Ladies and gentlemen, thank you for standing by. Welcome to the Cousins Properties Second Quarter 2012 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, Wednesday, August 1, 2012. I would now like to turn the conference over to Mr. Tripp Sullivan of Corporate Communications. Please go ahead sir.

Thank you. Certain matters the company will be discussing today are forward-looking statements within the meaning of federal securities laws. For example, the company may provide estimates about expected operating income from properties, as well as certain categories of expenses along with expectations regarding development, acquisition and disposition opportunities. Such forward-looking statements are subject to uncertainties and risks and actual results may differ materially from these statements. Please refer to the company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2011 for additional information regarding certain risks and uncertainties. Also, certain items the company may refer to today are considered non-GAAP financial measures within the meaning of Regulation G, as promulgated by the SEC. For these items, the comparable GAAP measures and related reconciliations may be found through the quarterly disclosures and supplemental SEC information links on the Investor Relations page of its website at www.cousinsproperties.com. And now, I’ll turn the call over to Larry Gellerstedt. Larry, please go ahead.

Good morning, everyone. Our strategy for Cousins is threefold, simple platform, trophy assets, and opportunistic investments. We’ve noted before that our portfolio will be increasingly comprised of Class A office assets that are well-placed within high-growth Sunbelt markets, where our expertise and long-term relationships are competitive advantages. Further playing to our strengths, we are using the stable platform to seek additional returns through opportunistic investments. The second quarter results with the successful disposition of three non-core assets and positive leasing headway in the operating portfolio demonstrate continued progress towards this vision. While we had no acquisitions in the second quarter, we are optimistic about our prospects for the balance of the year and remain encouraged by the development pipeline. I’ll briefly provide some additional color on our capital recycling efforts, the development pipeline in the operating portfolio. I’ll also give a quick update on our markets before handing it to Gregg for an overview of the financials. On the capital recycling front, we closed on the sale of three assets in the second quarter, and we’re pleased with the valuations across the board. As previously announced, Avenue Collierville, a 511,000 square-foot lifestyle center located outside of Memphis sold for $55 million. Ten Peachtree Place, our fully leased office building in Midtown, Atlanta sold for a gross price of $61 million and Galleria 75, a 111,000 square foot flex office building in the Galleria submarket in Northwest Atlanta closed in June for $9.2 million. We are now marketing two additional lifestyle centers for sale, Avenue Forsyth and Avenue Webb Gin, both of which are located in Atlanta. The teasers just went out, so it’s too early in the process to provide any guidance on pricing. However, based on our experience with Collierville, we think the pool of builders should be fairly…

Thank you, Larry. Good morning, everyone, I am pleased to report it was a clean solid quarter. No unusual items either up or down. FFO was $0.13 per share, which compares to $0.11 per share last year. As with our performance in the first quarter, earnings were driven by solid internal growth, same property NOI was up 3.7% over last year, an aggressive cost control. G&A was down 8% from last year. As Larry just discussed, we continue to make significant strides with our strategic planning. It shows up in many places including one I would really like to highlight this morning, the quality of our revenue stream. As recently as 2006, recurring rental revenues comprised only about 50% of our total revenues. The rest was made up of less consistent sources of revenue, fee income, and proceeds from lots, land, and condo sales. Today, rental revenue is comprised about 80% of our total revenues. This is a material improvement in the predictability and durability of our cash flow and an important measure of the progress we are making. We have accomplished this while significantly improving the quality of our balance sheet. Debt to un-depreciated assets is currently 36%, debt-to-EBITDA is 6.5 times. We have no debt maturities until next summer, and we only have $40 million outstanding on the $350 million credit facility. Financially, this is not the Cousins you may have known just a few years ago. The composition of both our income statement and our balance sheet has been reworked into what we believe is a more stable and resilient foundation to execute our strategic plan. With that quick introduction, I would like to review our financial performance. As I said FFO for the first quarter was, I am sorry for the most recent quarter was $0.13…

[Operator Instructions] And our first question comes from the line of Jamie Feldman with Bank of America Merrill Lynch.

So, I guess Gregg just following up on your last comments, since you kind of laid it out there, I mean what do you think is realistic in terms of timing as people are underwriting that upside to the portfolio?

Jamie, we are going as fast as we can, I can tell you all eyes internally are on that but I don’t want to put a timeframe out there right now.

So I guess digging deeper on the assets, so 191 Peachtree, what does the leasing pipeline look like?

Leasing pipeline, we obviously made a lot of progress in this last quarter and I would say the leasing pipeline continues to look solid here. The leasing pipeline at Promenade is very deep and we feel very, very confident about where Promenade is as well. And I would say the biggest question will be American Cancer Society and the response we’ve gotten from our data center initiative in terms of remarketing the unique qualities of that building into that particular target - targeted audience has been very, very strong. And so the question gets to be as that audience looks at this building how quickly we can convert that interest into sound leases and - and so I would say that American Cancer Society you know has been a struggle since Turner vacated the 90,000 square feet from an office perspective, it continues to, it’s a great building but it’s a very unique office tenant that wants to be there. And so the pipeline has been slow on that, the datacenter users that’s been a strong pipeline, but we don’t have as much experience with that particular pipeline and what conversion rate we may be successful in securing.

I think it’s a similar story to some other markets where there is kind of one off datacenter owners, do you guys think at all about just selling either the asset or maybe some sort of JV to one of the datacenter guys that - that’s their core competency?

We have - we got CMBS debt on it and we have not looked at a sale of the property, it is a property where some of the datacenter users and you hit on the point that have come to us are interested at some type of structure of a JV, condominium type of structure, some type of structure to take the spot and having some kind of repo when we decided to sell it that’s really the reason that I am having a, we’re less certain as to what our conversation likelihood might be with some of those users as we just work through those various issues.

And then I guess just to take a step back, focusing on Atlanta, I mean, the leasing stats were good for the quarter from the broker reports, it seemed like perimeter and some of the Northern submarkets seem better than downtown. Can you just give us a sense of - and then we are just also hearing on a macro environment and you’ve got a lot of kind of new manufacturing happening around the market, helping the warehouse business, can you kind of give us more of a sense of what’s really happening there and then what’s the risk of new supply that would really pushback on job growth and real net absorption?

At the macro level, I would say that, Atlanta is certainly showing and Georgia are certainly showing a lot of positive signs. The Hartsfield, which is obviously drives a lot of the attractiveness to Atlanta from the business standpoint just opened a $1.5 billion new international terminal. The port of Savannah is on fast-track funding for its deepening and expansion, which will make it one of the largest ports on the eastern seaboard and that’s drives a lot of transportation and logistics business up through Atlanta as well. Actually, our project on the multi-modal deal that we are working on just got upgraded in terms of where it stands in the potential funding cycle, down the road in the future. So, I think Atlanta from a quality of life, cost of living, travel perspective is driving these businesses that you are seeing and there have been a fair number of announcements this year of new businesses relocating to Atlanta and job growth is reflecting that. As you know well that, that growth is slower to show up in the office sector, but you are beginning to see that growth demonstrated in the leasing statistics that we’ve seen today. I think if you look at it from a standpoint of new supply, there is still a significant difference in every submarket in Atlanta from where market rents are to where replacement costs rents would have to be. And that’s not to say that there won’t be some new supply that’s driven by a corporate user or a large percentage of the building being driven by a corporate user, but it’s going to take a user that is - that’s willing to pay up significantly, depending on which submarket it is, but in every submarket, significant higher rents to be in that new building. So, we don’t see any prospects for any new buildings, new office buildings and any of the submarkets that we are tracking other than a building that would be a corporate user driving - driving that demand.

And then just to frame my last question, just to frame kind of the opportunistic investments you are talking about, are those more Texas-based? And can you just characterize kind of what the market looks like?

We are - obviously, we stay focused on Atlanta and Wolfe where it is, but our - we like our portfolio in Atlanta a lot in terms of where we are positioned with the assets with Terminus and Buckhead and Promenade and Midtown and 191 American Cancer Society downtown and North Point, those are great buildings. So, in terms of our investment appetite, we have been primarily focused on Texas primarily, North Carolina, secondarily. And in those markets we’ve been tracking, we spend a lot of time in the Houston market. Houston continues to be a very strong performer, and I am sure everybody on the call has been watching Houston’s numbers. So, we are actively looking at Houston, Dallas. We particularly are focused on the Uptown Arch District submarket, which is the strongest submarket in that particular city and had some real amenities coming to it with a new park that spans over the interstate between the Arch districts in the Uptown market. And then in Austin, where we’ve been a long time we continue to be focused there, primarily right now on our Third and Colorado initiatives, but we still own a site out at Research Park, which has been... We’ve done four buildings there and we’ve got a pad for a fifth and we give some interest periodically from corporate users on that. So, the Texas markets remain very, very healthy really across the board.

Our next question comes from the line of Anthony Paolone with JPMorgan.

Thanks. Good morning. Just a follow-up on the Atlanta macro commentary, Larry, I think it maybe you talked about specifically there being, I think something like three leases in downtown running around that maybe could land at 191. And also a notable potential corporate relocation to Atlanta, I was just wondering if you can update us on those and kind of either where the leases land and what kind of impact it had on the real estate markets?

Well, you are beginning to on the lease side on 191, we have landed or in process of landing those three leases that I talked about. So, we’ve been successful in securing those, this building just remains a fantastic value for tenants that are open to looking at downtown are already in downtown. And we’ve got some good prospects behind those. In terms of the corporate relocations, I think the one that and specifically we were talking about did pan out and you saw State Farm announce that they were going to move over 1000 jobs to Atlanta that will go in a couple of buildings in the Central Perimeter market. And that’s one of four or five similar size corporate relocations that have been announced in Atlanta in the last 12 months. So, things are definitely picking up and I think the statistics bear that out.

And those leases at 191 that you landed, are those in the leasing stats yet or thery’re just not quite there?

A couple of them are and one of them is yet to hit.

And then in terms of acquisitions, dispositions for the second half of the year, if you hit your land goal and you’ve got these other couple of retail assets out there, it seems like a couple of $100 million on the sale side at least. And then do you think you could be a net acquirer, given your comments about just activity picking up here or do you think you're a net seller in the second half?

Well, I hope we certainly find acquisition opportunities that make great use of those sales proceeds. But as Gregg said in his comments and I do anticipate we’re going to have something in the next couple of weeks in Texas to -- that will be very compelling to announce we’re just, I can’t give any more details on it right now. But we’ll have some more in a couple of weeks. But we do - we’re not going to try to get too queued on market timing. We think that based on our experience at Collierville, that this is a good time to move the [indiscernible] Webb Gin transaction based on the pricing that we saw at Collierville also the buyer interest. And so when the market is right we’re going to move on the sales side and keep the balance sheet strong. And we’re not going to try to obviously get too anxious on the acquisition side. But we do have some things in our gun sights, very specific opportunities for the balance of the year that I hope will be successful and be able to talk to you about shortly.

Is there anything, you think that’s prompting a little bit more deal flow on the potential acquisition side, it seems like you’re seeing more compared to some of your commentary last couple of quarters?

I think we - it varies, some of it's just seasonal, it seems as though the second and third quarter is always stronger in terms of deal flow than the fourth quarter. Anecdotally on a couple of deals we’re seeing, I do think that some private long-term owners of real estate are contemplating sale in some of the markets due to the health of the market and the pricing, but also just uncertainty about what tax policy may be in the next couple of years and how that might affect real estate. So, we do hear that sort of as a secondary discussion in terms of the motivation with some of these private borrowers to come to market right now.

Our next question comes from the line of Brendan Maiorana with Wells Fargo.

Just a follow-up on the capital recycling. Gregg, you highlighted the balance sheet in your prepared remarks and you’ve done a very good job of getting the leverage levels down to levels that I think you view as reasonable. But from a higher level perspective, notwithstanding timing that may happen in the back half of the year as we think about where leverage is today. Is it fair to assume that dispositions will offset net investments or do you think you can outside of selling equity, do you think that you can expand your -- you can be a net acquirer or net investor over the next couple of years.

Brendan, the plan is generally a leveraged neutral plan so on a gross basis, we are going to sell the same number that we buy. Timing obviously can play a role in - as those trades happen, but over the course of our strategic plan implementation call two to three years. We have generally are contemplating a leverage neutral - just slightly a leverage decline improvement favorable over that period of time. Any big jumps you see inter-period will just primarily be timing and we have nowhere in the plan at this time that we have any new equity issuance - common equity issuance.

So, we have got [indiscernible] that come out, there is 25 million of land this year. How much more do you think -- when you look beyond that and we get into next year, you still have some land left and then how much more do you think you have in terms of non-core assets that you’d like to -- proven over time and redeploy into more core stuff in Texas and North Carolina?

Brendan, quite a bit. If you look at our strategy, we’re talking about Class A trophy office assets in the Sunbelt in our specific submarkets. So the answer is quite a bit. In - I want you also -- you guys modeled the balance of the year out -- take a look at Palisades. We are under an obligation to sell that -- our interest in that property, 50% ownership interest in that property. At the option of our tenant there and they have given us every indication they are going to execute that option to purchase it from us. So, we will have an additional sale at the end of this year and it’s reasonably significant.

Yes and that one, I think we talked privately about that, but is it fair to assume that the pricing that your partner there got from your previous partner, I think it was around 345 or 350 a foot, that’s probably a pretty good proxy for what you guys are -- the purchase option that’s likely to occur at the end of the year.

Yes, the way that it works is it's fair market value and so I would think that would be as good as proxy as any on Palisades.

And then Gregg on your $10 million NOI upside of the three main office assets that you have, is that upside from the guidance that you provided in terms of NOI for 2012 or is that from the current Q2 run rate or how should we think about that $10 million of upside.

That’s based upon the upside from the first half of 2012. Take the six month number.

And then I know you kept the guidance for 191 the same. It seems like leasing is maybe a little bit better than what you guys had expected and the -- I think you’re looking for maybe $3.9 million of NOI by the end of the year. It would seem like if some of those tenants that you signed were to take occupancy the number would be higher than that. Is that sort of a fair characterization and does that indicate that maybe those tenants aren’t taking occupancy in the back half of the year, but that’s a ‘13 event.

Most of those tenants will be next - first part of next year, by the time they get their space built out and occupied.

So that’s next year.

Yes.

And then last one for me. I know as we talked about in January you guys have - still I think somewhere around $5 million of G&A that could come out of the run rate. Has there been any of that that’s been achieved in the first half of the year or is that still something that’s more likely to happen over the next couple of years and we haven’t gotten much of that thus far.

The G&A is something that I wouldn’t want to give any specific numbers on G&A, but as we continue to simplify the platform, we are looking for ways to make the G&A more efficient as we go and so it will be something that you will see achieved concurrently with the simplification of the platform and we will play out over the next 12 to 24 months.

Our next question comes from the line of Michael Knott with Green Street Advisors.

Good morning, guys, its Jed Reagan here with Michael. Wondering if you can talk about the tech demand, are you seeing any up-tick in tech demand in your markets and for your specific buildings and if so, where would you say that’s most pronounced these days?

Are you talking about tech demand being the tenants coming from the tech sector?

Yes.

You’ll certainly see it in Austin, very, very strongly. And that’s not 100% of the demand, but as you all know Austin is a very strong market in terms of both the folks that are there and the folks that continue to find it attractive. And therefore our Third and Colorado building, a fair amount of the prospects for that building do come from that sector. As we travel around other parts of the portfolio, in terms of other markets, I think the tech just like in the industry in general is continuing to be a larger and larger part of new tenant demand that a lot of the new businesses I would say are coming from that sector and that’s encouraging. It does provide an opportunity for us from an underwriting standpoint to get our hands around - our heads around those businesses and what make those tick. But you’re seeing particularly on the new business side and some of the rapidly expanding businesses a fair amount of that coming from the various aspects of the tech sector.

Would you say that’s a meaningful component of the demand in Atlanta these days?

Atlanta, I wouldn’t say it’s un-meaningful or meaningful, it’s a growing part. But Atlanta is still most of the tenant demand you see in Atlanta is service based because that’s just what drives the Atlanta economy and particularly our building types. So, law firms and other professional services tied organizations still represent the majority of our tenant mix in Atlanta.

Can you remind me, just in terms of yield expectations for the three major development projects that you’re in various stages on with Emory Point, UNC in Austin, anything you’ve provided on that before just a refresh?

Well we don’t give specific yield expectations, but and they vary depending on product type. So, obviously the apartments will have a lower yield than a retail development will just by the nature of that product type. But we continue to be disciplined in our underwriting and back of the envelope thing is we usually try to conservatively underwrite at a 200 basis point spread in terms of where we think we’re going to get our development margin on. And so if you think the yield and the product types that are seven, then you are trying to develop to minimum of a nine yield and that remains a pretty accurate way to look at the way we look at our development activity.

It’s helpful. And I apologize if you’ve touched on this, but just as far as -- looks like 2Q leasing activity at least there has been a kind of the headline volume numbers that slowed just a little bit in the second quarter. Are you seeing a noticeable slowdown in the market and then how would you characterize tenant decision making these days?

Well, when you -- obviously as we fill up a lot of the portfolio, the gross amount of leasing will decrease and that’s a good thing. But in terms of the tenant demand, we saw tenant demand be pretty strong in the first and second quarter. Usually things do slow down a little in the summer. Anecdotally though I would tell you that we think that some tenants are tapping the breaks and markets just due to really global economic and national economic uncertainty. It’s not as though that folks are hitting the brakes as like they were a few years ago. But it's just folks are seeing to be in a position to where if I don’t have to make a decision this quarter, I might just put it off to next quarter on space, and I think that could be something that we would see and I would think others might see between now and the end of the year just with the amount of uncertainty in the headlines coming across everyday.

That’s helpful. And just last one for Gregg. What would you say the biggest drivers of the 10% cash same-store NOI increase and would you characterize the results from the first half of the year as sort of representative of your expectations for the second half of the year in that regard?

The 10% growth in cash NOIs you can see is reasonably evenly split between retail and office, and lot of it’s driven - it’s driven by both revenues and expenses but it is driven by expense control, I mean we’re working really hard to run these properties smarter, not all expense control by any stretch of the imagination, but some of that is in there. In terms of looking, look forward as much as I would like to provide that guidance really, the guidance that we provide that [indiscernible] specific guidance and so I've given you all I can on that front.

[Operator Instructions] And our next question comes from the line of John Guinee with Stifel Financial.

Gregg, you did a great job sort of walking through potential FFO dilution from the dispositions and then monetizing embedded NOI. The next logical step was just to start giving FFO guidance and also in NAV page, is that coming down the pipe?

We’re not uncomfortable giving FFO guidance, we don’t have an inherent need to run from it, we just need to cleanup our cash flow just a little bit more before I feel like we're going to be confident in providing that guidance. If I’m going to provide it, I want it to be good. And so I think that’s going to come eventually and we’re making good headway to getting there John. On the NAV page, we are absolutely taking a look at providing a template as many of our peers do to help you all generate your NAV. So as we continue to look at that we pulled our peers, we actually looked at it this quarter as a potential inclusion in our supplement, but we just have a little more work to do before we can put something out that I'm comfortable with. But on both those fronts, yes, we’re moving in that direction.

Larry. [Indiscernible] just sold for about $136 a foot, which is at one-time was a very good asset up in the perimeter market, I don’t know if it’s really held that same position. Do you have exposure up in the perimeter market and what’s your thought on that market in general?

John, I don’t track that market as closely as we do the markets that we’re more focused on, but I have certainly with our exposure in that market in terms of Concourse and some other assets. We track and follow it. I think and you also, it looks like we’ll see Concourse probably trade --it's been in the paper that’s under contract in the next quarter or so. So I was not -- that pricing was about what I would have expected for that asset and from what I understand although I don’t know the details of the Concourse pricing, it would be about the -- I would have expected that about the same as well.

And then you had a lot of discussions on just asset by asset, so a quick obvious question is -- depending on how you account the square footage The American Cancer Society, your CMBS debt is about a $140 to $150 a square foot, I think it matures in a few years. What’s the thought process on putting any more money into that building and really trying to make something happen when it would be a real stretch to think that The American Cancer Society building might be worth more than the debt someday?

That’s a very good question. And one that, that we have absolutely been focused on and as we look at folks that might particularly be tenants in that building. We are very, very mindful of what the debt on that building is and making sure that we are being smart from any cash investment that we will get an appropriate return on any new cash deployed in that building, John.

And then Promenade, comparing Promenade and your Austin development, what do you think your on a per foot development cost would be in Austin and what do you think your stabilized basis would be on Promenade just to give people a sense on the relative cost these days?

I would think that the Third and Colorado new building in Austin, you would be at 350ish kind of dollars a square foot and the all-in basis on a Promenade would be in the 220, 230, so - $120, $130 difference.

And then the last question I think this is probably for Gregg, your Mahan Village down in Tallahassee, on one hand, it’s a development deal, which earns a 9% pref and a 16% look back. On the other hand, this wonderful chart you put together here shows that you are recognizing revenues and expenses as if fully owned, can you sort of reconcile what you are doing now in the development process in terms of earning any income on that assets?

Well, there is - John, there is no income yet being recognized at Mahan Village. And when we do, we’ll recognize it for GAAP, and GAAP will have us take a look at it just like we are looking at the original walk-in - Cousins walk-ins joint venture. We’ll run out of forecasted cash flow, and if the look back IRR in the docs, again 16% in the second one, just like 16% in the first one is highly probable. And GAAP would have us recognize 16%, but we are not there yet, and so there is really no - there is nothing running through my income statement on Mahan Village to-date.

So, walk-ins you are earning a 16% look back, but Mahan Village is just the typical development deal?

Yes, until it starts the cash flow.

And our next question is a follow-up question from the line of Jamie Feldman with Bank of America/Merrill Lynch.

Just a quick follow-up, so in terms of the Austin development, can you guys talk a little bit about the competitive landscape there, what are the other buildings that may go up around the same time?

Jamie, we are - we got the best site and we are further along in the sense that we are almost all the way through all of our entitlement process and review process. There are a couple other buildings that have been mentioned that are in the -- what I would call the pre-marketing stage. One of them is in the green water treatment facility, which the City of Austin took out of the mission and are redeveloping that site. That’s a initiative that the Trammell Crow is working with the city on and there are a couple of other buildings, but - and then there are couple of smaller buildings, largely owner occupied that are being currently delivered in that market, but we are further along and we do have a pre-leasing threshold that we want to get to and will get to before we go ahead with that.

Mr. Gellerstedt, there appear to be no further questions at this time. I will turn the call back to you. Please proceed with your closing remarks.

Well, we hope everyone is having a great summer and we appreciate you listening in and appreciate your continued interest in Cousins and we look forward to some - a great back half of the year. Thank you very much.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.