SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): September 13, 2006

Cousins Properties Incorporated

(Exact name of registrant as specified in its charter)

Georgia

0-3576

58-0869052

2500 Windy Ridge Parkway, Atlanta, Georgia 30339-5683
(Address of principal executive offices)

Registrant’s telephone number, including area code: (770) 955-2200

Not applicable

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.01. Completion of Acquisition or Disposition of Assets

     Sale of Frost Bank Tower and Purchase of 191 Peachtree Tower Partnership Interest

     On September 13, 2006, Cousins Properties Texas, LP, a subsidiary of Cousins Properties Incorporated (the “Company”), sold Frost Bank Tower, a 531,000 square foot office building in Austin, Texas, to TX-Frost Tower Limited Partnership, an affiliate of Equity Office Properties Trust (“EOP”), for approximately $188 million in cash. Also on September 13, 2006, the Company and its affiliates acquired all of EOP’s interests in 191 Peachtree Tower, a 1.2 million square foot office building in Atlanta, Georgia for total consideration of approximately $153 million in cash. The Company filed a Current Report on Form 8-K on August 8, 2006 disclosing the entry into these sale and purchase agreements.

     The 191 Peachtree Tower is owned by One Ninety One Peachtree Associates (the “191 Venture”). Prior to September 13, 2006, the Company held a minority interest in the 191 Venture, subject to a preference held by the majority partner, an affiliate of EOP. As part of the transactions described above, as of September 13, 2006, CPI 191 LLC, an affiliate of the Company, acquired the remaining interest in the 191 Venture from an affiliate of EOP. As a result of the acquisition, the 191 Venture is now 100% owned by the Company and its affiliates. In addition, as part of the transaction, the Company purchased from an affiliate of EOP a mortgage note payable by the 191 Venture and secured by 191 Peachtree Tower. The purchase of this debt has no effect on the consolidated financial statements of the Company, as it is considered intercompany debt for accounting purposes and is fully eliminated upon consolidation of the 191 Venture into the Company.

Item 9.01. Financial Statements and Exhibits

(a)

Financial Statements. The following financial information of the Company is filed herewith and incorporated herein by reference:

191 Peachtree Tower		Page
Report of Independent Auditors			F-1
Statements of Revenues Over Certain Operating Expenses for the year ended December 31, 2005 (audited) and the six months ended June 30, 2006 (unaudited)			F-2
Notes to Statements of Revenues Over Certain Operating Expenses for the year ended December 31, 2005 (audited) and the six months ended June 30, 2006 (unaudited)			F-3

(b)

Pro Forma Financial Information. The following pro forma financial information of the Registrant are filed herewith and incorporated herein by reference:

     Cousins Properties Incorporated

     Unaudited Pro Forma Financial Statements

Summary of Unaudited Pro Forma Financial Statements			F-6
Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2006 (unaudited)			F-7
Pro Forma Condensed Consolidated Statement of Income for the year ended December 31, 2005 (unaudited)			F-9
Pro Forma Condensed Consolidated Statement of Income for the six months ended June 30, 2006 (unaudited)			F-11

(c)

Exhibits. The following exhibits are filed herewith:

Exhibit No.		Description
10.1		Purchase and Sale Agreement between Cousins Properties Texas LP and TX-Frost Tower Limited Partnership, Frost Bank Tower, Austin, Texas, August 2, 2006
10.2		Purchase and Sale Agreement between CPI 191 LLC and GA-191 Peachtree, L.L.C., 191 Peachtree Street, Atlanta, Georgia, August 2, 2006

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: September 19, 2006

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Stockholders
Cousins Properties Incorporated
Atlanta, Georgia

We have audited the accompanying statement of revenues over certain operating expenses of 191 Peachtree Tower (the “Building”) for the year ended December 31, 2005. This statement is the responsibility of the Building’s management. Our responsibility is to express an opinion on this statement based on our audit.

We conducted our audit in accordance with U.S. generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Building’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Building’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

The accompanying statement of revenues over certain operating expenses was prepared for the purpose of complying with the rules of the Securities and Exchange Commission, as described in Note 2, and is not intended to be a complete presentation of the Building’s revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses referred to above presents fairly, in all material respects, the revenues and certain operating expenses described in Note 2 of the Building for the year ended December 31, 2005 in conformity with U.S. generally accepted accounting principles.

/s/ Frazier & Deeter, LLC

Atlanta, Georgia
September 15, 2006

191 Peachtree Tower

Statements of Revenues Over Certain Operating Expenses

For the year ended December 31, 2005 (audited)
and the six months ended June 30, 2006 (unaudited)
(in thousands)

		2006				2005
		(Unaudited)
Revenues:
Base rent		$	10,024			$	28,644
Tenant reimbursements			3,822				11,467
Other revenues			1,118				3,072
Total revenues			14,964				43,183
Expenses:
Real estate taxes			1,984				3,883
Utilities			728				1,752
General and administrative			313				786
Repairs and maintenance			666				1,776
Security			330				714
Management fees			461				1,321
Cleaning			302				836
Other operating expenses			510				1,057
Total expenses			5,294				12,125
Revenues over certain operating expenses		$	9,670			$	31,058

See accompanying notes.

191 Peachtree Tower

Notes to Statements of Revenues Over Certain Operating Expenses

For the year ended December 31, 2005 (audited)
and the six months ended June 30, 2006 (unaudited)

1. Description of Real Estate Property Acquired

On September 13, 2006, Cousins Properties Incorporated (“Cousins”), acquired an interest in One Ninety One Peachtree Associates (the “Venture”), the venture that owns 191 Peachtree Tower (the “Building”), a 50-story office building containing approximately 1.2 million square feet located in Atlanta, Georgia. Total consideration for the acquisition was approximately $153 million.

2. Basis of Accounting

The accompanying statements of revenues over certain operating expenses are presented in conformity with accounting principles generally accepted in the United States and in accordance with the applicable rules and regulations of the Securities and Exchange Commission for real estate properties acquired. Accordingly, the statements exclude certain historical expenses that are not comparable to the proposed future operations of the property such as certain ancillary income, amortization, depreciation, interest and corporate expenses. Therefore, the statements will not be comparable to the statements of operations of the Building after its acquisition by Cousins.

3. Significant Accounting Policies

Rental Revenue

Rental revenue is recognized on a straight-line basis over the terms of the related leases. The excess of rental income recognized over the amounts due pursuant to the lease terms is recorded as a receivable. The adjustment to this receivable decreased rental revenue by approximately $1.3 million for the year ended December 31, 2005 and decreased rental revenue by approximately $269,000 for the six months ended June 30, 2006.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

191 Peachtree Tower

Notes to Statements of Revenues Over Certain Operating Expenses (continued)

For the year ended December 31, 2005 (audited)
and the six months ended June 30, 2006 (unaudited)

4. Description of Leasing Arrangements

As of December 31, 2005, the Building was approximately 96% leased, with King & Spalding LLP, Wachovia Bank, N.A., and Powell Goldstein LLP leasing approximately 34%, 31%, and 13%, respectively, of the Building’s rentable square footage. King & Spalding LLP, Wachovia Bank, N.A., and Powell Goldstein LLP contributed approximately 38%, 33% and 16%, respectively, of rental revenue for the year ended December 31, 2005. Under the terms of the leases, each tenant was required to reimburse to the landlord its proportionate share of the Building’s operating expenses as defined in their specific lease agreements. The remaining rentable square footage was leased to various office and retail tenants under lease agreements with terms that vary in length and with various reimbursement clauses.

5. Future Minimum Rental Commitments

Future minimum rental commitments for the years ended December 31 are as follows (in thousands):

2006		$	17,092
2007			14,037
2008			12,793
2009			1,269
2010			908
Thereafter			812
Total		$	46,911

Subsequent to December 31, 2005, Wachovia Bank, N.A. and Deloitte and Touche will contribute approximately 63% and 11%, respectively, of the future minimum rental revenue from the leases in place at that date.

6. Ground Lease

The Venture has a ground lease agreement for a portion of the land upon which the Building has been constructed. The ground lease requires annual payments of $75,000 through January 31, 2008. Thereafter, the annual rents increase $2,500 per year until the expiration date of January 31, 2087. The Venture records ground rental expense on a straight-line basis. Ground rental expense is included in other operating expenses in the accompanying statements of revenues over certain operating expenses. The ground lease is renewable for an additional 99 years.

191 Peachtree Tower

Notes to Statements of Revenues Over Certain Operating Expenses (continued)

For the year ended December 31, 2005 (audited)
and the six months ended June 30, 2006 (unaudited)

7. Interim Unaudited Financial Information and Subsequent Event

The statement of revenues over certain operating expenses for the six months ended June 30, 2006 is unaudited; however, in the opinion of management, all adjustments (consisting solely of normal, recurring adjustments) necessary for the fair presentation of the financial statement for the interim period have been included. The results of the interim period are not necessarily indicative of the results to be obtained for a full fiscal year.

The King and Spalding LLP and Powell Goldstein LLP leases expired during the first quarter of 2006 without renewal, which had a significant impact on the results of operations for the six months ended June 30, 2006.

COUSINS PROPERTIES INCORPORATED

SUMMARY OF UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION

     The accompanying unaudited pro forma condensed consolidated financial information should be read in conjunction with the consolidated financial statements and notes of Cousins Properties Incorporated (the “Company” or the “Registrant”) included in its annual report filed on Form 10-K for the year ended December 31, 2005 and its quarterly report filed on Form 10-Q for the quarter ended June 30, 2006.

     The following unaudited pro forma condensed consolidated balance sheet as of June 30, 2006 has been prepared to give effect to the sale of Frost Bank Tower and the purchase of the interest in 191 Peachtree Tower as if these transactions had occurred on June 30, 2006. The purchase of 191 Peachtree Tower will be accounted for as a purchase in accordance with Statement of Financial Accounting Standards No. 141, “Business Combinations.” In addition, the unaudited pro forma condensed consolidated balance sheet as of June 30, 2006 was prepared to give effect as if the full base contribution was received by June 30, 2006 related to the second quarter 2006 contribution of five of the Company’s consolidated retail properties to a new joint venture formed with The Prudential Insurance Company of America on behalf of a separate account managed for institutional investors by Prudential Real Estate Investors (the “Venture”). A Current Report on Form 8-K was filed on July 6, 2006 by the Company describing the Venture formation and the base contribution details and included unaudited pro forma financial information related to the Venture formation.

     The following unaudited pro forma consolidated statements of income for the year ended December 31, 2005 and the six months ended June 30, 2006 have been prepared to give effect as if the Frost Bank Tower sale, the purchase of the interests in 191 Peachtree Tower and the Venture formation occurred on January 1, 2005. The pro forma financial information reflects the receipt of the full base contribution related to the Venture as if it had occurred on January 1, 2005.

     These unaudited consolidated financial statements are prepared for informational purposes only and are not necessarily indicative of future results or of actual results that would have been achieved had the second and third quarter 2006 transactions been consummated on January 1, 2005 for income statement purposes or on June 30, 2006 for balance sheet purposes.

     The acquisition of the interests in 191 Peachtree Tower is subject to audit pursuant to Rule 3-14 of Regulation S-X under the Securities Act of 1934. This Current Report on Form 8-K includes the statements of revenues over certain operating expenses for 191 Peachtree Tower for the year ended December 31, 2005 (audited) and the six months ended June 30, 2006 (unaudited).

COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 2006
(Unaudited, in thousands, except share and per share amounts)

		Cousins Properties				Adjustments
		Incorporated				Venture				Frost Bank Tower				191 Peachtree				Pro Forma
		Historical (a)				Formation				Disposition				Tower Acquisition				Total
ASSETS
PROPERTIES:
Operating properties, net of accumulated depreciation		$	424,818			$	—			$	(128,344	) (b)		$	138,232	(c)		$	434,706
Land held for investment or future development			96,643				—				—				—				96,643
Projects under development			315,775				—				—				—				315,775
Residential lots under development			8,477				—				—				—				8,477
Total properties			845,713				—				(128,344	)			138,232				855,601
CASH AND CASH EQUIVALENTS			16,116				133,375	(e)			183,135	(d)			(151,167	) (c)			26,603
							(133,375	) (f)			(11,025	) (f)
											(10,456	) (g)
RESTRICTED CASH			2,358				—								—				2,358
RECEIVABLE FROM VENTURE PARTNER			133,375				(133,375	) (e)							—				—
NOTES AND OTHER RECEIVABLES, net of allowance for doubtful accounts			28,917				—				(4,022	) (b)			—				24,895
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES			234,644				—								—				234,644
OTHER ASSETS, including goodwill			39,866				—				(505	) (b)			15,320	(c)			53,396
											(1,285	) (h)
TOTAL ASSETS		$	1,300,989			$	(133,375	)		$	27,498			$	2,385			$	1,197,497
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
NOTES PAYABLE		$	404,612			$	(133,375	) (f)		$	(11,025	) (f)		$	—			$	260,212
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES			74,300				—				(5,738	) (b)			2,385	(c)			72,796
											1,147	(i)
											702	(k)
DEFERRED GAIN			154,580				—				—				—				154,580
DEPOSITS AND DEFERRED INCOME			2,394				—				—				—				2,394
TOTAL LIABILITIES			635,886				(133,375	)			(14,914	)			2,385				489,982
MINORITY INTERESTS			58,175				—				(10,456	) (g)			—				47,719
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS’ INVESTMENT:
Preferred Stock, 20,000,000 shares authorized, $1 par value:
7.75% Series A cumulative redeemable preferred stock, $25 liquidation preference; 4,000,000 shares issued and outstanding			100,000				—				—				—				100,000
7.50% Series B cumulative redeemable preferred stock, $25 liquidation preference; 4,000,000 shares issued and outstanding			100,000				—				—				—				100,000
Common stock, $1 par value, 150,000,000 shares authorized, 53,564,472 shares issued at June 30, 2006			53,564				—				—				—				53,564
Additional paid-in capital			320,329				—				—				—				320,329
Treasury stock at cost, 2,691,582 shares			(64,894	)			—				—				—				(64,894	)
Cumulative undistributed net income			97,929				—				52,868	(j)							150,797
TOTAL STOCKHOLDERS’ INVESTMENT			606,928				—				52,868				—				659,796
TOTAL LIABILITIES AND STOCKHOLDERS’ INVESTMENT		$	1,300,989			$	(133,375	)		$	27,498			$	2,385			$	1,197,497

See Notes to Pro Forma Balance Sheet on the following page.

NOTES TO PRO FORMA BALANCE SHEET

COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2005
(Unaudited, in thousands, except per share amounts)

		Cousins
		Properties				Adjustments
		Incorporated								Frost Bank Tower				191 Peachtree Tower
		Historical (a)				Venture Formation				Disposition				Acquisition				Pro Forma Total
REVENUES:
Rental property revenues		$	100,602			$	(23,500	) (b)		$	(10,886	) (c)		$	41,769	(d)		$	106,070
															(1,915	) (e)
Fee income			20,082				705	(f)			217	(g)			—				21,004
Multi-family residential unit sales			11,233				—				—				—				11,233
Residential lot and outparcel sales			21,933				—				—				—				21,933
Interest and other			1,886				—				—				3,072	(d)			4,958
			155,736				(22,795	)			(10,669	)			42,926				165,198
COSTS AND EXPENSES:
Rental property operating expenses			40,005				(6,312	) (b)			(5,763	) (c)			12,130	(d)			40,060
General and administrative expenses			40,703				—												40,703
Depreciation and amortization			36,518				(7,620	) (b)			(5,233	) (c)			6,894	(h)			30,559
Multi-family residential unit cost of sales			9,405				—				—				—				9,405
Residential lot and outparcel cost of sales			16,404				—				—				—				16,404
Interest expense			9,094				(3,153	) (b)			—				—				4,072
							(3,117	) (i)
							1,248	(j)
Other			1,322				(16	) (b)			—				—				1,306
			153,451				(18,970	)			(10,996	)			19,024				142,509
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES AND INCOME FROM UNCONSOLIDATED JOINT VENTURES			2,285				(3,825	)			327				23,902				22,689
PROVISION FOR INCOME TAXES FROM OPERATIONS			(7,756	)			—				—				—				(7,756	)
INCOME FROM UNCONSOLIDATED JOINT VENTURES			40,955				736	(k)			—				—				41,691
MINORITY INTEREST IN INCOME OF CONSOLIDATED SUBSIDIARIES			(3,037	)			(2,242	) (l)			994	(m)							(3,687	)
							598	(m)
INCOME FROM CONTINUING OPERATIONS BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES			32,447				(4,733	)			1,321				23,902				52,937
GAIN ON SALE OF INVESTMENT PROPERTIES, NET OF APPLICABLE INCOME TAX PROVISION			15,733				—				—				—				15,733
INCOME FROM CONTINUING OPERATIONS			48,180				(4,733	)			1,321				23,902				68,670
DIVIDENDS TO PREFERRED STOCKHOLDERS			(15,250	)			—				—				—				(15,250	)
INCOME FROM CONTINUING OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS		$	32,930			$	(4,733	)		$	1,321			$	23,902			$	53,420
PER SHARE INFORMATION AVAILABLE TO COMMON STOCKHOLDERS — BASIC:
Income from continuing operations		$	0.66															$	1.07
PER SHARE INFORMATION AVAILABLE TO COMMON STOCKHOLDERS — DILUTED:
Income from continuing operations		$	0.64															$	1.03
CASH DIVIDENDS DECLARED PER COMMON SHARE		$	1.48															$	1.48
WEIGHTED AVERAGE SHARES			49,989																49,989
DILUTED WEIGHTED AVERAGE SHARES			51,747																51,747

See Notes to Pro Forma Income Statement on the following page.

NOTES TO PRO FORMA STATEMENT OF INCOME

COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2006
(Unaudited, in thousands, except per share amounts)

		Cousins
		Properties				Adjustments
		Incorporated								Frost Bank Tower				191 Peachtree Tower
		Historical (a)				Venture Formation				Disposition				Acquisition				Pro Forma Total
REVENUES:
Rental property revenues		$	58,242			$	(12,853	) (b)		$	(6,777	) (c)		$	14,115	(d)		$	51,769
															(958	) (e)
Fee income			8,922				382	(f)			157	(g)			—				9,461
											—				—
Multi-family residential unit sales			21,715				—				—				—				21,715
Residential lot and outparcel sales			7,634				—				—				—				7,634
Interest and other			3,544				—				—				1,118	(d)			4,662
			100,057				(12,471	)			(6,620	)			14,275				95,241
COSTS AND EXPENSES:
Rental property operating expenses			22,774				(3,300	) (b)			(3,673	) (c)			5,297	(d)			21,098
General and administrative expenses			19,838				—				—				—				19,838
Depreciation and amortization			24,512				(4,041	) (b)			(2,855	) (c)			3,447	(h)			21,063
Multi-family residential unit cost of sales			17,735				—				—				—				17,735
Residential lot and outparcel cost of sales			5,501				—				—				—				5,501
Interest expense			8,493				(1,546	) (b)			—				—				646
							(6,761	) (i)			—				—
							460	(j)			—				—
Loss on extinguishment of debt			2,764				(2,764	) (k)			—				—				—
Other			935				—				—				—				935
			102,552				(17,952	)			(6,528	)			8,744				86,816
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES AND INCOME FROM UNCONSOLIDATED JOINT VENTURES			(2,495	)			5,481				(92	)			5,531				8,425
PROVISION FOR INCOME TAXES FROM OPERATIONS			(4,296	)			—				—				—				(4,296	)
INCOME FROM UNCONSOLIDATED JOINT VENTURES			20,527				427	(l)			—				—				20,954
MINORITY INTEREST IN INCOME OF CONSOLIDATED SUBSIDIARIES			(2,391	)			(1,128	) (m)			490	(n)			—				(2,730	)
							299	(n)
INCOME FROM CONTINUING OPERATIONS BEFORE GAIN ON SALE OF INVESTMENT PROPERTIES			11,345				5,079				398				5,531				22,353
GAIN ON SALE OF INVESTMENT PROPERTIES, NET OF APPLICABLE INCOME TAX PROVISION			866				—				—				—				866
INCOME FROM CONTINUING OPERATIONS			12,211				5,079				398				5,531				23,219
DIVIDENDS TO PREFERRED STOCKHOLDERS			(7,625	)			—				—				—				(7,625	)
INCOME FROM CONTINUING OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS		$	4,586			$	5,079			$	398			$	5,531			$	15,594
PER SHARE INFORMATION AVAILABLE TO COMMON STOCKHOLDERS — BASIC:
Income from continuing operations		$	0.09															$	0.31
PER SHARE INFORMATION AVAILABLE TO COMMON STOCKHOLDERS — DILUTED:
Income from continuing operations		$	0.09															$	0.30
CASH DIVIDENDS DECLARED PER COMMON SHARE		$	0.74															$	0.74
WEIGHTED AVERAGE SHARES			50,377																50,377
DILUTED WEIGHTED AVERAGE SHARES			52,019																52,019

See Notes to Pro Forma Income Statement on the following page.

NOTES TO PRO FORMA STATEMENT OF INCOME