Cousins' Net Income, FFO Drop

ATLANTA-Cousins Properties Inc. is reporting lower net income and funds from operations for the second quarter ended June 30, a reversal from past periods. A sharp decrease in rental revenue due to sale of properties caused net income available to common stockholders to drop to $6.5 million or 13 cents per share compared with $45.7 million or 91 cents per share in second quarter 2004.

Funds from operations totaled $17.6 million or 34 cents per share versus $25.3 million or 50 cents per share last year.

For the six-month period, net income available was $12 million or 23 cents per share compared with $56.5 million or $1.12 per share. FFO was $33.9 million or 66 cents per share versus $52.3 million or $1.04 per share for the comparable 2004 period.

Cousins president and CEO Tom Bell attributes the lower numbers to “a decrease in rental revenues resulting from the sale of $1.3 billion of consolidated and joint venture operating properties in 2004, as well as the gains on sale of these properties recognized in the second quarter of 2004.” Bell says those gains were “partially offset by a related reduction in interest expense and an increase in gains from the sale of undepreciated investment property.”

Despite the lower financials, Bell says occupancy at the company’s portfolio of operational office buildings was 84% at June 30. That was an improvement from 83% occupancy at March 31. Cousins’ retail portfolio remains at 95% occupancy.

At the end of the first half, Cousins and its joint ventures had seven retail, office and industrial projects totaling 2.3 million sf under development, and two condominium projects under development containing a total 646 units. The company owns 3.2 million sf of retail properties.

Bell remains positive on the company’s outlook for the rest of the year. “All of our divisions performed well, with each division initiating new value-creating development projects,” he says in a prepared statement. “Our development pipeline remains quite strong.”