##### 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 June 30, 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
(State or other jurisdiction of 
incorporation or organization)
    
    58-0869052
(I.R.S. Employer
Identification No.)191 Peachtree Street, Suite 500, Atlanta, Georgia
(Address of principal executive offices)
    
    30303-1740
(Zip Code)
 (404) 407-1000
 þ o
 o o
  Large accelerated filer o   
    Accelerated filer þ
    Non-accelerated filer o
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
  Class
    
    Outstanding at August 1, 2011Common Stock, $1 par value per share
    
    103,717,435 shares




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TABLE OF CONTENTS  PART 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. ExhibitsSIGNATURESEX-31.1EX-31.2EX-32.1EX-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;
 
    
    potential acquisitions, new investments and/or dispositions;
 
    
    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; and
 
    
    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
 June 30, 2011
    
    
    December 31, 2010(Unaudited)ASSETSPROPERTIES:Operating properties, net of accumulated depreciation
of $298,085 and $274,925 in 2011 and 2010, respectively
    
    $
    868,155
    
    
    $
    898,119Land held for investment or future development
    
    
    120,557
    
    
    
    123,879Residential lots
    
    
    63,725
    
    
    
    63,403Other
    
    
    738
    
    
    
    2,994Total properties
    
    
    1,053,175
    
    
    
    1,088,395CASH AND CASH EQUIVALENTS
    
    
    4,349
    
    
    
    7,599RESTRICTED CASH
    
    
    14,544
    
    
    
    15,521NOTES AND OTHER RECEIVABLES, net of allowance for
doubtful accounts of $5,646 and $6,287 in 2011 and 2010, respectively
    
    
    50,405
    
    
    
    48,395INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
    
    
    179,149
    
    
    
    167,108OTHER ASSETS
    
    
    35,510
    
    
    
    44,264TOTAL ASSETS
    
    $
    1,337,132
    
    
    $
    1,371,282LIABILITIES AND EQUITYNOTES PAYABLE
    
    $
    498,034
    
    
    $
    509,509ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
    
    
    35,710
    
    
    
    32,388DEFERRED GAIN
    
    
    4,098
    
    
    
    4,216DEPOSITS AND DEFERRED INCOME
    
    
    17,419
    
    
    
    18,029TOTAL LIABILITIES
    
    
    555,261
    
    
    
    564,142COMMITMENTS AND CONTINGENT LIABILITIESREDEEMABLE NONCONTROLLING INTERESTS
    
    
    9,444
    
    
    
    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, 107,283,901 and
106,961,959 shares issued in 2011 and 2010, respectively
    
    
    107,284
    
    
    
    106,962Additional paid-in capital
    
    
    685,577
    
    
    
    684,551Treasury stock at cost, 3,570,082 shares in 2011 and 2010
    
    
    (86,840
    )
    
    
    (86,840
    )Distributions in excess of cumulative net income
    
    
    (136,075
    )
    
    
    (114,196
    )TOTAL STOCKHOLDERS INVESTMENT
    
    
    739,548
    
    
    
    760,079Nonredeemable noncontrolling interests
    
    
    32,879
    
    
    
    32,772TOTAL EQUITY
    
    
    772,427
    
    
    
    792,851TOTAL LIABILITIES AND EQUITY
    
    $
    1,337,132
    
    
    $
    1,371,282
 See notes to condensed consolidated financial statements.
  3




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##### Table of Contents



COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2011
    
    
    2010
    
    
    2011
    
    
    2010REVENUES:Rental property revenues
    
    $
    36,736
    
    
    $
    35,969
    
    
    $
    72,884
    
    
    $
    70,742Fee income
    
    
    3,435
    
    
    
    3,728
    
    
    
    6,820
    
    
    
    7,272Third party management and leasing revenues
    
    
    4,605
    
    
    
    4,485
    
    
    
    8,693
    
    
    
    9,279Multi-family residential unit sales
    
    
    7
    
    
    
    7,943
    
    
    
    4,664
    
    
    
    18,089Residential lot and outparcel sales
    
    
    80
    
    
    
    316
    
    
    
    245
    
    
    
    14,135Other
    
    
    556
    
    
    
    171
    
    
    
    1,069
    
    
    
    29545,419
    
    
    
    52,612
    
    
    
    94,375
    
    
    
    119,812COSTS AND EXPENSES:Rental property operating expenses
    
    
    15,472
    
    
    
    15,246
    
    
    
    29,720
    
    
    
    29,777Third party management and leasing expenses
    
    
    4,080
    
    
    
    4,214
    
    
    
    8,173
    
    
    
    9,172Multi-family residential unit cost of sales
    
    
    (13
    )
    
    
    6,108
    
    
    
    2,487
    
    
    
    14,078Residential lot and outparcel cost of sales
    
    
    76
    
    
    
    275
    
    
    
    145
    
    
    
    9,371General and administrative expenses
    
    
    6,133
    
    
    
    6,763
    
    
    
    13,533
    
    
    
    14,780Interest expense
    
    
    7,358
    
    
    
    10,286
    
    
    
    14,902
    
    
    
    20,067Reimbursed expenses
    
    
    1,371
    
    
    
    1,398
    
    
    
    2,883
    
    
    
    3,257Depreciation and amortization
    
    
    13,375
    
    
    
    14,231
    
    
    
    26,850
    
    
    
    27,407Impairment loss
    
    
    
    
    
    
    586
    
    
    
    3,508
    
    
    
    586Separation expenses
    
    
    77
    
    
    
    33
    
    
    
    178
    
    
    
    101Other
    
    
    672
    
    
    
    3,002
    
    
    
    1,534
    
    
    
    3,86448,601
    
    
    
    62,142
    
    
    
    103,913
    
    
    
    132,460LOSS ON EXTINGUISHMENT OF DEBT
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (592
    )LOSS FROM CONTINUING OPERATIONS BEFORE TAXES,
UNCONSOLIDATED JOINT VENTURES AND SALE OF
INVESTMENT PROPERTIES
    
    
    (3,182
    )
    
    
    (9,530
    )
    
    
    (9,538
    )
    
    
    (13,240
    )(PROVISION) BENEFIT FOR INCOME TAXES FROM OPERATIONS
    
    
    (27
    )
    
    
    (14
    )
    
    
    37
    
    
    
    1,132INCOME FROM UNCONSOLIDATED JOINT VENTURES
    
    
    2,312
    
    
    
    2,394
    
    
    
    4,808
    
    
    
    5,314LOSS FROM CONTINUING OPERATIONS BEFORE GAIN
ON SALE OF INVESTMENT PROPERTIES
    
    
    (897
    )
    
    
    (7,150
    )
    
    
    (4,693
    )
    
    
    (6,794
    )GAIN ON SALE OF INVESTMENT PROPERTIES
    
    
    59
    
    
    
    1,061
    
    
    
    118
    
    
    
    1,817LOSS FROM CONTINUING OPERATIONS
    
    
    (838
    )
    
    
    (6,089
    )
    
    
    (4,575
    )
    
    
    (4,977
    )INCOME (LOSS) FROM DISCONTINUED OPERATIONS:Income from discontinued operations
    
    
    40
    
    
    
    1,305
    
    
    
    112
    
    
    
    2,373Loss on sale of investment properties
    
    
    
    
    
    
    
    
    
    
    (384
    )
    
    
    40
    
    
    
    1,305
    
    
    
    (272
    )
    
    
    2,373NET LOSS
    
    
    (798
    )
    
    
    (4,784
    )
    
    
    (4,847
    )
    
    
    (2,604
    )NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
    
    
    (681
    )
    
    
    (584
    )
    
    
    (1,262
    )
    
    
    (1,110
    )NET LOSS ATTRIBUTABLE TO CONTROLLING INTEREST
    
    
    (1,479
    )
    
    
    (5,368
    )
    
    
    (6,109
    )
    
    
    (3,714
    )DIVIDENDS TO PREFERRED STOCKHOLDERS
    
    
    (3,227
    )
    
    
    (3,227
    )
    
    
    (6,454
    )
    
    
    (6,454
    )NET LOSS AVAILABLE TO COMMON STOCKHOLDERS
    
    $
    (4,706
    )
    
    $
    (8,595
    )
    
    $
    (12,563
    )
    
    $
    (10,168
    )PER COMMON SHARE INFORMATION  BASIC AND DILUTED:Loss from continuing operations attributable to controlling interest
    
    $
    (0.05
    )
    
    $
    (0.10
    )
    
    $
    (0.12
    )
    
    $
    (0.12
    )Income from discontinued operations
    
    
    
    
    
    
    0.01
    
    
    
    
    
    
    
    0.02Net loss available to common stockholders  basic and diluted
    
    $
    (0.05
    )
    
    $
    (0.09
    )
    
    $
    (0.12
    )
    
    $
    (0.10
    )WEIGHTED AVERAGE SHARES  BASIC AND DILUTED
    
    
    103,659
    
    
    
    101,001
    
    
    
    103,588
    
    
    
    100,538DIVIDENDS DECLARED PER COMMON SHARE
    
    $
    0.045
    
    
    $
    0.09
    
    
    $
    0.09
    
    
    $
    0.18
 See notes to condensed consolidated financial statements.
  4




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##### Table of Contents



COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
Six Months Ended June 30, 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)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,109
    )
    
    
    (6,109
    )
    
    
    1,233
    
    
    
    (4,876
    )Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,109
    )
    
    
    (6,109
    )
    
    
    1,233
    
    
    
    (4,876
    )Common stock issued pursuant to:Director stock grants
    
    
    
    
    
    
    82
    
    
    
    625
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    707
    
    
    
    
    
    
    
    707Restricted stock grants, net of amounts
withheld for income taxes
    
    
    
    
    
    
    244
    
    
    
    (247
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Stock issuance costs
    
    
    
    
    
    
    
    
    
    
    (16
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16
    )
    
    
    
    
    
    
    (16
    )Amortization of stock options and
restricted stock, net of forfeitures
    
    
    
    
    
    
    (4
    )
    
    
    1,190
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,186
    
    
    
    
    
    
    
    1,186Distributions to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,126
    )
    
    
    (1,126
    )Change in fair value of redeemable
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    (526
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (526
    )
    
    
    
    
    
    
    (526
    )Cash preferred dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,454
    )
    
    
    (6,454
    )
    
    
    
    
    
    
    (6,454
    )Cash common dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,316
    )
    
    
    (9,316
    )
    
    
    
    
    
    
    (9,316
    )Balance June 30, 2011
    
    $
    169,602
    
    
    $
    107,284
    
    
    $
    685,577
    
    
    $
    (86,840
    )
    
    $
    
    
    
    $
    (136,075
    )
    
    $
    739,548
    
    
    $
    32,879
    
    
    $
    772,427Balance December 31, 2009
    
    $
    169,602
    
    
    $
    103,352
    
    
    $
    662,216
    
    
    $
    (86,840
    )
    
    $
    (9,517
    )
    
    $
    (51,402
    )
    
    $
    787,411
    
    
    $
    32,848
    
    
    $
    820,259Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,714
    )
    
    
    (3,714
    )
    
    
    1,140
    
    
    
    (2,574
    )Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    141
    
    
    
    
    
    
    
    141
    
    
    
    
    
    
    
    141Total comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    141
    
    
    
    (3,714
    )
    
    
    (3,573
    )
    
    
    1,140
    
    
    
    (2,433
    )Common stock issued pursuant to:Stock dividend, net of issuance costs
    
    
    
    
    
    
    1,686
    
    
    
    10,284
    
    
    
    
    
    
    
    
    
    
    
    (12,030
    )
    
    
    (60
    )
    
    
    
    
    
    
    (60
    )Grants under director stock plan
    
    
    
    
    
    
    35
    
    
    
    215
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250
    
    
    
    
    
    
    
    250Restricted stock grants
    
    
    
    
    
    
    264
    
    
    
    (264
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of stock options and
restricted stock, net of forfeitures
    
    
    
    
    
    
    
    
    
    
    1,212
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,212
    
    
    
    
    
    
    
    1,212Change in fair value of redeemable
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,144
    
    
    
    1,144
    
    
    
    
    
    
    
    1,144Distributions to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,186
    )
    
    
    (1,186
    )Cash preferred dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,454
    )
    
    
    (6,454
    )
    
    
    
    
    
    
    (6,454
    )Cash common dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,031
    )
    
    
    (6,031
    )
    
    
    
    
    
    
    (6,031
    )Balance June 30, 2010
    
    $
    169,602
    
    
    $
    105,337
    
    
    $
    673,663
    
    
    $
    (86,840
    )
    
    $
    (9,376
    )
    
    $
    (78,487
    )
    
    $
    773,899
    
    
    $
    32,802
    
    
    $
    806,701
 See notes to condensed consolidated financial statements.
  5




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##### Table of Contents



COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six Months Ended June 30,2011
    
    
    2010CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (4,847
    )
    
    $
    (2,604
    )Adjustments to reconcile net loss to net cash flows provided by operating activities:Loss (gain) on sale of investment properties, net
    
    
    266
    
    
    
    (1,817
    )Loss on extinguishment of debt
    
    
    
    
    
    
    592Impairment loss
    
    
    3,508
    
    
    
    586Losses on abandoned predevelopment projects
    
    
    
    
    
    
    1,949Depreciation and amortization
    
    
    26,914
    
    
    
    28,459Amortization of deferred financing costs
    
    
    1,079
    
    
    
    911Stock-based compensation
    
    
    1,186
    
    
    
    1,462Effect of recognizing rental revenues on a straight-line or market basis
    
    
    (3,705
    )
    
    
    (2,225
    )Income from unconsolidated joint ventures
    
    
    (4,808
    )
    
    
    (5,314
    )Operating distributions from unconsolidated joint ventures
    
    
    4,692
    
    
    
    4,838Residential lot, outparcel and multi-family cost of sales, net of closing costs paid
    
    
    2,390
    
    
    
    21,581Residential lot acquisition and development expenditures
    
    
    (563
    )
    
    
    (894
    )Changes in other operating assets and liabilities:Change in other receivables and other assets
    
    
    1,114
    
    
    
    (1,647
    )Change in accounts payable and accrued liabilities
    
    
    (140
    )
    
    
    3,297Net cash provided by operating activities
    
    
    27,086
    
    
    
    49,174CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from investment property sales
    
    
    21,543
    
    
    
    14,788Property acquisition and development and tenant asset expenditures
    
    
    (14,915
    )
    
    
    (12,185
    )Investment in unconsolidated joint ventures
    
    
    (9,841
    )
    
    
    (3,624
    )Distributions from unconsolidated joint ventures
    
    
    4,696
    
    
    
    3,685Payment of debt guarantee of unconsolidated joint venture
    
    
    
    
    
    
    (17,250
    )Collection of notes receivable
    
    
    98
    
    
    
    88Change in other assets
    
    
    (2,386
    )
    
    
    (1,629
    )Change in restricted cash
    
    
    882
    
    
    
    (1,359
    )Net cash provided by (used in) investing activities
    
    
    77
    
    
    
    (17,486
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from credit facility
    
    
    52,900
    
    
    
    Repayment of credit facility
    
    
    (32,900
    )
    
    
    Payment of loan issuance costs
    
    
    
    
    
    
    (1,723
    )Repayment of notes payable
    
    
    (28,101
    )
    
    
    (9,830
    )Common stock issuance costs
    
    
    (16
    )
    
    
    (60
    )Cash common dividends paid
    
    
    (9,316
    )
    
    
    (6,031
    )Cash preferred dividends paid
    
    
    (6,454
    )
    
    
    (6,454
    )Contributions from noncontrolling interests
    
    
    
    
    
    
    1,269Distributions to noncontrolling interests
    
    
    (6,526
    )
    
    
    (1,186
    )Net cash used in financing activities
    
    
    (30,413
    )
    
    
    (24,015
    )NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (3,250
    )
    
    
    7,673CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    7,599
    
    
    
    9,464CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    4,349
    
    
    $
    17,137SIGNIFICANT NON-CASH TRANSACTIONS:Transfer from other assets to investment in unconsolidated joint ventures
    
    $
    6,050
    
    
    $
    
 See notes to condensed consolidated financial statements.
  6




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##### Table of Contents



COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2011
(UNAUDITED)
 1.
    
    BASIS OF PRESENTATION
      7




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##### Table of Contents



2.
    
    NOTES PAYABLE, INTEREST EXPENSE AND COMMITMENTS AND CONTINGENCIES
  Term/Amortization
    
    
    
    
    
    
    
    
    
    
    December 31,Description
    
    Interest Rate
    
    Period (Years)
    
    
    Maturity
    
    
    June 30, 2011
    
    
    2010Terminus 100 mortgage note
    
    5.25%
    
    
    12/30
    
    
    
    1/1/23
    
    
    $
    139,190
    
    
    $
    140,000The American Cancer Society Center mortgage
note (interest only until October 1, 2011)
    
    6.45%
    
    
    10/30
    
    
    
    9/1/17
    
    
    
    136,000
    
    
    
    136,000Credit Facility, unsecured (see note)
    
    LIBOR + 1.75% to 2.25%
    
    
    5/N/A
    
    
    
    8/29/12
    
    
    
    125,400
    
    
    
    105,400Meridian Mark Plaza mortgage note
    
    6.00%
    
    
    10/30
    
    
    
    8/1/20
    
    
    
    26,725
    
    
    
    26,892100/200 North Point Center East mortgage note
    
    5.39%
    
    
    5/30
    
    
    
    6/1/12
    
    
    
    24,656
    
    
    
    24,830Lakeshore Park Plaza mortgage note (see note)
    
    5.89%
    
    
    4/25
    
    
    
    8/1/12
    
    
    
    17,356
    
    
    
    17,544The Points at Waterview mortgage note
    
    5.66%
    
    
    10/25
    
    
    
    1/1/16
    
    
    
    16,367
    
    
    
    16,592600 University Park Place mortgage note
    
    7.38%
    
    
    10/30
    
    
    
    8/10/11
    
    
    
    12,163
    
    
    
    12,292Callaway Gardens
    
    4.13%
    
    
    N/A
    
    
    
    11/18/13
    
    
    
    177
    
    
    
    173333/555 North Point Center East mortgage note (see note)
    
    7.00%
    
    
    10/25
    
    
    
    11/1/11
    
    
    
    
    
    
    
    26,412Handy Road Associates, LLC (see note)
    
    Prime + 1%, but not < 6%
    
    
    5/N/A
    
    
    
    3/30/2011
    
    
    
    
    
    
    
    3,374$
    498,034
    
    
    $
    509,509
    Fair Value
  Interest Rate Swap Agreements
  Other Debt Information
    8




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##### Table of Contents



Litigation
  3.
    
    EARNINGS PER SHARE
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2011
    
    
    2010
    
    
    2011
    
    
    2010Weighted average shares  basic
    
    
    103,659
    
    
    
    101,001
    
    
    
    103,588
    
    
    
    100,538Dilutive potential common shares  stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted average shares  diluted
    
    
    103,659
    
    
    
    101,001
    
    
    
    103,588
    
    
    
    100,538
   Three Months Ended June 30,
    
    
    Six Months Ended June 30,2011
    
    
    2010
    
    
    2011
    
    
    2010Anti-dilutive options
    
    
    6,024
    
    
    
    7,174
    
    
    
    6,152
    
    
    
    7,185
 4.
    
    STOCK-BASED COMPENSATION
    9




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##### 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
    
    $
    308,009
    
    
    $
    313,603
    
    
    $
    36,329
    
    
    $
    36,620
    
    
    $
    261,228
    
    
    $
    267,085
    
    
    $
    15,013
    
    
    $
    15,364Charlotte Gateway Village, LLC
    
    
    151,843
    
    
    
    154,200
    
    
    
    90,175
    
    
    
    97,030
    
    
    
    58,507
    
    
    
    54,834
    
    
    
    10,350
    
    
    
    10,366CF Murfreesboro Associates
    
    
    127,195
    
    
    
    129,738
    
    
    
    100,724
    
    
    
    103,378
    
    
    
    24,441
    
    
    
    24,263
    
    
    
    14,316
    
    
    
    14,246Palisades West LLC
    
    
    125,907
    
    
    
    129,378
    
    
    
    
    
    
    
    
    
    
    
    80,680
    
    
    
    80,767
    
    
    
    42,178
    
    
    
    42,256CP Venture LLC entities
    
    
    102,269
    
    
    
    106,066
    
    
    
    
    
    
    
    
    
    
    
    100,704
    
    
    
    104,067
    
    
    
    3,427
    
    
    
    3,779CL Realty, L.L.C.
    
    
    82,838
    
    
    
    86,657
    
    
    
    1,727
    
    
    
    2,663
    
    
    
    79,312
    
    
    
    82,534
    
    
    
    38,193
    
    
    
    39,928MSREF/Terminus 200 LLC
    
    
    69,803
    
    
    
    65,164
    
    
    
    50,861
    
    
    
    46,169
    
    
    
    13,347
    
    
    
    13,956
    
    
    
    2,670
    
    
    
    2,791Temco Associates, LLC
    
    
    60,231
    
    
    
    60,608
    
    
    
    2,859
    
    
    
    2,929
    
    
    
    56,961
    
    
    
    57,475
    
    
    
    22,462
    
    
    
    22,713Cousins Watkins LLC
    
    
    56,987
    
    
    
    57,184
    
    
    
    28,725
    
    
    
    28,850
    
    
    
    27,683
    
    
    
    28,334
    
    
    
    15,706
    
    
    
    14,850Crawford Long  CPI, LLC
    
    
    33,433
    
    
    
    34,408
    
    
    
    48,174
    
    
    
    48,701
    
    
    
    (16,323
    )
    
    
    (15,341
    )
    
    
    (6,937
    )
    
    
    (6,431
    )Wildwood Associates
    
    
    21,208
    
    
    
    21,220
    
    
    
    
    
    
    
    
    
    
    
    21,131
    
    
    
    21,216
    
    
    
    (1,685
    )
    
    
    (1,642
    )Ten Peachtree Place Associates
    
    
    20,473
    
    
    
    20,980
    
    
    
    26,491
    
    
    
    26,782
    
    
    
    (7,054
    )
    
    
    (6,263
    )
    
    
    (4,762
    )
    
    
    (4,581
    )EP I LLC
    
    
    16,815
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    15,009
    
    
    
    
    
    
    
    14,091
    
    
    
    TRG Columbus Development Venture, Ltd.
    
    
    3,116
    
    
    
    3,574
    
    
    
    
    
    
    
    
    
    
    
    1,872
    
    
    
    2,115
    
    
    
    8
    
    
    
    58Pine Mountain Builders, LLC
    
    
    523
    
    
    
    1,559
    
    
    
    
    
    
    
    896
    
    
    
    360
    
    
    
    403
    
    
    
    735
    
    
    
    757$
    1,180,650
    
    
    $
    1,184,339
    
    
    $
    386,066
    
    
    $
    394,018
    
    
    $
    717,858
    
    
    $
    715,445
    
    
    $
    165,765
    
    
    $
    154,454
  10




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##### Table of Contents



Companys Share of NetTotal Revenues
    
    
    Net Income (Loss)
    
    
    Income (Loss)SUMMARY OF OPERATIONS:
    
    2011
    
    
    2010
    
    
    2011
    
    
    2010
    
    
    2011
    
    
    2010CP Venture IV LLC entities
    
    $
    15,430
    
    
    $
    15,579
    
    
    $
    1,890
    
    
    $
    1,826
    
    
    $
    539
    
    
    $
    491Charlotte Gateway Village, LLC
    
    
    16,308
    
    
    
    15,933
    
    
    
    4,282
    
    
    
    3,808
    
    
    
    588
    
    
    
    588CF Murfreesboro Associates
    
    
    6,622
    
    
    
    7,182
    
    
    
    178
    
    
    
    1,001
    
    
    
    (41
    )
    
    
    401Palisades West LLC
    
    
    8,114
    
    
    
    6,730
    
    
    
    2,911
    
    
    
    2,282
    
    
    
    1,422
    
    
    
    1,107CP Venture LLC entities
    
    
    9,506
    
    
    
    9,254
    
    
    
    3,830
    
    
    
    4,301
    
    
    
    396
    
    
    
    445CL Realty, L.L.C.
    
    
    3,144
    
    
    
    4,212
    
    
    
    1,390
    
    
    
    1,219
    
    
    
    545
    
    
    
    1,125MSREF/Terminus 200 LLC
    
    
    2,197
    
    
    
    245
    
    
    
    (2,173
    )
    
    
    (480
    )
    
    
    (434
    )
    
    
    (96
    )Temco Associates, LLC
    
    
    318
    
    
    
    1,877
    
    
    
    (416
    )
    
    
    813
    
    
    
    (202
    )
    
    
    406Cousins Watkins LLC
    
    
    2,422
    
    
    
    
    
    
    
    17
    
    
    
    
    
    
    
    1,188
    
    
    
    Crawford Long  CPI, LLC
    
    
    5,955
    
    
    
    5,688
    
    
    
    1,217
    
    
    
    834
    
    
    
    608
    
    
    
    416Wildwood Associates
    
    
    
    
    
    
    
    
    
    
    (85
    )
    
    
    (41
    )
    
    
    (43
    )
    
    
    (20
    )Ten Peachtree Place Associates
    
    
    3,611
    
    
    
    3,847
    
    
    
    407
    
    
    
    481
    
    
    
    212
    
    
    
    248EP I LLC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    TRG Columbus Development Venture, Ltd.
    
    
    19
    
    
    
    1,071
    
    
    
    7
    
    
    
    392
    
    
    
    50
    
    
    
    162Pine Mountain Builders, LLC
    
    
    2,632
    
    
    
    1,185
    
    
    
    (44
    )
    
    
    91
    
    
    
    (22
    )
    
    
    46Other
    
    
    
    
    
    
    533
    
    
    
    
    
    
    
    55
    
    
    
    2
    
    
    
    (5
    )$
    76,278
    
    
    $
    73,336
    
    
    $
    13,411
    
    
    $
    16,582
    
    
    $
    4,808
    
    
    $
    5,314
  6.
    
    OTHER ASSETS
  June 30, 2011
    
    
    December 31, 2010Investment in Verde Realty
    
    $
    5,868
    
    
    $
    9,376FF&E and leasehold improvements, net of accumulated depreciation
of $17,084 and $16,117 in 2011 and 2010, respectively
    
    
    5,056
    
    
    
    4,673Predevelopment costs and earnest money
    
    
    1,759
    
    
    
    7,039Lease inducements, net of accumulated amortization
of $3,540 and $2,991 in 2011 and 2010, respectively
    
    
    11,531
    
    
    
    11,899Loan closing costs, net of accumulated amortization
of $4,188 and $3,109 in 2011 and 2010, respectively
    
    
    1,625
    
    
    
    2,703Prepaid expenses and other assets
    
    
    3,448
    
    
    
    2,296Intangible Assets:Goodwill
    
    
    5,430
    
    
    
    5,430Above market leases, net of accumulated amortization
of $8,760 and $8,741 in 2011 and 2010, respectively
    
    
    508
    
    
    
    526In-place leases, net of accumulated amortization
of $2,529 and $2,492 in 2011 and 2010, respectively
    
    
    285
    
    
    
    322$
    35,510
    
    
    $
    44,264
  11




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##### Table of Contents



7.
    
    NONCONTROLLING INTERESTS
   2011
    
    
    2010Beginning Balance  Redeemable
    
    $
    14,289
    
    
    $
    12,591Net loss attributable to redeemable noncontrolling interests
    
    
    29
    
    
    
    (30
    )Contributions from (distributions to) noncontrolling interests
    
    
    (5,400
    )
    
    
    1,269Change in fair value of noncontrolling interests
    
    
    526
    
    
    
    (1,144
    )Ending Balance  Redeemable
    
    $
    9,444
    
    
    $
    12,686
  2011
    
    
    2010Net income attributable to nonredeemable noncontrolling interests
    
    $
    1,233
    
    
    $
    1,140Net loss attributable to redeemable noncontrolling interests
    
    
    29
    
    
    
    (30
    )Net income attributable to noncontrolling interests
    
    $
    1,262
    
    
    $
    1,110
 8.
    
    REPORTABLE SEGMENTS
   12




---



##### 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.
     13




---



##### Table of Contents



Third PartyManagement
    
    
    For-SaleThree Months Ended June 30, 2011
    
    Office
    
    
    Retail
    
    
    Land
    
    
    and Leasing
    
    
    Multi-Family
    
    
    Other
    
    
    TotalNet operating income, including discontinued operations
    
    $
    15,458
    
    
    $
    4,847
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    911
    
    
    $
    21,216Fee income, net of reimbursed expenses
    
    
    
    
    
    
    
    
    
    
    56
    
    
    
    2,396
    
    
    
    
    
    
    
    2,008
    
    
    
    4,460Residential lot, outparcel and multi-family unit sales, net of cost of sales
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    20
    
    
    
    
    
    
    
    24Other income
    
    
    447
    
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    187
    
    
    
    644Third party management and leasing expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,871
    )
    
    
    
    
    
    
    
    
    
    
    (1,871
    )General and administrative expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,133
    )
    
    
    (6,133
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,358
    )
    
    
    (7,358
    )Depreciation and amortization of non-real estate assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (372
    )
    
    
    (372
    )Separation expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (77
    )
    
    
    (77
    )Other expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (672
    )
    
    
    (672
    )Funds from operations from unconsolidated joint ventures
    
    
    2,685
    
    
    
    2,125
    
    
    
    127
    
    
    
    
    
    
    
    33
    
    
    
    
    
    
    
    4,970Income attributable to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (681
    )
    
    
    (681
    )Benefit for income taxes from operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27
    )
    
    
    (27
    )Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,227
    )
    
    
    (3,227
    )Funds from operations available to common stockholders
    
    $
    18,590
    
    
    $
    6,982
    
    
    $
    187
    
    
    $
    525
    
    
    $
    53
    
    
    $
    (15,441
    )
    
    
    10,896Real estate depreciation and amortization, including Companys
share of joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,661
    )Gain on sale of depreciated investment properties
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59Net loss available to common stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (4,706
    )
 Third PartyManagement
    
    
    For-SaleThree Months Ended June 30, 2010
    
    Office
    
    
    Retail
    
    
    Land
    
    
    and Leasing
    
    
    Multi-Family
    
    
    Other
    
    
    TotalNet operating income, including discontinued operations
    
    $
    14,992
    
    
    $
    6,735
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    615
    
    
    $
    22,342Fee income, net of reimbursed expenses
    
    
    
    
    
    
    
    
    
    
    126
    
    
    
    2,097
    
    
    
    
    
    
    
    2,204
    
    
    
    4,427Residential lot, multi-family unit, tract and outparcel sales, net of cost
of sales, including gain on sale of undepreciated investment properties
    
    
    
    
    
    
    (8
    )
    
    
    175
    
    
    
    
    
    
    
    1,835
    
    
    
    876
    
    
    
    2,878Other income
    
    
    
    
    
    
    33
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    157
    
    
    
    190Third party management and leasing expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,826
    )
    
    
    
    
    
    
    
    
    
    
    (1,826
    )General and administrative expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,763
    )
    
    
    (6,763
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,286
    )
    
    
    (10,286
    )Impairment loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (586
    )
    
    
    
    
    
    
    (586
    )Depreciation and amortization of non-real estate assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (463
    )
    
    
    (463
    )Separation expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33
    )
    
    
    (33
    )Other expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,002
    )
    
    
    (3,002
    )Funds from operations from unconsolidated joint ventures
    
    
    2,426
    
    
    
    1,644
    
    
    
    727
    
    
    
    
    
    
    
    45
    
    
    
    
    
    
    
    4,842Income attributable to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (584
    )
    
    
    (584
    )Provision for income taxes from operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    (14
    )Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,227
    )
    
    
    (3,227
    )Funds from operations available to common stockholders
    
    $
    17,418
    
    
    $
    8,404
    
    
    $
    1,028
    
    
    $
    271
    
    
    $
    1,294
    
    
    $
    (20,520
    )
    
    
    7,895Real estate depreciation and amortization, including Companys
share of joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,549
    )Gain on sale of depreciated investment properties
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59Net loss available to common stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (8,595
    )
  14




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##### Table of Contents



Third PartyManagement
    
    
    For-SaleSix Months Ended June 30, 2011
    
    Office
    
    
    Retail
    
    
    Land
    
    
    and Leasing
    
    
    Multi-Family
    
    
    Other
    
    
    TotalNet operating income, including discontinued operations
    
    $
    30,709
    
    
    $
    10,582
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,961
    
    
    $
    43,252Fee income, net of reimbursed expenses
    
    
    
    
    
    
    
    
    
    
    91
    
    
    
    4,236
    
    
    
    
    
    
    
    3,846
    
    
    
    8,173Residential lot, outparcel and multi-family unit sales, net of cost of sales
    
    
    
    
    
    
    50
    
    
    
    50
    
    
    
    
    
    
    
    2,177
    
    
    
    
    
    
    
    2,277Other income
    
    
    818
    
    
    
    34
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    305
    
    
    
    1,157Third party management and leasing expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,716
    )
    
    
    
    
    
    
    
    
    
    
    (3,716
    )General and administrative expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,533
    )
    
    
    (13,533
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,902
    )
    
    
    (14,902
    )Impairment loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,508
    )
    
    
    (3,508
    )Depreciation and amortization of non-real estate assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (935
    )
    
    
    (935
    )Separation expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (178
    )
    
    
    (178
    )Other expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,534
    )
    
    
    (1,534
    )Funds from operations from unconsolidated joint ventures
    
    
    5,449
    
    
    
    4,366
    
    
    
    279
    
    
    
    
    
    
    
    50
    
    
    
    
    
    
    
    10,144Income attributable to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,262
    )
    
    
    (1,262
    )Benefit for income taxes from operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37
    
    
    
    37Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,454
    )
    
    
    (6,454
    )Funds from operations available to common stockholders
    
    $
    36,976
    
    
    $
    15,032
    
    
    $
    420
    
    
    $
    520
    
    
    $
    2,227
    
    
    $
    (36,157
    )
    
    
    19,018Real estate depreciation and amortization, including Companys
share of joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,315
    )Loss on sale of depreciated investment properties, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (266
    )Net loss available to common stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (12,563
    )
 Third PartyManagement
    
    
    For-SaleSix Months Ended June 30, 2010
    
    Office
    
    
    Retail
    
    
    Land
    
    
    and Leasing
    
    
    Multi-Family
    
    
    Other
    
    
    TotalNet operating income, including discontinued operations
    
    $
    29,710
    
    
    $
    13,513
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,148
    
    
    $
    44,371Fee income, net of reimbursed expenses
    
    
    
    
    
    
    
    
    
    
    294
    
    
    
    4,332
    
    
    
    
    
    
    
    3,721
    
    
    
    8,347Residential lot, multi-family unit, tract and outparcel sales, net of cost
of sales, including gain on sale of undepreciated investment properties
    
    
    
    
    
    
    4,585
    
    
    
    674
    
    
    
    
    
    
    
    4,011
    
    
    
    1,204
    
    
    
    10,474Other income
    
    
    
    
    
    
    41
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    273
    
    
    
    314Loss on extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (592
    )
    
    
    (592
    )Third party management and leasing expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,225
    )
    
    
    
    
    
    
    
    
    
    
    (4,225
    )General and administrative expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,780
    )
    
    
    (14,780
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,067
    )
    
    
    (20,067
    )Impairment loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (586
    )
    
    
    
    
    
    
    (586
    )Depreciation and amortization of non-real estate assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,034
    )
    
    
    (1,034
    )Separation expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (101
    )
    
    
    (101
    )Other expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,864
    )
    
    
    (3,864
    )Funds from operations from unconsolidated joint ventures
    
    
    4,842
    
    
    
    3,447
    
    
    
    1,599
    
    
    
    
    
    
    
    162
    
    
    
    
    
    
    
    10,050Income attributable to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,110
    )
    
    
    (1,110
    )Benefit for income taxes from operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,132
    
    
    
    1,132Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,454
    )
    
    
    (6,454
    )Funds from operations available to common stockholders
    
    $
    34,552
    
    
    $
    21,586
    
    
    $
    2,567
    
    
    $
    107
    
    
    $
    3,587
    
    
    $
    (40,524
    )
    
    
    21,875Real estate depreciation and amortization, including Companys
share of joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32,161
    )Gain on sale of depreciated investment properties
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    118Net loss available to common stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (10,168
    )
  
    
    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.
  15




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##### Table of Contents



Three Months Ended June 30,
    
    
    Six Months Ended June 30,2011
    
    
    2010
    
    
    2011
    
    
    2010Net operating income
    
    $
    21,216
    
    
    $
    22,342
    
    
    $
    43,252
    
    
    $
    44,371Plus rental property operating expenses
    
    
    15,472
    
    
    
    15,246
    
    
    
    29,720
    
    
    
    29,777Fee income
    
    
    2,064
    
    
    
    2,330
    
    
    
    3,937
    
    
    
    4,015Third party management and leasing revenues
    
    
    2,396
    
    
    
    2,097
    
    
    
    4,236
    
    
    
    4,332Third party management and leasing expense reimbursements
    
    
    2,209
    
    
    
    2,388
    
    
    
    4,457
    
    
    
    4,947Reimbursed expenses
    
    
    1,371
    
    
    
    1,398
    
    
    
    2,883
    
    
    
    3,257Residential lot, outparcel, and multi-family unit sales, net of cost of sales, including
gain on sale of undepreciated investment properties
    
    
    24
    
    
    
    2,878
    
    
    
    2,277
    
    
    
    10,474Less gain on sale of undepreciated investment properties not included in revenues
    
    
    
    
    
    
    (1,002
    )
    
    
    
    
    
    
    (1,699
    )Plus residential lot, outparcel, multi-family unit and outparcel cost of sales
    
    
    63
    
    
    
    6,383
    
    
    
    2,632
    
    
    
    23,449Net operating income from discontinued operations not included in revenues
    
    
    48
    
    
    
    (1,619
    )
    
    
    (88
    )
    
    
    (3,406
    )Other income
    
    
    644
    
    
    
    190
    
    
    
    1,157
    
    
    
    314Other income  discontinued operations
    
    
    (88
    )
    
    
    (19
    )
    
    
    (88
    )
    
    
    (19
    )Total consolidated revenues
    
    $
    45,419
    
    
    $
    52,612
    
    
    $
    94,375
    
    
    $
    119,812
 9.
    
    PROPERTY TRANSACTIONS
   Three Months Ended June 30,
    
    
    Six Months Ended June 30,2011
    
    
    2010
    
    
    2011
    
    
    2010Rental property revenues
    
    $
    (48
    )
    
    $
    2,292
    
    
    $
    97
    
    
    $
    4,732Other income
    
    
    88
    
    
    
    19
    
    
    
    88
    
    
    
    19Rental property operating expenses
    
    
    
    
    
    
    (673
    )
    
    
    (9
    )
    
    
    (1,326
    )Depreciation and amortization
    
    
    
    
    
    
    (333
    )
    
    
    (64
    )
    
    
    (1,052
    )Income from discontinued operations
    
    $
    40
    
    
    $
    1,305
    
    
    $
    112
    
    
    $
    2,373Loss on sale of investment properties
    
    $
    
    
    
    $
    
    
    
    $
    (384
    )
    
    $
    
  16




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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 $407,000 and $442,000 in the three and six month periods,
respectively, at the American Cancer Society Center, where average economic occupancy
increased from 84% for the six month 2010 period to 90% for the six month 2011 period;
 
    
    Increase of $348,000 and $947,000 in the three and six month periods,
respectively, at The Avenue Forsyth, where the Company recognized higher revenues as a
result of the elimination of certain co-tenancy contingencies in the 2011 periods;
 
    
    Increase of $340,000 and $795,000 in the three and six month periods,
respectively, at 191 Peachtree Tower, where average economic occupancy increased from
72% for the 2010 six month period to 74% for the six month 2011 period. Rental
property revenues increased further in the six month 2011 period compared to the same
2010 period due to an increase in tenant expense reimbursements of approximately
$221,000; and
    
    Decrease of $287,000 and $251,000 in the three and six month periods,
respectively, at The Avenue Carriage Crossing, where average economic occupancy
decreased from 90% for the six month 2010 period to 87% for the six month 2011 period.
  17




---



##### Table of Contents



Third Party Management and Leasing Revenues and Expenses.
 Other Income.
 Multi-family Residential Unit Sales and Cost of Sales.
 Residential Lot and Outparcel Sales and Cost of Sales.
 Residential Lots
 Outparcels
 General and Administrative Expense (G&A)
 
    
    Decrease in salaries and benefits of employees of approximately $312,000 and $418,000
between the three and six month 2011 and 2010 periods, respectively, primarily due a
decrease in the number of employees at the Company between the periods;
 
    
    Additional decrease in salaries and benefits
of approximately $482,000 and $596,000 between the three and six month 2011
and 2010 periods, respectively, from higher capitalized personnel costs due to an increase in the number of leases executed and an
increase in costs associated with probable development projects during the 2011 period.
The Company capitalizes salaries and benefits of personnel who work on qualified
development projects or on leases that have been executed or are probable of being
executed;
 
    
    Increase of $352,000 and $324,000 between the three and six month periods,
respectively, due to a change in the board of directors compensation program between the
periods; and
 
    
    Decrease of $211,000 and $160,000 in the three and six month periods, respectively,
due to a decrease in professional fees.
 Impairment Loss
  18




---



##### Table of Contents



Interest Expense
 Depreciation and Amortization.
 Benefit for Income Taxes from Operations
 Income from Unconsolidated Joint Ventures
 
    
    Decrease in income from Temco Associates, LLC (Temco) of approximately $608,000 in
the six month 2011 period, primarily due to receipt of additional proceeds in 2010 from a
property sold in a prior year, offset by an increase in lot sales from one lot sold in the
2010 period to five lots sold in the 2011 period. There were no significant changes in
income from Temco between the three month 2011 and 2010 periods;
 
    
    Decrease of $656,000 and $580,000 at CL Realty, L.L.C. between the three and six
month 2011 and 2010 periods, respectively. The decrease in the three and six month
periods is a result of a $250,000 impairment charge recognized in the 2011 period, a
decrease in oil and gas revenues and a decrease in lot sales;
 
    
    Decrease in income of approximately $170,000 and $442,000 between the three and six
month 2011 and 2010 periods, respectively, from CF Murfreesboro Associates, mainly due to
the amendment of this ventures construction facility in 2010 at a higher interest rate;
and
 
    
    Increase in income of approximately $594,000 and $1.2 million in the three and six
month 2011 and 2010 periods, respectively, 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.
  19




---



##### Table of Contents



Funds From Operations
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2011
    
    
    2010
    
    
    2011
    
    
    2010Net Loss Available to Common Stockholders
    
    $
    (4,706
    )
    
    $
    (8,595
    )
    
    $
    (12,563
    )
    
    $
    (10,168
    )Depreciation and amortization:Consolidated properties
    
    
    13,375
    
    
    
    14,231
    
    
    
    26,850
    
    
    
    27,407Discontinued properties
    
    
    
    
    
    
    333
    
    
    
    64
    
    
    
    1,052Share of unconsolidated joint ventures
    
    
    2,663
    
    
    
    2,453
    
    
    
    5,346
    
    
    
    4,747Depreciation of furniture, fixtures and equipment:Consolidated properties
    
    
    (372
    )
    
    
    (462
    )
    
    
    (935
    )
    
    
    (1,029
    )Discontinued properties
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (5
    )Share of unconsolidated joint ventures
    
    
    (5
    )
    
    
    (5
    )
    
    
    (10
    )
    
    
    (11
    )(Gain) loss on sale of investment properties:Consolidated
    
    
    (59
    )
    
    
    (1,061
    )
    
    
    (118
    )
    
    
    (1,817
    )Discontinued properties
    
    
    
    
    
    
    
    
    
    
    384
    
    
    
    Gain on sale of undepreciated investment properties
    
    
    
    
    
    
    1,002
    
    
    
    
    
    
    
    1,699Funds From Operations Available to Common Stockholders
    
    $
    10,896
    
    
    $
    7,895
    
    
    $
    19,018
    
    
    $
    21,875Per Common Share  Basic and Diluted:Net Loss Available
    
    $
    (.05
    )
    
    $
    (.09
    )
    
    $
    (.12
    )
    
    $
    (.10
    )Funds From Operations
    
    $
    .11
    
    
    $
    .08
    
    
    $
    .18
    
    
    $
    .22Weighted Average Shares  Basic
    
    
    103,659
    
    
    
    101,001
    
    
    
    103,588
    
    
    
    100,538Weighted
Average Shares  Diluted
    
    
    103,684
    
    
    
    101,001
    
    
    
    103,606
    
    
    
    100,538
  20




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##### Table of Contents



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.
 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)
    
    $
    125,400
    
    
    $
    
    
    
    $
    125,400
    
    
    $
    
    
    
    $
    Mortgage notes payable
    
    
    372,634
    
    
    
    40,698
    
    
    
    26,744
    (2)
    
    
    24,041
    
    
    
    281,151Interest commitments (3)
    
    
    152,637
    
    
    
    23,328
    
    
    
    36,855
    
    
    
    35,092
    
    
    
    57,362Ground leases
    
    
    14,920
    
    
    
    100
    
    
    
    208
    
    
    
    219
    
    
    
    14,393Other operating leases
    
    
    1,520
    
    
    
    653
    
    
    
    626
    
    
    
    187
    
    
    
    54Total contractual obligations
    
    $
    667,111
    
    
    $
    64,779
    
    
    $
    189,833
    
    
    $
    59,539
    
    
    $
    352,960Commitments:Letters of credit
    
    $
    4,129
    
    
    $
    4,129
    
    
    $
    
    
    
    $
    
    
    
    $
    Performance bonds
    
    
    1,943
    
    
    
    1,943
    
    
    
    
    
    
    
    
    
    
    
    Unfunded tenant improvements and other
    
    
    15,191
    
    
    
    15,191
    
    
    
    
    
    
    
    
    
    
    
    Total commitments
    
    $
    21,263
    
    
    $
    21,263
    
    
    $
    
    
    
    $
    
    
    
    $
    
 
 (1)
    
    The Company has notified the bank of its intention to exercise a one-year extension option,
which will change the maturity to August 29, 2012.
Maturity is shown in the table above reflecting the one-year extension.(2)
    
    The Lakeshore Park Plaza mortage note is due on August 1, 2012, but was prepaid without penalty
on July 1, 2011. It is shown in the table above based on the contractual maturity.(3)
    
    Interest on variable rate obligations is based on rates effective as of June 30, 2011.  21




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##### Table of Contents



Other Debt Information
      Future Capital Requirements
      22




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##### Table of Contents



Cash Flows
  Cash Flows from Operating Activities.
 
    
    Cash inflows decreased $12.5 million 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. There are no multi-family units for sale as of June 30, 2011;
 
    
    Cash inflows decreased $12.4 million in net proceeds from outparcel sales. There were
no outparcel sales in 2011, compared to eight outparcel sales in 2010;
 
    
    Cash outflows increased $4.7 million for incentive compensation awards. In 2011, $4.7
million of cash incentive compensation awards were paid compared to none in 2010; and
 
    
    Cash outflows decreased $5.4 million due to a reduction in interest paid due to lower
average borrowings outstanding in 2011, the termination of two interest rate swaps in late
2010, and the refinancing of the Terminus 100 mortgage note.
 Cash Flows from Investing Activities.
 
    
    Increase in proceeds from the sale of investment properties of $6.8 million. The
Company sold Jefferson Mill in 2011 for net proceeds of approximately $21.5 million. In
2010, the Company sold Glenmore Garden Villas and three tracts of land for net proceeds of
approximately $14.7 million;
 
    
    Decrease in cash used of $17.3 million due to the payment of a debt guarantee in 2010
related to the old Terminus 200 joint venture; and
 
    
    Increase of $6.2 million in contributions to joint ventures, mainly related to $8.1
million contributed for the formation of the EP I joint venture in the second quarter of
2011. In the 2010 period, the Company contributed $2.7 million for the formation of the
MSREF/Terminus 200 LLC joint venture.
 Cash Flows from Financing Activities.
 
    
    Repayments of notes payable increased $18.3 million between 2011 and 2010. In 2011,
the Company prepaid the 333/555 North Point Center East mortgage note for $26.4 million,
and, in 2010, the Company repaid the $8.7 million Glenmore Garden Villas note in
conjunction with its sale;
 
    
    Cash common dividends increased $3.3 million in 2011 compared to 2010. The 2011
quarterly dividends were $0.045 per share paid all in cash. The 2010 quarterly dividends
were $0.09 per share paid in a combination of cash and stock;
 
    
    Distributions to noncontrolling interests increased $5.3 million between 2010 and 2011.
The Company distributed approximately $5.1 million to the partner in Jefferson Mill for
its share of sale proceeds; and
 
    
    Higher net proceeds of $20.0 million from the Credit Facility in 2011 compared to 2010,
partially offsetting the increase in cash used in financing activities.
 Capital Expenditures
  23




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##### Table of Contents



Six Months Ended June 30,2011
    
    
    2010Redevelopment property  building improvements
    
    $
    3,870
    
    
    $
    1,334Redevelopment property  tenant improvements and leasing costs
    
    
    2,338
    
    
    
    4,146Operating properties  building improvements
    
    
    112
    
    
    
    159Operating properties  tenant improvements and leasing costs
    
    
    10,273
    
    
    
    10,166Capitalized personnel costs
    
    
    610
    
    
    
    396Accrual to cash adjustment
    
    
    (2,288
    )
    
    
    (4,016
    )Total property acquisition and development expenditures
    
    $
    14,915
    
    
    $
    12,185
  Dividends.
  Off Balance Sheet Arrangements
 General.
  24




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##### Table of Contents



Debt.
    Bonds.
 Critical Accounting Policies
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  
 Item 4. Controls and Procedures.
    25




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
     
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. (Removed and Reserved).
 
 Item 5. Other Information.
   26




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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.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.  27




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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)   28