Cousins Properties Incorporated 2006 Annual Report - SNL Financial

Cash Flows from Investing Activities. Cash flows from investing activities increased approximately
$393.3 million between 2006 and 2005. Of this increase, approximately $297.3 million represents proceeds
received from the CPV IV formation and approximately $299.4 represents proceeds received mainly from the sales
of Frost Bank Tower, The Avenue of the Peninsula and seven ground leased sites at the Company’s North Point
property. In addition, distributions in excess of income from unconsolidated joint ventures were approximately
$57.5 million higher during 2006 mainly due to the return of the Company’s investment in CSC Associates from the
sale of Bank of America Plaza. Offsetting these increases was the purchase of two office buildings in 2006 for an
aggregate purchase price of $165.7 million; an increase in land acquisitions related to the Company’s second
industrial project in Jackson County, Georgia and land in Austin, Texas for the Palisades West office development;
and increased development expenditures for projects under construction. Also partially offsetting the increases in
cash flows from investing activities in 2006 was approximately $24.1 million more expenditures for other assets,
mainly due to increased predevelopment expenditures in 2006.
Net cash from investing activities decreased approximately $583.9 million between 2004 and 2005, mainly
due to a decline of approximately $501.7 million in sales proceeds from consolidated properties in 2004. The
Company sold one operating center in 2005, which was a significantly lower volume of sales than in 2004. The
Company also expended $81.9 million more in 2005 on development and acquisition of property due to a deeper
development pipeline in 2005 compared to 2004, and because the Company purchased additional land tracts in
2005 that are being held for investment or future development. The Company’s investment in unconsolidated joint
ventures increased in 2005 due to increased contributions to the CL Realty and Temco residential joint ventures and
distributions from joint ventures in excess of income decreased as a result of less asset sales activity in 2005. Both of
these factors contributed to the decrease in cash flows from investing activities. Partially offsetting the decrease was
an increase in proceeds from notes receivable of approximately $16.2 million, as the Company collected an
$8 million note receivable in 2005.
Cash Flows from Financing Activities. Cash flows used in financing activities increased approximately
$480.1 million between 2006 and 2005. The primary reason for the increase was a reduction in indebtedness of
$278.2 million with proceeds from the property sales and the formation of CPV IV and from the repayment of the
note payable related to CSC. In addition, the Company paid $15.4 million in defeasance costs associated with the
Bank of America Plaza sale that increased cash flows used in financing activities. The Company also paid
$21.2 million to minority partners during 2006 mainly related to the formation of CPV IV, the sale of Frost Bank
Tower and the closing of units at 905 Juniper. Also during 2006, the Company paid $177.0 million more in common
and preferred dividends, mainly due to the special dividend to common stockholders of $175.5 million paid in the
fourth quarter of 2006, which distributed tax gains from the property sales discussed above.
Net cash from financing activities increased approximately $626.8 million in 2005. Common dividends paid
decreased approximately $354.7 million due to the payment of a special dividend in 2004. Repayment of other
notes payable decreased approximately $171.4 million due to the repayment or assumption of debt in 2004 related
to the property sales. The Company borrowed more in 2005 which caused net borrowings on the credit facility to be
approximately $158.0 million higher. Proceeds from other notes payable increased by approximately $28.9 million
due to proceeds received from the construction loan on 905 Juniper and to a non-recourse mortgage note payable
obtained on The Points at Waterview in 2005. The Company also had a preferred stock offering in 2004 which
raised approximately $96.5 million. The Company did not have a similar level of property sales or offering proceeds
in 2005 compared to 2004 and expended more on development, necessitating the increased borrowings.
Dividends. During 2006, 2005 and 2004, the Company funded its dividend payments from cash provided by
operating activities and from proceeds from the sale of investment property. For the foreseeable future, the
Company intends to fund its quarterly distributions to common and preferred stockholders with cash provided by
operating activities, a portion of proceeds from investment property sales and a portion of distributions from
unconsolidated joint ventures in excess of income.
Effects of Inflation. The Company attempts to minimize the effects of inflation on income from operating
properties by using rents tied to tenants’ sales, periodic fixed-rent increases or increases based on the Consumer
Price Index and/or pass-through of certain operating expenses of properties to tenants.
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