##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2011
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 001-11312
 COUSINS PROPERTIES INCORPORATED
  GEORGIA
    
    58-0869052(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)191 Peachtree Street, Suite 500, Atlanta, Georgia
    
    30303-1740(Address of principal executive offices)
    
    (Zip Code)
 (404) 407-1000
 Yes þ No o
 Yes o No o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 Yes o No þ
  Class
    
    Outstanding at May 2, 2011Common Stock, $1 par value per share
    
    103,631,398 shares




---



TABLE OF CONTENTS  FORWARD-LOOKING STATEMENTSPART I  FINANCIAL INFORMATIONItem 1. Financial StatementsCONDENSED CONSOLIDATED BALANCE SHEETSCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSCONDENSED CONSOLIDATED STATEMENTS OF EQUITYCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and ProceduresPART II. OTHER INFORMATIONItem 1. Legal ProceedingsItem 1A. Risk FactorsItem 2. Unregistered Sales of Equity Securities and Use of ProceedsItem 3. Defaults Upon Senior SecuritiesItem 4. (Removed and Reserved)Item 5. Other InformationItem 6. ExhibitsSIGNATURESExhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2    Table of Contents  
 FORWARD-LOOKING STATEMENTS
  
    
    the Companys business and financial strategy;
 
    
    the Companys ability to obtain future financing arrangements;
 
    
    the Companys understanding of its competition and its ability to compete
effectively;
 
    
    projected operating results;
 
    
    market and industry trends;
 
    
    estimates relating to future distributions;
 
    
    projected capital expenditures; and
 
    
    interest rates.
  
    
    availability and terms of capital and financing, both to fund operations and to
refinance indebtedness as it matures;
 
    
    risks and uncertainties related to national and local economic conditions, the real
estate industry in general and in specific markets, and the commercial and residential
markets in particular;
 
    
    continued adverse market and economic conditions requiring the recognition of
additional impairment losses;
 
    
    leasing risks, including an inability to obtain new tenants or renew tenants on
favorable terms, or at all, upon the expiration of existing leases and the ability to
lease newly developed or currently unleased space;
 
    
    financial condition of existing tenants;
 
    
    rising interest rates and insurance rates;
 
    
    the availability of sufficient development or investment opportunities;
 
    
    competition from other developers or investors;
 
    
    the risks associated with development projects (such as construction delay, cost
overruns and leasing/sales risk of new properties);
 
    
    potential liability for uninsured losses, condemnation or environmental issues;
 
    
    potential liability for a failure to meet regulatory requirements;
 
    
    the financial condition and liquidity of, or disputes with, joint venture partners;
 
    
    any failure to comply with debt covenants under credit agreements;
 
    
    any failure to continue to qualify for taxation as a real estate investment trust.
   2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements.
 COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
  March 31, 2011
    
    
    December 31, 2010(Unaudited)ASSETSPROPERTIES:Operating properties, net of accumulated depreciation
of $286,547 and $274,925 in 2011 and 2010, respectively
    
    $
    870,723
    
    
    $
    898,119Land held for investment or future development
    
    
    123,885
    
    
    
    123,879Residential lots
    
    
    63,698
    
    
    
    63,403Other
    
    
    738
    
    
    
    2,994Total properties
    
    
    1,059,044
    
    
    
    1,088,395CASH AND CASH EQUIVALENTS
    
    
    5,097
    
    
    
    7,599RESTRICTED CASH
    
    
    15,854
    
    
    
    15,521NOTES AND OTHER RECEIVABLES, net of allowance for
doubtful accounts of $5,728 and $6,287 in 2011 and 2010, respectively
    
    
    48,414
    
    
    
    48,395INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
    
    
    165,119
    
    
    
    167,108OTHER ASSETS
    
    
    41,925
    
    
    
    44,264TOTAL ASSETS
    
    $
    1,335,453
    
    
    $
    1,371,282LIABILITIES AND EQUITYNOTES PAYABLE
    
    $
    496,823
    
    
    $
    509,509ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
    
    
    26,455
    
    
    
    32,388DEFERRED GAIN
    
    
    4,157
    
    
    
    4,216DEPOSITS AND DEFERRED INCOME
    
    
    17,978
    
    
    
    18,029TOTAL LIABILITIES
    
    
    545,413
    
    
    
    564,142COMMITMENTS AND CONTINGENT LIABILITIESREDEEMABLE NONCONTROLLING INTERESTS
    
    
    8,953
    
    
    
    14,289STOCKHOLDERS INVESTMENT:Preferred stock, 20,000,000 shares authorized, $1 par value:7.75% Series A cumulative redeemable preferred stock, $25 liquidation
preference; 2,993,090 shares issued and outstanding in 2011 and 2010
    
    
    74,827
    
    
    
    74,8277.50% Series B cumulative redeemable preferred stock, $25 liquidation
preference; 3,791,000 shares issued and outstanding in 2011 and 2010
    
    
    94,775
    
    
    
    94,775Common stock, $1 par value, 250,000,000 shares authorized, 107,201,480 and
106,961,959 shares issued in 2011 and 2010, respectively
    
    
    107,201
    
    
    
    106,962Additional paid-in capital
    
    
    685,028
    
    
    
    684,551Treasury stock at cost, 3,570,082 shares in 2011 and 2010
    
    
    (86,840
    )
    
    
    (86,840
    )Distributions in excess of cumulative net income
    
    
    (126,706
    )
    
    
    (114,196
    )TOTAL STOCKHOLDERS INVESTMENT
    
    
    748,285
    
    
    
    760,079Nonredeemable noncontrolling interests
    
    
    32,802
    
    
    
    32,772TOTAL EQUITY
    
    
    781,087
    
    
    
    792,851TOTAL LIABILITIES AND EQUITY
    
    $
    1,335,453
    
    
    $
    1,371,282
 See notes to condensed consolidated financial statements.
  3




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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  Three Months Ended March 31,2011
    
    
    2010REVENUES:Rental property revenues
    
    $
    36,148
    
    
    $
    34,773Fee income
    
    
    3,385
    
    
    
    3,544Third party management and leasing revenues
    
    
    4,088
    
    
    
    4,794Multi-family residential unit sales
    
    
    4,657
    
    
    
    10,146Residential lot and outparcel sales
    
    
    165
    
    
    
    13,819Other
    
    
    513
    
    
    
    12448,956
    
    
    
    67,200COSTS AND EXPENSES:Rental property operating expenses
    
    
    14,248
    
    
    
    14,531Third party management and leasing expenses
    
    
    4,093
    
    
    
    4,958Multi-family residential unit cost of sales
    
    
    2,500
    
    
    
    7,970Residential lot and outparcel cost of sales
    
    
    69
    
    
    
    9,096General and administrative expenses
    
    
    7,400
    
    
    
    8,017Interest expense
    
    
    7,544
    
    
    
    9,781Reimbursed expenses
    
    
    1,512
    
    
    
    1,859Depreciation and amortization
    
    
    13,475
    
    
    
    13,176Impairment loss
    
    
    3,508
    
    
    
    Separation expenses
    
    
    101
    
    
    
    68Other
    
    
    862
    
    
    
    86255,312
    
    
    
    70,318LOSS ON EXTINGUISHMENT OF DEBT
    
    
    
    
    
    
    (592
    )LOSS FROM CONTINUING OPERATIONS BEFORE TAXES,
UNCONSOLIDATED JOINT VENTURES AND SALE OF
INVESTMENT PROPERTIES
    
    
    (6,356
    )
    
    
    (3,710
    )BENEFIT FOR INCOME TAXES FROM OPERATIONS
    
    
    64
    
    
    
    1,146INCOME FROM UNCONSOLIDATED JOINT VENTURES
    
    
    2,496
    
    
    
    2,920INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE GAIN
ON SALE OF INVESTMENT PROPERTIES
    
    
    (3,796
    )
    
    
    356GAIN ON SALE OF INVESTMENT PROPERTIES
    
    
    59
    
    
    
    756INCOME (LOSS) FROM CONTINUING OPERATIONS
    
    
    (3,737
    )
    
    
    1,112INCOME (LOSS) FROM DISCONTINUED OPERATIONS:Income from discontinued operations
    
    
    72
    
    
    
    1,068Loss on sale of investment properties
    
    
    (384
    )
    
    
    (312
    )
    
    
    1,068NET INCOME (LOSS)
    
    
    (4,049
    )
    
    
    2,180NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
    
    
    (581
    )
    
    
    (526
    )NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST
    
    
    (4,630
    )
    
    
    1,654DIVIDENDS TO PREFERRED STOCKHOLDERS
    
    
    (3,227
    )
    
    
    (3,227
    )NET LOSS AVAILABLE TO COMMON STOCKHOLDERS
    
    $
    (7,857
    )
    
    $
    (1,573
    )PER COMMON SHARE INFORMATION  BASIC AND DILUTED:Loss from continuing operations attributable to controlling interest
    
    $
    (0.07
    )
    
    $
    (0.03
    )Income from discontinued operations
    
    
    
    
    
    
    0.01Net loss available to common stockholders  basic and diluted
    
    $
    (0.08
    )
    
    $
    (0.02
    )WEIGHTED AVERAGE SHARES  BASIC AND DILUTED
    
    
    103,515
    
    
    
    100,069DIVIDENDS DECLARED PER COMMON SHARE
    
    $
    0.045
    
    
    $
    0.09
 See notes to condensed consolidated financial statements.
  4




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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
 Three Months Ended March 31, 2011 and 2010
 (Unaudited, in thousands)
 AccumulatedOtherComprehensiveAdditional
    
    
    
    
    
    
    Loss on
    
    
    Distributions in
    
    
    
    
    
    
    NonredeemablePreferred
    
    
    Common
    
    
    Paid-In
    
    
    Treasury
    
    
    Derivative
    
    
    Excess of
    
    
    Stockholders
    
    
    Noncontrolling
    
    
    TotalStock
    
    
    Stock
    
    
    Capital
    
    
    Stock
    
    
    Instruments
    
    
    Net Income
    
    
    Investment
    
    
    Interests
    
    
    EquityBalance December 31, 2010
    
    $
    169,602
    
    
    $
    106,962
    
    
    $
    684,551
    
    
    $
    (86,840
    )
    
    $
    
    
    
    $
    (114,196
    )
    
    $
    760,079
    
    
    $
    32,772
    
    
    $
    792,851Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,630
    )
    
    
    (4,630
    )
    
    
    620
    
    
    
    (4,010
    )Common stock issued for restricted
stock grants, net of amounts
withheld for income taxes
    
    
    
    
    
    
    243
    
    
    
    (246
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Stock issuance costs
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    
    
    
    
    (14
    )Amortization of stock options and
restricted stock, net of forfeitures
    
    
    
    
    
    
    (4
    )
    
    
    683
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    679
    
    
    
    
    
    
    
    679Distributions to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (590
    )
    
    
    (590
    )Change in fair value of redeemable
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    54
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54
    
    
    
    
    
    
    
    54Cash preferred dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,227
    )
    
    
    (3,227
    )
    
    
    
    
    
    
    (3,227
    )Cash common dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,653
    )
    
    
    (4,653
    )
    
    
    
    
    
    
    (4,653
    )Balance March 31, 2011
    
    $
    169,602
    
    
    $
    107,201
    
    
    $
    685,028
    
    
    $
    (86,840
    )
    
    $
    
    
    
    $
    (126,706
    )
    
    $
    748,285
    
    
    $
    32,802
    
    
    $
    781,087Balance December 31, 2009
    
    $
    169,602
    
    
    $
    103,352
    
    
    $
    662,216
    
    
    $
    (86,840
    )
    
    $
    (9,517
    )
    
    $
    (51,402
    )
    
    $
    787,411
    
    
    $
    32,848
    
    
    $
    820,259Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,654
    
    
    
    1,654
    
    
    
    548
    
    
    
    2,202Other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32
    )
    
    
    
    
    
    
    (32
    )
    
    
    
    
    
    
    (32
    )Total comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32
    )
    
    
    1,654
    
    
    
    1,622
    
    
    
    548
    
    
    
    2,170Common stock issued pursuant to:Stock dividend, net of issuance costs
    
    
    
    
    
    
    820
    
    
    
    5,137
    
    
    
    
    
    
    
    
    
    
    
    (5,984
    )
    
    
    (27
    )
    
    
    
    
    
    
    (27
    )Restricted stock grants
    
    
    
    
    
    
    264
    
    
    
    (264
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of stock options and
restricted stock, net of forfeitures
    
    
    
    
    
    
    
    
    
    
    508
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    508
    
    
    
    
    
    
    
    508Distributions to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (573
    )
    
    
    (573
    )Cash preferred dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,227
    )
    
    
    (3,227
    )
    
    
    
    
    
    
    (3,227
    )Cash common dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,997
    )
    
    
    (2,997
    )
    
    
    
    
    
    
    (2,997
    )Balance March 31, 2010
    
    $
    169,602
    
    
    $
    104,436
    
    
    $
    667,597
    
    
    $
    (86,840
    )
    
    $
    (9,549
    )
    
    $
    (61,956
    )
    
    $
    783,290
    
    
    $
    32,823
    
    
    $
    816,113
 See notes to condensed consolidated financial statements.
  5




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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  Three Months EndedMarch 31,2011
    
    
    2010CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    (4,049
    )
    
    $
    2,180Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:Loss (gain) on sale of investment properties, net
    
    
    325
    
    
    
    (756
    )Loss on extinguishment of debt
    
    
    
    
    
    
    592Impairment loss
    
    
    3,508
    
    
    
    Depreciation and amortization
    
    
    13,539
    
    
    
    13,895Amortization of deferred financing costs
    
    
    536
    
    
    
    407Stock-based compensation
    
    
    679
    
    
    
    508Effect of recognizing rental revenues on a straight-line or market basis
    
    
    (1,500
    )
    
    
    (988
    )Income from unconsolidated joint ventures
    
    
    (2,496
    )
    
    
    (2,920
    )Operating distributions from unconsolidated joint ventures
    
    
    2,430
    
    
    
    2,461Residential lot, outparcel and multi-family cost of sales, net of closing costs paid
    
    
    2,325
    
    
    
    15,778Residential lot acquisition and development expenditures
    
    
    (435
    )
    
    
    (428
    )Changes in other operating assets and liabilities:Change in other receivables and other assets
    
    
    (258
    )
    
    
    (1,695
    )Change in accounts payable and accrued liabilities
    
    
    (5,421
    )
    
    
    3,040Net cash provided by operating activities
    
    
    9,183
    
    
    
    32,074CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from investment property sales
    
    
    21,543
    
    
    
    10,023Property acquisition and development and tenant asset expenditures
    
    
    (7,667
    )
    
    
    (4,279
    )Investment in unconsolidated joint ventures
    
    
    (839
    )
    
    
    (1,022
    )Distributions from unconsolidated joint ventures
    
    
    3,602
    
    
    
    2,279Collection of notes receivable
    
    
    36
    
    
    
    Change in other assets
    
    
    (1,451
    )
    
    
    (1,067
    )Change in restricted cash
    
    
    (496
    )
    
    
    457Net cash provided by investing activities
    
    
    14,728
    
    
    
    6,391CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from credit facility
    
    
    12,600
    
    
    
    Repayment of credit facility
    
    
    (24,300
    )
    
    
    Payment of loan issuance costs
    
    
    
    
    
    
    (1,647
    )Repayment of notes payable
    
    
    (986
    )
    
    
    (9,229
    )Common stock issuance costs
    
    
    (14
    )
    
    
    (27
    )Cash common dividends paid
    
    
    (4,653
    )
    
    
    (2,997
    )Cash preferred dividends paid
    
    
    (3,227
    )
    
    
    (3,227
    )Contributions from noncontrolling interests
    
    
    
    
    
    
    120Distributions to noncontrolling interests
    
    
    (5,833
    )
    
    
    (573
    )Net cash used in financing activities
    
    
    (26,413
    )
    
    
    (17,580
    )NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (2,502
    )
    
    
    20,885CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    7,599
    
    
    
    9,464CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    5,097
    
    
    $
    30,349
 See notes to condensed consolidated financial statements.
  6




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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2011
 (UNAUDITED)
 1.
    
    BASIS OF PRESENTATION
      7




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2.
    
    NOTES PAYABLE, INTEREST EXPENSE AND COMMITMENTS AND CONTINGENCIES
  Term/Amortization
    
    
    
    
    
    
    March 31,
    
    
    December 31,Description
    
    Interest Rate
    
    
    Period (Years)
    
    
    Maturity
    
    
    2011
    
    
    2010Credit Facility, unsecured (see note)
    
    LIBOR + 1.75% to 2.25
    %
    
    
    4/N/A
    
    
    
    8/29/11
    
    
    $
    93,700
    
    
    $
    105,400Terminus 100 mortgage note
    
    
    5.25
    %
    
    
    12/30
    
    
    
    1/1/23
    
    
    
    139,678
    
    
    
    140,000The American Cancer Society Center mortgage
note (interest only until October 1, 2011)
    
    
    6.45
    %
    
    
    10/30
    
    
    
    9/1/17
    
    
    
    136,000
    
    
    
    136,000333/555 North Point Center East mortgage note (see note)
    
    
    7.00
    %
    
    
    10/25
    
    
    
    11/1/11
    
    
    
    26,184
    
    
    
    26,412100/200 North Point Center East mortgage note
    
    
    5.39
    %
    
    
    5/30
    
    
    
    6/1/12
    
    
    
    24,744
    
    
    
    24,830Meridian Mark Plaza mortgage note
    
    
    6.00
    %
    
    
    10/30
    
    
    
    8/1/20
    
    
    
    26,809
    
    
    
    26,892Lakeshore Park Plaza mortgage note
    
    
    5.89
    %
    
    
    4/25
    
    
    
    8/1/12
    
    
    
    17,451
    
    
    
    17,544The Points at Waterview mortgage note
    
    
    5.66
    %
    
    
    10/25
    
    
    
    1/1/16
    
    
    
    16,480
    
    
    
    16,592600 University Park Place mortgage note
    
    
    7.38
    %
    
    
    10/30
    
    
    
    8/10/11
    
    
    
    12,228
    
    
    
    12,292Handy Road Associates, LLC (see note)
    
    Prime + 1%, but not < 6
    %
    
    
    5/N/A
    
    
    
    3/30/11
    
    
    
    3,374
    
    
    
    3,374Callaway
    
    
    4.13
    %
    
    
    2/N/A
    
    
    
    11/18/13
    
    
    
    175
    
    
    
    173$
    496,823
    
    
    $
    509,509
    Fair Value
  Interest Rate Swap Agreements
  Other Debt Information
     8




---



##### Table of Contents



3.
    
    EARNINGS PER SHARE
   Three Months EndedMarch 31,2011
    
    
    2010Weighted average shares-basic
    
    
    103,515
    
    
    
    100,069Dilutive potential stock options
    
    
    
    
    
    
    Weighted average shares-diluted
    
    
    103,515
    
    
    
    100,069Anti-dilutive options not included
    
    
    6,612
    
    
    
    7,137
 4.
    
    STOCK-BASED COMPENSATION
     9




---



##### Table of Contents



5.
    
    INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
  Total Assets
    
    
    Total Debt
    
    
    Total Equity
    
    
    Companys InvestmentSUMMARY OF FINANCIAL POSITION:
    
    2011
    
    
    2010
    
    
    2011
    
    
    2010
    
    
    2011
    
    
    2010
    
    
    2011
    
    
    2010CP Venture IV LLC entities
    
    $
    310,800
    
    
    $
    313,603
    
    
    $
    36,475
    
    
    $
    36,620
    
    
    $
    263,841
    
    
    $
    267,085
    
    
    $
    15,149
    
    
    $
    15,364Charlotte Gateway Village, LLC
    
    
    152,600
    
    
    
    154,200
    
    
    
    93,630
    
    
    
    97,030
    
    
    
    56,646
    
    
    
    54,834
    
    
    
    10,358
    
    
    
    10,366CF Murfreesboro Associates
    
    
    127,918
    
    
    
    129,738
    
    
    
    101,983
    
    
    
    103,378
    
    
    
    24,376
    
    
    
    24,263
    
    
    
    14,273
    
    
    
    14,246Palisades West LLC
    
    
    126,412
    
    
    
    129,378
    
    
    
    
    
    
    
    
    
    
    
    80,591
    
    
    
    80,767
    
    
    
    42,150
    
    
    
    42,256CP Venture LLC entities
    
    
    103,403
    
    
    
    106,066
    
    
    
    
    
    
    
    
    
    
    
    101,654
    
    
    
    104,067
    
    
    
    3,528
    
    
    
    3,779CL Realty, L.L.C.
    
    
    82,785
    
    
    
    86,657
    
    
    
    2,152
    
    
    
    2,663
    
    
    
    78,929
    
    
    
    82,534
    
    
    
    38,137
    
    
    
    39,928MSREF/Terminus 200 LLC
    
    
    67,403
    
    
    
    65,164
    
    
    
    48,936
    
    
    
    46,169
    
    
    
    13,719
    
    
    
    13,956
    
    
    
    2,744
    
    
    
    2,791Temco Associates, LLC
    
    
    60,580
    
    
    
    60,608
    
    
    
    2,894
    
    
    
    2,929
    
    
    
    57,423
    
    
    
    57,475
    
    
    
    22,688
    
    
    
    22,713Crawford Long  CPI, LLC
    
    
    34,057
    
    
    
    34,408
    
    
    
    48,440
    
    
    
    48,701
    
    
    
    (15,796
    )
    
    
    (15,341
    )
    
    
    (6,668
    )
    
    
    (6,431
    )Wildwood Associates
    
    
    21,209
    
    
    
    21,220
    
    
    
    
    
    
    
    
    
    
    
    21,169
    
    
    
    21,216
    
    
    
    (1,666
    )
    
    
    (1,642
    )Ten Peachtree Place Associates
    
    
    19,942
    
    
    
    20,980
    
    
    
    26,637
    
    
    
    26,782
    
    
    
    (7,161
    )
    
    
    (6,263
    )
    
    
    (5,028
    )
    
    
    (4,581
    )Cousins Watkins LLC
    
    
    57,447
    
    
    
    57,184
    
    
    
    28,800
    
    
    
    28,850
    
    
    
    28,191
    
    
    
    28,334
    
    
    
    15,280
    
    
    
    14,850TRG Columbus Development Venture, Ltd.
    
    
    3,525
    
    
    
    3,574
    
    
    
    
    
    
    
    
    
    
    
    2,121
    
    
    
    2,115
    
    
    
    75
    
    
    
    58Pine Mountain Builders, LLC
    
    
    1,246
    
    
    
    1,559
    
    
    
    664
    
    
    
    896
    
    
    
    363
    
    
    
    403
    
    
    
    737
    
    
    
    757$
    1,169,327
    
    
    $
    1,184,339
    
    
    $
    390,611
    
    
    $
    394,018
    
    
    $
    706,066
    
    
    $
    715,445
    
    
    $
    151,757
    
    
    $
    154,454
  Companys Share of NetTotal Revenues
    
    
    Net Income (Loss)
    
    
    Income (Loss)SUMMARY OF OPERATIONS:
    
    2011
    
    
    2010
    
    
    2011
    
    
    2010
    
    
    2011
    
    
    2010CP Venture IV LLC entities
    
    $
    7,727
    
    
    $
    8,004
    
    
    $
    905
    
    
    $
    1,192
    
    
    $
    263
    
    
    $
    289Charlotte Gateway Village, LLC
    
    
    8,045
    
    
    
    7,903
    
    
    
    2,118
    
    
    
    1,879
    
    
    
    294
    
    
    
    294CF Murfreesboro Associates
    
    
    3,428
    
    
    
    4,084
    
    
    
    113
    
    
    
    623
    
    
    
    (5
    )
    
    
    266Palisades West LLC
    
    
    4,030
    
    
    
    3,315
    
    
    
    1,456
    
    
    
    1,124
    
    
    
    711
    
    
    
    545CP Venture LLC entities
    
    
    4,826
    
    
    
    4,641
    
    
    
    2,504
    
    
    
    2,263
    
    
    
    259
    
    
    
    234CL Realty, L.L.C.
    
    
    1,662
    
    
    
    1,727
    
    
    
    657
    
    
    
    (144
    )
    
    
    313
    
    
    
    238MSREF/Terminus 200 LLC
    
    
    938
    
    
    
    
    
    
    
    (1,159
    )
    
    
    
    
    
    
    (232
    )
    
    
    Terminus 200 LLC
    
    
    
    
    
    
    397
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    Temco Associates, LLC
    
    
    59
    
    
    
    1,820
    
    
    
    (204
    )
    
    
    1,200
    
    
    
    (103
    )
    
    
    603Crawford Long  CPI, LLC
    
    
    2,937
    
    
    
    2,810
    
    
    
    544
    
    
    
    448
    
    
    
    272
    
    
    
    223Wildwood Associates
    
    
    
    
    
    
    
    
    
    
    (47
    )
    
    
    (44
    )
    
    
    (24
    )
    
    
    (21
    )Ten Peachtree Place Associates
    
    
    1,931
    
    
    
    1,906
    
    
    
    300
    
    
    
    228
    
    
    
    154
    
    
    
    118Cousins Watkins LLC
    
    
    1,213
    
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    594
    
    
    
    TRG Columbus Development Venture, Ltd.
    
    
    12
    
    
    
    1,055
    
    
    
    
    
    
    
    385
    
    
    
    17
    
    
    
    117Pine Mountain Builders, LLC
    
    
    1,064
    
    
    
    745
    
    
    
    (40
    )
    
    
    40
    
    
    
    (21
    )
    
    
    20Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    (6
    )$
    37,872
    
    
    $
    38,407
    
    
    $
    7,168
    
    
    $
    9,204
    
    
    $
    2,496
    
    
    $
    2,920
 6.
    
    OTHER ASSETS
  March 31, 2011
    
    
    December 31, 2010Investment in Verde
    
    $
    5,868
    
    
    $
    9,376FF&E and leasehold improvements, net of accumulated depreciation
of $16,697 and $16,117 in 2011 and 2010, respectively
    
    
    4,834
    
    
    
    4,673Predevelopment costs and earnest money
    
    
    7,384
    
    
    
    7,039Lease inducements, net of accumulated amortization
of $3,272 and $2,991 in 2011 and 2010, respectively
    
    
    11,642
    
    
    
    11,899Loan closing costs, net of accumulated amortization
of $3,645 and $3,109 in 2011 and 2010, respectively
    
    
    2,167
    
    
    
    2,703Prepaid expenses and other assets
    
    
    3,781
    
    
    
    2,296Intangible Assets:Goodwill
    
    
    5,430
    
    
    
    5,430Above market leases, net of accumulated amortization
of $8,751 and $8,741 in 2011 and 2010, respectively
    
    
    517
    
    
    
    526In-place leases, net of accumulated amortization
of $2,512 and $2,492 in 2011 and 2010, respectively
    
    
    302
    
    
    
    322$
    41,925
    
    
    $
    44,264
  10




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##### Table of Contents



7.
    
    NONCONTROLLING INTERESTS
   2011
    
    
    2010Beginning Balance  Redeemable
    
    $
    14,289
    
    
    $
    12,591Net loss attributable to redeemable noncontrolling interests
    
    
    (39
    )
    
    
    (22
    )Contributions from (distributions to) noncontrolling interests
    
    
    (5,243
    )
    
    
    120Change in fair value of noncontrolling interests
    
    
    (54
    )
    
    
    Ending Balance  Redeemable
    
    $
    8,953
    
    
    $
    12,689
  2011
    
    
    2010Net income attributable to nonredeemable noncontrolling interests
    
    $
    620
    
    
    $
    548Net loss attributable to redeemable noncontrolling interests
    
    
    (39
    )
    
    
    (22
    )Net income attributable to noncontrolling interests
    
    $
    581
    
    
    $
    526
 8.
    
    REPORTABLE SEGMENTS
   11




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##### Table of Contents




    
    fee income for third party properties, other than
those managed by CPS, and joint venture properties for which the Company performs
management, development and leasing services (fee income related to
residential joint ventures is included in the Land segment);
 
    
    compensation for corporate employees, other than those in the CPS Third Party
Management and Leasing segment;
 
    
    general corporate overhead costs, interest expense for consolidated entities (as
financing decisions are made at the corporate level, with the exception of joint venture
interest expense, which is included in joint venture results in the respective segment);
 
    
    income attributable to noncontrolling interests;
 
    
    income taxes;
 
    
    depreciation;
 
    
    preferred dividends; and
 
    
    operations of the Industrial properties, which are not material for separate
presentation.
    12




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##### Table of Contents



Third PartyManagement
    
    
    For-SaleThree Months Ended March 31, 2011
    
    Office
    
    
    Retail
    
    
    Land
    
    
    and Leasing
    
    
    Multi-Family
    
    
    Other
    
    
    TotalNet operating income
    
    $
    15,250
    
    
    $
    5,737
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,049
    
    
    $
    22,036Fee income, net of reimbursed expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,840
    
    
    
    
    
    
    
    1,873
    
    
    
    3,713Residential lot, outparcel and multi-family unit sales, net of cost of sales
    
    
    
    
    
    
    50
    
    
    
    46
    
    
    
    
    
    
    
    2,157
    
    
    
    
    
    
    
    2,253Other income
    
    
    371
    
    
    
    24
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    118
    
    
    
    513Third party management and leasing expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,845
    )
    
    
    
    
    
    
    
    
    
    
    (1,845
    )General and administrative expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,400
    )
    
    
    (7,400
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,544
    )
    
    
    (7,544
    )Impairment loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,508
    )
    
    
    (3,508
    )Depreciation and amortization of non-real estate assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (563
    )
    
    
    (563
    )Separation expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (101
    )
    
    
    (101
    )Other expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (862
    )
    
    
    (862
    )Funds from operations from unconsolidated joint ventures
    
    
    2,721
    
    
    
    2,241
    
    
    
    195
    
    
    
    
    
    
    
    17
    
    
    
    
    
    
    
    5,174Income attributable to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (581
    )
    
    
    (581
    )Benefit for income taxes from operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64
    
    
    
    64Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,227
    )
    
    
    (3,227
    )Funds from operations available to common stockholders
    
    $
    18,342
    
    
    $
    8,052
    
    
    $
    241
    
    
    $
    (5
    )
    
    $
    2,174
    
    
    $
    (20,682
    )
    
    
    8,122Real estate depreciation and amortization, including Companys
share of joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,654
    )Loss on sale of depreciated investment properties, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (325
    )Net loss available to common stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (7,857
    )
 Third PartyManagement
    
    
    For-SaleThree Months Ended March 31, 2010
    
    Office
    
    
    Retail
    
    
    Land
    
    
    and Leasing
    
    
    Multi-Family
    
    
    Other
    
    
    TotalNet operating income
    
    $
    14,718
    
    
    $
    6,778
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    533
    
    
    $
    22,029Fee income, net of reimbursed expenses
    
    
    
    
    
    
    
    
    
    
    66
    
    
    
    2,235
    
    
    
    
    
    
    
    1,619
    
    
    
    3,920Residential lot, outparcel and multi-family unit sales, net of cost of sales
    
    
    
    
    
    
    4,593
    
    
    
    499
    
    
    
    
    
    
    
    2,176
    
    
    
    328
    
    
    
    7,596Other income
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116
    
    
    
    124Loss on extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (592
    )
    
    
    (592
    )Third party management and leasing expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,399
    )
    
    
    
    
    
    
    
    
    
    
    (2,399
    )General and administrative expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,017
    )
    
    
    (8,017
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,781
    )
    
    
    (9,781
    )Depreciation and amortization of non-real estate assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (571
    )
    
    
    (571
    )Separation expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (68
    )
    
    
    (68
    )Other expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (862
    )
    
    
    (862
    )Funds from operations from unconsolidated joint ventures
    
    
    2,416
    
    
    
    1,803
    
    
    
    872
    
    
    
    
    
    
    
    117
    
    
    
    
    
    
    
    5,208Income attributable to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (526
    )
    
    
    (526
    )Benefit for income taxes from operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,146
    
    
    
    1,146Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,227
    )
    
    
    (3,227
    )Funds from operations available to common stockholders
    
    $
    17,134
    
    
    $
    13,182
    
    
    $
    1,437
    
    
    $
    (164
    )
    
    $
    2,293
    
    
    $
    (19,902
    )
    
    
    13,980Real estate depreciation and amortization, including Companys
share of joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,612
    )Gain on sale of depreciated investment properties
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59Net loss available to common stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (1,573
    )
  
    
    Rental property operations, including discontinued;
    
    Reimbursements of third-party and joint venture personnel costs;
    
    Residential, tract and outparcel sales;
    
    Multi-family unit sales; and
    
    Gains or losses on sales of investment properties.
  13




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##### Table of Contents



Three Months Ended March 31,2011
    
    
    2010Net operating income
    
    $
    22,036
    
    
    $
    22,029Plus rental property operating expenses
    
    
    14,248
    
    
    
    14,531Fee income
    
    
    1,873
    
    
    
    1,685Third party management and leasing revenues
    
    
    1,840
    
    
    
    2,235Reimbursed expenses
    
    
    3,760
    
    
    
    4,418Residential lot, outparcel, and multi-family unit sales, net of cost of sales, including
gain on sale of undepreciated investment properties
    
    
    2,253
    
    
    
    7,596Less gain on sale of undepreciated investment properties not included in revenues
    
    
    
    
    
    
    (697
    )Plus residential lot, outparcel, multi-family unit and outparcel cost of sales
    
    
    2,569
    
    
    
    17,066Net operating income from discontinued operations not included in revenues
    
    
    (136
    )
    
    
    (1,787
    )Other income
    
    
    513
    
    
    
    124Total consolidated revenues
    
    $
    48,956
    
    
    $
    67,200
 9.
    
    PROPERTY TRANSACTIONS
   2011
    
    
    2010Rental property revenues
    
    $
    145
    
    
    $
    2,440Rental property operating expenses
    
    
    (9
    )
    
    
    (653
    )Depreciation and amortization
    
    
    (64
    )
    
    
    (719
    )Income from discontinued operations
    
    $
    72
    
    
    $
    1,068Loss on sale of investment properties
    
    $
    (384
    )
    
    $
    
  14




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##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview:
    Results of Operations:
 Rental Property Revenues
 
    
    Increase of $599,000 at The Avenue Forsyth, where the Company recognized deferred
tenant income and an increase in rental rates for certain tenants during the 2011 period;
and
 
    
    Increase of $454,000 at 191 Peachtree Tower, where average economic occupancy
increased from 70% in the 2010 period to 73% in the 2011 period.
 Rental Property Operating Expenses.
 Third Party Management and Leasing Revenues.
 Third Party Management and Leasing Expenses.
 Other Income.
 For-Sale Multi-family Residential Sales and Cost of Sales.
 Residential Lot and Outparcel Sales and Cost of Sales.
 Residential Lots
  15




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##### Table of Contents



2011
    
    
    2010Consolidated projects
    
    
    1
    
    
    
    2Temco
    
    
    
    
    
    
    1CL Realty
    
    
    60
    
    
    
    86Total
    
    
    61
    
    
    
    89
  Outparcels
 General and Administrative Expense (G&A)
 
    
    Decrease in salaries and benefits of employees, excluding stock-based compensation,
of approximately $362,000 due a decrease in the number of employees at the Company between
the periods; and
 
    
    Increase of approximately $232,000 in capitalization of salaries and benefits in the
2011 period primarily due to an increase in the number of leases executed and an increase
in costs associated with a probable development project during the 2011 period. The
Company capitalizes salaries and benefits of personnel who work on qualified development
projects or leases that have been executed or are probable of being executed.
 Impairment Loss
 Interest Expense
 Benefit for Income Taxes from Operations
  16




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##### Table of Contents



Income from Unconsolidated Joint Ventures
 
    
    Decrease in income from Temco Associates of approximately $705,000 due mainly to the
2010 receipt of letter of credit proceeds that were released to the venture;
 
    
    CL Realty sold a 20-acre tract where it deferred substantially all the gain due to
the ventures continuing involvement in the tract. The venture expects to recognize the
deferred gain over the remainder of 2011, the Companys share of which is anticipated to
be $250,000;
 
    
    Decrease in income of approximately $271,000 from CF Murfreesboro Associates
primarily due to an outparcel sale in the first quarter of 2010 with no corresponding 2011
sale; and
 
    
    Increase in income of approximately $594,000 from Cousins Watkins LLC as this joint
venture was formed at the end of 2010.
 Gain on Sale of Investment Properties
 Income (Loss) from Discontinued Operations.
 Funds From Operations
  17




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##### Table of Contents



Three Months EndedMarch 31,2011
    
    
    2010Net Loss Available to Common Stockholders
    
    $
    (7,857
    )
    
    $
    (1,573
    )Depreciation and amortization:Consolidated properties
    
    
    13,475
    
    
    
    13,176Discontinued properties
    
    
    64
    
    
    
    719Share of unconsolidated joint ventures
    
    
    2,683
    
    
    
    2,294Depreciation of furniture, fixtures and equipment:Consolidated properties
    
    
    (563
    )
    
    
    (567
    )Discontinued properties
    
    
    
    
    
    
    (4
    )Share of unconsolidated joint ventures
    
    
    (5
    )
    
    
    (6
    )(Gain) loss on sale of investment properties:Consolidated
    
    
    (59
    )
    
    
    (756
    )Discontinued properties
    
    
    384
    
    
    
    Gain on sale of undepreciated investment properties
    
    
    
    
    
    
    697Funds From Operations Available to Common Stockholders
    
    $
    8,122
    
    
    $
    13,980Per Common Share  Basic and Diluted:Net loss available to common stockholders
    
    $
    (.08
    )
    
    $
    (.02
    )Funds from operations available to common stockholders
    
    $
    .08
    
    
    $
    .14Weighted Average Shares-Basic
    
    
    103,515
    
    
    
    100,069Weighted Average Shares-Diluted
    
    
    103,530
    
    
    
    100,069
 Liquidity and Capital Resources:
  
    
    Cash from operations;
    
    Borrowings under its Credit Facility;
    
    Mortgage notes payable;
    
    Proceeds from equity offerings;
    
    Joint venture formations; and
    
    Sales of assets.
  
    
    Corporate expenses;
    
    Expenditures on predevelopment and development projects;
    
    Payments of tenant improvements and other leasing costs;
    
    Principal and interest payments on debt obligations;
    
    Dividends to common and preferred stockholders; and
    
    Property investments.
  18




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##### Table of Contents



Financial Condition
  Contractual Obligations and Commitments
  Less than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 yearsContractual Obligations:Company debt:Unsecured Credit Facility (1)
    
    $
    93,700
    
    
    $
    
    
    
    $
    93,700
    
    
    $
    
    
    
    $
    Mortgage notes payable
    
    
    403,123
    
    
    
    46,034
    
    
    
    50,704
    
    
    
    24,043
    
    
    
    282,342Interest commitments (2)
    
    
    156,274
    
    
    
    23,638
    
    
    
    37,176
    
    
    
    35,321
    
    
    
    60,139Ground leases
    
    
    14,945
    
    
    
    100
    
    
    
    207
    
    
    
    217
    
    
    
    14,421Other operating leases
    
    
    1,544
    
    
    
    545
    
    
    
    708
    
    
    
    231
    
    
    
    60Total contractual obligations
    
    $
    669,586
    
    
    $
    70,317
    
    
    $
    182,495
    
    
    $
    59,812
    
    
    $
    356,962Commitments:Letters of credit
    
    $
    4,129
    
    
    $
    4,129
    
    
    $
    
    
    
    $
    
    
    
    $
    Performance bonds
    
    
    1,659
    
    
    
    1,659
    
    
    
    
    
    
    
    
    
    
    
    Unfunded tenant improvements and other
    
    
    17,602
    
    
    
    16,602
    
    
    
    1,000
    
    
    
    
    
    
    
    Total commitments
    
    $
    23,390
    
    
    $
    22,390
    
    
    $
    1,000
    
    
    $
    
    
    
    $
    
 (1)
    
    Reflects that the one-year extension on the Credit Facility will be exercised.(2)
    
    Interest on variable rate obligations is based on rates effective as of March 31, 2011.  Other Debt Information
     Future Capital Requirements
   19




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##### Table of Contents



Cash Flows
  Cash Flows from Operating Activities.
 
    
    Decrease of $5.5 million in proceeds from multi-family unit sales, due to a decrease in
the number of units sold at both the Companys 10 Terminus and 60 North Market condominium
projects. The projects are essentially completely sold as of March 31, 2011;
 
    
    Decrease of $13.4 million in proceeds from outparcel sales. There were no outparcel
sales in 2011, compared to eight outparcel sales in 2010;
 
    
    Decrease of $4.7 million in the 2011 period due to the payment of 2010 cash incentive
awards in February 2011. There were no cash incentive awards paid in 2010; and
 
    
    Partially offsetting these decreases in operating cash flows was a decrease in interest
paid of $2.7 million, due a decrease in average borrowings and the average interest rate
under the Companys Credit Facility, as the Companys interest rate swaps terminated or
expired in late 2010. Interest expense decreased further due to the amendment of the
Terminus 100 mortgage note in 2010 where the interest rate decreased.
 Cash Flows from Investing Activities.
 
    
    Increase in proceeds from the sale of investment properties of $11.5 million. The
Company sold Jefferson Mill Business Park Building A in 2011 for proceeds of approximately
$21.5 million. In 2010, the Company sold Glenmore Garden Villas, a townhome development in
Charlotte, North Carolina, and sold another tract of land, which generated approximately
$7.5 million in proceeds. The Company also received a deposit of $3.0 million towards a
second quarter 2010 property sale.
 
    
    Offsetting this increase in cash provided by investing activities was an increase in
property acquisition and development expenditures of $3.4 million primarily due to an
increase in payments for tenant assets under new leases.
 Cash Flows from Financing Activities.
 
    
    Net repayments under the Credit Facility were $11.7 million in the 2011 period, as the
Company used a portion of the sales proceeds from the sale of Jefferson Mill to reduce its
borrowings. There were no borrowings or repayments on the Credit Facility in 2010.
 
    
    Repayments of notes payable decreased $8.2 million between 2011 and 2010 due to
repayment of the Glenmore Garden Villas note in conjunction with the sale of that property
in 2010.
  20




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##### Table of Contents




    
    Cash common dividends increased $1.7 million in 2011 compared to 2010. The first
quarter 2011 dividend was $0.045 per share and was paid all in cash. The first quarter
2010 dividend was $0.09 per share and was paid in a combination of cash and stock.
 
    
    Distributions to noncontrolling interests increased $5.3 million between 2010 and 2011.
Jefferson Mill Business Park Building A was owned in a consolidated joint venture and, the
Company distributed approximately $5.1 million to its partner for its share of the proceeds
from the sale.
 Dividends.
  Off Balance Sheet Arrangements
      21




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##### Table of Contents



Critical Accounting Policies
  
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4.
    
    Controls and Procedures
   
 PART II. OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
  
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
   Total Numberof Shares
    
    
    Average PricePurchased (1)
    
    
    Paid per Share (1)January 1 - 31
    
    
    
    
    
    $
    February 1 - 28
    
    
    
    
    
    
    March 1 - 31
    
    
    349
    
    
    
    8.26349
    
    
    $
    8.26
 (1)
    
    The purchases of equity securities that occur outside the plan relate to shares
remitted by employees as payment for option exercises or income taxes due. Activity for
the first quarter 2011 related to the remittances of shares for income taxes due for
restricted stock vesting.  22




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##### Table of Contents



Item 3.
    
    Defaults Upon Senior Securities
  
 Item 4.
    
    (Removed and Reserved)
 
 Item 5.
    
    Other Information
   23




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##### Table of Contents



Item 6.
    
    Exhibits
 3.1
    
    
    Restated and Amended Articles of Incorporation of the Registrant, as amended
August 9, 1999, filed as Exhibit 3.1 to the Registrants Form 10-Q for the quarter
ended June 30, 2002, and incorporated herein by reference.3.1.1
    
    
    Articles of Amendment to Restated and Amended Articles of Incorporation of
the Registrant, as amended July 22, 2003, filed as Exhibit 4.1 to the Registrants
Current Report on Form 8-K filed on July 23, 2003, and incorporated herein by
reference.3.1.2
    
    
    Articles of Amendment to Restated and Amended Articles of Incorporation of
the Registrant, as amended December 15, 2004, filed as Exhibit 3(a)(i) to the
Registrants Form 10-K for the year ended December 31, 2004, and incorporated herein
by reference.3.1.3
    
    
    Articles of Amendment to Restated and Amended Articles of Incorporation of
the Registrant, as amended May 4, 2010, filed as Exhibit 3.1 to the Registrants
Current Report on Form 8-K filed May 6, 2010, and incorporated herein by reference.3.2
    
    
    Bylaws of the Registrant, as amended and restated June 6, 2009, filed as
Exhibit 3.1 to the Registrants Current Report on Form 8-K filed on June 8, 2009, and
incorporated herein by reference.10.1
    
    
    Form of New Change in Control Severance Agreement, filed as Exhibit 10.1 to
the Registrants Current Report on Form 8-K filed on January 7, 2011 and incorporated
herein by reference.10.2
    
    
    Form of Amendment Number Two to Change in Control Severance Agreement, filed
as Exhibit 10.2 to the Registrants Current Report on Form 8-K filed on January 7,
2011 and incorporated herein by reference.11
    
    
    Computation of Per Share Earnings*31.1
    
    
    Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 *
    
    Data required by ASC 260, Earnings per Share, is provided in Note 3 to the Condensed
Consolidated financial statements included in this report.  24




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##### Table of Contents



SIGNATURES
  COUSINS PROPERTIES INCORPORATED/s/ Gregg D. AdzemaGregg D. AdzemaExecutive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)   25