EX-99.1 2 a08-4644_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

 

News Release

 

 

Investor Relations Contacts:

 

News Media Contact:

Shona L. Bedwell

 

Joel Reuter

317.808.6169

 

317.808.6137

shona.bedwell@dukerealty.com

 

joel.reuter@dukerealty.com

 

 

 

Randy A. Henry

 

 

317.808.6060

 

 

randy.henry@dukerealty.com

 

 

 

 

 

Duke Realty Announces Fourth Quarter Earnings

 

Common and Preferred Stock Dividends Declared

 

 

                (Indianapolis, Indiana — January 30, 2008) — Duke Realty Corporation (NYSE: DRE) reported today results for the fourth quarter 2007.  Funds from Operations available to common shareholders (diluted) (“FFO”) was $0.80 per share for the fourth quarter of 2007, as compared to $0.76 per share for the same quarter in 2006, an increase of 5.3 percent.  Net income available for common shareholders (diluted) (“EPS”) was $0.40 per share for the fourth quarter of 2007, as compared to $0.37 for the same quarter in 2006.

 

Denny Oklak, Chairman and Chief Executive Officer, commenting on Duke’s fourth quarter performance, stated,

 

“The fourth quarter was solid in nearly all areas of our operating business.  Leasing activity remained strong and we successfully closed our anticipated dispositions.  We are pleased that our overall 2007 execution resulted in record levels of leasing and new developments along with a 10.5% growth in annual FFO per share.  As we look forward to 2008, the volatility in the capital markets has increased uncertainty in the business climate; therefore, we are revising our 2008 guidance for FFO per share to $2.60 - $2.90 from $2.80 - $3.00 to reflect our more cautious view.”

 

 


 

Dividends

 

Additionally, the Company’s Board of Directors declared its quarterly common stock dividend of $0.48 per share, or $1.92 per share on an annualized basis.  The dividend is payable on February 29, 2008, to shareholders of record on February 14, 2008.

 

The Board also declared today the following dividends on the Company’s outstanding preferred stock:

 


Class

 

NYSE
Symbol

 

Quarterly
Amount/Share

 


Record Date

 


Payment Date

 

Series J

 

DREPRJ

 

$.414063

 

February 15, 2008

 

February 29, 2008

 

Series K

 

DREPRK

 

$.406250

 

February 15, 2008

 

February 29, 2008

 

Series L

 

DREPRL

 

$.412500

 

February 15, 2008

 

February 29, 2008

 

Series M

 

DREPRM

 

$.434375

 

March 17, 2008

 

March 31, 2008

 

Series N

 

DREPRN

 

$.453125

 

March 17, 2008

 

March 31, 2008

 

 

 

Fourth Quarter Operating Statistics

 

·                  The Company’s 688 in-service properties totaling 111.1 million square feet were 92.7 percent leased compared to 93.5 percent and 92.8 percent leased at September 30, 2007 and December 31, 2006, respectively.

 

·                  The Company’s value creation pipeline totaled $2.0 billion, including $742 million of developments with an expected stabilized return of 9.0 percent that Duke plans to own indefinitely after completion; $1.0 billion of developments with an expected stabilized return of 8.4 percent that the Company plans to sell within approximately one year of completion; and a $183 million backlog of third-party construction volume with an average overall profit margin of 15.8 percent.

 

·                  In addition to 688 in-service properties, the Company has 38 properties under development representing 10.0 million square feet that are 27.6 percent pre-leased.

 

·                  Duke renewed 68 percent of leases up for renewal, totaling 1.3 million square feet, on which net effective rents increased 9.0 percent.

 

·                  Same property net operating income increased 0.8 percent for the three months ended December 31, 2007.

 

·                  Property sales in the fourth quarter totaled $209.3 million at an average stabilized capitalization rate of 7.2 percent.

 

·                  The Company completed the acquisition of an industrial portfolio totaling $69.8 million with an overall stabilized yield of 8.6 percent.

 


 

·                  The Company’s interest and fixed-charge coverage ratios in the fourth quarter were 4.0 and 2.5, respectively, and its debt-to-total market capitalization ratio was 48.4 percent at December 31, 2007.

 

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 March 6, 2007 for additional information concerning these risks.

 

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 130 million rentable square feet in 22 major U.S. cities. Duke, which controls approximately 7,700 acres of land for over 113 million square feet of future development, also provides nationwide real estate solutions through its national development division.  Duke Realty Corporation is publicly traded on the NYSE under the symbol DRE and is included in the S&P MidCap 400 Index.

 

                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 tomorrow at 3:00 p.m. New York time to discuss its fourth 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.

 

 


Financial Highlights

(in thousands, except per share data)

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31,

 

December 31,

 

Operating Results

 

2007

 

2006

 

2007

 

2006

 

 

 

 

 

 

 

 

 

 

 

Revenues from continuing operations

 

$

261,384

 

$

256,351

 

$

923,227

 

$

871,677

 

Earnings from rental operations

 

37,610

 

37,154

 

109,079

 

125,514

 

Earnings from service operations

 

25,781

 

34,719

 

52,034

 

53,196

 

Net income available for common shareholders - Basic

 

58,666

 

50,196

 

217,692

 

145,095

 

Net income available for common shareholders - Diluted

 

61,964

 

55,038

 

232,091

 

159,333

 

Funds from operations available for common shareholders - Basic

 

116,750

 

102,788

 

384,032

 

338,008

 

Funds from operations available for common shareholders - Diluted

 

123,492

 

112,657

 

409,414

 

371,104

 

 

 

 

 

 

 

 

 

 

 

Per Share:

 

 

 

 

 

 

 

 

 

Funds from operations available for common shareholders - Basic

 

$

0.80

 

$

0.76

 

$

2.76

 

$

2.51

 

Funds from operations available for common shareholders - Diluted

 

$

0.80

 

$

0.76

 

$

2.74

 

$

2.48

 

Net income available for common shareholders - Basic

 

$

0.40

 

$

0.37

 

$

1.56

 

$

1.08

 

Net income available for common shareholders - Diluted

 

$

0.40

 

$

0.37

 

$

1.55

 

$

1.07

 

Dividend payout ratio of funds from operations

 

60.0

%

62.5

%

69.9

%

76.4

%

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

Basic - Net income and Funds From Operations

 

145,623

 

134,665

 

139,255

 

134,883

 

Diluted- Net income and Funds From Operations

 

154,467

 

149,020

 

149,614

 

149,393

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

Balance Sheet Data

 

 

 

 

 

2007

 

2006

 

 

 

 

 

 

 

 

 

 

 

Net real estate investments

 

 

 

 

 

$

6,101,332

 

$

5,781,272

 

Total assets

 

 

 

 

 

7,661,981

 

7,238,595

 

Total debt

 

 

 

 

 

4,316,460

 

4,109,154

 

Shareholders' equity

 

 

 

 

 

2,750,033

 

2,503,583

 

Common shares outstanding at end of period

 

 

 

 

 

146,175

 

133,921

 

 

 

 


 

Reconciliation of Net Income to Funds From Operations

 

(in thousands, except per share data)

 

 

 

 

Three Months Ended
December 31,
(Unaudited)

 

 

 

2007

 

2006

 

 

 

Amount

 

Wtd.
Avg.
Shares

 

Per
Share

 

Amount

 

Wtd.
Avg.
Shares

 

Per
Share

 

Net Income Available for Common Shares

 

$

58,666

 

145,623

 

$

0.40

 

$

50,196

 

134,665

 

$

0.37

 

Add back:

 

 

 

 

 

 

 

 

 

 

 

 

 

Minority interest in earnings of unitholders

 

3,298

 

8,146

 

 

 

4,842

 

12,839

 

 

 

Other common stock equivalents

 

 

 

698

 

 

 

 

 

1,516

 

 

 

Diluted Net Income Available for Common Shares

 

$

61,964

 

154,467

 

$

0.40

 

$

55,038

 

149,020

 

$

0.37

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation to Funds From Operations ("FFO")

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income Available for Common Shares

 

$

58,666

 

145,623

 

$

0.40

 

$

50,196

 

134,665

 

$

0.37

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and Amortization

 

69,469

 

 

 

 

 

64,156

 

 

 

 

 

Company Share of Joint Venture Depreciation and amortization

 

5,796

 

 

 

 

 

4,700

 

 

 

 

 

Earnings from depreciable property sales-wholly owned

 

(9,321

)

 

 

 

 

(516

)

 

 

 

 

Earnings from depreciable property sales-JV

 

(4,416

)

 

 

 

 

(10,721

)

 

 

 

 

Minority interest share of adjustments

 

(3,444

)

 

 

 

 

(5,027

)

 

 

 

 

Basic Funds From Operations

 

116,750

 

145,623

 

$

0.80

 

102,788

 

134,665

 

$

0.76

 

Minority interest in earnings of unitholders

 

3,298

 

8,146

 

 

 

4,842

 

12,839

 

 

 

Minority interest share of adjustments

 

3,444

 

 

 

 

 

5,027

 

 

 

 

 

Other common stock equivalents

 

 

 

698

 

 

 

 

 

1,516

 

 

 

Diluted Funds From Operations

 

$

123,492

 

154,467

 

$

0.80

 

$

112,657

 

149,020

 

$

0.76

 

 

 

 

 

Twelve Months Ended
December 31,
(Unaudited)

 

 

 

2007

 

2006

 

 

 

Amount

 

Wtd.
Avg.
Shares

 

Per
Share

 

Amount

 

Wtd.
Avg.
Shares

 

Per
Share

 

Net Income Available for Common Shares

 

$

217,692

 

139,255

 

$

1.56

 

$

145,095

 

134,883

 

$

1.08

 

Add back:

 

 

 

 

 

 

 

 

 

 

 

 

 

Minority interest in earnings of unitholders

 

14,399

 

9,204

 

 

 

14,238

 

13,186

 

 

 

Other common stock equivalents

 

 

 

1,155

 

 

 

 

 

1,324

 

 

 

Diluted Net Income Available for Common Shares

 

$

232,091

 

149,614

 

$

1.55

 

$

159,333

 

149,393

 

$

1.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation to Funds From Operations ("FFO")

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income Available for Common Shares

 

$

217,692

 

139,255

 

$

1.56

 

$

145,095

 

134,883

 

$

1.08

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and Amortization

 

277,691

 

 

 

 

 

254,268

 

 

 

 

 

Company Share of Joint Venture Depreciation and amortization

 

26,948

 

 

 

 

 

18,394

 

 

 

 

 

Earnings from depreciable property sales-wholly owned

 

(121,072

)

 

 

 

 

(42,089

)

 

 

 

 

Earnings from depreciable property sales-share of joint venture

 

(6,244

)

 

 

 

 

(18,802

)

 

 

 

 

Minority interest share of adjustments

 

(10,983

)

 

 

 

 

(18,858

)

 

 

 

 

Basic Funds From Operations

 

384,032

 

139,255

 

$

2.76

 

338,008

 

134,883

 

$

2.51

 

Minority interest in earnings of unitholders

 

14,399

 

9,204

 

 

 

14,238

 

13,186

 

 

 

Minority interest share of adjustments

 

10,983

 

 

 

 

 

18,858

 

 

 

 

 

Other common stock equivalents

 

 

 

1,155

 

 

 

 

 

1,324

 

 

 

Diluted Funds From Operations

 

$

409,414

 

149,614

 

$

2.74

 

$

371,104

 

149,393

 

$

2.48