SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1997 Commission file number 0-3576
COUSINS PROPERTIES INCORPORATED
A GEORGIA CORPORATION
I.R.S. EMPLOYER IDENTIFICATION NO. 58-0869052
2500 WINDY RIDGE PARKWAY
ATLANTA, GEORGIA 30339-5683
TELEPHONE: 770-955-2200
Registrant has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and
has been subject to such filing requirements for the past 90 days.
At April 30, 1997, 29,176,273 shares of common stock of the Registrant were
outstanding.
<PAGE>
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
CONSOLIDATED BALANCE SHEETS
($ in thousands, except per share amounts)
<TABLE>
<CAPTION>
December 31, March 31,
1996 1997
------------ ---------
(Unaudited)
ASSETS
- ------
<S> <C> <C>
Operating properties $252,699 $351,440
Land held for investment or future development 21,213 21,494
Projects under construction 88,568 21,233
Residential lots under development 15,183 17,098
Less: accumulated depreciation (20,339) (24,190)
-------- --------
Total properties 357,324 387,075
-------- --------
CASH AND CASH EQUIVALENTS, at cost which
approximates market 1,598 4,666
NOTES AND OTHER RECEIVABLES 56,497 38,774
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES 132,262 112,355
OTHER ASSETS 8,963 8,796
-------- --------
TOTAL ASSETS $556,644 $551,666
======== ========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
- ----------------------------------------
NOTES PAYABLE $231,831 $227,561
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 25,302 19,523
DEPOSITS AND DEFERRED INCOME 327 345
-------- --------
TOTAL LIABILITIES 257,460 247,429
-------- --------
STOCKHOLDERS' INVESTMENT
Common stock, $1 par value, authorized
50,000,000 shares; issued 28,920,122
shares at December 31, 1996 and
29,176,273 shares at March 31, 1997 28,920 29,176
Additional paid-in capital 164,970 169,108
Cumulative undistributed net income 105,294 105,953
-------- --------
TOTAL STOCKHOLDERS' INVESTMENT 299,184 304,237
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS'
INVESTMENT $556,644 $551,666
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
<PAGE>
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1997
(UNAUDITED)
($ in thousands, except per share amounts)
<TABLE>
<CAPTION>
1996 1997
---- ----
REVENUES:
<S> <C> <C>
Rental property revenues $ 5,838 $15,255
Development income 273 974
Management fees 570 834
Leasing and other fees 727 137
Residential lot and outparcel sales 4,380 2,261
Interest and other 1,435 830
------- ------
13,223 20,291
------- ------
INCOME FROM UNCONSOLIDATED JOINT VENTURES 4,394 3,582
------- ------
COSTS AND EXPENSES:
Rental property operating expenses 1,394 3,709
General and administrative expenses 2,199 3,259
Depreciation and amortization 1,294 3,429
Stock appreciation right expense (credit) (359) (131)
Residential lot and outparcel cost of sales 4,165 1,946
Interest expense 1,014 3,656
Property taxes on undeveloped land 243 259
Other 203 479
------- ------
10,153 16,606
------- ------
INCOME FROM OPERATIONS BEFORE INCOME TAXES 7,464 7,267
PROVISION FOR INCOME TAXES FROM OPERATIONS 166 39
------- ------
INCOME BEFORE GAIN ON SALE OF INVESTMENT
PROPERTIES 7,298 7,228
GAIN ON SALE OF INVESTMENT PROPERTIES, NET OF
APPLICABLE INCOME TAX PROVISION -- 2,396
------- ------
NET INCOME $ 7,298 $ 9,624
======= =======
NET INCOME PER SHARE $ .26 $ .33
======= =======
CASH DIVIDENDS DECLARED PER SHARE $ .27 $ .31
======= =======
WEIGHTED AVERAGE COMMON EQUIVALENT SHARES 28,278 28,995
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
<PAGE>
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1997
(UNAUDITED)
($ in thousands)
<TABLE>
<CAPTION>
1996 1997
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income before gain on sale of
investment properties $ 7,298 $ 7,228
Adjustments to reconcile net income before
gain on sale of investment properties to net
cash provided by operating activities:
Depreciation and amortization 1,294 3,429
Stock appreciation right expense (credit) (359) (131)
Cash charges to expense accrual for stock
appreciation rights (40) (520)
Effect of recognizing rental revenues on a
straight-line basis 9 (121)
Income from unconsolidated joint ventures (4,394) (3,582)
Operating distributions from unconsolidated
joint ventures 3,878 8,904
Residential lot and outparcel cost of sales 3,910 1,793
Changes in other operating assets and liabilities:
Change in other receivables (647) 2,576
Change in accounts payable and accrued
liabilities (72) (7,008)
------- -------
Net cash provided by operating activities 10,877 12,568
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Gain on sale of investment properties -- 2,396
Adjustments to reconcile gain on sale of investment
properties to net cash provided by sales activities:
Cost of sales -- 287
Property acquisition and development expenditures (35,399) (16,202)
Non-operating distributions from unconsolidated
joint ventures -- 14,600
Investment in notes receivable (18,000) (1,656)
Change in other assets, net (883) (46)
Investment in unconsolidated joint ventures,
including interest capitalized to equity
investments (161) (15)
Collection of notes receivable 103 1
------- -------
Net cash used in investing activities (53,248) (635)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of lines of credit (37,427) (38,422)
Proceeds from lines of credit 4,558 35,237
Dividends paid (7,623) (8,965)
Common stock sold, net of expenses 2,084 4,370
Repayment of other notes payable (378) (1,085)
Proceeds from other notes payable 79,834 --
------- -------
Net cash provided by (used in) financing activities 41,048 (8,865)
------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,323) 3,068
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,552 1,598
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 229 $ 4,666
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
<PAGE>
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
1. BASIS OF PRESENTATION
The Consolidated Financial Statements include the accounts of Cousins
Properties Incorporated ("Cousins") and its majority and wholly-owned
affiliates, as well as Cousins Real Estate Corporation ("CREC") and its
subsidiaries. All of the entities included in the Consolidated Financial
Statements are hereinafter referred to collectively as the "Company."
Cousins has elected to be taxed as a real estate investment trust
("REIT"), and intends to distribute 100% of its federal taxable income to
stockholders, thereby eliminating any liability for future corporate federal
income taxes. Therefore, the results included herein do not include a federal
income tax provision for Cousins. However, CREC and its subsidiaries are taxed
separately from Cousins as a regular corporation. Accordingly, the Consolidated
Statements of Income include a provision for CREC's income taxes.
The Consolidated Financial Statements were prepared by the Company
without audit, but in the opinion of management reflect all adjustments
necessary for the fair presentation of the Company's financial position as of
March 31, 1997, and results of operations for the three month periods ended
March 31, 1996 and 1997. Results of operations for the interim 1997 period are
not necessarily indicative of results expected for the full year. While certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to the rules and regulations of the Securities and
Exchange Commission, the Company believes that the disclosures herein are
adequate to make the information presented not misleading. These condensed
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, 1996. The accounting
policies employed are the same as those shown in Note 1 to the Consolidated
Financial Statements included in such Form 10-K.
Certain 1996 amounts have been reclassified to conform to the 1997
presentation.
2. SUPPLEMENTAL INFORMATION CONCERNING CASH FLOWS
Interest (net of $1,633,000 and $590,000 capitalized in 1996 and 1997,
respectively) and income taxes paid were as follows for the three months ended
March 31, 1996 and 1997 ($ in thousands):
1996 1997
------ ------
Interest paid $927 $3,579
Income taxes paid $ 23 --
In January 1997, approximately $17,005,000 was transferred from Notes
and Other Receivables to Operating Properties (see Note 5). During the three
months ended March 31, 1997, approximately $59,716,000 was transferred from
Projects Under Construction to Operating Properties.
At March 31, 1997, cash and cash equivalents included $3,337,000 from
property sales held in escrow pending reinvestment in a tax-deferred exchange
and $1,028,000 which is restricted under a municipal bond indenture.
3. COSTS CAPITALIZED AND FEES ELIMINATED IN CONSOLIDATION
Development, construction, and leasing fees received by CREC and its
subsidiaries from Cousins and Cousins' majority owned affiliates are eliminated
in consolidation. Costs related to planning, development, leasing and
construction of properties (including related general and administrative
expenses) are capitalized. The table below shows the fees eliminated, the
internal costs capitalized related to these fees, and the additional internal
costs capitalized by CREC to its own residential developments for the three
months ended March 31, 1996 and 1997 ($ in thousands):
<TABLE>
<CAPTION>
1996 1997
---- ----
<S> <C> <C>
Fees eliminated in consolidation $1,134 $421
Internal costs capitalized in consolidation
to projects on which fees were eliminated 649 549
Internal costs capitalized to CREC
residential developments 129 138
</TABLE>
4. NOTES PAYABLE AND INTEREST EXPENSE
At December 31, 1996 and March 31, 1997, the composition of notes payable
was as follows ($ in thousands):
<TABLE>
<CAPTION>
December 31, 1996 March 31, 1997
--------------------------------- --------------------------------
Share of Share of
Unconsolidated Unconsolidated
Company Joint Ventures Total Company Joint Ventures Total
------- -------------- ----- ------- -------------- -----
<S> <C> <C> <C> <C> <C> <C>
Fixed Rate Mortgages
(primarily non-recourse) $206,731 $105,487 $312,218 $205,647 $120,020 $325,667
Floating Rate Lines
of Credit 25,100 2,025 27,125 21,914 80 21,994
-------- -------- -------- -------- -------- --------
$231,831 $107,512 $339,343 $227,561 $120,100 $347,661
======== ======== ======== ======== ======== ========
</TABLE>
On March 20, 1997, Wildwood Associates completed the financing of the
4100 and 4300 Wildwood Parkway Buildings with a $30 million non-recourse
mortgage note payable at a 7.65% interest rate and term of fifteen years. In
conjunction with this financing and a portion of the $70 million financing of
the 3200 Windy Hill Road Building completed in December 1996, in the first
quarter of 1997, Wildwood Associates made non-operating cash distributions of
$12.5 million to each partner and paid the entire calendar year 1997 operating
distribution of $4.5 million to each partner. Wildwood Associates will use the
approximately $10 million remaining proceeds and the operating cash flow for the
balance of 1997 to complete the 4200 Wildwood Parkway Building.
Subsequent to March 31, 1997, the Company extended the maturity of its
$100 million line of credit from June 30, 1997 to June 29, 1998. As of March 31,
1997, the outstanding balance under the line of credit was $20.6 million.
For the three months ended March 31, 1997, interest expense was
recorded as follows ($ in thousands):
<TABLE>
<CAPTION>
Share of
Unconsolidated
Company Joint Ventures Total
------- -------------- -----
<S> <C> <C> <C>
Interest Expensed $ 3,656 $1,946 $ 5,602
Interest Capitalized 590 188 778
------- ------ -------
$ 4,246 $2,134 $ 6,390
======= ====== =======
</TABLE>
During the first quarter of 1997, interest was capitalized related to
the Company's and the Company's share of unconsolidated joint venture projects
under construction which had an average balance of $48 million.
5. WILDWOOD TRAINING FACILITY
The Wildwood Training Facility is owned by a limited partnership which
leases the land under the facility from the Company through November 30, 2013,
with no renewal option, and owes the Company $25.9 million on a note
collateralized by the building located on the land (see Note 3 of "Notes to
Consolidated Financial Statements" in the Company's annual report on Form 10-K
for the year ended December 31, 1996). The facility had been 100% leased to
International Business Machines Corporation ("IBM") through November 30, 1998.
The IBM lease generated net cash flow of approximately $2.4 million, of which
all but $44,000 was paid to the Company as payments on the mortgage note and
ground lease, and for management fees. At December 31, 1996, the land and the
mortgage note (which for financial reporting purposes was treated as an
amortizing note even though it did not actually amortize) were carried at $0 and
$17,005,000, respectively, in the accompanying financial statements.
Effective January 1, 1997, the IBM lease was extended eight years
beyond its previous expiration, to November 30, 2006. The amended lease will
continue to generate net cash flow of approximately $2.4 million through
November 30, 1998, after which it will generate approximately $2.7 million
through November 30, 2002, and $3.0 million through November 30, 2006. All but
$44,000 will be paid to the Company as payments on the mortgage note and ground
lease and for management fees through November 30, 1998, after which all but
$54,000 will be paid to the Company. The mortgage note payable to the Company is
not expected to amortize during this period.
Based on the above, the Company will receive substantially all of the
economic risks and rewards from the property through the term of the IBM lease.
In addition, the Company will receive substantially all of the future economic
risks and rewards from the property beyond the IBM lease because of the short
term remaining on the land lease (7 years) and the large mortgage note balance
($25.9 million) that would have to be paid off, with interest, in that 7 year
period before the limited partnership would receive any significant benefit.
Therefore, effective January 1, 1997, the $17,005,000 balance of the mortgage
note and land were reclassified to Operating Properties, and 1997 revenues and
expenses (including depreciation) have been recorded as if the building were
owned by the Company.
6. ABBOTTS BRIDGE STATION
In January 1997, the Company purchased the land for, and commenced
construction of Abbotts Bridge Station, an approximately 85,000 square foot
neighborhood retail center located in suburban Atlanta, Georgia. The Company
purchased the 17 acre site for approximately $2.8 million. The center is
expected to be completed in the first half of 1998 at a cost of approximately
$11 million.
7. NORFOLK HOTEL ASSOCIATES MORTGAGE NOTE PAYOFF
On February 14, 1997, the mortgage note receivable due to Norfolk Hotel
Associates with a balance of $8,325,000 was repaid in full (see Note 5 of "Notes
to Consolidated Financial Statements' in the Company's annual report on Form
10-K for the year ended December 31, 1996). A portion of the proceeds from the
repayment was used to pay off the partnership's lines of credit, with
substantially all of the balance of the partnership's assets ($2.1 million of
cash for each partner) distributed to the partners in March 1997.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations for the Three Months Ended March 31, 1996
and 1997.
Results of Operations:
Rental Property Revenues and Operating Expenses. Rental property
revenues were approximately $9,417,000 higher in 1997. Rental revenues from the
Company's office portfolio increased approximately $5,891,000 in 1997 due
primarily to the acquisition of two office buildings and the addition of two new
office buildings which became operational for financial reporting purposes
during 1996. Rental revenues from One Independence Center and 615 Peachtree
Street, two office buildings which were acquired in December 1996 and August
1996, respectively, contributed to the increase by $3,105,000 and $699,000
respectively. Two office buildings, 100 and 200 North Point Center East, which
became operational for financial reporting purposes in April 1996 and November
1996, respectively, increased rental revenues approximately $675,000 and
$574,000, respectively.
The Wildwood Training Facility also favorably impacted the rental
revenues recognized from the Company's office portfolio. Effective January 1,
1997, the Wildwood Training Facility is being accounted for as if it were owned
by the Company (see Note 5). Thus, rental revenues were favorably impacted by
the rental revenues from the Wildwood Training Facility which were approximately
$809,000 in the three months ended March 31, 1997.
Rental revenues from the Company's retail portfolio increased
approximately $3,587,000 in 1997. The increase was due primarily to five retail
centers or expansions of existing centers which became operational for financial
reporting purposes during 1996 as follows: Colonial Plaza MarketCenter
($938,000) in March 1996, Greenbrier MarketCenter ($910,000) in October 1996,
Los Altos MarketCenter ($554,000) in November 1996, the expansion of
Presidential MarketCenter ($165,000) in June 1996 and Mansell Crossing Phase II
($162,000) in March 1996 (the Company does not own Mansell Crossing Phase I).
Rivermont Station which became operational in February 1997 also increased
rental revenues by $205,000.
The tax-deferred exchange of Lawrenceville MarketCenter in November
1996 partially offset the above increases in rental revenues by approximately
$599,000.
Rental property operating expenses increased approximately $2,315,000,
which increase was primarily related to the occupancy of the retail centers and
the 100 and 200 North Point Center East office buildings, as well as the
acquisitions of the 615 Peachtree Street and One Independence Center office
buildings and the reclassification of the Wildwood Training Facility as
discussed above.
Development Income. Development income was approximately $701,000
higher in 1997. The increase was due primarily to approximately $685,000 of
income recognized from a center in Cuyahoga Falls, Ohio. Additionally,
approximately $123,000 of income was recognized in 1997 from the fee development
of Total Systems' corporate headquarters in Columbus, Georgia.
Management Fees. Management fees increased approximately $264,000 in
1997. The increase was primarily due to the acquisition of the management
contracts of The Lea Richmond Company in July 1996, which contributed
approximately $219,000 of management fees (see Note 8 of "Notes to Consolidated
Financial Statements" in the Company's annual report on Form 10-K for the year
ended December 31, 1996).
Leasing and Other Fees. Leasing and other fees decreased approximately
$590,000 in 1997. The decrease was due in part to a decrease of approximately
$234,000 from leasing fees related to Wildwood Office Park, primarily related to
fees received from the leasing of the 4100 and 4300 Wildwood Parkway Buildings.
Leasing fees recognized by the Company's retail division from third party
developments also decreased approximately $230,000 in 1997.
Residential Lot and Outparcel Sales and Cost of Sales. Residential lot
and outparcel sales decreased approximately $2,119,000 in 1997. The decrease was
due primarily to a decrease in residential lot sales from 68 lots in 1996 to 26
lots in 1997. CREC and one of its subsidiaries also recognized $1,636,000 and
$1,084,000 in outparcel sales in 1996 and 1997, respectively, from three and two
outparcel sales in 1996 and 1997, respectively.
Residential lot and outparcel cost of sales decreased approximately
$2,219,000 in 1997 due to decreases in sales discussed above.
Interest and Other Income. Interest and other income decreased
approximately $605,000 in 1997. The decrease was due primarily to the
reclassification of the Wildwood Training Facility Mortgage Note to Operating
Properties (see Note 5). No interest income from this mortgage note was
recognized in 1997 which caused a decrease of approximately $401,000 in interest
income. Also contributing to the decrease was a decrease of approximately
$195,000 in interest income recognized from temporary investments. In the three
months ended March 31, 1996, the Company was recognizing interest income on
temporary investments made with proceeds received from the CSC Associates, L.P.
financing (see Note 4 of "Notes to Consolidated Financial Statements" in the
Company's annual report on Form 10-K for the year ended December 31, 1996). No
similar amounts were invested in the three months ended March 31, 1997.
Income from Unconsolidated Joint Ventures. (All amounts reflect the
Company's share of joint venture income.) Income from unconsolidated joint
ventures decreased approximately $812,000 in 1997.
Income from Temco Associates decreased approximately $412,000 in 1997.
In March 1996, Temco Associates exercised an option to purchase 240 acres of
land which it simultaneously sold. CREC's share of the gain on the sale was
$430,000. There was no similar sale in the three months ended March 31, 1997.
Income from Wildwood Associates decreased approximately $464,000 in
1997. Results in 1996 were negatively impacted by an increase in interest
expense (approximately $364,000). This increase was due primarily to the
financing of the 3200 Windy Hill Road Building which contributed approximately
$726,000 to the increase in interest expense. On December 16, 1996, Wildwood
Associates completed the financing of this building with a $70 million mortgage
note payable at an 8.23% interest rate and maturity of January 1, 2007.
Concurrent with the financing, Wildwood Associates paid down its line of credit
to $0 which partially offset the increase in interest expense by approximately
$187,000. Also partially offsetting the increase in interest expense was a
decrease of approximately $130,000 in interest expense related to the Summit
Green Building. Effective December 1, 1996, Wildwood Associates disposed of its
interest in this building in exchange for cancellation of the related mortgage
debt.
Income before depreciation, amortization and interest expense from the
4100 and 4300 Wildwood Parkway Buildings favorably impacted results by
approximately $407,000. The 4100 and 4300 Wildwood Parkway Buildings became
partially operational for financial reporting purposes in March 1996. Income
before depreciation, amortization and interest expense from the 3200 Windy Hill
Road Building decreased approximately $319,000 due primarily to the effect of
the straight-lining of rental revenues in accordance with Statement of Financial
Accounting Standards No. 13, which decreased rental revenues by approximately
$433,000. The disposition of the Summit Green Building, as discussed above,
decreased income before depreciation, amortization and interest expense by
approximately $220,000.
The disposition of the Summit Green Building also impacted depreciation
and amortization, a decrease of approximately $106,000. The 4100 and 4300
Wildwood Parkway Buildings increased depreciation and amortization by
approximately $299,000.
General and Administrative Expenses. General and administrative
expenses increased approximately $1,060,000 in 1997. The increase was primarily
due to the Company's expansion and acquisition of The Lea Richmond Company and
The Richmond Development Company in July 1996 (see Note 8 of "Notes to
Consolidated Financial Statements" in the Company's annual report on Form 10-K
for the year ended December 31, 1996). Additionally, approximately $397,000 of
additional expense in 1997 was accrued for higher than anticipated estimates of
runoff and other expenses associated with the termination of the Company's
partially self-insured medical plan in December 1996.
Depreciation and Amortization. Depreciation and amortization increased
approximately $2,135,000 in 1997. The increase was partially due to the retail
centers becoming operational as discussed above. The increase was also due to
the 100 and 200 North Point Center East office buildings becoming operational
and the acquisitions of the One Independence Center and 615 Peachtree Street
office buildings in December 1996 and August 1996, respectively, and the
reclassification of the Wildwood Training Facility to Operating Properties.
Stock Appreciation Right Expense (Credit). The credit to stock
appreciation expense decreased approximately $228,000 in 1997. This non-cash
item is primarily related to a reduction in the number of stock appreciation
rights outstanding due to exercises which occurred since the first quarter of
1996, as well as the Company's stock price, which was $20.25 and $19.50 at
December 31, 1995 and March 31, 1996, respectively; and $28.125 and $27.25 at
December 31, 1996, and March 31, 1997, respectively.
Interest Expense. Interest expense increased approximately $2,642,000
in 1997. Interest expense before capitalization increased to $4,247,000 in 1997
from $2,647,000 in 1996 due to higher debt levels. Also contributing to the
increase was a decrease in interest capitalization because of a lower level of
projects under development. The amount of interest capitalized to projects under
development (a reduction of interest expense) decreased to $590,000 in 1997 from
$1,633,000 in 1996.
Other Expenses. Other expenses increased approximately $276,000 in
1997 due to increases in predevelopment expense.
Gain on Sale of Investment Properties. Gain on sale of investment
properties increased $2,396,000 in 1997. The increase is due to a sale of
certain acres of land at the Company's North Point development in January 1997
for net proceeds of $2,683,000. No similar sale occurred in 1996.
Liquidity and Capital Resources:
Financial Condition. The Company's debt (including its pro rata share
of unconsolidated joint venture debt) was 30% of total market capitalization at
March 31, 1997. As discussed in Note 4, the Company extended the maturity of its
$100 million line of credit to June 29, 1998.
The Company has development projects in various stages. The Company
currently intends to finance these projects, as well as the completion of
projects currently under construction, using its existing lines of credit
(increasing those lines of credit as required), long-term non-recourse financing
on the Company's unleveraged projects and other financings as market conditions
warrant and sales of assets as market conditions warrant. In September 1996, the
Company filed a shelf registration statement with the Securities and Exchange
Commission ("SEC") for offering from time to time of up to $200 million of
common stock, warrants to purchase common stock and debt securities.
Cash Flows. Net cash provided by operating activities increased $1.7
million in 1997. Operating distributions from unconsolidated joint ventures
increased $5.0 million due primarily to increases of $3.5 million in
distributions from Wildwood Associates and $1.45 million from CSC Associates,
L.P. The increase in the distributions from Wildwood Associates was due to a
portion of the proceeds from the $30 million financing of the 4100 and 4300
Wildwood Parkway Buildings in March 1997 (see Note 4) being distributed to each
partner ($4.5 million). Depreciation and amortization increased $2.1 million due
to several retail and office projects becoming operational during 1996 and 1997
and the acquisitions of One Independence Center and 615 Peachtree Street during
1996. Residential lot and outparcel cost of sales decreased $2.1 million due to
decreases in the number of lots and outparcels sold in 1997. Cash flows from
operating activities were negatively impacted by changes in other operating
assets and liabilities, a decrease of $3.7 million.
Net cash used in investing activities decreased $52.6 million in 1997
due to a decrease of $19.2 million in property acquisition and development
expenditures, as a result of the Company having a lower level of projects under
development. Also, investment in notes receivable decreased $16.3 million in
1997. The Company temporarily invested approximately $18 million of proceeds
from the $80 million CSC Associates, L.P. financing completed in 1996 in a note
receivable due from Wildwood Associates. No similar investment occurred in 1997.
Non-operating distributions from unconsolidated joint ventures increased $14.6
million due primarily to distributions from Wildwood Associates of $10 million
in January 1997 from the proceeds of the financing of the 3200 Wildwood Plaza
Building completed in December 1996 and $2.5 million from the proceeds of the
financing of the 4100 and 4300 Wildwood Parkway Buildings in March 1997 (see
Note 4). The Company also received a $2.1 million distribution from Norfolk
Hotel Associates (see Note 7). Net cash provided by sales activities increased
$2.9 million due to a land sale in January 1997. There were no land sales in the
three months ended March 31, 1997.
Net cash provided by financing activities decreased $49.9 million in
1997, which was primarily attributable to a decrease of $79.8 million in
proceeds from other notes payable. The Company completed the $80 million CSC
Associates, L.P. financing in February 1996. No similar financing occurred in
the three months ended March 31, 1997. An increase in the dividends paid per
share from $.27 to $.31 and an increase in the number of shares outstanding also
contributed to the decrease as dividends paid increased $1.3 million. Partially
offsetting the above increases were increases in proceeds from lines of credit
($30.7 million) and common stock sold net of expenses ($2.3 million.)
Supplemental Financial Information:
Depreciation and amortization expense included the following components
for the three months ended March 31, 1997 ($ in thousands):
<TABLE>
<CAPTION>
Share of
Unconsolidated
Company Joint Ventures Total
------- -------------- -----
<S> <C> <C> <C>
Furniture, fixtures and equipment $ 95 $ 2 $ 97
Deferred financing costs -- 3 3
Goodwill and related business
acquisition costs 130 8 138
Real estate related:
Building (including tenant
first generation) 3,020 2,268 5,288
Tenant second generation 184 313 497
------ ------ ------
$3,429 $2,594 $6,023
====== ====== ======
</TABLE>
Exclusive of new developments and purchases of furniture, fixtures and
equipment, the Company had the following capital expenditures during the three
months ended March 31, 1997, including its share of unconsolidated joint
ventures ($ in thousands):
<TABLE>
<CAPTION>
Office Retail Total
------ ------ -----
<S> <C> <C> <C>
Second generation related costs $213 $ -- $213
Building improvements 10 -- 10
---- ---- ----
$223 $ -- $223
==== ==== ====
</TABLE>
<PAGE>
PART II. OTHER INFORMATION
Item 2. Changes in Securities
(a) At the Company's Annual Meeting of Stockholders held
on April 29, 1997, the Company's stockholders
approved an amendment to the Company's Restated
Articles of Incorporation so as to, among other
things, authorize the Board of Directors to issue,
without any further stockholder action, up to 20
million shares of Preferred Stock, in one or more
series, with such terms and at such times and for
such consideration as the Board of Directors may
determine. Stockholders of the Company do not have
preemptive rights to purchase any shares of Preferred
Stock that may be issued in the future, and any such
shares of Preferred Stock may rank senior to the
Company's Common Stock with respect to dividends,
redemption and liquidation rights. The issuance of
Preferred Stock could also have the effect of
delaying, deferring or preventing a change in
control of the Company.
(b) Not applicable.
(c) Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company's Annual Meeting of Stockholders was held
on April 29, 1997.
(b) Not applicable.
(c) The following proposals were adopted by the
stockholders of the Company:
(i) The election of seven Directors.
The vote on the above was:
<TABLE>
<CAPTION>
For Against Abstained
--- ------- ---------
<S> <C> <C> <C>
Bennett A. Brown 24,356,474 -- 39,745
Richard W. Courts, II 24,357,124 -- 39,095
Thomas G. Cousins 24,357,368 -- 38,851
Terence C. Golden 24,354,574 -- 41,645
Boone A. Knox 24,357,124 -- 39,095
William Porter Payne 24,348,937 -- 47,282
Richard E. Salomon 23,542,637 -- 853,580
</TABLE>
(ii) A proposal to amend the Restated Articles of
Incorporation so as to, among other things,
authorize preferred stock, modify the stock
ownership limitation provisions, increase
the flexibility of the Board of Directors
with respect to acquisitions of treasury
shares, remove the concept of "capital
surplus" from the Company's distribution
requirements, remove the requirement of par
value with respect to future issuances of
capital stock and clarify limitations on
Director liability.
The vote on the above proposal was:
For 16,947,465
Against 4,706,079
Abstained 66,115
(iii) A proposal to amend the Stock Plan for
Outside Directors so as to, among other
things, allow the grant of restricted stock
and stock options to Outside Directors and
increase the shares available under the
plan.
The vote on the above proposal was:
For 23,791,550
Against 538,340
Abstained 66,328
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Amended and Restated Articles of
Incorporation
27 Financial Data Schedule
(b) Reports on Form 8-K
A Form 8-K/A was filed on February 18, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COUSINS PROPERTIES INCORPORATED
Registrant
/s/ Kelly H. Barrett
-------------------------------------------
Kelly H. Barrett
Vice President and Controller
(Authorized Officer)
(Principal Accounting Officer)
May 14, 1997
<PAGE>
ARTICLES OF RESTATEMENT AND AMENDMENT TO
RESTATED ARTICLES OF INCORPORATION
OF
COUSINS PROPERTIES INCORPORATED
Cousins Properties Incorporated, a corporation organized and existing
under the laws of the State of Georgia, hereby certifies as follows:
1. The name of the corporation is Cousins Properties Incorporated (the
"Corporation").
2. Pursuant to Section 14-2-1007 of the Georgia Business Corporation
Code, these Articles of Incorporation restate and amend the Restated Articles of
Incorporation of the Corporation (the "Articles of Restatement and Amendment").
These Articles of Restatement and Amendment were duly adopted by the
shareholders of the Corporation in accordance with the provisions of Section
14-2-1003 of the Georgia Business Corporation Code on April 29, 1997.
3. The Restated Articles of Incorporation of the Corporation as
heretofore amended or supplemented are hereby restated and further amended to
read in their entirety as follows:
<PAGE>
RESTATED AND AMENDED
ARTICLES OF INCORPORATION
OF
COUSINS PROPERTIES INCORPORATED
1.
The name of the Corporation is:
COUSINS PROPERTIES INCORPORATED
2.
The Corporation shall have perpetual duration.
3.
The purposes of the Corporation shall be to engage in and carry on the
businesses of buying, leasing and otherwise acquiring lands and interests in
lands of every kind and description and wheresoever situated; buying, leasing
and otherwise acquiring and constructing and erecting, or contracting for the
construction and erection of buildings and structures in and on said lands for
any uses or purposes; holding, owning, improving, developing, maintaining,
operating, letting, leasing, mortgaging, selling or otherwise disposing of such
property or any part thereof; equipping, furnishing and operating apartments,
apartment houses, hotels, apartment hotels, restaurants, office buildings,
shopping centers, warehouses or any other buildings or structures of whatsoever
kind; to loan its funds to any person, firm or corporation, either with or
without security; and to conduct any other businesses and engage in any other
activities not specifically prohibited to corporations for profit under the laws
of the State of Georgia, and the Corporation shall have all powers necessary to
conduct such businesses and engage in such activities, including, but not
limited to, the powers enumerated in the Georgia Business Corporation Code or
any amendment thereto.
4.
A. The Corporation shall have the authority to issue 50 million
shares of Common Stock, $1 par value per share. Each share of
Common Stock shall have one vote on each matter submitted to a
vote of the shareholders of the Corporation. The holders of
shares of Common Stock shall be entitled to receive, in
proportion to the number of shares of Common Stock held, the
net assets of the Corporation upon dissolution after any
preferential amounts required to be paid or distributed to
holders of outstanding shares of Preferred Stock, if any, are
so paid or distributed.
B. The Corporation shall have the authority to issue 20 million
shares of Preferred Stock, $1.00 par value per share. The
Preferred Stock may be issued from time to time by the Board
of Directors as shares of one or more series. The description
of shares of each series of Preferred Stock, including any
designations, preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption shall
be as set forth in resolutions adopted by the Board of
Directors, and articles of amendment shall be filed with the
Georgia Secretary of State as required by law to be filed
with respect to issuance of such Preferred Stock, prior to
the issuance of any shares of such series.
The Board of Directors is expressly authorized, at any time,
by adopting resolutions providing for the issuance of, or
providing for a change in the number of, shares of any
particular series of Preferred Stock and, if and to the extent
from time to time required by law, by filing articles of
amendment that are effective without shareholder action, to
increase or decrease the number of shares included in each
series of Preferred Stock, but not below the number of shares
then issued, and to set in any one or more respects the
designations, preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends,
qualifications, or terms and conditions of redemption relating
to the shares of each such series (provided, however, that no
such issuance or designation shall result in any holder of
shares of Common Stock being in violation of the Limit
provided for in Article 11.A.(1) or any Prior Owner being in
violation of Article 11.A.(3), as applicable, or otherwise
resulting in the Corporation failing to qualify as a REIT).
Notwithstanding the foregoing, the Board of Directors shall
not be authorized to change the right of holders of Common
Stock of the Corporation to vote one vote per share on all
matters submitted for shareholder action. The authority of the
Board of Directors with respect to each series of Preferred
Stock shall include, but not be limited to, setting or
changing the following:
(1) the dividend rate, if any, on shares of such series,
the times of payment and the date from which
dividends shall be accumulated, if dividends are to
be cumulative;
(2) whether the shares of such series shall be redeemable
and, if so, the redemption price and the terms and
conditions of such redemption;
(3) the obligation, if any, of the Corporation to redeem
shares of such series pursuant to a sinking fund or
otherwise;
(4) whether shares of such series shall be convertible
into, or exchangeable for, shares of stock of any
other class, classes or series, or any other
security, and, if so, the terms and conditions of
such conversion or exchange, including the price or
prices or the rate or rates of conversion or exchange
and the terms of adjustment, if any;
(5) whether the shares of such series shall have voting
rights, in addition to the voting rights provided by
law, and, if so, the extent of such voting rights;
(6) the rights of the shares of such series in the
event of voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation;
(7) restrictions on transfer to preserve the status of
the Corporation as a REIT; and
(8) any other relative rights, powers, preferences,
qualifications, limitations or restrictions thereof
relating to such series.
5.
Shares of stock of the Corporation may be issued by the Corporation for
such consideration as shall be fixed from time to time by the Board of
Directors.
6.
No shareholder shall have any preemptive right to subscribe for or to
purchase any shares of stock or other securities issued by the Corporation.
7.
Subject to the provisions of applicable law and the rights of the
holders of the outstanding shares of Preferred Stock, if any, the holders of
shares of Common Stock shall be entitled to receive, when and as declared by the
Board of Directors of the Corporation, out of the assets of the Corporation
legally available therefor, dividends or other distributions, whether payable in
cash, property or securities of the Corporation.
8.
The Corporation shall have the full power to purchase and otherwise
acquire, and dispose of its own shares and securities granted by the laws of the
State of Georgia. Shares of the Corporation's Common Stock acquired by the
Corporation shall be treasury shares and may be resold or otherwise disposed of
by the Corporation for such consideration as shall be determined by the Board of
Directors, unless or until the Board of Directors shall by resolution provide
that any or all treasury shares so acquired shall constitute authorized, but
unissued shares.
9.
A. In addition to any affirmative vote required by law, by any
other provision of these Restated and Amended Articles of
Incorporation or by the Bylaws of the Corporation,
(1) any merger or consolidation of the Corporation with
or into any other corporation;
(2) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction
or a series of related transactions) of all or
substantially all of the assets of the Corporation;
(3) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation; or
(4) any reclassification of securities of the
Corporation or recapitalization or reorganization
of the Corporation;
shall require the affirmative vote of the holders of at least
two-thirds of the then outstanding shares of Common Stock of
the Corporation.
B. Any amendment of or addition to these Restated and Amended
Articles of Incorporation or the Bylaws of the Corporation
which would have the effect of amending, altering, changing or
repealing this Article shall require the affirmative vote of
the holders of at least two-thirds of the then outstanding
shares of Common Stock of the Corporation.
10.
No Director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of duty of care
or other duty as a Director, except for liability (i) for any appropriation, in
violation of his duties, of any business opportunity of the Corporation, (ii)
for acts or omissions which involve intentional misconduct or a knowing
violation of law, (iii) for the types of liabilities set forth in Section
14-2-832 of the Georgia Business Corporation Code, or (iv) for any transaction
from which the Director derived an improper personal benefit. If the Georgia
Business Corporation Code is amended to authorize corporate action further
eliminating or limiting the personal liability of Directors, then the liability
of a Director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the Georgia Business Corporation Code, as amended. Neither
the amendment nor repeal of this Article 10 nor the adoption of any provision of
these Restated and Amended Articles of Incorporation inconsistent with this
Article shall eliminate or adversely affect any right or protection of a
Director of the Corporation existing immediately prior to such amendment, repeal
or adoption.
11.
A. So long as the Corporation desires to qualify as a real estate
investment trust ("REIT") under the Internal Revenue Code
of 1986, as amended (the "Code"), and subject to the terms and
provisions of this Article,
(1) After December 31, 1986, shares of stock of the
Corporation shall not be transferable to any Person
(as defined in C., below) if such transfer would
cause such person to be the Owner (as defined in C.,
below) of more than 3.9% in value of the outstanding
shares, which shall include both Common Stock and
Preferred Stock, of the Corporation (the "Limit").
After December 31, 1986, any transfer of shares
either (a) on the books of the Corporation or (b)
between stockholders or (c) among accounts of a
record stockholder (each of (a) (b) and (c) is
referred to as a "Record Transfer") which would cause
an accumulation of shares by any Person in excess of
the Limit and therefore violate the prohibition of
this A.(1), shall be void, and the intended
beneficial transferee (the "Record Transferee") of
such shares shall acquire no rights in such shares.
(2) Except for Persons who were Owners of shares in
excess of the Limit as of the close of business on
December 31, 1986 ("Prior Owners"), no Person shall
at any time be the Owner of shares in excess of the
Limit. The Board of Directors, in the exercise of its
sole and absolute discretion, may exempt from the
operation of A.(1) and A.(2) certain specified shares
of stock of the Corporation proposed to be
transferred to a Person who has provided the Board of
Directors with such evidence, undertakings and
assurances as the Board of Directors may require that
such transfer to such Person of the specified shares
of stock will not prevent the continued qualification
of the Corporation as a REIT under the Code and the
regulations thereunder. The Board of Directors may,
but shall not be required to, condition the grant of
any such exemption upon the obtaining of an opinion
of counsel, a ruling from the Internal Revenue
Service, assurances from one or more third parties as
to future acquisitions of shares, or such other
assurances as the Board of Directors may deem to be
satisfactory.
(3) After the close of business on December 31, 1986, no
Prior Owner shall at any time become the Owner of any
shares not Owned as of the close of business on
December 31, 1986, except for shares received
pursuant to pro rata stock splits, stock dividends or
similar transactions, shares acquired pursuant to
stock plans approved by the shareholders of the
Corporation and shares acquired from a Person whose
shares are attributed to such Prior Owner for
purposes of determining whether the Corporation
satisfies the requirement imposed on REITs under
Section 856(a)(6) of the Code; provided, however,
that a Prior Owner may become the Owner of shares not
Owned as of the close of business on December 31,
1986 and not acquired in accordance with the first
clause of this sentence (collectively, "Additional
Shares") if immediately after the transaction in
which such Prior Owner becomes the Owner of such
Additional Shares, such Prior Owner will not Own a
percentage of the value of the outstanding shares,
which shall include both Common Stock and Preferred
Stock, of the Corporation greater than the percentage
of the value of the outstanding shares of the
Corporation Owned by such Prior Owner as of the close
of business on December 31, 1986, excluding, for the
purpose of calculating such Prior Owner's Ownership
percentage after such transaction, shares acquired by
such Prior Owner since December 31, 1986 in
transactions permitted under the first clause of this
sentence. Any Record Transfer which would result in a
transfer of shares to a Prior Owner after December
31, 1986, in violation of this A.(3), shall be void,
and the Record Transferee shall acquire no rights in
such shares.
(4) If, notwithstanding the provisions hereof at any time
after December 31, 1986, there is a Record Transfer
in violation of the provisions hereof to a Person
which, absent the prohibitions in A.(1), would have
become an Owner of shares of the Corporation in
excess of the Limit, or there is a Record Transfer in
violation of the provisions hereof to a Prior Owner
after December 31, 1986, which, absent the
prohibitions of A.(3), would have resulted in a Prior
Owner becoming the Owner of shares not Owned as of
the close of business on December 31, 1986, those
shares of the Corporation which are a part of the
most recent Record Transfer and which are in excess
of the Limit or are to or for the benefit of a Prior
Owner after December 31, 1986, as the case may be,
including for this purpose shares deemed Owned
through attribution, shall constitute "Excess
Shares."
(5) Excess Shares shall have the following
characteristics:
(a) Excess Shares shall be deemed to have been
transferred to the Corporation as trustee
(the "Trustee") of a trust (the "Trust") for
the exclusive benefit of such Person or
Persons to whom the Excess Shares shall
later be transferred pursuant to (b) or (e)
below;
(b) Subject to the Corporation's rights
described in (e) below, an interest in the
Trust (representing the number of Excess
Shares held by the Trust attributable to the
Record Transferee as a result of the Record
Transfer that is void under A.(1) or A.(3)
shall be freely transferable by the Record
Transferee (i) at a price which does not
exceed the price paid by the Record
Transferee for the Excess Shares in
connection with the Record Transfer, or
(ii) if the shares become Excess Shares in a
transaction otherwise than for value (e.g.
by gift, devise or descent) at a price which
does not exceed the Market Price on the
date of the Record Transfer (in either case,
the "Record Transfer Price"), provided,
however, that the Excess Shares held in the
Trust attributable to the Record Transferee
would not constitute Excess Shares in the
hands of the transferee of the interest
in the Trust. Upon such transfer, the Excess
Shares attributable to the Record Transferee
shall be removed from the Trust and
transferred to the transferee of the
interest in the Trust and shall no longer be
Excess Shares, and the Record Transferee's
interest in the Trust shall be extinguished;
(c) Excess Shares shall not have any voting
rights, and shall not be considered for the
purpose of any stockholder vote or
determining a quorum at the annual meeting
or any special meeting of stockholders, but
shall continue to be reflected as issued and
outstanding stock of the Corporation;
(d) No dividends or other distributions shall be
paid with respect to Excess Shares; any
dividends paid in error to a Record
Transferee prior to the discovery by the
Corporation that the Record Transfer is void
under A.(1) or A.(3) will be payable back to
the Corporation upon demand; and
(e) Excess Shares shall be deemed to have been
offered for sale to the Corporation or its
designee at the lesser of the Record
Transfer Price or the Market Price on the
date of acceptance of the offer. The
Corporation shall have the right to accept
such offer for a period of ninety (90) days
from (i) the date of the Record Transfer
which, absent the provisions of A.(1) or
A.(3), would have made the Record Transferee
the holder of Excess Shares, if the
Corporation has been given notice pursuant
to B.(2) that such Record Transfer creates
Excess Shares as of the date of such Record
Transfer or (ii) the date the Board of
Directors determines in good faith that a
Record Transfer which, absent the
provisions of A.(l) or A.(3 ), would have
made the Record Transferee the holder of
Excess Shares has taken place, if the
Corporation does not receive such notice
pursuant to B.(2). Prior to any transfer
of an interest in the Trust pursuant to
A.(5)(b), notice of the transfer must be
given to the Corporation by the Record
Transferee, and the Corporation must (i)
waive in writing its right to accept the
offer described in this A.(5)(e) and (ii)
make a good faith determination that the
Excess Shares held in the Trust
attributable to the Record Transferee
would not constitute Excess Shares in the
hands of the transferee of the interest in
the Trust.
(6) If, notwithstanding the provisions of A.(1) and
A.(3), (i) any Person acquires shares in excess of
the Limit or (ii) any Prior Owner acquires additional
shares after December 31, 1986, in violation of the
provisions hereof, and the Corporation would have
qualified as a REIT but for the fact that more than
50% in value of its shares are held by five or fewer
individuals in the last half of the taxable year in
violation of the requirements of the Code, then that
Person, and any legal entities which constitute that
Person, shall be jointly and severally liable for and
shall pay to the Corporation, on an after-tax basis,
an amount equal to all taxes, penalties and interest
imposed, and all costs (plus interest of 15% per
annum from the date such costs are incurred) incurred
by the Corporation, as a result of the Corporation
losing its REIT qualification (the "Indemnity"). For
purposes of the preceding sentence, the amount of
taxes shall include the taxes that would be payable
if the Corporation, immediately after losing its REIT
qualification, sold all of its properties for cash at
their fair market value ("Built-In Gain Tax"),
regardless of whether the Corporation actually
engages in any such sales. Should the loss of REIT
qualification occur as described above, then the
Corporation may seek to have its qualification
restored for the next taxable year, but shall not be
required to do so. If the Corporation is unable to
requalify for the succeeding year as a result of the
prohibited share acquisitions, the Indemnity shall be
applicable until the Corporation is again able to
elect to be taxed as a REIT. Even if the Corporation
is again able to elect to be taxed as a REIT,
however, the Indemnity shall nevertheless include the
full amount of the Built-In Gain Tax, even if the
Corporation is allowed to pay any such taxes at the
time any properties are sold during the ten-year
period following the Corporation's requalification as
a REIT. If more than one Person has acquired shares
in excess of the Limit or is a Prior Owner who has
improperly acquired additional shares after December
31,1986, prior to or at the time of the loss of REIT
qualification, then all such Persons and Prior
Owners, together with all legal entities which
constitute any of them, shall be jointly and
severally liable, with right of contribution, for the
Indemnity. However, the foregoing sentence shall not
require that the Corporation proceed against any one
or several of such Persons or Prior Owners or the
legal entities which constitute them.
(7) All certificates evidencing ownership of shares of
the Corporation shall bear a conspicuous legend
describing the restrictions set forth in this
Article. Stickers bearing such legend will be
distributed to record holders of shares of the
Corporation's Common Stock within 30 days after the
effective date of this Article 11. Such stickers
shall be affixed by the holders to the certificates
evidencing ownership of their shares.
B. (1) If the Board of Directors or its designees shall at
any time determine in good faith that a Record
Transfer has taken place in violation of A.(1) or
A.(3) or that a Person intends to acquire or has
attempted to acquire Ownership of any shares of the
Corporation in violation of A.(1) or A.(3), the Board
of Directors or its designees shall take such
such action as it deems advisable to refuse to give
effect or to prevent such transfer or acquisition,
including but not limited to refusing to give effect
to such transfer or acquisition on the books of the
Corporation or instituting proceedings to enjoin such
transfer or acquisition.
(2) Any Person who acquires or attempts to acquire shares
in violation of A.(1) or A.(3), or who becomes the
Record Transferee of shares which, under A.(4),
become Excess Shares in the hands of that Person, is
obliged immediately to give written notice thereof to
the Corporation and to give to the Corporation such
other information as the Corporation may reasonably
require of such Person (a) with respect to the
Ownership of outstanding shares held directly or by
attribution by such Person, and (b) such other
information as may be necessary to determine the
Corporation's status under the Code.
(3) The Corporation has the right to request information
similar to that described in (2) immediately above if
it determines, in good faith, that a Person is
attempting to acquire shares in violation of A.(1)
and A.(3) or that a Record Transfer has been made
which has resulted in Excess Shares.
C. For the purpose of the determination to be made under this
Article,
(1) A Person shall be considered to "Own", be the "Owner"
or have "Ownership" of shares if he is treated as
owner of such shares for purposes of determining
whether the Corporation satisfies the requirements
imposed on REITs under Section 856(a)(6) of the Code.
(2) "Person" includes an individual, corporation,
partnership, estate, trust (including a trust
qualified under Section 401(a) or 501 (c)(17) of the
Code), association, private foundation within the
meaning of Section 509(a) of the Code, joint stock
company or other entity and also includes a group as
that term is used for purposes of Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended, but
does not include an underwriter which participates in
a public offering of the Corporation's common stock
for a period of seven days following the purchase by
such underwriter of the Corporation's common stock.
"Person" does not include an organization that
qualifies under Section 501(c)(3) of the Code that is
not a private foundation within the meaning of
Section 509(a) of the Code.
(3) "Market Price" for Excess Shares shall be the average
of the high and low prices as reported on the New
York Stock Exchange composite tape if the shares are
listed or admitted for trading on the New York Stock
Exchange, or as reported by The Nasdaq Stock Market
if the shares are designated as national market
system securities and are not listed or admitted for
trading on the New York Stock Exchange, for the
trading day immediately preceding the relevant date.
(4) In the case of an ambiguity in the application of any
of the provisions of (1) and (2) above, the Board of
Directors or a committee thereof shall have the power
to determine for purposes of this Article on the
basis of information known to it (i) whether any
Person Owns shares, (ii) whether any two or more
individuals, corporations, partnerships, estates,
trusts, associations or joint stock companies or
other entities constitute a Person, and (iii) whether
any of the entities of (ii) above constitute a group.
D. If any provision of this Article or any application of any
such provision is determined to be invalid by any Federal or
state court having jurisdiction over the issues, the validity
of the remaining provisions shall not be affected and other
applications of such provision shall be affected only to the
extent necessary to comply with the determination of such
court.
E. Nothing contained in this Article shall limit the authority of
the Board of Directors to take such other action as it deems
necessary or advisable to protect the Corporation and the
interests of its stockholders by preservation of the
Corporation's status as a REIT under the Code.
IN WITNESS WHEREOF, Cousins Properties Incorporated has caused these
Restated and Amended Articles of Incorporation to be executed, its corporate
seal to be affixed, and its seal and execution thereof to be attested, all by
its duly authorized officers this 5th day of May, 1997.
COUSINS PROPERTIES INCORPORATED
[CORPORATE SEAL]
By: /s/ Daniel M. Dupree
Attest: President and Chief Operating Officer
/s/ Tom G. Charlesworth
Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 4,666
<SECURITIES> 0
<RECEIVABLES> 38,774
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 411,265
<DEPRECIATION> 24,190
<TOTAL-ASSETS> 551,666
<CURRENT-LIABILITIES> 227,561
<BONDS> 0
0
0
<COMMON> 29,176
<OTHER-SE> 275,061
<TOTAL-LIABILITY-AND-EQUITY> 551,666
<SALES> 0
<TOTAL-REVENUES> 20,291
<CGS> 0
<TOTAL-COSTS> 16,606
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,656
<INCOME-PRETAX> 7,267
<INCOME-TAX> 39
<INCOME-CONTINUING> 7,228
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,624
<EPS-PRIMARY> .33
<EPS-DILUTED> .33
</TABLE>
