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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995 Commission file number 2-20111
COUSINS PROPERTIES INCORPORATED
A GEORGIA CORPORATION
I.R.S. EMPLOYER IDENTIFICATION NO. 58-086952
2500 WINDY RIDGE PARKWAY
ATLANTA, GEORGIA 30339
TELEPHONE: 770-955-2200
Name of exchange on which registered: New York Stock Exchange
Securities registered pursuant to Section 12(b) of the Act:
Common Stock ($1 Par Value)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) 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 (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
As of March 20, 1996, 28,345,020 common shares were outstanding; and the
aggregate market value of the common shares of Cousins Properties Incorporated
held by nonaffiliates was $397,712,906.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents have been incorporated by reference into the
designated Part of this Form 10-K:
Registrant's Proxy Statement Part III, Items 10, 11, 12 and 13
dated March 29, 1996
Registrant's Annual Report to Part II, Items 5, 6, 7 and 8
Stockholders for the year
ended December 31, 1995
PART I
Item 1. Business
- --------------------
Corporate Profile
Cousins Properties Incorporated (the "Registrant" or "Cousins") is a
Georgia corporation, which since 1987 has elected to be taxed as a real estate
investment trust ("REIT"). Cousins Real Estate Corporation ("CREC"), a taxable
entity consolidated with the Registrant, owns, develops, and manages a portion
of the Company's real estate portfolio. Cousins MarketCenters, Inc. ("CMC")
(formerly known as Cousins/New Market Development Company, Inc.) is a subsidiary
of CREC which develops retail shopping centers. The Registrant, together with
CREC, CMC and CREC's other consolidated entities, is hereafter referred to as
the "Company."
Cousins is an Atlanta-based, fully integrated equity real estate investment
trust. The Company has extensive experience in the real estate industry,
including the acquisition, financing, development, management and leasing of
properties. Cousins has been a public company since 1962, and its common stock
trades on the New York Stock Exchange. The Company owns a portfolio of
well-located, high-quality retail and office developments and holds several
tracts of strategically located undeveloped land. The Company's holdings are
concentrated in the southeastern United States, primarily in the Atlanta area.
The strategies employed to achieve the Company's investment goals include the
development of properties which are substantially precommitted to quality
tenants; maintaining high levels of occupancy within owned properties; the
selective sale of assets and the acquisition of quality income-producing
properties at attractive prices. The Company also seeks to be opportunistic and
take advantage of normal real estate business cycles.
Unless otherwise indicated, the notes referenced in the discussion below
are the "Notes to Consolidated Financial Statements" included in the financial
section of the Registrant's 1995 Annual Report to Stockholders.
Brief Description of Company Investments
Office. As of March 15, 1996, the Company owns, directly and indirectly,
equity interests of at least 50% in the following fourteen high-quality
commercial office buildings:
Company's
Metropolitan Rentable Ownership
Property Description Area Square Feet Interest
-------------------- ------------ ----------- --------
First Union Tower Greensboro, NC 317,000 100% (c)
3100 Windy Hill Road Atlanta 188,000 100% (b)
100 North Point Center East Atlanta 128,000 100% (a)
200 North Point Center East Atlanta 125,000 100% (a)
3301 Windy Ridge Parkway Atlanta 106,000 100%
NationsBank Plaza Atlanta 1,256,000 50%
3200 Windy Hill Road Atlanta 681,000 50%
2300 Windy Ridge Parkway Atlanta 634,000 50%
2500 Windy Ridge Parkway Atlanta 313,000 50%
Ten Peachtree Place Atlanta 259,000 50%
John Marshall-II Washington, D.C. 224,000 50%
4300 Wildwood Parkway Atlanta 150,000 50% (a)
Summit Green Greensboro, NC 135,000 50%
4100 Wildwood Parkway Atlanta 100,000 50% (a)
---------
4,616,000
=========
(a) Under construction or in early stages of leaseup.
(b) See Item 2. Properties footnote (5) where ownership is discussed.
(c) See Item 2. Properties footnote (7) where ownership is discussed.
The weighted average leased percentage of these office buildings (excluding
200 North Point Center East on which construction commenced in late 1995) was
approximately 92% as of March 15, 1996 and the leases expire as follows:
2005
&
1996 1997 1998 1999 2000 2001 2002 2003 2004 Thereafter Total
---- ---- ---- ---- ---- ---- ---- ---- ---- ---------- -----
OFFICE
100% Owned Properties:
Square Feet Expiring (d) 0 3,306 202,672 2,705 161,755 80,365 8,125 73,896 0 84,536 617,360(b)
% of Leased Space 0% 1% 33% 0% 26% 13% 1% 12% 0% 14% 100%
Annual Base Rent (a) 0 43,342 2,529,721 37,762 2,381,034 1,445,262 156,406 665,064 0 1,306,665 8,565,256
Annual Base
Rent/Sq. Ft. (a) 0 13.11 12.48 13.96 14.72 17.98 19.25 9.00 0 15.46 13.87
50% Owned Properties:
SquareFeetExpiring(d) 122,735 128,133 342,204 54,722 203,460 704,311 237,402 66,177 65,019 1,592,269 3,516,432(c)
% of Leased Space 3% 4% 9% 2% 6% 20% 7% 2% 2% 45% 100%
Annual Base Rent (a)1,985,607 1,870,829 5,804,652 747,947 3,653,463 9,958,208 4,705,464 1,113,927 1,353,444 39,134,496 70,328,037
Annual Base
Rent/Sq. Ft. (a) 16.18 14.60 16.96 13.67 17.96 14.14 19.82 16.83 20.82 24.58 20.00
Total (including only Company's share of 50% Owned Properties):
Square Feet Expiring(d)61,368 67,372 373,774 30,066 263,485 432,520 126,826 106,985 32,510 880,670 2,375,576
% of Leased Space 3% 3% 16% 1% 11% 18% 5% 5% 1% 37% 100%
Annual Base Rent (a) 992,804 978,757 5,432,047 411,736 4,207,765 6,424,366 2,509,138 1,222,027 676,722 20,873,913 43,729,275
Annual Base
Rent/Sq. Ft. (a) 16.18 14.53 14.53 13.69 15.97 14.85 19.78 11.42 20.82 23.70 18.41
(a) Annual base rent excludes the operating expense reimbursement portion of
the rent payable. If the lease does not provide for pass through of such
operating expense reimbursements, an estimate of operating expenses is
deducted from the rental rate shown. The base rental rate shown is the rate
in the year of expiration. Amounts disclosed are in dollars.
(b) Rentable square feet leased as of March 15, 1996 out of 739,000 total
rentable square feet.
(c) Rentable square feet leased as of March 15, 1996 out of 3,752,000 total
rentable square feet. (d) Where tenant has the option to cancel its lease
without penalty, the lease expiration date used in the table above reflects
the cancellation option date rather than the lease expiration date.
The weighted average remaining lease term of these thirteen office
buildings was approximately 8 years as of March 31, 1996. Most of the Company's
leases in these buildings provide for pass through of operating expenses, and
base rents which escalate over time.
Retail. As of March 15, 1996, the Company's retail portfolio includes the
following eleven properties:
Rentable
Square Feet Company's
Metropolitan (Company Ownership
Property Description Area Owned) Interest
-------------------- ------------ ----------- ----------
Colonial Plaza MarketCenter ....... Orlando, FL 533,000 100% (a)
Lawrenceville MarketCenter ........ Atlanta 499,000 100%
Greenbrier MarketCenter ........... Chesapeake, VA 474,000 100% (a)
North Point MarketCenter .......... Atlanta 370,000 100% (b)
Presidential MarketCenter ......... Atlanta 334,000 100% (c)
Perimeter Expo .................... Atlanta 170,000 100%
Los Altos MarketCenter ............ Long Beach, CA 152,000 100% (a)
Mansell Crossing Phase II ......... Atlanta 100,000 100% (a)(b)
Rivermont Station ................. Atlanta 92,000 100% (a)
Lovejoy Station ................... Atlanta 77,000 100%
Haywood Mall ...................... Greenville, SC 330,000 50%
---------
3,131,000
=========
(a) Under construction or in early stages of leaseup.
(b) See Item 2. Properties footnote (14) where ownership is discussed.
(c) Phase II (130,000 square feet) is under construction.
The weighted average leased percentage of these eleven retail properties
(excluding the properties under construction or in early stages of leaseup and
excluding Haywood Mall) was approximately 99% as of March 15, 1996, and the
leases of these eleven properties (excluding only Haywood Mall) expire as
follows:
2005
&
1996 1997 1998 1999 2000 2001 2002 2003 2004 Thereafter Total
---- ---- ---- ---- ---- ---- ---- ---- ---- ---------- -----
RETAIL
Square Feet Expiring 0 2,195 13,810 54,904 68,988 74,776 0 0 85,267 2,028,808 2,328,748(b)
% of Leased Space 0% 0% 1% 2% 3% 3% 0% 0% 4% 87% 100%
Annual Base Rent (a) 0 41,486 217,051 982,861 1,032,491 711,701 0 0 941,311 22,906,420 26,833,321
Annual Base
Rent/Sq. Ft. (a) 0 18.90 15.72 17.90 14.97 9.52 0 0 11.04 11.29 11.52
(a) Annual base rent excludes the operating expense reimbursement portion
of the rent payable and any percentage rents due. If the lease does
not provide for pass through of such operating expense reimbursements,
an estimate of operating expenses is deducted from the rental rate
shown. The base rental rate shown is the rate in the year of
expiration. Amounts disclosed are in dollars.
(b) Gross leasable area leased as of March 15, 1996 out of 2,801,000 total
gross leasable area.
The weighted average remaining lease term of these eleven retail properties
(excluding only Haywood Mall) was approximately 16 years as of March 15, 1996.
All of the major tenant leases in these retail properties have lease terms of 10
years or more and provide for pass through of operating expenses and base rents
which escalate over time.
Other. The Company's other real estate holdings include equity interests in
approximately 484 acres of strategically located land held for investment and
future development at North Point and Wildwood Office Park, and two mortgage
notes for $28 million which are secured by a 250,000 square foot office building
in Washington, D.C. The terms of these two notes have some of the
characteristics of an equity investment, and should provide a comparable return
on investment (see Note 3).
The Company's joint venture partners include IBM and affiliates of The
Coca-Cola Company ("Coca-Cola"), NationsBank Corporation ("NationsBank"),
Corporate Property Investors, Odyssey Partners, L.P., Temple-Inland Inc., Dutch
Institutional Holding Company ("DIHC"), American General Corporation, and Carr
Realty Corporation.
The success of the Company's operations is dependent upon such
unpredictable factors as the availability of satisfactory financing; general and
local economic conditions; the activity of others developing competitive
projects; the cyclical nature of the real estate industry; and zoning,
environmental impact, and other government regulations.
Refer to Item 2 hereof for a more detailed description of the Company's
real estate properties.
Significant Changes in 1995
Significant changes in the Company's business and properties during the
year ended December 31, 1995 were as follows:
In September 1995, North Point MarketCenter Phase II, a 173,000 square foot
(57,000 square feet of which are owned by the Company) retail power center
expansion in north central suburban Atlanta, became fully operational for
financial reporting purposes. In October 1995, Lawrenceville MarketCenter, a
499,000 square foot retail power center in northeast suburban Atlanta, became
partially operational for financial reporting purposes. In December 1995,
Lovejoy Station, a 77,000 square foot neighborhood retail center in south
central suburban Atlanta, became partially operational for financial reporting
purposes.
Construction which commenced during 1995 included: Colonial Plaza
MarketCenter, a 533,000 square foot retail power center in suburban north
central Orlando, Florida, in February 1995; Greenbrier MarketCenter, a 474,000
square foot retail power center in Chesapeake, Virginia, in May 1995; Mansell
Crossing Phase II, a 100,000 square foot retail power center expansion adjacent
to the Company's other North Point properties, in May 1995; Presidential
MarketCenter Phase II, a 130,000 square foot retail power center expansion in
northeast suburban Atlanta, in November 1995; and Rivermont Station, a 92,000
square foot neighborhood retail center in north central suburban Atlanta, in
December 1995. Also, development commenced on the Los Altos MarketCenter in
February 1996. Los Altos MarketCenter is a 280,000 square foot (152,000 square
feet of which the Company will own) retail power center located in Long Beach,
California.
In August 1995, Wildwood Associates, a 50% owned joint venture of the
Company, commenced construction on two new office buildings on approximately
12.6 acres of land it owns in Wildwood Office Park. The two buildings will be a
total of 250,000 rentable square feet of which 227,000 rentable square feet are
pre-leased to Georgia-Pacific Corporation. Georgia-Pacific Corporation began
occupying a portion of its space in February 1996.
In November 1995, construction commenced on 200 North Point Center East, a
125,000 rentable square foot office building at North Point, adjacent to 100
North Point Center East (a building of similar size which opened in December
1995), North Point Mall and the Company's retail properties in north central
suburban Atlanta.
The Company completed three new financings and two refinancings during
1995. In July 1995, the Company completed the long term non-recourse financing
of its North Point MarketCenter and Perimeter Expo retail power centers. The
North Point MarketCenter financing is for $30 million, with an interest rate of
8.5% and a maturity of 10 years. The Perimeter Expo financing is for $21.5
million, with an interest rate of 8.04% and a maturity of 10 years. In November
1995, the Company completed a $28 million financing secured by the 650
Massachusetts Avenue Notes Receivable. This $28 million note payable has a
maturity of 5 years with a rate of LIBOR + 1%, which rate was effectively fixed
at 6.53% as of January 10, 1996 through an interest rate swap agreement.
Wildwood Associates refinanced two mortgage notes in December 1995. One of
those mortgage notes, which had an $81 million balance at a 9.09% rate and
matured in August 1999, was refinanced with a $72 million 7.56% mortgage note
due in 10 years. The second mortgage note, which had a $31 million balance at a
9.125% rate and matured in June 1996, was refinanced with a $26 million 7.45%
mortgage note due in 10 years.
Executive Offices
The Registrant's executive offices are located at 2500 Windy Ridge Parkway,
Suite 1600, Atlanta, Georgia 30339. At December 31, 1995, the Company employed
130 people.
Item 2. Properties
Table of Major Properties
The following tables set forth certain information relating to major office
and retail properties, stand alone retail lease sites, and land held for
investment and future development in which the Company has a 50% or greater
ownership interest. All information presented is as of December 31, 1995, except
percentage leased which is as of March 15, 1996. Dollars are stated in
thousands.
Adjusted
Cost and
Adjusted
Percentage Cost Less
Description, Year Rentable Leased Average Major Depreciation
Location Development Joint Company's Square Feet as of 1995 Major Tenants (lease Tenants' and
and Completed Venture Ownership and Acres March 15, Economic expiration/options Rentable Amortization
Zip Code or Acquired Partner Interest as Noted 1996 Occupancy expiration) Sq. Feet (1)
-------- ----------- ------- --------- ----------- --------- --------- -------------------- -------- ------------
Office
- ------
Wildwood Office Park:
Suburban Atlanta, GA
2300 Windy
Ridge Parkway
30339-5671 1987 IBM 50% 634,000 95% 92% IBM (2002/2012) 240,430 $ 76,257
12 Acres Georgia-Pacific Corporation 63,006 $ 54,337
(2002/2007) (23)
Electrolux (2000/2005) 62,576
Computer Associates 62,445
(2005/2010)
Chevron USA (1998) 50,242
2500 Windy
Ridge Parkway
30339-5683 1985 IBM 50% 313,000 87% 88% Coca-Cola Enterprises Inc. 165,180 $ 27,414
8 Acres (1998/2008) $ 18,307
3200 Windy
Hill Road
30339-5609 1991 IBM 50% 681,000 95% 95% IBM (2001/2011) 440,139 $ 78,319
15 Acres Equifax (4) (1998/2003) 68,402 $ 63,326
W.H. Smith Inc. 41,858
(2002/2007)
3301 Windy Ridge
Parkway
30339-5685 1984 N/A 100% 106,000 70% 70% TSW International, Inc. 73,896 $ 10,368
10 Acres (2003/2008) (3) $ 7,179
3100 Windy Hill
Road
30339-5605 1983 N/A (5) 188,000 100% 100% IBM (1998/2003) 188,000 $ 17,416(5)
13 Acres $ 17,416(5)
4100/4300
Wildwood Parkway
30339-9999 (13) IBM 50% 250,000 91% (13) Georgia-Pacific 227,000 $ 10,964
13 Acres Corporation (2012/2017) (13)
Debt
Maturity
1995 FFO (2) and
------------------
Company's Debt Interest
100% Share Balance Rate
---- ----- ------- ----
Office
- ------
Wildwood Office Park:
Suburban Atlanta, GA
2300 Windy
Ridge Parkway
30339-5671 $ 9,648 $ 4,824 $72,000 12/1/05
7.56%
2500 Windy
Ridge Parkway
30339-5683 $ 4,563 $ 2,282 $26,000 12/15/05
7.45%
3200 Windy
Hill Road
30339-5609 $ 8,789 $ 4,395 $ 0 N/A
3301 Windy Ridge
Parkway
30339-5685 $ 467 $ 467 $ 0 N/A
3100 Windy Hill
Road
30339-5605 $ 1,931(5) $ 1,931(5) $ 0 N/A
4100/4300
Wildwood Parkway
30339-9999 (13) (13) $ 0 N/A
Adjusted
Cost and
Adjusted
Percentage Cost Less
Description, Year Rentable Leased Average Major Depreciation
Location Development Joint Company's Square Feet as of 1995 Major Tenants (lease Tenants' and
and Completed Venture Ownership and Acres March 15, Economic expiration/options Rentable Amortization
Zip Code or Acquired Partner Interest as Noted 1996 Occupancy expiration) Sq. Feet (1)
-------- ----------- ------- --------- ----------- --------- --------- -------------------- -------- ------------
Office (Continued)
- ------------------
NationsBank Plaza
Atlanta, GA
30308-2214 1992 NationsBank 50%(6) 1,256,000 92% 83% NationsBank(4) 572,742 $222,735
(4) 4 Acres (2012/2042) $196,621
Ernst & Young 188,175
(2007/2017)
Troutman Sanders 178,459
(2007/2017)
Paul Hastings (2012/2017) 68,980
Hunton & Williams 56,560
(2004/2009)
First Union Tower
Greensboro, NC
27401-2167 1990 N/A (7) 100%(7) 317,000 91% 85% Smith Helms Mullis & 70,360 $ 33,651(7)
1 Acre Moore (2000/2015) $ 25,304(7)
First Union Bank (4) 62,622
(2009/2019)
Halstead Industries 60,253
(2000/2005)
Ten Peachtree Place
Atlanta, GA
30309-3814 1991 Coca-Cola 50%(6) 259,000 100% 100% Coca-Cola (4) (2001/2006) 259,000 $ 23,474
(4) 5 Acres $ 20,897
Summit Green
Greensboro, NC
27408-7023 1986 IBM 50% 135,000 99% 100% IBM (1996/2006) 75,797 $ 10,540
9 Acres(9) Fitech Systems (1999/2004) 22,688 $ 7,420
Massachusetts Mutual 11,476
Life Ins. Co. (1997/2002)
John Marshall-II
Suburban
Washington, D.C.
22102-3802 (13) Carr Realty 50% 224,000 100% (13) Booz-Allen & Hamilton 224,000 $ 25,379
. Corporation (4) 3 Acres (2011/2016) (13)
North Point Center East
Suburban Atlanta, GA
30202-4885 1995(11) N/A 100% 128,000 55% (11) Schweitzer-Mauduit 30,728 $ 9,779
7 Acres International, Inc. (11)
(2001/2007)
Green Tree Financial 21,914
Debt
Maturity
1995 FFO (2) and
------------------
Company's Debt Interest
100% Share Balance Rate
---- ----- ------- ----
Office (Continued)
- ------------------
NationsBank Plaza
Atlanta, GA
30308-2214 $21,237 $10,653 $ 0 N/A
(6)
First Union Tower
Greensboro, NC
27401-2167 $ 4,172 $ 4,172 $ 0 N/A
(7)
Ten Peachtree Place
Atlanta, GA
30309-3814 $ 2,871 $ 1,173 $20,971 11/30/01(8)
(6) 8.00%
Summit Green
Greensboro, NC
27408-7023 $ 1,846 $ 923 $10,547 4/01/98
9.875%
John Marshall-II
Suburban
Washington, D.C.
22102-3802 (13) (13) $15,518 6/21/98(10)
. Renewable
Floating
100 North Point Center East
Suburban Atlanta, GA
30202-4885 (11) (11) $ 0 N/A
Adjusted
Cost and
Adjusted
Percentage Cost Less
Description, Year Rentable Leased Average Major Depreciation
Location Development Joint Company's Square Feet as of 1995 Major Tenants (lease Tenants and
and Completed Venture Ownership and Acres March 15, Economic expiration/options Rentable Amortization
Zip Code or Acquired Partner Interest as Noted 1996 Occupancy expiration) Sq. Feet (1)
-------- ----------- ------- --------- ----------- --------- --------- -------------------- -------- ------------
Office (Continued)
- ------------------
200 North Point Center East
Suburban Atlanta, GA
30202-4885 (13) N/A 100% 125,000 0% (13) N/A N/A $ 768
(13)
Retail Centers and Malls
Haywood Mall
Greenville, SC
29607-2749 1977/1995 Corporate 50% 1,256,000 95% 86% Sears (12) N/A $ 49,044
Property 86 acres overall of J.C. Penney (12) N/A $ 38,740
Investors (4) of which 83% of Venture Rich's (12) N/A
330,000 and Venture owned Belk (12) N/A
19 acres are owned Dillard's (12) N/A
owned by
venture (9)
Perimeter Expo
Atlanta, GA
30338-1519 1993 N/A 100% 290,000 95% 100% The Home Depot Expo (12) N/A $ 19,707
9 acres overall of Marshalls (2014/2029) 36,598 $ 18,837
of which 92% of Company Best Buy (2014/2029) 36,090
0,000 and Company owned Linens 'N Things(2014/2024)30,351
10 acres are owned Office Max (2013/2033) 23,500
owned by The Sport Shoe (2004/2014) 14,348
the Company
North Point MarketCenter Phases I & II
Suburban
Atlanta, GA
30202-4889 1994/1995 N/A 100% 486,000 100% 89% Target (12) N/A $ 25,121(14)
(14) (14)60 Acres (16) (15) Babies "R" Us (2012/2032) 50,275 $ 23,841(14)
of which Media Play (2010/2025) 48,884
370,000 and Marshalls (2010/2025) 40,000
49 acres are Rhodes (2011/2021) 40,000
owned by Linens 'N Things 35,000
the Company (2005/2025)
United Artists (2014/2034) 34,733
Circuit City (2015/2030) 33,420
PETsMART (2009/2029) 25,465
Gaps Old Navy Store 17,000
Debt
Maturity
1995 FFO (2) and
------------------
Company's Debt Interest
100% Share Balance Rate
---- ----- ------- ----
Office (Continued)
- ------------------
200 North Point Center East
Suburban Atlanta, GA
30202-4885 (13) (13) $ 0 N/A
Retail Centers and Malls
- ------------------------
Haywood Mall
Greenville, SC
29607-2749 $ 7,330 $ 3,665 $ 0 N/A
Perimeter Expo
Atlanta, GA
30338-1519 $ 3,048 $ 3,048 $21,442 8/15/05
8.04%
North Point MarketCenter Phases I & II
Suburban
Atlanta, GA
30202-4889 $ 3,564 $ 3,564 $29,853 7/15/05
(15) (14)(15) 8.50%
Adjusted
Cost and
Adjusted
Percentage Cost Less
Description, Year Rentable Leased Average Major Depreciation
Location Development Joint Company's Square Feet as of 1995 Major Tenants (lease Tenants' and
and Completed Venture Ownership and Acres March 15, Economic expiration/options Rentable Amortization
Zip Code or Acquired Partner Interest as Noted 1996 Occupancy expiration) Sq. Feet (1)
-------- ----------- ------- --------- ----------- --------- --------- -------------------- -------- ------------
Retail Centers and Malls (Continued)
- ------------------------------------
Presidential MarketCenter Phase I
Suburban
Atlanta, GA
30278-2149 1994 N/A 100% 320,000 100% 98% Target (12) N/A $ 10,045
29 acres overall of Publix Super Market 56,146 $ 9,622
of which 100% ompany (2019/2044)
204,000 and of Company owned HomeGoods, Inc. (2004/2014) 35,000
19 acres owned T.J. Maxx (2004/2014) 32,000
are owned Marshalls (2010/2025) 30,000
by the
Company
Presidential MarketCenter Phase II
Suburban
Atlanta, GA
30278-2149 (13) N/A 100% 130,000(13) 54% (13) MJDesigns (4) 37,957 $ 3,822
15 Acres (2011/2026)(13) (13)
Office Depot, Inc. 31,615
(2011/2026)(13)
Lovejoy Station
Suburban
Atlanta, GA
30228-9999 1995 N/A 100% 77,000 96% 7% Publix Super Market 47,955 $ 6,132
12 Acres (17) (2016/2036) $ 6,120
Lawrenceville MarketCenter
Suburban
Atlanta, GA
30243-5420 1995 N/A 100% 499,000 100% 22% Target (2014/2040) 117,000 $ 16,647
56 Acres (18) Home Depot (2025/2040) 103,000 $ 16,566
AMC Theater (4)(2016/2036) 64,319
MJDesigns (4)(2011/2026) 36,966
Linens 'N Things(2010/2025) 35,000
Goody's (2008/2026) 32,400
Marshalls (2011/2026) 30,000
PETsMART (2011/2031) 25,416
Gap's Old Navy Store 14,000
(2002/2012)
Colonial Plaza MarketCenter
Orlando, FL
32803-5029 (13) N/A 100% 533,000 60% (13) Circuit City (2017/2037)(13) 43,432 $ 26,517
49 Acres Barnes & Noble 40,450 (13)
(2011/2021)(13)
Rhodes (2011/2026)(13) 40,000
BabySuperstore(2006/2021)(13)40,000
Linens 'N Things 35,000
(2011/2026)(13)
Debt
Maturity
1995 FFO (2) and
------------------
Company's Debt Interest
100% Share Balance Rate
---- ----- ------- ----
Retail Centers and Malls (Continued)
- ------------------------------------
Presidential MarketCenter Phase I
Suburban
Atlanta, GA
30278-2149 $ 1,313 $ 1,313 $ 0 N/A
Presidential MarketCenter Phase II
Suburban
Atlanta, GA
30278-2149 (13) (13) $ 0 N/A
Lovejoy Station
Suburban
Atlanta, GA
30228-9999 $ 26(17) $ 26(17) $ 0 N/A
Lawrenceville MarketCenter
Suburban
Atlanta, GA
30243-5420 $ 232(18) $ 232(18) $ 0 N/A
Colonial Plaza MarketCenter
Orlando, FL
32803-5029 (13) (13) $ 0 N/A
Adjusted
Cost and
Adjusted
Percentage Cost Less
Description, Year Rentable Leased Average Major Depreciation
Location Development Joint Company's Square Feet as of 1995 Major Tenants (lease Tenants' and
and Completed Venture Ownership and Acres March 15, Economic expiration/options Rentable Amortization
Zip Code or Acquired Partner Interest as Noted 1996 Occupancy expiration) Sq. Feet (1)
-------- ----------- ------- --------- ----------- --------- --------- -------------------- -------- ------------
Retail Centers and Malls (Continued)
- ------------------------------------
Colonial Plaza MarketCenter (Continued) Luria's (2011/2026)(13) 32,900
Marshalls (2011/2026)(13) 30,400
Ross Stores (2006/2026)(13) 28,000
Walgreen Co. (2002/2012)(13) 18,614
Gap's Old Navy Store 17,920
(2002/2012)(13)
Mansell Crossing Phase II
Suburban
Atlanta, GA
30202-4822 (13) N/A 100% 100,000 61% (13) Bed Bath & Beyond 40,000 $ 5,367
(14) (14) 13 Acres (2010/2025)(13) (13)(14)
Rooms To Go (2015/2035)(13) 21,000
Greenbrier MarketCenter
Chesapeake, VA
23327-9999 (13) N/A 100% 474,000 76% (13) Target (2016/2046)(13) 117,220 $ 15,674
38 Acres Harris Teeter, Inc. 50,000 (13)
(2015/2035)(13)
Bed Bath & Beyond 40,484
(2011/2026)(13)
Baby Superstore, Inc. 40,000
(2005/2020)(13)
Kinetex, Inc.(2011/2026)(13) 33,111
Barnes & Noble Superstores, 30,545
Inc. (2010/2020)(13)
PETsMART (2010/2030)(13) 26,040
Office Max (2011/2026)(13) 23,484
Rivermont Station
Suburban
Atlanta, Ga.
30076-9999 (13) N/A 100% 92,000 73% (13) Harris Teeter, Inc. 58,261 $ 8,468
19 Acres (2015/2035)(13) (13)
CVS Drug Store (4) 8,775
(2006/2021)(13)
Los Altos MarketCenter
Long Beach, CA
90815-3126 (19) N/A 100% 280,000 (19) (19) Sears (12) N/A (19)
19 Acres Circuit City(4)(2016/2036)(19) 37,591
of which Borders, Inc.(2017/2037)(19 30,000
152,000 and Bristol Farms(4)(2011/2031)(19) 28,200
17 Acres CompUSA, Inc. (2011/2021)(19) 25,620
are owned by Savon Drugs (4)(2016/2026)(19) 16,914
the Company
Debt
Maturity
1995 FFO (2) and
------------------
Company's Debt Interest
100% Share Balance Rate
---- ----- ------- ----
Retail Centers and Malls (Continued)
- ------------------------------------
Colonial Plaza MarketCenter (Continued)
Mansell Crossing Phase II
Suburban
Atlanta, GA
30202-4822 (13) (13) $ 0 N/A
(14)
Greenbrier MarketCenter
Chesapeake, VA
23327-9999 (13) (13) $ 0 N/A
Rivermont Station
Suburban
Atlanta, Ga.
30076-9999 (13) (13) $ 0 N/A
Los Altos MarketCenter
Long Beach, CA
90815-3126 (19) (19) $ 0 N/A
Adjusted
Cost and
Adjusted
Percentage Cost Less
Description, Year Rentable Leased Average Major Depreciation
Location Development Joint Company's Square Feet as of 1995 Major Tenants (lease Tenants' and
and Completed Venture Ownership and Acres March 15, Economic expiration/options Rentable Amortization
Zip Code or Acquired Partner Interest as Noted 1996 Occupancy expiration) Sq. Feet (1)
-------- ----------- ------- --------- ----------- --------- --------- -------------------- -------- ------------
Stand Alone Retail Sites Adjacent to Company's Office and Retail Projects
- -------------------------------------------------------------------------
Wildwood Office Park
Suburban
Atlanta, GA
30339-5671 1985-1993 IBM 50% 16 Acres 91% 89% N/A N/A $ 8,739
$ 7,834
GA Highway 400 Property
Suburban
Atlanta, GA
30202-4885 1993 N/A 100% 30 Acres 81% 56% N/A N/A $ 4,721
$ 4,694
Debt
Maturity
1995 FFO (2) and
------------------
Company's Debt Interest
100% Share Balance Rate
---- ----- ------- ----
Stand Alone Retail Sites Adjacent to Company's Office and Retail Projects
- -------------------------------------------------------------------------
Wildwood Office Park
Suburban
Atlanta, GA
30339-5671 $ 994(20) $ 497(20) $ 0 N/A
$ 7,834
GA Highway 400 Property
Suburban
Atlanta, GA
30202-4885 $ 762(21) $ 762(21) $ 0 N/A
(1) Cost as shown in the accompanying table includes deferred leasing and
financing costs and other related assets. For each of the following
projects: 2300 and 2500 Windy Ridge Parkway, 3200 Windy Hill Road,
4100/4300 Wildwood Parkway and Wildwood Stand Alone Retail Lease Sites, the
cost shown is what the cost would be if the venture's land cost were
adjusted downward to the Company's lower basis in the land it contributed
to the venture.
(2) FFO represents cash flows from operating activities before interest
expense excluding changes in other operating assets and liabilities. FFO
should not be considered an alternative to net income or other measurements
under generally accepted accounting principles as an indicator of operating
performance; or to cash flows from operating, investing, or financing
activities as a measure of liquidity.
(3) TSW International, Inc. and Georgia-Pacific Corporation have the right
to terminate their leases in 1998 and 2007, respectively, upon payment of
significant cancellation penalties.
(4) Actual tenant or venture partner is affiliate of entity shown.
(5) For 3100 Windy Hill Road, the cost shown is the Company's carrying
value of the land lease and first mortgage note from which it derives
substantially all of the economic benefits of the property. The FFO in the
accompanying table includes the interest and ground lease income recognized
by the Company and excludes $375,000 of principal amortization of the first
mortgage note.
(6) See "Major Properties" - "NationsBank Plaza" and "Ten Peachtree Place"
where the partnership's preferences are discussed.
(7) The Company has the option to purchase its 15% minority partner's interest
in the First Union Tower for $999,000 by July 31, 1996. Pursuant to this
partnership amendment, the Company is entitled to 100% of the earnings and
cash flow from the partnership through the option period. As a result, the
accompanying table discloses all information as if the Company owned 100%
of First Union Tower and includes the $999,000 buyout amount in the
Adjusted Cost amounts disclosed in the accompanying table.
(8) Maturity of the Ten Peachtree Place mortgage debt is extendible to December
31, 2008. Rate becomes floating after November 30, 2001.
(9) Summit Green and a portion of the Haywood Mall parking lot (3 acres) are
subject to long-term ground leases.
(10) The rate on the construction loan on the John Marshall-II building floats
at .90% over LIBOR rate. LIBOR rate averaged 5.74% for the month of
December 1995. The venture has a commitment for a $24,675,000, 17 year
fully amortizing non-recourse mortgage note at a 7% interest rate which
should fund by April 1996.
(11) 100 North Point Center East was completed in December 1995, but was not
considered operational for financial reporting purposes until the first
quarter of 1996.
(12) This anchor tenant owns its own space.
(13) Project was under construction as of December 31, 1995. Lease expiration
dates are based upon estimated commencement dates, and square footage is
estimated.
(14) At December 31, 1995, the Company had interests in two partnerships with
Coca-Cola which were exchanged effective January 1, 1996: Spring/Haynes
Associates (50% interest) and North Point Market Associates, L.P. (82.3%
interest). The Company and Coca-Cola entered into an exchange transaction
which effectively resulted in Coca-Cola receiving 100% of the Spring/Haynes
Associate' property and the Company receiving $1,092,000 in cash and 100%
of North Point Market Associates, L.P.'s properties (North Point
MarketCenter and Mansell Crossing Phase II). The above table discloses all
information as if the exchange transaction had occurred on December 31,
1995.
(15) North Point MarketCenter Phase II became operational for financial
reporting purposes in mid 1995. Thus, FFO and economic occupancy reported
for North Point MarketCenter Phase II does not include a full year of
operations.
(16) North Point MarketCenter includes approximately 6 outparcels available for
ground lease to freestanding users, of which four are currently leased. The
remaining 2 sites are expected to be developed for freestanding retailers
in 1996.
(17) Lovejoy Station became partially operational for financial reporting
purposes in December 1995. Thus, FFO and economic occupancy reported for
Lovejoy Station do not include a full year of operations. FFO will be
approximately $700,000 on a stabilized basis.
(18) Lawrenceville MarketCenter became partially operational for financial
reporting purposes in late 1995. Thus, FFO and economic occupancy reported
for Lawrenceville MarketCenter do not include a full year of operations.
FFO will be approximately $3.2 million on a stabilized basis.
(19) Land was acquired and construction commenced on Los Altos MarketCenter
subsequent to December 31, 1995. Lease expiration dates are based upon
estimated commencement dates, and square footage is estimated.
(20) Approximately 14 acres of the Wildwood Office Park ground lease sites were
generating FFO for the twelve months ended December 31, 1995. One of the
remaining 2 acres is leased to a tenant whose rental commencement begins in
August 1996.
(21) During 1995, rentals were received from 24 acres of the GA Highway 400
Property, with rentals from 11 of the acres commencing during 1995. The
remaining acres are currently being marketed to prospective tenants.
(22) Tenant has the option to purchase the building on its lease expiration date
for a price of $33,750,000.
(23) Tenant has the right to terminate its lease in 1997.
Land Held for Investment and Future Development (excluding Retail Outparcels)
Adjusted
Cost
Less
Developable Company's Depreciation
Land Area Joint Venture Ownership and Debt
Description, Location and Zoned Use Year Acquired (Acres)(1) Partner Interest Amortization Balances
- ----------------------------------- ------------------------ ------- -------- ---------------------
Wildwood Office Park
Suburban Atlanta, Georgia
Office and Commercial 1971-1987 148 N/A 100% $ 7,005 $ 0
Office and Commercial 1971-1982 42 IBM 50% $ 12,676(2) $ 0
Georgia Highway 400 Land
(Georgia Highway 400 & Haynes Bridge Road) (3)
Suburban Atlanta, Georgia
Office and Commercial - East 1970-1985 63 N/A 100% $ 1,856 $ 0
Office and Commercial - West 1970-1985 230 N/A 100% $ 4,422 $ 0
Midtown Atlanta
Office and Commercial 1984 2 N/A 100% $ 1,975 $ 0
Temco Associates
(Paulding County)
Suburban Atlanta, Georgia 1991 -(5) Temple-Inland 50% --(5) $ 0
Inc. (4)
Lawrenceville
Gwinnett County
Suburban Atlanta, Georgia
Single-Family Residential
and Commercial 1994 84 N/A 100% $ 1,484 $ 0
(1) Based upon management's estimates.
(2) For the portion of the Wildwood Office Park land owned by a joint venture,
the cost shown is what the cost would be if the venture's land cost were
adjusted downward to the Company's lower basis in the land it contributed
to the venture. The adjusted cost excludes building predevelopment costs of
$1,252,000.
(3) The Georgia Highway 400 property is located both east and west of Georgia
Highway 400. Currently, only the land which is located east of Georgia
Highway 400 is being developed, but planning has begun for additional
development on the west side property. This land surrounds North Point
Mall, a 1.1 million square foot regional mall (currently being expanded to
1.3 million square feet) on a 100 acre site which the Company sold in 1988
to a joint venture of Homart Development Co. and JMB/Federated Realty
Associates, Ltd.
(4) Joint venture partner is an affiliate of the entity shown.
(5) Temco Associates has an option through March 2006, with no carrying costs,
to acquire approximately 35,000 acres in Paulding County, Georgia
(northwest of Atlanta, Georgia), of which approximately 13,000 acres would
be a fee simple interest and approximately 22,000 acres would be a timber
rights interest only. The option may be exercised in whole or in part over
the option period. Temco Associates has engaged in certain sales of land as
to which it simultaneously exercised its purchase option. During 1993 and
1994, approximately 1,100 and 72 acres, respectively of the option related
to the fee simple interest was exercised and simultaneously sold for gross
profits of $305,000 and $243,000, respectively. None of the option was
exercised in 1995.
Major Properties
- ----------------
General
- -------
This section describes the major operating properties in which the Company
has an interest either directly or indirectly through joint venture
arrangements. A "negative investment" in a joint venture results from
distributions of capital to the Company, if any, exceeding the sum of (i) the
Company's contributions of capital and (ii) reported earnings (losses) of the
joint venture allocated to the Company. "Investment" in a joint venture means
the book value of the Company's investment in the joint venture.
Wildwood Office Park
- --------------------
Wildwood Office Park is a 289 acre Class A commercial development in
suburban Atlanta master planned by I.M. Pei, including 7 office buildings (of
which 2 are under construction) containing 2,172,000 rentable square feet. The
property is zoned for office, institutional and commercial use, with over 7
million additional gross square feet of office and commercial space planned for
the park. Approximately 107 acres in the park are owned by, or committed to be
contributed to, Wildwood Associates (see below), including approximately 42
acres of land held for future development. The Company owns 100% of the 148 acre
balance of the land available for future development.
Located in Atlanta's northwest commercial district, just north of the
Interstate 285/Interstate 75 intersection, Wildwood features convenient access
to all of Atlanta's major office, commercial and residential districts. The
Wildwood complex overlooks the Chattahoochee River and borders 1,200 acres of
national forest, thus providing an urban office facility in a forest setting.
Wildwood Associates. Wildwood Associates is a joint venture formed in 1985
between the Company and IBM. The Company and IBM each have a 50% interest in
Wildwood Associates. At December 31, 1995, the Company's investment in Wildwood
Associates and a related partnership (see "Summit Green") was approximately $2.2
million, which included the cost of the land the Company is committed to
contribute to Wildwood Associates.
Wildwood Associates owns the 3200 Windy Hill Road Building (681,000
rentable square feet), the 2300 Windy Ridge Parkway Building (634,000 rentable
square feet), the 2500 Windy Ridge Parkway Building (313,000 rentable square
feet) and the 4100/4300 Wildwood Parkway Buildings (250,000 rentable square
feet, which is under construction). At March 15, 1996, these buildings were 95%,
95%, 87%, and 91% leased, respectively. Wildwood Associates also owns 15 acres
leased to two banking facilities and five restaurants.
Wildwood Associates refinanced two mortgage notes in December 1995. The
2300 Windy Ridge Parkway Building which had an $81 million balance at a 9.09%
rate and matured in August 1999, was refinanced with a $72 million 7.56%
mortgage note due in 10 years. The 2500 Windy Ridge Parkway Building which had a
$31 million balance at a 9.125% rate and matured in June 1996, was refinanced
with a $26 million 7.45% mortgage note due in 10 years.
The 3200 Windy Hill Road Building and the 4100/4300 Wildwood Parkway
Buildings have no mortgage debt and are unencumbered assets. Wildwood Associates
has a $50 million bank line of credit (the Company severally guarantees
one-half) under which $26.3 million was drawn at December 31, 1995.
Other Buildings in Wildwood Office Park. Wildwood Office Park also contains
the 3301 Windy Ridge Parkway Building, a 106,000 rentable square foot office
building located on approximately 10 acres which is wholly owned by the Company.
Commencing January 1994, a single tenant, TSW International, Inc., leased the
building for a term of ten years. The lease was initially for 60% of the
building with options permitting the tenant to expand its occupancy to the
remainder of the building over the next several years; the first such option for
an additional 10% of the space was exercised in the fourth quarter of 1994. In
addition, the 3100 Windy Hill Road Building, a 188,000 rentable square foot
corporate training facility occupies a 13-acre parcel of land which is wholly
owned by the Company. The training facility improvements were sold in 1983 to a
limited partnership of private investors, at which time the Company received a
leasehold mortgage note. The training facility land was simultaneously leased to
the partnership for thirty years, along with certain equipment for varying
periods. The training facility was 100% leased by the partnership to IBM through
November 1993. In January 1993, the IBM lease was extended through November 30,
1998. Concurrently with the IBM extension, the mortgage note and related leases
were also modified (see Note 3).
North Point
- -----------
North Point is a mixed-use commercial development located in north central
suburban Atlanta, Georgia off of Georgia Highway 400, a six lane state highway
that runs from downtown Atlanta to the northern Atlanta suburbs. The Company
owns approximately 169 and 230 acres located on the east and west sides of
Georgia Highway 400, respectively. Currently, only the land which is located
east of Georgia Highway 400 is being developed, but planning has begun for
additional development on the west side property. The Company previously sold
100 acres of its holdings located on the east side of Georgia Highway 400 in
1988 to a joint venture of Homart Development Co. and JMB/Federated Realty
Associates, Ltd. This joint venture constructed North Point Mall, a 1.1 million
square foot regional mall which opened in October 1993 and has been expanded to
1.3 million square feet with the addition of a sixth anchor store (Dillard's).
The following describes the various components of North Point.
North Point MarketCenter and Mansell Crossing Phase II. Through December
31, 1995, these two retail properties were owned by North Point Market
Associates, L.P. ("NPMA") a limited partnership between Cousins (82.3%) and an
affiliate of Coca-Cola (17.7%). At December 31, 1995, Cousins also had a 50%
interest with an affiliate of Coca-Cola in another partnership, Spring/Haynes
Associates, which owned approximately 11 acres of land in midtown Atlanta.
Effective January 1, 1996, Cousins and Coca-Cola entered into a transaction to
exchange their interests in these two partnerships, which effectively resulted
in Coca-Cola receiving 100% of the Spring/Haynes Associates' property and
Cousins receiving $1,092,000 in cash and 100% of North Point Market Associates,
L.P.'s properties (North Point MarketCenter and Mansell Crossing Phase II).
North Point MarketCenter, which is 100% leased as of March 15, 1996, is a
486,000 square foot retail power center (of which 370,000 square feet are owned
by Cousins) located adjacent to North Point Mall. North Point MarketCenter-Phase
I (313,000 square feet) became operational for financial reporting purposes in
May 1994, with Phase II (173,000 square feet, of which 57,000 are owned by
Cousins) becoming fully operational for financial reporting purposes in
September 1995. Construction commenced in May 1995 on Mansell Crossing Phase II,
an approximately 100,000 square foot expansion of an existing retail power
center previously developed by the Company for a third party. North Point
MarketCenter also includes six outparcels available for ground lease to
freestanding users, of which four are currently leased.
North Point Center East. In November 1995, construction commenced on 200
North Point Center East, an approximately 125,000 rentable square foot Class A
office building located adjacent to 100 North Point Center East. 100 North Point
Center East, an approximately 128,000 rentable square foot Class A office
building opened in December 1995 and should become operational for financial
reporting purposes in the first quarter of 1996. These two office buildings are
located on 14 acres adjacent to North Point Mall.
Other North Point Property. Approximately 30 acres of the North Point land
are being ground leased in 1 to 5 acre sites to freestanding users.
Approximately 24 acres were leased as of March 15, 1996.
The remaining approximately 293 developable acres at North Point are 100%
owned by the Company. Approximately 63 acres of this land are located on the
east side of Georgia Highway 400 and are zoned for mixed-use development
including retail and office space. Approximately 230 acres of the land are
located on the west side of Georgia Highway 400 and are zoned for office,
institutional and light industrial use.
Other Office Properties
- -----------------------
NationsBank Plaza. NationsBank Plaza is a Class A, 55-story, 1.3 million
rentable square foot office tower designed by Kevin Roche and is located on
approximately 4 acres of land between the midtown and downtown districts of
Atlanta, Georgia. The building, which was completed in 1992, was approximately
92% leased at March 15, 1996. An affiliate of NationsBank leases 46% of the
rentable square feet. NationsBank Plaza was developed by CSC Associates, L.P.
("CSC"), a joint venture formed by the Company and a wholly owned subsidiary of
NationsBank Corporation, each as 50% partners.
In October 1993, the partnership fully repaid all of its debt with equity
contributions of $86.7 million made by each partner. At December 31, 1995, the
Company's investment in CSC was approximately $104,776,000.
CSC's net income or loss and cash distributions are allocated to the
partners based on their percentage interests (50% each), subject to a preference
to Cousins, which preference resulted in Cousins recognizing $874,000, $451,000,
and $36,000 in income over what it would have otherwise recognized in the years
ended December 31, 1993, 1994, and 1995, respectively. No additional preference
is due to Cousins.
First Union Tower. First Union Tower is a Class A office building
containing approximately 317,000 rentable square feet. The property is located
on approximately one acre of land in downtown Greensboro, North Carolina. First
Union Tower opened in the first quarter of 1990 and at March 15, 1996 was
approximately 91% leased.
First Union Tower is owned by North Greene Associates Limited Partnership
("NGA"), which was formed in 1987 as a joint venture between Cousins and Weaver
Downtown Limited Partnership. Cousins has an 85% ownership interest in NGA, and
accounts for it as a consolidated entity. Pursuant to an amendment to the
partnership agreement executed as of August 1, 1995, Cousins has the option to
purchase its partner's interest for $999,000 by July 1996 and is entitled to
100% of the earnings and cash flow from the partnership through the option
period. Cousins recognized 100% of the earnings from the partnership for the
year ended December 31, 1995.
One Ninety One Peachtree Tower. One Ninety One Peachtree Tower is a
50-story, Class A office tower located in downtown Atlanta, Georgia that was
completed in December 1990. One Ninety One Peachtree Tower, which contains 1.2
million rentable square feet, was designed by John Burgee Architects, with
Phillip Johnson as design consultant.
One Ninety One Peachtree Tower was developed on approximately 2 acres of
land, of which approximately 1.5 acres is owned and approximately one-half acre
under the parking facility is leased for a 99-year term expiring in 2088 with a
99-year renewal option. One Ninety One Peachtree Tower was approximately 92%
leased at March 15, 1996.
C-H Associates, Ltd. ("C-H Associates"), a partnership formed in 1988
between CREC (49%), Hines Peachtree Associates Limited Partnership (49%) and
Peachtree Palace Hotel, Ltd. (2%), owns a 20% interest in the partnership that
owns One Ninety One Peachtree Tower. C-H Associates' 20% ownership of One Ninety
One Peachtree Tower results in an effective 9.8% ownership interest by CREC in
the One Ninety One Peachtree Tower project. The balance of the One Ninety One
Peachtree Tower project is owned by DIHC Peachtree Associates, an affiliate of
DIHC.
Through C-H Associates, CREC received 50% of the development fees from the
One Ninety One Peachtree Tower project. In addition, CREC owns a 50% interest in
two general partnerships which receive fees from leasing and managing the One
Ninety One Peachtree Tower project.
The One Ninety One Peachtree Tower project was funded substantially by debt
until March 1993, at which time DIHC Peachtree Associates contributed equity in
the amount of $145,000,000. Subsequent to the equity contribution, C-H
Associates is entitled to a priority distribution of $250,000 per year (of which
the Company is entitled to receive $112,500) for seven years beginning in 1993.
The equity contributed by DIHC Peachtree Associates is entitled to a preferred
return at a rate increasing over the first 14 years from 5.5% to 11.5% (payable
after the Company's priority return); at December 31, 1995, the cumulative
undistributed preferred return was $9,770,495. Thereafter, the partners will
share in any distributions in accordance with their percentage interests. At
December 31, 1995, the Company had a negative investment of $90,000 in the One
Ninety One Peachtree Tower project.
Ten Peachtree Place. Ten Peachtree Place is a 20-story, 259,000 rentable
square foot Class A office building located in midtown Atlanta, Georgia.
Completed in 1991, this structure was designed by Michael Graves and is
currently 100% leased to Coca-Cola. Approximately four acres of adjacent land,
currently used for surface parking, are available for future development.
Ten Peachtree Place is owned by Ten Peachtree Place Associates, a general
partnership between the Company (50%) and a wholly owned subsidiary of Coca-Cola
(50%). The partnership acquired the property in 1991 for a nominal cash
investment, subject to a ten-year purchase money note. This 8% purchase money
note had an outstanding balance of $21.0 million at December 31, 1995. If the
purchase money note is paid in accordance with its terms, it will amortize to
approximately $15.3 million ($59 per rentable square foot) over the ten-year
term of the Coca-Cola lease, at which time Coca-Cola is entitled to receive the
preferred return described below and the property may be sold, released, or
returned to the lender under the purchase money note for $1.00 without penalty
or any further liability to the Company for the indebtedness. At December 31,
1995, the Company had a negative investment in Ten Peachtree Place Associates of
$39,000.
The Company anticipates that Ten Peachtree Place Associates will generate
approximately $400,000 per year of cash flows from operating activities net of
note principal amortization during the ten-year lease. The partnership agreement
generally provides that each of the partners is entitled to receive 50% of cash
flows from operating activities net of note principal amortization (excluding
any sale proceeds) for ten years, after which time the Company is entitled to
15% of cash flows (including any sale proceeds) and its partner is entitled to
receive 85% of cash flows (including any sale proceeds), until the two partners
have received a combined distribution of $15.3 million, after which time each
partner is entitled to receive 50% of cash flows (including any sale proceeds).
Summit Green. Summit Green, a 21-acre office park located in Greensboro,
North Carolina, is owned by Wildwood Associates (the partnership with IBM) and a
related partnership. The park contains a 135,000 rentable square foot mid-rise
office building which was 99% leased at March 15, 1996. The Summit Green land is
leased from an unrelated third party for a 99-year term expiring in 2084. Space
exists for two additional office buildings.
CC-JM II Associates. This joint venture was formed in 1994 between the
Company and an affiliate of Carr Realty Corporation, each as 50% general
partners, to develop and own a 224,000 square foot office building in suburban
Washington, D.C. The building is 100% leased for 15 years to Booz-Allen &
Hamilton, an international consulting firm, as a part of its corporate
headquarters campus. Rent commenced on January 21, 1996. The building is
expected to be completed in 1996 at a total cost of approximately $32 million
with contributions to the venture of $4 million by each partner. The venture has
a commitment for a $24,675,000, 17 year fully amortizing non-recourse mortgage
note at a 7% interest rate which should fund by April 1996.
Other Retail Properties
- -----------------------
Haywood Mall. Haywood Mall is an enclosed regional shopping center located
5 miles southeast of downtown Greenville, South Carolina, which was developed
and opened in 1980. Haywood Mall Associates, a venture formed in 1979 by the
Company and Bellwether Properties of South Carolina, L.P., an affiliate of
Corporate Properties Investors, owns the mall. Expansion of the mall from
956,000 gross leasable square feet ("GLA") (of which the venture's ownership is
approximately 272,000 GLA) to 1,256,000 GLA (of which the venture's ownership is
approximately 330,000) was substantially completed in 1995. The balance of the
mall is owned by the mall's five major department stores. The portion of Haywood
Mall owned by Haywood Mall Associates was developed on approximately 19 acres of
land, of which approximately 16 acres is owned and approximately 3 acres (of
parking area) is leased under a ground lease expiring in 2067. The portion of
Haywood Mall owned by the venture was approximately 83% leased as of March 15,
1996.
The Company has a 50% interest in Haywood Mall Associates. The Company
originally had only a nominal cash investment, but funded an aggregate of $2.8
million in 1988 through 1990 as its 50% share of capital improvements made to
the mall, including a new food court area. Additionally, the Company contributed
$16.1 million and $5.8 million during 1994 and 1995 to fund its share of the
expansion and the prepayment of an existing 9.37% first mortgage in May 1994. At
December 31, 1995, the Company's investment was $21,961,000.
Other Fully Operational Retail Properties. In addition to North Point
MarketCenter which is discussed above, the Company owns two other retail power
centers which were fully operational for financial reporting purposes as of
December 31, 1995. Perimeter Expo is a 295,000 square foot retail power center
(of which the Company owns 170,000 square feet) which is located in Atlanta,
Georgia and was 92% leased (Company owned) as of March 15, 1996. Presidential
MarketCenter Phase I is a 320,000 square foot retail power center (of which the
Company owns 204,000 square feet) which is located in suburban Atlanta, Georgia
and was 100% leased (Company owned) as of March 15, 1996.
Partially Operational Retail Properties. The Company owns two retail
properties which were partially operational for financial reporting purposes as
of December 31, 1995. Lawrenceville MarketCenter is a 499,000 square foot retail
power center which is located in suburban Atlanta and was 100% leased as of
March 15, 1996. Lovejoy Station is a 77,000 square foot neighborhood retail
center which is located in suburban Atlanta and was 96% leased as of March 15,
1996.
Retail Projects Under Construction. In addition to Mansell Crossing Phase
II which is discussed above, the Company owns three retail power centers and one
neighborhood retail center which were under construction as of December 31,
1995. Presidential MarketCenter Phase II is a 130,000 square foot expansion of
an existing retail power center which is located in suburban Atlanta and is
expected to be completed during 1996 and 1997 at a total cost of approximately
$10 million. Colonial Plaza MarketCenter is a 533,000 square foot retail power
center which is located in Orlando, Florida and is expected to be completed in
mid-1996 at a total cost of approximately $45 million. Greenbrier MarketCenter
is a 474,000 square foot retail power center which is located in Chesapeake,
Virginia and is expected to be completed in the fall of 1996 at a total cost of
approximately $34 million. Rivermont Station is a 92,000 square foot
neighborhood retail center which is located in suburban Atlanta and is expected
to be completed in late 1996 at a total cost of approximately $10 million.
Subsequent to year-end, the Company purchased the Los Altos Shopping
Center, a retail center located in Long Beach, California. The Company commenced
the demolition of the retail center and began construction of Los Altos
MarketCenter, a 280,000 square foot (of which the Company will own 152,000
square feet) retail power center which is expected to be completed in late 1996
at a total cost of approximately $23 million.
Residential Lot Developments
- ----------------------------
As of December 31, 1995, CREC owned the following parcels of land which are
being developed into residential communities ($ in thousands):
Estimated
Total Lots Purchase
Initial on Land Money
Year Currently Lots Remaining Carrying Debt
Description Acquired Owned (1) Sold to Date Lots Value Balances
----------- -------- --------- ------------ ---- ----- --------
Brown's Farm 1993 160 75 85 $ 2,214 $ 0
West Cobb County
Suburban Atlanta, GA
Apalachee River Club 1994 185 40 145 3,608 0
Gwinnett County
Suburban Atlanta, GA
Echo Mill 1994 219 78 141 2,261 617
West Cobb County
Suburban Atlanta, GA
Barrett Downs 1994 144 8 136 2,849 0
Forsyth County
Suburban Atlanta, GA
Bradshaw Farms 1994 118 95 23 520 0
Cherokee County
Suburban Atlanta, GA
--- --- --- ------- -----
Total 826 296 530 $11,452 $ 617
=== === === ======= =====
(1) Includes lots sold to date. Additional lots may be developed on adjacent
land on which CREC holds purchase options.
Land Held for Investment and Future Development
- -----------------------------------------------
In addition to the various land parcels located adjacent to operating
properties or projects under construction discussed above, the Company owns the
following significant land holdings either directly or indirectly through joint
venture arrangements. The Company intends to convert its land holdings to
income-producing usage or to sell portions of land holdings as opportunities
present themselves over time.
Spring/Haynes Associates. This general partnership was formed in 1985
between the Company and a wholly owned subsidiary of Coca-Cola, each as 50%
general partners, to jointly own and develop real estate. See North Point above
where it is discussed that effective January 1, 1996, Cousins and Coca-Cola
exchanged their interests in Spring/Haynes Associates and North Point Market
Associates, L.P.
Temco Associates. Temco Associates was formed in March 1991 as a
partnership between CREC (50%) and a subsidiary of Temple-Inland Inc. (50%).
Temco Associates has an option through March 2006, with no carrying costs, to
acquire approximately 35,000 acres in Paulding County, Georgia (northwest of
Atlanta, Georgia), of which approximately 13,000 acres would be a fee simple
interest and approximately 22,000 acres would be a timber rights interest only.
The option may be exercised in whole or in part over the option period and the
option price of this fee simple land was $736 per acre at January 1, 1996,
escalating at 6% on January 1 of each succeeding year during the term of the
option. The Temco Associates property has the potential for future residential,
industrial and commercial development. Temco Associates has to date sold parcels
of land as to which it simultaneously exercised its purchase option. During 1993
and 1994, approximately 1,100 and 72 acres, respectively, of the option related
to the fee simple interest was exercised and simultaneously sold for gross
profits of $305,000 and $243,000, respectively. None of the option was exercised
in 1995.
Other Real Property Investments
- -------------------------------
Omni Norfolk Hotel. Norfolk Hotel Associates ("NHA") is a general
partnership formed in 1978 between the Company and an affiliate of Odyssey
Partners, L.P. (an investment partnership), each as 50% partners, which held a
mortgage note on and owned the land under the 442-room Omni International Hotel
in downtown Norfolk, Virginia. In January 1992, NHA terminated the land lease
and became the owner of the hotel and a long-term parking agreement with an
adjacent building owner. In April 1993, the partnership sold the hotel, but
retained its interest in the parking agreement. The Company's share of the gain
on this transaction was approximately $.5 million and is included in Income From
Joint Ventures in the 1993 Consolidated Statement of Income. The partnership
received a mortgage note for a portion of the sales proceeds. In July 1994, NHA
distributed to each partner a 50% interest in the parking agreement held by NHA.
The Company currently receives payments of approximately $228,000 per year for
its 50% interest in the agreement, and has entered into an agreement to sell its
interest for $2 million in July 1996, which would result in a profit to the
Company of approximately $411,000. Additionally, in July 1994, each partner
contributed $2 million to NHA to pay down $4 million in debt.
At December 31, 1995, the Company had an investment of $1,815,000 in NHA.
The Company has also guaranteed a $2.4 million line of credit to NHA under which
$2.2 million had been drawn at December 31, 1995, and its partner has guaranteed
an equal line of credit under which $2.2 million had been drawn at December 31,
1995.
Dusseldorf Joint Venture. In 1992, Cousins entered into a joint venture
agreement for the development of a 133,000 rentable square foot office building
in Dusseldorf, Germany which is 34% leased to IBM. Cousins' venture partners are
IBM and Multi Development Corporation International B.V. ("Multi"), a Dutch real
estate development company. In December 1993, the building was presold to an
affiliate of Deutsche Bank. CREC and Multi jointly developed the building. Due
to the release of certain completion guarantees related to the building,
approximately $2.6 million of development income was recognized in September
1995 ($931,000 of which had been deferred as of December 31, 1994).
Kennesaw Crossings. The Company owns Kennesaw Crossings, a 116,000 square
foot shopping center in suburban Atlanta, Georgia. The center was constructed in
1974 on 14 acres of land leased from an unrelated party through 2068. The
Company's net carrying value in Kennesaw Crossings as of December 31, 1995 was
$1.1 million.
Air Rights Near the CNN Center. The Company owns a leasehold interest in
the air rights over the approximately 365,000 square foot CNN Center parking
facility in Atlanta, Georgia, adjoining the world headquarters of Turner
Broadcasting System, Inc. and Cable News Network. The air rights are developable
for additional parking or office use. The Company's net carrying value of this
property is $0.
Supplemental Financial and Leasing Information
- ----------------------------------------------
Depreciation and amortization expense include the following components for
the years ended December 31, 1994 and 1995 ($ in thousands):
1994 1995
Share of Share of
Unconsolidated Unconsolidated
Consolidated Joint Ventures Total Consolidated Joint Ventures Total
------------ -------------- ----- ------------ -------------- -----
Furniture, fixtures and
equipment $ 444 $ 202 $ 646 $ 389 $ 122 $ 511
Deferred financing costs 119 80 199 -- 80 80
Goodwill and related business
acquisition costs 441 37 478 229 28 257
Real estate related:
Building (including tenant
first generation) 2,598 7,724 10,322 3,754 8,082 11,836
Tenant second generation 140 509 649 144 655 799
------ ------- ------- ------ ------- ---
$ 3,742 $ 8,552 $12,294 $4,516 $ 8,967 $13,483
======= ======= ======= ====== ======= =======
Exclusive of new developments and purchases of furniture, fixtures and
equipment, the Company had the following capital expenditures for the years
ended December 31, 1994 and 1995, including its share of unconsolidated joint
ventures ($ in thousands):
1994 1995
Office Retail Total Office Retail Total
------ ------ ----- ------ ------ -----
Second generation related costs $ 381 $ 272 $ 653 $1,316 $ -- $1,316
Building improvements 62 -- 62 28 23 51
----- ----- ----- ------ ----- --
Total $ 443 $ 272 $ 715 $1,344 $ 23 $1,367
===== ===== ===== ====== ===== ======
Item 3. Legal Proceedings
- --------------------------
No material legal proceedings are presently pending by or against the
Company.
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
No matter was submitted to a vote of security holders during the fourth
quarter of the Registran's fiscal year ended December 31, 1995.
Item X. Executive Officers of the Registrant
- ---------------------------------------------
The Executive Officers of the Registrant as of the date hereof are as
follows:
Name Age Office Held
---- --- -----------
Thomas G. Cousins 64 Chairman of the Board of Directors
and Chief Executive Officer
Daniel M. DuPree 49 President and Chief Operating Officer
George J. Berry 58 Senior Vice President
Tom G. Charlesworth 46 Senior Vice President, Secretary, and
General Counsel
Craig B. Jones 45 Senior Vice President
Joel T. Murphy 37 Senior Vice President and President of the
Retail Division (Cousins MarketCenters,
Inc.)
John L. Murphy 50 Senior Vice President - Marketing
W. James Overton 49 Senior Vice President - Development
Peter A. Tartikoff 54 Senior Vice President and Chief Financial
Officer
Relationships:
- --------------
There are no family relationships among the Executive Officers or
Directors.
Term of Office:
- ---------------
The term of office for all officers expires at the annual directors'
meeting, but the Board has the power to remove any officer at any time.
Business Experience:
- --------------------
Mr. Cousins has been the Chief Executive Officer of the Company since its
inception.
Mr. DuPree joined the Company in October 1992, became Senior Vice President
in April 1993, Senior Executive Vice President in April 1995 and President and
Chief Operating Officer in November 1995. Prior to that he was President of New
Market Companies, Inc. and affiliates since 1984.
Mr. Berry has been Senior Vice President since joining the Company in
September 1990. Prior to that he was Commissioner of the State of Georgia's
Department of Industry, Trade and Tourism from 1983 to 1990.
Mr. Charlesworth joined the Company in October 1992 and became Senior Vice
President, Secretary, and General Counsel in November 1992. Prior to that he
worked for certain affiliates of Thomas G. Cousins as Chief Financial Officer
and Legal Counsel.
Mr. Jones joined the Company in October 1992 and became Senior Vice
President in November 1995. From 1987 until joining the Company, he was
Executive Vice President of New Market Companies, Inc. and affiliates.
Mr. Joel Murphy joined the Company in October 1992 and became Senior Vice
President of the Company and President of the Retail Division in November 1995.
From 1988 until joining the Company, he was Senior Vice President of New Market
Companies, Inc. and affiliates.
Mr. John Murphy has been Senior Vice President since joining the Company in
December 1987.
Mr. Overton has been Senior Vice President since joining the Company in
September 1989. Prior to that he was employed by Hardin Construction Group, Inc.
from 1972 to 1989, where he served as President from 1985 to 1989.
Mr. Tartikoff has been Senior Vice President and Chief Financial Officer of
the Company since February 1986.
PART II
-------
Item 5. Market for Registrant's Common Stock and Related Security Holder Matters
- --------------------------------------------------------------------------------
The information concerning the market prices for the Registrant's common
stock and related stockholder matters appearing under the caption "Market and
Dividend Information" on page 42 of the Registrant's 1995 Annual Report to
Stockholders is incorporated herein by reference.
Item 6. Selected Financial Data
- -------------------------------
The information appearing under the caption "Five Year Summary of Selected
Financial Data" on page 36 of the Registrant's 1995 Annual Report to
Stockholders is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
- -------------------------------------------------------------------------------
of Operations
-------------
Management's Discussion and Analysis of Financial Condition and Results of
Operations which appears on pages 37 through 41 of the Registrant's 1995 Annual
Report to Stockholders is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
- ---------------------------------------------------
The Consolidated Financial Statements and Notes to Consolidated Financial
Statements of the Registrant and Report of Independent Public Accountants which
appear on pages 19 through 36 of the Registrant's 1995 Annual Report to
Stockholders are incorporated herein by reference.
The information appearing under the caption "Selected Quarterly Financial
Information (Unaudited)" on page 43 of the Registrant's 1995 Annual Report to
Stockholders is incorporated herein by reference.
Other financial statements and financial statement schedules required under
Regulation S-X are filed pursuant to Item 14 of Part IV of this report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
- -------------------------------------------------------------------------
Financial Disclosure
--------------------
Not applicable.
PART III
--------
Item 10. Directors and Executive Officers of the Registrant
- -----------------------------------------------------------
The information concerning the Directors and Executive Officers of the
Registrant that is required by this Item 10, except that which is presented in
Item X in Part I above, is included under the caption "Directors and Executive
Officers of the Company" on pages 2 through 4 of the Proxy Statement dated March
29, 1996 relating to the 1996 Annual Meeting of the Registrant's Stockholders,
and is incorporated herein by reference.
Item 11. Executive Compensation
- -------------------------------
The information appearing under the caption "Executive Compensation" on
pages 7 through 10 of the Proxy Statement dated March 29, 1996 relating to the
1996 Annual Meeting of the Registrant's Stockholders is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- -----------------------------------------------------------------------
The information concerning security ownership of certain beneficial owners
and management required by this Item 12 is included under the captions
"Directors and Executive Officers of the Company" on pages 2 through 6 and
"Principal Stockholders" on pages 27 and 28 of the Proxy Statement dated March
29, 1996 relating to the 1996 Annual Meeting of the Registrant's Stockholders,
and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
- -------------------------------------------------------
The information concerning certain transactions required by this Item 13 is
included under the caption "Certain Transactions" on pages 14 and 15 of the
Proxy Statement dated March 29, 1996 relating to the 1996 Annual Meeting of the
Registrant's Stockholders, and is incorporated herein by reference.
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
- --------------------------------------------------------------------------
(a) 1. Financial Statements
--------------------------
A. The following Consolidated Financial Statements of the Registrant, together
with the applicable Report of Independent Public Accountants, are contained
on pages 19 through 36 of the Registrant's 1995 Annual Report to
Stockholders and are incorporated herein by reference:
Page Number
in Annual Report
----------------
Consolidated Balance Sheets - December 31, 1994
and 1995 19
Consolidated Statements of Income for the Years Ended
December 31, 1993, 1994 and 1995 20
Consolidated Statements of Stockholders' Investment for the
Years Ended December 31, 1993, 1994 and 1995 21
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1993, 1994 and 1995 22
Notes to Consolidated Financial Statements
December 31, 1993, 1994 and 1995 23
Report of Independent Public Accountants 36
B. The following Combined Financial Statements, together with the applicable
Report of Independent Public Accountants, of Wildwood Associates and Green
Valley Associates II, joint ventures of the Registrant meeting the criteria
for significant subsidiaries under the rules and regulations of the
Securities and Exchange Commission, are filed as a part of this report.
Page Number
in Form l0-K
------------
Report of Independent Public Accountants F-1
Combined Balance Sheets - December 31, 1994 and 1995 F-2
Combined Statements of Income for the Years
Ended December 31, 1993, 1994 and 1995 F-3
Combined Statements of Partners' Capital for the Years
Ended December 31, 1993, 1994 and 1995 F-4
Combined Statements of Cash Flows for the Years Ended
December 31, 1993, 1994 and 1995 F-5
Notes to Combined Financial Statements
December 31, 1993, 1994 and 1995 F-6 through
F-12
Item 14. Continued
- ---------------------
C. The following Financial Statements, together with the applicable Report of
Independent Auditors, of CSC Associates, L.P., a joint venture of the
Registrant meeting the criteria for a significant subsidiary under the
rules and regulations of the Securities and Exchange Commission, are filed
as a part of this report.
Page Number
in Form l0-K
------------
Report of Independent Auditors G-1
Balance Sheets - December 31, 1994 and 1995 G-2
Statements of Operations for the Years Ended
December 31, 1993, 1994 and 1995 G-3
Statements of Partners' Capital for the Years Ended
December 31, 1993, 1994 and 1995 G-4
Statements of Cash Flows for the Years Ended
December 31, 1993, 1994 and 1995 G-5
Notes to Financial Statements G-6 through
December 31, 1993, 1994 and 1995 G-9
D. The following Financial Statements, together with the applicable Report of
Independent Auditors, of Haywood Mall Associates, a joint venture of the
Registrant meeting the criteria for a significant subsidiary under the
rules and regulations of the Securities and Exchange Commission, are filed
as part of this report.
Page Number
in Form l0-K
------------
Report of Independent Auditors H-1
Balance Sheets - December 31, 1995 and 1994 H-2
Statements of Income for the Years Ended
December 31, 1995, 1994 and 1993 H-3
Statements of Cash Flows for the Years Ended
December 31, 1995, 1994 and 1993 H-4
Statements of Venturers' Equity for the Three Years
Ended December 31, 1995 H-5
Notes to Financial Statements H-6 through
December 31, 1995, 1994 and 1993 H-7
2. Financial Statement Schedules
-----------------------------------
The following financial statement schedules, together with the
applicable report of independent public accountants are filed as
a part of this report.
Page Number
in Form l0-K
------------
A. Cousins Properties Incorporated and Consolidated Entities:
Report of Independent Public Accountants on Schedules S-1
Schedule III- Real Estate and Accumulated
Depreciation - December 31, 1995 S-2 through
S-6
B. Wildwood Associates and Green Valley Associates II
Schedule III - Real Estate and Accumulated
Depreciation - December 31, 1995 F-13
C. CSC Associates, L.P.
Schedule III- Real Estate and Accumulated
Depreciation - December 31, 1995 G-10
D. Haywood Mall Associates
Schedule III- Real Estate and Accumulated
Depreciation - December 31, 1995 H-8
NOTE:Other schedules are omitted because of the absence of conditions under
which they are required or because the required information is given in the
financial statements or notes thereto.
Item 14. Continued
- ---------------------
3. Exhibits
-----------
3(a)(i) Articles of Incorporation of Registrant, as restated as of
April 29, 1993, filed as Exhibit 4(a) to the Registrant's
Form S-3 dated September 28, 1993, and incorporated herein by
reference.
3(b) By-laws of Registrant, as amended and restated as of November
30, 1989, as further amended by Stockholders on April 30, 1990,
and as further amended by the Stockholders on April 29, 1993,
filed as Exhibit 4(b) to the Registrant's Form S-3 dated
September 28, 1993, and incorporated herein by reference.
4(a) Dividend Reinvestment Plan as restated as of March 27, 1995,
filed in the Registrant's Form S-3 dated March 27, 1995, and
incorporated herein by reference.
10(a)(i) Cousins Properties Incorporated 1989 Stock Option Plan, as
amended on April 26, 1994, filed as Exhibit 99.1 to the
Registrant's Form S-8 dated December 8, 1994, and incorporated
herein by reference.
10(a)(ii) Cousins Real Estate Corporation Stock Appreciation Right Plan,
amended and restated as of March 15, 1993, filed as Exhibit
10(a)(ii) to the Registrant's Form 10-K for the year ended
December 31, 1992, and incorporated herein by reference.
10(a)(iii)Cousins Properties Incorporated Stock Appreciation Right Plan,
dated as of March 15, 1993, filed as Exhibit 10(a)(iii) to the
Registrant's Form 10-K for the year ended December 31, 1992, and
incorporated herein by reference.
10(b)(i) Cousins Properties Incorporated Profit Sharing Plan as amended
and restated effective as of January 1, 1996.
10(b)(ii) Cousins Properties Incorporated Profit Sharing Trust Agreement as
effective as of January 1, 1991, filed as Exhibit 10(b)(ii) to
the Registrant's Form 10-K for the year ended December 31, 1991,
and incorporated herein by reference.
10(c) Land lease (Kennesaw) dated December 17, 1969, and an amendment
thereto dated December 15, 1977, filed as Exhibit l0(d) to the
Registrant's Form 10-K for the year ended December 31, 1980, and
incorporated herein by reference.
10(d) Cousins Properties Incorporated Stock Plan for Outside Directors,
filed as Exhibit A to the Registrant's Proxy Statement dated
March 28, 1995 relating to the 1995 Annual Meeting of
Registrant's Stockholders, and incorporated herein by reference.
Item 14. Continued
- ---------------------
11 Schedule showing computations of weighted average number of
shares of common stock outstanding as used to compute primary and
fully diluted income per share for each of the five years ended
December 31, 1995.
13 Annual Report to Stockholders for the year ended December 31,
1995.
21 Subsidiaries of the Registrant.
23(a) Consent of Independent Public Accountants (Arthur Andersen LLP).
23(b) Consent of Independent Auditors (Ernst & Young LLP).
27 Financial Data Schedule.
(b) Reports on Form 8-K.
--------------------------
No reports on Form 8-K were filed during the fourth quarter of the
year ended December 31, 1995.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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)
Dated: March 27, 1996
BY: /s/ Peter A. Tartikoff
-----------------------------
Peter A. Tartikoff
Senior Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
Signature Capacity Date
- --------- -------- ----
Principal Executive Officer:
Chairman of the Board, March 27, 1996
Chief Executive Officer
/s/ T. G. Cousins and Director
- ----------------------------
T. G. Cousins
Principal Financial and Accounting Officer:
Senior Vice President and March 27, 1996
/s/ Peter A. Tartikoff Chief Financial Officer
- ----------------------------
Peter A. Tartikoff
Additional Directors:
/s/ Richard W. Courts, II Director March 27, 1996
- ----------------------------
Richard W. Courts, II
/s/ Boone A. Knox Director March 27, 1996
- ----------------------------
Boone A. Knox
/s/ Richard E. Salomon Director March 27, 1996
- ----------------------------
Richard E. Salomon
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE
----------------------------------------------------
To the Stockholders of Cousins Properties Incorporated:
We have audited in accordance with generally accepted auditing standards,
the financial statements included in the Cousins Properties Incorporated annual
report to stockholders incorporated by reference in this Form l0-K, and have
issued our report thereon dated February 20, 1996. Our audit was made for the
purpose of forming an opinion on those statements taken as a whole. The schedule
listed in Item 14, Part (a)2.A. is the responsibility of the Company's
management and is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not part of the basic financial statements.
This schedule has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 20, 1996
SCHEDULE III
(Page 1 of 5)
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
($ in thousands)
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 1995
---------- -------------- -----------------
Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a),(b)
- ----------- ------------ ---- ------------ ----- --------- ------------ ------------ -------
LAND HELD FOR INVESTMENT OR FUTURE DEVELOPMENT
- ----------------------------------------------
Wildwood - Cobb Co., GA $ -- $ 11,156 $ -- $ 4,737 $ (8,888) $ 7,005 $ -- $ 7,005
North Fulton Property -
Fulton Co., GA -- 10,294 -- 12,213 (16,229) 6,278 -- 6,278
Midtown - Atlanta, GA 145 2,949 -- 56 (1,029) 1,976 -- 1,976
McMurray - Cobb Co., GA. -- 1,015 -- 172 (1,092) 95 -- 95
Presidential MarketCenter
Outparcels - Gwinnett
Co., GA -- 2,939 -- 623 (1,786) 1,776 -- 1,776
Lawrenceville -
Gwinnett Co., GA -- 5,543 -- 129 (1,560) 4,112 -- 4,112
Colonial Plaza MarketCenter
Orange Co., FL -- 1,649 -- -- 105 1,754 -- 1,754
Greenbrier MarketCenter
Outparcels
Chesapeake, VA -- 3,191 -- -- 153 3,344 -- 3,344
Lovejoy Station
Clayton Co., GA -- 575 -- -- -- 575 -- 575
Miscellaneous Investments -
Atlanta, GA -- 120 -- -- -- 120 -- 120
---------------------------------------------------------------------------------------------
145 39,431 -- 17,930 (30,326) 27,035 -- 27,035
---------------------------------------------------------------------------------------------
Column F Column G Column H Column I
-------- -------- -------- --------
Life on
Which De-
preciation
Accumu- In 1995
lated Date of Income
Deprecia- Construc- Date Statement
tion (a) tion Acquired Is Computed
--------- --------- -------- -----------
LAND HELD FOR INVESTMENT OR FUTURE DEVELOPMENT
- ----------------------------------------------
Wildwood - Cobb Co., GA $ -- -- 1971-1982,1989 $--
North Fulton Property -
Fulton Co., GA -- -- 1970-1985 --
Midtown - Atlanta, GA -- -- 1984 --
McMurray - Cobb Co., GA. -- -- 1981 --
Presidential MarketCenter
Outparcels - Gwinnett
Co., GA -- -- 1993 --
Lawrenceville -
Gwinnett Co., GA -- -- 1994 --
Colonial Plaza MarketCenter
Orange Co., FL -- -- 1995 --
Greenbrier MarketCenter
Outparcels
Chesapeake, VA -- -- 1995 --
Lovejoy Station
Clayton Co., GA -- -- 1995 --
Miscellaneous Investments -
Atlanta, GA -- -- 1972-1984 --
-------
--
-------
SCHEDULE III
(Page 2 of 5)
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
($ in thousands)
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 1995
---------- -------------- -----------------
Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a),(b)
- ----------- ------------ ---- ------------ ----- --------- ------------ ------------ -------
OPERATING PROPERTIES
- --------------------
First Union Tower -
Greensboro, N.C. $ -- $ 1,394 $ -- $ 29,287 $ 1,971 $ 1,399 $31,253 $ 32,652
Wildwood - 3301 Windy
Ridge - Cobb Co., GA -- 20 -- 8,829 1,519 1,237 9,131 10,368
Kennesaw - Cobb Co., GA -- -- -- 2,337 -- -- 2,337 2,337
Perimeter Expo -
Fulton Co., GA -- 8,564 -- 11,072 71 8,564 11,143 19,707
GA Highway 400
Stand Alone Retail Sites -
Fulton Co., GA -- 4,559 -- 162 -- 4,721 -- 4,721
North Point MarketCenter Phase I
Fulton Co., GA -- 7,932 -- 16,161 394 7,932 16,555 24,487
North Point MarketCenter Phase II
Fulton Co., GA -- 568 -- 2,623 112 568 2,735 3,303
Presidential MarketCenter Phase I
Gwinnett Co., GA -- 1,786 -- 8,037 222 1,786 8,259 10,045
Norfolk Parking Agreement -- 1,589 -- -- -- 1,589 -- 1,589
Miscellaneous -- 398 145 77 (475) -- 145 145
---------------------------------------------------------------------------------------------
-- 26,810 145 78,585 3,814 27,796 81,558 109,354
---------------------------------------------------------------------------------------------
Column F Column G Column H Column I
-------- -------- -------- --------
Life on
Which De-
preciation
Accumu- In 1995
lated Date of Income
Deprecia- Construc- Date Statement
tion (a) tion Acquired Is Computed
--------- --------- -------- -----------
OPERATING PROPERTIES
- --------------------
First Union Tower -
Greensboro, N.C. $8,347 1988-1990 1987 40 Years
Wildwood - 3301 Windy
Ridge - Cobb Co., GA 3,189 1984 1984 30 Years
Kennesaw - Cobb Co., GA 1,247 1974 1973 30 Years
Perimeter Expo -
Fulton Co., GA 869 1993 1993 30 Years
GA Highway 400
Stand Alone Retail Sites -
Fulton Co., GA 27 -- 1970-1985 --
North Point MarketCenter Phase I
Fulton Co., GA 1,241 1993-1994 1970-1985 30 Years
North Point MarketCenter Phase II
Fulton Co., GA 39 1994 1970-1985 30 Years
Presidential MarketCenter Phase I
Gwinnett Co., GA 423 1993-1994 1993 30 Years
Norfolk Parking Agreement -- -- 1994 --
Miscellaneous 101 -- 1977-1984 Various
-------
15,483
-------
SCHEDULE III
(Page 3 of 5)
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
($ in thousands)
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 1995
---------- -------------- -----------------
Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a),(b)
- ----------- ------------ ---- ------------ ----- --------- ------------ ------------ -------
PROJECTS UNDER CONSTRUCTION
- ---------------------------
Mansell Crossing Phase II
Fulton Co., GA $ -- $ 3,272 $ -- $ 2,371 $ 266 $ 3,272 $ 2,637 $ 5,909
Lawrenceville MarketCenter
Gwinnett Co., GA -- 3,510 -- 12,550 507 3,960 12,607 16,567
100 North Point Center
Fulton Co., GA -- 441 -- 9,109 229 441 9,338 9,779
200 North Point Center
Fulton County, GA -- 441 -- 322 5 441 327 768
Colonial Plaza MarketCenter
Orange Co., FL -- 8,500 -- 17,025 992 8,500 18,017 26,517
Greenbrier MarketCenter
Chesapeake, VA -- 5,500 -- 9,767 407 5,500 10,174 15,674
Presidential MarketCenter-Phase II
Gwinnett Co., GA -- 2,170 -- 1,447 205 2,400 1,422 3,822
Lovejoy Station -
Clayton Co., GA -- 1,387 -- 4,433 300 811 5,309 6,120
Rivermont Station
Fulton Co., GA -- 2,050 -- 292 5 2,050 297 2,347
---------------------------------------------------------------------------------------------
-- 27,271 -- 57,316 2,916 27,375 60,128 87,503
---------------------------------------------------------------------------------------------
Column F Column G Column H Column I
-------- -------- -------- --------
Life on
Which De-
preciation
Accumu- In 1995
lated Date of Income
Deprecia- Construc- Date Statement
tion (a) tion Acquired Is Computed
--------- --------- -------- -----------
PROJECTS UNDER CONSTRUCTION
- ---------------------------
Mansell Crossing Phase II
Fulton Co., GA $ -- 1995 1995 --
Lawrenceville MarketCenter
Gwinnett Co., GA -- 1994 1994 --
100 North Point Center
Fulton Co., GA -- 1994 1994 --
200 North Point Center
Fulton County, GA -- 1995 1995 --
Colonial Plaza MarketCenter
Orange Co., FL -- 1995 1995 --
Greenbrier MarketCenter
Chesapeake, VA -- 1995 1995 --
Presidential MarketCenter-Phase II
Gwinnett Co., GA -- 1995 1995 --
Lovejoy Station -
Clayton Co., GA -- 1994 1994 --
Rivermont Station
Fulton Co., GA -- 1995 1995 --
-------
--
-------
SCHEDULE III
(Page 4 of 5)
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
($ in thousands)
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 1995
---------- -------------- -----------------
Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a),(b)
- ----------- ------------ ---- ------------ ----- --------- ------------ ------------ -------
RESIDENTIAL LOTS UNDER DEVELOPMENT
- ----------------------------------
Brown's Farm -
Cobb Co., GA $ -- $ 1,473 $ -- $ 3,649 $ (2,908) $ 2,214 $ -- $ 2,214
Apalachee River Club
Gwinnett Co., GA -- 1,820 -- 3,008 (1,220) 3,608 -- 3,608
Echo Mill
Cobb Co., GA 454 1,318 -- 3,456 (2,513) 2,261 -- 2,261
Barrett Downs
Forsyth Co., GA -- 900 -- 2,031 (82) 2,849 -- 2,849
Bradshaw Farms
Cherokee Co., GA -- 1,741 -- 3,098 (4,319) 520 -- 520
---------------------------------------------------------------------------------------------
454 7,252 -- 15,242 (11,042) 11,452 -- 11,452
---------------------------------------------------------------------------------------------
$ 599 $ 100,764 $ 145 $169,073 $(34,638) $ 93,658 $141,686 $235,344
=============================================================================================
Column F Column G Column H Column I
-------- -------- -------- --------
Life on
Which De-
preciation
Accumu- In 1995
lated Date of Income
Deprecia- Construc- Date Statement
tion (a) tion Acquired Is Computed
--------- --------- -------- -----------
RESIDENTIAL LOTS UNDER DEVELOPMENT
- ----------------------------------
Brown's Farm -
Cobb Co., GA $ -- 1993-1994 1993-1994 --
Apalachee River Club
Gwinnett Co., GA -- 1994 1994 --
Echo Mill
Cobb Co., GA -- 1994 1994 --
Barrett Downs
Forsyth Co., GA -- 1994 1994 --
Bradshaw Farms
Cherokee Co., GA -- 1994 1994 --
-------
--
-------
$15,483
=======
SCHEDULE III
(Page 5 of 5)
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
($ in thousands)
NOTES:
(a) Reconciliations of total real estate carrying value and accumulated
depreciation for the three years ended December 31, 1995 are as
follows:
Real Estate Accumulated Depreciation
---------------------------- -------------------------
1993 1994 1995 1993 1994 1995
---- ---- ---- ---- ---- ----
Balance at beginning of period $ 71,994 $108,252 $149,242 $7,448 $ 9,418 $12,112
Additions during the period:
Improvements and other
capitalized costs 37,851 53,580 101,544 -- -- --
Provision for depreciation -- -- -- 1,970 2,694 3,371
---------------------------- ------------------------
37,85 53,580 101,544 1,970 2,694 3,371
---------------------------- ------------------------
Deductions during the period:
Cost of real estate sold (1,593) (12,590) (15,442) -- -- --
---------------------------- -------------------------
(1,593) (12,590) (15,442) -- -- --
---------------------------- -------------------------
Balance at close of period $108,252 $149,242 $235,344 $9,418 $12,112 $ 15,483
============================ =========================
(b) Initial cost for Kennesaw was previously adjusted to reflect a
write-down of $1,430 to state the property at the then realizable
value.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Wildwood Associates and Green Valley Associates II:
We have audited the accompanying combined balance sheets of WILDWOOD
ASSOCIATES (a Georgia general partnership) and GREEN VALLEY ASSOCIATES II (a
North Carolina general partnership) as of December 31, 1994 and 1995, and the
related combined statements of income, partners' capital and cash flows for each
of the three years in the period ended December 31, 1995. These financial
statements are the responsibility of the management of the partnerships. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Wildwood Associates and
Green Valley Associates II as of December 31, 1994 and 1995, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1995 in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in Item 14 is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 20, 1996
WILDWOOD ASSOCIATES AND GREEN VALLEY ASSOCIATES II
--------------------------------------------------
COMBINED BALANCE SHEETS
-----------------------
DECEMBER 31, 1994 AND 1995
--------------------------
($ in thousands)
1994 1995
---- ----
ASSETS
- ------
REAL ESTATE ASSETS:
Income producing properties, including land of
$37,677 in 1994 and 1995 (Note 7) ................. $217,869 $217,748
Accumulated depreciation and amortization ........... (40,009) (44,900)
------------------
177,860 172,848
Land committed to be contributed (Note 3) ........... 20,440 13,903
Land and property predevelopment costs .............. 12,429 27,777
------------------
Total real estate assets ..................... 210,729 214,528
------------------
CASH AND CASH EQUIVALENTS ............................... 4 --
------------------
OTHER ASSETS:
Deferred expenses, net of accumulated amortization of
$6,065 and $6,078 in 1994 and 1995, respectively .. 4,892 5,641
Receivables (Note 6) ................................ 14,506 14,920
Allowance for possible losses (Note 1) .............. (2,616) (2,550)
Furniture, fixtures and equipment, net of accumulated
depreciation of $1,198 and $1,276 in 1994 and 1995,
respectively ...................................... 358 296
Other ............................................... 2 31
------------------
17,142 18,338
------------------
$227,875 $232,866
==================
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
NOTES PAYABLE (Note 7) .................................. $132,608 $134,855
RETAINAGE, ACCOUNTS PAYABLE AND
ACCRUED LIABILITIES ................................. 2,983 7,843
------------------
Total liabilities ............................ 135,591 142,698
------------------
PARTNERS' CAPITAL (Notes 3 and 4):
International Business Machines Corporation ......... 46,142 45,084
Cousins Properties Incorporated ..................... 46,142 45,084
------------------
Total partners' capital ...................... 92,284 90,168
------------------
$227,875 $232,866
==================
The accompanying notes are an integral part of these combined balance sheets.
WILDWOOD ASSOCIATES AND GREEN VALLEY ASSOCIATES II
---------------------------------------------------
COMBINED STATEMENTS OF INCOME
-----------------------------
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
----------------------------------------------------
($ in thousands)
1993 1994 1995
---- ---- ----
REVENUES:
Rental income and recovery of expenses
charged directly to specific tenants ..... $36,104 $36,196 $37,589
Interest ..................................... 24 27 32
Other ........................................ 96 82 146
---------------------------
Total revenues .................... 36,224 36,305 37,767
---------------------------
OPERATING EXPENSES:
Real estate taxes ............................ 2,785 2,516 3,032
Maintenance and repairs ...................... 2,142 1,991 2,207
Utilities .................................... 1,737 1,822 1,965
Management and personnel costs ............... 1,805 1,794 1,892
Contract security ............................ 761 745 820
Grounds maintenance .......................... 632 588 646
Expenses charged directly to specific tenants 852 458 395
Insurance .................................... 99 100 98
---------------------------
Total operating expenses .............. 10,813 10,014 11,055
---------------------------
OTHER EXPENSES:
Interest expense ............................. 11,606 11,790 11,478
Depreciation and amortization ................ 8,336 8,648 8,353
Predevelopment, marketing and other expenses . 489 342 345
Ground lease expense (Note 8) ................ 322 322 322
Real estate taxes on undeveloped land (Note 4) 190 182 163
General and administrative expenses .......... 146 163 167
---------------------------
Total other expenses .................. 21,089 21,447 20,828
---------------------------
Total expenses ........................ 31,902 31,461 31,883
---------------------------
NET INCOME ....................................... $ 4,322 $ 4,844 $ 5,884
===========================
The accompanying notes are an integral part of these combined statements.
WILDWOOD ASSOCIATES AND GREEN VALLEY ASSOCIATES II
--------------------------------------------------
COMBINED STATEMENTS OF PARTNERS' CAPITAL
----------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
----------------------------------------------------
($ in thousands)
International
Business Cousins
Machines Properties
Corporation Incorporated Total
----------- ------------ -----
BALANCE, December 31, 1992 $49,559 $49,559 $99,118
Distributions ........ (4,000) (4,000) (8,000)
Net income ........... 2,161 2,161 4,322
-----------------------------------
BALANCE, December 31, 1993 47,720 47,720 95,440
Distributions ........ (4,000) (4,000) (8,000)
Net income ........... 2,422 2,422 4,844
-----------------------------------
BALANCE, December 31, 1994 46,142 46,142 92,284
Distributions ........ (4,000) (4,000) (8,000)
Net income ........... 2,942 2,942 5,884
-----------------------------------
BALANCE, December 31, 1995 $45,084 $45,084 $90,168
===================================
The accompanying notes are an integral part of these combined statements.
WILDWOOD ASSOCIATES AND GREEN VALLEY ASSOCIATES II
--------------------------------------------------
COMBINED STATEMENTS OF CASH FLOWS (Note 9)
------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
----------------------------------------------------
($ in thousands)
1993 1994 1995
---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ...................................... $ 4,322 $ 4,844 $ 5,884
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization ............ 8,336 8,648 8,353
Rental revenue recognized on straight-line
basis in excess of rental revenue
specified in the lease agreements .... (570) (349) (383)
Change in tenant rental receivables ...... (106) 51 (38)
Change in accounts payable and accrued
liabilities related to operations .... 24 (195) (1,004)
--------------------------
Net cash provided by operating activities ........... 12,006 12,999 12,812
--------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property acquisition and development expenditures (3,581) (3,008) (4,940)
Payment for deferred expenses; furniture, fixtures
and equipment; and other assets ............. (1,617) (661) (2,123)
--------------------------
Net cash used in investing activities ............... (5,198) (3,669) (7,063)
--------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of notes payable ...................... (413) (630) (1,063)
Repayment of long term financing ................ -- -- (111,998)
Proceeds from long term refinancing ............. -- -- 98,000
Proceeds from line of credit .................... 11,500 12,600 31,212
Repayments under line of credit ................. 10,40 (13,300) (13,904)
Partnership distributions ....................... 8,000) (8,000) (8,000)
--------------------------
Net cash used in financing activities ............... (7,313) (9,330) (5,753)
--------------------------
NET DECREASE IN CASH AND
CASH EQUIVALENTS ................................ (505) -- (4)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR ......................................... 509 4 4
--------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR ............ $ 4 $ 4 $ --
=========================
The accompanying notes are an integral part of these combined statements.
WILDWOOD ASSOCIATES AND GREEN VALLEY ASSOCIATES II
--------------------------------------------------
NOTES TO COMBINED FINANCIAL STATEMENTS
--------------------------------------
DECEMBER 31, 1993, 1994 AND 1995
--------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation:
The Combined Financial Statements include the accounts of Wildwood
Associates ("WWA") and Green Valley Associates II ("GVA II"), both of which are
general partnerships. Cousins Properties Incorporated (together with its other
consolidated entities hereinafter referred to as "Cousins") and International
Business Machines Corporation ("IBM") each have a 50% general partnership
interest in both partnerships. The financial statements of the partnerships have
been combined because of the common ownership. The combined entities are
hereinafter referred to as the "Partnerships." All transactions between WWA and
GVA II have been eliminated in the Combined Financial Statements.
Cost of Property Contributed by Cousins:
The cost of property contributed or committed to be contributed by Cousins
was recorded by WWA based upon the procedure described in Note 3. Such cost was,
in the opinion of the partners, at or below estimated fair market value at the
time of such contribution or commitment, but was in excess of Cousins'
historical cost basis.
Cost Capitalization:
All costs related to planning, development and construction of buildings,
and expenses of buildings prior to the date they become operational for
financial statement purposes, are capitalized. Interest and real estate taxes
are also capitalized to property under development.
Depreciation and Amortization:
Buildings are depreciated over 25 to 40 years. Furniture, fixtures, and
equipment are depreciated over 5 years. Leasehold improvements and tenant
improvements are amortized over the life of the leases or useful life of the
assets, whichever is shorter. Deferred expenses - which include organizational
costs, certain marketing and leasing costs, and loan acquisition costs - are
amortized over the period of estimated benefit. The straight-line method is used
for all depreciation and amortization.
Allowance for Possible Losses:
The allowance for possible losses provides for potential writeoffs of
certain tenant related and other assets on WWA's books. The allowance reflects
management's evaluation of the exposure to WWA based on a specific review of its
properties and the impact of current economic conditions on those properties.
Allocation of Operating Expenses:
In accordance with certain lease agreements, certain management and
maintenance costs incurred by WWA are allocated to individual buildings or
tenants, including buildings not owned by WWA.
Income Taxes:
No provision has been made for federal or state income taxes because each
partner's proportionate share of income or loss from the Partnerships is
passed through to be included on each partner's separate tax return.
Cash and Cash Equivalents:
Cash and Cash Equivalents includes all cash and highly liquid money market
instruments. Highly liquid money market instruments include securities and
repurchase agreements with original maturities of three months or less, money
market mutual funds, and securities on which the interest rate is adjusted to
market rate at least every three months.
Rental Income:
In accordance with Statement of Financial Accounting Standards ("SFAS") No.
13, income on leases which include scheduled increases in rental rates over the
lease term is recognized on a straight-line basis.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Impairment of Long-Lived Assets:
The Partnerships have adopted SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed of" which requires
impairment losses to be recorded on long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amount. SFAS
No. 121 also addresses the accounting for long-lived assets that are expected to
be disposed of. The adoption of SFAS No. 121 had no effect on the financial
results of the Partnerships.
2. FORMATION AND PURPOSE OF THE PARTNERSHIPS
WWA and GVA II were formed under the terms of partnership agreements
effective May 30, 1985 and March 31, 1988, respectively. The purpose of the
Partnerships is, among other things, to develop and operate the Summit Green
project located in Greensboro, North Carolina, and selected property within
Wildwood Office Park ("Wildwood"), located in Atlanta, Georgia.
Summit Green is a project consisting of one office building and a parts
distribution center totaling approximately 144,000 gross square feet ("GSF")
which was completed in 1986, and land for two additional office buildings not
yet constructed. The two additional buildings are planned to total approximately
240,000 GSF. The 21 acres in the project are leased from a third party by WWA
(see Note 8). GVA II subleases the undeveloped portion of this land from WWA.
Wildwood is an office park containing a total of approximately 289 acres,
of which approximately 85 acres are owned by WWA, and an estimated 22 acres are
committed to be contributed to WWA by Cousins (see Note 3). Cousins owns the
balance of the developable acreage in the park. At December 31, 1995, WWA's
income producing real estate assets in Wildwood consisted of: one office
building of 338,000 GSF which became operational January 1, 1986, one office
building of 684,000 GSF which became operational December 1, 1987 and one office
building of 757,000 GSF which became operational April 1, 1991, two office
buildings totaling 482,000 GSF which are under construction (including land
under such buildings totaling approximately 48 acres); land parcels totaling
approximately 15 acres leased to two banking facilities and five restaurants; a
2 acre site on which a child care facility is constructed, and a 1 acre retail
site currently being marketed to prospective users. In addition, WWA's assets
include 42 acres of land held for future development, which is composed of a 4
acre site with approximately 58,000 square feet of office space which was
purchased in 1986 for future development (classified with income producing
properties in the accompanying financial statements), and 38 acres of other land
to be developed (including additional land committed to be contributed by
Cousins) (see Note 3).
3. CONTRIBUTIONS TO THE PARTNERSHIPS
IBM and Cousins have each contributed or committed to contribute
$62,857,000 in cash or properties to the Partnerships. The value of property
contributed was agreed to by the partners at the time of formation of WWA.
The status of contributions at December 31, 1995, was as follows ($ in
thousands):
IBM COUSINS TOTAL
--- ------- -----
Cash contributed $46,590 $ 84 $ 46,674
Property contributed 16,267 49,354 65,621
Land committed to be contributed -- 13,419 13,419
----------------------------------
Total $62,857 $62,857 $125,714
==================================
WWA has elected not to take title to the remaining land committed to be
contributed by Cousins until such land is needed for development. However,
Cousins' capital account was previously credited with the amount originally
required to bring it equal to IBM's, and a like amount, plus preacquisition
costs paid by WWA, and condemnation proceeds net of condemnation restoration
costs, were set up as an asset entitled "Land Committed To Be Contributed." This
asset account subsequently has been reduced as land actually has been
contributed, or as land yet to be contributed became associated with a
particular building.
At December 31, 1995, Cousins was committed to contribute land on which an
additional 991,462 GSF are developable, provided that regardless of planned use
or density, 38,333 GSF shall be the minimum GSF attributed to each developable
acre contributed. Cousins has also agreed to contribute infrastructure land in
Wildwood, as defined, at no cost to WWA, in order to provide the necessary land
for development of roads and utilities. The ultimate acreage remaining to be
contributed by Cousins will depend upon the actual density achieved, but would
be approximately 22 acres if the density were similar to that achieved on land
contributed to date.
4. OTHER PROVISIONS OF THE PARTNERSHIP AGREEMENTS
Net income or loss and net cash flow, as defined, shall be allocated to the
partners based on their percentage interests (50% each, subject to adjustment as
provided in the partnership agreements).
In the event of dissolution of the Partnerships, the assets will be
distributed as follows:
First, to repay all debts to third parties, including any secured loans
with the partners.
Second, to each partner until each capital account is reduced to zero.
The balance to each partner in accordance with its percentage interest.
WWA pays all real estate taxes on property owned by Cousins which is
subject to future contribution. Such real estate taxes were $190,000, $182,000
and $163,000 in 1993, 1994 and 1995, respectively, all of which were expensed.
5. FEES TO RELATED PARTIES
The Partnerships engaged Cousins to manage, develop and lease the
Partnerships' property. Fees to Cousins incurred by the Partnerships during
1993, 1994 and 1995 were as follows ($ in thousands):
1993 1994 1995
---- ---- ----
Development and tenant
construction fees $ 132 $ 57 $ 250
Management fees 902 909 945
Leasing and procurement fees 523 189 235
-----------------------------
$1,557 $1,155 $1,430
=============================
6. RENTAL REVENUES
WWA leases property to the partners, as well as to unrelated third parties.
The leases with partners are at rates comparable to those quoted to third
parties. The leases typically contain escalation provisions and provisions
requiring tenants to pay a pro rata share of operating expenses. The leases
typically include renewal options and all are classified and accounted for as
operating leases.
At December 31, 1995, future minimum rentals to be received under existing
non-cancelable leases, including tenants' current pro rata share of operating
expenses are as follows ($ in thousands):
Leases
Leases With
With Third
Partners Parties Total
-------- ------- -----
1996 $15,586 $ 20,973 $ 36,559
1997 14,049 21,063 35,112
1998 14,837 18,497 33,334
1999 14,524 12,432 26,956
2000 14,409 9,979 24,388
Thereafter 6,165 41,369 47,534
---------------------------------
$79,570 $124,313 $203,883
=================================
In the years ended December 31, 1993, 1994 and 1995, income recognized on a
straightline basis exceeded income which would have accrued in accordance with
the lease terms by $570,000, $349,000 and $383,000, respectively. At December
31, 1994 and 1995, receivables which related to the cumulative excess of
revenues recognized in accordance with SFAS No. 13 over revenues which accrued
in accordance with the actual lease agreements totaled $14,371,000, and
$14,754,000, respectively. Of the 1995 amount, 60% was related to leases with
IBM.
7. NOTES PAYABLE
At December 31, 1995, notes payable consisted of the following ($ in
thousands):
Term/
Amortization Balance at
Period Final December 31,
Description Rate (Years) Maturity 1995
----------- ---- ------------ -------- ------------
Line of credit ($50 million maximum) Fed Funds + .75% 2/ N/A 9/1/97 $ 26,308
2300 Windy Ridge Parkway Building mortgage note 7.56% 10/25 12/01/05 72,000
2500 Windy Ridge Parkway Building mortgage note 7.45% 10/20 12/15/05 26,000
Summit Green mortgage note 9.875% 10/30 4/1/98 10,547
--------
$134,855
========
Wildwood Associates refinanced two mortgage notes in December 1995. The
2300 Windy Ridge Parkway Building mortgage note which had an $81 million balance
at a 9.09% rate and matured in August 1999, was refinanced with a $72 million
7.56% mortgage note. The 2500 Windy Ridge Parkway Building mortgage note which
had a $31 million balance at a 9.125% rate and matured in June 1996, was
refinanced with a $26 million 7.45% mortgage note.
The 2300 Windy Ridge Parkway Building mortgage note is secured by the
building, which had a net carrying value of approximately $58,566,000 and
$57,507,000 as of December 31, 1994 and 1995, respectively. The 2500 Windy Ridge
Parkway Building mortgage note is secured by the building, which had a net
carrying value of approximately $20,665,000 and $20,161,000 as of December 31,
1994 and 1995, respectively. The Summit Green Building mortgage note is secured
by a leasehold mortgage on the building, which had a net carrying value of
approximately $7,571,000 and $7,420,000 as of December 31, 1995.
The line of credit matures September 1, 1997, but will automatically be
renewed from year to year unless the lender provides a notice of non-renewal at
least three months in advance of the annual renewal date. The line generally
prohibits new borrowings other than those under the line, or the pledging of any
assets not pledged as of August 1, 1990. The line bears a floating interest rate
equal to the daily federal funds rate plus 3/4%, and there are no fees or
compensating balance arrangements required under the line. Cousins and IBM have
each severally guaranteed one-half of the line of credit.
The aggregate maturities of the indebtedness at December 31, 1995
summarized above are as follows ($ in thousands):
1996 $ 1,620
1997 28,143
1998 13,107
1999 3,008
2000 3,243
Thereafter 85,734
--------
$134,855
========
The Partnerships capitalize interest expense to property under development
as required by Statement of Financial Accounting Standards No. 34. In the years
ended December 31, 1993 and 1995, the Partnerships capitalized interest totaling
$108,000 and $236,000, respectively. No interest was capitalized during the year
ended December 31, 1994.
The estimated fair value of the Partnership's $133 million and $135 million
of notes payable at December 31, 1994 and 1995 respectively, is $132 million and
$135 million, respectively, calculated by discounting future cash flows under
the notes payable at estimated rates at which similar notes would be made
currently.
8. GROUND LEASE
All of the land in the Summit Green development is subject to a
non-subordinated ground lease expiring October 31, 2084. Lease payments
commenced December 1, 1986, and are payable in monthly installments at an annual
rate of approximately $322,000 per year for the first ten years. The lease rate
escalates at ten year intervals commencing December 1, 1996, based on the
cumulative increase in the Consumer Price Index ("Index") over the prior ten
year period (subject to a 5% annual cap on the increase in such Index in any one
year); or, at lessor's option, at the end of any ten year interval the property
shall be appraised, and the lessee shall elect to either purchase the land for
the appraised value, or pay annually during the succeeding ten year period 10%
of the appraised fair market value of the land.
9. COMBINED STATEMENTS OF CASH FLOWS-SUPPLEMENTAL INFORMATION
Interest (net of amounts capitalized) was as follows ($ in thousands):
1993 1994 1995
---- ---- ----
Interest paid $11,608 $11,780 $12,011
Significant non-cash financing and investing activities included the
following:
In 1993, a land parcel with a value of $926,000 was transferred from Land
Committed To Be Contributed to Land and Property Predevelopment Costs. In
September 1993, restaurant site parcels under construction with an aggregate
value of $6,700,000 were transferred from Land and Property Predevelopment Costs
to Income Producing Properties. See Notes 2 and 3.
In 1994, the child care facility under construction with an aggregate value
of $1,600,000 was transferred from Land and Property Predevelopment Costs to
Income Producing Properties. See Notes 2 and 3.
In 1995, a land parcel with a value of $6,537,000 was transferred from Land
Committed To Be Contributed to Land and Property Predevelopment Cost. See Notes
2 and 3.
SCHEDULE III
WILDWOOD ASSOCIATES AND GREEN VALLEY ASSOCIATES II
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
($ in thousands)
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 1995
---------- -------------- -----------------
Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a),(b)
- ----------- ------------ ---- ------------ ----- --------- ------------ ------------ -------
Wildwood Office Park -
Cobb Co., GA
2500 Windy Ridge $ 26,000 $ 4,414 $ 14,814 $ 9,306 $ 141 $ 4,414 $ 24,261 $ 28,675
2300 Windy Ridge 72,000 8,927 -- 60,908 5,429 8,927 66,337 75,264
Parkside -- 4,274 2,553 (1,017) (45) 3,136 2,629 5,765
3200 Windy Hill -- 10,503 -- 66,020 5,470 10,503 71,490 81,993
4100/4300 Wildwood Parkway -- 6,537 -- 8,583 251 -- 15,371 15,371
Stand Alone Retail Sites -- 7,659 1,234 3,642 123 9,570 3,088 12,658
Land committed to
be contributed -- 13,522 -- -- 381 13,903 -- 13,903
Other land and
property -- 11,430 -- 3,467 (139) 11,609 3,149 14,758
--------------------------------------------------------------------------------------------
98,000 67,266 18,601 150,909 11,611 62,062 186,325 248,387
--------------------------------------------------------------------------------------------
Summit Green, Greensboro, NC:
Summit Green Phase I 10,547 -- -- 10,281 259 -- 10,540 10,540
Other property -- -- -- 501 -- -- 501 501
--------------------------------------------------------------------------------------------
10,547 -- -- 10,782 259 -- 11,041 11,041
--------------------------------------------------------------------------------------------
$108,547 $67,266 $ 18,601 $161,691 $ 11,870 $62,062 $197,366 $259,428
============================================================================================
Life on
Which De-
preciation
Accumu- In 1995
lated Date of Income
Deprecia- Construc- Date Statement
tion (a) tion Acquired Is Computed
--------- --------- -------- -----------
Wildwood Office Park -
Cobb Co., GA
2500 Windy Ridge $ 8,514 1985 1985 40 Years
2300 Windy Ridge 17,757 1986 1986 40 Years
Parkside 1,036 1980 1986 25 Years
3200 Windy Hill 13,162 1989 1989 40 Years
4100/4300 Wildwood Parkway -- 1995 1986 --
Stand Alone Retail Sites 877 Various 1985-1995 Various
Land committed to
be contributed -- -- 1985-1986 --
Other land and
property 434 Various 1985-1986 Various
-------
41,780
-------
Summit Green, Greensboro, NC:
Summit Green Phase I 3,120 1986 1986 40 Years
Other property -- 1986 1986 --
-------
3,120
-------
$44,900
=======
NOTE: (a) Reconciliations of total real estate carrying value and accumulated
depreciation for the three years ended December 31, 1995 are as
follows:
Real Estate Accumulated Depreciation
-------------------------- ------------------------
1993 1994 1995 1993 1994 1995
---- ---- ---- ---- ---- ----
Balance at beginning of period $246,472 $249,714 $250,738 $26,039 $32,932 $40,009
Additions during the period:
Improvements, and other
capitalized costs 3,242 1,058 8,690 -- -- --
Provisions for depreciation -- -- -- 6,893 7,111 4,891
Deductions during the period:
Retirement of fully depreciated
assets and writeoffs -- (34) -- -- (34) --
------------------------------ ---------------------------
Balance at close of period $249,714 $250,738 $259,428 $32,932 $40,009 $44,900
============================== ===========================
REPORT OF INDEPENDENT AUDITORS
To the Partners of
CSC Associates, L.P. (A Limited Partnership)
We have audited the accompanying balance sheets of CSC Associates, L.P.
(the Partnership) as of December 31, 1994 and 1995, and the related statements
of operations, partners' capital, and cash flows for each of the three years in
the period ended December 31, 1995. Our audits also included the financial
statement schedule of CSC Associates, L.P. listed in the Index at Item 14(a).
These financial statements and schedule are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of CSC Associates, L.P. as of
December 31, 1994 and 1995, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1995, in conformity
with generally accepted accounting principles. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
ERNST & YOUNG LLP
Atlanta, Georgia
February 6, 1996
CSC ASSOCIATES, L.P.
--------------------
BALANCE SHEETS
--------------
DECEMBER 31, 1994 AND 1995
--------------------------
($ in thousands)
ASSETS
------
1994 1995
---- ----
REAL ESTATE ASSETS:
Building and improvements, including land and
land improvements of $22,818 in 1994 and 1995 ..... $203,275 $208,676
Accumulated depreciation (14,980) (21,232)
---------------------
188,295 187,444
---------------------
CASH .................................................... 1,395 97
--------------------
OTHER ASSETS:
Deferred expenses, net of accumulated
amortization of $2,715 and $3,664 in
1994 and 1995, respectively ......................... 8,170 8,306
Receivables (Note 3) .................................. 9,002 10,142
Furniture, fixtures and equipment, net of
accumulated depreciation of $866 and $1,218
in 1994 and 1995, respectively ...................... 1,167 871
Other ................................................. 28 29
--------------------
Total other assets ........................... 18,367 19,348
--------------------
$208,057 $206,889
====================
LIABILITIES AND PARTNERS' CAPITAL
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES ................$ 3,345 $ 2,951
--------------------
Total liabilities ............................ 3,345 2,951
--------------------
PARTNERS' CAPITAL (Note 1) .............................. 204,712 203,938
--------------------
$208,057 $206,889
====================
The accompanying notes are an integral part of these balance sheets.
CSC ASSOCIATES, L.P.
--------------------
STATEMENTS OF OPERATIONS
------------------------
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
----------------------------------------------------
($ in thousands)
1993 1994 1995
---- ---- ----
REVENUES:
Rental income and recovery of expenses
charged directly to specific tenants $27,810 $28,931 $31,195
OPERATING EXPENSES:
Real estate taxes ...................... 3,673 3,493 3,482
Utilities .............................. 1,317 1,198 1,103
Management and personnel costs ......... 1,311 1,313 1,403
Cleaning ............................... 1,042 1,041 1,086
Contract security ...................... 419 412 434
Repairs and maintenance ................ 258 352 349
Elevator ............................... 193 274 305
Parking ................................ 186 206 208
Insurance .............................. 111 111 116
Grounds maintenance .................... 90 105 116
------------------------------
Total operating expenses ........ 8,600 8,505 8,602
------------------------------
OTHER EXPENSES:
Interest expense ....................... 12,317 -- --
Depreciation and amortization .......... 7,182 7,222 7,688
Marketing and other expenses ........... 174 154 164
General and administrative expenses .... 8 41 44
------------------------------
Total other expenses ............ 19,681 7,417 7,896
------------------------------
Total expenses .................. 28,281 15,922 16,498
------------------------------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM .... (471) 13,009 14,697
EXTRAORDINARY ITEM (Note 4) ................ (723) -- --
------------------------------
NET INCOME (LOSS) .......................... $(1,194) $13,009 $14,697
==============================
The accompanying notes are an integral part of these statements.
CSC ASSOCIATES, L.P.
--------------------
STATEMENTS OF PARTNERS' CAPITAL
-------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
----------------------------------------------------
($ in thousands)
BALANCE, December 31, 1992 $ 35,600
Net loss ............... (1,194)
Capital contributions .. 173,347
Distributions .......... (1,900)
--------
BALANCE, December 31, 1993 205,853
--------
Net income ............. 13,009
Distributions .......... (14,150)
--------
BALANCE, December 31, 1994 204,712
Net income ............. 14,697
Distributions .......... (15,471)
--------
BALANCE, December 31, 1995 $203,938
========
The accompanying notes are an integral part of these statements.
CSC ASSOCIATES, L.P.
--------------------
STATEMENTS OF CASH FLOWS
------------------------
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
----------------------------------------------------
($ in thousands)
(Note 6)
1993 1994 1995
---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) .............................. $ (1,194) $13,009 $14,697
Extraordinary item (Note 4) ...................... 723 -- --
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization .................. 7,182 7,222 7,688
Rental revenue recognized on straight-line
basis in excess of rental revenue
specified in the lease agreements ............. (3,333) (3,156) (1,148)
Change in other receivables and
other assets ................................ 31 (315) 7
Change in accounts payable and
accrued liabilities related to operations ... (1,016) 17 1,122
-------------------------
Net cash provided by operating activities ......... 2,393 16,777 22,366
-------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to building and improvements .......... (7,242) (1,120) (6,918)
Payments for deferred expenses .................. (1,732) (1,060) (1,285)
Proceeds from (payments for) furniture, fixtures
and equipment ................................. (388) (17) 10
-------------------------
Net cash used in investing activities ............. (9,362) (2,197) (8,193)
-------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from construction loan ................. 4,533 -- --
Repayment of construction loan .................. (168,046) -- --
Capital contributions ........................... 173,347 -- --
Partnership distributions ....................... (1,900) (14,150)(15,471)
-------------------------
Net cash provided by (used in) financing activities 7,934 (14,150)(15,471)
-------------------------
NET INCREASE (DECREASE) IN CASH ................... 965 4 (1,298)
CASH AT BEGINNING OF YEAR ......................... -- 965 1,395
--------------------------
CASH AT END OF YEAR ............................... $ -- $ 1,395 $ 97
==========================
The accompanying notes are an integral part of these statements.
CSC ASSOCIATES, L.P.
--------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1993, 1994 AND 1995
--------------------------------
1. FORMATION OF THE PARTNERSHIP AND TERMS OF THE PARTNERSHIP AGREEMENT
-------------------------------------------------------------------
CSC Associates, L.P. ("CSC," or the "Partnership") was formed under the
terms of a Limited Partnership Agreement dated September 29, 1989 and by the
filing of its Certificate of Limited Partnership on October 27, 1989. C&S
Premises, Inc. ("Premises") and Cousins Properties Incorporated ("CPI") each own
a 1% general partnership and a 49% limited partnership interest in the
Partnership. Premises is a wholly owned subsidiary of NB Holdings Corporation
which is a wholly owned subsidiary of NationsBank Corporation. The Partnership
was formed for the purpose of developing and owning a 1.4 million gross square
foot office tower in downtown Atlanta, Georgia (the "Building"), which is the
Atlanta headquarters of NationsBank Corporation.
The Partnership Agreement and related documents (the "Agreements") contain
among other provisions, the following:
a. CPI is the Managing Partner.
b. CPI is obligated to contribute a total of $18.2 million cash to the
Partnership, all of which has been contributed. Premises is obligated to
contribute land parcels to the Partnership having an aggregate agreed upon value
of $18.2 million, all of which has been contributed, which property value, in
the opinion of the partners, was equal to the estimated fair market value of the
land at the time of formation of the Partnership. In October 1993, the partners
each contributed an additional $86.7 million.
c. No interest is earned on partnership capital.
d. Net income or loss and cash distributions are allocated to the partners
based on their percentage interests (50% each), subject to a preference to CPI.
The CPI preference was $2.5 million, and accrued to CPI, with interest at 9% to
the extent unpaid, over the period February 1, 1992 through January 31, 1995.
During the year ended December 31, 1994, CPI received distributions of the
preference and accrued interest of approximately $2.65 million. The remaining
preference amount of $71,000 was distributed to CPI in January 1995. Amounts
above the preference amount are allocated based on the partners' percentage
interests.
2. SIGNIFICANT ACCOUNTING POLICIES
-------------------------------
Capitalization Policies
All costs related to planning, development and construction of the
Building, and expenditures for the Building prior to the date it became
operational for financial statement purposes, have been capitalized. Interest
expense, amortization of financing costs, and real estate taxes were also
capitalized while the Building was under development.
Depreciation and Amortization
Depreciation of the Building commenced the date the Building became
operational for financial statement purposes and the Building is being
depreciated over 40 years. Leasehold and tenant improvements are amortized over
the life of the leases or useful life of the assets, whichever is shorter.
Furniture, fixtures, and equipment are depreciated over 5 years. Deferred
expenses which include organizational costs, certain marketing and leasing
costs, and loan acquisition costs are amortized over the period of estimated
benefit. The straight line method is used for all depreciation and amortization.
Income Taxes
No provision has been made for federal or state income taxes because each
partner's proportionate share of income or loss from the Partnership will be
passed through to be included on each partner's separate tax return.
Rental Income
In accordance with Statement of Financial Accounting Standards No. 13
("SFAS No. 13"), income on leases which include increases in rental rates over
the lease term is recognized on a straight-line basis.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from these estimates.
Impairment of Long-Lived Assets
The Partnership has adopted SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of" which requires
impairment losses to be recorded on long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amount. SFAS
No. 121 also addresses the accounting for long-lived assets that are expected to
be disposed of. The adoption of SFAS No. 121 had no effect on the financial
results of the Partnership.
3. LEASES
------
The Partnership has leased office space to NB Holdings Corporation, as well
as to unrelated third parties. The lease with NB Holdings Corporation was at
rates comparable to those quoted to third parties. The leases contain escalation
provisions and provisions requiring tenants to pay a pro rata share of operating
expenses. The leases typically include renewal options and all are classified
and accounted for as operating leases.
At December 31, 1995, future minimum rentals to be received under existing
non-cancelable leases, including tenants' current pro rata share of operating
expenses, are as follows ($ in thousands):
Lease Leases
With With
NB Holdings Third
Corporation Parties Total
----------- ------- -----
1996 $ 15,091 $ 16,268 $ 31,359
1997 15,110 16,113 31,223
1998 15,114 16,415 31,529
1999 15,114 16,338 31,452
2000 15,114 16,215 31,329
Subsequent to 2000 172,981 114,588 287,569
----------------------------------
$248,524 $195,937 $444,461
==================================
In the years ended December 31, 1994 and 1995, income recognized on a
straight-line basis exceeded income which would have accrued in accordance with
the lease terms by $3,156,000 and $1,148,000, respectively. At December 31, 1994
and 1995, receivables which related to the cumulative excess of revenues
recognized in accordance with SFAS No. 13 over revenues which accrued in
accordance with the actual lease agreements totaled $8,536,000 and $9,684,000,
respectively. Of that amount, 23% was related to leases with NB Holdings
Corporation. At December 31, 1995, two professional services firms leased
approximately 15% and 12%, respectively, of the net rentable space of the
Building.
4. NOTES PAYABLE
-------------
At December 31, 1992, notes payable consisted solely of the amount borrowed
under a Construction Loan Agreement with six banks under which a maximum of $210
million could have been drawn. On October 29, 1993, using capital contributions
made by each partner, the Partnership paid off this note payable, which had an
outstanding balance of $168 million. Approximately $723,000 of deferred loan
costs were written off due to the early extinguishment of this note payable and
is classified as an Extraordinary Item in the accompanying Statements of
Operations. The Construction Loan was payable interest only monthly and had a
floating interest rate equal to LIBOR plus the Applicable Spread Rate which was
reduced to .65% effective January 1, 1993 and .60% effective February 1, 1993 to
maturity.
The Partnership entered into an interest rate swap agreement with an
affiliate of Premises which effectively fixed LIBOR at 8.45% through September
1993. The face amount of the swap increased over time in amounts corresponding
to the projected increases in the Construction Loan balance.
The Partnership has an unsecured $3 million line of credit provided by an
affiliate of Premises. Interest on the line is paid at a floating rate (6.45%
weighted average rate in December 1995) and interest only is payable quarterly
through July 31, 1996, at which time the entire outstanding balance is due.
There were no borrowings under the line as of December 31, 1994 and 1995.
5. RELATED PARTIES
---------------
The Partnership engaged CPI and an affiliate of CPI to manage, develop and
lease the Building. During 1993, 1994 and 1995, fees to CPI and its affiliate
incurred by the Partnership were as follows ($ in thousands):
1993 1994 1995
---- ---- ----
Development and tenant construction fees $ 58 $ 25 $ 88
Leasing and procurement fees 684 230 229
Management fees 610 640 744
------------------------------
$1,352 $895 $1,061
==============================
6. STATEMENT OF CASH FLOWS - SIGNIFICANT NON-CASH TRANSACTIONS
-----------------------------------------------------------
In 1993, 1994 and 1995, there were no significant non-cash transactions.
Interest paid was $13,387,000 and $15,000 in 1993 and 1994, respectively. No
interest was paid in 1995.
7. SUBSEQUENT EVENT
----------------
On February 6, 1996, the Partnership issued $80 million of 6.377%
collateralized notes (the "Notes"). The Notes amortize in equal monthly
installments of $590,680 based on a 20 year amortization schedule, and mature
February 15, 2011. The Notes are non-recourse obligations of the Partnership and
are secured by a Deed to Secure Debt, Assignment of Rents and Security Agreement
covering the Partnership's interest in the Building. In conjunction with this
financing, Premises transferred its 1% general partnership interest in the
partnership to C&S Premises-SPE, Inc., a wholly owned subsidiary of Premises.
The Partnership has loaned the $80 million proceeds of the Notes to CPI
under a non-recourse loan (the "CPI Loan") secured by CPI's Partnership
interests under the same payment terms as those of the Notes. CPI paid all costs
of issuing the Notes and the CPI Loan, including a $400,000 fee to an affiliate
of NationsBank Corporation. In addition, CPI will pay a monthly fee to an
affiliate of NationsBank Corporation of .025% of the outstanding principal
balance of the Notes.
SCHEDULE III
CSC ASSOCIATES, L.P.
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
($ in thousands)
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 1995
---------- -------------- -----------------
Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a),(b)
- ----------- ------------ ---- ------------ ----- --------- ------------ ------------ -------
NationsBank Plaza
Atlanta, Georgia $ -- $ 18,200 $ -- $180,027 $ 10,449 $ 22,818 $185,858 $208,676
=============================================================================================
Life on
Which De-
preciation
Accumu- In 1995
lated Date of Income
Deprecia- Construc- Date Statement
tion (a) tion Acquired Is Computed
--------- --------- -------- -----------
NationsBank Plaza
Atlanta, Georgia $21,232 1990-1992 1990 5-40
NOTE: (a) Reconciliations of total real estate carrying value and accumulated
depreciation for the three years ended December 31, 1995 are as
follows:
Real Estate Accumulated Depreciation
------------------------------ --------------------------
1993 1994 1995 1993 1994 1995
---- ---- ---- ---- ---- ----
Balance at beginning of period $195,681 $200,781 $203,275 $3,463 $ 9,176 $14,980
Improvements and other capitalized costs 5,100 2,494 5,401 -- -- -- --
Provision for depreciation -- -- -- 5,713 5,804 6,252
------------------------------ --------------------------
Balance at close of period $200,781 $203,275 $208,676 $9,176 $14,980 $21,232
REPORT OF INDEPENDENT AUDITORS
The Partners
Haywood Mall Associates
(A South Carolina Joint Venture)
We have audited the accompanying balance sheets of Haywood Mall Associates
(A South Carolina Joint Venture) as of December 31, 1995 and 1994, and the
related statements of income, cash flows and venturers' equity for each of the
three years in the period ended December 31, 1995. Our audits also included the
financial statement schedules of Haywood Mall Associates listed in the Index at
Item 14(a). These financial statements and schedules are the responsibility of
the Management of the Joint Venture. Our responsibility is to express an opinion
on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Haywood Mall Associates (A
South Carolina Joint Venture) at December 31, 1995 and December 31, 1994, and
the results of its operations and its cash flows for each of the three years in
the period ended December 31, 1995, in conformity with generally accepted
accounting principles. Also, in our opinion the related financial statement
schedules, when considered in relation to the basic financial statements taken
as a whole, present fairly in all material respects the information set forth
therein.
ERNST & YOUNG LLP
New York, NY
February 8, 1996
HAYWOOD MALL ASSOCIATES
(A South Carolina Joint Venture)
BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
1995 1994
---- ----
ASSETS
Shopping center:
Land .............................. $ 3,353,335 $ 3,353,335
Building and improvements ......... 38,861,068 19,339,940
-------------------------
42,214,403 22,693,275
Less: accumulated depreciation .... 8,550,512 7,412,999
-------------------------
33,663,891 15,280,276
Construction-in-progress .......... -- 11,862,132
Cash ................................. 2,971,993 1,630,497
Receivables (principally rentals) less
allowance of $428,094 and $249,291 2,716,834 1,988,716
Other assets ......................... 5,178,154 2,063,948
-------------------------
$44,530,872 $32,825,569
=========================
LIABILITIES AND VENTURERS' EQUITY
Accounts payable and
accrued liabilities ............... $ 1,237,422 $ 956,553
Venturers' equity:
Cousins Properties Incorporated ... 21,268,088 15,891,995
Bellwether Properties of
South Carolina, L.P. ............ 22,025,362 15,977,021
-------------------------
$44,530,872 $32,825,569
=========================
The accompanying notes are an integral part of these financial statements.
HAYWOOD MALL ASSOCIATES
(A South Carolina Joint Venture)
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993
---- ---- ----
INCOME
Rental income:
Minimum ............................ $ 6,667,505 $ 6,050,650 $6,064,131
Overage ............................ 261,214 568,546 435,082
Real estate taxes .................. 459,222 418,166 408,422
Utility charges and
other operating expense recoveries 3,776,482 3,287,614 3,044,326
Interest income .................... 104,741 45,655 27,320
--------------------------------------
11,269,164 10,370,631 9,979,281
--------------------------------------
EXPENSES
Mortgage interest ..................... -- 598,389 1,842,232
Repairs and maintenance ............... 1,014,931 882,580 916,474
Utilities ............................. 917,881 820,798 806,911
Managing agent's costs
(principally payroll) .............. 924,208 840,149 817,137
Depreciation .......................... 1,137,513 597,732 598,780
Other ................................. 742,457 486,981 477,501
Real estate taxes ..................... 539,020 450,338 444,642
Leasehold rent ........................ 66,752 64,765 61,984
--------------------------------------
5,342,762 4,741,732 5,965,661
--------------------------------------
INCOME BEFORE
EXTRAORDINARY ITEM ................. 5,926,402 5,628,899 4,013,620
Extraordinary loss from
prepayment of mortgage debt ........ -- 680,277 --
--------------------------------------
NET INCOME ................... $ 5,926,402 $ 4,948,622 $4,013,620
======================================
The accompanying notes are an integral part of these financial statements.
HAYWOOD MALL ASSOCIATES
(A South Carolina Joint Venture)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993
---- ---- ----
OPERATING ACTIVITIES
Net income ................................. $ 5,926,402 $ 4,948,622 $ 4,013,620
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation ............................... 1,137,513 597,732 598,780
Amortization of deferred charges ........... 482,746 363,230 338,069
Straight line adjustment for
step lease rentals ....................... (209,567) (114,085) (255,254)
Loss from prepayment of
mortgage debt ............................ -- 680,277 --
Change in operating assets and
liabilities:
Decrease/(increase) in receivables ..... (518,551) (134,841) 53,552
Increase in other assets, principally
deferred leasing costs ............... (3,596,952) (543,502) (138,880)
Increase in accounts payable and
accrued liabilities .................. 280,869 58,522 17,915
-----------------------------------------
Net Cash Provided by
Operating Activities ....................... 3,502,460 5,855,955 4,627,802
-----------------------------------------
INVESTING ACTIVITIES
Investments in shopping center ............. (7,658,996) (11,864,544) (27,247)
-----------------------------------------
Cash Used in Investing Activities ............. (7,658,996) (11,864,544) (27,247)
-----------------------------------------
FINANCING ACTIVITIES
Principal payments on mortgages ............ -- (92,492) (260,913)
Prepayment of mortgage debt ................ -- (20,116,762) --
Cash distributions ......................... (6,698,000) (,758,268) (4,105,000)
Partners' capital contribution ............. 12,196,032 32,031,738 --
-----------------------------------------
Cash Provided by (Used) in Financing Activities 5,498,032 6,064,216 (4,365,913)
-----------------------------------------
Increase in cash ........................... 1,341,496 55,627 234,642
Cash at beginning of year .................. 1,630,497 1,574,870 1,340,228
-----------------------------------------
Cash at end of year ........................... $ 2,971,993 $ 1,630,497 $ 1,574,870
=========================================
SUPPLEMENTAL DISCLOSURE
Interest paid during the year .............. $ -- $ 750,964 $ 1,844,258
=========================================
The accompanying notes are an integral part of these financial statements.
HAYWOOD MALL ASSOCIATES
(A South Carolina Joint Venture)
STATEMENTS OF VENTURERS' EQUITY
FOR THE THREE YEARS ENDED DECEMBER 31, 1995
Bellwether Cousins
Properties of Properties
South Carolina, L.P. Incorporated Total
-------------------- ------------ -----
Balance at December 31, 1992 $ 369,152 $ 369,152 $ 738,304
Net income ............ 2,006,810 2,006,810 4,013,620
Cash distributions .... (2,052,500) (2,052,500) (4,105,000)
-------------------------------------------
Balance at December 31, 1993 323,462 323,462 646,924
Net income ............ 2,474,311 2,474,311 4,948,622
Cash distributions .... (2,879,134) (2,879,134) (5,758,268)
Capital contributions . 16,058,382 15,973,356 32,031,738
-------------------------------------------
Balance at December 31, 1994 15,977,021 15,891,995 31,869,016
Net income ............ 2,963,201 2,963,201 5,926,402
Cash distributions .... (3,349,000) (3,349,000) (6,698,000)
Capital contributions . 6,434,140 5,761,892 12,196,032
-------------------------------------------
Balance at December 31, 1995 $22,025,362 $21,268,088 $43,293,450
===========================================
The accompanying notes are an integral part of these financial statements.
HAYWOOD MALL ASSOCIATES
(A South Carolina Joint Venture)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE A - JOINT VENTURE AGREEMENT
Haywood Mall Associates (the "Venture") is a South Carolina Joint Venture
between Bellwether Properties of South Carolina, L.P., a South Carolina Limited
Partnership, and Cousins Properties Incorporated (hereinafter collectively
referred to as the "Venturers") formed for the purpose of owning and operating a
regional shopping center in Greenville, South Carolina.
Under the terms of the joint venture agreement, the Venturers share equally
in the cash flow and the profits and losses of the Venture.
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
Shopping Center: Land and building and improvements are stated at cost.
Depreciation of the building and improvements is computed on the straight-line
method over an estimated useful life of 35 years. The tenants' alterations are
amortized over the life of the related leases. Construction-in-progress at
December 31, 1994 represents costs incurred in connection with expanding the
shopping center which was completed during April 1995.
Taxes: No provision has been made for income taxes, since any taxes which
may be payable are the liability of the individual Venturers.
Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
NOTE C - MORTGAGES PAYABLE
The mortgage notes which bore interest at 9% and 10-1/2% and matured in
2000 were prepaid as of April 29. 1994. A prepayment fee equal to 3-1/2% of the
outstanding principal balance was paid in the amount of $680,277.
NOTE D - LEASES
The Venture has a land lease with a base period that extends through the
year 2017. Future lease payments due under the lease, at December 31, 1995, are
as follows:
1996 - $ 67,000
1997 - 67,000
1998 - 67,000
1999 - 70,000
2000 - 72,000
Thereafter - 1,274,000
There are five l0-year renewal option periods available beginning in the
year 2017. Annual payments during the renewal periods are based upon fair market
value as determined at each renewal date.
Space in the shopping center is leased to retail tenants. Leases generally
provide for minimum rentals plus overage rentals based on the tenants' sales
volume, and also require tenants to pay a portion of real estate taxes and other
property operating expenses. Lease periods generally range from 5 to 15 years
and contain various renewal options.
Future minimum rentals (excluding expenses billable to tenants) to be
received under leases, all of which are classified and accounted for as
operating leases at December 31, 1995 are as follows:
Year Ending December 31:
Amount*
-------
1996 $ 7,777,216
1997 7,823,488
1998 7,694,450
1999 6,707,140
2000 5,810,929
Thereafter 19,015,014
-----------
TOTAL $54,828,237
===========
*Does not include rentals applicable to renewal options.
At December 31, 1994 and 1995, receivables which related to the cumulative
excess of revenues recognized in accordance with Statement of Financial
Accounting Standards No. 13 "Accounting for Leases" over revenues which accrued
in accordance with the actual lease agreements aggregates $1,735,815 and
$1,945,382, respectively.
NOTE E - RELATED PARTY TRANSACTIONS
The Venture pays Corporate Property Investors, which has an indirect
ownership interest in one of the Venturers, a leasing fee of 1% of gross rentals
received, as defined. During the years ended December 31, 1995, 1994 and 1993,
the Venture incurred leasing fees of $61,601, $62,405 and $58,951 respectively.
Such amounts are included in managing agent's costs.
SCHEDULE III
HAYWOOD MALL ASSOCIATES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
($ in thousands)
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 1995
---------- -------------- -----------------
Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a),(b)
- ----------- ------------ ---- ------------ ----- --------- ------------ ------------ -------
Haywood Mall
Greenville, S.C. $ -- $ 3,598 $ 9,630 $ 10,669 $ 0 $ 3,353 $43,623 $46,976
=============================================================================================
Life on
Which De-
preciation
Accumu- In 1995
lated Date of Income
Deprecia- Construc- Date Statement
tion (a) tion Acquired Is Computed
--------- --------- -------- -----------
Haywood Mall
Greenville, S.C. $ 9,108 1979-1980 1979 35 (1)
7 (2
=========
NOTES: (1) Estimated useful life for Buildings and Improvements.
(2) Estimated useful life for Property Equipment.
(3) Amounts will not tie to Property totals on Balance Sheet as some
real estate assets are classified as Other Assets.
(4) Reconciliations of total real estate carrying value and
accumulated depreciation for the three years ended December 31,
1995 are as follows:
Real Estate Accumulated Depreciation
-------------------------------- ----------------------------
1993 1994 1995 1993 1994 1995
---- ---- ---- ---- ---- ----
Balance at beginning of period $23,291 $23,392 $23,897 $6,321 $7,017 $7,722
Improvements and other capitalized costs 101 505 23,079 -- -- --
Provision for depreciation -- -- -- 696 705 1,386
--------------------------------- ---------------------------
Balance at close of period $23,392 $23,897 $46,976 $7,017 $7,722 $9,108
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