Duke Realty Announces First Quarter Earnings; Common and Preferred Stock Dividends Also Announced.INDIANAPOLIS -- Duke Realty realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. Corporation (NYSE NYSE See: New York Stock Exchange :DRE DRE Digital rectal examination. Mentioned in: Rectal Examination ) reported today that net income available for common shareholders for the first quarter of 2006 was $11.4 million compared to $25.5 million for the first quarter of 2005. On a per share basis, first quarter 2006 net income available for common shareholders was $0.08 per share compared with $0.18 per share for the first quarter of 2005. First quarter 2005 results included net income from the 212 properties that were sold as part of the flex portfolio sale in September 2005. In addition, first quarter 2005 results included $8.3 million of gains on property sales as compared to $650,000 in the first quarter of this year. Net income in the first quarter of 2006 was negatively impacted by $2.6 million of preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. redemption charges Redemption charge The commission a mutual fund charges an investor who is redeeming shares. For example, a 2% redemption charge (also called a back end load) on the sale of shares valued at $1000 will result in payment of $980 (or 98% of the value) to the investor. that were incurred in connection with the redemption of the $75 million Series I 8.45 percent preferred stock. In February, the Company completed an issuance of $184 million Series M 6.95 percent preferred stock. All per share amounts reported are diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. with basic per share information also included in the financial table accompanying this press release. Funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. ("FFO FFO See: Funds from operations ") was $67.7 million for the first quarter of 2006 versus $81.6 million for the same period in 2005. On a per share basis, first quarter FFO was $0.50 per share compared with $0.57 per share for the first quarter of 2005. Similar to net income, FFO for the first quarter of 2006 was diluted by the effects of the flex portfolio sale and the preferred stock redemption charges, noted above. In addition, FFO for the first quarter of 2005 included $4.6 million of gains on undepreciated property sales. 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 NAREIT National Association of Real Estate Investment Trusts ") as net income or loss, excluding gains or losses from sales of depreciated Depreciated may refer to:
See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income is included in the financial tables accompanying this press release. At the Company's Annual Meeting of Shareholders today, it was announced that all directors standing for re-election have been re-elected to the Board for a one-year term. As part of the Company's corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. policy, each director must stand for re-election annually. Shareholders also approved the ratification The confirmation or adoption of an act that has already been performed. A principal can, for example, ratify something that has been done on his or her behalf by another individual who assumed the authority to act in the capacity of an agent. of KPMG KPMG Klynveld Peat Marwick Goerdeler (accounting firm) KPMG Kaiser Permanente Medical Group KPMG Keiner Prüft Mehr Genau (German) KPMG Kommen Prüfen Meckern Gehen LLP LLP - Lower Layer Protocol as the Company's independent public accountants for 2006. Additionally, the Company's Board of Directors declared a quarterly dividend of $.47 per common share, or $1.88 per share on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis. The dividend is payable on May 31, 2006 to common shareholders of record on May 12, 2006. The Board also declared today the following dividends on the Company's outstanding preferred stock:
Class NYSE Quarterly Record Date Payment Date
Symbol Amount/Share
----------- ------------ ------------ ---------------- --------------
Series B Not Listed $.998750 June 16, 2006 June 30, 2006
Series J DREPRJ $.414063 May 17, 2006 May 31, 2006
Series K DREPRK $.406250 May 17, 2006 May 31, 2006
Series L DREPRL $.412500 May 17, 2006 May 31, 2006
Series M DREPRM $.434375 June 16, 2006 June 30, 2006
Denny Oklak, Chairman and Chief Executive Officer, commenting on Duke's first quarter performance, stated, "We are very pleased with our first quarter activity. We continued our geographic expansion with the acquisition of a 5.1 million square foot bulk industrial portfolio at the Port of Savannah The Port of Savannah is a major United States of America seaport, located in Savannah, Georgia, just up the Savannah River from the Atlantic Ocean and is operated by the Georgia Ports Authority. , and a 2.9 million square foot acquisition of The Mark Winkler Winkler may refer to:
Property information at March 31, 2006 was as follows: --The Company's 709 in-service properties totaling 105.3 million square feet were 93.2 percent leased compared to 92.6 percent leased at December 31, 2005. --The Company's value creation pipeline totaled $851 million, including $363 million of developments with an expected stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. return of 9.5 percent that Duke plans to own indefinitely after completion; $394 million of developments with an expected stabilized return of 8.9 percent that the Company plans to sell within approximately one year of completion; and a $94 million backlog of third-party construction volume with a 9.6 percent pre-tax profit margin. --Including 6.8 million square feet of projects under development that were 33.1 percent pre-leased, the Company's total portfolio at the end of the first quarter consisted of 735 properties totaling more than 112 million square feet that were 89.5 percent leased. The Company also disclosed the following information for the first quarter of 2006: --Duke renewed 77 percent of leases up for renewal, totaling 1.9 million square feet, on which net effective rents increased 3.6 percent. --Same property net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased 1.3 percent. --Property sales in the first quarter totaled $57.9 million at an average stabilized capitalization rate Capitalization Rate According to the Appraisal Institute, it is a method used to convert an estimate of a single year's income expectancy into an indication of value in one direct step, by dividing the income estimate by an appropriate rate. of 8.2 percent. --Acquisitions in the first quarter totaled $914.3 million at a stabilized capitalization rate of 6.9 percent. --The Company's interest and fixed-charge coverage ratios Fixed-Charge Coverage Ratio A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated as the following: in the first quarter were 3.2 and 2.1, respectively, and its debt-to-total market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. ratio was 36.2 percent at March 31, 2006. When used in this press release, the word "believes," "expects," "estimates" and similar expressions are intended to identify forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . 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 relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc environmental matters and liquidity of real estate investments. Readers are advised to refer to Duke's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. Report as filed with the Securities and Exchange Commission on March 6, 2006 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 United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Duke's properties encompass more than 112 million rentable square feet that are leased by more than 3,600 tenants, and 5,000 acres of undeveloped land that can support an additional 73 million square feet of development. Duke provides a full range of services in-house, backs them with more than 30 years experience, and delivers valuable real estate solutions to satisfied customers across the nation. Duke common stock is listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol: DRE. Visit Duke on the web at www.dukerealty.com. A copy of the Company's supplemental information fact book will be available after 6:00 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT today in the Investor Information 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 New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of time to discuss its first quarter operating results. All investors are invited to listen to this call, which can be accessed through the Investor Information section of the Company's web site at www.dukerealty.com.
Financial Highlights
(in thousands, except per share data)
------------------------
Three Months Ended
March 31,
------------------------
Operating Results 2006 2005
----------------------------------------------------------------------
Revenues from continuing operations $212,010 $187,577
Earnings from rental operations 33,726 26,301
Earnings from service operations 4,450 11,838
Net income available for common shareholders -
Basic 11,448 25,481
Net income available for common shareholders -
Diluted 12,597 27,968
Funds from operations available for common
shareholders - Basic 67,677 81,625
Funds from operations available for common
shareholders - Diluted 74,414 89,549
Per Share:
Net income available for common shareholders -
Basic $0.08 $0.18
Net income available for common shareholders -
Diluted $0.08 $0.18
Funds from operations available for common
shareholders - Basic $0.50 $0.57
Funds from operations available for common
shareholders - Diluted $0.50 $0.57
Dividend payout ratio of funds from operations 94.0% 81.6%
Weighted average shares outstanding
Basic - Net income and Funds From
Operations 134,781 143,089
Diluted - Net income and Funds From
Operations 149,265 157,720
------------------------
March 31, December 31,
Balance Sheet Data 2006 2005
----------------------------------------------------------------------
Net real estate investments $5,708,714 $4,733,100
Total assets 6,704,019 5,647,560
Total debt 3,621,649 2,600,651
Shareholders' equity 2,526,929 2,452,798
Common shares outstanding at end of period 134,857 134,697
Reconciliation of Net Income to Funds From Operations
(in thousands, except per share data)
Three Months Ended
March 31,
(Unaudited)
---------------------------------------------
2006 2005
---------------------- ----------------------
Wtd. Wtd.
Avg. Per Avg. Per
Amount Shares Share Amount Shares Share
---------------------- ----------------------
Net Income Available for
Common Shares $11,448 134,781 $0.08 $25,481 143,089 $0.18
Add back:
Minority interest in
earnings of
unitholders 1,149 13,394 2,487 13,858
Other common stock
equivalents 1,090 773
---------------- ----------------
Diluted Net Income
Available for Common
Shares $12,597 149,265 $0.08 $27,968 157,720 $0.18
====================== ======================
Reconciliation to Funds
From Operations ("FFO")
Net Income Available for
Common Shares $11,448 134,781 $0.08 $25,481 143,089 $0.18
Adjustments:
Depreciation and
amortization 60,582 63,226
Company share of
joint venture
depreciation
and amortization 4,702 4,865
Earnings from
depreciable
property sales-
wholly owned (505) (6,510)
Earnings from
depreciable
property sales-JV (2,962) -
Minority interest
share of
adjustments (5,588) (5,437)
---------------- ----------------
Basic Funds From
Operations 67,677 134,781 $0.50 81,625 143,089 $0.57
Minority interest in
earnings of
unitholders 1,149 13,394 2,487 13,858
Minority interest
share of
adjustments 5,588 5,437
Other common stock
equivalents 1,090 773
---------------- ----------------
Diluted Funds From
Operations $74,414 149,265 $0.50 $89,549 157,720 $0.57
====================== ======================
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