SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
Amendment No. 1
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: December 5, 1996
(Date of Earliest Event Reported)
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
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired.
The financial statements required by Item 7(a) relating to the One
Independence Center Acquisition described in Item 2 of Form 8-K
dated December 5, 1996 are attached hereto as Exhibit A and
incorporated herein by this reference.
(b) Pro Forma Financial Information.
The unaudited pro forma financial information required by
Item 7(b) relating to the One Independence Center Acquisition
described in Item 2 of Form 8-K dated December 5, 1996 is
attached hereto as Exhibit B and incorporated herein by this
reference.
(c) Exhibits.
Exhibit
No. Description
------- -----------
A Financial statements required by Item 7(a).
B Pro forma financial information required by Item 7(b).
C Consent of Independent Auditors
<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 hereunto duly authorized.
COUSINS PROPERTIES INCORPORATED
Registrant
/s/ Kelly H. Barrett________________________
Kelly H. Barrett
Vice President and Controller
(Authorized Officer)
(Principal Accounting Officer)
February 17, 199
<PAGE>
INDEX TO EXHIBITS
Exhibit Description Page
------- ----------- ----
A Financial statements required by Item 7(a) 5
B Pro forma financial information required by Item 7(b) 10
C Consent of Independent Auditors 16
<PAGE>
EXHIBIT A
ONE INDEPENDENCE CENTER
STATEMENTS OF EXCESS OF REVENUE OVER SPECIFIC OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995 AND THE
NINE MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED)
<PAGE>
Report of Independent Auditors
To the Stockholders
Cousins Properties Incorporated
We have audited the accompanying Statement of Excess of Revenues Over
Specific Operating Expenses of One Independence Center for the year ended
December 31, 1995. This statement is the responsibility of One Independence
Center's management. Our responsibility is to express an opinion on this
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statement. An audit also includes assessing
the basis of accounting used and significant estimates made by management, as
well as evaluating the overall presentation of the statement. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying statement has been prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission as
described in the accompanying Note 1 and is not intended to be a complete
presentation of the revenue and expenses of One Independence Center.
In our opinion, the Statement of Excess of Revenues Over Specific Operating
Expenses referred to above presents fairly, in all material respects, the excess
of revenues over specific operating expenses as described in Note 1 of One
Independence Center for the year ended December 31, 1995 in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Dallas, Texas
January 8, 1997
<PAGE>
ONE INDEPENDENCE CENTER
STATEMENTS OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995
AND THE NINE MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
1995 1996
---- ----
(unaudited)
<S> <C> <C>
Revenues
Rental revenues . ................................ $10,083 $8,109
Other property revenues .......................... 907 704
Interest income on required reserves ............. 58 40
------- ------
11,048 8,853
------- ------
Specific Operating Expenses
Costs and operating .............................. 3,424 2,483
Management fees .................................. 330 285
Interest on bonds assumed ........................ 109 63
General and administrative ....................... 249 145
------- ------
4,112 2,976
------- ------
Excess of Revenues Over
Specific Operating Expenses .................... $ 6,936 $ 5,877
======= =======
</TABLE>
See accompanying notes.
<PAGE>
ONE INDEPENDENCE CENTER
NOTES TO THE STATEMENTS OF EXCESS REVENUES
OVER SPECIFIC OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 1995
AND THE NINE MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED)
1. Organization and Basis of Presentation
The Statements of Excess of Revenues Over Specific Operating Expenses (the
Statements) for the year ended December 31, 1995 and the nine months ended
September 30, 1996 relate to the operations of One Independence Center, an
office building located in Charlotte, North Carolina. The office building was
acquired from an unaffiliated party by Cousins Properties Incorporated (Cousins)
on December 5, 1996. Cousins assumed the rights and obligations of the prior
owners under a lease on the underground parking garage, leased from the City of
Charlotte. Ownership of the garage reverts to Cousins at the end of the lease
term. To finance the garage, the municipality issued tax-exempt revenue bonds,
amortizing over 15 years (Bonds). The Bonds require that certain cash reserves
be maintained. During the Bonds term, lease payments are equal to the greater of
the debt service on the Bonds or net revenues, as defined, from the parking
operations. The Bonds bear interest at 65% of prime and require annual sinking
fund installments of $375,000 through 2000. For eight years beyond the Bonds
term, the lease payments are equal to the net revenues, as defined, from the
parking operations. The accompanying statements have been prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for real estate acquired. The statements are not intended to
be a complete presentation of income and expenses of One Independence Center for
the year ended December 31, 1995 and the nine months ended September 30, 1996,
as certain adjustments to recognize rental revenue on the straight-line basis
over the period of the related lease agreement and certain costs such as
depreciation, amortization, mortgage interest, professional fees and other costs
not considered comparable to the future operations of One Independence Center
have been excluded.
2. Summary of Significant Accounting Policies
Rental Revenues
Rental revenues consist of lease payments earned from tenants under lease
agreements terminating in 1997 through 2008, and also include tenant expense
reimbursements of $3,043,000 and $2,453,000 for 1995 and 1996, respectively.
Other property revenues includes $300,000 and $225,000 of ground lease income
and $556,000 and $472,000 of parking income for 1995 and 1996, respectively.
Capitalization Policy
Ordinary repairs and maintenance are expensed as incurred; major replacements
and betterments are capitalized.
Use of Estimtes
The preparation of the Statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the Statements and accompanying notes. Actual
results could differ from those estimates.
Unaudited Interim Statement
The Statement of Excess Revenues Over Specific Operating Expenses for the nine
months ended September 30, 1996 is unaudited. In the opinion of management, all
adjustments necessary for a fair presentation of such Statement have been
included. The results of operations for the period are not necessarily
indicative of the One Independence Center future results of operations.
3. Related Party Transactions
Management fees of $330,000 and $285,000 and leasing commissions of $74,000 and
$54,000 in 1995 and 1996, respectively, were paid to affiliates of the prior
owners under property management contracts.
4. Operating Leases
The land under the parking garage is leased to the City of Charlotte for a
remaining term of 21 years as of December 31, 1995 or 8 years after the Bonds
are paid in full. Annual rental revenue is $300,000 for the first 15 years
beginning in 1984 through November 30, 1998 and $25,000 thereafter.
Minimum future rentals receivable from operating properties and land leased to
others, excluding contingent rentals, under noncancellable leases are as follows
(in thousands):
1996 $ 7,519
1997 6,983
1998 6,261
1999 6,024
2000 6,071
Thereafter 41,272
-------
$74,130
=======
5. Concentration of Credit Risk
The property was 96% leased at December 31, 1995, with one tenant occupying 68%
of the property. Under a portion of this tenant's lease, the tenant is to pay
monthly rentals of $114,000 increasing annually up to $119,000 until November
2000, plus the tenant's pro rata share of certain operating expenses in excess
of a negotiated base. Under the remainder of the lease, the tenant is to pay
monthly base rentals of $372,000 increasing annually by 2% each year until
August 2008, plus the tenant's pro rata share of certain operating expenses.
<PAGE>
EXHIBIT B
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1996
(UNAUDITED)
(in thousands, except per share amounts)
The unaudited pro forma consolidated balance sheet is presented as if the
December 5, 1996 acquisition of One Independence Center had occurred as of
September 30, 1996.
The unaudited pro forma consolidated balance sheet is not necessarily
indicative of what the actual financial position would have been at September
30, 1996 nor does it purport to represent the future financial position of
Cousins Properties Incorporated and Consolidated Entities ("the Company").
<PAGE>
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1996
(UNAUDITED)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Pro Forma
Company Acquisition Company
Historical Adjustments (A) Pro Forma
---------- --------------- ---------
<S> <C> <C> <C>
ASSETS
- ------
PROPERTIES:
Operating properties .................... $171,842 $51,134 $222,976
Land held for investment or
future development .. 24,284 -- 24,284
Projects under construction ............. 104,470 -- 104,470
Residential lots under development ...... 15,120 -- 15,120
Less: accumulated depreciation ......... (19,134) -- (19,134)
-------- ------- --------
Total properties ....................... 296,582 51,134 347,716
-------- ------- --------
CASH AND CASH EQUIVALENTS ............... 132 (132) --
NOTES AND OTHER RECEIVABLES ............. 53,027 48 53,075
INVESTMENT IN UNCONSOLIDATED
JOINT VENTURES ......................... 134,268 -- 134,268
OTHER ASSETS ............................ 8,789 -- 8,789
-------- ------- --------
TOTAL ASSETS ......................... $492,798 $51,050 $543,848
======== ======= ========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
NOTES PAYABLE ........................... $186,460 $50,800 $237,260
ACCOUNTS PAYABLE AND ACCRUED
LIABILITIES ............................ 19,008 250 19,258
MINORITY INTERESTS IN CONSOLIDATED
ENTITIES ............................... 9 -- 9
DEPOSITS AND DEFERRED INCOME ............ 333 -- 333
-------- ------- --------
TOTAL LIABILITIES .................... 205,810 51,050 256,860
-------- ------- --------
STOCKHOLDERS' INVESTMENT:
Common stock ........................... 28,771 -- 28,771
Additional paid-in capital ............. 162,132 -- 162,132
Cumulative undistributed net income .... 96,085 -- 96,085
-------- ------- --------
TOTAL STOCKHOLDERS' INVESTMENT .......... 286,988 -- 286,988
-------- ------- --------
TOTAL LIABILITIES AND STOCKHOLDERS'
INVESTMENT ............................. $492,798 $51,050 $543,848
======== ======= ========
</TABLE>
<PAGE>
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands, except per share amounts)
The unaudited consolidated statements of income are presented as if the
Company acquired One Independence Center as of the beginning of each period
presented. In Management's opinion, all adjustments necessary to present fairly
the effects of the property acquisition have been made.
The unaudited pro forma consolidated statements of income are not
necessarily indicative of what the actual results of operations of the Company
would have been assuming the Company had acquired the properties as of the
beginning of each period presented, nor do they purport to represent the results
of operations for future periods.
<PAGE>
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
One Additional
Company Independence Pro Forma Company
Historical Center Adjustments Pro Forma
---------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
REVENUES:
Rental property revenues ......... $21,827 $8,806 $ 428 (B) $31,061
Development and construction fees. 1,380 -- -- 1,380
Management fees .................. 1,959 -- -- 1,959
Leasing and other fees ........... 1,362 -- -- 1,362
Residential lot and outparcels
sales .......................... 9,688 -- -- 9,688
Interest and other ............... 3,974 47 -- 4,021
------- ------ ------- -------
40,190 8,853 428 49,471
------- ------ ------- -------
INCOME FROM UNCONSOLIDATED
JOINT VENTURES .................. 12,926 -- -- 12,926
------- ------ ------- -------
COSTS AND EXPENSES:
Rental property operating expenses 4,946 2,768 -- 7,714
General and administrative expenses 6,581 145 -- 6,726
Depreciation and amortization .... 4,729 -- 1,990 (C) 6,719
Leasing and other commissions .... 41 -- -- 41
Stock appreciation right expense . 440 -- -- 440
Residential lot and outparcel cost
of sales ........................ 9,522 -- -- 9,522
Interest expense ................. 3,959 63 3,057 (D) 7,079
Property taxes on undeveloped land 901 -- -- 901
Other ............................ 992 -- -- 992
------- ------ ------- -------
32,111 2,976 4,047 40,134
------- ------ ------- -------
INCOME FROM OPERATIONS BEFORE
INCOME TAXES AND GAIN ON SALE
OF INVESTMENT PROPERTIES ........ 21,005 5,877 (4,619) 22,263
PROVISION (BENEFIT) FOR INCOME
TAXES FROM OPERATIONS ........... (864) -- -- (864)
------- ------ ------- -------
INCOME FROM OPERATIONS BEFORE
GAIN ON SALE OF INVESTMENT
PROPERTIES ...................... 21,869 5,877 (4,619) 23,127
GAIN ON SALE OF INVESTMENT
PROPERTIES, NET OF APPLICABLE
INCOME TAX PROVISION ............ 1,017 -- -- 1,017
------- ------ ------- -------
NET INCOME ....................... $22,886 $5,877 $(4,619) $24,144
======= ====== ======= =======
NET INCOME PER SHARE ............. $ .80 $ -- $ -- $ .85
======= ====== ======= =======
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING .............. 28,431 -- -- 28,431
======= ====== ======= =======
</TABLE>
<PAGE>
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1995 (UNAUDITED)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
One Additional
Company Independence Pro Forma Company
Historical Center Adjustments Pro Forma
---------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
REVENUES:
Rental property revenues ......... $19,348 $10,939 $ 571 (B) $30,858
Development and construction fees. 3,515 -- -- 3,515
Management fees .................. 2,213 -- -- 2,213
Leasing and other fees ........... 2,156 -- -- 2,156
Residential lot and outparcels
sales 9,040 -- -- 9,040
Interest and other ............... 4,764 109 -- 4,873
------- ------- ------- -------
41,036 11,048 571 52,655
------- ------- ------- -------
INCOME FROM UNCONSOLIDATED
JOINT VENTURES ................... 14,113 -- -- 14,113
COSTS AND EXPENSES:
Rental property operating expenses 4,681 3,754 -- 8,435
General and administrative expenses 7,648 249 -- 7,897
Depreciation and amortization ..... 4,516 -- 2,653 (C) 7,169
Leasing and other commissions ..... 20 -- -- 20
Stock appreciation right expense .. 1,298 -- -- 1,298
Residential lot and outparcel cost
of sales ......................... 8,407 -- -- 8,407
Interest expense .................. 687 109 4,070 (D) 4,806
Property taxes on undeveloped land 977 -- -- 977
Other ............................. 1,688 -- -- 1,688
------- ------- ------- -------
29,922 4,112 6,723 40,757
------- ------- ------- -------
INCOME FROM OPERATIONS BEFORE
INCOME TAXES AND GAIN ON
SALE OF INVESTMENT PROPERTIES ..... 25,227 6,936 (6,152) 26,011
PROVISION FOR INCOME TAXES
BEFORE OPERATIONS ................. 747 -- -- 747
------- ------- ------- -------
INCOME FROM OPERATIONS BEFORE
GAIN ON SALE OF INVESTMENT
PROPERTIES ........................ 24,480 6,936 (6,152) 25,264
GAIN ON SALE OF INVESTMENT
PROPERTIES, NET OF APPLICABLE
INCOME TAX PROVISION .............. 1,862 -- -- 1,862
------- ------- ------- -------
NET INCOME ......................... $26,342 $ 6,936 $(6,152) $27,126
======= ======= ======= =======
NET INCOME PER SHARE ............... $ .94 $ -- $ -- $ .97
======= ======= ======= =======
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING ................ 27,983 -- -- 27,983
====== ======= ======= ======
</TABLE>
<PAGE>
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
NOTES AND ASSUMPTIONS TO UNAUDITED PRO FORMA
CONSOLIDATED BALANCE SHEET
AND CONSOLIDATED STATEMENTS OF INCOME
(A) Reflects the December 5, 1996 acquisition of One Independence Center and
the related assumption of a mortgage note payable.
(B) To recognize rental revenue on the straight-line basis over the period of
the related lease agreements.
(C) To record depreciation expense for the building and amortization expense
for tenant improvements.
(D) To record interest expense associated with borrowings under the loan and
amortization expense of deferred financing costs.
<PAGE>
EXHIBIT C
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation of our report dated January 8, 1997, with
respect to the Statement of Excess of Revenues Over Specific Operating Expenses
of One Independence Center included in this Form 8-K/A, into the Company's
previously filed Registration Statement (Form S-3 No. 33-60350) pertaining to
the Dividend Reinvestment Plan of Cousins Properties Incorporated and in the
related Prospectus, in the Registration Statement (Form S-8 No. 33- 56787)
pertaining to the 1989 Stock Option Plan of Cousins Properties Incorporated and
in the related Prospectus, in the Registration Statement (Form S-8 No 33-41927)
pertaining to the 1989 Stock Option Plan, 1987 Restricted Stock Plan for Outside
Directors and Incentive Stock Option Plan of Cousins Properties Incorporated and
in the related Prospectus, and in the Registration Statement (Form S-3 No.
333-12031).
ERNST & YOUNG LLP
Dallas, Texas
February 17, 1997
- -16-
