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TABLE OF CONTENTS |
Forward-Looking Statements | |
Earnings Release | 4 |
Condensed Consolidated Statements of Operations | 6 |
Condensed Consolidated Balance Sheets | |
Key Performance Metrics | |
Funds From Operations - Detail | |
Portfolio Statistics | |
Office Leasing Activity | |
Office Lease Expirations | |
Top 20 Office Tenants | |
Tenant Industry Diversification | |
Investment Activity | |
Land Inventory | |
Debt Schedule | |
Non-GAAP Financial Measures - Calculations and Reconciliations | |
Non-GAAP Financial Measures - Discussion |
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Cousins Properties Incorporated | Q4 2017 Supplemental Information |
FORWARD-LOOKING STATEMENTS |
Certain matters contained in this report are “forward-looking statements” within the meaning of the federal securities laws and are subject to uncertainties and risks, as itemized in Item 1A included in the Annual Report on Form 10-K for the year ended December 31, 2017 and 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 business and financial strategy; future financing; future acquisitions and dispositions of operating assets; future acquisitions of land; future development and redevelopment opportunities; future dispositions of land and other non-core assets; future issuances and repurchases of common stock; projected operating results; market and industry trends; future distributions; projected capital expenditures; interest rates; the impact of the transactions involving us, Parkway Properties, Inc. ("Parkway") and Parkway, Inc. ("New Parkway"), including future financial and operating results, plans, objectives, expectations and intentions; and all statements that address operating performance, events, or developments that we expect or anticipate will occur in the future — including statements relating to creating value for stockholders.
Any forward-looking statements are based upon management's beliefs, assumptions, and expectations of our future performance, taking into account information currently available. These beliefs, assumptions, and expectations may change as a result of possible events or factors, not all of which are known. If a change occurs, our business, financial condition, liquidity, and results of operations may vary materially from those expressed in forward-looking statements. Actual results may vary from forward-looking statements due to, but not limited to, the availability and terms of capital; the ability to refinance or repay indebtedness as it matures; the failure of purchase, sale, or other contracts to ultimately close; the failure to achieve anticipated benefits from acquisitions, investments, or dispositions; the potential dilutive effect of common stock or operating partnership unit issuances; the availability of buyers and pricing with respect to the disposition of assets; risks and uncertainties related to national and local economic conditions, the real estate industry, and the commercial real estate markets in which we operate, particularly in Atlanta, Charlotte, Austin, and Phoenix where we have high concentrations of our lease revenue; changes to our strategy with regard to land and other non-core holdings that require impairment losses to be recognized; leasing risks, including the ability to obtain new tenants or renew expiring tenants, the ability to lease newly developed and/or recently acquired space, and the risk of declining leasing rates; the adverse change in the financial condition of one or more of our major tenants; volatility in interest rates and insurance rates; competition from other developers or investors; the risks associated with real estate developments (such as zoning approval, receipt of required permits, construction delays, cost overruns, and leasing risk); the loss of key personnel; the potential liability for uninsured losses, condemnation, or environmental issues; the potential liability for a failure to meet regulatory requirements; the financial condition and liquidity of, or disputes with, joint venture partners; any failure to comply with debt covenants under credit agreements; any failure to continue to qualify for taxation as a real estate investment trust and meet regulatory requirements; 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; 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; and those additional risks and factors discussed in reports filed with the Securities and Exchange Commission by the Company.
The words “believes,” “expects,” “anticipates,” “estimates,” “plans,” “may,” “intend,” “will,” or similar expressions are intended to identify forward-looking statements. Although we believe that our plans, intentions, and expectations reflected in any forward-looking statements are reasonable, we can give no assurance that such plans, intentions, or expectations will be achieved. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information, or otherwise, except as required under U.S. federal securities laws.
Cousins Properties Incorporated | 3 | Q4 2017 Supplemental Information |
EARNINGS RELEASE |
COUSINS PROPERTIES REPORTS RESULTS
FOR THE QUARTER AND YEAR ENDED DECEMBER 31, 2017
Highlights
• | Net income available to common stockholders for the fourth quarter was $0.07 per share. |
• | Funds From Operations for the fourth quarter was $0.15 per share. |
• | Same property net operating income on a cash basis increased 4.2% during the fourth quarter. |
• | Legacy Parkway same property net operating income on a cash basis increased 5.7% during the fourth quarter. |
• | Second generation net rent per square foot on a cash basis increased 6.3% during the fourth quarter. |
• | Executed 943,022 square feet of office leases during the fourth quarter. |
• | Sold the three-property downtown Orlando portfolio for $208.1 million. |
• | Sold the Company's 20% interest in Courvoisier Centre in Miami in a transaction that valued the Company's interest at $33.9 million. |
• | Subsequent to quarter end, the Company: |
◦ | Completed the development of 864 Spring Street, Phase One of NCR's world headquarters in midtown Atlanta. |
◦ | Closed a new $1 billion unsecured revolving credit facility that replaced the existing $500 million facility. |
◦ | Announced 300 Colorado, a 100% leased, 309,000 square foot office tower development in downtown Austin. |
ATLANTA (February 7, 2018) - Cousins Properties (NYSE:CUZ) today reported its results of operations for the quarter and year ended December 31, 2017.
“It was a solid quarter highlighted by several sizable transactions that we believe will generate significant value for our shareholders.” said Larry Gellerstedt, Chairman and Chief Executive Officer of Cousins Properties. “Looking forward, we are excited about the prospects in 2018 and beyond. We have built a unique and compelling company with an outstanding balance sheet that is in a strong position to take advantage of opportunities as they arise.”
Financial Results
Net income available to common stockholders was $31.4 million, or $0.07 per share, for the fourth quarter of 2017, compared with $36.9 million, or $0.10 per share, for the fourth quarter of 2016. Net income available to common stockholders was $216.3 million, or $0.52 per share, for the year ended December 31, 2017, compared with $79.1 million, or $0.31 per share, for the year ended December 31, 2016.
Funds From Operations ("FFO") was $64.2 million, or $0.15 per share, for the fourth quarter of 2017, compared with $27.4 million, or $0.07 per share, for the fourth quarter of 2016. FFO was $259.9 million, or $0.61 per share, for the year ended December 31, 2017, compared with $160.6 million, or $0.63 per share, for the year ended December 31, 2016.
Cousins Properties Incorporated | 4 | Q4 2017 Supplemental Information |
EARNINGS RELEASE |
2018 FFO Guidance
For the year ending December 31, 2018, the Company expects to report net income in the range of $0.15 to $0.19 per share and FFO in the range of $0.59 to $0.63 per share. This guidance reflects management's view of current and future market conditions, as well as the earnings impact of events referenced in this release and corresponding conference call.
2018 FFO guidance includes the following assumptions:
• | Same property net operating income growth of 2.0% to 4.0% on a GAAP basis. |
• | Same property net operating income growth of 3.5% to 5.5% on a cash basis. |
• | Fee and other income of $10 million to $12 million. Guidance does not include potential termination fees. |
• | General and administrative expenses of $24 million to $26 million, net of capitalized salaries. |
• | Interest and other expenses of $46 million to $48 million, net of capitalized interest. |
• | No property acquisition or disposition activity. |
• | No new development projects except those disclosed herein. |
• | GAAP straight-lined rental revenue of $26.5 million to $28.5 million. |
• | Above and below market rental revenue of $6.5 million to $8.5 million. |
A reconciliation of projected net income per share to projected FFO per share is provided as follows:
Full Year 2018 Range | |||||||
Low | High | ||||||
Net income per share | $ | 0.15 | $ | 0.19 | |||
Add: Real estate depreciation and amortization | 0.44 | 0.44 | |||||
Funds From Operations per share | $ | 0.59 | $ | 0.63 |
The Company's guidance is provided for information purposes based on current plans and assumptions and is subject to change.
Investor Conference Call and Webcast
The Company will conduct a conference call at 11:00 a.m. (Eastern Time) on Thursday, February 8, 2018, to discuss the results of the quarter and year ended December 31, 2017. The number to call for this interactive teleconference is (877) 247-1056.
A replay of the conference call will be available for seven days by dialing (877) 344-7529 and entering the passcode 10115599. The live webcast and replay can be accessed on the Company's website, www.cousinsproperties.com, through the “Cousins Properties Fourth Quarter 2017 Conference Call” link on the Investor Relations page.
Acting through its operating partnership Cousins Properties, LP, Cousins Properties is a leading fully-integrated real estate investment trust (REIT) with extensive experience in development, acquisition, financing, management, and leasing. Based in Atlanta, the Company actively invests in top-tier urban office assets and opportunistic mixed-use properties in Sunbelt markets.
Cousins Properties Incorporated | 5 | Q4 2017 Supplemental Information |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
(unaudited; in thousands, except per share amounts)
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenues: | |||||||||||||||
Rental property revenues | $ | 109,942 | $ | 111,432 | $ | 446,035 | $ | 249,814 | |||||||
Fee income | 2,245 | 2,379 | 8,632 | 8,347 | |||||||||||
Other | 1,925 | 481 | 11,518 | 1,050 | |||||||||||
114,112 | 114,292 | 466,185 | 259,211 | ||||||||||||
Expenses: | |||||||||||||||
Rental property operating expenses | 40,167 | 41,456 | 163,882 | 96,908 | |||||||||||
Reimbursed expenses | 860 | 796 | 3,527 | 3,259 | |||||||||||
General and administrative expenses | 5,530 | 8,290 | 27,523 | 25,592 | |||||||||||
Interest expense | 7,673 | 10,089 | 33,524 | 26,650 | |||||||||||
Depreciation and amortization | 44,199 | 48,145 | 196,745 | 97,948 | |||||||||||
Acquisition and transaction costs | 162 | 20,633 | 1,661 | 24,521 | |||||||||||
Other | 733 | 5,205 | 1,796 | 5,888 | |||||||||||
99,324 | 134,614 | 428,658 | 280,766 | ||||||||||||
Gain (loss) on extinguishment of debt | — | (5,180 | ) | 2,258 | (5,180 | ) | |||||||||
Income (loss) from continuing operations before unconsolidated joint ventures and gain (loss) on sale of investment properties | 14,788 | (25,502 | ) | 39,785 | (26,735 | ) | |||||||||
Income from unconsolidated joint ventures | 3,753 | 5,418 | 47,115 | 10,562 | |||||||||||
Income (loss) from continuing operations before gain on sale of investment properties | 18,541 | (20,084 | ) | 86,900 | (16,173 | ) | |||||||||
Gain on sale of investment properties | 13,330 | 63,169 | 133,059 | 77,114 | |||||||||||
Income from continuing operations | 31,871 | 43,085 | 219,959 | 60,941 | |||||||||||
Income (loss) from discontinued operations | — | (5,198 | ) | — | 19,163 | ||||||||||
Net income | 31,871 | 37,887 | 219,959 | 80,104 | |||||||||||
Net income attributable to noncontrolling interests | (503 | ) | (995 | ) | (3,684 | ) | (995 | ) | |||||||
Net income available to common stockholders | $ | 31,368 | $ | 36,892 | $ | 216,275 | $ | 79,109 | |||||||
Per common share information — basic and diluted: | |||||||||||||||
Income from continuing operations for common stockholders | $ | 0.07 | $ | 0.11 | $ | 0.52 | $ | 0.24 | |||||||
Income from discontinued operations for common stockholders | — | (0.01 | ) | — | 0.07 | ||||||||||
Net income available to common stockholders | $ | 0.07 | $ | 0.10 | $ | 0.52 | $ | 0.31 | |||||||
Weighted average shares — basic | 420,021 | 383,654 | 415,610 | 253,895 | |||||||||||
Weighted average shares — diluted | 427,288 | 391,413 | 423,297 | 256,023 |
Cousins Properties Incorporated | 6 | Q4 2017 Supplemental Information |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(in thousands, except share and per share amounts)
December 31, 2017 | December 31, 2016 | ||||||
(unaudited) | |||||||
Assets: | |||||||
Real estate assets: | |||||||
Operating properties, net of accumulated depreciation of $275,977 and $215,856 in 2017 and 2016, respectively | $ | 3,332,619 | $ | 3,432,522 | |||
Projects under development | 280,982 | 162,387 | |||||
Land | 4,221 | 4,221 | |||||
3,617,822 | 3,599,130 | ||||||
Cash and cash equivalents | 148,929 | 35,687 | |||||
Restricted cash | 56,816 | 15,634 | |||||
Notes and accounts receivable, net of allowance for doubtful accounts of $535 and $1,167 in 2017 and 2016, respectively | 14,420 | 27,683 | |||||
Deferred rents receivable | 58,158 | 39,464 | |||||
Investment in unconsolidated joint ventures | 101,414 | 179,397 | |||||
Intangible assets, net of accumulated amortization of $104,931 and $53,483 in 2017 and 2016, respectively | 186,206 | 245,529 | |||||
Other assets | 20,854 | 29,083 | |||||
Total assets | $ | 4,204,619 | $ | 4,171,607 | |||
Liabilities: | |||||||
Notes payable | $ | 1,093,228 | $ | 1,380,920 | |||
Accounts payable and accrued expenses | 137,909 | 109,278 | |||||
Deferred income | 37,383 | 33,304 | |||||
Intangible liabilities, net of accumulated amortization of $28,960 and $12,227 in 2017 and 2016, respectively | 70,454 | 89,781 | |||||
Other liabilities | 40,534 | 44,084 | |||||
Total liabilities | 1,379,508 | 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 | 3,604,776 | 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 | (1,121,647 | ) | (1,214,114 | ) | |||
Total stockholders' investment | 2,771,973 | 2,455,557 | |||||
Nonredeemable noncontrolling interests | 53,138 | 58,683 | |||||
Total equity | 2,825,111 | 2,514,240 | |||||
Total liabilities and equity | $ | 4,204,619 | $ | 4,171,607 |
Cousins Properties Incorporated | 7 | Q4 2017 Supplemental Information |
KEY PERFORMANCE METRICS |
2015 | 2016 1st | 2016 2nd | 2016 3rd | 2016 4th | 2016 | 2017 1st | 2017 2nd | 2017 3rd | 2017 4th | 2017 | ||||||||||||
Property Statistics | ||||||||||||||||||||||
Consolidated Operating Properties | 12 | 11 | 11 | 11 | 25 | 25 | 26 | 26 | 26 | 23 | 23 | |||||||||||
Consolidated Rentable Square Feet (in thousands) | 12,122 | 11,993 | 11,993 | 11,993 | 13,024 | 13,024 | 13,249 | 12,477 | 12,466 | 11,428 | 11,428 | |||||||||||
Unconsolidated Operating Properties | 6 | 6 | 6 | 6 | 8 | 8 | 7 | 5 | 6 | 5 | 5 | |||||||||||
Unconsolidated Rentable Square Feet (in thousands) | 3,434 | 3,435 | 3,435 | 3,435 | 3,999 | 3,999 | 3,774 | 2,988 | 3,456 | 3,113 | 3,113 | |||||||||||
Total Operating Properties | 18 | 17 | 17 | 17 | 33 | 33 | 33 | 31 | 32 | 28 | 28 | |||||||||||
Total Rentable Square Feet (in thousands) | 15,556 | 15,428 | 15,428 | 15,428 | 17,023 | 17,023 | 17,023 | 15,465 | 15,922 | 14,541 | 14,541 | |||||||||||
Office Leasing Activity (1) | ||||||||||||||||||||||
Net Leased during the period (square feet in thousands) | 2,972 | 220 | 402 | 971 | 761 | 2,354 | 571 | 341 | 335 | 943 | 2,190 | |||||||||||
Net Rent (per square foot) | $18.30 | $23.55 | $22.73 | $23.51 | $26.32 | $24.52 | $26.10 | $28.58 | $26.57 | $32.73 | $29.41 | |||||||||||
Tenant improvements, leasing commissions, and free rent (per square foot) | (3.64) | (6.31) | (7.08) | (6.18) | (6.08) | (6.35) | (7.44) | (7.42) | (5.84) | (6.48) | (6.77) | |||||||||||
Net Effective Rent (per square foot) | $14.66 | $17.24 | $15.65 | $17.33 | $20.24 | $18.17 | $18.66 | $21.16 | $20.73 | $26.25 | $22.64 | |||||||||||
Change in Second Generation Net Rent | 36.7 | % | 18.9 | % | 17.2 | % | 27.9 | % | 18.7 | % | 20.0 | % | 15.8 | % | 28.5 | % | 16.9 | % | 19.7 | % | 19.6 | % |
Change in Cash-Basis Second Generation Net Rent | 19.8 | % | 1.8% | 4.3 | % | 9.1 | % | 14.7 | % | 10.3 | % | 3.3 | % | 13.5 | % | 7.3 | % | 6.3 | % | 6.9 | % | |
Same Property Information (2) | ||||||||||||||||||||||
Percent Leased (period end) | 91.6 | % | 90.3 | % | 90.7 | % | 91.2 | % | 91.8 | % | 91.8 | % | 92.1 | % | 93.9 | % | 92.9 | % | 92.6 | % | 92.6 | % |
Weighted Average Occupancy | 90.7 | % | 89.4 | % | 89.2 | % | 89.5 | % | 89.4 | % | 89.4 | % | 89.9 | % | 90.7 | % | 89.1 | % | 87.7 | % | 89.4 | % |
Change in Net Operating Income (over prior year period) | 3.3 | % | 4.3 | % | 1.4 | % | 3.6 | % | 4.4 | % | 6.1 | % | 5.5 | % | 6.8 | % | 1.3 | % | 3.6 | % | 4.4 | % |
Change in Cash-Basis Net Operating Income (over prior year period) | 7.3 | % | 8.6 | % | 3.9 | % | 4.3 | % | 7.1 | % | 8.4 | % | 5.4 | % | 8.6 | % | 2.0 | % | 4.2 | % | 5.3 | % |
Development Pipeline | ||||||||||||||||||||||
Estimated Project Costs (in thousands) (3) | $261,500 | $326,300 | $340,200 | $506,200 | $512,200 | $512,200 | $529,200 | $463,500 | $402,000 | $490,500 | $490,500 | |||||||||||
Estimated Project Costs (3) / Total Undepreciated Assets | 7.6 | % | 9.5 | % | 9.6 | % | 13.7 | % | 10.5 | % | 10.5 | % | 10.6 | % | 9.6 | % | 8.1 | % | 9.9 | % | 9.9 | % |
Market Capitalization (4) | ||||||||||||||||||||||
Common Stock Price (period end) | $9.43 | $10.38 | $10.40 | $10.44 | $8.51 | $8.51 | $8.27 | $8.79 | $9.34 | $9.25 | $9.25 | |||||||||||
Common Shares/Units Outstanding (period end in thousands) | 211,513 | 210,107 | 210,171 | 210,170 | 401,596 | 401,596 | 426,823 | 426,942 | 426,995 | 426,995 | 426,995 | |||||||||||
Equity Market Capitalization (in thousands) | $1,994,568 | $2,180,911 | $2,185,778 | $2,194,175 | $3,417,582 | $3,417,582 | $3,529,826 | $3,752,820 | $3,988,133 | $3,949,704 | $3,949,704 | |||||||||||
Debt (in thousands) | 947,017 | 992,241 | 999,999 | 1,112,322 | 1,632,270 | 1,632,270 | 1,498,044 | 1,205,632 | 1,286,252 | 1,262,523 | 1,262,523 | |||||||||||
Total Market Capitalization (in thousands) | $2,941,585 | $3,173,152 | $3,185,777 | $3,306,497 | $5,049,852 | $5,049,852 | $5,027,870 | $4,958,452 | $5,274,385 | $5,212,227 | $5,212,227 | |||||||||||
Credit Ratios (4) | ||||||||||||||||||||||
Net Debt/Total Market Capitalization | 32.1 | % | 31.1 | % | 31.4 | % | 30.7 | % | 31.6 | % | 31.6 | % | 29.1 | % | 24.0 | % | 23.2 | % | 21.4 | % | 21.4 | % |
Net Debt/Total Undepreciated Assets | 27.4 | % | 28.6 | % | 28.3 | % | 27.5 | % | 32.8 | % | 32.8 | % | 29.4 | % | 24.7 | % | 24.7 | % | 22.5 | % | 22.5 | % |
Net Debt/Annualized EBITDA | 3.99 | 4.63 | 4.51 | 4.34 | 5.22 | 5.22 | 4.49 | 3.93 | 4.31 | 3.75 | 3.75 | |||||||||||
Fixed Charges Coverage | 4.84 | 4.49 | 4.43 | 4.46 | 5.04 | 4.63 | 5.13 | 5.49 | 5.82 | 6.01 | 5.58 | |||||||||||
Cousins Properties Incorporated | 8 | Q4 2017 Supplemental Information |
KEY PERFORMANCE METRICS |
2015 | 2016 1st | 2016 2nd | 2016 3rd | 2016 4th | 2016 | 2017 1st | 2017 2nd | 2017 3rd | 2017 4th | 2017 | ||||||||||||
Dividend Information (4) | ||||||||||||||||||||||
Common Dividend per Share (5) | $0.32 | $0.08 | $0.08 | $0.08 | $0.06 | $0.30 | $0.06 | $0.06 | $0.06 | $0.06 | $0.24 | |||||||||||
FFO Payout Ratio | 35.9 | % | 38.9 | % | 38.8 | % | 36.2 | % | 85.9 | % | 46.1 | % | 37.5 | % | 38.0 | % | 40.4 | % | 39.3 | % | 38.8 | % |
FAD Payout Ratio | 61.4 | % | 55.9 | % | 61.7 | % | 58.3 | % | 61.1 | % | 59.3 | % | 58.2 | % | 54.4 | % | 69.9 | % | 69.5 | % | 62.2 | % |
Operations Ratios (4) | ||||||||||||||||||||||
Annualized General and Administrative Expenses/Total Undepreciated Assets | 0.49 | % | 0.96 | % | 0.53 | % | 0.47 | % | 0.68 | % | 0.53 | % | 0.50 | % | 0.72 | % | 0.58 | % | 0.45 | % | 0.56 | % |
Additional Information (4) | ||||||||||||||||||||||
Straight Line Rental Revenue | $20,009 | $3,595 | $3,434 | $3,449 | $8,489 | $18,967 | $9,608 | $7,826 | $6,825 | $6,714 | $30,973 | |||||||||||
Above and Below Market Rents Amortization | $7,981 | $1,834 | $1,854 | $1,907 | $1,502 | $7,097 | $1,602 | $1,929 | $1,852 | $1,838 | $7,221 | |||||||||||
Second Generation Capital Expenditures | $54,214 | $7,904 | $13,166 | $13,968 | $11,838 | $46,876 | $10,971 | $7,569 | $15,949 | $18,996 | $53,485 | |||||||||||
(1) See Office Leasing Activity on page 19 for additional detail and explanations.
(2) Same Property Information is derived from the pool of office properties, as defined, in the period originally reported. See Same Property Performance on page 17 and Non-GAAP Financial Measures - Calculations and Reconciliations on page 35 for additional information.
(3) Represents Cousins' share of estimated project costs. See Development Pipeline on page 26 for additional detail.
(4) See Non-GAAP Financial Measures - Calculations and Reconciliations beginning on page 31.
(5) The fourth quarter 2016 dividend was declared and paid one quarter in arrears.
Cousins Properties Incorporated | 9 | Q4 2017 Supplemental Information |
KEY PERFORMANCE METRICS |
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(1) Office properties only.
Note: See additional information included herein for calculations, definitions, and reconciliations to GAAP financial measures.
Cousins Properties Incorporated | 10 | Q4 2017 Supplemental Information |
FUNDS FROM OPERATIONS - SUMMARY (1) |
2015 | 2016 1st | 2016 2nd | 2016 3rd | 2016 4th | 2016 | 2017 1st | 2017 2nd | 2017 3rd | 2017 4th | 2017 | |||||||||||||||||||||||
Net Operating Income | $ | 241,232 | $ | 59,513 | $ | 59,008 | $ | 61,621 | $ | 80,139 | $ | 260,281 | $ | 80,167 | $ | 80,115 | $ | 75,815 | $ | 77,109 | $ | 313,206 | |||||||||||
Land Sales Less Cost of Sales | 3,905 | — | — | — | 3,770 | 3,770 | — | 63 | 4 | — | 67 | ||||||||||||||||||||||
Fee Income | 7,297 | 2,199 | 1,824 | 1,945 | 2,379 | 8,347 | 1,936 | 1,854 | 2,597 | 2,245 | 8,632 | ||||||||||||||||||||||
Other Income | 2,451 | 1,121 | 280 | 287 | 3,837 | 5,525 | 6,889 | 5,304 | 1,634 | 2,164 | 15,991 | ||||||||||||||||||||||
Reimbursed Expenses | (3,430 | ) | (870 | ) | (798 | ) | (795 | ) | (796 | ) | (3,259 | ) | (865 | ) | (907 | ) | (895 | ) | (860 | ) | (3,527 | ) | |||||||||||
General and Administrative Expenses | (16,918 | ) | (8,243 | ) | (4,691 | ) | (4,368 | ) | (8,290 | ) | (25,592 | ) | (6,182 | ) | (8,618 | ) | (7,193 | ) | (5,530 | ) | (27,523 | ) | |||||||||||
Interest Expense | (38,178 | ) | (9,421 | ) | (9,360 | ) | (9,748 | ) | (12,566 | ) | (41,095 | ) | (12,066 | ) | (10,444 | ) | (9,363 | ) | (9,509 | ) | (41,382 | ) | |||||||||||
Other Expenses | (1,941 | ) | (465 | ) | (2,640 | ) | (2,175 | ) | (40,704 | ) | (45,984 | ) | (2,391 | ) | (542 | ) | 196 | (953 | ) | (3,690 | ) | ||||||||||||
Depreciation and Amortization of Non-Real Estate Assets | (1,669 | ) | (377 | ) | (335 | ) | (328 | ) | (325 | ) | (1,365 | ) | (451 | ) | (465 | ) | (461 | ) | (497 | ) | (1,874 | ) | |||||||||||
FFO (1) | $ | 192,749 | $ | 43,457 | $ | 43,288 | $ | 46,439 | $ | 27,444 | $ | 160,628 | $ | 67,037 | $ | 66,360 | $62,334 | $ | 64,169 | $ | 259,900 | ||||||||||||
Weighted Average Shares - Diluted | 215,979 | 210,974 | 210,362 | 210,326 | 391,413 | 256,023 | 411,186 | 427,180 | 427,300 | 427,288 | 423,297 | ||||||||||||||||||||||
FFO per Share (1) | $ | 0.89 | $ | 0.21 | $ | 0.21 | $ | 0.22 | $ | 0.07 | $ | 0.63 | $ | 0.16 | $ | 0.16 | $ | 0.15 | $ | 0.15 | $ | 0.61 |
(1) See pages 31 and 34 for reconciliations of Funds from Operations to net income available to common shareholders.
Cousins Properties Incorporated | 11 | Q4 2017 Supplemental Information |
FUNDS FROM OPERATIONS - DETAIL (1) |
2015 | 2016 1st | 2016 2nd | 2016 3rd | 2016 4th | 2016 | 2017 1st | 2017 2nd | 2017 3rd | 2017 4th | 2017 | |||||||||||||||||||||||
Net Operating Income | |||||||||||||||||||||||||||||||||
Consolidated Properties | |||||||||||||||||||||||||||||||||
Hearst Tower | $ | — | $ | — | $ | — | $ | — | $ | 5,957 | $ | 5,957 | $ | 6,356 | $ | 6,370 | $ | 6,302 | $ | 7,158 | $ | 26,186 | |||||||||||
Hayden Ferry (2) | — | — | — | — | 3,881 | 3,881 | 5,209 | 5,307 | 5,466 | 5,968 | 21,950 | ||||||||||||||||||||||
Corporate Center (2) | — | — | — | — | 5,005 | 5,005 | 4,761 | 5,374 | 5,308 | 5,446 | 20,889 | ||||||||||||||||||||||
Northpark (2) | 22,400 | 5,607 | 5,097 | 5,599 | 5,841 | 22,144 | 5,410 | 5,130 | 4,945 | 5,021 | 20,506 | ||||||||||||||||||||||
Fifth Third Center | 14,956 | 4,238 | 4,349 | 4,451 | 4,463 | 17,501 | 4,842 | 4,681 | 4,772 | 4,989 | 19,284 | ||||||||||||||||||||||
Promenade | 13,985 | 3,740 | 3,419 | 3,839 | 3,557 | 14,555 | 4,173 | 4,407 | 4,184 | 3,991 | 16,755 | ||||||||||||||||||||||
San Jacinto Center | — | — | — | — | 3,456 | 3,456 | 4,038 | 4,207 | 3,918 | 3,906 | 16,069 | ||||||||||||||||||||||
One Eleven Congress | — | — | — | — | 3,256 | 3,256 | 3,713 | 3,735 | 4,172 | 3,526 | 15,146 | ||||||||||||||||||||||
Colorado Tower | 6,768 | 2,724 | 3,064 | 3,221 | 3,399 | 12,408 | 3,383 | 3,352 | 3,344 | 3,478 | 13,557 | ||||||||||||||||||||||
One Buckhead Plaza | — | — | — | — | 2,817 | 2,817 | 3,097 | 2,806 | 3,071 | 2,760 | 11,734 | ||||||||||||||||||||||
3344 Peachtree | — | — | — | — | 3,505 | 3,505 | 3,235 | 2,884 | 2,705 | 2,085 | 10,909 | ||||||||||||||||||||||
816 Congress Avenue | 8,526 | 2,468 | 2,555 | 2,514 | 2,363 | 9,900 | 2,694 | 2,641 | 2,766 | 2,797 | 10,898 | ||||||||||||||||||||||
NASCAR Plaza | — | — | — | — | 2,507 | 2,507 | 2,477 | 2,394 | 2,609 | 2,709 | 10,189 | ||||||||||||||||||||||
3350 Peachtree | — | — | — | — | 2,006 | 2,006 | 2,264 | 2,288 | 2,153 | 1,968 | 8,673 | ||||||||||||||||||||||
Tempe Gateway | — | — | — | — | 1,966 | 1,966 | 2,008 | 2,136 | 1,964 | 1,971 | 8,079 | ||||||||||||||||||||||
3348 Peachtree | — | — | — | — | 1,541 | 1,541 | 1,491 | 1,491 | 1,657 | 1,507 | 6,146 | ||||||||||||||||||||||
Two Buckhead Plaza | — | — | — | — | 1,369 | 1,369 | 1,321 | 1,337 | 1,318 | 1,806 | 5,782 | ||||||||||||||||||||||
The Pointe | — | — | — | — | 1,227 | 1,227 | 1,146 | 1,146 | 1,069 | 1,207 | 4,568 | ||||||||||||||||||||||
Meridian Mark Plaza | 3,777 | 908 | 857 | 954 | 955 | 3,674 | 989 | 997 | 979 | 1,116 | 4,081 | ||||||||||||||||||||||
111 West Rio | — | — | — | — | — | — | — | 1,396 | 1,236 | 1,412 | 4,044 | ||||||||||||||||||||||
Harborview Plaza | — | — | — | — | 898 | 898 | 930 | 931 | 1,035 | 1,074 | 3,970 | ||||||||||||||||||||||
Research Park V | — | — | 144 | 288 | 412 | 844 | 359 | 916 | 874 | 827 | 2,976 | ||||||||||||||||||||||
8000 Avalon | — | — | — | — | — | — | — | — | 80 | 353 | 433 | ||||||||||||||||||||||
NCR | — | — | — | — | — | — | — | — | — | 50 | 50 | ||||||||||||||||||||||
Other (3) | 43,287 | 7,864 | 7,443 | 7,587 | 9,593 | 32,487 | 7,095 | 6,580 | 2,954 | 2,650 | 19,279 | ||||||||||||||||||||||
Subtotal - Consolidated | 113,699 | 27,549 | 26,928 | 28,453 | 69,974 | 152,904 | 70,991 | 72,506 | 68,881 | 69,775 | 282,153 | ||||||||||||||||||||||
Unconsolidated Properties (4) | |||||||||||||||||||||||||||||||||
Terminus 100 | 7,268 | 1,872 | 1,978 | 1,899 | 1,837 | 7,586 | 1,912 | 1,906 | 1,829 | 1,851 | 7,498 | ||||||||||||||||||||||
Gateway Village (2)(5) | 1,208 | 536 | 451 | 460 | 1,003 | 2,450 | 1,751 | 1,756 | 1,805 | 1,735 | 7,047 | ||||||||||||||||||||||
Terminus 200 | 6,069 | 1,658 | 1,770 | 1,678 | 1,648 | 6,754 | 1,798 | 1,749 | 1,769 | 1,663 | 6,979 | ||||||||||||||||||||||
Emory University Hospital Midtown Medical Office Tower | 3,974 | 987 | 1,000 | 975 | 1,008 | 3,970 | 989 | 948 | 961 | 1,015 | 3,913 | ||||||||||||||||||||||
Carolina Square | — | — | — | — | — | — | — | — | 47 | 658 | 705 | ||||||||||||||||||||||
Other (3) | 5,816 | 1,593 | 1,755 | 1,748 | 2,930 | 8,026 | 2,726 | 1,250 | 523 | 412 | 4,911 | ||||||||||||||||||||||
Subtotal - Unconsolidated | 24,335 | 6,646 | 6,954 | 6,760 | 8,426 | 28,786 | 9,176 | 7,609 | 6,934 | 7,334 | 31,053 | ||||||||||||||||||||||
Discontinued Operations (6) | 103,198 | 25,318 | 25,126 | 26,408 | 1,739 | 78,591 | — | — | — | — | — | ||||||||||||||||||||||
Total Net Operating Income (1) | 241,232 | 59,513 | 59,008 | 61,621 | 80,139 | 260,281 | 80,167 | 80,115 | 75,815 | 77,109 | 313,206 | ||||||||||||||||||||||
Sales Less Cost of Sales | |||||||||||||||||||||||||||||||||
Land Sales Less Cost of Sales - Consolidated | 1,625 | — | — | — | 3,580 | 3,580 | — | 63 | 4 | — | 67 | ||||||||||||||||||||||
Land Sales Less Cost of Sales - Unconsolidated (4) | 2,280 | — | — | — | 190 | 190 | — | — | — | — | — | ||||||||||||||||||||||
Total Sales Less Cost of Sales | 3,905 | — | — | — | 3,770 | 3,770 | — | 63 | 4 | — | 67 | ||||||||||||||||||||||
Cousins Properties Incorporated | 12 | Q4 2017 Supplemental Information |
FUNDS FROM OPERATIONS - DETAIL (1) |
2015 | 2016 1st | 2016 2nd | 2016 3rd | 2016 4th | 2016 | 2017 1st | 2017 2nd | 2017 3rd | 2017 4th | 2017 | |||||||||||||||||||||||
Fee Income | |||||||||||||||||||||||||||||||||
Management Fees (7) | 5,188 | 1,325 | 1,263 | 1,253 | 1,317 | 5,158 | 1,402 | 1,492 | 1,458 | 1,442 | 5,794 | ||||||||||||||||||||||
Development Fees | 1,778 | 608 | 486 | 549 | 634 | 2,277 | 432 | 318 | 1,062 | 328 | 2,140 | ||||||||||||||||||||||
Leasing & Other Fees | 331 | 266 | 75 | 143 | 428 | 912 | 102 | 44 | 77 | 475 | 698 | ||||||||||||||||||||||
Total Fee Income | 7,297 | 2,199 | 1,824 | 1,945 | 2,379 | 8,347 | 1,936 | 1,854 | 2,597 | 2,245 | 8,632 | ||||||||||||||||||||||
Other Income | |||||||||||||||||||||||||||||||||
Termination Fees | 398 | — | — | — | 122 | 122 | 5,238 | 2,913 | 734 | 385 | 9,270 | ||||||||||||||||||||||
Gain on Extinguishment of Debt | — | — | — | — | — | — | — | 1,829 | 429 | — | 2,258 | ||||||||||||||||||||||
Interest and Other Income | 460 | 390 | 27 | 153 | 358 | 928 | 188 | 262 | 258 | 1,540 | 2,248 | ||||||||||||||||||||||
Termination Fees - Unconsolidated (4) | 419 | — | — | — | 3,000 | 3,000 | 959 | 195 | 132 | 8 | 1,294 | ||||||||||||||||||||||
Interest and Other Income - Unconsolidated (4) | 747 | 546 | 151 | 134 | 357 | 1,188 | 504 | 105 | 81 | 231 | 921 | ||||||||||||||||||||||
Termination Fees - Discontinued Operations (6) | 450 | 186 | 102 | — | — | 288 | — | — | — | — | — | ||||||||||||||||||||||
Interest and Other Income - Discontinued Operations (6) | (23 | ) | (1 | ) | — | — | — | (1 | ) | — | — | — | — | — | |||||||||||||||||||
Total Other Income | 2,451 | 1,121 | 280 | 287 | 3,837 | 5,525 | 6,889 | 5,304 | 1,634 | 2,164 | 15,991 | ||||||||||||||||||||||
Total Fee and Other Income | 9,748 | 3,320 | 2,104 | 2,232 | 6,216 | 13,872 | 8,825 | 7,158 | 4,231 | 4,409 | 24,623 | ||||||||||||||||||||||
Reimbursed Expenses | (3,430 | ) | (870 | ) | (798 | ) | (795 | ) | (796 | ) | (3,259 | ) | (865 | ) | (907 | ) | (895 | ) | (860 | ) | (3,527 | ) | |||||||||||
General and Administrative Expenses | (16,918 | ) | (8,243 | ) | (4,691 | ) | (4,368 | ) | (8,290 | ) | (25,592 | ) | (6,182 | ) | (8,618 | ) | (7,193 | ) | (5,530 | ) | (27,523 | ) | |||||||||||
Interest Expense | |||||||||||||||||||||||||||||||||
Consolidated Debt | |||||||||||||||||||||||||||||||||
Term Loan, Unsecured | — | — | — | — | (386 | ) | (386 | ) | (1,288 | ) | (1,564 | ) | (1,655 | ) | (1,691 | ) | (6,198 | ) | |||||||||||||||
Fifth Third Center | — | — | — | (427 | ) | (1,275 | ) | (1,702 | ) | (1,272 | ) | (1,266 | ) | (1,260 | ) | (1,254 | ) | (5,052 | ) | ||||||||||||||
Promenade | (4,734 | ) | (1,165 | ) | (1,157 | ) | (1,150 | ) | (1,142 | ) | (4,614 | ) | (1,134 | ) | (1,127 | ) | (1,119 | ) | (1,112 | ) | (4,492 | ) | |||||||||||
Senior Notes, Unsecured ($250M) | — | — | — | — | — | — | — | — | (2,353 | ) | (2,489 | ) | (4,842 | ) | |||||||||||||||||||
Colorado Tower | — | — | — | (353 | ) | (1,059 | ) | (1,412 | ) | (1,059 | ) | (1,059 | ) | (1,059 | ) | (1,059 | ) | (4,236 | ) | ||||||||||||||
816 Congress Avenue | (3,269 | ) | (817 | ) | (817 | ) | (817 | ) | (817 | ) | (3,268 | ) | (814 | ) | (810 | ) | (806 | ) | (803 | ) | (3,233 | ) | |||||||||||
Credit Facility, Unsecured | (4,089 | ) | (832 | ) | (1,053 | ) | (870 | ) | (1,159 | ) | (3,914 | ) | (1,035 | ) | (1,153 | ) | (444 | ) | (418 | ) | (3,050 | ) | |||||||||||
Senior Notes, Unsecured ($100M) | — | — | — | — | — | — | — | (876 | ) | (1,025 | ) | (1,036 | ) | (2,937 | ) | ||||||||||||||||||
Meridian Mark Plaza | (1,538 | ) | (381 | ) | (379 | ) | (377 | ) | (375 | ) | (1,512 | ) | (373 | ) | (372 | ) | (370 | ) | (368 | ) | (1,483 | ) | |||||||||||
The Pointe | — | — | — | — | (171 | ) | (171 | ) | (176 | ) | (178 | ) | (177 | ) | (176 | ) | (707 | ) | |||||||||||||||
Other (3) | (12,684 | ) | (2,987 | ) | (2,979 | ) | (2,990 | ) | (5,413 | ) | (14,369 | ) | (4,180 | ) | (2,336 | ) | (20 | ) | — | (6,536 | ) | ||||||||||||
Capitalized | 3,577 | 742 | 1,016 | 1,230 | 1,709 | 4,697 | 1,590 | 2,218 | 2,701 | 2,733 | 9,242 | ||||||||||||||||||||||
Subtotal - Consolidated | (22,737 | ) | (5,440 | ) | (5,369 | ) | (5,754 | ) | (10,088 | ) | (26,651 | ) | (9,741 | ) | (8,523 | ) | (7,587 | ) | (7,673 | ) | (33,524 | ) | |||||||||||
Unconsolidated Debt (4) | |||||||||||||||||||||||||||||||||
Terminus 100 | (3,436 | ) | (848 | ) | (844 | ) | (840 | ) | (836 | ) | (3,368 | ) | (831 | ) | (827 | ) | (824 | ) | (818 | ) | (3,300 | ) | |||||||||||
Terminus 200 | (1,560 | ) | (390 | ) | (389 | ) | (387 | ) | (385 | ) | (1,551 | ) | (383 | ) | (382 | ) | (380 | ) | (378 | ) | (1,523 | ) | |||||||||||
Emory University Hospital Midtown Medical Office Tower | (1,333 | ) | (330 | ) | (329 | ) | (327 | ) | (325 | ) | (1,311 | ) | (324 | ) | (322 | ) | (320 | ) | (319 | ) | (1,285 | ) | |||||||||||
Carolina Square | — | — | — | — | — | — | — | — | (27 | ) | (157 | ) | (184 | ) | |||||||||||||||||||
Other (3) | (1,126 | ) | (439 | ) | (464 | ) | (484 | ) | (806 | ) | (2,193 | ) | (787 | ) | (390 | ) | (225 | ) | (164 | ) | (1,566 | ) | |||||||||||
Subtotal - Unconsolidated | (7,455 | ) | (2,007 | ) | (2,026 | ) | (2,038 | ) | (2,352 | ) | (8,423 | ) | (2,325 | ) | (1,921 | ) | (1,776 | ) | (1,836 | ) | (7,858 | ) | |||||||||||
Discontinued Operations (6) | (7,986 | ) | (1,974 | ) | (1,965 | ) | (1,956 | ) | (126 | ) | (6,021 | ) | — | — | — | — | — |
Cousins Properties Incorporated | 13 | Q4 2017 Supplemental Information |
FUNDS FROM OPERATIONS - DETAIL (1) |
2015 | 2016 1st | 2016 2nd | 2016 3rd | 2016 4th | 2016 | 2017 1st | 2017 2nd | 2017 3rd | 2017 4th | 2017 | |||||||||||||||||||||||
Total Interest Expense | (38,178 | ) | (9,421 | ) | (9,360 | ) | (9,748 | ) | (12,566 | ) | (41,095 | ) | (12,066 | ) | (10,444 | ) | (9,363 | ) | (9,509 | ) | (41,382 | ) | |||||||||||
Other Expenses | |||||||||||||||||||||||||||||||||
Transaction Costs - Merger | — | (19 | ) | (2,424 | ) | (1,446 | ) | (20,633 | ) | (24,522 | ) | (1,930 | ) | (246 | ) | 677 | (162 | ) | (1,661 | ) | |||||||||||||
Property Taxes and Other Holding Costs | (828 | ) | (89 | ) | (98 | ) | (95 | ) | (158 | ) | (440 | ) | (304 | ) | (140 | ) | (139 | ) | (181 | ) | (764 | ) | |||||||||||
Predevelopment & Other | (522 | ) | (108 | ) | (118 | ) | (140 | ) | (577 | ) | (943 | ) | (129 | ) | (156 | ) | (265 | ) | (253 | ) | (803 | ) | |||||||||||
Severance | (181 | ) | (249 | ) | — | — | — | (249 | ) | (28 | ) | — | (73 | ) | (345 | ) | (446 | ) | |||||||||||||||
Partners' share of FFO in consolidated joint ventures | (111 | ) | — | — | — | (3,775 | ) | (3,775 | ) | — | — | (4 | ) | (12 | ) | (16 | ) | ||||||||||||||||
Transaction Costs - Spin-off | — | — | — | (494 | ) | (5,855 | ) | (6,349 | ) | — | — | — | — | — | |||||||||||||||||||
Loss on Extinguishment of Debt - Unconsolidated (4) | — | — | — | — | (5,180 | ) | (5,180 | ) | — | — | — | — | — | ||||||||||||||||||||
Impairment Loss | — | — | — | — | (4,526 | ) | (4,526 | ) | — | — | — | — | — | ||||||||||||||||||||
Acquisition Costs | (299 | ) | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||
Total Other Expenses | (1,941 | ) | (465 | ) | (2,640 | ) | (2,175 | ) | (40,704 | ) | (45,984 | ) | (2,391 | ) | (542 | ) | 196 | (953 | ) | (3,690 | ) | ||||||||||||
Depreciation and Amortization of Non-Real Estate Assets | |||||||||||||||||||||||||||||||||
Consolidated | (1,621 | ) | (377 | ) | (335 | ) | (328 | ) | (325 | ) | (1,365 | ) | (451 | ) | (465 | ) | (461 | ) | (497 | ) | (1,874 | ) | |||||||||||
Unconsolidated (4) | (48 | ) | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||
Total Depreciation and Amortization of Non-Real Estate Assets | (1,669 | ) | (377 | ) | (335 | ) | (328 | ) | (325 | ) | (1,365 | ) | (451 | ) | (465 | ) | (461 | ) | (497 | ) | (1,874 | ) | |||||||||||
FFO (1) | $ | 192,749 | $ | 43,457 | $ | 43,288 | $ | 46,439 | $ | 27,444 | $ | 160,628 | $ | 67,037 | $ | 66,360 | $ | 62,334 | $ | 64,169 | $ | 259,900 | |||||||||||
Weighted Average Shares - Diluted | 215,979 | 210,974 | 210,362 | 210,326 | 391,413 | 256,023 | 411,186 | 427,180 | 427,300 | 427,288 | 423,297 | ||||||||||||||||||||||
FFO per Share (1) | $ | 0.89 | $ | 0.21 | $ | 0.21 | $ | 0.22 | $ | 0.07 | $ | 0.63 | $ | 0.16 | $ | 0.16 | $ | 0.15 | $ | 0.15 | $ | 0.61 |
Note: Amounts may differ slightly from other schedules contained herein due to rounding. | |||||||||||||||||
(1) See Non-GAAP Financial Measures - Calculations and Reconciliations beginning on page 31. | |||||||||||||||||
(2) Contains multiple buildings that are grouped together for reporting purposes. | |||||||||||||||||
(3) Represents properties sold and loans repaid prior to December 31, 2017 that are not considered discontinued operations. | |||||||||||||||||
(4) Unconsolidated amounts include amounts recorded in unconsolidated joint ventures for the respective category multiplied by the Company's ownership interest. The Company does not control the operations of the unconsolidated joint ventures, but believes including these amounts in the categories indicated is meaningful to investors and analysts. | |||||||||||||||||
(5) Through December 1, 2016, the Company received an 11.46% current return on its $11.1 million investment in Gateway Village and, when certain other revenue criteria were met, received additional returns. The Company recognized these amounts as NOI from this venture. After December 1, 2016, net income and cash flows were allocated 50% to each joint venture member. | |||||||||||||||||
(6) Primarily represents Greenway Plaza and Post Oak Central. | |||||||||||||||||
(7) Management Fees include reimbursement of expenses that are included in the "Reimbursed Expenses" line item. |
Cousins Properties Incorporated | 14 | Q4 2017 Supplemental Information |
PORTFOLIO STATISTICS |
Office Properties | Rentable Square Feet | Financial Statement Presentation | Company's Ownership Interest | End of Period Leased 4Q17 | End of Period Leased 3Q17 | Weighted Average Occupancy 4Q17 | Weighted Average Occupancy 3Q17 | % of Total Net Operating Income (1) | Property Level Debt ($000) (2) | |||||||||||||
Northpark (3) | 1,528,000 | Consolidated | 100% | 86.3% | 88.1% | 75.3% | 78.7% | 6.8% | $ | — | ||||||||||||
Promenade | 777,000 | Consolidated | 100% | 94.1% | 94.1% | 94.1% | 94.2% | 5.4% | 102,071 | |||||||||||||
One Buckhead Plaza | 461,000 | Consolidated | 100% | 89.6% | 89.5% | 89.5% | 90.4% | 3.7% | — | |||||||||||||
3344 Peachtree | 484,000 | Consolidated | 100% | 91.7% | 91.7% | 90.6% | 89.8% | 2.8% | — | |||||||||||||
3350 Peachtree | 413,000 | Consolidated | 100% | 86.2% | 93.2% | 93.2% | 93.1% | 2.7% | — | |||||||||||||
Terminus 100 | 660,000 | Unconsolidated | 50% | 93.7% | 89.9% | 88.6% | 89.9% | 2.5% | 61,922 | |||||||||||||
Two Buckhead Plaza | 210,000 | Consolidated | 100% | 91.0% | 85.1% | 83.9% | 82.5% | 2.4% | — | |||||||||||||
Terminus 200 | 566,000 | Unconsolidated | 50% | 94.1% | 98.2% | 90.6% | 94.0% | 2.2% | 39,644 | |||||||||||||
3348 Peachtree | 258,000 | Consolidated | 100% | 87.1% | 89.7% | 88.9% | 90.0% | 2.0% | — | |||||||||||||
Meridian Mark Plaza | 160,000 | Consolidated | 100% | 100.0% | 100.0% | 100.0% | 100.0% | 1.5% | 23,970 | |||||||||||||
Emory University Hospital Midtown Medical Office Tower | 358,000 | Unconsolidated | 50% | 99.5% | 99.5% | 98.5% | 96.3% | 1.4% | 35,523 | |||||||||||||
8000 Avalon | 224,000 | Consolidated | 90% | 94.1% | 93.9% | 39.0% | 4.8% | 0.5% | — | |||||||||||||
ATLANTA | 6,099,000 | 90.5% | 91.4% | 84.9% | 84.8% | 33.9% | 263,130 | |||||||||||||||
Hearst Tower | 966,000 | Consolidated | 100% | 98.9% | 98.7% | 98.7% | 98.6% | 9.7% | — | |||||||||||||
Fifth Third Center | 698,000 | Consolidated | 100% | 98.8% | 96.7% | 95.9% | 95.9% | 6.7% | 145,974 | |||||||||||||
NASCAR Plaza | 394,000 | Consolidated | 100% | 98.7% | 98.7% | 98.7% | 98.6% | 3.7% | — | |||||||||||||
Gateway Village (3) | 1,061,000 | Unconsolidated | 50% | 99.4% | 99.4% | 99.4% | 99.4% | 2.3% | — | |||||||||||||
CHARLOTTE | 3,119,000 | 98.9% | 98.3% | 98.1% | 98.0% | 22.4% | 145,974 | |||||||||||||||
�� | ||||||||||||||||||||||
San Jacinto Center | 395,000 | Consolidated | 100% | 94.4% | 98.9% | 98.7% | 99.2% | 5.3% | — | |||||||||||||
One Eleven Congress | 519,000 | Consolidated | 100% | 87.8% | 88.1% | 85.0% | 84.4% | 4.8% | — | |||||||||||||
Colorado Tower | 373,000 | Consolidated | 100% | 100.0% | 100.0% | 100.0% | 100.0% | 4.7% | 119,165 | |||||||||||||
816 Congress | 435,000 | Consolidated | 100% | 95.2% | 95.2% | 95.2% | 94.6% | 3.8% | 82,742 | |||||||||||||
Research Park V | 173,000 | Consolidated | 100% | 97.1% | 97.1% | 85.7% | 85.7% | 1.1% | — | |||||||||||||
AUSTIN | 1,895,000 | 94.1% | 95.1% | 93.2% | 93.0% | 19.7% | 201,907 | |||||||||||||||
Hayden Ferry (3) | 789,000 | Consolidated | 100% | 96.2% | 93.0% | 91.2% | 92.9% | 8.0% | — | |||||||||||||
Tempe Gateway | 264,000 | Consolidated | 100% | 98.6% | 98.5% | 98.5% | 97.3% | 2.7% | — | |||||||||||||
111 West Rio | 225,000 | Consolidated | 100% | 100.0% | 100.0% | 100.0% | 100.0% | 1.9% | — | |||||||||||||
PHOENIX | 1,278,000 | 97.3% | 95.4% | 94.3% | 95.0% | 12.6% | — | |||||||||||||||
Corporate Center (3) | 1,224,000 | Consolidated | 100% | 96.7% | 96.5% | 91.8% | 86.9% | 7.3% | — | |||||||||||||
The Pointe | 253,000 | Consolidated | 100% | 93.1% | 97.6% | 95.0% | 94.7% | 1.6% | 22,729 | |||||||||||||
Harborview Plaza | 205,000 | Consolidated | 100% | 99.7% | 98.0% | 98.0% | 98.0% | 1.5% | — | |||||||||||||
TAMPA | 1,682,000 | 96.5% | 96.9% | 93.1% | 89.4% | 10.4% | 22,729 | |||||||||||||||
Carolina Square Office (4) | 158,000 | Unconsolidated | 50% | 74.8% | 74.3% | 23.1% | —% | 0.2% | 10,873 | |||||||||||||
CHAPEL HILL | 158,000 | 74.8% | 74.3% | 23.1% | —% | 0.2% | 10,873 | |||||||||||||||
TOTAL OFFICE | 14,231,000 | 94.1% | 94.4% | 90.4% | 89.8% | 99.2% | $ | 644,613 | ||||||||||||||
Other Properties | ||||||||||||||||||||||
Carolina Square Retail (4) | 44,000 | Unconsolidated | 50% | 81.5% | 81.5% | 58.0% | 41.3% | 0.1% | 3,028 | |||||||||||||
Carolina Square Apartments (246 Units) (4) | 266,000 | Unconsolidated | 50% | 91.1% | 87.0% | 87.4% | 55.0% | 0.7% | 18,305 | |||||||||||||
TOTAL OTHER | 310,000 | 89.7% | 86.2% | 83.2% | 53.1% | 0.8% | $ | 21,333 | ||||||||||||||
TOTAL | 14,541,000 | 100.0% | $ | 665,946 | ||||||||||||||||||
See next page for footnotes |
Cousins Properties Incorporated | 15 | Q4 2017 Supplemental Information |
PORTFOLIO STATISTICS |
![chart-785bec3ffcd35ada857.jpg](https://capedge.com/proxy/8-K/0000025232-18-000008/chart-785bec3ffcd35ada857.jpg)
(1 | ) | Represents the Company's share of net operating income for the three months ended December 31, 2017. |
(2 | ) | Represents the Company's share of property specific mortgage debt as of December 31, 2017. |
(3 | ) | Contains multiple buildings that are grouped together for reporting purposes. |
(4 | ) | The Company's share of Carolina Square debt has been allocated to office, retail, and apartments based on their relative square footage. |
Cousins Properties Incorporated | 16 | Q4 2017 Supplemental Information |
SAME PROPERTY PERFORMANCE (1) |
COUSINS PROPERTIES INCORPORATED | |||||||||||||
Net Operating Income ($ in thousands) | |||||||||||||
Three Months Ended December 31, | |||||||||||||
2017 | 2016 | % Change | |||||||||||
Property Revenues (2) | $ | 35,167 | $ | 34,764 | 1.2 | % | |||||||
Property Operating Expenses (2) | 12,724 | 13,091 | (2.8 | )% | |||||||||
Property Net Operating Income | $ | 22,443 | $ | 21,673 | 3.6 | % | |||||||
Cash Basis Property Revenues (3) | $ | 33,409 | $ | 32,943 | 1.4 | % | |||||||
Cash Basis Property Operating Expenses (4) | 12,735 | 13,103 | (2.8 | )% | |||||||||
Cash Basis Property Net Operating Income | $ | 20,674 | $ | 19,840 | 4.2 | % | |||||||
End of Period Leased | 92.6 | % | 91.6 | % | |||||||||
Weighted Average Occupancy | 87.7 | % | 90.4 | % | |||||||||
Year Ended December 31, | |||||||||||||
2017 | 2016 | % Change | |||||||||||
Property Revenues (2) | $ | 142,087 | $ | 135,371 | 5.0 | % | |||||||
Property Operating Expenses (2) | 52,174 | 49,284 | 5.9 | % | |||||||||
Property Net Operating Income | $ | 89,913 | $ | 86,087 | 4.4 | % | |||||||
Cash Basis Property Revenues (3) | $ | 134,860 | $ | 127,815 | 5.5 | % | |||||||
Cash Basis Property Operating Expenses (4) | 52,220 | 49,331 | 5.9 | % | |||||||||
Cash Basis Property Net Operating Income | $ | 82,640 | $ | 78,484 | 5.3 | % |
(1) | Same Properties include those office properties that were operational and stabilized on January 1, 2016, excluding properties subsequently sold. See Non-GAAP Financial Measures - Calculation and Reconciliations. Properties included in this reporting period are as follows: | ||
Northpark | Emory University Hospital Midtown Medical Office Tower | Meridian Mark Plaza | |
Promenade | Terminus 100 | Terminus 200 | |
816 Congress | Fifth Third Center | ||
(2) | Property Revenues and Expenses include results for the Company and its share of unconsolidated joint ventures. Net operating income for unconsolidated joint ventures is calculated as property revenues less property expenses at the joint ventures multiplied by the Company's ownership interest. The Company does not control the operations of the unconsolidated joint ventures, but believes that including these amounts with consolidated net operating income is meaningful to investors and analysts. | ||
(3) | Cash Basis Same Property Revenues include that of the Company and its share of unconsolidated joint ventures. It represents Property Revenues, excluding straight-line rents, amortization of lease inducements, and amortization of acquired above and below market rents. | ||
(4) | Cash Basis Same Property Operating Expenses include that of the Company and its share of unconsolidated joint ventures. It represents Property Operating Expenses, excluding straight-line ground rent expense and amortization of above and below market ground rent expense. |
Cousins Properties Incorporated | 17 | Q4 2017 Supplemental Information |
SAME PROPERTY PERFORMANCE (1) |
LEGACY PARKWAY PROPERTIES | |||||||||||
Net Operating Income ($ in thousands) | |||||||||||
Three Months Ended December 31, | |||||||||||
2017 | 2016 | % Change | |||||||||
Cash Basis Property Revenues (2) | $ | 58,631 | $ | 56,022 | 4.7 | % | |||||
Cash Basis Property Operating Expenses (3) | 22,440 | 21,790 | 3.0 | % | |||||||
Cash Basis Property Net Operating Income | $ | 36,191 | $ | 34,232 | 5.7 | % | |||||
End of Period Leased | 94.3 | % | 93.3 | % | |||||||
Weighted Average Occupancy | 93.0 | % | 91.4 | % | |||||||
Year Ended December 31, | |||||||||||
2017 | 2016 | % Change | |||||||||
Cash Basis Property Revenues (2) | $ | 228,469 | $ | 207,904 | 9.9 | % | |||||
Cash Basis Property Operating Expenses (3) | 87,756 | 79,742 | 10.0 | % | |||||||
Cash Basis Property Net Operating Income | $ | 140,713 | $ | 128,162 | 9.8 | % |
(1) | Same Properties include those office properties that were operational and stabilized on January 1, 2016, excluding properties subsequently sold. Properties included in this reporting period are as follows: | ||
3344 Peachtree | Harborview Plaza | Corporate Center | |
3348 Peachtree | Hayden Ferry | San Jacinto Center | |
3350 Peachtree | Hearst Tower | Tempe Gateway | |
One Eleven Congress | NASCAR Plaza | The Pointe | |
One Buckhead Plaza | Two Buckhead Plaza | ||
(2) | Cash Basis Same Property Revenues include that of the Company and its share of unconsolidated joint ventures. It represents Property Revenues, excluding straight-line rents, amortization of lease inducements, and amortization of acquired above and below market rents. | ||
(3) | Cash Basis Same Property Operating Expenses include that of the Company and its share of unconsolidated joint ventures. It represents Property Operating Expenses, excluding straight-line ground rent expense and amortization of above and below market ground rent expense. |
Cousins Properties Incorporated | 18 | Q4 2017 Supplemental Information |
OFFICE LEASING ACTIVITY(1) |
Three Months Ended December 31, 2017 | Year Ended December 31, 2017 | ||||||||||||||||||||||||||||||
New | Renewal | Expansion | Total | New | Renewal | Expansion | Total | ||||||||||||||||||||||||
Gross leased (square feet) | 1,000,195 | 2,452,812 | |||||||||||||||||||||||||||||
Less: Leases one year or less, amenity leases, percentage rent leases, storage leases, intercompany leases, and license agreements | (57,173) | (263,133) | |||||||||||||||||||||||||||||
Net leased (square feet) | 422,479 | 420,365 | 100,178 | 943,022 | 1,088,475 | 836,396 | 264,808 | 2,189,679 | |||||||||||||||||||||||
Number of transactions | 11 | 11 | 7 | 29 | 58 | 61 | 22 | 141 | |||||||||||||||||||||||
Lease term (years) (2) | 11.4 | 3.5 | 8.0 | 7.5 | 10.2 | 4.5 | 7.0 | 7.6 | |||||||||||||||||||||||
Net rent (per square foot) (3) | $ | 39.64 | $ | 26.19 | $ | 31.04 | $ | 32.73 | $ | 31.68 | $ | 26.42 | $ | 29.50 | $ | 29.41 | |||||||||||||||
Free rent (per square foot) | (0.34 | ) | (0.18 | ) | (1.46 | ) | (0.39 | ) | (0.83 | ) | (0.51 | ) | (1.18 | ) | (0.75 | ) | |||||||||||||||
Tenant Improvements and Commissions (per square foot) | (8.28 | ) | (3.85 | ) | (6.22 | ) | (6.09 | ) | (7.49 | ) | (4.03 | ) | (6.31 | ) | (6.02 | ) | |||||||||||||||
Net effective rent (per square foot) | $ | 31.02 | $ | 22.16 | $ | 23.36 | $ | 26.25 | $ | 23.36 | $ | 21.88 | $ | 22.01 | $ | 22.64 | |||||||||||||||
Second generation leased square feet (4) | 545,089 | 1,319,149 | |||||||||||||||||||||||||||||
Increase in second generation net rent (2)(3)(4) | 19.7 | % | 19.6 | % | |||||||||||||||||||||||||||
Increase in cash basis second generation net rent (2)(4)(5) | 6.3 | % | 6.9 | % | |||||||||||||||||||||||||||
(1) Excludes apartment and retail leasing at mixed-use projects. | |||||||||||||||||||||||||||||||
(2) Weighted average. | |||||||||||||||||||||||||||||||
(3) Represents straight-lined net rent per square foot (operating expenses deducted from gross leases) over the lease term. | |||||||||||||||||||||||||||||||
(4) Excludes leases executed for spaces that were vacant upon acquisition, new leases in development properties, and leases for spaces that have been vacant for one year or more. | |||||||||||||||||||||||||||||||
(5) Represents increase in net rent at the end of term paid by the prior tenant compared to net rent at beginning of term paid by the current tenant. For early renewals, represents increase in net rent at the end of the term of the original lease compared to net rent at the beginning of the extended term of the lease. |
Cousins Properties Incorporated | 19 | Q4 2017 Supplemental Information |
OFFICE LEASE EXPIRATIONS |
Lease Expirations by Year (1)
Year of Expiration | Square Feet Expiring | % of Leased Space | Annual Contractual Rents ($000's) (2) | % of Total Annual Contractual Rents | Annual Contractual Rent/Sq. Ft. (2) | ||||||||||||
2018 | 777,011 | 6.5 | % | 21,006 | 5.4 | % | 27.03 | ||||||||||
2019 | 892,339 | 7.4 | % | 26,841 | 7.0 | % | 30.08 | ||||||||||
2020 | 871,998 | 7.3 | % | 28,110 | 7.3 | % | 32.24 | ||||||||||
2021 | 1,315,069 | 10.9 | % | 40,888 | 10.6 | % | 31.09 | ||||||||||
2022 | 1,472,160 | 12.2 | % | 44,626 | 11.6 | % | 30.31 | ||||||||||
2023 | 1,076,065 | 8.9 | % | 36,944 | 9.6 | % | 34.33 | ||||||||||
2024 | 945,557 | 7.9 | % | 34,525 | 8.9 | % | 36.51 | ||||||||||
2025 | 1,352,057 | 11.2 | % | 44,389 | 11.5 | % | 32.83 | ||||||||||
2026 & Thereafter | 3,335,996 | 27.7 | % | 108,721 | 28.1 | % | 32.59 | ||||||||||
Total | 12,038,252 | 100.0 | % | $ | 386,050 | 100.0 | % | $ | 32.07 |
Lease Expirations Greater than 100,000 Square Feet Through Year End 2020
Expiration Date | Tenant | Market | Building | Square Feet Expiring | |||||
January 2019 | National Union Fire Insurance Company (dba AIG) | Atlanta | Northpark | 105,362 |
(1) Company's share. | |||
(2) Annual Contractual Rent shown is the rate in the year of expiration. It includes the minimum contractual rent paid by the tenant which may or may not include a base year of operating expenses depending upon the terms of the lease. |
Cousins Properties Incorporated | 20 | Q4 2017 Supplemental Information |
OFFICE LEASE EXPIRATIONS |
![chart-de700903668d5a079bf.jpg](https://capedge.com/proxy/8-K/0000025232-18-000008/chart-de700903668d5a079bf.jpg)
(1) Company's share
Cousins Properties Incorporated | 21 | Q4 2017 Supplemental Information |
TOP 20 OFFICE TENANTS |
Tenant (1) | Number of Properties Occupied | Number of Markets Occupied | Company's Share of Square Footage | Company's Share of Annualized Base Rent (2) | Percentage of Total Company's Share of Annualized Base Rent | Weighted Average Remaining Lease Term (Years) | |||||||||||
1 | Bank of America, N.A. | 4 | 2 | 1,103,765 | $ | 18,825,511 | 5.7% | 7 | |||||||||
2 | Wells Fargo Bank, N.A. | 5 | 4 | 236,033 | 7,064,444 | 2.1% | 5 | ||||||||||
3 | Blue Cross Blue Shield | 1 | 1 | 227,592 | 6,136,052 | 1.9% | 3 | ||||||||||
4 | McGuirewoods LLP | 3 | 3 | 198,648 | 5,921,920 | 1.8% | 9 | ||||||||||
5 | ADP, LLC | 1 | 1 | 225,000 | 5,400,000 | 1.6% | 10 | ||||||||||
6 | Smith, Gambrell & Russell, LLP | 1 | 1 | 159,136 | 5,059,025 | 1.5% | 3 | ||||||||||
7 | Regus Equity Business Centers, LLC | 7 | 4 | 169,994 | 5,019,436 | 1.5% | 4 | ||||||||||
8 | OSI Restaurant Partners, LLC (dba Outback Steakhouse) | 1 | 1 | 167,723 | 4,886,131 | 1.5% | 7 | ||||||||||
9 | NASCAR Media Group, LLC | 1 | 1 | 139,461 | 4,796,073 | 1.5% | 3 | ||||||||||
10 | Hearst Communications, Inc. | 1 | 1 | 137,724 | 4,269,444 | 1.3% | 12 | ||||||||||
11 | Amazon | 3 | 2 | 120,153 | 4,209,909 | 1.3% | 6 | ||||||||||
12 | Parsley Energy, L.P. | 1 | 1 | 135,107 | 4,116,710 | 1.2% | 7 | ||||||||||
13 | Board of Regents of the University System of Georgia (dba Georgia State University) | 1 | 1 | 135,124 | 3,991,563 | 1.2% | 6 | ||||||||||
14 | K & L Gates LLP | 1 | 1 | 110,914 | 3,838,935 | 1.2% | 10 | ||||||||||
15 | Fifth Third Bank | 2 | 2 | 120,436 | 3,458,125 | 1.0% | 4 | ||||||||||
16 | Carlton Fields Jorden Burt, PA | 1 | 1 | 83,798 | 3,351,082 | 1.0% | 14 | ||||||||||
17 | Westrock Shared Services, LLC | 1 | 1 | 107,578 | 3,300,936 | 1.0% | 6 | ||||||||||
18 | SVB Financial Group (dba Silicon Valley Bank) | 1 | 1 | 100,532 | 3,043,323 | 0.9% | 6 | ||||||||||
19 | National Union Fire Insurance Company (dba AIG) | 1 | 1 | 105,362 | 3,037,233 | 0.9% | 1 | ||||||||||
20 | US Bank National Association | 2 | 2 | 89,363 | 2,776,764 | 0.8% | 8 | ||||||||||
Grand Total | 3,873,443 | $ | 102,502,616 | 30.9% | 7 | ||||||||||||
(1) | In some cases, the actual tenant may be an affiliate of the entity shown. | ||||||||||||||||
(2) | Annualized Base Rent represents the annualized minimum rent paid by the tenant as of the date of this report. If the tenant is in a free rent period as of the date of this report, Annualized Base Rent represents the annualized minimum contractual rent the tenant will pay in the first month it is required to pay rent which may or may not include a base year of operating expenses depending upon the terms of the lease. | ||||||||||||||||
Note: | This schedule includes tenants whose leases have commenced and/or who have taken occupancy. Leases that have been signed but have not commenced are excluded. |
Cousins Properties Incorporated | 22 | Q4 2017 Supplemental Information |
TENANT INDUSTRY DIVERSIFICATION |
![chart-2cb96a389c3b5ae7976.jpg](https://capedge.com/proxy/8-K/0000025232-18-000008/chart-2cb96a389c3b5ae7976.jpg)
(1) Represents Company's share of total revenues excluding properties sold prior to December 31, 2017.
Cousins Properties Incorporated | 23 | Q4 2017 Supplemental Information |
INVESTMENT ACTIVITY |
Completed Property Acquisitions
Property | Type | Metropolitan Area | Company's Ownership Interest | Timing | Square Feet | Gross Purchase Price ($ in thousands) | |||||||||
2017 | |||||||||||||||
111 West Rio (1) | Office | Phoenix | 100.0% | 1Q | 225,000 | $ | 19,600 | ||||||||
2016 | |||||||||||||||
Parkway Properties | Office | Various | Various | 4Q | 8,819,000 | (2 | ) | ||||||||
Cousins Fund II, L.P. (3) | Office | Various | 100.0% | 4Q | (3 | ) | 279,100 | ||||||||
2014 | |||||||||||||||
Fifth Third Center | Office | Charlotte | 100.0% | 3Q | 698,000 | 215,000 | |||||||||
Northpark | Office | Atlanta | 100.0% | 4Q | 1,528,000 | 348,000 | |||||||||
2013 | |||||||||||||||
Post Oak Central | Office | Houston | 100.0% | 1Q | 1,280,000 | 230,900 | |||||||||
Terminus 200 | Office | Atlanta | 50.0% | 1Q | 566,000 | 164,000 | |||||||||
816 Congress | Office | Austin | 100.0% | 2Q | 435,000 | 102,400 | |||||||||
Greenway Plaza | Office | Houston | 100.0% | 3Q | 4,348,000 | 950,000 | |||||||||
777 Main | Office | Fort Worth | 100.0% | 3Q | 980,000 | 160,000 | |||||||||
2012 | |||||||||||||||
2100 Ross | Office | Dallas | 100.0% | 3Q | 844,000 | 59,200 | |||||||||
19,723,000 | $ | 2,528,200 |
Completed Property Developments
Project | Type | Metropolitan Area | Company's Ownership Interest | Timing | Square Feet | Total Project Cost ($ in thousands) | |||||||||
2017 | |||||||||||||||
8000 Avalon | Office | Atlanta | 90.0% | 2Q | 224,000 | 73,000 | |||||||||
Carolina Square | Mixed | Chapel Hill | 50.0% | 3Q | 468,000 | (4) | $ | 123,000 | |||||||
2015 | |||||||||||||||
Colorado Tower | Office | Austin | 100.0% | 1Q | 373,000 | 126,100 | |||||||||
Emory Point - Phase II | Mixed | Atlanta | 75.0% | 3Q | 302,000 | 75,400 | |||||||||
Research Park V | Office | Austin | 100.0% | 4Q | 173,000 | 45,000 | |||||||||
2013 | |||||||||||||||
Emory Point - Phase I | Mixed | Atlanta | 75.0% | 4Q | 484,000 | 102,300 | |||||||||
2012 | |||||||||||||||
Mahan Village | Retail | Tallahassee | 50.5% | 4Q | 147,000 | 25,800 | |||||||||
2,171,000 | $ | 570,600 | |||||||||||||
(1) The Company acquired a 74.6% interest in 111 West Rio as part of the Parkway merger and, in the first quarter of 2017, purchased the remaining 25.4% interest from American Airlines.
(2) This transaction was part of the Parkway Merger. See further information in note 3 to the financial statements included in the Company's filings on Form 10-K for the years ended
December 31, 2016 and December 31, 2017, respectively, and reports filed with the SEC by the Company, Parkway, and New Parkway.
(3) Purchased the outside interest (approximately 70%) in a consolidated partnership for $279.1 million; this included cash from the sale of Two Liberty Place in Philadelphia as well as the
Hayden Ferry buildings in Tempe and 3344 Peachtree in Atlanta.
(4) Carolina Square is comprised of 202,000 square feet of office and retail space and 246 apartments.
Cousins Properties Incorporated | 24 | Q4 2017 Supplemental Information |
INVESTMENT ACTIVITY |
Completed Property Dispositions
Property | Type | Metropolitan Area | Company's Ownership Interest | Timing | Square Feet | Gross Sales Price ($ in thousands) | |||||||||
2017 | |||||||||||||||
Emory Point I and II | Mixed | Atlanta | 75.0% | 2Q | 786,000 | $ | 199,000 | ||||||||
American Cancer Society Center | Office | Atlanta | 100.0% | 2Q | 996,000 | 166,000 | |||||||||
Bank of America Center, One Orlando ---Centre, and Citrus Center | Office | Orlando | 100.0% | 4Q | 1,038,000 | 208,100 | |||||||||
Courvoisier Centre (1) | Office | Miami | 20.0% | 4Q | 343,000 | 33,900 | |||||||||
2016 | |||||||||||||||
100 North Point Center East | Office | Atlanta | 100.0% | 1Q | 129,000 | 22,000 | |||||||||
Post Oak Central and Greenway Plaza (2) | Office | Houston | 100.0% | 4Q | 5,628,000 | — | |||||||||
Two Liberty Place | Office | Philadelphia | 100.0% | 4Q | 941,000 | 219,000 | |||||||||
191 Peachtree | Office | Atlanta | 100.0% | 4Q | 1,225,000 | 267,500 | |||||||||
Lincoln Place | Office | Miami | 100.0% | 4Q | 140,000 | 80,000 | |||||||||
The Forum | Office | Atlanta | 4Q | 220,000 | 70,000 | ||||||||||
2015 | |||||||||||||||
2100 Ross | Office | Dallas | 100.0% | 3Q | 844,000 | 131,000 | |||||||||
200, 333, and 555 North Point Center East | Office | Atlanta | 100.0% | 4Q | 411,000 | 70,300 | |||||||||
The Points at Waterview | Office | Dallas | 100.0% | 4Q | 203,000 | 26,800 | |||||||||
2014 | |||||||||||||||
Lakeshore and University Park Place | Office | Birmingham | 100.0% | 3Q | 320,000 | 44,700 | |||||||||
Mahan Village | Retail | Florida | 50.5% | 4Q | 147,000 | 29,500 | |||||||||
Cousins Watkins LLC | Retail | Other | 50.5% | 4Q | 339,000 | 50,000 | |||||||||
777 Main | Office | Fort Worth | 100.0% | 4Q | 980,000 | 167,000 | |||||||||
2013 | |||||||||||||||
Terminus 100 | Office | Atlanta | 100.0% | 1Q | 656,000 | 209,200 | |||||||||
Tiffany Springs MarketCenter | Retail | Kansas City | 88.5% | 3Q | 238,000 | 53,500 | |||||||||
The Avenue Murfreesboro | Retail | Nashville | 50.0% | 3Q | 752,000 | 164,000 | |||||||||
CPV Two LLC and CPV Five LLC | Retail | Other | 10.3% | 3Q | 2,113,000 | 522,300 | |||||||||
Inhibitex | Office | Atlanta | 100.0% | 4Q | 51,000 | 8,300 | |||||||||
2012 | |||||||||||||||
The Avenue Collierville | Retail | Memphis | 100.0% | 2Q | 511,000 | 55,000 | |||||||||
Galleria 75 | Office | Atlanta | 100.0% | 2Q | 111,000 | 9,200 | |||||||||
Ten Peachtree Place | Office | Atlanta | 50.0% | 2Q | 260,000 | 45,300 | |||||||||
The Avenue Webb Gin | Retail | Atlanta | 100.0% | 4Q | 322,000 | 59,600 | |||||||||
The Avenue Forsyth | Retail | Atlanta | 88.5% | 4Q | 524,000 | 119,000 | |||||||||
Cosmopolitan Center | Office | Atlanta | 100.0% | 4Q | 51,000 | 7,000 | |||||||||
Palisades West | Office | Austin | 50.0% | 4Q | 373,000 | 64,800 | |||||||||
Presbyterian Medical Plaza | Office | Charlotte | 11.5% | 4Q | 69,000 | 4,500 | |||||||||
20,721,000 | $ | 3,106,500 |
(1) The Company sold its partnership interest for $12.6 million in a transaction that valued its interest in the property at $33.9 million, prior to deduction for existing mortgage debt.
(2) This transaction was part of the Parkway Merger. See further information in note 3 to the financial statements included in the Company's filings on Form 10-K for the years ended
December 31, 2016 and December 31, 2017, respectively, and reports filed with the SEC by the Company, Parkway, and New Parkway.
Cousins Properties Incorporated | 25 | Q4 2017 Supplemental Information |
DEVELOPMENT PIPELINE (1) |
Project | Type | Metropolitan Area | Company's Ownership Interest | Actual or Projected Construction Start Date | Number of Square Feet /Apartment Units | Estimated Project Cost (1) ($ in thousands) | Company's Share of Estimated Project Costs | Project Cost Incurred to Date ($ in thousands) | Company's Share of Project Costs Incurred to Date | Percent Leased | Initial Occupancy (2) | Estimated Stabilization (3) | |||||||||||||||||||||||
864 Spring Street (NCR Phase I) | Office | Atlanta, GA | 100 | % | 3Q15 | 503,000 | 219,000 | 219,000 | 212,628 | 212,628 | 100 | % | 1Q18 (5) | 1Q18 | |||||||||||||||||||||
858 Spring Street (NCR Phase II) | Office | Atlanta, GA | 100 | % | 4Q16 | 260,000 | 120,000 | 120,000 | 68,354 | 68,354 | 100 | % | 4Q18 | 4Q18 | |||||||||||||||||||||
Dimensional Place | Office | Charlotte, NC | 50 | % | 4Q16 | 94,000 | 47,000 | 53,199 | 26,600 | ||||||||||||||||||||||||||
Office | 266,000 | 100 | % | 4Q18 | 4Q18 | ||||||||||||||||||||||||||||||
Retail | 16,000 | — | % | 4Q18 | 4Q18 | ||||||||||||||||||||||||||||||
120 West Trinity | Mixed | Atlanta, GA | 20 | % | 1Q17 | 85,000 | 17,000 | 18,066 | 3,613 | ||||||||||||||||||||||||||
Office | 33,000 | — | % | 1Q19 | 1Q20 | ||||||||||||||||||||||||||||||
Retail | 19,000 | — | % | 1Q19 | 1Q20 | ||||||||||||||||||||||||||||||
Apartments | 330 | — | % | 1Q19 | 1Q20 | ||||||||||||||||||||||||||||||
300 Colorado (4) | Office | Austin, TX | 50 | % | 4Q18 | 175,000 | 87,500 | — | — | ||||||||||||||||||||||||||
Office | 302,000 | 100 | % | 1Q21 | 1Q21 | ||||||||||||||||||||||||||||||
Retail | 7,000 | 100 | % | 1Q21 | 1Q21 | ||||||||||||||||||||||||||||||
Total | $ | 693,000 | $ | 490,500 | $ | 352,247 | $ | 311,195 |
(1) | This schedule shows projects currently under active development through the substantial completion of construction. Amounts included in the estimated project cost column represent the estimated costs of the project through stabilization. Significant estimation is required to derive these costs, and the final costs may differ from these estimates. The projected stabilization dates are also estimates and are subject to change as the project proceeds through the development process. | ||||
(2) | The quarter within which the Company estimates the first tenant will take occupancy. | ||||
(3) | Stabilization is the earlier of the quarter within which the Company estimates it will achieve 90% economic occupancy or one year from initial occupancy. | ||||
(4) | The budget is not finalized, and it is subject to change. In January 2018, the joint venture acquired the land for this project, and construction is expected to commence December 2018. | ||||
(5) | Initial occupancy took place on January 1, 2018. |
Cousins Properties Incorporated | 26 | Q4 2017 Supplemental Information |
LAND INVENTORY |
Metropolitan Area | Type | Company's Ownership Interest | Total Developable Land (Acres) | Company's Share (Acres) | ||||||||||
Wildwood Office Park | Atlanta | Commercial | 50% | 22 | ||||||||||
North Point | Atlanta | Commercial | 100% | 12 | ||||||||||
The Avenue Forsyth-Adjacent Land | Atlanta | Commercial | 100% | 10 | ||||||||||
10000 Avalon | Atlanta | Commercial | 75% | 3 | ||||||||||
Georgia | 47 | |||||||||||||
Padre Island | Corpus Christi | Residential | 50% | 15 | ||||||||||
Victory Center | Dallas | Commercial | 75% | 3 | ||||||||||
Texas | 18 | |||||||||||||
Corporate Center | Tampa | Commercial | 100% | 7 | ||||||||||
Florida | 7 | |||||||||||||
Total Land Held (Acres) | 72 | 52 | ||||||||||||
Total Land Held (Cost Basis) | $ | 47,902 | $ | 23,254 | ||||||||||
Cousins Properties Incorporated | 27 | Q4 2017 Supplemental Information |
DEBT SCHEDULE |
Company's Share of Debt Maturities and Principal Payments | |||||||||||||||||||||||||||||||||||||||||||||
Description (Interest Rate Base, if not fixed) | Company's Ownership Interest | Rate at End of Quarter | Maturity Date | 2018 | 2019 | 2020 | 2021 | 2022 | Thereafter | Total Principal | Deferred Loan Costs | Above/Below Market Value | Total | ||||||||||||||||||||||||||||||||
Consolidated Debt | |||||||||||||||||||||||||||||||||||||||||||||
Floating Rate | |||||||||||||||||||||||||||||||||||||||||||||
Term Loan, Unsecured (LIBOR + 1.20%-1.70%) (1) | 100% | 2.76% | 12/2/21 | $ | — | $ | — | $ | — | $ | 250,000 | $ | — | $ | — | $ | 250,000 | $ | (1,541 | ) | $ | — | $ | 248,459 | |||||||||||||||||||||
Credit Facility, Unsecured (LIBOR + 1.10%-1.45%) (2)(5) | 100% | 2.66% | 5/28/19 | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Total Floating Rate Debt | — | — | — | 250,000 | — | — | 250,000 | (1,541 | ) | — | 248,459 | ||||||||||||||||||||||||||||||||||
Fixed Rate | |||||||||||||||||||||||||||||||||||||||||||||
Senior Notes, Unsecured | 100% | 3.91% | 7/6/25 | — | — | — | — | — | 250,000 | 250,000 | (1,371 | ) | — | 248,629 | |||||||||||||||||||||||||||||||
Fifth Third Center | 100% | 3.37% | 10/1/26 | 3,061 | 3,165 | 3,274 | 3,386 | 3,502 | 130,169 | 146,557 | (583 | ) | — | 145,974 | |||||||||||||||||||||||||||||||
Colorado Tower | 100% | 3.45% | 9/1/26 | 573 | 2,343 | 2,425 | 2,510 | 2,598 | 109,551 | 120,000 | (835 | ) | — | 119,165 | |||||||||||||||||||||||||||||||
Promenade | 100% | 4.27% | 10/1/22 | 3,116 | 3,252 | 3,393 | 3,541 | 89,053 | — | 102,355 | (284 | ) | — | 102,071 | |||||||||||||||||||||||||||||||
Senior Notes, Unsecured | 100% | 4.09% | 7/6/27 | — | — | — | — | — | 100,000 | 100,000 | (511 | ) | — | 99,489 | |||||||||||||||||||||||||||||||
816 Congress | 100% | 3.75% | 11/1/24 | 1,628 | 1,690 | 1,754 | 1,821 | 1,890 | 74,521 | 83,304 | (562 | ) | — | 82,742 | |||||||||||||||||||||||||||||||
Meridian Mark Plaza | 100% | 6.00% | 8/1/20 | 514 | 546 | 22,978 | — | — | — | 24,038 | (68 | ) | — | 23,970 | |||||||||||||||||||||||||||||||
The Pointe | 100% | 4.01% | 2/10/19 | 455 | 22,055 | — | — | — | — | 22,510 | — | 219 | 22,729 | ||||||||||||||||||||||||||||||||
Total Fixed Rate Debt | 9,347 | 33,051 | 33,824 | 11,258 | 97,043 | 664,241 | 848,764 | (4,214 | ) | 219 | 844,769 | ||||||||||||||||||||||||||||||||||
Total Consolidated Debt | $ | 9,347 | $ | 33,051 | $ | 33,824 | $ | 261,258 | $ | 97,043 | $ | 664,241 | $ | 1,098,764 | $ | (5,755 | ) | $ | 219 | $ | 1,093,228 | ||||||||||||||||||||||||
Unconsolidated Debt | |||||||||||||||||||||||||||||||||||||||||||||
Floating Rate | |||||||||||||||||||||||||||||||||||||||||||||
Carolina Square (LIBOR + 1.90%) (3) | 50% | 3.46% | 5/1/18 | 32,206 | — | — | — | — | — | 32,206 | — | — | 32,206 | ||||||||||||||||||||||||||||||||
Total Floating Rate Debt | 32,206 | — | — | — | — | — | 32,206 | — | — | 32,206 | |||||||||||||||||||||||||||||||||||
. | |||||||||||||||||||||||||||||||||||||||||||||
Fixed Rate | |||||||||||||||||||||||||||||||||||||||||||||
Terminus 100 | 50% | 5.25% | 1/1/23 | 1,418 | 1,494 | 1,575 | 1,659 | 1,749 | 54,091 | 61,986 | (64 | ) | — | 61,922 | |||||||||||||||||||||||||||||||
Terminus 200 | 50% | 3.79% | 1/1/23 | 800 | 831 | 863 | 896 | 931 | 35,350 | 39,671 | (27 | ) | — | 39,644 | |||||||||||||||||||||||||||||||
Emory University Hospital Midtown Medical Office Tower | 50% | 3.50% | 6/1/23 | 786 | 813 | 842 | 872 | 903 | 31,436 | 35,652 | (129 | ) | — | 35,523 | |||||||||||||||||||||||||||||||
Total Fixed Rate Debt | 3,004 | 3,138 | 3,280 | 3,427 | 3,583 | 120,877 | 137,309 | (220 | ) | — | 137,089 | ||||||||||||||||||||||||||||||||||
Total Unconsolidated Debt | 35,210 | 3,138 | 3,280 | 3,427 | 3,583 | 120,877 | 169,515 | (220 | ) | — | 169,295 | ||||||||||||||||||||||||||||||||||
Total Debt | $ | 44,557 | $ | 36,189 | $ | 37,104 | $ | 264,685 | $ | 100,626 | $ | 785,118 | $ | 1,268,279 | $ | (5,975 | ) | $ | 219 | $ | 1,262,523 | ||||||||||||||||||||||||
Total Maturities (4) | $ | 32,206 | $ | 22,018 | $ | 22,644 | $ | 250,000 | $ | 86,295 | $ | 756,515 | $ | 1,169,678 | |||||||||||||||||||||||||||||||
% of Maturities | 3 | % | 1 | % | 2 | % | 21 | % | 8 | % | 65 | % | 100 | % |
Cousins Properties Incorporated | 28 | Q4 2017 Supplemental Information |
DEBT SCHEDULE |
Floating and Fixed Rate Debt Analysis
Total Debt ($) | Total Debt (%) | Weighted Average Interest Rate | Weighted Average Maturity (Yrs.) | ||||||||||
Floating Rate Debt | $ | 282,206 | 22 | % | 2.84 | % | 3.5 | ||||||
Fixed Rate Debt | 986,073 | 78 | % | 3.93 | % | 7.1 | |||||||
Total Debt | $ | 1,268,279 | 100 | % | 3.69 | % | 6.3 |
(1) The spread over LIBOR at December 31, 2017 was 1.20%.
(2) Total borrowing capacity of the Credit Facility as of December 31, 2017 was $500 million. The spread over LIBOR at December 31, 2017 was 1.10%.
(3) The Company's share of the total borrowing capacity of the facility is $39.9 million.
(4) Maturities include lump sum principal payments due at the maturity date. Maturities do not include scheduled principal payments due prior to the maturity date.
(5) Subsequent to year end, the Company entered into a Fourth Amended and Restated Credit Agreement under which the Company may borrow up to $1 billion if certain conditions are satisfied. The new Credit Facility matures in January 2023.
Cousins Properties Incorporated | 29 | Q4 2017 Supplemental Information |
DEBT SCHEDULE |
![chart-c5380b4c880751d3851.jpg](https://capedge.com/proxy/8-K/0000025232-18-000008/chart-c5380b4c880751d3851.jpg)
Cousins Properties Incorporated | 30 | Q4 2017 Supplemental Information |
NON-GAAP FINANCIAL MEASURES - CALCULATIONS AND RECONCILIATIONS |
2015 | 2016 1st | 2016 2nd | 2016 3rd | 2016 4th | 2016 | 2017 1st | 2017 2nd | 2017 3rd | 2017 4th | 2017 | |||||||||||||||||||||||
Income from Discontinued Operations | |||||||||||||||||||||||||||||||||
Rental Property Revenues | $ | 176,828 | $ | 43,123 | $ | 44,281 | $ | 46,046 | $ | 3,477 | $ | 136,927 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Rental Property Operating Expenses | (73,630 | ) | (17,805 | ) | (19,155 | ) | (19,638 | ) | (1,738 | ) | (58,336 | ) | — | — | — | — | — | ||||||||||||||||
Net Operating Income | 103,198 | 25,318 | 25,126 | 26,408 | 1,739 | 78,591 | — | — | — | — | — | ||||||||||||||||||||||
Termination Fees | 450 | 186 | 102 | — | — | 288 | — | — | — | — | — | ||||||||||||||||||||||
Interest and Other Expense | (8,009 | ) | (1,975 | ) | (1,965 | ) | (1,956 | ) | (126 | ) | (6,022 | ) | — | — | — | — | — | ||||||||||||||||
Transaction Costs | — | — | — | (494 | ) | (5,855 | ) | (6,349 | ) | — | — | — | — | — | |||||||||||||||||||
FFO from Discontinued Operations | 95,639 | 23,529 | 23,263 | 23,958 | (4,242 | ) | 66,508 | — | — | — | — | — | |||||||||||||||||||||
Depreciation and Amortization of Real Estate | (63,791 | ) | (15,428 | ) | (15,740 | ) | (15,221 | ) | (956 | ) | (47,345 | ) | — | — | — | — | — | ||||||||||||||||
Income (Loss) from Discontinued Operations | 31,848 | 8,101 | 7,523 | 8,737 | (5,198 | ) | 19,163 | — | — | — | — | — | |||||||||||||||||||||
FFO and EBITDA | |||||||||||||||||||||||||||||||||
Net income available to common stockholders | 125,518 | 79,109 | 7,765 | 11,657 | 36,892 | 79,109 | 4,751 | 168,089 | 12,067 | 31,368 | 216,275 | ||||||||||||||||||||||
Depreciation and amortization of real estate assets: | |||||||||||||||||||||||||||||||||
Consolidated properties | 70,003 | 16,164 | 16,306 | 16,293 | 47,819 | 96,583 | 54,433 | 49,575 | 47,161 | 43,700 | 194,869 | ||||||||||||||||||||||
Share of unconsolidated joint ventures | 11,645 | 3,259 | 3,231 | 3,268 | 4,146 | 13,904 | 4,195 | 3,478 | 2,862 | 2,656 | 13,191 | ||||||||||||||||||||||
Discontinued properties | 63,791 | 15,428 | 15,740 | 15,221 | 956 | 47,345 | — | — | — | — | — | ||||||||||||||||||||||
Partners' share of real estate depreciation | — | — | — | — | (3,564 | ) | (3,564 | ) | — | — | (4 | ) | (19 | ) | (23 | ) | |||||||||||||||||
(Gain) loss on sale of depreciated properties: | |||||||||||||||||||||||||||||||||
Consolidated properties | (78,759 | ) | (14,190 | ) | 246 | — | (59,589 | ) | (73,533 | ) | 18 | (119,767 | ) | 36 | (13,330 | ) | (133,043 | ) | |||||||||||||||
Share of unconsolidated joint ventures | — | — | — | — | — | — | 3,539 | (37,871 | ) | — | (718 | ) | (35,050 | ) | |||||||||||||||||||
Discontinued properties | 551 | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Non-controlling interest related to unit holders | — | — | — | — | 784 | 784 | 101 | 2,856 | 212 | 512 | 3,681 | ||||||||||||||||||||||
FFO | 192,749 | 43,457 | 43,288 | 46,439 | 27,444 | 160,628 | 67,037 | 66,360 | 62,334 | 64,169 | 259,900 | ||||||||||||||||||||||
Interest Expense | 38,178 | 9,421 | 9,359 | 9,748 | 12,566 | 41,094 | 12,066 | 10,444 | 9,363 | 9,509 | 41,382 | ||||||||||||||||||||||
Non-Real Estate Depreciation and Amortization | 1,669 | 377 | 335 | 328 | 325 | 1,365 | 451 | 465 | 461 | 497 | 1,874 | ||||||||||||||||||||||
Acquisition and Merger Costs | 299 | 19 | 2,424 | 1,940 | 26,488 | 30,871 | 1,930 | 246 | (677 | ) | 162 | 1,661 | |||||||||||||||||||||
(Gain)/Loss on Extinguishment of Debt | — | — | — | — | 5,180 | 5,180 | — | (1,829 | ) | (429 | ) | — | (2,258 | ) | |||||||||||||||||||
Impairment Loss | — | — | — | — | 4,526 | 4,526 | — | — | — | — | — | ||||||||||||||||||||||
EBITDA (1) | 232,895 | 53,274 | 55,406 | 58,455 | 76,529 | 243,664 | 81,484 | 75,686 | 71,052 | 74,337 | 302,559 | ||||||||||||||||||||||
Income (Loss) from Unconsolidated Joint Ventures | |||||||||||||||||||||||||||||||||
Net Operating Income | |||||||||||||||||||||||||||||||||
Office Properties | 18,501 | 5,050 | 5,213 | 5,013 | 6,123 | 21,400 | 6,909 | 6,750 | 6,890 | 6,638 | 27,187 | ||||||||||||||||||||||
Other Properties | 5,834 | 1,596 | 1,741 | 1,747 | 2,302 | 7,386 | 2,267 | 859 | 44 | 696 | 3,866 | ||||||||||||||||||||||
Net Operating Income | 24,335 | 6,646 | 6,954 | 6,760 | 8,425 | 28,785 | 9,176 | 7,609 | 6,934 | 7,334 | 31,053 | ||||||||||||||||||||||
Sales Less Cost of Sales | 2,280 | — | — | — | 190 | 190 | — | — | — | — | — | ||||||||||||||||||||||
Termination Fees | 419 | — | — | — | 3,000 | 3,000 | 959 | 195 | 132 | 8 | 1,294 | ||||||||||||||||||||||
Interest Expense | (7,455 | ) | (2,007 | ) | (2,026 | ) | (2,038 | ) | (2,352 | ) | (8,423 | ) | (2,325 | ) | (1,922 | ) | (1,776 | ) | (1,836 | ) | (7,859 | ) | |||||||||||
Other Income/(Expense) | 368 | 454 | 87 | 72 | 303 | 916 | 505 | 45 | 33 | 185 | 768 | ||||||||||||||||||||||
Funds from Operations - Unconsolidated Joint Ventures | 19,947 | 5,093 | 5,015 | 4,794 | 9,566 | 24,468 | 8,315 | 5,927 | 5,323 | 5,691 | 25,256 |
Cousins Properties Incorporated | 31 | Q4 2017 Supplemental Information |
NON-GAAP FINANCIAL MEASURES - CALCULATIONS AND RECONCILIATIONS |
2015 | 2016 1st | 2016 2nd | 2016 3rd | 2016 4th | 2016 | 2017 1st | 2017 2nd | 2017 3rd | 2017 4th | 2017 | |||||||||||||||||||||||
Gain (Loss) on Sale of Depreciated Investment Properties, net | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (3,539 | ) | $ | 37,871 | $ | — | $ | 718 | $ | 35,050 | ||||||||||
Depreciation and Amortization of Real Estate | (11,645 | ) | (3,259 | ) | (3,231 | ) | (3,268 | ) | (4,147 | ) | (13,905 | ) | (4,195 | ) | (3,478 | ) | (2,862 | ) | (2,656 | ) | (13,191 | ) | |||||||||||
Net Income from Unconsolidated Joint Ventures | 8,302 | 1,834 | 1,784 | 1,526 | 5,419 | 10,563 | 581 | 40,320 | 2,461 | 3,753 | 47,115 | ||||||||||||||||||||||
Market Capitalization | |||||||||||||||||||||||||||||||||
Common Stock price at Period End | 9.43 | 10.38 | 10.40 | 10.44 | 8.51 | 8.51 | 8.27 | 8.79 | 9.34 | 9.25 | 9.25 | ||||||||||||||||||||||
Number of Common Shares/Units Outstanding at Period End | 211,513 | 210,107 | 210,171 | 210,170 | 401,596 | 401,596 | 426,823 | 426,942 | 426,995 | 426,995 | 426,995 | ||||||||||||||||||||||
Common Stock Capitalization | 1,994,568 | 2,180,911 | 2,185,778 | 2,194,175 | 3,417,582 | 3,417,582 | 3,529,826 | 3,752,820 | 3,988,133 | 3,949,704 | 3,949,704 | ||||||||||||||||||||||
Debt | 721,293 | 767,811 | 777,485 | 888,378 | 1,380,920 | 1,380,920 | 1,240,728 | 1,019,619 | 1,095,177 | 1,093,228 | 1,093,228 | ||||||||||||||||||||||
Share of Unconsolidated Debt | 225,724 | 224,430 | 222,514 | 223,944 | 251,350 | 251,350 | 257,316 | 186,013 | 191,075 | 169,295 | 169,295 | ||||||||||||||||||||||
Debt (1) | 947,017 | 992,241 | 999,999 | 1,112,322 | 1,632,270 | 1,632,270 | 1,498,044 | 1,205,632 | 1,286,252 | 1,262,523 | 1,262,523 | ||||||||||||||||||||||
Total Market Capitalization | 2,941,585 | 3,173,152 | 3,185,777 | 3,306,497 | 5,049,852 | 5,049,852 | 5,027,870 | 4,958,452 | 5,274,385 | 5,212,227 | 5,212,227 | ||||||||||||||||||||||
Credit Ratios | |||||||||||||||||||||||||||||||||
Net Debt (Debt (1) minus Cash) | 945,014 | 986,777 | 999,053 | 1,015,081 | 1,596,583 | 1,596,583 | 1,462,289 | 1,189,212 | 1,224,085 | 1,113,594 | 1,113,594 | ||||||||||||||||||||||
Total Market Capitalization | 2,941,585 | 3,173,152 | 3,185,777 | 3,306,497 | 5,049,852 | 5,049,852 | 5,027,870 | 4,958,452 | 5,274,385 | 5,212,227 | 5,212,227 | ||||||||||||||||||||||
Net Debt / Total Market Capitalization | 32.1 | % | 31.1 | % | 31.4 | % | 30.7 | % | 31.6 | % | 31.6 | % | 29.1 | % | 24.0 | % | 23.2 | % | 21.4 | % | 21.4 | % | |||||||||||
Total Assets - Consolidated | 2,597,803 | 2,610,408 | 2,622,995 | 2,760,732 | 4,171,607 | 4,171,607 | 4,206,289 | 4,136,046 | 4,224,200 | 4,204,619 | 4,204,619 | ||||||||||||||||||||||
Accumulated Depreciation - Consolidated | 463,008 | 486,747 | 519,075 | 539,719 | 269,339 | 269,339 | 326,039 | 303,266 | 352,425 | 380,908 | 380,908 | ||||||||||||||||||||||
Undepreciated Assets - Unconsolidated (1) | 486,941 | 460,516 | 504,408 | 507,611 | 604,236 | 604,236 | 578,207 | 467,992 | 483,299 | 455,100 | 455,100 | ||||||||||||||||||||||
Less: Investment in Unconsolidated Joint Ventures | (102,577 | ) | (110,138 | ) | (114,455 | ) | (116,933 | ) | (179,397 | ) | (179,397 | ) | (128,589 | ) | (101,532 | ) | (109,222 | ) | (101,414 | ) | (101,414 | ) | |||||||||||
Total Undepreciated Assets (1) | 3,445,175 | 3,447,533 | 3,532,023 | 3,691,129 | 4,865,785 | 4,865,785 | 4,981,946 | 4,805,772 | 4,950,702 | 4,939,213 | 4,939,213 | ||||||||||||||||||||||
Net Debt (Debt (1) minus Cash) | 945,014 | 986,777 | 999,053 | 1,015,081 | 1,596,583 | 1,596,583 | 1,462,289 | 1,189,212 | 1,224,085 | 1,113,594 | 1,113,594 | ||||||||||||||||||||||
Undepreciated Assets (1) | 3,445,175 | 3,447,533 | 3,532,023 | 3,691,129 | 4,865,785 | 4,865,785 | 4,981,946 | 4,805,772 | 4,950,702 | 4,939,213 | 4,939,213 | ||||||||||||||||||||||
Net Debt / Total Undepreciated Assets (1) | 27.4 | % | 28.6 | % | 28.3 | % | 27.5 | % | 32.8 | % | 32.8 | % | 29.4 | % | 24.7 | % | 24.7 | % | 22.5 | % | 22.5 | % | |||||||||||
Coverage Ratios (1) | |||||||||||||||||||||||||||||||||
Interest Expense | 38,178 | 9,421 | 9,359 | 9,748 | 12,566 | 41,094 | 12,066 | 10,444 | 9,363 | 9,509 | 41,382 | ||||||||||||||||||||||
Scheduled Principal Payments | 9,892 | 2,444 | 3,143 | 3,344 | 2,632 | 11,563 | 3,810 | 3,334 | 2,846 | 2,869 | 12,859 | ||||||||||||||||||||||
Fixed Charges | 48,070 | 11,865 | 12,502 | 13,092 | 15,198 | 52,657 | 15,876 | 13,778 | 12,209 | 12,378 | 54,241 | ||||||||||||||||||||||
EBITDA | 232,895 | 53,274 | 55,406 | 58,455 | 76,529 | 243,664 | 81,484 | 75,686 | 71,052 | 74,337 | 302,559 | ||||||||||||||||||||||
Fixed Charges Coverage Ratio (1) | 4.84 | 4.49 | 4.43 | 4.46 | 5.04 | 4.63 | 5.13 | 5.49 | 5.82 | 6.01 | 5.58 | ||||||||||||||||||||||
Net Debt (Debt (1) minus Cash) | 945,014 | 986,777 | 999,053 | 1,015,081 | 1,596,583 | 1,596,583 | 1,462,289 | 1,189,212 | 1,224,085 | 1,113,594 | 1,113,594 | ||||||||||||||||||||||
Annualized EBITDA (2) | 236,754 | 213,096 | 221,624 | 233,820 | 306,116 | 306,116 | 325,936 | 302,744 | 284,208 | 297,348 | 297,348 | ||||||||||||||||||||||
Net Debt / Annualized EBITDA (2) | 3.99 | 4.63 | 4.51 | 4.34 | 5.22 | 5.22 | 4.49 | 3.93 | 4.31 | 3.75 | 3.75 | ||||||||||||||||||||||
Cousins Properties Incorporated | 32 | Q4 2017 Supplemental Information |
NON-GAAP FINANCIAL MEASURES - CALCULATIONS AND RECONCILIATIONS |
2015 | 2016 1st | 2016 2nd | 2016 3rd | 2016 4th | 2016 | 2017 1st | 2017 2nd | 2017 3rd | 2017 4th | 2017 | |||||||||||||||||||||||
Dividend Information | |||||||||||||||||||||||||||||||||
Common Dividends (3) | $ | 69,196 | $ | 16,918 | $ | 16,810 | $ | 16,821 | $ | 23,577 | $ | 74,126 | $ | 25,161 | $ | 25,212 | $ | 25,201 | $ | 25,202 | $ | 100,776 | |||||||||||
FFO | 192,749 | 43,457 | 43,288 | 46,439 | 27,444 | 160,628 | 67,037 | 66,360 | 62,334 | 64,169 | 259,900 | ||||||||||||||||||||||
FFO Payout Ratio | 35.9 | % | 38.9 | % | 38.8 | % | 36.2 | % | 85.9 | % | 46.1 | % | 37.5 | % | 38.0 | % | 40.4 | % | 39.3 | % | 38.8 | % | |||||||||||
FFO | 192,749 | 43,457 | 43,288 | 46,439 | 27,444 | 160,628 | 67,037 | 66,360 | 62,334 | 64,169 | 259,900 | ||||||||||||||||||||||
Straight Line Rental Revenue | (20,009 | ) | (3,595 | ) | (3,434 | ) | (3,449 | ) | (8,489 | ) | (18,967 | ) | (9,608 | ) | (7,826 | ) | (6,825 | ) | (6,714 | ) | (30,973 | ) | |||||||||||
Above and Below Market Rents | (7,981 | ) | (1,834 | ) | (1,854 | ) | (1,907 | ) | (1,502 | ) | (7,097 | ) | (1,602 | ) | (1,929 | ) | (1,852 | ) | (1,838 | ) | (7,221 | ) | |||||||||||
Amortization of Above and Below Market Debt | — | — | — | — | (2,999 | ) | (2,999 | ) | (3,190 | ) | (646 | ) | (51 | ) | (50 | ) | (3,937 | ) | |||||||||||||||
Lease Inducements | 1,807 | 441 | 499 | 373 | 209 | 1,522 | 133 | 103 | 114 | 135 | 485 | ||||||||||||||||||||||
Ground Lease Straight Line Rent | 88 | (2 | ) | (2 | ) | (2 | ) | 110 | 104 | 110 | 110 | 110 | 110 | 440 | |||||||||||||||||||
Above and Below Market Rents Ground Rent | (55 | ) | (14 | ) | (14 | ) | (14 | ) | 39 | (3 | ) | 40 | 40 | 40 | 39 | 159 | |||||||||||||||||
Acquisition and Merger Costs | 299 | 19 | 2,424 | 1,940 | 26,488 | 30,871 | 1,930 | 246 | (677 | ) | 162 | 1,661 | |||||||||||||||||||||
(Gain) loss on Extinguishment of Debt | — | — | — | — | 5,180 | 5,180 | — | (1,829 | ) | (429 | ) | — | (2,258 | ) | |||||||||||||||||||
Impairment Loss | — | — | — | — | 4,526 | 4,526 | — | — | — | — | — | ||||||||||||||||||||||
Second Generation CAPEX | (54,214 | ) | (7,904 | ) | (13,166 | ) | (13,968 | ) | (11,838 | ) | (46,876 | ) | (10,971 | ) | (7,569 | ) | (15,949 | ) | (18,996 | ) | (53,485 | ) | |||||||||||
Deferred Income - Tenant Improvements | (48 | ) | (280 | ) | (488 | ) | (564 | ) | (594 | ) | (1,926 | ) | (625 | ) | (732 | ) | (761 | ) | (750 | ) | (2,868 | ) | |||||||||||
FAD (1) | 112,636 | 30,288 | 27,253 | 28,848 | 38,574 | 124,963 | 43,254 | 46,328 | 36,054 | 36,267 | 161,903 | ||||||||||||||||||||||
Common Dividends (3) | 69,196 | 16,918 | 16,810 | 16,821 | 23,577 | 74,126 | 25,161 | 25,212 | 25,201 | 25,202 | 100,776 | ||||||||||||||||||||||
FAD Payout Ratio (1) | 61.4 | % | 55.9 | % | 61.7 | % | 58.3 | % | 61.1 | % | 59.3 | % | 58.2 | % | 54.4 | % | 69.9 | % | 69.5 | % | 62.2 | % | |||||||||||
Operations Ratios | |||||||||||||||||||||||||||||||||
Total Undepreciated Assets (1) | 3,445,175 | 3,447,533 | 3,532,023 | 3,691,129 | 4,865,785 | 4,865,785 | 4,981,946 | 4,805,772 | 4,950,702 | 4,939,213 | 4,939,213 | ||||||||||||||||||||||
General and Administrative Expenses | 16,918 | 8,242 | 4,691 | 4,368 | 8,290 | 25,591 | 6,182 | 8,618 | 7,193 | 5,530 | 27,523 | ||||||||||||||||||||||
Annualized General and Administrative Expenses (4) / Total Undepreciated Assets | 0.49 | % | 0.96 | % | 0.53 | % | 0.47 | % | 0.68 | % | 0.53 | % | 0.50 | % | 0.72 | % | 0.58 | % | 0.45 | % | 0.56 | % | |||||||||||
2nd Generation TI & Leasing Costs & Building CAPEX | |||||||||||||||||||||||||||||||||
Second Generation Leasing Related Costs | 46,821 | 4,867 | 10,356 | 7,992 | 10,021 | 33,236 | 10,710 | 7,258 | 15,480 | 17,168 | 50,616 | ||||||||||||||||||||||
Second Generation Building Improvements | 7,393 | 3,037 | 2,810 | 5,976 | 1,817 | 13,640 | 261 | 311 | 469 | 1,828 | 2,869 | ||||||||||||||||||||||
54,214 | 7,904 | 13,166 | 13,968 | 11,838 | 46,876 | 10,971 | 7,569 | 15,949 | 18,996 | 53,485 | |||||||||||||||||||||||
(1) Includes Company share of unconsolidated joint ventures. These amounts are derived from the amounts in the categories indicated that are recorded at the joint venture multiplied by the Company's ownership interest. The Company does not control the operations of the unconsolidated joint ventures, but believes that including these amounts in the categories indicated is meaningful to investors and analysts. | |||||||||||||||||||||||||||||||||
(2) Annualized equals quarter amount annualized. | |||||||||||||||||||||||||||||||||
(3) The fourth quarter 2016 dividend was declared and paid a quarter in arrears. | |||||||||||||||||||||||||||||||||
(4) Quarter amount represents quarter annualized; year-to-date represents year-to-date actual annualized. | |||||||||||||||||||||||||||||||||
Note: Amounts may differ slightly from other schedules contained herein due to rounding. | |||||||||||||||||||||||||||||||||
Cousins Properties Incorporated | 33 | Q4 2017 Supplemental Information |
NON-GAAP FINANCIAL MEASURES - CALCULATIONS AND RECONCILIATIONS |
FUNDS FROM OPERATIONS
(unaudited; in thousands, except per share amounts)
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net Income Available to Common Stockholders | $ | 31,368 | $ | 36,892 | $ | 216,275 | $ | 79,109 | |||||||
Depreciation and amortization of real estate assets: | |||||||||||||||
Consolidated properties | 43,700 | 47,819 | 194,869 | 96,583 | |||||||||||
Discontinued properties | — | 956 | — | 47,345 | |||||||||||
Share of unconsolidated joint ventures | 2,656 | 4,146 | 13,191 | 13,904 | |||||||||||
Partners' share of real estate depreciation | (19 | ) | (3,564 | ) | (23 | ) | (3,564 | ) | |||||||
(Gain) loss on sale of depreciated properties: | |||||||||||||||
Consolidated properties | (13,330 | ) | (59,589 | ) | (133,043 | ) | (73,533 | ) | |||||||
Share of unconsolidated joint ventures | (718 | ) | — | (35,050 | ) | — | |||||||||
Non-controlling interest related to unit holders | 512 | 784 | 3,681 | 784 | |||||||||||
Funds From Operations | $ | 64,169 | $ | 27,444 | $ | 259,900 | $ | 160,628 | |||||||
Per Common Share — Diluted: | |||||||||||||||
Net Income Available Available to Common Shareholders | $ | 0.07 | $ | 0.10 | $ | 0.52 | $ | 0.31 | |||||||
Funds from Operations | $ | 0.15 | $ | 0.07 | $ | 0.61 | $ | 0.63 | |||||||
Weighted Average Shares — Diluted | 427,288 | 391,413 | 423,297 | 256,023 |
The table above shows Funds From Operations Available to Common Stockholders (“FFO”) and the related reconciliation to Net Income Available to Common Stockholders for Cousins Properties Incorporated and Subsidiaries. The Company calculated FFO in accordance with the National Association of Real Estate Investment Trusts' ("NAREIT") definition, which is net income (loss) available to common stockholders (computed in accordance with accounting principles generally accepted in the United States ("GAAP")), excluding extraordinary items, cumulative effect of change in accounting principle and gains or losses from sales of depreciable property, plus depreciation and amortization of real estate assets, impairment losses on depreciable investment property 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 an equity 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. Management believes that 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, the Company uses FFO along with other measures, to assess performance in connection with evaluating and granting incentive compensation to its officers and other key employees.
Cousins Properties Incorporated | 34 | Q4 2017 Supplemental Information |
NON-GAAP FINANCIAL MEASURES - CALCULATIONS AND RECONCILIATIONS |
Three Months Ended | Year Ended | |||||||||||||||
Cousins Net Operating Income (in thousands) | December 31, 2017 | December 31, 2016 | December 31, 2017 | December 31, 2016 | ||||||||||||
Net income | $ | 31,871 | $ | 37,887 | $ | 219,959 | $ | 80,104 | ||||||||
Net operating income from unconsolidated joint ventures | 7,334 | 8,426 | 31,053 | 28,785 | ||||||||||||
Net operating income from discontinued operations | — | 1,739 | — | 78,591 | ||||||||||||
Fee income | (2,245 | ) | (2,379 | ) | (8,632 | ) | (8,347 | ) | ||||||||
Other income | (1,925 | ) | (481 | ) | (11,518 | ) | (1,050 | ) | ||||||||
Reimbursed expenses | 860 | 796 | 3,527 | 3,259 | ||||||||||||
General and administrative expenses | 5,530 | 8,290 | 27,523 | 25,592 | ||||||||||||
Interest expense | 7,673 | 10,089 | 33,524 | 26,650 | ||||||||||||
Depreciation and amortization | 44,199 | 48,145 | 196,745 | 97,948 | ||||||||||||
Acquisition and transaction costs | 162 | 20,633 | 1,661 | 24,521 | ||||||||||||
Other expenses | 733 | 5,205 | 1,796 | 5,888 | ||||||||||||
(Gain) loss on extinguishment of debt | — | 5,180 | (2,258 | ) | 5,180 | |||||||||||
Income from unconsolidated joint ventures | (3,753 | ) | (5,418 | ) | (47,115 | ) | (10,562 | ) | ||||||||
(Gain) loss on sale of investment properties | (13,330 | ) | (63,169 | ) | (133,059 | ) | (77,114 | ) | ||||||||
Income from discontinued operations | — | 5,198 | — | (19,163 | ) | |||||||||||
Net Operating Income | $ | 77,109 | $ | 80,141 | $ | 313,206 | $ | 260,282 | ||||||||
Straight line rent | 6,714 | 8,489 | 30,973 | 18,968 | ||||||||||||
Non-cash income | 2,454 | 1,887 | 9,602 | 7,500 | ||||||||||||
Non-cash expense | (149 | ) | (148 | ) | (597 | ) | (102 | ) | ||||||||
Cash Basis Net Operating Income | $ | 68,090 | $ | 69,913 | $ | 273,228 | $ | 233,916 | ||||||||
Net Operating Income | ||||||||||||||||
Same Property | $ | 22,443 | $ | 21,673 | $ | 89,913 | $ | 86,087 | ||||||||
Non-Same Property | 54,666 | 58,468 | 223,293 | 174,195 | ||||||||||||
$ | 77,109 | $ | 80,141 | $ | 313,206 | $ | 260,282 | |||||||||
Cash Basis Net Operating Income | ||||||||||||||||
Same Property | $ | 20,674 | $ | 19,840 | $ | 82,640 | $ | 78,484 | ||||||||
Non-Same Property | 47,416 | 50,073 | 190,588 | 155,432 | ||||||||||||
$ | 68,090 | $ | 69,913 | $ | 273,228 | $ | 233,916 | |||||||||
Cousins Properties Incorporated | 35 | Q4 2017 Supplemental Information |
NON-GAAP FINANCIAL MEASURES - CALCULATIONS AND RECONCILIATIONS |
Three Months Ended | Year Ended | |||||||||||||||
Legacy Parkway Net Operating Income (in thousands) | December 31, 2017 | December 31, 2016 | December 31, 2017 | December 31, 2016 | ||||||||||||
Net income | $ | 31,871 | $ | 37,887 | $ | 219,959 | $ | 80,104 | ||||||||
Net operating income from unconsolidated joint ventures | 7,334 | 8,426 | 31,053 | 28,785 | ||||||||||||
Net operating income from discontinued operations | — | 1,739 | — | 78,591 | ||||||||||||
Fee income | (2,245 | ) | (2,379 | ) | (8,632 | ) | (8,347 | ) | ||||||||
Other income | (1,925 | ) | (481 | ) | (11,518 | ) | (1,050 | ) | ||||||||
Reimbursed expenses | 859 | 796 | 3,527 | 3,259 | ||||||||||||
General and administrative expenses | 5,530 | 8,290 | 27,523 | 25,592 | ||||||||||||
Interest expense | 7,673 | 10,089 | 33,524 | 26,650 | ||||||||||||
Depreciation and amortization | 44,199 | 48,145 | 196,745 | 97,948 | ||||||||||||
Acquisition and transaction costs | 162 | 20,633 | 1,661 | 24,521 | ||||||||||||
Other expenses | 733 | 5,205 | 1,796 | 5,888 | ||||||||||||
(Gain) loss on extinguishment of debt | — | 5,180 | (2,258 | ) | 5,180 | |||||||||||
Income from unconsolidated joint ventures | (3,753 | ) | (5,418 | ) | (47,115 | ) | (10,562 | ) | ||||||||
(Gain) loss on sale of investment properties | (13,330 | ) | (63,169 | ) | (133,059 | ) | (77,114 | ) | ||||||||
Income from discontinued operations | — | 5,198 | — | (19,163 | ) | |||||||||||
Net Operating Income for non-Legacy Parkway Same Properties | (36,174 | ) | (41,820 | ) | (152,059 | ) | (221,961 | ) | ||||||||
Net Operating Income for Legacy Parkway Same Properties included in Cousins' consolidated results | 40,934 | 38,321 | 161,147 | 38,321 | ||||||||||||
Net Operating Income for Legacy Parkway Same Properties not included in Cousins' consolidated results (1) | — | 2,091 | — | 108,795 | ||||||||||||
Legacy Parkway Same Property Net Operating Income | 40,934 | 40,412 | 161,147 | 147,116 | ||||||||||||
Legacy Parkway Same Property Net Operating Income | 40,934 | 40,412 | 161,147 | 147,116 | ||||||||||||
Straight line rent | (3,320 | ) | (5,161 | ) | (16,040 | ) | (16,558 | ) | ||||||||
Non-cash income | (1,586 | ) | (1,189 | ) | (5,044 | ) | (2,963 | ) | ||||||||
Non-cash expense | 163 | 170 | 650 | 567 | ||||||||||||
Legacy Parkway Same Property Cash Basis Net Operating Income | $ | 36,191 | $ | 34,232 | $ | 140,713 | $ | 128,162 | ||||||||
(1) Cousins merged with Parkway Properties, Inc. on October 6, 2016. Therefore, the operations of the Parkway properties acquired in the merger are included in the consolidated operations of Cousins from October 6, 2016 forward. The operations of the Parkway properties from periods prior to October 6, 2016 must be added to the operations including and subsequent to October 6, 2016 to present a full comparable period for purposes of reporting Legacy Parkway Same Property information. | ||||||||||||||||
Cousins Properties Incorporated | 36 | Q4 2017 Supplemental Information |
NON-GAAP FINANCIAL MEASURES - DISCUSSION |
The Company uses non-GAAP financial measures in its filings and other public disclosures. The following is a list of non-GAAP financial measures that the Company commonly uses and a description for each measure of (1) the reasons that management believes the measure is useful to investors and (2) if material, any additional uses of the measure by management of the Company. “2nd Generation Tenant Improvements and Leasing Costs and Building Capital Expenditures” is used in the valuation and analysis of real estate. Because the Company develops and acquires properties, in addition to operating existing properties, its property acquisition and development expenditures included in the Statements of Cash Flows includes both initial costs associated with developing and acquiring investment assets and those expenditures necessary for operating and maintaining existing properties at historic performance levels. The latter costs are referred to as second generation costs and are useful in evaluating the economic performance of the asset and in valuing the asset. Accordingly, the Company discloses the portion of its property acquisition and development expenditures that pertain to second generation space in its operating properties. The Company excludes from second generation costs amounts incurred to lease vacant space in newly acquired buildings as well as building improvements on newly acquired buildings that management identifies as necessary to bring the building to the Company's operational standards. In addition, the Company excludes leasing costs and building improvements associated with properties identified as under redevelopment or repositioning. “Cash Basis Net Operating Income” represents Net Operating Income excluding straight-line rents, amortization of lease inducements, amortization of acquired above and below market rents, and non-cash ground lease expense. “EBITDA” represents FFO plus consolidated and Company share of unconsolidated interest expense, non-real estate depreciation and amortization, income taxes, impairment losses, predevelopment charges, loss on debt extinguishment, gain on sale of third party business, participation interest income, acquisition and merger costs, and preferred stock dividends and original issuance costs. Management believes that EBITDA provides analysts and investors with appropriate information to use in various ratios that evaluate the Company's level of debt. "Funds Available for Distribution” (“FAD”) represents FFO adjusted to exclude the effect of straight-line rent and above and below market lease amortization less 2nd Generation Tenant Improvements and Leasing Costs and Building Capital Expenditures. Management believes that FAD provides analysts and investors with information that assists in the comparability of the Company's dividend policy with other real estate companies. “FAD Before Certain Charges” represents FAD before preferred share issuance costs write off, non-depreciable impairment losses, predevelopment and other charges, loss on debt extinguishment, acquisition and merger costs, interest income and separation charges. Management believes that FAD Before Certain Charges provides analysts and investors with appropriate information related to the Company's core operations and for comparability of the results of its operations and dividend policy with other real estate companies. “Funds From Operations Available to Common Stockholders” (“FFO”) is a supplemental operating performance measure used in the real estate industry. The Company calculates FFO in accordance with the National Association of Real Estate Investment | Trusts' (“NAREIT”) definition, which is net income (loss) available to common stockholders (computed in accordance with accounting principles generally accepted in the United States (“GAAP”)), excluding extraordinary items, cumulative effect of change in accounting principle and gains or losses from sales of depreciable real property, plus depreciation and amortization of real estate assets, impairment losses on depreciable investment property 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 an equity 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. Management believes that 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, the Company uses FFO and FFO per share, along with other measures, as a performance measure for incentive compensation to its officers and other key employees. “FFO Before Certain Charges” represents FFO before preferred share issuance costs write off, non-depreciable impairment losses, predevelopment and other charges, loss on debt extinguishment, acquisition and merger costs, gain on sale of third party business, participation interest income and separation charges. Management believes that FFO Before Certain Charges provides analysts and investors with appropriate information related to the Company's core operations and for comparability of the results of its operations with other real estate companies. “Net Operating Income” ("NOI") is used by industry analysts, investors and Company management to measure operating performance of the Company's properties. Net Operating Income, which is rental property revenues less rental property operating expenses, excludes certain components from net income in order to provide results that are more closely related to a property's results of operations. Certain items, such as interest expense, while included in FFO and net income, do not affect the operating performance of a real estate asset and are often incurred at the corporate level as opposed to the property level. As a result, management uses only those income and expense items that are incurred at the property level to evaluate a property's performance. Depreciation and amortization are also excluded from Net Operating Income for the reasons described under FFO above. “Same Property Net Operating Income” represents Net Operating Income or Cash Basis Net Operating Income for those office properties that have been fully operational in each of the comparable reporting periods. A fully operational property is one that achieved 90% economic occupancy or has been substantially complete and owned by the Company for each of the two periods presented. Same-Property Net Operating Income or Cash Basis Same Property Net Operating Income allows analysts, investors and management to analyze continuing operations and evaluate the growth trend of the Company's portfolio. |
Cousins Properties Incorporated | 37 | Q4 2017 Supplemental Information |