8-K

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 5, 2003

DUKE REALTY LIMITED PARTNERSHIP
(Exact name of registrant specified in its charter)

Indiana	0-20625	35-1898425
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
600 East 96th Street Suite 100 Indianapolis, IN 46240 (Address of principal executive offices, zip code)

Registrant's telephone number, including area code: (317) 808-6000

Item 5.    Other Events

RISK FACTORS

        As required of all public companies, Duke Realty Limited Partnership files periodic reports with the Securities and Exchange Commission. In addition, we from time to time issue press releases and other oral or written information. These documents and statements may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We make such forward-looking statements based on our expectations at the time we make the statements, and all such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to materially differ from our expectations. For this reason, investors and potential investors should exercise caution in interpreting such forward-looking statements.

        In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we are identifying and discussing in this report certain business risks and other important factors that could cause our actual results to differ materially from our expectations expressed in forward-looking statements made by us or on our behalf.

We are dependent on Duke Realty Corporation continuing to qualify as a real estate investment trust.

        We are the operating partnership through which Duke Realty Corporation ("Duke") holds its real estate assets and conducts all of its operations. Consequently, we must rely on Duke, as our general partner, to manage our affairs and business. Currently, Duke elects to be taxed as a real estate investment trust (a "REIT") under the Internal Revenue Code of 1986, as amended (the "Code"). Duke's qualification as a REIT provides significant tax advantages to us. If Duke were to cease to qualify as a REIT we would lose these tax benefits, which could adversely affect our ability to fund our continuing operations and service our debt. Duke intends to continue to operate so as to qualify as a REIT, however in order to do so it must satisfy numerous requirements established under highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. Satisfaction of these requirements also depends on various factual circumstances not entirely within Duke's or our control. Even a technical or inadvertent mistake could jeopardize Duke's REIT status. Although we believe that Duke can continue to operate so as to qualify as a REIT, we cannot offer any assurance that it can continue to do so or that legislation, new regulations, administrative interpretations or court decisions will not significantly change the qualification requirements or the Federal income tax consequences of qualification. If Duke were to fail to qualify as a REIT in any taxable year, it would have the following effects:

•

Duke would not be allowed a deduction for distributions to shareholders and would be subject to Federal income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate rates;



•

unless Duke were entitled to relief under certain statutory provisions, it would be disqualified from treatment as a REIT for the four taxable years following the year during which it lost its qualification; and



•

Duke's and our net earnings available for investment, distribution to shareholders, or service of debt would decrease due to the additional tax liability for the year or years involved.

        As such, any failure of Duke to qualify as a REIT would likely have a significant adverse effect on the value of our securities.

Conflicts of interests may arise in the course of our business.

        Holders of our units may suffer adverse tax consequences upon a sale or refinancing of any of our properties. Therefore, these holders, including certain of Duke's officers and directors, may have

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interests that conflict with those of Duke's shareholders regarding the appropriate timing and pricing of such sales or refinancings. Duke, as our general partner, has exclusive authority with respect to the terms of sale or refinancing for any individual property, however, members of Duke's management or board who hold our units may influence Duke not to sell or refinance certain properties even though such action might otherwise be in our best interests. There can be no assurance that Duke's and our policies will be successful in eliminating all influence of such conflicts.

Our net earnings available for investment could decrease as a result of factors outside of our control.

        Our business is subject to the risks incident to the ownership and operation of commercial real estate, many of which involve circumstances not within our control. Such risks include the following:

•

downturns in the national economy, or in regions or localities where our properties are located, generally will negatively impact the demand for rental space and rental rates;



•

competition for tenants;



•

changes in market rental rates;



•

oversupply or reduced demand for space in the areas where our properties are located;



•

delay or inability to collect rent from tenants who are bankrupt, insolvent or otherwise unwilling or unable to pay;



•

difficulty in leasing or re-leasing space quickly or on favorable terms;



•

costs associated with periodically renovating, repairing and reletting rental space;



•

our ability to provide adequate maintenance and insurance;



•

our ability to control variable operating costs;



•

changes in government regulations;



•

changes in interest rate levels;



•

the availability of financing; and



•

potential liability under, and changes in, environmental, zoning, tax and other laws.

        Further, a significant portion of our costs, such as real estate taxes, insurance and maintenance costs and our debt service payments, are generally not reduced when circumstances cause a decrease in cash flow from our properties.

Our real estate development activities are subject to risks particular to development.

        We intend to continue to pursue development activities as opportunities arise. These development activities generally require various government and other approvals. We may not receive the necessary approvals. We are subject to the risks associated with development activities. These risks include:

•

unsuccessful development opportunities could result in direct expenses to us;



•

construction costs of a project may exceed original estimates, possibly making the project less profitable than originally estimated, or possibly unprofitable;



•

the time required to complete the construction of a project or to lease up the completed project may be greater than originally anticipated, thereby adversely affecting our cash flow and liquidity;



•

occupancy rates and rents of a completed project may not be sufficient to make the project profitable; and

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•

the unavailability of favorable sources to fund our development activities.

We may be unsuccessful in operating completed real estate projects.

        We face the risk that the real estate projects we develop or acquire will not perform in accordance with our expectations. This risk exists because of factors such as the following:

•

the prices paid for acquired facilities are based upon a series of market judgments; and



•

costs of any improvements required to bring an acquired facility up to standards to establish the market position intended for that facility might exceed budgeted costs.

        Further, we can give no assurance that acquisition targets meeting our guidelines for quality and yield will be available when we seek them.

We are exposed to the risks of defaults by tenants.

        Any of our tenants may experience a downturn in their business that may weaken their financial condition. In the event of default or the insolvency of a significant number of our tenants, we may experience a substantial loss of rental revenue and/or delays in collecting rent and incur substantial costs in enforcing our rights as landlord. If a tenant files for bankruptcy protection, a court could allow the tenant to reject and terminate its lease with us.    Our income and cash flow would be adversely affected if a significant number of our tenants became unable to meet their obligations to us, became insolvent or declared bankruptcy.

We may be unable to renew leases or relet space.

        When our tenants decide not to renew their leases upon their expiration, we may not be able to relet the space. Even if our tenants do renew or we are able to relet the space, the terms of renewal or reletting (including the cost of renovations, if necessary) may be less favorable than current lease terms. If we are unable to promptly renew the leases or relet the space, or if the rental rates upon such renewal or reletting are significantly lower than current rates, then our income and cash flow would be adversely affected, especially if we were unable to lease a significant amount of the space vacated by tenants in our properties.

Our insurance coverage on our properties may be inadequate.

        We maintain comprehensive insurance on each of our facilities, including liability, fire and extended coverage. We believe this coverage is of the type and amount customarily obtained for real property. However, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes and floods or acts of war or terrorism that may be uninsurable or not economically insurable. We use our discretion when determining amounts, coverage limits and deductibles for insurance. These terms are determined based on retaining an acceptable level of risk at a reasonable cost. This may result in insurance coverage that in the event of a substantial loss would not be sufficient to pay the full current market value or current replacement cost of our lost investment. Inflation, changes in building codes and ordinances, environmental considerations and other factors also may make it unfeasible to use insurance proceeds to replace a facility after it has been damaged or destroyed. Under such circumstances, the insurance proceeds we receive may not be adequate to restore our economic position in a property. If an insured loss occurred, we could lose both our investment in and anticipated profits and cash flow from a property, and we would continue to be obligated on any mortgage indebtedness or other obligations related to the property. Although we believe our insurance is with highly rated providers, we are also subject to the risk that such providers may be unwilling or unable to pay our claims when made.

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We could be exposed to significant environmental liabilities as a result of conditions of which we are not now aware.

        As an owner and operator of real property, we may be liable under various Federal, state and local laws for the costs of removal or remediation of certain hazardous substances released on or in our property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of the hazardous substances. In addition, we could have greater difficulty in selling real estate on which hazardous substances were present or in borrowing using such real estate as collateral. It is our general policy to have Phase I environmental audits performed for all of our properties and land by qualified environmental consultants. These Phase I environmental audits have not revealed any environmental liability that would have a material adverse effect on our business. However, a Phase I environmental audit does not involve invasive procedures such as soil sampling or ground water analysis, and we cannot be sure that the Phase I environmental audits did not fail to reveal a significant environmental liability or that a prior owner did not create a material environmental condition on our properties or land which has not yet been discovered. We could also incur environmental liability as a result of future uses or conditions of such real estate or changes in applicable environmental laws.

We do not have exclusive control over our joint venture investments.

        We have interests in joint ventures and partnerships and may in the future conduct business through joint ventures and partnerships. These investments involve risks that are not present in our wholly owned projects. For example, co-investors or partners may become bankrupt or have business interests or goals inconsistent with ours. Further, our co-investors or partners may be in a position to take action contrary to our instructions and our interests.

Our use of debt financing could have a material adverse effect on our financial condition.

        We are subject to the risks normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required principal and interest payments and the risk that we will be unable to refinance our existing indebtedness, or that the terms of such refinancing will not be as favorable as the terms of our existing indebtedness. If prevailing interest rates or other factors at the time of a refinancing result in higher interest rates or other restrictive financial covenants upon the refinancing, then such refinancing would adversely affect our cash flow and funds available for operation and development. We are also subject to financial covenants under our existing debt instruments. Should we fail to comply with the covenants in our existing debt instruments, then we would not only be in breach under the applicable debt instruments but we would also likely be unable to borrow any further amounts under these instruments, which could adversely affect our ability to fund operations. We also have incurred and may incur in the future indebtedness that bears interest at variable rates. Thus, as market interest rates increase, so will our debt expense, which would adversely affect our cash flow.

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ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS

        As previously reported, in October 2001, FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, which became effective on January 1, 2002. SFAS No. 144 requires us to report in discontinued operations the results of operations of a property that has either been disposed of or is classified as held for sale, unless certain conditions are met. SFAS No. 144 further requires us to reclassify results of operations from a property disposed or held for sale subsequent to December 31, 2002 as income from discontinued operations during prior reported periods. The purpose of this section of the Current Report on Form 8-K is to set forth audited consolidated statements of operations of the Operating Partnership for the years ended December 31, 2002, 2001 and 2000, including a revised note thereto, which reflect the impact of our adoption of SFAS No. 144.

        During the six-month period ended June 30, 2003, we sold or held for sale four properties owned by us and not classified as assets held for sale as of December 31, 2002. The results of operations from such properties have been reclassified as income from discontinued operations for the years ended December 31, 2002, 2001 and 2000 in the accompanying consolidated statements of operations. There is no effect on the previously reported net income available for common unitholders.

        Management does not believe that adoption of SFAS No. 144 has a material effect on our selected consolidated financial data or management's discussion and analysis of financial condition and results of operations for the years ended December 31, 2002, 2001 and 2000 as previously reported in our 2002 Annual Report on Form 10-K.

Item 7.    Financial Statements and Other Exhibits

(c)	Exhibits
	12	Statement re: Calculation of Ratios of Earnings to Combined Fixed Charges and Preferred Unit Distributions
	23	Consent of KPMG LLP
	99.1	Independent Auditors' Report
	99.2	Consolidated Statements of Operations, Years Ended December 31, 2002, 2001 and 2000
	99.3	Press Release Dated September 5, 2003

Item 9.    Regulation FD Disclosure

        Duke's press release dated September 5, 2003, titled "Duke Realty Corporation Announces Effect of SEC Accounting Interpretation on Prior Year Redemptions of Preferred Securities," is hereby furnished as part of this Current Report.

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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.

DUKE REALTY LIMITED PARTNERSHIP
By:    Duke Realty Corporation, in its capacity as General Partner
	By:	/s/   MATTHEW A. COHOAT Matthew A. Cohoat Senior Vice President and Corporate Controller

Dated: September 5, 2003

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Item 5. Other Events

RISK FACTORS
ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS

Item 7. Financial Statements and Other Exhibits
Item 9. Regulation FD Disclosure

SIGNATURES

EX-12

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Exhibit 12

Statement re: Calculation of Ratios of Earnings to
Combined Fixed Charges and Preferred Unit Distributions
(Dollars in thousands)

		Six Months Ended June 30, 2003			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2000			Year Ended December 31, 1999			Year Ended December 31, 1998
Net income from continuing operations less preferred distributions		$	77,002		$	176,130		$	257,914		$	243,841		$	159,447		$	103,112
Preferred distributions			20,308			52,613			60,850			57,389			46,808			19,833
Earnings from land and depreciated property dispositions			(11,146	)		(2,340	)		(45,708	)		(60,692	)		(10,012	)		(1,351	)
Interest expense			67,377			116,570			111,419			131,048			86,757			60,217
	Earnings before fixed charges		153,541			342,973			384,475			371,586			283,000			181,811
Interest expense			67,377			116,570			111,419			131,048			86,757			60,217
Preferred distributions			20,308			52,613			60,850			57,389			46,808			19,833
Interest costs capitalized			3,306			13,529			25,859			32,980			26,017			8,546
	Total fixed charges		90,991			182,712			198,128			221,417			159,582			88,596
Ratio of Earnings to Fixed Charges			2.17			2.64			2.80			2.27			2.51			2.64
Ratio of Earnings to Combined Fixed Charges and Preferred Distributions			1.69			1.88			1.94			1.68			1.77			2.05

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Exhibit 12

EX-23

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Exhibit 23

Independent Auditors' Consent

The Partners
Duke Realty Limited Partnership:

We consent to incorporation by reference in the registration statement No. 333-100571 on Form S-3 of Duke Realty Limited Partnership of our audit report dated January 29, 2003, except as to note 14, which is as of September 5, 2003, with respect to the consolidated balance sheets and financial statement schedule of Duke Realty Limited Partnership and subsidiaries as of December 31, 2002 and 2001 and the related consolidated statements of operations, cash flows and partners' equity for each of the years in the three-year period ended December 31, 2002.

/s/ KPMG LLP

KPMG LLP
Indianapolis, Indiana
September 5, 2003

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Exhibit 23

Independent Auditors' Consent

EX-99.1

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Exhibit 99.1

Independent Auditors' Report

The Partners
Duke Realty Limited Partnership:

We have audited the consolidated balance sheets of Duke Realty Limited Partnership and Subsidiaries as of December 31, 2002 and 2001, and the related consolidated statements of operations, cash flows and partners' equity for each of the years in the three-year period ended December 31, 2002. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule III. These consolidated financial statements and the financial statement schedule are the responsibility of the Partnership's management. Our responsibility is to express an opinion on the consolidated financial statements and the financial statement schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Duke Realty Limited Partnership and Subsidiaries as of December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the related financial statement schedule III, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

KPMG LLP
Indianapolis, Indiana
January 29, 2003, except as to note 14, which is as of September 5, 2003

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Exhibit 99.1

Independent Auditors' Report

EX-99.2

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Exhibit 99.2

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statements of Operations
For the Year Ended December 31,
(in thousands, except per unit amounts)

				Year Ended
				December 2002			December 2001			December 2000
RENTAL OPERATIONS:
	Revenues:
		Rental income		$	682,432		$	681,461		$	691,397
		Equity in earnings of unconsolidated companies			27,180			31,391			14,556
					709,612			712,852		$	705,953
	Operating Expenses:
		Rental expenses			126,820			120,609			117,682
		Real estate taxes			73,292			70,312			70,786
		Interest expense			116,570			111,419			131,048
		Depreciation and amortization			174,250			157,116			161,259
					490,932			459,456			480,775
			Earnings from rental operations		218,680			253,396			225,178
SERVICE OPERATIONS:
	Revenues:
		General contractor gross revenue			194,439			264,455			292,661
		General contractor costs			(172,559	)		(229,845	)		(253,763	)
			Net general contractor revenue		21,880			34,610			38,898
		Property management, maintenance, & leasing fees			14,301			22,824			25,477
		Construction management and development activity income			29,428			19,142			16,965
		Other income			2,011			3,883			1,459
			Total revenue		67,620			80,459			82,799
	Operating expenses				38,100			45,344			50,039
			Earnings from service operations		29,520			35,115			32,760
	General and administrative expense				(24,735	)		(15,553	)		(21,128	)
			Operating income		223,465			272,958			236,810
OTHER INCOME (EXPENSE):
		Interest income			3,849			5,091			6,836
		Earnings from sale of land and depreciable property dispositions, net of impairment adjustment			2,340			45,708			60,692
		Other revenue (expense)			182			(2,582	)		(963	)
		Other minority interest in earnings of subsidiaries			(1,093	)		(2,411	)		(2,145	)
			Income from continuing operations		228,743			318,764			301,230
Discontinued operations:
		Net income from discontinued operations			3,633			4,516			1,188
		Loss on sale of discontinued operations, net of impairment adjustments			(17	)		—			—
			Income from discontinued operations		3,616			4,516			1,188
Net income					232,359			323,280			302,418
Dividends on preferred units					(52,613	)		(60,850	)		(57,389	)
		Net income available for common unitholders		$	179,746		$	262,430		$	245,029
Basic net income per common unit:
		Continuing operations		$	1.18		$	1.74		$	1.67
		Discontinued operations			0.02			0.03			0.01
		Total		$	1.20		$	1.77		$	1.68
Diluted net income per common unit:
		Continuing operations		$	1.17		$	1.72		$	1.65
		Discontinued operations			0.02			0.03			0.01
		Total		$	1.19		$	1.75		$	1.66
Weighted average number of common units outstanding					149,423			147,961			145,906
Weighted average number of common and dilutive potential common units					150,839			151,710			147,441

See accompanying Notes to Consolidated Financial Statements.

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DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements—(Continued)

(14) Discontinued Operations

        During the period January 1, 2003 through June 30, 2003, the Partnership sold or held for sale four properties owned by the Partnership and not classified as assets held for sale as of December 31, 2002. The results of operations from such properties have been reclassified as income from discontinued operations for the years ended December 31, 2002, 2001, and 2000 in the consolidated statements of operations. The effect of these reclassifications resulted in a decrease to income from discontinued operations for the year ended December 31, 2002 of $2.3 million, which included a $2.7 million reclass of an impairment charge. For 2001 and 2000, these reclassifications resulted in an increase of $924,000 and $26,000, respectively.

        In addition, the reclassifications of the operations of these four properties to discontinued operations result in the following restated segment disclosures:

				2002			2001		2000
Revenues
	Rental Operations:
		Office		$	397,975		$	378,955	$	331,885
		Industrial			274,633			284,517		327,283
		Retail			6,933			18,213		28,467
	Service Operations				67,620			80,459		82,799
			Total Segment Revenues		747,161			762,144		770,434
	Non-Segment Revenue				30,071			31,167		18,318
			Consolidated Revenue from continuing operations		777,232			793,311		788,752
	Discontinued Operations				9,405			10,497		5,873
			Consolidated Revenue	$	786,637		$	803,808	$	794,625
Funds From Operations
	Rental Operations:
		Office		$	265,745		$	255,128	$	225,252
		Industrial			211,097			221,691		256,010
		Retail			5,990			15,036		23,008
	Services Operations				29,520			35,115		32,760
			Total Segment FFO		512,352			526,970		537,030
	Non-Segment FFO:
		Interest expense			(116,570	)		(111,419)		(131,048	)
		Interest income			3,849			5,091		6,836
		General and administrative expense			(24,735	)		(15,553)		(21,128	)
		Gain on land sales			4,478			5,080		9,165
		Other expenses			(330	)		(3,899)		(2,826	)
		Minority interest in earnings of subsidiaries			(1,093	)		(2,411)		(2,145	)
		Joint Venture FFO			44,837			45,570		24,182
		Dividends on preferred units			(52,613	)		(60,850)		(57,389	)
		Discontinued operations			6,279			7,114		2,452
			Consolidated FFO		376,454			395,693		365,129
		Depreciation and amortization on continuing operations			(174,250	)		(157,116)		(161,259	)
		Depreciation and amortization on discontinued operations			(1,371	)		(2,598)		(1,264	)
		Share of joint venture adjustments			(17,657	)		(14,177)		(9,104	)

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		Earnings (loss) from depreciated property sales on continuing operations			(2,138	)		40,628		51,527
		Earnings (loss) from depreciated property sales on discontinued operations			(1,292	)		—		—
			Net income available for common shareholders	$	179,746		$	262,430	$	245,029
Assets
	Rental Operations
		Office		$	2,677,427		$	2,625,015
		Industrial			2,144,686			2,184,234
		Retail			71,072			64,946
	Service Operations				91,399			99,554
			Total Segment Assets		4,984,584			4,973,749
	Non-Segment Assets				362,471			356,497
	Consolidated Assets			$	5,347,055		$	5,330,246

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Exhibit 99.2

EX-99.3

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Exhibit 99.3

For Immediate Release
September 5, 2003
2003-09 For Investor Inquiries, contact:
Thomas K. Peck
317/808-6168
For Media Inquiries, contact:
Donna Hovey
317/808-6137

Duke Realty Corporation Announces Effect of SEC Accounting Interpretation on Prior Year Redemptions of Preferred Securities

Indianapolis—Today, Duke Realty Corporation (DRE/NYSE) announced that it will adopt the SEC's July 31, 2003 Staff Policy Statement that clarifies the application of FASB-EITF Topic D-42, "The Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock," and, accordingly, amend its accounting treatment of the Company's 2001 and 2002 preferred share redemptions.

        In August 1996, the Company incurred $2.5 million of offering costs relating to the issuance of $75 million of Series A preferred shares, resulting in a net carrying value of $72.5 million. Prior to its merger in July 1999 with the Company, Weeks Corporation had a $150 million series of preferred stock that was exchanged for Series F preferred shares of Duke at the time of the Duke-Weeks merger. Pursuant to purchase accounting treatment, these Series F preferred shares were carried on Duke's balance sheet for $142.5 million. In August 2001 and October 2002, respectively, the Company redeemed its Series A and Series F shares in full at par value.

        In addition to its Series A and Series F preferred redemptions, Duke also repurchased approximately $18 million of it Series B preferred shares in August 2002 through open market transactions. The pro-rata amount of original issuance costs applicable to these Series B preferred share repurchases was $645,000.

        At the time of each of these preferred stock redemptions and repurchases, the Company recorded the amount of the redemption or repurchase as a reduction in shareholder's equity. Under the new SEC interpretation, the difference between the redemption value and carrying value attributable to issuance costs of the preferred shares that were redeemed or repurchased must be treated as a preferred dividend and deducted from net income available to common shareholders. Accordingly, in future financial statement filings, Duke intends to restate its 2001 and 2002 net income and earnings per share to reflect the new SEC guidance. In addition, the Company will also reflect these changes in its calculation of funds from operations ("FFO"). FFO is a supplemental non-GAAP financial measurement used as a standard in the real estate industry to measure and compare the operating performance of real estate companies. FFO is defined by the National Association of Real Estate Investment Trusts ("NAREIT") as net income or loss, excluding gains or losses from sales of depreciated property, plus operating property depreciation and amortization and adjustments for minority interest and unconsolidated companies on the same basis.

        The restatements will reflect non-cash charges in the period of the redemption and will not affect the Company's statement of cash flows. Going forward, the Company also intends to apply the new SEC guidance to any future redemption or repurchase of preferred shares.

        The impact of Duke's amended 2001 and 2002 operating results is summarized below:

	2001		2002
Reported Basic EPS	$	1.77	$	1.20
Restated Basic EPS	$	1.75	$	1.14
Reported Diluted EPS	$	1.75	$	1.19
Restated Diluted EPS	$	1.74	$	1.14
Reported Basic FFO	$	2.67	$	2.52
Restated Basic FFO	$	2.65	$	2.46
Reported Diluted FFO	$	2.62	$	2.48
Restated Diluted FFO	$	2.60	$	2.42

        A reconciliation of FFO per share to GAAP earnings per share is set forth below:

Year Ended 2001

		2001 as Reported			Carrying Value Adjustment			2001 as Restated
Basic Earnings Per Share		$	1.77		$	(0.02	)	$	1.75
Add:
	Real Estate Depreciation and Amortization		1.23
	Share of Joint Venture Adjustments		0.11
Deduct:
	Earnings on Sale of Depreciable Property		(0.31	)
	Minority Interest Share of Add-backs		(0.13	)
Basic Funds From Operations Per Share		$	2.67		$	(0.02	)	$	2.65
Diluted Earnings Per Share		$	1.75		$	(0.01	)	$	1.74
Add:
	Real Estate Depreciation and Amortization		1.02
	Share of Joint Venture Adjustments		0.09
	Other(1)		0.02
Deduct:
	Earnings on Sale of Depreciable Property		(0.26	)
Diluted Funds From Operations Per Share		$	2.62		$	(0.02	)	$	2.60

Year Ended 2002

		2002 as Reported			Carrying Value Adjustment			2002 as Restated
Basic Earnings Per Share		$	1.20		$	(0.06	)	$	1.14
Add:
	Real Estate Depreciation and Amortization		1.31
	Share of Joint Venture Adjustments		0.13
	Loss on Sale of Depreciable Property		0.03
Deduct:
	Minority Interest Share of Add-backs		(0.15	)
Basic Funds From Operations Per Share		$	2.52		$	(0.06	)	$	2.46
Diluted Earnings Per Share		$	1.19		$	(0.05	)	$	1.14
Add:
	Real Estate Depreciation and Amortization		1.12
	Share of Joint Venture Adjustments		0.11
	Loss on Sale of Depreciable Property		0.02
	Other(1)		0.04
Diluted Funds From Operations Per Share		$	2.48		$	(0.06	)	$	2.42

(1)

Represents the effects of certain convertible securities that are dilutive for FFO computational purposes, but not for EPS computational purposes.

        Duke Realty Corporation is the largest publicly traded office and industrial real estate company in the United States. Offering a complete range of real estate products and services, Duke produces approximately $800 million in annual revenue from more than 4,000 tenants and focuses on building dominant market positions in each of its 13 geographic platforms across the Midwest and the Sunbelt. Duke owns interests in more than 109 million square feet of properties, has over 1,000 employees and owns or controls more than 4,000 acres of undeveloped land that can support more than 63 million square feet of future development. Visit Duke on the web at www.dukerealty.com.

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Duke Realty Corporation Announces Effect of SEC Accounting Interpretation on Prior Year Redemptions of Preferred Securities