Cousins Properties Incorporated 2006 Annual Report - SNL Financial

esidential lot development and land tract sales. CL Realty sold 973, 1,314 and 972 lots in 2006, 2005 and 2004,
respectively.
Income from Temco increased $3.5 million between 2005 and 2006 and decreased $1.2 million between 2004
and 2005. The primary reason for the changes between periods is the result of tract sales activities as the number of
lots sold by Temco remained consistent. Temco is a venture in which the Company is a 50% partner and is in the
business of residential lot development and land tract sales. Temco sold 477, 467 and 491 lots in 2006, 2005 and
2004, respectively, which caused a portion of the changes between years. Temco sold 1,088, 212 and 310 acres of
land during 2006, 2005 and 2004, respectively, which generated pre-tax gains to the Company of approximately
$5.0 million, $1.7 million and $2.2 million in 2006, 2005 and 2004, respectively.
Income from CPV IV increased approximately $1.8 million between 2006 and 2005. In June 2006, the
Company contributed five retail properties to this venture, which is accounted for on the equity method. The
ownership of the venture decreased in stages between June and December 2006, and the Company now owns 11.5%
of the venture and will be recognizing income based on its 11.5% ownership going forward.
Income from Deerfield Towne Center, LLC, (“Deerfield”) increased approximately $5.3 million between
2004 and 2005 and decreased approximately the same amount between 2005 and 2006. The Company had a 10%
profits interest in Deerfield and neither made nor was obligated to make any capital contributions to the entity. The
Company obtained this interest through a predevelopment and leasing arrangement and recognized income as
distributions were received. Deerfield sold its operating retail center in 2005 and distributed the proceeds, thus
accounting for the income recognition by the Company in 2005. No significant income or loss was recognized in
2006.
Income from 285 Venture, LLC (“285 Venture”) decreased approximately $1.4 million between 2005 and
2006. In 2005, 285 Venture sold 1155 Perimeter Center West, the single asset of the venture, and the Company
recognized a gain of approximately $1.6 million on the sale. No significant income or loss was recognized in 2006.
Income from Wildwood Associates decreased $101.2 million between 2004 and 2005. The 2005 decrease was
due to approximately $99.4 million in gains on sales of investment properties in 2004. Wildwood Associates sold all
of its office buildings and its 15 acres of stand-alone retail sites under ground leases in 2004. In 2005 and 2006,
Wildwood Associates’ assets consisted mainly of undeveloped land. No significant income or loss was recognized
in 2005 or 2006.
Income from CPI/FSP I, L.P. decreased $14.1 million between 2004 and 2005. The 2005 decrease was due to a
$12.4 million gain on sale of investment properties, as CPI/FSP I, L.P. sold Austin Research Park — Buildings III
and IV in the third quarter of 2004. The assets that CPI/FSP I, L.P. currently owns consist mainly of undeveloped
land. No significant income or loss was recognized in 2006.
Income from CC-JM II Associates decreased $18.1 million between 2004 and 2005. In 2004, the John
Marshall — II office building, the single asset which CC-JM II Associates owned, was sold and a gain of
$19.2 million recognized. No significant income or loss was recognized in 2005 or 2006.
The results for Cousins LORET Venture, L.L.C. (“LORET”) decreased $45.6 million between 2004 and 2005
due to a $45.3 million gain on sale of investment properties in 2004, as LORET sold its office buildings, The
Pinnacle and Two Live Oak Center, in the third quarter of 2004. No significant income or loss was recognized in
2005 or 2006.
Gain on Sale of Investment Properties. Gain on sale of investment properties, net of applicable income tax
provision, was $3.0 million, $15.7 million and $118.1 million in 2006, 2005 and 2004, respectively. The 2006 gain
included the following:
The sale of undeveloped land at The Lakes of Cedar Grove residential development — $0.2 million;
The sale of undeveloped land at the North Point/Westside mixed use project — $2.3 million; and
The recurring amortization of deferred gain from CP Venture, LLC (“CPV”) — $0.5 million (see Note 5 in
Notes to Consolidated Financial Statements in Item 8).
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