Forward-Looking Statements This report contains forward-looking statements about future results, strategy, and market trends, subject to risks and uncertainties based on current management expectations - This report contains forward-looking statements regarding future results, business strategy, acquisitions, development, capital expenditures, and market trends. These statements are based on current management expectations and are subject to numerous risks and uncertainties5 - Actual results may differ materially due to factors such as capital availability, economic conditions, real estate market volatility (especially in Atlanta, Austin, Charlotte, Phoenix, Tampa, and Dallas), leasing risks, tenant financial health, interest rate changes, and the impacts of the COVID-19 pandemic5 PART I-FINANCIAL INFORMATION Condensed Consolidated Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for Q1 2021, including balance sheets, operations, equity, and cash flows, with detailed notes on accounting policies and significant transactions Consolidated Balance Sheets Total assets remained stable at approximately $7.1 billion as of March 31, 2021, while total liabilities slightly increased and total equity marginally decreased Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 (unaudited, in thousands) | December 31, 2020 (in thousands) | | :--- | :--- | :--- | | Total Assets | $7,106,182 | $7,107,398 | | Total Real Estate Assets | $6,442,511 | $6,452,341 | | Cash and cash equivalents | $14,576 | $4,290 | | Total Liabilities | $2,624,934 | $2,611,860 | | Notes payable | $2,214,692 | $2,162,719 | | Total Equity | $4,481,248 | $4,495,538 | Consolidated Statements of Operations Net income available to common stockholders significantly decreased to $29.1 million or $0.20 per diluted share in Q1 2021, primarily due to the absence of large gains from investment property sales seen in Q1 2020 Q1 2021 vs. Q1 2020 Statement of Operations (in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :--- | :--- | :--- | | Total Revenues | $189,550 | $193,898 | | Total Expenses | $162,164 | $159,160 | | Gain on sales of investments | $39 | $46,230 | | Gain (loss) on investment property | ($17) | $90,916 | | Net Income | $29,311 | $175,309 | | Net Income Available to Common Stockholders | $29,110 | $174,943 | | Net Income per Share — Diluted | $0.20 | $1.18 | Consolidated Statements of Equity Total equity decreased by $14.3 million in Q1 2021 to $4.481 billion, primarily due to $46.2 million in common dividends partially offset by $29.3 million in net income - Total equity decreased by $14.3 million during Q1 2021, from $4.495 billion to $4.481 billion17 - The company paid common dividends of $0.31 per share, totaling $46.2 million during the first quarter of 202117 Consolidated Statements of Cash Flows Net cash from operating activities increased to $35.8 million in Q1 2021, while investing activities used $35.8 million and financing activities provided $9.7 million, reflecting shifts from the prior year's property sales and debt management Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $35,777 | $12,964 | | Net cash provided by (used in) investing activities | ($35,772) | $417,784 | | Net cash provided by (used in) financing activities | $9,689 | ($321,777) | | Net Increase in Cash | $9,694 | $108,971 | Notes to Condensed Consolidated Financial Statements Notes detail the company's REIT business in Sun Belt markets, including an $8 million land acquisition, a post-quarter $137.5 million property sale, joint venture details, $2.2 billion in notes payable, and no COVID-19 related impairments recorded despite uncertainty - The company's business focuses on developing, acquiring, leasing, and owning Class A office properties in Sun Belt markets, including Atlanta, Austin, Charlotte, Phoenix, Tampa, and Dallas25 - On March 12, 2021, the company acquired a 0.24-acre land parcel in Atlanta for a gross purchase price of $8 million35 - Subsequent to the quarter end, on April 7, 2021, the company sold its Burnett Plaza property for a gross purchase price of $137.5 million38 - The company acknowledges substantial uncertainty due to the COVID-19 pandemic but has not recorded any impairments on long-lived investments or significant valuation adjustments for tenant receivables as of March 31, 202168 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2021 performance, noting 271,000 sq. ft. leased, a 21.5% increase in net effective rent on renewals, a 4.1% YoY decrease in same property NOI, $0.69 FFO per share, and $711.0 million available liquidity, reinforcing its Sun Belt market strategy - During Q1 2021, the company leased or renewed 271,000 square feet of office space. For spaces re-leased within the past year, net effective rent increased by 21.5%94 - Same property net operating income (NOI) decreased by 4.1% year-over-year, mainly due to lower parking revenue resulting from decreased physical occupancy during the COVID-19 pandemic and a significant tenant lease expiration94 - As of March 31, 2021, the company had $711.0 million of borrowing capacity under its Credit Facility and $14.6 million in cash and cash equivalents121 Funds From Operations (FFO) Reconciliation (in thousands, except per share) | Metric | Three Months Ended March 31, 2021 (in thousands) | | :--- | :--- | | Net Income Available to Common Stockholders | $29,110 | | Adjustments (Depreciation, Gains/Losses, etc.) | $72,850 | | Funds From Operations (FFO) | $101,960 | | Weighted Average Shares - Diluted | 148,725 | | FFO per Share | $0.69 | Contractual Obligations Summary (as of March 31, 2021, in thousands) | Obligation Type | Total (in thousands) | Less than 1 Year (in thousands) | 1-3 Years (in thousands) | 3-5 Years (in thousands) | More than 5 years (in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Company debt | $2,212,863 | $262,338 | $644,556 | $335,842 | $970,127 | | Interest commitments | $340,605 | $62,978 | $107,774 | $90,465 | $79,388 | | Ground leases | $214,270 | $3,049 | $5,566 | $8,705 | $196,950 | | Total Obligations | $2,767,923 | $328,504 | $757,936 | $435,018 | $1,246,465 | Quantitative and Qualitative Disclosures About Market Risk No material changes in market risk associated with the company's notes payable were reported as of March 31, 2021, compared to the 2020 Annual Report on Form 10-K disclosures - There have been no material changes in the market risk associated with the company's notes payable compared to what was disclosed in the 2020 Annual Report on Form 10-K142 Controls and Procedures Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting during the quarter - An evaluation supervised by management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report144 - No changes in internal control over financial reporting were identified during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls144 PART II. OTHER INFORMATION Legal Proceedings The company is subject to ordinary course legal proceedings, which management does not expect to have a material adverse effect on financial condition or results of operations - Information regarding legal proceedings is detailed in Note 9 of the financial statements, which states that ongoing proceedings are not expected to have a material adverse effect on the company14667 Risk Factors No material changes in the company's risk factors were reported from those previously disclosed in the 2020 Annual Report on Form 10-K - There have been no material changes in risk factors from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2020147 Unregistered Sales of Equity Securities and Use of Proceeds During Q1 2021, the company did not engage in any sales of unregistered equity securities or repurchases of its common shares - The company did not make any sales of unregistered securities during the first quarter of 2021149 - The company did not purchase any of its common shares during the first quarter of 2021149 Exhibits This section lists all exhibits filed with the Form 10-Q, including CEO and CFO certifications and financial data in inline XBRL format - The report includes a list of filed exhibits, such as CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906, and financial statements formatted in inline XBRL153 Signatures The report was signed on April 29, 2021, by Gregg D. Adzema, Executive Vice President and Chief Financial Officer - The report was duly signed on April 29, 2021, by Gregg D. Adzema, Executive Vice President and Chief Financial Officer156
Cousins Properties(CUZ) - 2021 Q1 - Quarterly Report