Good day, and welcome to the Cousins Properties’ Fourth Quarter 2013 Conference Call. Today’s call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Tripp Sullivan of Corporate Communications.

Thank you. Certain matters that 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 the expectations regarding leasing activity, rail rates, leasing expense, development, acquisition, financing and disposition opportunities and expectations regarding the demographic and economic trends in markets in which the company is active. 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, 2013 for additional information regarding certain risks and uncertainties. Also, certain items that company may refer to today are considered non-GAAP financial measures within the meaning of Regulation G, as promulgated via 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. Larry?

Good morning everyone and thank you for joining us today. With me this morning are Gregg Adzema, Cousins’ Chief Financial Officer and Colin Connolly, Cousin's Chief Investment Officer. For the past two years, we've been consistent in our strategy to transform Cousins by focusing on simple platform, trophy assets and opportunistic investments. 2013 more of the pivotal year for the company's execution on this vision. I want to acknowledge our team at Cousins, who have performed at a phenomenally high level in making this transformative year a reality. I'm honored to be a part of your team. Let me start with a brief synopsis of our year. Our moment’s notable move, the acquisition of Crescent’s Texas portfolio grew the company's total market cap by 57% overnight, while adding 5.3 million square feet of Class A office assets in Houston and Fort Worth. In the first half of the year, we acquired Post Oak Central and Houstan and 816 Congress in Austin. Our Texas presence now represents approximately 52% of our total portfolio square footage in the three major markets such as Houston, Dallas Fort Worth and Austin. We simplify the platform with a $192.9 million in retail asset sales including the sale of substantially all of our lifestyle and power center assets. Additionally, we broke ground on two well positioned developments in our core markets, Colorado Tower, our trophy office building in Austin and Emory Point Phase 2 an opportunistic mix use development in Atlanta. We announced our new strategic plant in January of 2012. Our equity market cap was $665 million with 46% of NOI coming from urban trophy office buildings. Today, it's $2 billion with 85% of NOI coming from urban trophy office assets. We timed the cycle well during this period acquiring $1.6 billion of trophy assets…

Thanks Larry. Good morning everyone. As Larry mentioned, 2013 was a fantastic and transformative year for Cousins. We repositioned the company through a combination of value add acquisition, several new development starts and dispositions of non-core assets. The net result is a portfolio that overwhelmingly consists of trophy office properties located in the best urban sub-markets of Atlanta, Houston, Austin, Dallas and Charlotte. The strategy behind this is simple. We believe that these type of properties if managed in a first class manner, will outperform over the long-term and generate the best returns for our shareholders. To highlight this in real time, let’s take a deeper look at the buckets of market in Atlanta which is home to our Terminus property. According to CoStar, Class A occupancy in Buckhead is about 85%. However the trophy concept in Buckhead which in our view consists of approximately 6.5 million square feet is 91% leased and significantly outperforming the broader market. There are very similar dynamics at play in our other urban sub markets including Midtown Atlanta, the Houston Galleria, Austin CBD and the Uptown Arts District in Dallas. The best assets in the best sub markets recover the quickest and command the best rents within their respective markets. And most importantly our shareholders, we are beginning to see our strategic focus on trophy urban office properties and our aggressive expansion into Texas translates into real financial results for Cousins. Our team leased over 430,000 square feet of office space during the fourth quarter at economics that continue to trend in a positive direction. Moreover, the re-leasing spread on a cash basis during the fourth quarter was 11% to the positive. The primary driver of this growth is our Texas portfolio. When we purchased 2100 Ross, 816 Congress, Post Oak Central and the…

Thank you, Colin. Good morning everyone. As I mentioned in the last quarter’s call, we expected fourth quarter earnings to accelerate, and they did not disappoint. FFO for the quarter was $0.18 per share, up almost 30% over the fourth quarter of last year. Excluding the gain on a recent sale of the third party business, this was our highest quarterly FFO per share number since 2008. It was also a clean quarter, there were no special or unusual items pushing FFO either up or down. We expect this to be the beginning of a constructive trend. Going forward, the simplicity and quality of our earnings should increase with the much larger percentage coming from property level NOI rather than fee income land profits and the like. And as such, it should be easier for you to understand, to forecast and to value. When all set and done, we expect the fourth quarter of 2013 will mark an important point in time for Cousins. It will be the beginning of a period during which we expect to generate more simple and predictable, high quality earnings. And high quality doesn’t stop with just earnings; we also have a higher quality balance sheet. I’d like to take a moment to quickly review the progress we made with our balance sheet over the past five years. It’s fairly dramatic. In the first quarter of 2009, our debt to total market cap was 70%, today it’s 29.5%. Adding in preferred equity was 80% in the first quarter of 2009, today it’s 32.8%. Our debt to EBITDA ratio in the first quarter of ‘09 was 14.9; in the fourth quarter of this tax year it was 4.7, these are significant improvements. And relative to our office peers, these are best in class ratios. The most…

Thank you. (Operator Instructions). And our first question comes from the line of Jamie Feldman with Bank of America Merrill Lynch. Please proceed with your question.

Great, thank you. Congratulations on the quarter. Can you guys talk a little bit more about what are you seeing in Downtown, Atlanta? I know from broker contacts, we have been hearing the Midtown and Central Perimeter are doing pretty well, but it sounds like you certainly see some more signs of life Downtown, you also have some leasing at 191, P Oak, I guess you love full occupancy at 191 Peachtree. But just generally what that bring in that bring in that market and how should we think about going forward?

Good morning, Jamie. As you alluded to in your question, what we have seen in Atlanta is significant tightening in the Central parameter, significant tightening in Buckhead, which bodes well for both Midtown and Downtown. We in the last two quarters have begun to see that demand in terms of prospects looking at both submarkets. And we, the tightening will happen in first in Midtown, but the amount of activity we are seeing in Downtown has also increased significantly. And I want to remind folks on the call as we said before there is about $2.5 billion of investment and new development investment going on in Downtown Atlanta which surpasses the amount of investment that one runs in 1996 Olympics. So that includes new Falcon Stadium, a streetcar that opens in May of this year, new College Football Hall of Fame which opens in August, National Center for Civil and Human Rights which opens in June, as well as significant expansion from Georgia Tax and Georgia State. So Downtown in addition to that, you have got Coca Cola which are moving 2,000 are paying IT jobs County to down town this year. So we are beginning to see the benefits of that in down town, but we’re also seeing an increase demand in Midtown, which is lacked a little bit of behind, thus far and obviously we've been the beneficiary of that it prominent.

Great thank. And then I guess the follow-up. In your comments you had mentioned your submarkets are not seeing a lot of new supply, but can you talk a little bit more granular about Houston, we are seeing (inaudible) to pick there and just how we should be thinking about your portfolio positioning versus maybe the submarkets that are seeing new supply?

Yes Jaime, I’ll kick it off and then I’ll let Colin add some color to that. But in the Galleria submarket which is about $18 million fee, you’ve had two buildings the way we’re in the last year they total a little bit over 600,000 fee and there both being delivered with significant occupancy in place, I think it’s closed about 90%. So that's the first two building we’ve been added in 30 years in that submarket and obviously it is absorbed that supply easily. The other thing just happen across all of our submarkets which I alluded to in my speech, is a lot of the office sites and all of our markets have been taken up the multi-family expansion, which is great for office owners on two fronts; one it takes out competitive sites and two it just adds to the quality of life that folks are looking forward with the urban experience. So we think there is only two or three sites left in the Galleria market and a couple of other sites are taking about build the suites which are slightly to happen in the next year. Greenway has not seen any new supply. We understand that there may be one building that is starting some site work. And I will let Colin add anything that I have missed in those comments.

Sure Jamie we are certainly very mindful of the new development discussion in Houston and track it very closely throughout all the sub markets. So really you look at it on a macro at Houston depending on whose numbers you use are anywhere from 13 million to 14 million square feet under construction. But it’s approximately 70% to 75% pre-leased. And a vast majority of that activity is either in the Woodlands which is really being driven by Exxon’s massive consolidation, national consolidation into that sub market as well as adding the energy corridor. But it is really focused on the urban sub markets being the Galleria, Greenway and Downtown which is where we are most focused on. There is a lot of talk of new development. We haven’t really seen a lot of action at this point and a large part of that is driven by what Larry alluded to it’s hard to find suitable sites within those markets. And so we are again very mindful of it. We think that there is a couple of sites that overtime could be developed in the Galleria. There is a couple of sites outside of our Greenway positive footprint where we think a couple of people might build. But again on a relative basis, the scale of those markets we don’t see a meaningful impact at this time.

Okay. And you had mentioned Downtown, is that really a core sub market for you guys?

It is a market that we continue to look at. I think long-term we’d certainly like to find an entry point there. I don’t think that that’s something in the near-term that we’ll pursue I think given the cost of where we see existing assets trading well above replacement cost. I don’t see that on the near-term for us but it’s certainly a market we want to continue to be educated on.

And Jamie I just would add one thing to what Colin said just we don’t want to show too much of our cards on this call, but obviously these markets that are tight and have few development sites and so obviously a focus of us in saying is that make sense for us to get in and get one of those sites to be a developer of new product, which is certainly a skillset that we have.

Okay, great. Thank you.

Thanks Jaime.

And our next question comes from the line of Dave Rodgers with Robert W. Baird. Please proceed with your question.

Yes, good morning. Maybe Colin or Larry just start with you guys. Talk a little bit more about Austin if you would and the development lease up there, you said you got two leases that you're further along in negotiations, obviously that given us too much. Could you give us a little color maybe on the sizing range of some of those tenants but maybe just more broadly on, are you seeing the in migration that that building was really predicated upon and how do you feel about it?

Let me talk about the overall market and I'll let Colin give you a little color on the specifics of the new leasing that we're seeing. The overall market dynamics as I alluded to in my speech it remains strong. The thing that I'm particularly encouraged about and it wasn’t like things we have really spent a lot of time thinking about before, we started Colorado Tower was some of the in migrations, the lack of in migrations to the Downtown market driven by lack of supply, due to tight vacancy or was it driven by other factors in terms of what's often losing some of that capability. And the comfort level, it was certainly seen in the last year and just in a extremely significant way in the last few quarters. As if you start to look at the leasing that I'm confident that we'll begin announcing in the next six months, a large percentage of it is in migration, either in migration from other sub-markets and often or in migration from other markets around the country. And that's really what always has driven Austin. So that early leasing that we did because you’re talking about small, generally small tenants in the Austin CBD and the fact that we had not started was primarily tenants moving from one builder to another into CBD and us capturing our share of that. But you’re really now beginning to see the migration that we all count on in Austin taken place. Colin, you might give little more color on the specifics.

Sure. In general, I’d say the average square foot of the leasing that we’re working on, let’s say plus or minus 25,000 square feet, we see some two-fold floor type deals, we’re looking on some half floor type transactions, but in general I would as Larry said, a big chunk of that is in migration. One of the themes that we were focused as we started the project is a little bit of the slide from California to Texas. And we’re certainly starting to see that play out of the 320,000 square feet of net absorption as I said is floating in the market. There is a big chunk of it that is exactly that California to Austin, as you’d imagine a lot of that is technology driven. The other thing that we’re actually -- have been very interested to see is some of the energy companies who might have been in smaller markets in Texas or Oklahoma looking for a larger market that is very attracted to their employee base and we’re starting to see some of that in migration as well.

Great. Maybe second question, with regard to the lease expiration schedule just looking that you’ve got three tenants I think that expire within the next two years. You’ve talked a little bit about in the past. I wonder if you have any update; you mentioned Transocean earlier but they have the remaining space, Exxon is expected a leap but the timing is unclear. Do you have any update on the timing there on those net assets, any clarity on kind of the remaining states there?

Sure. Over the next two years, we don’t have a significant number of material lease expirations. I guess I’d characterize that as in anything over 50,000 square feet. As we look forward into 2014, Firethorn, which is a two-floor tenant at Terminus has an August of 2014 expiration. We believe that they will be leaving that space but we’re actively in the lease negotiations to backfill about 25,000 square feet of it. Some of the other expirations that you will see in 2014, were either close to or have signed extensions to those [Coast Roads] which is a large of law firm in Greenway Plaza. In 2015, as you mentioned, Exxon does have their 300,000 square foot expiration in February of ‘15. That being said, they do have two to six month renewal rights and we will start to get some visibility on whether they are going to trigger those extensions sometime in the middle of the year. One other large expiration in Atlanta is net assets at North Point that’s about 120,000 square feet that expires in June 2015 and we’re actively in those renewal discussions today.

Great. Gregg, last question for you, the term fee that the Colin mentioned for Transocean, was that in the fourth quarter or will that be in the second quarter? And if it’s in the second quarter, is that embedded in your fee income guidance?

Yes. So, fee income in the fourth quarter of this year was about $800,000, about 600 of that was portion of the Transocean term fee. We have to amortize their entire term fee over the -- from period of time they gave us notice to the period of time that they actually vacate, so they gave us notice at the beginning of the fourth quarter. They vacate in mid 2014, so we recognized about our third of bit in the fourth quarter and we will recognize the balance as the year progresses.

Thank you.

And our next question comes from the line of John Guinee with Stifel. Please proceed with your question.

Great, thank you very much. Larry, you talk a lot about replacement cost, buying at a discount to replacement cost et cetera. And back of the envelope, it looks like Colorado Tower is going to cost you about 340 square foot, can you give us a rundown on what you think replacement cost is in the better business districts where you are doing business Greenway Plaza, Galleria, Arts District, the various submarkets in Atlanta even Birmingham?

John, they vary a little bit market to market, because there is some differentiation just in terms of land prices and construction cost as well as tenant improvement cost from market to market. But I would say back of the envelope is Colorado Tower is a pretty good measure of what new construction is going to be. So 350 to 400 on the upper side would be a good benchmark to use. So in most of our markets that translate back to be able to do new development you need net rents and high 20s to low 30s, to be able to make the numbers work. As you know, we generally underwrite to trying to get a 150 to 200 basis points spread over what we think is a conservative sort of 10 year cap rate. So that's the way we generally look at it. It varies a little bit market to market, but not a whole lot.

And if you kind of cover backwards the two major components are base building and then land, can you just give us a number and if not, we can talk offline, in terms of land for available square foot in some of these markets for example Galleria and Greenway where residential makes a lot of sense, may have a different land basis than some of the other markets, is there a sense for the difference or the disparity in the land cost per available foot?

Well, there is a little bit just because as you would imagine of a market where like the Galleria and Houston or Downtown Austin where there is a little bit more active supply coming on, on the multifamily side and little bit on the office side, they get a little bit higher. But generally you are looking on an SAR basis I would say low to high, you are going to be in the $25 to $30 square foot range for land in the other markets, and some of the tighter markets you may get up in the $40 square foot range, that type of variation.

Okay. And then just a little clean up question, what’s going on in Charlotte with the big gateway, the joint venture you have with the Bank of America?

Sure. John, it’s Colin. As you’ll recall that property in Charlotte is about 1 million square feet; it’s effectively 100% -- it is 100% leased to Bank of America. That has term through December of 2016 and also has a -- and the maturity on the loan at December of 2016. We continue to have conversations with Bank of America about that and their long-term plans. I think at this point, they don’t have the clarity to make any long-term decisions. That being said, they certainly identify this asset as mission critical to them. But I think that will be a conservation that will continue to unfold over the next 12 months to 18 months.

Great. Thank you very much.

Thanks John.

(Operator Instructions). We'll go to Brendan Maiorana with Wells Fargo. Please proceed with your question.

Thanks, good morning. Gregg, if I did the math correctly on the NOI progression by the lease up assets, it sounds like by the end of the year, I guess that $6.5 million of kind of signed, but not yet cash flow either recognized NOI should be in place, is that correct? And then at Post Oak, the jump in NOI seems pretty significant. How much of that is attributable to the change in structure of the Apache lease versus I think you mentioned that you expected a little bit more lease up as that asset progresses as well?

So, I'll answer the first question which is of the $6.5 million that's which is the delta between the $10 million and the leases that we have signed in the 3.5 of revenues that we've actually captured up that $10 million. You're correct, the vast majority of that will come through in the balance of ‘14, but not all of it. We have a couple of leases; one in particular at Promenade that has kind of a staggered move in and you'll see some move in ‘15 and ‘16. So, I'm just going to around for you Brendan, but I'd say 90% to 95% of that should roll in by the end of ‘14. And then in terms of Post Oak Central, we typically don't get that granular in terms of breaking it down, but those are the two primary drivers. The Apache driver is larger than occupancy driver at Post Oak in 2014. That's a big lease and that’s a big number.

Is there change in the Apache lease? Does that give us -- is anything related to their expiration and what they may do and I forgot if that was 17 or 18 I can’t remember exactly when that expiration was, but is there change in least, give us any indication of what they may do upon expiration of their term?

The lease expires in ‘18 and no it doesn’t that was cooked in there already. We have got no fresh information from Apache on their intentions.

Okay, great. So, if I just do the math it sounds like your annual NOI is probably have somewhere between $10 million and $12 million run rate by the end of the year just from kind of the Post Oak and the big assets in terms of lease up, I guess is that we should think about it?

Yes. If you sum up everything you get to a number right around there.

Okay, great. And then I am not sure if this is for Colin or maybe Larry, but the lease spread in the quarter were very high on both the cash and a GAAP basis, year-to-date they were modestly negative on cash basis, but still pretty healthy on a GAAP basis. So, I think Colin you mentioned in your remarks that you felt like the Texas assets coming into the portfolio over the past couple of quarters, really helps your mark-to-market on a cash basis. So I guess the question is what you did in the quarter kind of more indicative of how you see the portfolio and the trends going forward or do you think that kind of year-to-date number that posted in terms of rent spread is more likely as we look out over the next year or two?

Hey Brendan, it’s a good question. And again, we don’t provide forward guidance on our releasing spreads. I guess I would take a look back in terms of my comments, my prepared comments where we said that at the time of acquisition the Texas assets we disclosed those properties anywhere from 15% to 20% below market and those obviously comprise a pretty significant chunk of our large portfolio today. So as you said, that’s ultimately what’s driving those spreads.

So I guess maybe just asking in a little bit of different way, is the fourth quarter -- was there anything unusual in the fourth quarter or is maybe that more and more represented a look of your portfolio as it stands today then thinking where you were first couple of quarters of the year?

It’s Gregg, Brendon. There was nothing unusual in the fourth quarter in terms of new leases that were signed that would drive that number up or down. But again, we don’t get so granular as to provide guidance on this going forward.

Yes, no fair enough, okay, thanks guys.

Thanks Brendon.

And our final question comes from the line of Michael Knott with Green Street Advisors. Please proceed with your question.

Hey, good morning guys. It’s Jed Reagan for Michael. So I am not sure if I missed it early, but maybe if you could just talk specifically about the renewal prospect to Transocean just given the recent contraction of your outlook for that has changed at all?

Not early, as Colin said, they been there since late 1980s and this was space that they added immediately after the disaster in the Gulf. And so the space was occupied by their lawyers, we just care to think how many lawyers those repossess, but that was occupied by lawyers working through all the claims. And so it never really was core Transocean space. So we were not surprised by the early termination, we could certainly see it as the space just become underutilized for them. But it really is not connected in any way in terms of the core corporate Transocean options. And so we feel good about our chances in terms of when that lease roles and this was really after that was more of a one-time event there.

Okay thanks. And you talked a little bit earlier about the Houston supply picture, can you talk a little bit about the demand picture there, maybe how tenant demands has changed versus maybe three months ago? And can you talk a little kind of on top of that about just a magnitude of market rent increases you are seeing in the submarket there?

Sure. [John] it’s Colin, Again from the demand perspective in the sense we talked last quarter, really remains unchanged and it’s and we would characterize it is very strong, across the submarkets that we’re active and across the market as a whole. What was the second piece of your question?

Just sort of a magnitude of rent increases, you have seen or expect to see in your market in Houston?

It’s very good and a large part of what drives those increases yet is what was the effectively the retiring lease term. In terms of the tenants who had -- who we’re kind of rolling off a 10 year lease term has obviously been when very, very dramatic increases to those rents. So you could in find different buildings in our submarkets where some of these rolls-up can be north to $10 square foot.

Okay great. And what would you consider to be non-core in your portfolio at this point?

The (inaudible) list is getting pretty small, but we certainly look at the Watkins portfolio that has the grocery anchored, a public center is something that is non-core and we may look to monetize that over the next year, year and a half. We also, if you note in our supplement we move Birmingham to held for sale and we will be marketing those assets in the next few quarters. So, those will be the two things that would come, we certainly continue to have some land that’s non-core that we continue to look to move off the balance sheet. And as I said in my remarks, imagine that we’ll as we move some of that land off and just would general moving more into development cycle we probably add some strategic land hold positions in some of these core submarkets as we alluded to. So those would be the main thing.

Thanks.

Hey guys, it’s Michael. Gregg quick question for you now that the business is much simpler just curious I can thought about the decision to continue giving guidance where you guys have as opposed to just give me more conventional FFO per share guidance.

Yes it’s something that we think about a lot Michael and it’s something that we’ll consider as the year progresses.

And then also just curious as well looks like your operating expenses have been growing at a pretty healthy rate in the same-store pool, it’s interesting to compare that to Highwood that were about flat just curious what’s driving those numbers there?

Well our operating expenses during this past quarter grew at 5%, but if you go back and look at kind of an eight quarter average, they grew up less than 1% on average over the previous eight quarters. So expenses can be lumpy and sometimes it’s driven by property taxes and sometimes it’s driven by one-time events. But I think if you broaden your horizon a little bit beyond just one or two quarters, you'd see that we've actually had a pretty good track record of keeping expenses under control.

Okay. And then I appreciate the new disclosure on releasing spreads and showing on an after CapEx basis. Just curious how that 11% -- you would think that if your, some of your rents are 15% to 20% below market and I presume those comments were on a gross rent basis not sort of a net effective. You might think that the 11% might have actually been a little higher. Do you have similar rents that are in the rolling that are even more below market than what we saw in the fourth quarter?

Michael, it's Colin, just to clarify. That [threat] is on a net rent basis that are not under the net effective rent basis. And again, I think at 11% we feel like I got the very healthy spread and as I refer Q1 earlier with the addition of the Texas portfolio, I think that's where you’re really starting to see kind of drive that through as we added Greenway in the fourth quarter and Post Oak in the second?

Okay. And then just last one from me just to touch back on the Austin CBD development, is you’re your progress so far consistent with what you had underwritten or where do you stand on that versus what you thought?

Yes, like I said in our -- I know I said in an earlier call, we underwrote it to be 50% leased at the time that we open which is the end of this year and we feel very good about where we stand relative to that. And then we always underwrite to have a couple of years to lease up until we get to full stabilization. So, we're very, very pleased with where we are with Colorado Tower and continue to be confident about it.

Okay, guys. Thanks a lot.

Thanks Michael.

We have no further questions at this time. Mr. Gellerstedt, I’ll turn the call back to you.

We appreciate everybody’s continued interest in Cousins. We look forward to seeing lot of you all in Houston next week. And we’ll wrap it up with that. Thanks.

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.