COUSINS PROPERTIES INC 10-Q

Item 1. Financial Statements. COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) June 30, 2020 December 31, 2019 (unaudited) Assets: Real estate assets: Operating properties, net of accumulated depreciation of $ 692,126 and $ 577,139 in 2020 and 2019, respectively $ 6,011,375 $ 5,669,324 Projects under development 205,376 410,097 Land 97,196 116,860 6,313,947 6,196,281 Real estate assets and other assets held for sale, net of accumulated depreciation and amortization of $ 61,093 in 2019 — 360,582 Cash and cash equivalents 28,255 15,603 Restricted cash 1,947 2,005 Notes and accounts receivable 35,078 23,680 Deferred rents receivable 119,982 102,314 Investment in unconsolidated joint ventures 129,857 133,884 Intangible assets, net 224,066 257,649 Other assets 55,316 59,449 Total assets $ 6,908,448 $ 7,151,447 Liabilities: Notes payable $ 1,939,517 $ 2,222,975 Accounts payable and accrued expenses 183,350 209,904 Deferred income 57,199 52,269 Intangible liabilities, net of accumulated amortization of $ 66,343 and $ 55,798 in 2020 and 2019, respectively 72,560 83,105 Other liabilities 115,493 134,128 Liabilities of real estate assets held for sale, net of accumulated amortization of $ 7,771 in 2019 — 21,231 Total liabilities 2,368,119 2,723,612 Commitments and contingencies Equity: Stockholders' investment: Preferred stock, $ 1 par value, 20,000,000 shares authorized, 1,716,837 shares issued and outstanding in 2019 — 1,717 Common stock, $ 1 par value, 300,000,000 shares authorized, 151,153,042 and 149,347,382 shares issued, and 148,568,109 and 146,762,449 shares outstanding in 2020 and 2019, respectively 151,153 149,347 Additional paid-in capital 5,540,945 5,493,883 Treasury stock at cost, 2,584,933 shares in 2020 and 2019 ( 148,473 ) ( 148,473 ) Distributions in excess of cumulative net income ( 1,028,289 ) ( 1,137,200 ) Total stockholders' investment 4,515,336 4,359,274 Nonredeemable noncontrolling interests 24,993 68,561 Total equity 4,540,329 4,427,835 Total liabilities and equity $ 6,908,448 $ 7,151,447 See accompanying notes. 4 Table of Contents COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited; in thousands, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Revenues: Rental property revenues $ 175,099 $ 134,933 $ 364,228 $ 258,798 Fee income 4,690 7,076 9,422 15,804 Other 126 11 163 151 179,915 142,020 373,813 274,753 Expenses: Rental property operating expenses 61,621 46,705 126,159 90,192 Reimbursed expenses 322 1,047 843 1,979 General and administrative expenses 8,543 8,374 14,195 19,834 Interest expense 13,993 12,059 29,897 22,879 Depreciation and amortization 72,868 50,904 144,482 96,765 Transaction costs 63 49,827 428 49,830 Other 552 624 1,118 804 157,962 169,540 317,122 282,283 Income from unconsolidated joint ventures 1,715 3,634 5,140 6,538 Gain (loss) on sales of investments in unconsolidated joint ventures ( 231 ) — 45,999 — Gain (loss) on investment property transactions ( 201 ) 1,304 90,715 14,415 Net income (loss) 23,236 ( 22,582 ) 198,545 13,423 Net (income) loss attributable to noncontrolling interests ( 135 ) 173 ( 501 ) ( 491 ) Net income (loss) available to common stockholders $ 23,101 $ ( 22,409 ) $ 198,044 $ 12,932 Net income (loss) per common share — basic and diluted $ 0.16 $ ( 0.20 ) $ 1.34 $ 0.12 Weighted average shares — basic 148,548 112,926 147,986 109,049 Weighted average shares — diluted 148,580 114,670 148,570 110,822 See accompanying notes. 5 Table of Contents COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (unaudited; in thousands except per share amounts) Three Months Ended June 30, 2020 Preferred Stock Common Stock Additional Paid-In Capital Treasury Stock Distributions in Excess of Net Income Stockholders’ Investment Nonredeemable Noncontrolling Interests Total Equity Balance March 31, 2020 $ — $ 151,125 $ 5,538,875 $ ( 148,473 ) $ ( 1,006,820 ) $ 4,534,707 $ 24,291 $ 4,558,998 Net income — — — — 23,101 23,101 135 23,236 Common stock issued pursuant to stock based compensation — 30 928 — — 958 — 958 Amortization of stock options, restricted stock, and restricted stock units, net of forfeitures — ( 2 ) 1,142 — — 1,140 — 1,140 Contributions from nonredeemable noncontrolling interests — — — — — — 780 780 Distributions to nonredeemable noncontrolling interests — — — — — — ( 213 ) ( 213 ) Common dividends ($ 0.30 per share) — — — — ( 44,570 ) ( 44,570 ) — ( 44,570 ) Balance June 30, 2020 $ — $ 151,153 $ 5,540,945 $ ( 148,473 ) $ ( 1,028,289 ) $ 4,515,336 $ 24,993 $ 4,540,329 Three Months Ended June 30, 2019 Preferred Stock Common Stock Additional Paid-In Capital Treasury Stock Distributions in Excess of Net Income Stockholders’ Investment Nonredeemable Noncontrolling Interests Total Equity Balance March 31, 2019 $ 1,717 $ 107,731 $ 3,934,038 $ ( 148,473 ) $ ( 1,124,596 ) $ 2,770,417 $ 57,812 $ 2,828,229 Net loss — — — — ( 22,409 ) ( 22,409 ) ( 173 ) ( 22,582 ) Common stock issued in merger — 41,576 1,556,613 — — 1,598,189 — 1,598,189 Common stock issued pursuant to stock based compensation — 41 1,373 — — 1,414 — 1,414 Amortization of stock options and restricted stock, net of forfeitures — — 624 — — 624 — 624 Nonredeemable noncontrolling interests acquired in merger — — — — — — 5,187 5,187 Contributions from nonredeemable noncontrolling interests — — — — — — 1,660 1,660 Distributions to nonredeemable noncontrolling interests — — — — — — ( 541 ) ( 541 ) Common dividends ($ 0.29 per share) — — — — ( 42,562 ) ( 42,562 ) — ( 42,562 ) Balance June 30, 2019 $ 1,717 $ 149,348 $ 5,492,648 $ ( 148,473 ) $ ( 1,189,567 ) $ 4,305,673 $ 63,945 $ 4,369,618 6 Table of Contents COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (unaudited; in thousands except per share amounts) Six Months Ended June 30, 2020 Preferred Stock Common Stock Additional Paid-In Capital Treasury Stock Distributions in Excess of Net Income Stockholders’ Investment Nonredeemable Noncontrolling Interests Total Equity Balance December 31, 2019 $ 1,717 $ 149,347 $ 5,493,883 $ ( 148,473 ) $ ( 1,137,200 ) $ 4,359,274 $ 68,561 $ 4,427,835 Net income — — — — 198,044 198,044 501 198,545 Common stock issued pursuant to stock based compensation — 90 ( 397 ) — — ( 307 ) — ( 307 ) Common stock issued pursuant to unitholder redemption ( 1,717 ) 1,719 45,032 — — 45,034 ( 45,034 ) — Amortization of stock options, restricted stock, and restricted stock units, net of forfeitures — ( 3 ) 2,427 — — 2,424 — 2,424 Contributions from nonredeemable noncontrolling interests — — — — — — 1,816 1,816 Distributions to nonredeemable noncontrolling interests — — — — — — ( 851 ) ( 851 ) Common dividends ($ 0.60 per share) — — — — ( 89,133 ) ( 89,133 ) — ( 89,133 ) Balance June 30, 2020 $ — $ 151,153 $ 5,540,945 $ ( 148,473 ) $ ( 1,028,289 ) $ 4,515,336 $ 24,993 $ 4,540,329 Six Months Ended June 30, 2019 Preferred Stock Common Stock Additional Paid-In Capital Treasury Stock Distributions in Excess of Net Income Stockholders’ Investment Nonredeemable Noncontrolling Interests Total Equity Balance December 31, 2018 $ 1,717 $ 107,681 $ 3,934,385 $ ( 148,473 ) $ ( 1,129,445 ) $ 2,765,865 $ 55,291 $ 2,821,156 Net income — — — — 12,932 12,932 491 13,423 Common stock issued in merger — 41,576 1,556,613 — — 1,598,189 — 1,598,189 Common stock issued pursuant to stock based compensation — 91 418 — — 509 — 509 Amortization of stock options and restricted stock, net of forfeitures — — 1,232 — — 1,232 — 1,232 Nonredeemable noncontrolling interests acquired in merger — — — — — — 5,187 5,187 Contributions from nonredeemable noncontrolling interests — — — — — — 4,241 4,241 Distributions to nonredeemable noncontrolling interests — — — — — — ( 1,265 ) ( 1,265 ) Common dividends ($ 0.58 per share) — — — — ( 73,054 ) ( 73,054 ) — ( 73,054 ) Balance June 30, 2019 $ 1,717 $ 149,348 $ 5,492,648 $ ( 148,473 ) $ ( 1,189,567 ) $ 4,305,673 $ 63,945 $ 4,369,618 See accompanying notes. 7 Table of Contents COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited; in thousands) Six Months Ended June 30, 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 198,545 $ 13,423 Adjustments to reconcile net income to net cash provided by operating activities: Gain on sales of investments in unconsolidated joint ventures ( 45,999 ) — Gain on investment properties transactions ( 90,715 ) ( 14,415 ) Depreciation and amortization 144,482 96,765 Amortization of deferred financing costs and premium/discount on notes payable ( 446 ) 1,211 Stock-based compensation expense, net of forfeitures 3,485 2,594 Effect of non-cash adjustments to revenues ( 26,303 ) ( 23,289 ) Income from unconsolidated joint ventures ( 5,140 ) ( 6,538 ) Operating distributions from unconsolidated joint ventures 3,351 4,036 Changes in other operating assets and liabilities: Change in other receivables and other assets, net ( 20,243 ) ( 15,674 ) Change in operating liabilities, net ( 27,429 ) 19,678 Net cash provided by operating activities 133,588 77,791 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from investment property sales 433,673 57,772 Proceeds from sales of investments in unconsolidated joint ventures 52,874 — Property acquisition, development, and tenant asset expenditures ( 235,466 ) ( 168,700 ) Investment in unconsolidated joint ventures ( 2,341 ) ( 12,249 ) Change in notes receivable and other assets 52 85,978 Other — ( 47 ) Net cash provided by (used in) investing activities 248,792 ( 37,246 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from credit facility 280,500 837,000 Repayment of credit facility ( 532,000 ) ( 773,000 ) Repayment of notes payable ( 30,760 ) ( 684,445 ) Issuance of unsecured senior notes — 650,000 Payment of deferred financing costs — ( 2,861 ) Contributions from nonredeemable noncontrolling interests 1,816 4,241 Distributions to nonredeemable noncontrolling interests ( 851 ) ( 1,265 ) Common dividends paid ( 87,123 ) ( 57,817 ) Other ( 1,368 ) ( 1,026 ) Net cash used in financing activities ( 369,786 ) ( 29,173 ) NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 12,594 11,372 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD 17,608 2,695 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD $ 30,202 $ 14,067 See accompanying notes. 8 Table of Contents COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2020 (Unaudited) 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business : Cousins Properties Incorporated (“Cousins”), a Georgia corporation, is a self-administered and self-managed real estate investment trust (“REIT”). Cousins conducts substantially all of its operations through Cousins Properties LP ("CPLP"). Cousins owns over 99 % of CPLP and consolidates CPLP. CPLP owns Cousins TRS Services LLC ("CTRS"), a taxable entity which owns and manages its own real estate portfolio and performs certain real estate related services for other parties. Cousins, CPLP, CTRS, and their subsidiaries (collectively, the "Company") develop, acquire, lease, manage, and own Class A office and mixed-use properties in Sun Belt markets with a focus on Georgia, Texas, North Carolina, Arizona, and Florida. Cousins has elected to be taxed as a REIT and intends to, among other things, distribute 100 % of its net taxable income to stockholders, thereby eliminating any liability for federal income taxes under current law. Therefore, the results included herein do not include a federal income tax provision for Cousins. As of June 30, 2020, the Company's portfolio of real estate assets consisted of interests in 19.0 million square feet of office space and 310,000 square feet of mixed-use space. Basis of Presentation : The condensed consolidated financial statements are unaudited and were prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, these financial statements reflect all adjustments necessary (which adjustments are of a normal and recurring nature) for the fair presentation of the Company's financial position as of June 30, 2020 and the results of operations for the three and six months ended June 30, 2020 and 2019. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of results expected for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. The accounting policies employed are substantially the same as those shown in note 2 to the consolidated financial statements included therein. On June 14, 2019, the Company restated and amended its articles of incorporation to effect a reverse stock split of the issued and outstanding shares of its common and preferred stock pursuant to which (1) each four shares of the Company's issued and outstanding common stock and preferred stock were combined into one share of the Company's common or preferred stock, respectively, and (2) the authorized number of the Company's common stock was proportionally reduced to 175 million shares. Fractional shares of common stock resulting from the reverse stock split were settled in cash. Fractional shares of preferred stock resulting from the reverse stock split were redeemed without payout. Immediately thereafter, the Company further amended its articles of incorporation to increase the number of authorized shares of its common stock from 175 million to 300 million shares. All shares of common stock, preferred stock, stock options, restricted stock units, and per share information presented in the condensed consolidated financial statements have been adjusted to reflect the reverse stock split on a retroactive basis for all periods presented. For the three and six months ended June 30, 2020 and 2019, there were no items of other comprehensive income. Therefore, no presentation of comprehensive income is required. The Company evaluates all partnerships, joint ventures, and other arrangements with variable interests to determine if the entity or arrangement qualifies as a variable interest entity ("VIE"), as defined in the Financial Accounting Standard Board's ("FASB") Accounting Standards Codification ("ASC"). If the entity or arrangement qualifies as a VIE and the Company is determined to be the primary beneficiary, the Company is required to consolidate the assets, liabilities, and results of operations of the VIE. At June 30, 2020, the Company had no investments or interests in any VIEs. 2. MERGER WITH TIER REIT, INC. On June 14, 2019, pursuant to the Agreement and Plan of Merger dated March 25, 2019 (the “Merger Agreement”), by and among the Company and TIER REIT, Inc. (“TIER”), TIER merged with and into a subsidiary of the Company (the “Merger”) with this subsidiary continuing as the surviving corporation of the Merger. In accordance with the terms and conditions of the Merger Agreement, each share of TIER common stock issued and outstanding immediately prior to the Merger was converted into 2.98 newly-issued pre-reverse split shares of the Company’s common stock with fractional shares being settled in cash. In the Merger, former TIER common stockholders received approximately 166 million pre-reverse split shares of common stock of the Company. As discussed in note 1 to the condensed consolidated financial statements, immediately following the Merger, the Company completed a 1-for-4 reverse stock split. 9 Table of Contents The Merger has been accounted for as a business combination with the Company as the accounting acquirer, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their acquisition date fair value. The total value of the transaction is based on the closing stock price of the Company's common stock on June 13, 2019, the day immediately prior to the closing of the Merger. Based on the shares issued in the transaction, the total fair value of the assets acquired and liabilities assumed in the Merger was $ 1.6 billion. For the three and six months ended June 30, 2020, the Company incurred expenses related to the Merger of $ 63,000 and $ 428,000 , respectively. For the three and six months ended June 30, 2019, the Company incurred expenses related to the Merger of $ 49.8 million. Management engaged a third party valuation specialist to assist with valuing the real estate assets acquired and liabilities assumed in the Merger. The third party used cash flow analyses as well as an income approach and a cost approach to determine the fair value of real estate assets acquired. The purchase price was allocated as follows (in thousands): Real estate assets $ 2,201,773 Real estate assets held for sale 21,005 Cash and cash equivalents 84,042 Restricted cash 1,947 Notes and other receivables 6,586 Investment in unconsolidated joint ventures 292 Intangible assets 141,184 Other assets 9,954 2,466,783 Notes payable 747,549 Accounts payable and accrued expenses 51,748 Deferred income 8,131 Intangible liabilities 47,988 Other liabilities 7,676 Nonredeemable noncontrolling interests 5,329 868,421 Total purchase price $ 1,598,362 During the three and six months ended June 30, 2020, the Company recorded revenues related to assets acquired in the Merger of $ 51.7 million and $ 102.7 million, respectively. During the three and six months ended June 30, 2019, the Company recorded revenues related to assets acquired in the Merger of $ 9.7 million. The following unaudited supplemental pro forma information is based upon the Company's historical condensed consolidated statements of operations, adjusted as if the Merger had occurred on January 1, 2018. The supplemental pro forma information is not necessarily indicative of future results, or of actual results, that would have been achieved had the Merger been consummated on January 1, 2018. Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Revenues $ 182,288 $ 367,319 Net income 62,092 87,744 Net income available to common stockholders 61,211 86,576 Supplemental pro forma earnings were adjusted to exclude $ 49.8 million of transaction costs incurred in the three and six months ended June 30, 2019. 10 Table of Contents 3. TRANSACTIONS WITH NORFOLK SOUTHERN RAILWAY COMPANY On March 1, 2019, the Company entered into a series of agreements and executed related transactions with Norfolk Southern Railway Company (“NS”) as follows: • Sold land to NS for $ 52.5 million. • Executed a Development Agreement with NS whereby the Company will receive fees totaling $ 5 million in consideration for development services for NS’s corporate headquarters that is being constructed on the land sold to NS. • Executed a Consulting Agreement with NS whereby the Company will receive fees totaling $ 32 million in consideration for consulting services for NS’s corporate headquarters. The Development Agreement and Consulting Agreement are collectively referred to below as the “Fee Agreements.” • Purchased a building from NS (“1200 Peachtree”) for $ 82 million subject to a three-year market rate lease with NS that covers the entire building. The Company sold the land to NS for $ 5.0 million above its carrying amount, which included $ 37.0 million of land purchased in 2018, $ 6.5 million of land purchased in 2019, and $ 4.0 million of site preparation work. The Company purchased 1200 Peachtree from NS for an amount it determined to be $ 10.3 million below the building’s fair value. The Company determined that all contracts and transactions associated with NS should be combined for accounting purposes, and the amounts exchanged under the combined contracts should be allocated to the various components of the overall transaction at fair value or market value as discussed below. The Company determined that the purchase of 1200 Peachtree should be recorded at fair value of $ 92.3 million. The Company determined that the lease with NS at the 1200 Peachtree building was at market value under ASC 842. The land sale was accounted for under ASC 610-20 and no gain or loss was recorded on the derecognition of this non-financial asset as the fair value was determined to equal the carrying amount. Consideration related to various services provided to NS, and accounted for under ASC 606, was determined to be $ 52.3 million and represents the negotiated market value for the services agreed to by the Company and NS in the contracts. This amount included non-cash consideration of the $ 10.3 million discount on the purchase of 1200 Peachtree as well as cash consideration of $ 5 million from the land sale contract (difference between fair value and contract amount), $ 5 million from the Development Agreement, and $ 32 million from the Consulting Agreement. Since all of the agreements and contracts above were executed for the purpose of delivering and constructing a corporate headquarters for NS and all of the services and deliverables are highly interdependent, the Company determined that the services represent a single performance obligation under ASC 606. The Company determined that control of the services to be provided is being transferred over time and, thus, the Company must recognize the $ 52.3 million contract price in revenue as it satisfies the performance obligation. The Company determined that the inputs method of measuring progress of satisfying the performance obligation was the most appropriate method of recognizing revenue for the services component. Therefore, the Company began recognizing revenue in the quarter ended March 31, 2019, and will continue to recognize revenue based upon the time spent by the Company’s employees in providing these services as compared to the total estimated time required to satisfy the performance obligation. During the three months ended June 30, 2020 and 2019, the Company recognized $ 3.7 million and $ 5.0 million, respectively, in fee income in its condensed consolidated statements of operations related to the services provided to NS. During the six months ended June 30, 2020 and 2019, the Company recognized $ 7.5 million and $ 11.6 million, respectively, in fee income in its condensed consolidated statements of operations related to the services provided to NS. As of June 30, 2020 and December 31, 2019, the Company had deferred income included in the consolidated balance sheet of $ 8.5 million and $ 11.3 million, respectively, related to NS. 4. REAL ESTATE TRANSACTIONS During May 2020, the Company purchased a 1,550 space parking garage in Charlotte, North Carolina for a gross purchase price of $ 85.0 million. This property is included in real estate assets on the condensed consolidated balance sheet and in the Company's Charlotte/Office operating segment. During March 2020, the Company sold Hearst Tower, a 966,000 square foot office building in Charlotte, North Carolina, for a gross purchase price of $ 455.5 million. This property was included in the Company's Charlotte/Office operating segment. This transaction was triggered by the exercise of a purchase option by the building's primary lessee. The Company recognized a net gain of $ 90.7 million on the sale of Hearst Tower. During February 2020, as part of the Company's strategy in regards to disposal of non-core assets, the Company sold Woodcrest, a 386,000 square foot office property in Cherry Hill, New Jersey, for a gross purchase price of $ 25.3 million. This property was included in the Company's Other/Office operating segment. The Company acquired Woodcrest in the Merger with TIER and did not record any gain or loss on the sale of Woodcrest. During February 2019, the Company sold air rights that cover eight acres in Downtown Atlanta for a gross sales price of $ 13.3 million and recorded a gain of $ 13.1 million. 11 Table of Contents 5. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES The following information summarizes financial data and principal activities of the Company's unconsolidated joint ventures. The information included in the following table entitled summary of financial position is as of June 30, 2020 and December 31, 2019 (in thousands). The information included in the summary of operations table is for the six months ended June 30, 2020 and 2019 (in thousands): Total Assets Total Debt Total Equity Company’s Investment SUMMARY OF FINANCIAL POSITION: 2020 2019 2020 2019 2020 2019 2020 2019 DC Charlotte Plaza LLLP $ 177,003 $ 179,694 $ — $ — $ 91,115 $ 90,373 $ 48,249 $ 48,058 Austin 300 Colorado Project, LP 149,576 112,630 54,074 21,430 68,196 68,101 37,648 36,846 AMCO 120 WT Holdings, LLC 81,484 77,377 — — 78,304 70,696 14,753 13,362 Carolina Square Holdings LP 112,052 114,483 76,298 75,662 23,815 25,184 14,130 14,414 HICO Victory Center LP 15,696 16,045 — — 15,550 15,353 10,519 10,373 Charlotte Gateway Village, LLC — 109,675 — — — 106,651 — 6,718 Wildwood Associates — 11,061 — — — 10,978 — ( 521 ) (1) Crawford Long - CPI, LLC 30,130 28,459 67,136 67,947 ( 38,463 ) ( 40,250 ) ( 18,353 ) (1) ( 19,205 ) (1) Other 7,666 8,879 — — 7,472 7,318 4,558 4,113 $ 573,607 $ 658,303 $ 197,508 $ 165,039 $ 245,989 $ 354,404 $ 111,504 $ 114,158 Total Revenues Net Income (Loss) Company's Share of Income (Loss) SUMMARY OF OPERATIONS: 2020 2019 2020 2019 2020 2019 Charlotte Gateway Village, LLC $ 6,684 $ 13,611 $ 3,400 $ 5,049 $ 1,699 $ 2,524 DC Charlotte Plaza LLLP 10,429 5,410 3,681 2,201 1,661 1,101 Crawford Long - CPI, LLC 6,453 6,255 1,787 1,809 852 863 Carolina Square Holdings LP 7,209 6,491 1,228 158 569 110 HICO Victory Center LP 197 235 197 235 98 137 Austin 300 Colorado Project, LP 195 222 95 110 48 55 Terminus Office Holdings LLC — 24,050 — 3,819 — 1,800 AMCO 120 WT Holdings, LLC 584 — ( 1,310 ) ( 32 ) ( 272 ) — Other 244 64 198 ( 93 ) 485 ( 52 ) $ 31,995 $ 56,338 $ 9,276 $ 13,256 $ 5,140 $ 6,538 (1) Negative bases are included in deferred income on the condensed consolidated balance sheets. In April 2020, the Carolina Square Holdings LP joint venture executed an amendment for its associated construction loan, extending the maturity date from May 2020 to May 2021 and reducing the spread over the London Interbank Offering Rate ("LIBOR") from 1.90 % to 1.25 %. This amendment also eliminated the Company's repayment guaranty. In March 2020, the Company sold its interest in Charlotte Gateway Village, LLC ("Gateway"), which owned a 1.1 million square foot office building in Charlotte, North Carolina, to its partner for a gross purchase price of $ 52.2 million. The sale was triggered by the exercise of the partner's purchase option and the proceeds from this sale represent a 17 % internal rate of return for the Company on its invested capital, as stipulated in the partnership agreement. The Company recognized a gain of $ 44.7 million on the sale of its interest in Gateway. In February 2020, as part of its strategy in regards to disposal of non-core assets, the Company sold its remaining interest in the Wildwood Associates joint venture, which owned a 6.3 acre parcel of land in Atlanta, to its venture partner for a gross purchase price of $ 900,000 . The Company recognized a gain of $ 1.3 million on the sale of its interest in Wildwood Associates, which included elimination of the remaining negative basis in the joint venture of $ 520,000 . 12 Table of Contents 6. INTANGIBLE ASSETS Intangible assets on the balance sheets as of June 30, 2020 and December 31, 2019 included the following (in thousands): 2020 2019 In-place leases, net of accumulated amortization of $ 192,808 and $ 163,867 in 2020 and 2019, respectively $ 173,818 $ 202,760 Above-market tenant leases, net of accumulated amortization of $ 30,991 and $ 26,487 in 2020 and 2019, respectively 31,196 35,699 Below-market ground lease, net of accumulated amortization of $ 1,035 and $ 897 in 2020 and 2019, respectively 17,378 17,516 Goodwill 1,674 1,674 $ 224,066 $ 257,649 The carrying amount of goodwill did not change during the six months ended June 30, 2020 and 2019. Aggregate net amortization expense related to intangible assets and liabilities for the three and six months ended June 30, 2020 was $ 11.4 million and $ 23.5 million, respectively. Aggregate net amortization expense related to intangible assets and liabilities for the three and six months ended June 30, 2019 was $ 7.3 million and $ 13.1 million, respectively. Over the next five years and thereafter aggregate amortization of these intangible assets and liabilities is anticipated to be as follows (in thousands): Below Market Rents Above Market Ground Lease Below Market Ground Lease Above Market Rents In Place Leases 2020 (six months) $ ( 8,865 ) $ ( 23 ) $ 138 $ 3,673 $ 24,997 2021 ( 14,139 ) ( 46 ) 276 6,600 39,932 2022 ( 11,047 ) ( 46 ) 276 5,230 27,979 2023 ( 9,360 ) ( 46 ) 276 4,182 22,820 2024 ( 8,143 ) ( 46 ) 276 3,294 17,920 Thereafter ( 19,356 ) ( 1,443 ) 16,136 8,217 40,170 $ ( 70,910 ) $ ( 1,650 ) $ 17,378 $ 31,196 $ 173,818 7. OTHER ASSETS Other assets on the condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019 included the following (in thousands): 2020 2019 Predevelopment costs and earnest money $ 17,403 $ 25,586 Furniture, fixtures and equipment, leasehold improvements, and other deferred costs, net of accumulated depreciation of $ 30,879 and $ 29,131 in 2020 and 2019, respectively 18,647 17,791 Prepaid expenses and other assets 10,092 5,924 Lease inducements, net of accumulated amortization of $ 2,807 and $ 2,333 in 2020 and 2019, respectively 5,408 5,632 Line of credit deferred financing costs, net of accumulated amortization of $ 3,705 and $ 2,952 in 2020 and 2019, respectively 3,766 4,516 $ 55,316 $ 59,449 13 Table of Contents 8. NOTES PAYABLE The following table summarizes the terms of notes payable outstanding at June 30, 2020 and December 31, 2019 ($ in thousands): Description Interest Rate Maturity (1) 2020 2019 Unsecured Notes: Credit Facility, Unsecured 1.21 % 2023 $ — $ 251,500 Term Loan, Unsecured 1.36 % 2021 250,000 250,000 2019 Senior Notes, Unsecured 3.95 % 2029 275,000 275,000 2017 Senior Notes, Unsecured 3.91 % 2025 250,000 250,000 2019 Senior Notes, Unsecured 3.86 % 2028 250,000 250,000 2019 Senior Notes, Unsecured 3.78 % 2027 125,000 125,000 2017 Senior Notes, Unsecured 4.09 % 2027 100,000 100,000 1,250,000 1,501,500 Secured Mortgage Notes: Fifth Third Center 3.37 % 2026 138,709 140,332 Terminus 100 5.25 % 2023 116,593 118,146 Colorado Tower 3.45 % 2026 115,883 117,085 Promenade 4.27 % 2022 94,308 95,986 816 Congress 3.75 % 2024 79,118 79,987 Terminus 200 3.79 % 2023 75,224 76,079 Legacy Union One 4.24 % 2023 66,000 66,000 Meridian Mark Plaza 6.00 % 2020 — 22,978 685,835 716,593 $ 1,935,835 $ 2,218,093 Unamortized premium 9,406 11,239 Unamortized loan costs ( 5,724 ) ( 6,357 ) Total Notes Payable $ 1,939,517 $ 2,222,975 (1) Weighted average maturity of notes payable outstanding at June 30, 2020 was 5.4 years. Credit Facility The Company has a $ 1 billion senior unsecured line of credit (the "Credit Facility") that matures on January 3, 2023. The Credit Facility contains financial covenants that require, among other things, the maintenance of an unencumbered interest coverage ratio of at least 1.75 ; a fixed charge coverage ratio of at least 1.50 ; a secured leverage ratio of no more than 40 %; and an overall leverage ratio of no more than 60 %. The Credit Facility also contains customary representations and warranties and affirmative and negative covenants, as well as customary events of default. The amounts outstanding under the Credit Facility may be accelerated upon the occurrence of any events of default. The Company is in compliance with all covenants of the Credit Facility. The interest rate applicable to the Credit Facility varies according to the Company's leverage ratio, and may, at the election of the Company, be determined based on either (1) the current London Interbank Offering Rate ("LIBOR") plus a spread of between 1.05 % and 1.45 %, or (2) the greater of Bank of America's prime rate, the federal funds rate plus 0.50 %, or the one-month LIBOR plus 1.0 % (the "Base Rate"), plus a spread of between 0.10 % or 0.45 %, based on leverage. At June 30, 2020, the Credit Facility's spread over LIBOR was 1.05 %. The amount that the Company may draw under the Credit Facility is a defined calculation based on the Company's unencumbered assets and other factors. The total available borrowing capacity under the Credit Facility was $ 1.0 billion at June 30, 2020. Term Loan The Company has a $ 250 million unsecured term loan (the "Term Loan") that matures on December 2, 2021. The Term Loan has financial covenants consistent with those of the Credit Facility. The interest rate applicable to the Term Loan varies according to the Company’s leverage ratio and may, at the election of the Company, be determined based on either (1) the current LIBOR plus a spread of between 1.20 % and 1.70 %, based on leverage or (2) the greater of Bank of America's prime rate, the federal funds rate plus 14 Table of Contents 0.50 %, or the one-month LIBOR plus 1.00 % (the “Base Rate”), plus a spread of between 0.00 % and 0.75 %, based on leverage. At June 30, 2020, the Term Loan's spread over LIBOR was 1.20 %. The Company is in compliance with all covenants of the Term Loan. Unsecured Senior Notes The Company has unsecured senior notes of $ 1.0 billion that were funded in five tranches. The first tranche of $ 100 million is due in 2027 and has a fixed annual interest rate of 4.09 %. The second tranche of $ 250 million is due in 2025 and has a fixed annual interest rate of 3.91 %. The third tranche of $ 125 million is due in 2027 and has a fixed annual interest rate of 3.78 %. The fourth tranche of $ 250 million is due in 2028 and has a fixed annual interest rate of 3.86 %. The fifth tranche of $ 275 million is due in 2029 and has a fixed annual interest rate of 3.95 %. The unsecured senior notes contain financial covenants that require, among other things, the maintenance of an unencumbered interest coverage ratio of at least 1.75 ; a fixed charge coverage ratio of at least 1.50 ; an overall leverage ratio of no more than 60 %; and a secured leverage ratio of no more than 40 %. The senior notes also contain customary representations and warranties and affirmative and negative covenants, as well as customary events of default. The Company is in compliance with all covenants of the unsecured senior notes. Mortgage Notes On February 3, 2020, the Company prepaid in full, without penalty, the $ 23.0 million Meridian Mark Plaza mortgage note. Other Debt Information At June 30, 2020 and December 31, 2019, the estimated fair value of the Company’s notes payable was $ 2.0 billion and $ 2.3 billion, respectively, calculated by discounting the debt's remaining contractual cash flows at estimated rates at which similar loans could have been obtained at June 30, 2020 and December 31, 2019. The estimate of the current market rate, which is the most significant input in the discounted cash flow calculation, is intended to replicate debt of similar maturity and loan-to-value relationship. These fair value calculations are considered to be Level 2 under the guidelines as set forth in ASC 820 as the Company utilizes market rates for similar type loans from third party brokers. For the three and six months ended June 30, 2020 and 2019, interest expense was recorded as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Total interest incurred $ 17,952 $ 13,175 $ 39,165 $ 25,010 Interest capitalized ( 3,959 ) ( 1,116 ) ( 9,268 ) ( 2,131 ) Total interest expense $ 13,993 $ 12,059 $ 29,897 $ 22,879 9. OTHER LIABILITIES Other liabilities on the condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019 included the following (in thousands): 2020 2019 Ground lease liability $ 59,123 $ 59,379 Prepaid rent 29,364 33,428 Security deposits 13,405 13,545 Restricted stock unit liability 7,856 16,592 Other liabilities 5,745 11,184 $ 115,493 $ 134,128 10. COMMITMENTS AND CONTINGENCIES Commitments At June 30, 2020, the Company had outstanding performance bonds totaling $ 1.2 million. As a lessor, the Company had $ 193.8 million in future obligations under leases to fund tenant improvements and other future construction obligations at June 30, 2020. 15 Table of Contents Litigation The Company is subject to various legal proceedings, claims, and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. The Company records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, the Company accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, the Company discloses the nature and estimate of the possible loss of the litigation. The Company does not disclose information with respect to litigation where an unfavorable outcome is considered to be remote or where the estimated loss would not be material. Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business, or financial condition of the Company. Contingencies Recent events related to the COVID-19 pandemic and the actions taken to contain it have created substantial uncertainty for all businesses, including the Company. The Company’s financial statements as of and for the three and six months ended June 30, 2020 have been prepared in light of these circumstances. We have continued to follow the policies described in our footnotes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, including those related to impairment and estimates of the likelihood of collectibility of amounts due from tenants. While our current analysis did not result in any impairments or material valuation adjustments to amounts due from tenants as of June 30, 2020, circumstances related to the COVID-19 pandemic may result in recording impairments or material valuation adjustments to amounts due from tenants in future periods. In limited circumstances to date, we have entered into lease amendments with certain tenants, a majority of which are small retail operators who have experienced disruptions in their business as a result of the pandemic. Some of these agreements forgive rents in 2020 and extend the lease term for the equivalent number of months at the end of the original lease. These rent forgiveness and extension agreements will be accounted for as lease modifications, and the Company will recognize the effects over time through straight-line rent. Other agreements provide for payment deferrals without extensions. The Company will also account for these deferral agreements as lease modifications and has included these deferred payments in deferred rents receivable on the accompanying condensed consolidated balance sheet. 11. STOCKHOLDERS' EQUITY In the first quarter of 2020, the Company issued 1.7 million shares of common stock in connection with the redemption of 1.7 million limited partnership units in CPLP. Each of the redeemed limited partnership units in CPLP was "paired" with a share of limited voting preferred stock with a par value of $ 1 per share. The shares of limited voting preferred stock were automatically redeemed by Cousins without consideration when their paired limited partnership unit in CPLP was redeemed. Holders of limited voting preferred stock are entitled to one vote on the following matters only: the election of directors, any proposed amendment of the Company's Articles of Incorporation, any merger or other business combination of the Company, any sale of substantially all of the Company's assets, and any liquidation of the Company. Holders of limited voting preferred stock are not entitled to any dividends or distributions and the limited voting preferred stock is not convertible into or exchangeable for any other property or securities of the Company. As of June 30, 2020, the Company had no preferred stock outstanding. 12. STOCK-BASED COMPENSATION The Company has several types of stock-based compensation — stock options, restricted stock, and restricted stock units (“RSUs”). The Company's compensation expense for the three and six months ended June 30, 2020 relates to restricted stock and RSUs awarded in 2018, 2019, and 2020. Compensation expense for the six months ended June 30, 2020 also includes expenses related to restricted stock and RSUs awarded in 2017. Restricted stock and the 2020 RSUs are equity-classified awards for which the compensation expense per share is fixed. The 2018 and 2019 RSUs are liability-classified awards for which the expense fluctuates from period to period dependent, in part, on both the Company's stock price and on the Company's stock performance relative to its peers. For the three and six months ended June 30, 2020 and 2019, stock-based compensation expense, net of forfeitures, was recorded as follows (in thousands): 16 Table of Contents Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Equity-classified awards $ 1,141 $ 624 $ 2,425 $ 1,232 Liability-classified awards 1,780 497 760 5,417 Total stock-based compensation expense, net of forfeitures $ 2,921 $ 1,121 $ 3,185 $ 6,649 On April 23, 2019, the Company's stockholders approved the Cousins Properties Incorporated 2019 Omnibus Incentive Stock Plan (the "2019 Plan"). The Company also maintains the Cousins Properties Incorporated 2009 Incentive Stock Plan (the "2009 Plan") and the Cousins Properties Incorporated 2005 Restricted Stock Unit Plan (the “RSU Plan”), although no further awards are permitted under the 2009 plan or RSU Plan. Under the 2019 Plan, during the six months ended June 30, 2020, the Company made restricted stock grants of 71,421 shares to key employees, which vest ratably over a three-year period. Also under the 2019 Plan, during the six months ended June 30, 2020, the Company awarded two types of RSUs to key employees based on the following metrics: (1) Total Stockholder Return of the Company, as defined in the 2019 Plan, as compared to the companies in the SNL US REIT Office index (“Market-based RSUs”), and (2) the ratio of cumulative funds from operations (“FFO”) per share to targeted cumulative FFO per share (“Performance-based RSUs”), as defined in the 2019 Plan. The measurement period for both awards is January 1, 2020 to December 31, 2022, and the targeted units awarded of Market-based RSUs and Performance-based RSUs was 71,038 and 30,447 , respectively. The ultimate settlement of these awards can range from 0 % to 200 % of the targeted number of units depending on the achievement of the market and performance metrics described above. These RSU awards cliff vest on December 31, 2022 and are to be settled in the Company’s common stock with settlement dependent on attainment of required service, market, and performance criteria. The number of RSUs vesting will be determined by the Compensation Committee. The Company expenses an estimate of the fair value of the Market-based RSUs, calculated using a Monte Carlo valuation at grant date, ratably over the vesting period, adjusting for forfeitures when they occur. The Performance-based RSUs are expensed over the vesting period based on the Company’s share price on the grant date. The expense is recognized ratably over the vesting period and adjusted each quarter based on the number of shares expected to vest and for forfeitures when they occur. Dividend equivalents on the Market-based RSUs and the Performance-based RSUs will also be settled in shares of the Company’s common stock based upon the number of units vested. Under the 2019 Plan, during the three months ended June 30, 2020, the Company issued 34,059 shares of common stock to members of its board of directors, reflecting the regular equity component of the non-executive director annual compensation, along with the exercise by some directors to receive common stock in lieu of all or a portion of the cash component of their annual compensation. The Company recorded $ 1.1 million in general and administrative expense related to these issuances. The Company’s stock compensation for stock options, restricted stock, and RSUs granted in 2018 and 2019 is described in note 15 of the notes to consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. 13. REVENUE RECOGNITION The Company categorizes its primary sources of revenue into revenue from contracts with customers and other revenue accounted for as leases under ASC 842 as follows: • Rental property revenues consist of (1) contractual revenues from leases recognized on a straight-line basis over the term of the respective lease; (2) percentage rents recognized once a specified sales target is achieved; (3) parking revenue; (4) termination fees; and (5) the reimbursement of the tenants' share of real estate taxes, insurance, and other operating expenses. The Company's leases typically include renewal options and are classified and accounted for as operating leases. Rental property revenues are accounted for in accordance with the guidance set forth in ASC 842. • Fee income consists of development fees, management fees, and leasing fees earned from unconsolidated joint ventures and from third parties. Fee income is accounted for in accordance with the guidance set forth in ASC 606. For the three and six months ended June 30, 2020, the Company recognized rental property revenues of $ 175.1 million and $ 364.2 million, respectively, of which $ 44.2 million and $ 98.3 million, respectively, represented variable rental revenue. For the three and six months ended June 30, 2019, the Company recognized rental property revenues of $ 134.9 million and $ 258.8 million, respectively, of which $ 35.8 million and $ 68.9 million, respectively, represented variable rental revenue. For the three and six months ended June 30, 2020, the Company recognized fee and other revenue of $ 4.8 million and $ 9.6 million, respectively. For the three and six months ended June 30, 2019, the Company recognized fee and other revenue of $ 7.1 million and $ 16.0 million, respectively. 17 Table of Contents 14. EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2020 and 2019 (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Earnings per Common Share - basic: Numerator: Net income (loss) $ 23,236 $ ( 22,582 ) $ 198,545 $ 13,423 Net (income) loss attributable to noncontrolling interests in CPLP from continuing operations ( 5 ) 265 ( 307 ) ( 323 ) Net income attributable to other noncontrolling interests ( 130 ) ( 92 ) ( 194 ) ( 168 ) Net income (loss) available to common stockholders $ 23,101 $ ( 22,409 ) $ 198,044 $ 12,932 Denominator: Weighted average common shares - basic 148,548 112,926 147,986 109,049 Net income (loss) per common share - basic $ 0.16 $ ( 0.20 ) $ 1.34 $ 0.12 Earnings per common share - diluted: Numerator: Net income (loss) $ 23,236 $ ( 22,582 ) $ 198,545 $ 13,423 Net income attributable to other noncontrolling interests ( 130 ) ( 92 ) ( 194 ) ( 168 ) Net income (loss) available for common stockholders before allocation of net income attributable to noncontrolling interests in CPLP $ 23,106 $ ( 22,674 ) $ 198,351 $ 13,255 Denominator: Weighted average common shares - basic 148,548 112,926 147,986 109,049 Add: Potential dilutive common shares - stock options 5 — 10 29 Potential dilutive common shares - restricted stock units, less shares assumed purchased at market price 2 — 2 — Weighted average units of CPLP convertible into common shares 25 1,744 572 1,744 Weighted average common shares - diluted 148,580 114,670 148,570 110,822 Net income (loss) per common share - diluted $ 0.16 $ ( 0.20 ) $ 1.34 $ 0.12 Antidilutive restricted stock units, less share assumed purchased at market price, and antidilutive stock options outstanding 18 27 7 — For the three and six months ended June 30, 2020, 18,000 and 7,000 restricted stock units, less shares assumed purchased at market price, respectively, were not included in the diluted weighted average common shares because they would have been antidilutive for the period presented. These restricted stock units could be dilutive in the future. For the three months ended June 30, 2019, 27,000 stock options had an exercise price that did not exceed the average market value of the Company's stock. They were not included in the diluted weighted average common shares due to the net loss during the period. These antidilutive stock options could be dilutive in the future. 18 Table of Contents 15. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - SUPPLEMENTAL INFORMATION Supplemental information related to the cash flows, including significant non-cash activity affecting the condensed consolidated statement of cash flows, for the six months ended June 30, 2020 and 2019 is as follows (in thousands): 2020 2019 Interest paid $ 31,800 $ 22,130 Non-Cash Activity: Transfers from projects under development to operating properties 277,097 — Common stock dividends declared and accrued 44,570 42,563 Transfer from land held and other assets to projects under development 29,121 — Change in accrued property, acquisition, development, and tenant expenditures 16,569 8,973 Non-cash assets and liabilities assumed in TIER transaction — 1,512,384 Ground lease right-of-use assets and associated liabilities — 56,294 Non-cash consideration for property acquisition — 10,071 The following table provides a reconciliation of cash, cash equivalents, and restricted cash recorded on the condensed consolidated balance sheets to cash, cash equivalents, and restricted cash in the condensed consolidated statements of cash flows (in thousands): June 30, 2020 December 31, 2019 Cash and cash equivalents $ 28,255 $ 15,603 Restricted cash 1,947 2,005 Total cash, cash equivalents, and restricted cash $ 30,202 $ 17,608 16. REPORTABLE SEGMENTS The Company's segments are based on its method of internal reporting, which classifies operations by property type and geographical area. The segments by property type are: Office and Mixed-Use. The segments by geographical region are: Atlanta, Austin, Charlotte, Dallas, Phoenix, Tampa, and Other. Included in Other is a property in Cherry Hill, New Jersey that was sold in February 2020 and properties located in Chapel Hill, Fort Worth, and Houston. These reportable segments represent an aggregation of operating segments reported to the Chief Operating Decision Maker based on similar economic characteristics that include the type of property and the geographical location. Each segment includes both consolidated operations and the Company's share of unconsolidated joint venture operations. Company management evaluates the performance of its reportable segments in part based on net operating income (“NOI”). NOI represents rental property revenues, less termination fees, less rental property operating expenses. NOI is not a measure of cash flows or operating results as measured by GAAP, is not indicative of cash available to fund cash needs, and should not be considered an alternative to cash flows as a measure of liquidity. All companies may not calculate NOI in the same manner. The Company considers NOI to be an appropriate supplemental measure to net income as it helps both management and investors understand the core operations of the Company's operating assets. NOI excludes corporate general and administrative expenses, interest expense, depreciation and amortization, impairments, gains/loss on sales of real estate, and other non-operating items. 19 Table of Contents Segment net income, amount of capital expenditures, and total assets are not presented in the following tables because management does not utilize these measures when analyzing its segments or when making resource allocation decisions. Information on the Company's segments along with a reconciliation of NOI to net income for the three and six months ended June 30, 2020 and 2019 are as follows (in thousands): Three Months Ended June 30, 2020 Office Mixed-Use Total Revenues: Atlanta $ 62,457 $ 129 $ 62,586 Austin 52,455 — 52,455 Charlotte 20,505 — 20,505 Dallas 4,487 — 4,487 Phoenix 12,084 — 12,084 Tampa 12,912 — 12,912 Other 15,043 1,176 16,219 Total segment revenues 179,943 1,305 181,248 Less: Company's share of rental property revenues from unconsolidated joint ventures ( 4,844 ) ( 1,305 ) ( 6,149 ) Total rental property revenues $ 175,099 $ — $ 175,099 Three Months Ended June 30, 2019 Office Mixed-Use Total Revenues: Atlanta $ 59,499 $ — $ 59,499 Austin 31,815 — 31,815 Charlotte 27,110 — 27,110 Dallas 804 — 804 Phoenix 12,805 — 12,805 Tampa 13,471 — 13,471 Other 3,581 1,093 4,674 Total segment revenues 149,085 1,093 150,178 Less: Company's share of rental property revenues from unconsolidated joint ventures ( 14,152 ) ( 1,093 ) ( 15,245 ) Total rental property revenues $ 134,933 $ — $ 134,933 Six Months Ended June 30, 2020 Office Mixed-Use Total Revenues Atlanta $ 128,334 $ 165 $ 128,499 Austin 101,202 — 101,202 Charlotte 55,041 — 55,041 Dallas 8,958 — 8,958 Phoenix 25,243 — 25,243 Tampa 27,024 — 27,024 Other 31,538 2,438 33,976 Total segment revenues 377,340 2,603 379,943 Less: Company's share of rental property revenues from unconsolidated joint ventures ( 13,112 ) ( 2,603 ) ( 15,715 ) Total rental property revenues $ 364,228 $ — $ 364,228 20 Table of Contents Six Months Ended June 30, 2019 Office Mixed-Use Total Revenues: Atlanta $ 116,969 $ — $ 116,969 Austin 59,907 — 59,907 Charlotte 50,496 — 50,496 Dallas 804 804 Phoenix 25,808 — 25,808 Tampa 26,441 — 26,441 Other 4,126 2,277 6,403 Total segment revenues 284,551 2,277 286,828 Less: Company's share of rental property revenues from unconsolidated joint ventures ( 25,753 ) ( 2,277 ) ( 28,030 ) Total rental property revenues $ 258,798 $ — $ 258,798 NOI by reportable segment for the three and six months ended June 30, 2020 and 2019 are as follows (in thousands): Three Months Ended June 30, 2020 Office Mixed-Use Total Net Operating Income: Atlanta $ 41,709 $ ( 13 ) $ 41,696 Austin 31,229 — 31,229 Charlotte 14,480 — 14,480 Dallas 3,580 — 3,580 Phoenix 8,922 — 8,922 Tampa 7,998 — 7,998 Other 8,397 830 9,227 Total Net Operating Income $ 116,315 $ 817 $ 117,132 Three Months Ended June 30, 2019 Office Mixed-Use Total Net Operating Income: Atlanta $ 39,368 $ — $ 39,368 Austin 18,577 — 18,577 Charlotte 18,050 — 18,050 Dallas 669 — 669 Phoenix 9,290 — 9,290 Tampa 8,573 — 8,573 Other 2,182 708 2,890 Total Net Operating Income $ 96,709 $ 708 $ 97,417 21 Table of Contents Six Months Ended June 30, 2020 Office Mixed-Use Total Net Operating Income: Atlanta $ 86,564 $ ( 73 ) $ 86,491 Austin 60,523 — 60,523 Charlotte 36,593 — 36,593 Dallas 7,219 — 7,219 Phoenix 18,715 — 18,715 Tampa 16,142 — 16,142 Other $ 17,525 $ 1,706 $ 19,231 Total Net Operating Income $ 243,281 $ 1,633 $ 244,914 Six Months Ended June 30, 2019 Office Mixed-Use Total Net Operating Income: Atlanta $ 76,766 $ — $ 76,766 Austin 34,525 — 34,525 Charlotte 33,859 — 33,859 Dallas 670 — 670 Phoenix 18,781 — 18,781 Tampa 16,560 — 16,560 Other 2,411 1,576 3,987 Total Net Operating Income $ 183,572 $ 1,576 $ 185,148 The following reconciles Net Operating Income to net income (loss) for each of the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net Operating Income $ 117,132 $ 97,417 $ 244,914 $ 185,148 Net operating income from unconsolidated joint ventures ( 4,193 ) ( 9,379 ) ( 10,228 ) ( 17,252 ) Fee income 4,690 7,076 9,422 15,804 Termination fee income 539 190 3,383 710 Other income 126 11 163 151 Reimbursed expenses ( 322 ) ( 1,047 ) ( 843 ) ( 1,979 ) General and administrative expenses ( 8,543 ) ( 8,374 ) ( 14,195 ) ( 19,834 ) Interest expense ( 13,993 ) ( 12,059 ) ( 29,897 ) ( 22,879 ) Depreciation and amortization ( 72,868 ) ( 50,904 ) ( 144,482 ) ( 96,765 ) Transaction costs ( 63 ) ( 49,827 ) ( 428 ) ( 49,830 ) Other expenses ( 552 ) ( 624 ) ( 1,118 ) ( 804 ) Income from unconsolidated joint ventures 1,715 3,634 5,140 6,538 Gain (loss) on sales of investments in unconsolidated joint ventures ( 231 ) — 45,999 — Gain (loss) on investment property transactions ( 201 ) 1,304 90,715 14,415 Net income (loss) $ 23,236 $ ( 22,582 ) $ 198,545 $ 13,423 22 Table of Contents