~March 31, 2020.

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~~three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 are as follows (in thousands):

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	Nine Months Ended September 30,						Three Months Ended March 31,
	2017			2016			2020		2019
Acquisition of property							$	—	$	82,120
Development	$	144,116		$	69,899		22,037		11,983
Operating — leasing costs	53,809			53,425			2,801		6,647
Operating — building improvements	38,097			2,063			21,202		2,330
Purchase of land held for investment							—		6,512
Capitalized interest	6,509			2,988			5,309		1,015
Capitalized personnel costs	5,361			5,366			1,882		1,093
Change in accrued capital expenditures	(18,081		)	(11,384		)	13,811		11,085
Total property acquisition and development expenditures	$	229,811		$	122,357
Total property acquisition, development, and tenant asset expenditures							$	67,042	$	122,785

Capital expenditures ~~including~~decreased $55.7 million between the 2020 and 2019 three month periods primarily due to the purchase of 1200 Peachtree and the purchase of land in the first quarter of 2019. This is partially offset by increases in spending for projects under development, tenant improvements, and leasing commissions and by increased capitalized interest ~~increased due~~related to ~~an increase in~~ the ~~number of~~Domain development ~~projects between the periods and an increase in building improvement~~ projects. 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 three months ended March 31, 2020 and 2019 were as follows:

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	Nine Months Ended September 30,
	2017	2016	2020	2019
New leases	$6.98	$7.13	$12.33	$1.82
Renewal leases	$4.21	$4.07	$6.58	$4.74
Expansion leases	$6.36	$6.48	$8.28	$7.29

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 per square foot in future periods to remain consistent with those experienced in the first nine months of 2017.~~costs.

Dividends. We paid common dividends of ~~$74.0~~$42.6 million and ~~$50.5~~$27.3 million in the ~~2017~~2020 and ~~2016 nine~~2019 three 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 68 of our ~~2016~~2019 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,~~March 31, 2020, our unconsolidated joint ventures had aggregate outstanding indebtedness to third parties of ~~$444.8~~$185.8 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~~$76.1 million as of ~~September 30, 2017.~~March 31, 2020. At ~~September 30, 2017,~~March 31, 2020, we guaranteed ~~$7.8~~$9.5 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.~~2019.

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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~~There have been no material changes 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. At September 30, 2017 we had $850.9 million of fixed rate debt outstanding at a weighted average interest rate of 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%. The amount of fixed-rate debt outstanding decreased and the weighted average interest rate decreased from December 31, 2016 to September 30, 2017 as a result of repayment of mortgage notes payable, repayments on our credit facility and the issuance of senior unsecured notes at lower rates. See note 7 of the notes to condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding 2017 debt activity.

At September 30, 2017, 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 million of variable rate debt outstanding, which consisted of the Credit Facility with an outstanding balance of $134.0 million at a weighted average interest rate of 1.87% and a $250.0 million term loan with a weighted average interest rate of 1.97%. Based on our average variable rate debt balances in the nine months ended September 30, 2017, interest incurred would have increased by $2.5 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 our notes payable at March 31, 2020 compared to that as of September 30, 2017. It includes the principal maturing, an estimate of the weighted average interest rates on those expected principal maturity dates 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. The information presented below should be readdisclosed in ~~conjunction with note 7 of the notes to condensed consolidated financial statements included in this Quarterly~~our Annual Report on Form ~~10-Q. Notes receivable at September 30, 2017 were not material, and~~10-K for the ~~table does not include information related to notes receivable.~~

Twelve Months Ended September 30,
($ in thousands) 2018 2019 2020 2021 2022 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
Average Interest Rate 3.95 % 3.95 % 5.28 % 3.73 % 3.73 % 3.80 % 3.86 %
Variable Rate $ —
$ —
$ —
$ —
$ 250,000
$ —
$ 250,000
$ 250,000
Average Interest Rate (1) —
—
— % — % 2.43 % —
2.43 %

~~(1)Interest rates on variable rate notes payable are equal to the variable rates in effect on September 30, 2017.~~

year ended December 31, 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 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 810 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.~~2019. 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.

A pandemic, epidemic or outbreak of a contagious disease, such as the ongoing global pandemic of COVID-19, could adversely affect us.

Public health crises, pandemics, and epidemics, such as those caused by COVID-19, could have a material adverse effect on global, national, and local economies, as well as on our business and our tenants’ businesses. The potential impact of a pandemic, epidemic, or outbreak of a contagious disease on our tenants and our properties is difficult to predict or assess. The extent to which the ongoing COVID-19 pandemic, including the outbreaks in Atlanta, Austin, Charlotte, Phoenix, Tampa, and Dallas and actions taken to contain or slow them, impacts our operations and those of our tenants, will depend on future developments. These may include the scope, severity, and duration of the pandemic, and the actions taken to mitigate its impact, all of which are highly uncertain and unpredictable, but could be material. Considerable uncertainty surrounds the nature of COVID-19 and its potential effects, and the extent of and effectiveness of any responses taken on a national and local level to try to contain it. The long-term impact of COVID-19 on the U.S. and global economies is uncertain and could result in a world-wide economic downturn and recession that may lead to corporate bankruptcies among our tenants. Any of these developments, and other effects of the ongoing global pandemic of COVID-19 or any other pandemic, epidemic, or outbreak of contagious disease, could adversely affect us.

In addition to the general economic impact of a pandemic, epidemic, or outbreak of a contagious disease, if an outbreak of COVID-19 occurs within the workforce of our tenants or otherwise disrupts their management and other personnel, the business and operating results of our tenants could be negatively impacted. Large-scale “shelter in place” or “stay safe” executive orders in Atlanta, Austin, Charlotte, Phoenix, Tampa, or Dallas, where we have high concentrations of our lease revenues, could cause many of our tenants, including retailers and restaurants, to stay closed for an extended period of time. The negative impact upon our tenants may include an immediate reduction in cash flow available to pay rent under our leases, and although various governmental financial programs may mitigate this, governmental assistance may not be available to all affected tenants or may be significantly delayed. In turn, our tenants' inability to pay rent under our leases could adversely affect our own liquidity, and there can be no guarantee that additional liquidity will be readily available or available on favorable terms in the future. Large-scale executive orders and other measures taken to curb the spread of COVID-19 may also negatively impact the ability of our properties to continue to obtain necessary goods and services or provide adequate staffing, which may also adversely affect our operating results and reputation. Any increased costs or lost revenue as a result of tenant financial difficulty, or their need to comply with executive orders and other guidance from the Centers for Disease Control and Prevention, may not be fully recoverable under our leases or adequately covered by insurance, which could impact our profitability. In addition to the potential consequences listed above, these same factors may cause prospective tenants to delay their leasing decisions or to lease less space. Even after the pandemic has ceased to be active, the prevalence of work-from-home policies during the pandemic may alter tenant preferences in the long term with respect to the demand for leasing office space.

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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 1315 of our Annual Report on Form 10-K, and note 1012 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 first quarter of 2020.

We purchased the following common shares during the first quarter of 2020:



	Total Number of Shares Purchased (1)	Average Price Paid per Share (1)
January 1 - 31	7,940	$	41.31
February 1 - 29	40,917	41.57
March 1 - 31	481	34.33
	49,338	$	41.46

(1) Activity for the first quarter of 2020 related to the remittance of shares for income taxes associated with restricted stock vesting and to the remittance of shares for income taxes and strike price associated with the exercise of fully vested stock options.

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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.

~~31.1~~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.

10(a)(xl)	†	Cousins Properties Incorporated 2019 Omnibus Incentive Stock Plan — Director Stock Grant Certificate.

10(b)	†	Retirement Agreement and General Release for Lawrence L. Gellerstedt, Executive Chairman of the Board.

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 inline 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.

104	†	Cover page interactive data file (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibit 101).



*		~~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~~April 30, 2020

3132



	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
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2120
Item 3. Quantitative and Qualitative Disclosures About Market Risk	28
Item 4. Controls and Procedures	28

PART II. OTHER INFORMATION	29
Item 1. Legal Proceedings	29
Item 1A. Risk Factors	29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	29
~~Item 6. Exhibits~~	30
~~SIGNATURES~~Item 6. Exhibits	31
SIGNATURES	32



	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



	Twelve Months Ended September 30,
($ in thousands)	2018			2019			2020			2021			2022			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
Average Interest Rate	3.95		%	3.95		%	5.28		%	3.73		%	3.73		%	3.80		%	3.86		%
Variable Rate	$	—		$	—		$	—		$	—		$	250,000		$	—		$	250,000		$	250,000
Average Interest Rate (1)	—			—			—		%	—		%	2.43		%	—			2.43		%



	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