Cousins Properties Incorporated 2006 Annual Report - SNL Financial

capitalization at December 31, 2006, and the Company had $11.5 million in cash on hand. The Company believes
that it has sufficient availability on its credit and construction facilities and the capacity to generate additional
capital to fund its development expenditures through 2007. The financial condition of the Company is discussed in
further detail below.
At December 31, 2006, the Company was subject to the following contractual obligations and commitments
($ in thousands):
Total
Less than
1 Year 1-3 Years 4-5 Years
After
5 Years
Contractual Obligations:
Company long-term debt
Unsecured notes payable and construction
loans ............................ $199,179 $ 338 $ 5,941 $192,900 $ —
Mortgage notes payable ................
Interest commitments under notes
115,970 24,337 12,510 62,990 16,133
payable(1) ........................ 70,604 20,083 36,341 10,686 3,494
Operating leases (ground leases) ............ 15,343 90 186 196 14,871
Operating leases (offices) ................. 1,404 741 370 255 38
Total Contractual Obligations ............ $402,500 $ 45,589 $55,348 $267,027 $34,536
Commitments:
Letters of credit ........................ $ 3,016 $ 3,016 $ — $ — $ —
Performance bonds. ..................... 17,973 16,874 1,099 — —
Estimated development commitments ........ 286,360 186,664 76,358 23,338 —
Unfunded tenant improvements. ............ 18,294 18,294 — — —
Total Commitments ................... $325,643 $224,848 $77,457 $ 23,338 $ —
(1) Interest on variable rate obligations is based on rates effective as of December 31, 2006.
As discussed above, the Company formed a new venture with Prudential in 2006, and contributed its interests
in five retail properties. Through December 31, 2006, Prudential had contributed $300 million in cash to this
venture and may make further contributions of up to $20.5 million to this venture in 2007 based on future leasing
and development performed by the Company on the contributed properties. The cash contributed by Prudential is
expected to be used to fund development projects of the development venture, and the current funds are being used
to reduce indebtedness of the Company until the Company commences development of such projects.
In addition to capital generated from this venture formation, the Company received cash from the sales of
Bank of America Plaza, Frost Bank Tower, The Avenue of the Peninsula and from the sale of seven ground leased
outparcels at its North Point property. These sales created taxable income that the Company distributed to common
stockholders in the form of a special dividend in the fourth quarter of 2006 of $175.5 million (see Cash Flows
section below). The Company may consider selling other income producing assets in 2007 as a result of the
continued strategic review and analysis of assets it holds.
With the relatively low leverage created by the capital generated from these transactions, the Company expects
to utilize indebtedness to fund a portion of its commitments in 2007. In the first quarter of 2006, the Company
created additional borrowing capacity by expanding its existing revolving credit facility and by adding a
construction facility. The revised credit facility can be expanded to $500 million under certain circumstances,
although the availability of the additional capacity is not guaranteed. The revised credit facility also reduced the
spread over LIBOR when compared to the previous facility, removed any restrictions on dividend payments
provided the Company’s Debt to Total Assets, as defined, is less than 55% and provided additional flexibility in
some of the financial covenants. As of December 31, 2006, the Company had $128.2 million drawn on its
$400 million credit facility. The amount available under this credit facility is reduced by outstanding letters of
credit, which were approximately $3.0 million at December 31, 2006. The Company’s interest rate on its credit
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