Form 10-Q September 30, 2012
Table of Contents


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
þ
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2012
OR
o
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number: 001-11312
COUSINS PROPERTIES INCORPORATED
(Exact name of registrant as specified in its charter)
GEORGIA
(State or other jurisdiction of
incorporation or organization)
58-0869052
(I.R.S. Employer
Identification No.)
191 Peachtree Street, Suite 500, Atlanta, Georgia
(Address of principal executive offices)
30303-1740
(Zip Code)
(404) 407-1000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o
Smaller reporting company o
 
 
(Do not check if a smaller reporting company)
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class
 
Outstanding at October 26, 2012
Common Stock, $1 par value per share
 
104,119,830 shares

Table of Contents


 
Page No.
 
 

Table of Contents


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 Company's Annual Report on Form 10-K for the year ended December 31, 2011. These forward-looking statements include information about possible or assumed future results of the Company's business and the Company's 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:
•the Company's business and financial strategy;
•the Company's ability to obtain future financing arrangements;
•future investments and future dispositions of assets;
•the Company's understanding of its competition and its ability to compete effectively;
•projected operating results;
•market and industry trends;
•estimates relating to future distributions;
•projected capital expenditures; and
•interest rates.
The forward-looking statements are based upon management's beliefs, assumptions and expectations of the Company's future performance, taking into account information currently available. These beliefs, assumptions and expectations may change as a result of many possible events or factors, not all of which are known. If a change occurs, the Company's business, financial condition, liquidity and results of operations may vary materially from those expressed in forward-looking statements. Actual results may vary from forward-looking statements due to, but not limited to, the following:
•
availability and terms of capital and financing, to refinance indebtedness as it matures;
•
failure of purchase, sale or other contracts to ultimately close;
•
the availability of buyers and adequate pricing with respect to the disposition of assets;
•
risks and uncertainties related to national and local economic conditions, the real estate industry in general and in specific markets, and the commercial markets in particular;
•
changes in the Company's business and financial strategy and/or continued market and economic conditions requiring the recognition of impairment losses;
•
the effects of the sale of the Company's third party management business;
•
leasing risks, including the inability to obtain new tenants or renew expiring tenants on favorable terms, or at all, and the ability to lease newly developed, recently acquired or current vacant space;
•
financial condition of existing tenants;
•
volatility in interest rates and insurance rates;
•
the availability of sufficient investment opportunities;
•
competition from other developers or investors;
•
the risks associated with real estate developments and acquisitions (such as construction delays, cost overruns and leasing risk);
•
loss of key personnel;
•
potential liability for uninsured losses, condemnation or environmental issues;
•
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; and
•
any failure to continue to qualify for taxation as a real estate investment trust.
The words “believes,” “expects,” “anticipates,” “estimates,” “plans,” “may,” “intend,” “will,” or similar expressions are intended to identify forward-looking statements. Although the Company believes its plans, intentions and expectations reflected in any forward-looking statements are reasonable, the Company can give no assurance that such plans, intentions or expectations will be achieved. The Company undertakes 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.


2
Table of Contents


PART I — FINANCIAL INFORMATION
Item 1.    Financial Statements.
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
 
September 30, 2012
 
December 31, 2011
 
(unaudited)
 
 
ASSETS
 
 
 
PROPERTIES:
 
 
 
Operating properties, net of accumulated depreciation of $247,774 and $289,473 in 2012 and 2011, respectively
$
674,615

 
$
884,652

Projects under development
24,668

 
11,325

Land held
51,217

 
54,132

Residential lots
11,965

 
13,195

Other
431

 
637

Total properties
762,896

 
963,941

 
 
 
 
OPERATING PROPERTIES AND RELATED ASSETS HELD FOR SALE, net of accumulated depreciation of $46,936 in 2012
174,054

 
—

 
 
 
 
CASH AND CASH EQUIVALENTS
5,469

 
4,858

RESTRICTED CASH
2,749

 
4,929

NOTES AND ACCOUNTS RECEIVABLE, net of allowance for doubtful accounts of $1,207 and $5,100 in 2012 and 2011, respectively
11,163

 
11,359

DEFERRED RENTS RECEIVABLE
37,840

 
37,141

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
139,782

 
160,587

OTHER ASSETS
65,148

 
52,720

 
 
 
 
TOTAL ASSETS
$
1,199,101

 
$
1,235,535

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
NOTES PAYABLE
$
518,630

 
$
539,442

ACCOUNTS PAYABLE AND OTHER LIABILITIES
40,073

 
38,592

DEFERRED INCOME
12,498

 
17,343

TOTAL LIABILITIES
571,201

 
595,377

 
 
 
 
COMMITMENTS AND CONTINGENT LIABILITIES

 

 
 
 
 
REDEEMABLE NONCONTROLLING INTERESTS
—

 
2,763

 
 
 
 
STOCKHOLDERS’ INVESTMENT:
 
 
 
Preferred stock, 20,000,000 shares authorized, $1 par value:
 
 
 
7.75% Series A cumulative redeemable preferred stock, $25 liquidation preference; 2,993,090 shares issued and outstanding in 2012 and 2011
74,827

 
74,827

7.50% Series B cumulative redeemable preferred stock, $25 liquidation preference; 3,791,000 shares issued and outstanding in 2012 and 2011
94,775

 
94,775

Common stock, $1 par value, 250,000,000 shares authorized, 107,705,782 and 107,272,078 shares issued in 2012 and 2011, respectively
107,706

 
107,272

Additional paid-in capital
689,194

 
687,835

Treasury stock at cost, 3,570,082 shares in 2012 and 2011
(86,840
)
 
(86,840
)
Distributions in excess of cumulative net income
(285,508
)
 
(274,177
)
TOTAL STOCKHOLDERS’ INVESTMENT
594,154

 
603,692

 
 
 
 
Nonredeemable noncontrolling interests
33,746

 
33,703

TOTAL EQUITY
627,900

 
637,395

 
 
 
 
TOTAL LIABILITIES AND EQUITY
$
1,199,101

 
$
1,235,535

 
 
 
 
See accompanying notes.
 
 
 

3
Table of Contents
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)


 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2012
 
2011
 
2012
 
2011
REVENUES:
 
 
 
 
 
 
 
Rental property revenues
$
32,592

 
$
27,022

 
$
92,846

 
$
78,802

Fee income
7,343

 
3,909

 
12,985

 
10,729

Residential lot sales
732

 
165

 
2,216

 
410

Other
3,061

 
447

 
4,587

 
6,154

 
43,728

 
31,543

 
112,634

 
96,095

COSTS AND EXPENSES:
 
 
 
 
 
 
 
Rental property operating expenses
14,400

 
11,775

 
39,595

 
33,658

Residential lot and outparcel cost of sales
354

 
158

 
1,334

 
303

General and administrative expenses
5,255

 
4,295

 
17,523

 
17,828

Interest expense
5,793

 
6,601

 
17,936

 
21,503

Reimbursed expenses
1,235

 
1,866

 
3,968

 
4,749

Depreciation and amortization
11,567

 
8,719

 
32,526

 
25,562

Impairment losses
488

 
—

 
488

 
3,508

Separation expenses
574

 
15

 
866

 
193

Other
2,257

 
773

 
3,504

 
4,760

 
41,923

 
34,202

 
117,740

 
112,064

LOSS ON EXTINGUISHMENT OF DEBT
—

 
(74
)
 
(94
)
 
(74
)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES, UNCONSOLIDATED JOINT VENTURES AND SALE OF INVESTMENT PROPERTIES
1,805

 
(2,733
)
 
(5,200
)
 
(16,043
)
(PROVISION) BENEFIT FOR INCOME TAXES FROM OPERATIONS
(60
)
 
180

 
(120
)
 
217

INCOME FROM UNCONSOLIDATED JOINT VENTURES
2,269

 
2,660

 
14,217

 
7,468

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES
4,014

 
107

 
8,897

 
(8,358
)
GAIN ON SALE OF INVESTMENT PROPERTIES
60

 
59

 
146

 
177

INCOME (LOSS) FROM CONTINUING OPERATIONS
4,074

 
166

 
9,043

 
(8,181
)
 
 
 
 
 
 
 
 
INCOME (LOSS) FROM DISCONTINUED OPERATIONS:
 
 
 
 
 
 
 
Income (loss) from discontinued operations
1,760

 
2,619

 
(5,093
)
 
6,503

Gain on sale of discontinued operations, net
7,444

 
2,821

 
8,204

 
2,437

 
9,204

 
5,440

 
3,111

 
8,940

NET INCOME
13,278

 
5,606

 
12,154

 
759

NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
(608
)
 
(2,192
)
 
259

 
(3,454
)
NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST
12,670

 
3,414

 
12,413

 
(2,695
)
DIVIDENDS TO PREFERRED STOCKHOLDERS
(3,226
)
 
(3,226
)
 
(9,680
)
 
(9,680
)
 
 
 
 
 
 
 
 
NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS
$
9,444

 
$
188

 
$
2,733

 
$
(12,375
)
 
 
 
 
 
 
 
 
PER COMMON SHARE INFORMATION — BASIC AND DILUTED:
 
 
 
 
 
 
 
Income (loss) from continuing operations attributable to controlling interest
$
—

 
$
(0.05
)
 
$
—

 
$
(0.21
)
Income from discontinued operations
0.09

 
0.05

 
0.03

 
0.09

Net income (loss) available to common stockholders
$
0.09

 
$
—

 
$
0.03

 
$
(0.12
)
 
 
 
 
 
 
 
 
WEIGHTED AVERAGE SHARES — BASIC
104,193

 
103,715

 
104,120

 
103,631

WEIGHTED AVERAGE SHARES — DILUTED
104,203

 
103,715

 
104,125

 
103,631

DIVIDENDS DECLARED PER COMMON SHARE
$
0.045

 
$
0.045

 
$
0.135

 
$
0.135

See accompanying notes

4
Table of Contents


COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
Nine Months Ended September 30, 2012 and 2011
(unaudited, in thousands)
 
 
Preferred
Stock
 
Common
Stock
 
Additional
Paid-In
Capital
 
Treasury
Stock
 
Distributions in
Excess of
Net Income
 
Stockholders’
Investment
 
Nonredeemable
Noncontrolling
Interests
 
Total
Equity
Balance December 31, 2011
 
$
169,602

 
$
107,272

 
$
687,835

 
$
(86,840
)
 
$
(274,177
)
 
$
603,692

 
$
33,703

 
$
637,395

Net income
 
—

 
—

 
—

 
—

 
12,413

 
12,413

 
1,743

 
14,156

Common stock issued pursuant to:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Director stock grants
 
—

 
72

 
468

 
—

 
—

 
540

 
—

 
540

Restricted stock grants, net of amounts withheld for income taxes
 
—

 
448

 
(617
)
 
—

 
—

 
(169
)
 
—

 
(169
)
Amortization of stock options and restricted stock, net of forfeitures
 
—

 
(86
)
 
1,508

 
—

 
—

 
1,422

 
—

 
1,422

Distributions to noncontrolling interests
 
—

 
—

 
—

 
—

 
—

 
—

 
(1,700
)
 
(1,700
)
Cash preferred dividends paid
 
—

 
—

 
—

 
—

 
(9,680
)
 
(9,680
)
 
—

 
(9,680
)
Cash common dividends paid
 
—

 
—

 
—

 
—

 
(14,064
)
 
(14,064
)
 
—

 
(14,064
)
Balance September 30, 2012
 
$
169,602

 
$
107,706

 
$
689,194

 
$
(86,840
)
 
$
(285,508
)
 
$
594,154

 
$
33,746

 
$
627,900

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance December 31, 2010
 
$
169,602

 
$
106,962

 
$
684,551

 
$
(86,840
)
 
$
(114,196
)
 
$
760,079

 
$
32,772

 
$
792,851

Net income (loss)
 
—

 
—

 
—

 
—

 
(2,695
)
 
(2,695
)
 
3,358

 
663

Common stock issued pursuant to:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Director stock grants
 
—

 
82

 
625

 
—

 
—

 
707

 
—

 
707

Stock option exercises
 
—

 
4

 
30

 
—

 
—

 
34

 
—

 
34

Restricted stock grants, net of amounts withheld for income taxes
 
—

 
244

 
(263
)
 
—

 
—

 
(19
)
 
—

 
(19
)
Amortization of stock options and restricted stock, net of forfeitures
 
—

 
(8
)
 
1,691

 
—

 
—

 
1,683

 
—

 
1,683

Change in fair value of redeemable noncontrolling interests
 
—

 
—

 
(526
)
 
—

 
—

 
(526
)
 
—

 
(526
)
Contributions from noncontrolling interests
 
—

 
—

 
—

 
—

 
—

 
—

 
1,300

 
1,300

Distributions to noncontrolling interests
 
—

 
—

 
—

 
—

 
—

 
—

 
(1,712
)
 
(1,712
)
Cash preferred dividends paid
 
—

 
—

 
—

 
—

 
(9,680
)
 
(9,680
)
 
—

 
(9,680
)
Cash common dividends paid
 
—

 
—

 
—

 
—

 
(13,982
)
 
(13,982
)
 
—

 
(13,982
)
Balance September 30, 2011
 
$
169,602

 
$
107,284

 
$
686,108

 
$
(86,840
)
 
$
(140,553
)
 
$
735,601

 
$
35,718

 
$
771,319

See accompanying notes.

5
Table of Contents
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)


 
Nine Months Ended September 30,
 
2012
2011
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
Net income
$
12,154

$
759

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Gain on sales of investment properties and other, net, including discontinued operations
(8,350
)
(2,614
)
Loss on extinguishment of debt
94

74

Impairment losses
12,721

3,508

Depreciation and amortization, including discontinued operations
41,148

40,283

Amortization of deferred financing costs
784

1,480

Stock-based compensation
1,422

1,683

Effect of recognizing rental revenues on a straight-line or market basis
(3,056
)
(5,302
)
Income from unconsolidated joint ventures
(14,217
)
(7,468
)
Operating distributions from unconsolidated joint ventures
12,065

7,416

Residential lot and multi-family cost of sales, net of closing costs paid
1,385

2,547

Residential lot development expenditures
(51
)
(818
)
Changes in other operating assets and liabilities:
 
 
Change in other receivables and other assets
(2,069
)
(1,015
)
Change in accounts payable and other liabilities
(1,619
)
(2,052
)
Net cash provided by operating activities
52,411

38,481

 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
Proceeds from sales of investment properties and other
73,052

69,615

Property acquisition, development and tenant asset expenditures
(94,118
)
(34,700
)
Investment in unconsolidated joint ventures
(6,571
)
(13,885
)
Distributions from unconsolidated joint ventures
25,767

5,403

Collection of notes receivable
1,156

348

Change in other assets
(2,733
)
(3,210
)
Change in restricted cash
2,180

10,007

Net cash provided by (used in) investing activities
(1,267
)
33,578

 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
Proceeds from credit facility
414,200

98,850

Repayments of credit facility
(518,950
)
(84,450
)
Proceeds from notes payable and construction facilities
111,632

—

Repayment of notes payable
(27,694
)
(58,401
)
Payment of loan issuance costs
(3,419
)
(442
)
Common stock issued, net of expenses
—

18

Common dividends paid
(14,064
)
(13,982
)
Preferred dividends paid
(9,680
)
(9,680
)
Contributions from noncontrolling interests
—

1,300

Distributions to noncontrolling interests
(2,558
)
(7,237
)
Net cash used in financing activities
(50,533
)
(74,024
)
 
 
 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
611

(1,965
)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
4,858

7,599

CASH AND CASH EQUIVALENTS AT END OF PERIOD
$
5,469

$
5,634

 
 
 
INTEREST PAID, NET OF AMOUNTS CAPITALIZED
$
17,320

$
19,679

INCOME TAXES REFUNDED
$
—

$
377

 
 
 
SIGNFICANT NON-CASH TRANSACTIONS:
 
 
  Transfer from other assets to investment in unconsolidated joint ventures
$
—

$
6,050

  Transfer from operating properties to operating properties and related assets held for sale
$
174,054

$
—


See accompanying notes.

6
Table of Contents


COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)
1. BASIS OF PRESENTATION
The consolidated financial statements included herein include the accounts of Cousins Properties Incorporated (“Cousins”) and its consolidated subsidiaries, including Cousins Real Estate Corporation and its subsidiaries (“CREC”). All of the entities included in the consolidated financial statements are hereinafter referred to collectively as the “Company.”
The Company develops, acquires, manages and owns primarily office and retail real estate properties. Cousins has elected to be taxed as a real estate investment trust (“REIT”) and intends to, among other things, distribute 100% of its federal taxable income to stockholders, thereby eliminating any liability for federal income taxes under current law. Therefore, the results included herein do not include a federal income tax provision for Cousins. CREC operates as a taxable REIT subsidiary and is taxed separately from Cousins as a C-Corporation. Accordingly, if applicable, the Statements of Operations include a provision for, or benefit from, CREC's income taxes.
The condensed consolidated financial statements are unaudited and were prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, these financial statements reflect all adjustments necessary (which adjustments are of a normal and recurring nature) for the fair presentation of the Company's financial position as of September 30, 2012 and the results of operations for the three and nine months ended September 30, 2012 and 2011. The results of operations for the three and nine months ended September 30, 2012 are not necessarily indicative of results expected for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011. The accounting policies employed are substantially the same as those shown in Note 2 to the consolidated financial statements included in such Form 10-K.
During the third quarter of 2012, the Company identified an error in the previous classification of the $12.2 million impairment loss associated with the sale The Avenue Collierville, which occurred during the second quarter of 2012. For the nine month period ended September 30, 2012, the Company has corrected the classification of the impairment loss from impairment losses to income (loss) from discontinued operations on the Consolidated Statements of Operations. Management does not believe such correction is material to the previously issued financial statements. In the second quarter of 2012, the Company reclassified deferred rents receivable from notes and accounts receivable to a separate line on the Consolidated Balance Sheets.  In addition, deferred gain, which was previously presented as a separate line on the Consolidated Balance Sheets, was reclassified to deferred income.  Also, accounts payable and accrued liabilities were revised to include security and construction deposits, which were previously presented in deposits and deferred income.   Prior periods have been revised to conform to this new presentation.
2. NOTES PAYABLE, INTEREST EXPENSE AND COMMITMENTS AND CONTINGENCIES
The following table summarizes the terms and amounts of the Company’s notes payable at September 30, 2012 and December 31, 2011 ($ in thousands):

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Description
 
Interest Rate
 
Term/Amortization Period (Years)
 
Maturity
 
September 30, 2012
 
December 31, 2011
Terminus 100 mortgage note
 
5.25
%
 
12/30
 
1/1/2023
 
$
136,651

 
$
138,194

The American Cancer Society Center mortgage note
 
6.45
%
 
10/30
 
9/1/2017
 
134,615

 
135,650

191 Peachtree Tower mortgage note (interest only until May 1, 2016) (see discussion below)
 
3.35
%
 
6.5/30
 
10/1/2018
 
100,000

 
—

Credit Facility, unsecured (see discussion below)
 
1.71
%
 
4/N/A
 
2/28/2016
 
93,500

 
198,250

Meridian Mark Plaza mortgage note
 
6.00
%
 
10/30
 
8/1/2020
 
26,286

 
26,554

100/200 North Point Center East mortgage note (see discussion below)
 
5.39
%
 
5/30
 
6/1/2012
 
—

 
24,478

The Points at Waterview mortgage note
 
5.66
%
 
10/25
 
1/1/2016
 
15,775

 
16,135

Mahan Village construction facility
 
1.86
%
 
3/N/A
 
9/12/2014
 
11,633

 
1

Callaway Gardens
 
4.13
%
 
N/A
 
11/18/2013
 
170

 
180

 
 
 
 
 
 
 
 
$
518,630

 
$
539,442

Credit Facility
On February 28, 2012, the Company amended its $350 million senior unsecured line of credit by entering into the Second Amended and Restated Credit Agreement (the “Credit Facility”), which replaced the Amended and Restated Credit Agreement dated August 29, 2007 (the “Old Facility"). The Credit Facility amended the Old Facility by, among other things, extending the maturity date from August 29, 2012 to February 28, 2016, with an additional one-year extension option upon certain conditions and with the payment of a fee. It also added an accordion feature, which authorized the maximum amount available to be borrowed to increase to $500 million under certain conditions and in specified increments.
The Credit Facility contains financial covenants that require, among other things, the maintenance of an unencumbered interest coverage ratio of at least 2.00; a fixed charge coverage ratio of at least 1.40, increasing to 1.50 during any extension period; and maximum leverage of no more than 60%.
The Credit Facility also reduced the Company's interest rate spreads on borrowings. The Company may borrow funds at an interest rate, at its option, calculated as either (1) the current London Interbank Offered Rate (LIBOR) plus the applicable spread as detailed below or (2) the greater of Bank of America's prime rate, the federal funds rate plus 0.50% or the one-month LIBOR plus 1.0% (the “Base Rate”), plus the applicable spread as detailed below. The Company also pays an annual facility fee on the total commitment under the Credit Facility. The pricing spreads and the Facility Fee under the Credit Facility are as follows:
Leverage Ratio
 
Applicable % Spread for LIBOR
 
Applicable % Spread for Base Rate
 
Annual Facility Fee %
 
 
 
 
 
 
 
≤ 40%
 
1.50%
 
0.50%
 
0.20%
>40% but ≤ 50%
 
1.60%
 
0.60%
 
0.25%
>50% but ≤ 55%
 
1.90%
 
0.90%
 
0.35%
>55% but ≤ 60%
 
2.10%
 
1.10%
 
0.40%
The Company selected the LIBOR for interest calculation purposes in September 2012, and the applicable spread at September 30, 2012 was 1.50%.
Other Debt Activity
On March 28, 2012, the Company entered into a $100 million mortgage note payable secured by 191 Peachtree Tower, a 1.2 million square foot office building in Atlanta, Georgia. The interest rate is 3.35% and interest-only payments are due monthly through May 1, 2016, followed by monthly principal and interest payments through October 1, 2018, the maturity date.
In April 2012, the Company prepaid the 100/200 North Point Center East mortgage note in full, without penalty.
Fair Value
At September 30, 2012 and December 31, 2011, the aggregate estimated fair values of the Company's notes payable were $539.9 million and $568.5 million, respectively, calculated by discounting future cash flows using estimated rates at which similar loans could have been obtained at those respective dates. This fair value calculation is considered to be a Level 2 calculation under the guidelines as set forth in ASC 820, “Fair Value Measurements and Disclosures,” as the Company utilizes estimates of market rates for similar type loans from third party brokers in its discounted cash flow calculations.
Other Information

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For the three and nine months ended September 30, 2012 and 2011, interest expense was as follows (in thousands):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Total interest incurred
$
6,337

 
$
6,838

 
$
19,395

 
$
21,740

Interest capitalized
(544
)
 
(237
)
 
(1,459
)
 
(237
)
Total interest expense
$
5,793

 
$
6,601

 
$
17,936

 
$
21,503

The real estate and other assets of The American Cancer Society Center (the “ACS Center”) are restricted under the ACS Center loan agreement in that they are not available to settle debts of the Company. However, provided that the ACS Center loan has not incurred any uncured event of default, as defined in the loan agreement, the cash flows from the ACS Center, after payments of debt service, operating expenses and reserves, are available for distribution to the Company.
At September 30, 2012, the Company had outstanding letters of credit and performance bonds totaling $2.7 million. As a lessor, the Company has $14.8 million in future obligations under leases to fund tenant improvements as of September 30, 2012. As a lessee, the Company has future obligations under ground and office leases of approximately $15.9 million at September 30, 2012.
Litigation
The Company is subject to various legal proceedings, claims and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. The Company records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, the Company accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, the Company discloses the nature and estimate of the possible loss of the litigation. The Company does not disclose information with respect to litigation where an unfavorable outcome is considered to be remote. Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business or financial condition of the Company.
3. EARNINGS PER SHARE
Net income (loss) per share-basic is calculated as net income (loss) available to common stockholders divided by the weighted average number of common shares outstanding during the period, including nonvested restricted stock which has nonforfeitable dividend rights. Net income (loss) per share-diluted is calculated as net income (loss) available to common stockholders divided by the diluted weighted average number of common shares outstanding during the period. Diluted weighted average number of common shares uses the same weighted average share number as in the basic calculation and adds the potential dilution, if any, that would occur if stock options (or any other contracts to issue common stock) were exercised and resulted in additional common shares outstanding, calculated using the treasury stock method. The numerator is reduced for the effect of preferred dividends in both the basic and diluted net income (loss) per share calculations. Weighted average shares-basic and diluted for the three and nine months ending September 30, 2012 and 2011 are as follows (in thousands):
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Weighted average shares — basic
104,193

 
103,715

 
104,120

 
103,631

Dilutive potential common shares — stock options
10

 
—

 
5

 
—

Weighted average shares — diluted
104,203

 
103,715

 
104,125

 
103,631

Stock options are dilutive when the average market price of the Company's stock during the period exceeds the option exercise price. However, in periods where the Company is in a net loss position, the dilutive effect of stock options is not included in the diluted weighted average shares total.
Anti-dilutive stock options represent stock options which are outstanding but which are not exercisable during the period because the exercise price exceeded the average market value of the Company's stock. These anti-dilutive stock options are not included in the current calculation of dilutive weighted average shares, but could be dilutive in the future. Total weighted average

9
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anti-dilutive stock options for each of the periods are as follows (in thousands):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Anti-dilutive options
4,795

 
6,479

 
4,799

 
6,453

4. STOCK-BASED COMPENSATION
The Company has several types of stock-based compensation - stock options, restricted stock, long-term incentive awards and restricted stock units (“RSUs”) - which are described in Note 6 of “Notes to Consolidated Financial Statements” in the Company's Annual Report on Form 10-K for the year ended December 31, 2011. The expense related to certain stock-based compensation awards is fixed. The expense related to other awards fluctuates from period to period dependent, in part, on the Company's stock price. The Company recorded net stock-based compensation expense of $334,000 and an expense reversal of $435,000 for the three months ended September 30, 2012 and 2011, respectively, and recorded net stock-based compensation of $2.5 million and $1.3 million for the nine months ended September 30, 2012 and 2011, respectively.
The Company made restricted stock grants in 2012 of 261,973 shares to key employees, which vest ratably over a three-year period. In addition, the Company awarded two types of performance-based RSUs to key employees based on the following performance metrics: (1) Total Stockholder Return of the Company, as defined, as compared to the companies in the SNL US REIT Office index (“TSR SNL RSUs”), and (2) the ratio of cumulative funds from operations per share to targeted cumulative funds from operations per share (“FFO RSUs”) as defined in the plan. The performance period for both awards is January 1, 2012 to December 31, 2014, and the targeted units awarded of TSR SNL RSUs and FFO RSUs is 162,783 and 101,918, respectively. The ultimate payout of these awards can range from 0% to 200% of the targeted number of units depending on the achievement of the performance metrics described above. Both of these types of RSUs cliff vest on February 15, 2015 and are dependent upon the attainment of required service and performance criteria. The number of RSUs vesting will be determined at that date, and the payout per unit will be equal to the average closing price on each trading day during the 30-day period ending on December 31, 2014. The TSR SNL RSUs are expensed using a quarterly Monte Carlo valuation over the vesting period. The FFO RSUs are expensed over the vesting period using the fair market value of the Company's stock at the reporting date multiplied by the anticipated number of units to be paid based on the current estimate of what the ratio is expected to be upon vesting.
Also in 2012, the Company made a special grant of restricted stock of 208,333 shares to its Chief Executive Officer, which vests ratably over a three-year period. Additionally, the Company issued performance-based RSUs to the Chief Executive Officer. The targeted number of units awarded is 281,532. The payout of these awards can range from 0% to 150% of the targeted number of units depending on the Total Stockholder Return of the Company, as defined on an absolute basis, compared to the total stockholder return for the companies in the SNL US REIT Office Index. The performance period of the awards is from January 1, 2012 to December 31, 2016 with interim performance measurement dates at each of the third, fourth and fifth anniversaries. To the extent that the Company has attained the defined performance goals at the end each of these periods, one-third of the units may be credited after each of the third and fourth anniversaries, with the balance credited at the end of the fifth anniversary, and to be awarded subject to continuous employment on the fifth anniversary. This award is expensed using a quarterly Monte Carlo valuation over the vesting period. The number of RSUs vesting under this award will be determined at the fifth anniversary date of the grant, and the cash payout per unit will be equal to the average closing price on each trading day during the 30-day period ending with such date.
5. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
The Company describes its investments in unconsolidated joint ventures in Note 4 of “Notes to Consolidated Financial Statements” in its Annual Report on Form 10-K for the year ended December 31, 2011. The following table summarizes balance sheet data of the Company's unconsolidated joint ventures as of September 30, 2012 and December 31, 2011 (in thousands):

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Total Assets
 
Total Debt
 
Total Equity
 
Company’s Investment
 
SUMMARY OF FINANCIAL POSITION:
 
2012
 
2011
 
2012
 
2011
 
2012
 
2011
 
2012
 
2011
 
 Palisades West LLC
 
$
120,035

 
$
124,588

 
$
—

 
$
—

 
$
79,025

 
$
81,635

 
$
41,259

 
$
42,616

 
 EP I LLC
 
74,387

 
33,343

 
33,525

 
1

 
32,999

 
29,137

 
28,175

 
24,827

 
 Cousins Watkins LLC
 
54,888

 
56,096

 
28,331

 
28,571

 
25,647

 
26,893

 
16,439

 
16,321

 
 CF Murfreesboro Associates
 
122,685

 
125,668

 
95,586

 
98,922

 
25,125

 
24,810

 
14,509

 
14,421

 
 CP Venture IV Holdings LLC
 
290,149

 
301,352

 
35,572

 
36,031

 
246,690

 
255,881

 
14,092

 
14,694

 
 Charlotte Gateway Village, LLC
 
144,152

 
146,854

 
72,046

 
83,097

 
68,705

 
62,423

 
10,308

 
10,333

 
 Temco Associates, LLC
 
8,404

 
23,653

 
—

 
2,787

 
8,056

 
20,646

 
4,006

 
7,363

 
 MSREF/ Cousins Terminus 200 LLC
 
95,641

 
92,421

 
74,117

 
68,562

 
19,927

 
17,967

 
3,984

 
3,593

 
 CL Realty, L.L.C.
 
7,274

 
44,481

 
—

 
1,056

 
6,927

 
42,932

 
3,464

 
22,413

 
 CP Venture LLC entities
 
100,258

 
102,178

 
—

 
—

 
98,509

 
99,942

 
3,192

 
3,343

 
 Pine Mountain Builders, LLC
 
225

 
429

 
—

 
—

 
41

 
153

 
209

 
632

 
 Ten Peachtree Place Associates
 
790

 
22,523

 
—

 
26,192

 
758

 
(4,145
)
 
116

 
(3,679
)
 *
 TRG Columbus Development Venture, Ltd.
 
2,389

 
2,450

 
—

 
—

 
1,847

 
1,857

 
29

 
31

 
 Terminus 200 LLC
 
789

 
789

 
—

 
—

 
789

 
789

 
—

 
—

 
 Wildwood Associates
 
21,281

 
21,224

 
—

 
—

 
21,185

 
21,221

 
(1,658
)
 *
(1,639
)
 *
 Crawford Long - CPI, LLC
 
33,153

 
32,739

 
46,787

 
47,631

 
(15,729
)
 
(16,137
)
 
(6,698
)
 *
(6,873
)
 *
 
 
$
1,076,500

 
$
1,130,788

 
$
385,964

 
$
392,850

 
$
620,501

 
$
666,004

 
$
131,426

 
$
148,396

 
*Negative balances are included in Deferred Income on the Balance Sheets.
The following table summarizes statement of operations information of the Company's unconsolidated joint ventures for the nine months ended September 30, 2012 and 2011 (in thousands):
 
 
Total Revenues
 
Net Income (Loss)
 
Company's Share of Income (Loss)
SUMMARY OF OPERATIONS:
 
2012
 
2011
 
2012
 
2011
 
2012
 
2011
 Palisades West LLC
 
$
12,566

 
$
12,256

 
$
4,350

 
$
4,371

 
$
2,083

 
$
2,132

 EP I LLC
 
306

 
—

 
(53
)
 
(6
)
 
(39
)
 
(4
)
 Cousins Watkins LLC
 
4,365

 
3,633

 
24

 
47

 
1,810

 
1,799

 CF Murfreesboro Associates
 
9,920

 
9,903

 
316

 
307

 
(46
)
 
(44
)
 CP Venture IV Holdings LLC
 
22,558

 
23,133

 
2,814

 
3,111

 
778

 
811

 Charlotte Gateway Village, LLC
 
24,821

 
24,324

 
7,189

 
6,517

 
882

 
882

 Temco Associates, LLC
 
560

 
405

 
(141
)
 
(782
)
 
(275
)
 
(383
)
 MSREF/ Cousins Terminus 200 LLC
 
9,242

 
3,875

 
(727
)
 
(2,912
)
 
(146
)
 
(584
)
 CL Realty, L.L.C.
 
2,294

 
5,282

 
840

 
2,481

 
105

 
1,007

 CP Venture LLC entities
 
14,535

 
14,259

 
7,280

 
6,132

 
752

 
619

 Pine Mountain Builders, LLC
 
1,260

 
2,926

 
(111
)
 
(156
)
 
(423
)
 
(78
)
 Ten Peachtree Place Associates
 
2,488

 
5,413

 
20,938

 
801

 
7,852

 
413

 TRG Columbus Development Venture, Ltd.
 
9

 
23

 
(10
)
 
(1
)
 
(3
)
 
48

 Wildwood Associates
 
—

 
—

 
(127
)
 
(126
)
 
(63
)
 
(63
)
 Crawford Long - CPI, LLC
 
8,697

 
8,924

 
1,908

 
1,828

 
950

 
913

 
 
$
113,621

 
$
114,356

 
$
44,490

 
$
21,612

 
$
14,217

 
$
7,468

In March 2012, CL Realty, L.L.C. and Temco Associates, LLC sold their interests in 18 residential development projects and related residential land to Forestar Realty Inc., the Company's partner in both ventures. The Company's share of the proceeds from the sale was $23.5 million.
In the second quarter of 2012, the Ten Peachtree Place Associates joint venture sold Ten Peachtree Place, a 260,000 square foot office building in Atlanta, Georgia, for $45.3 million. The Company recognized a gain on this transaction through income from unconsolidated entities of $7.5 million.
In the third quarter of 2012, Dimensional Fund Advisors, the Company's partner in Palisades West LLC, notified the Company that it will exercise its option to purchase the Company's interests in the joint venture. This transaction is expected to close in the fourth quarter of 2012.
6. OTHER ASSETS

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Table of Contents


Other Assets on the Balance Sheets as of September 30, 2012 and December 31, 2011 included the following (in thousands):
 
 
September 30, 2012
 
December 31, 2011
Lease inducements, net of amortization of of $4,544 and $3,696 in 2012 and 2011, respectively
 
$
11,541

 
$
12,219

Investment in Verde Realty
 
5,380

 
5,868

FF&E and leasehold improvements, net of accumulated depreciation of $18,504 and $17,814 in 2012 and 2011, respectively
 
4,398

 
4,736

Loan closing costs, net of accumulated amortization of $2,421 and $4,026 in 2012 and 2011, respectively
 
3,976

 
1,435

Prepaid expenses and other assets
 
2,932

 
2,168

Predevelopment costs and earnest money
 
1,958

 
581

Intangible Assets:
 
 
 
 
In-place leases, net of accumulated amortization of $5,099 and $2,833 in 2012 and 2011, respectively
 
22,767

 
16,144

Goodwill
 
5,039

 
5,155

Above market leases, net of accumulated amortization of $9,369 and $8,845 in 2012 and 2011, respectively
 
7,157

 
4,414

 
 
$
65,148

 
$
52,720


Investment in Verde Realty relates to a cost method investment in a privately-held real estate investment trust. In the third quarter of 2012, the Company reduced its investment in Verde Realty by $488,000 as a result of a merger of Verde into another real estate company. The Company expects to receive cash proceeds upon closing of this merger in the fourth quarter of 2012 of $5.4 million.
Goodwill relates entirely to the Office reportable segment. As office assets are sold, either by the Company or by joint ventures in which the Company has an ownership interest, goodwill is reduced. The following is a summary of goodwill activity for the nine months ended September 30, 2012 and September 30, 2011 (in thousands):
 
Nine Months Ended September 30,
 
2012
2011
Beginning balance
$
5,155

$
5,430

Allocated to property sales
(116
)
(275
)
Ending balance
$
5,039

$
5,155

7. NONCONTROLLING INTERESTS
The Company consolidates various joint ventures that are involved in the ownership and/or development of real estate. The following table details the components of Redeemable Noncontrolling Interests in consolidated entities for the nine months ended September 30, 2012 and 2011 (in thousands):
 
 
Nine Months Ended September 30,
 
 
2012
 
2011
 
 
 
 
 
Beginning Balance
 
$
2,763

 
$
14,289

Net income (loss) attributable to redeemable noncontrolling interests
 
(2,002
)
 
96

Distributions to redeemable noncontrolling interests
 
(858
)
 
(5,525
)
Other
 
97

 
—

Change in fair value of redeemable noncontrolling interests
 
—

 
526

Ending Balance
 
$
—

 
$
9,386

The following reconciles the net income or loss attributable to nonredeemable noncontrolling interests as shown in the Statements of Equity to the net income or loss attributable to noncontrolling interests as shown in the Statements of Operations, which includes both redeemable and nonredeemable interests, for the nine months ended September 30, 2012 and 2011 (in thousands):

12
Table of Contents


 
 
Nine Months Ended September 30,
 
 
2012
 
2011
Net income attributable to nonredeemable noncontrolling interests
 
$
1,743

 
$
3,358

Net income (loss) attributable to redeemable noncontrolling interests
 
(2,002
)
 
96

Net income (loss)
 
$
(259
)
 
$
3,454

8. REPORTABLE SEGMENTS
The Company has five reportable segments: Office, Retail, Land, Third Party Management and Leasing, and Other. In the third quarter of 2012, the Company sold its third party management and leasing business. See Note 9 for detailed information. These reportable segments represent an aggregation of operating segments reported to the Chief Operating Decision Maker based on similar economic characteristics that include the type of product and the nature of service. Each segment includes both consolidated operations and joint ventures. The Office and Retail segments show the results for that product type. For these two segments, net operating income is calculated as rental property revenues less rental property operating expenses. The Land segment includes results of operations for certain land holdings and single-family residential communities that are sold as developed lots to homebuilders. Fee income and related expenses for the third party-owned office and retail properties which are managed or leased by the Company are included in the Third Party Management and Leasing segment. In prior years, the Company had an additional segment, the For-Sale Multi-Family Residential Unit segment, which included results of operations for the development and sale of multi-family real estate projects. The Company has sold substantially all of its multi-family residential units, and this line of business is no longer considered to be a separate reportable segment. The 2011 results for this segment are included in Other. The Other segment also includes:
•
fee income for third party owned development properties and joint venture properties for which the Company performs management, development and leasing services;
•
compensation for corporate employees, other than those in the Third Party Management and Leasing segment;
•
general corporate overhead costs, interest expense for consolidated entities (as financing decisions are made at the corporate level, with the exception of joint venture interest expense, which is included in joint venture results in the respective segment);
•
income attributable to noncontrolling interests;
•
income taxes;
•
depreciation;
•
preferred dividends; and
•
operations of the Industrial properties, which were sold in 2011.
Company management evaluates the performance of its reportable segments in part based on funds from operations available to common stockholders (“FFO”). FFO is a supplemental operating performance measure used in the real estate industry. The Company calculated FFO using the National Association of Real Estate Investment Trusts' (“NAREIT”) definition of FFO, which is net income (loss) available to common stockholders (computed in accordance with GAAP), excluding extraordinary items, cumulative effect of change in accounting principle and gains or losses on sale of or impairment losses on depreciable property, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures to reflect FFO on the same basis.
FFO is used by industry analysts, investors and the Company as a supplemental measure of a REIT's operating performance. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Thus, NAREIT created FFO as a supplemental measure of a REIT's operating performance that excludes historical cost depreciation, among other items, from GAAP net income. Management believes 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, as a performance measure for incentive compensation to its officers and other key employees.
Segment net income, the balance of the Company's investment in joint ventures and the amount of capital expenditures are not presented in the following tables. Management does not utilize these measures when analyzing its segments or when making resource allocation decisions, and therefore this information is not provided. FFO is reconciled to net income (loss) on a total Company basis (in thousands):

13
Table of Contents


Three Months Ended September 30, 2012
 
Office
 
Retail
 
Land
 
Third Party Management and Leasing
 
Other
 
Total
Net operating property income, including discontinued operations
 
$
17,242

 
$
4,497

 
$
—

 
$
—

 
$
—

 
$
21,739

Fee income, net of reimbursed expenses
 
—

 
—

 
—

 
2,311

 
6,108

 
8,419

Residential lot and other sales, net of cost of sales
 
—

 
—

 
378

 
—

 
—

 
378

Other income
 
2,975

 
267

 
—

 
—

 
86

 
3,328

Third party management and leasing expenses
 
—

 
—

 
—

 
(1,782
)
 
—

 
(1,782
)
General and administrative expenses
 
—

 
—

 
—

 
—

 
(5,255
)
 
(5,255
)
Interest expense
 
—

 
—

 
—

 
—

 
(5,793
)
 
(5,793
)
Depreciation and amortization of non-real estate assets
 
—

 
—

 
—

 
—

 
(256
)
 
(256
)
Impairment losses
 
—

 
—

 
—

 
—

 
(488
)
 
(488
)
Separation expenses
 
—

 
—

 
—

 
—

 
(574
)
 
(574
)
Other expenses
 
—

 
(8
)
 
—

 
—

 
(2,257
)
 
(2,265
)
Funds from operations from unconsolidated joint ventures
 
2,731

 
2,150

 
(137
)
 
—

 
—

 
4,744

Gain on sale of third party management and leasing business
 
—

 
—

 
—

 
7,384

 
—

 
7,384

Funds from operations attributable to noncontrolling interests
 
—

 
—

 
—

 
—

 
(608
)
 
(608
)
Provision for income taxes from operations
 
—

 
—

 
—

 
—

 
(60
)
 
(60
)
Preferred stock dividends
 
—

 
—

 
—

 
—

 
(3,226
)
 
(3,226
)
Funds from operations available to common stockholders
 
$
22,948

 
$
6,906

 
$
241

 
$
7,913

 
$
(12,323
)
 
25,685

 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate depreciation and amortization, including Company's share of joint ventures
 
 
 
 
 
 
 
 
 
 
 
(16,361
)
Gain on sale of depreciable investment properties
 
 
 
 
 
 
 
 
 
 
 
120

Net income available to common stockholders
 
 
 
 
 
 
 
 
 
 
 
$
9,444




14
Table of Contents


Three Months Ended September 30, 2011
Office
 
Retail
 
Land
 
 Third Party Management and Leasing
 
Other
 
Total
Net operating property income, including discontinued operations
$
15,442

 
$
5,026

 
$
—

 
$
—

 
$
907

 
$
21,375

Fee income, net of reimbursed expenses
—

 
—

 
14

 
3,300

 
2,029

 
5,343

Residential lot and other sales, net of cost of sales
—

 
—

 
7

 
—

 
—

 
7

Other income
368

 
—

 
—

 
—

 
80

 
448

Third party management and leasing expenses
—

 
—

 
—

 
(2,143
)
 
—

 
(2,143
)
General and administrative expenses
—

 
—

 
—

 
—

 
(4,295
)
 
(4,295
)
Interest expense
—

 
—

 
—

 
—

 
(6,601
)
 
(6,601
)
Loss on extinguishment of debt
—

 
—

 
—

 
—

 
(74
)
 
(74
)
Depreciation and amortization of non-real estate assets
—

 
—

 
—

 
—

 
(388
)
 
(388
)
Separation expenses
—

 
—

 
—

 
—

 
(15
)
 
(15
)
Other expenses
—

 
—

 
—

 
—

 
(790
)
 
(790
)
Funds from operations from unconsolidated joint ventures
2,766

 
2,110

 
225

 
—

 
(2
)
 
5,099

Funds from operations attributable to noncontrolling interests
—

 
—

 
—

 
—

 
(611
)
 
(611
)
Benefit for income taxes from operations
—

 
—

 
—

 
—

 
180

 
180

Preferred stock dividends
—

 
—

 
—

 
—

 
(3,226
)
 
(3,226
)
Funds from operations available to common stockholders
$
18,576

 
$
7,136


$
246


$
1,157


$
(12,806
)

14,309

 
 
 
 
 
 
 
 
 
 
 
 
Real estate depreciation and amortization, including Company's share of joint ventures
 
 
 
 
 
 
 
 
 
 
(15,420
)
Noncontrolling interest related to gain on sale of depreciated investment properties
 
 
 
 
 
 
 
 
 
 
(1,581
)
Gain on sale of depreciable investment properties, net
 
 
 
 
 
 
 
 
 
 
2,880

Net income available to common stockholders
 
 
 
 
 
 
 
 
 
 
$
188


15
Table of Contents


Nine Months Ended September 30, 2012
Office
 
Retail
 
Land
 
Third Party Management and Leasing
 
Other
 
Total
Net operating income, including discontinued operations
$
50,920

 
$
15,297

 
$
—

 
$
—

 
$
1

 
$
66,218

Fee income, net of reimbursed expenses
—

 
—

 
—

 
8,396

 
9,018

 
17,414

 Residential lot and other sales, net of cost of sales
—

 
—

 
882

 
—

 
—

 
882

Other income
2,975

 
472

 
—

 
—

 
1,612

 
5,059

Third party management and leasing expenses
—

 
—

 
—

 
(6,034
)
 
—

 
(6,034
)
General and administrative expenses
—

 
—

 
—

 
—

 
(17,523
)
 
(17,523
)
Interest expense
—

 
—

 
—

 
—

 
(17,936
)
 
(17,936
)
Depreciation and amortization of non-real estate assets
—

 
—

 
—

 
—

 
(843
)
 
(843
)
Impairment losses
—

 
—

 
—

 
—

 
(488
)
 
(488
)
Loss on extinguishment of debt
—

 
—

 
—

 
—

 
(94
)
 
(94
)
Separation expenses
—

 
—

 
—

 
—

 
(866
)
 
(866
)