EX-99.1 2 g14503exv99w1.htm EX-99.1 DUKE REALTY CORPORATION PRESS RELEASE DATED JULY 30, 2008 EX-99.1 DUKE REALTY CORPORATION PRESS RELEASE
Exhibit 99.1
     
(DUKE LOGO)
 
News Release
 
    
Investor Relations Contacts:
Shona L. Bedwell
317.808.6169
shona.bedwell@dukerealty.com
  News Media Contact:
Joel Reuter
317.808.6137
joel.reuter@dukerealty.com
Randy A. Henry
317.808.6060
randy.henry@dukerealty.com
 
Duke Realty Corporation Announces Second Quarter Earnings
 
Common Stock Dividend Increase Announced
 
Lynn Thurber Elected to the Board of Directors
     (Indianapolis, Indiana — July 30, 2008) — Duke Realty Corporation (NYSE: DRE) reported today results for the second quarter 2008. Funds from Operations available to common shareholders (diluted) (“FFO”) was $0.60 per share for the second quarter of 2008 compared to $0.63 per share for the same quarter of 2007. The decrease is primarily attributable to the timing of recognition of gains on build-for-sale dispositions and other transactions of a non-recurring nature. Net income available for common shareholders (diluted) (“EPS”) was $0.12 per share for the second quarter of 2008, compared to $0.27 for the same quarter in 2007. In addition to the variances noted above, the majority of the remaining decrease in EPS is attributable to reduced held-for-rental property sale gains in 2008 compared to 2007.
     Duke also announced today that its Board of Directors increased its quarterly common stock dividend to $0.485 per share, payable on August 29, 2008 to shareholders of record on August 14, 2008. Equal to $1.94 per share on an annualized basis, the new dividend provides a 1.0 percent increase over the previous amount and represents the fifteenth consecutive annual increase since the Company’s October 1993 public offering.
- more -

 

 

     Denny Oklak, Chairman and Chief Executive Officer, commenting on Duke’s second quarter performance, stated:
“Even though the economic environment is challenging, our stabilized in-service portfolio increased to 93.1 percent leased and we were able to improve our overall portfolio occupancy by 1.2 percent to 87.2 percent during the quarter. We are also pleased with our fifteenth consecutive annual dividend increase.”
Looking forward for the remainder of 2008, Mr. Oklak stated,
“Our 2008 annual guidance for FFO per share is $2.60 to $2.90. Based on our current expectations of economic conditions for the remainder of the year, we anticipate that FFO per share will be at the lower end of our guidance.”
     The Company also announced the election of Ms. Lynn C. Thurber to its Board of Directors, effective immediately. Ms. Thurber is the non-Executive Chairman of LaSalle Investment Management, a global real estate money management firm investing in private real estate as well as publicly-traded real estate companies on behalf of institutional and individual investors, which is a part of Jones Lang LaSalle Inc. Prior to becoming Chairman, Ms. Thurber was the Chief Executive Officer of LaSalle Investment Management from March 2000 to December 2006 and Co-President from December 1994 to March 2000. Ms. Thurber holds an A.B. degree from Wellesley College and an M.B.A. from Harvard Business School.
“We are extremely pleased to have Lynn Thurber join our Board of Directors,” Mr. Oklak said. “Lynn has outstanding experience in the real estate industry through her tenure at LaSalle Investment Management, ABKB Realty Advisors and Morgan Stanley. Her expertise in the fund management business and international investment experience will be of great value as we execute on our strategic plan.”
     The Board also declared today the following dividends on the Company’s outstanding preferred stock:
                     
    NYSE   Quarterly        
Class   Symbol   Amount/Share   Record Date   Payment Date
Series J
  DREPRJ   $ .414063     August 15, 2008   August 29, 2008
 
                    
Series K
  DREPRK   $ .406250     August 15, 2008   August 29, 2008
 
                    
Series L
  DREPRL   $ .412500     August 15, 2008   August 29, 2008
 
                    
Series M
  DREPRM   $ .434375     September 16, 2008   September 30, 2008
 
                    
Series N
  DREPRN   $ .453125     September 16, 2008   September 30, 2008
 
                    
Series O
  DREPRO   $ .523438     September 16, 2008   September 30, 2008
-more-

 

 

Second Quarter Operating Statistics
  •   At the end of the second quarter, the Company’s 673 stabilized in-service properties, totaling 109.2 million square feet, were 93.1 percent leased compared to 92.9 percent at March 31, 2008.
  •   The Company’s value creation pipeline totaled $1.7 billion, including $377 million of developments with an expected stabilized return of 8.9 percent that Duke plans to own indefinitely after completion; $1.3 billion of developments with an expected stabilized return of 8.2 percent that the Company plans to sell within approximately one year of completion; and a $106 million backlog of third-party construction contracts with an average overall profit margin of 16.1 percent.
  •   In addition to its 673 stabilized in-service properties, the Company owns 32 recently completed development properties, with a total 9.7 million square feet, that are 34.1 percent leased. The company owns 18 properties under development, with a total of 3.1 million square feet, that are 42.4 percent pre-leased.
  •   The Company renewed 76 percent of all leases expiring in the second quarter, for a total of 1.8 million square feet, with average net effective rent increases of 3.4 percent.
  •   Same property net operating income increased 2.2 percent for the three months ended June 30, 2008.
  •   Property sales in the second quarter totaled $102.4 million, at an average stabilized capitalization rate of 7.1 percent.
  •   The Company completed acquisitions of properties totaling $7.4 million, with an overall stabilized yield of 7.6 percent.
     When used in this press release, the word “believes,” “expects,” “estimates” and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially. In particular, among the factors that could cause actual results to differ materially are continued qualification as a real estate investment trust, general business and economic conditions, competition, increases in real estate construction costs, interest rates, accessibility of debt and equity capital markets and other risks inherent in the real estate business including tenant defaults, potential liability relating to environmental matters and liquidity of real estate investments. Readers are advised to refer to Duke’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on February 29, 2008 for additional information concerning these risks.
- more -

 

 

About Duke Realty Corporation
     Duke Realty Corporation specializes in the ownership, construction, development, leasing and management of office, industrial, medical office and retail real estate. It is the largest publicly traded, vertically integrated office/industrial real estate company in the United States. The company owns, manages or has under development more than 131 million rentable square feet in 24 major U.S. cities. Duke, which controls over 7,400 acres of land for more than 110 million square feet of future development, also provides nationwide real estate solutions through its national development division.
     A copy of the Company’s supplemental information fact book will be available after 6:00 p.m. EDT today in the Investor Relations section of the Company’s web site at www.dukerealty.com. Duke is also hosting a conference call on Thursday, July 31 at 3:00 p.m. New York time to discuss its second quarter operating results. All investors are invited to listen to this call, which can be accessed through the Investor Relations section of the Company’s web site.
- more -

 

 

Financial Highlights
(in thousands, except per share data)
                                 
    Three Months Ended   Six Months Ended
    June 30,   June 30,
Operating Results   2008   2007   2008   2007
     
 
                                
Revenues from continuing operations
   $ 242,232     $ 222,719     $ 479,131     $ 446,120  
Earnings from rental operations
     21,945       26,734       41,223       51,476  
Earnings from service operations
     10,390       12,018       14,803       18,952  
Net income available for common shareholders — Basic
     17,797       37,076       21,845       105,639  
Net income available for common shareholders — Diluted
     18,751       39,694       23,019       113,167  
Funds from operations available for common shareholders — Basic
     88,094       87,282       172,736       173,609  
Funds from operations available for common shareholders — Diluted
     92,710       93,479       181,898       185,979  
 
                                
Per Share:
                                
Funds from operations available for common shareholders — Basic
   $ 0.60     $ 0.64     $ 1.18     $ 1.27  
Funds from operations available for common shareholders — Diluted
   $ 0.60     $ 0.63     $ 1.17     $ 1.26  
Net income available for common shareholders — Basic
   $ 0.12     $ 0.27     $ 0.15     $ 0.77  
Net income available for common shareholders — Diluted
   $ 0.12     $ 0.27     $ 0.15     $ 0.76  
Dividend payout ratio of funds from operations
     80.8 %     76.2 %     82.5 %     75.8 %
Weighted average shares outstanding
                                
Basic — Net income and Funds From Operations
     146,741       136,921       146,536       136,873  
Diluted- Net income and Funds From Operations
     155,064       148,129       154,894       148,170  
                 
    June 30,   December 31
Balance Sheet Data   2008   2007
 
 
                
Net real estate investments
   $ 6,237,870     $ 6,101,332  
Total assets
     7,833,069       7,661,981  
Total debt
     4,346,822       4,316,460  
Shareholders’ equity
     2,935,021       2,750,033  
Common shares outstanding at end of period
     146,869       146,175  
- more -

 

 

Reconciliation of Net Income to Funds From Operations
(in thousands, except per share data)
                                                 
                    Three Months Ended                  
                    June 30,                  
    (Unaudited)  
    2008     2007  
            Wtd.                     Wtd.        
            Avg.     Per             Avg.     Per  
    Amount     Shares     Share     Amount     Shares     Share  
         
Net Income Available for Common Shares
   $ 17,797       146,741     $ 0.12     $ 37,076       136,921     $ 0.27  
Add back:
                                                
Minority interest in earnings of unitholders
     954       7,684               2,618       9,782          
Other common stock equivalents
             639                       1,426          
                         
Diluted Net Income Available for Common Shares
   $ 18,751       155,064     $ 0.12     $ 39,694       148,129     $ 0.27  
         
Reconciliation to Funds From Operations (“FFO”)
                                                
Net Income Available for Common Shares
   $ 17,797       146,741     $ 0.12     $ 37,076       136,921     $ 0.27  
Adjustments:
                                                
Depreciation and Amortization
     76,575                       68,407                  
Company Share of Joint Venture Depreciation and amortization
     7,391                       5,610                  
Earnings from depreciable property sales-wholly owned
     (9,531 )                     (20,361 )                
Earnings from depreciable property sales-JV
     (476 )                     129                  
Minority interest share of adjustments
     (3,662 )                     (3,579 )                
                         
Basic Funds From Operations
     88,094       146,741     $ 0.60       87,282       136,921     $ 0.64  
Minority interest in earnings of unitholders
     954       7,684               2,618       9,782          
Minority interest share of adjustments
     3,662                       3,579                  
Other common stock equivalents
             639                       1,426          
                         
Diluted Funds From Operations
   $ 92,710       155,064     $ 0.60     $ 93,479       148,129     $ 0.63  
         
- more -

 

 

                                                 
                    Six Months Ended                  
                    June 30,                  
    (Unaudited)  
    2008     2007  
            Wtd.                     Wtd.        
            Avg.     Per             Avg.     Per  
    Amount     Shares     Share     Amount     Shares     Share  
         
Net Income Available for Common Shares
   $ 21,845       146,536     $ 0.15     $ 105,639       136,873     $ 0.77  
Add back:
                                                
Minority interest in earnings of unitholders
     1,174       7,771               7,528       9,755          
Other common stock equivalents
             587                       1,542          
                         
Diluted Net Income Available for Common Shares
   $ 23,019       154,894     $ 0.15     $ 113,167       148,170     $ 0.76  
         
Reconciliation to Funds From Operations (“FFO”)
                                                
Net Income Available for Common Shares
   $ 21,845       146,536     $ 0.15     $ 105,639       136,873     $ 0.77  
Adjustments:
                                                
Depreciation and Amortization
     155,696                       136,146                  
Company Share of Joint Venture Depreciation and amortization
     14,319                       10,578                  
Earnings from depreciable property sales-wholly owned
     (10,641 )                     (72,081 )                
Earnings from depreciable property sales-share of joint venture
     (495 )                     (1,831 )                
Minority interest share of adjustments
     (7,988 )                     (4,842 )                
                         
Basic Funds From Operations
     172,736       146,536     $ 1.18       173,609       136,873     $ 1.27  
Minority interest in earnings of unitholders
     1,174       7,771               7,528       9,755          
Minority interest share of adjustments
     7,988                       4,842                  
Other common stock equivalents
             587                       1,542          
                         
Diluted Funds From Operations
   $ 181,898       154,894     $ 1.17     $ 185,979       148,170     $ 1.26  
         
- more -