Cousins Properties(CUZ) - 2025 Q2 - Quarterly Report

PART I Item 1. Condensed Consolidated Financial Statements (Unaudited) These unaudited statements detail the company's financial position, operations, and cash flows, reflecting asset growth to $9.05 billion and increased revenues and net income Consolidated Balance Sheets Total assets increased to $9.05 billion by June 30, 2025, driven by higher cash balances, with liabilities also rising Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $9,051,863 | $8,802,146 | | Cash and cash equivalents | $416,840 | $7,349 | | Real estate assets, net | $7,902,022 | $7,940,323 | | Total Liabilities | $4,250,710 | $3,931,979 | | Notes payable | $3,476,761 | $3,095,666 | | Total Equity | $4,801,153 | $4,870,167 | Consolidated Statements of Operations Total revenues reached $240.1 million in Q2 2025, leading to increased net income and diluted earnings per share year-over-year Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $240,128 | $212,978 | $490,456 | $422,219 | | Net Income | $14,658 | $7,961 | $35,751 | $21,412 | | Net Income Available to Common Stockholders | $14,483 | $7,840 | $35,380 | $21,128 | | Net Income per Share (diluted) | $0.09 | $0.05 | $0.21 | $0.14 | Consolidated Statements of Cash Flows Net cash from operating activities increased to $167.3 million, with reduced cash used in investing and a surge in financing activities Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $167,312 | $153,807 | | Net cash used in investing activities | ($25,411) | ($181,275) | | Net cash provided by financing activities | $267,590 | $27,375 | | Net Increase (Decrease) in Cash | $409,491 | ($93) | Notes to Condensed Consolidated Financial Statements The notes provide detailed disclosures on accounting policies and significant financial activities, including acquisitions and capital market transactions - Subsequent to quarter-end, the company acquired The Link in Dallas for $218.0 million[38] - Real estate debt investments decreased from $167.2 million to $17.0 million due to significant loan repayments, including the $138.0 million Saint Ann mortgage and $12.8 million Radius mezzanine loan[39][41][42] - In June 2025, the company issued $500.0 million of 5.250% public senior notes due 2030, with proceeds used for debt repayment and acquisitions[68] - The company sold its SVB Financial bankruptcy claim for $4.6 million in cash, recognized as other revenue[97] - Under its ATM Program, 2.9 million shares were sold via Forward Sales contracts, with $305.6 million remaining available as of June 30, 2025[92] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's strategy, highlighting strong operational performance with increased NOI and FFO per share, supported by robust liquidity Results of Operations Net income increased in Q2 2025, driven by higher Net Operating Income (NOI) from both Same Property and Non-Same Property segments Net Operating Income (NOI) Growth - Q2 2025 vs Q2 2024 (in thousands) | Category | Q2 2025 | Q2 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Same Property NOI | $139,122 | $134,752 | $4,370 | 3.2% | | Non-Same Property NOI | $24,414 | $5,002 | $19,412 | 388.1% | | Total NOI | $163,536 | $139,754 | $23,782 | 17.0% | - NOI for the Austin market increased 26.4% and Charlotte market increased 73.1% in Q2 2025, primarily due to recent acquisitions[128] - Interest expense increased by $8.8 million (29.5%) in Q2 2025, primarily due to recent public unsecured senior note issuances[132] Funds From Operations (FFO) Funds From Operations (FFO) increased to $117.5 million or $0.70 per diluted share in Q2 2025, reflecting higher NOI FFO Reconciliation Highlights (in thousands, except per share) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income Available to Common Stockholders | $14,483 | $7,840 | $35,380 | $21,128 | | Depreciation and amortization of real estate | $103,258 | $95,812 | $207,466 | $182,387 | | Funds From Operations | $117,494 | $103,346 | $242,328 | $202,842 | | FFO per Diluted Share | $0.70 | $0.68 | $1.44 | $1.33 | Liquidity and Capital Resources The company maintains a strong liquidity position with $416.8 million in cash and full access to its $1.0 billion credit facility - As of June 30, 2025, the company held $416.8 million in cash and had full $1.0 billion available under its credit facility[142] - 93% of the company's consolidated debt bears interest at a fixed rate[143] Leasing Activity - Six Months Ended June 30, 2025 | Metric | New Leases | Renewals | Total | | :--- | :--- | :--- | :--- | | Net Leased Square Feet | 342,165 | 400,488 | 873,431 | | Lease Term (Years) | 7.9 | 5.6 | 6.9 | | Net Effective Rent (per sq ft) | $25.83 | $26.47 | $26.32 | | Increase in Straight-Line 2nd Gen Rent | | | 20.8% | - Unconsolidated joint ventures hold $368.6 million in aggregate third-party debt, which is generally non-recourse[160] Item 3. Quantitative and Qualitative Disclosures About Market Risk No material changes in market risk exposure have occurred since the prior annual report disclosures - No material changes in market risk for notes payable were observed compared to the 2024 Form 10-K disclosures[163] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls - The CEO and CFO concluded that disclosure controls and procedures were effective as of the report period end[165] PART II Legal Proceedings The company is subject to ordinary course legal proceedings not expected to materially affect financial condition or results - Legal proceedings, as described in Note 10, are not expected to have a material adverse effect on the company[90][166] Risk Factors No material changes to the company's risk factors have occurred since prior disclosures in the 2024 Form 10-K and Q1 2025 Form 10-Q - No material changes in risk factors were observed since the 2024 Form 10-K and Q1 2025 Form 10-Q disclosures[167] Unregistered Sales of Equity Securities and Use of Proceeds The company did not conduct any sales of unregistered common shares during Q2 2025, with only minor share remittances for tax obligations - The company made no sales of unregistered securities during Q2 2025[168] Exhibits This section lists all exhibits filed with the Form 10-Q, including corporate agreements, debt indentures, and required CEO/CFO certifications - The report includes standard exhibits such as CEO/CFO certifications and financial data in inline XBRL format[172]