Cousins Properties Incorporated 2006 Annual Report - SNL Financial

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COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Tax Status of Dividends: Distributions to stockholders are characterized for federal income tax purposes as ordinary income, capital gains, non-taxable return of capital, or a combination of the three. Distributions to stockholders that exceed the Company’s current and accumulated earnings and profits (calculated for federal income tax purposes) constitute a return of capital rather than a dividend and generally reduce the stockholder’s basis in the stock. To the extent that a distribution exceeds both current and accumulated earnings and profits and the stockholder’s basis in the stock, it will generally be treated as a gain from the sale or exchange of that stockholder’s stock. The following summarizes the taxability of stock distributions for the Company for the periods indicated: Date Paid Long-Term Capital Gain Type Total Capital Gain Total Ordinary 25% Unrecaptured Section 1250 gain Qualified Dividends Ordinary Dividends Non-Taxable Distribution 2006 Dividends Common ........ 2/22/2006 15% 4% 56% 25% — 5/30/2006 78% 22% 0% 0% — 8/25/2006 78% 22% 0% 0% — 12/1/2006 78% 22% 0% 0% — 12/22/2006 78% 22% 0% 0% — Preferred A ..... 2/15/2006 74% 20% 4% 2% — 5/15/2006 74% 20% 4% 2% — 8/15/2006 74% 20% 4% 2% — 11/15/2006 74% 20% 4% 2% — Preferred B. ..... 2/15/2006 74% 20% 4% 2% — 5/15/2006 74% 20% 4% 2% — 8/15/2006 74% 20% 4% 2% — 2005 Dividends 11/15/2006 74% 20% 4% 2% — Common ........ 2/22/2005 28% — 50% 22% — 5/27/2005 4% — 61% 35% — 8/25/2005 6% — 60% 34% — 12/22/2005 37% 3% 24% 13% 23% Also in 2005, the Company designated 20% of the preferred dividends paid as capital gain dividends, 1% as 25% unrecaptured Section 1250 gain dividends, 27% as ordinary, and 52% as qualified dividends. In 2006 and 2005, an amount calculated as 0.14% and 0.57%, respectively, for each year of total dividends was an “adjustment attributed to depreciation of tangible property placed in service after 1986” for alternative minimum tax purposes. In addition, in 2006, an amount calculated as 2.98% of total dividends was a favorable “adjustment to gain or loss” for alternative minimum tax purposes. These amounts were passed through to stockholders and must be used as an item of adjustment in determining each stockholder’s alternative minimum taxable income. F-30
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 8. INCOME TAXES CREC is a taxable entity and its consolidated provision for income taxes is composed of the following for the years ended December 31, 2006, 2005 and 2004 ($ in thousands): 2006 2005 2004 Current tax expense Federal ............................................ $ 6,167 $ 7,411 $ 3,213 State .............................................. 724 872 377 Deferred tax expense 6,891 8,283 3,590 Federal ............................................ (2,703) 816 452 State .............................................. (317) 97 53 (3,020) 913 505 Total income tax expense. ................................ Benefit (provision) applicable to discontinued operations and sale of 3,871 9,196 4,095 investment property ................................... 322 (1,440) (1,351) Provision for income taxes from operations ................... $ 4,193 $ 7,756 $ 2,744 The net income tax provision differs from the amount computed by applying the statutory federal income tax rate to CREC’s income before taxes for the years ended December 31, 2006, 2005 and 2004 as follows ($ in thousands): 2006 2005 2004 Amount Rate Amount Rate Amount Rate Federal income tax provision ............. State income tax provision, net of federal $ 4,466 34% $ 8,228 34% $ 4,073 34% income tax effect .................... 525 4 968 4 479 4 Cousins benefit for income taxes .......... — — — — (376) (3) Deferred tax adjustments ................ (1,184) (9) — — — — Other. .............................. 64 — — — (81) (1) CREC provision for income taxes ......... Benefit (provision) applicable to discontinued operations and sale of investment 3,871 29% 9,196 38% 4,095 34% property . . . ........................ Consolidated provision applicable to income 322 (1,440) (1,351) from continuing operations ............. $ 4,193 $ 7,756 $ 2,744 F-31
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Outstanding Performance Cousins Pro
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FORWARD-LOOKING STATEMENTS Certain
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Had significant leasing activity, n
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Certain environmental laws impose l
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Environmental issues. Environmental
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Financing Risks If interest rates o
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eceive less cash than the amount of
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income, Cousins is subject to tax o
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16 Description and Location Year De
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18 Lease Expirations — Office As
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20 Description and Location Year De
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Lease Expirations — Industrial As
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Additional Information Related to O
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(3) Total Project GLA includes anch
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Description Year Commenced Estimate
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Description and Location(1) Zoned U
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Mr. DuPree rejoined the Company in
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Performance Graph The following gra
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General and Administrative Expenses
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For the foreseeable future, the Com
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collectibility of unit purchase pri
Page 43 and 44: Decrease of approximately $1.2 mill
Page 45 and 46: The vesting period for stock option
Page 47 and 48: esidential lot development and land
Page 49 and 50: Stock-Based Compensation. The Compa
Page 51 and 52: capitalization at December 31, 2006
Page 53 and 54: Cash Flows from Investing Activitie
Page 55 and 56: eceivable. The table presents sched
Page 57 and 58: Item 9. Changes in and Disagreement
Page 59 and 60: We have also audited, in accordance
Page 61 and 62: 10(a)(v)* Form of Restricted Stock
Page 63 and 64: SIGNATURES Pursuant to the requirem
Page 65 and 66: Cousins Properties Incorporated IND
Page 67 and 68: COUSINS PROPERTIES INCORPORATED AND
Page 73 and 74: fair values at the date of acquisit
Page 75 and 76: Income Taxes COUSINS PROPERTIES INC
Page 77 and 78: outstanding. The income amounts use
Page 89 and 90: Company and 28% to GDL, after each
Page 93: COUSINS PROPERTIES INCORPORATED AND
Page 99 and 100: The following supplemental pro form
Page 107 and 108: 14. PROFIT SHARING/401(K) PLAN The
Page 109 and 110: S-2 Description Encumbrances COUSIN
Page 111 and 112: S-4 Description Encumbrances COUSIN
Page 113 and 114: COUSINS PROPERTIES INCORPORATED STA
Page 115 and 116: Subsidiary State of Incorporation C
Page 117 and 118: I, Thomas D. Bell, Jr., certify tha
Page 119 and 120: Exhibit 32.1 CERTIFICATION PURSUANT
Page 121 and 122: Shareholder Information INDEPENDENT
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Cousins Properties Incorporated 2006 Annual Report - SNL Financial

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