Duke Realty Announces Fourth Quarter Earnings; CEO Transition Plan Announced; Common and Preferred Stock Dividends Also Announced.Business Editors INDIANAPOLIS--(BUSINESS WIRE)--Jan. 29, 2003 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 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. 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 ") were $92.3 million for the fourth quarter of 2002 versus $98.8 million for the same period in 2001. On a per share basis, fourth quarter FFO decreased 6.4 percent to $0.59 compared to $0.63 for the fourth quarter of 2001. For the year ended December December: see month. 31, 2002, FFO was $2.48 per share compared to $2.62 per share in 2001, a decrease of 5.3 percent. 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. A reconciliation of FFO to GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income is included in the financial tables accompanying this press release. Net income available for common shareholders for the fourth quarter of 2002 was $28.3 million on revenues of $188.0 million, compared to $44.4 million on revenues of $190.0 million for the fourth quarter last year. On a per share basis, fourth quarter net income available for common shareholders was $0.21 per share compared with $0.34 per share for the fourth quarter of 2001, a 38.2 percent decrease. For all of 2002, net income available for common shareholders was $1.19 per share, compared with $1.75 per share in 2001, a 32.0 percent decrease. Approximately $0.29 per share of the decline in Duke's 2002 net income is attributable to $40.6 million of net gains on sales of depreciable depreciable Of, relating to, or being a long-term tangible asset that is subject to depreciation. property in 2001 compared to a $3.4 million net loss on such sales in 2002. Included in the $3.4 million net loss on sale of depreciable property in 2002 is a $9.4 million valuation allowance recorded in the fourth quarter for six of Duke's 910 in-service in-service In-service training adjective Referring to any form of on-the-job training noun In-service training of an employee properties determined to have a permanent impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of their book value. All per share amounts reported are diluted with basic per share information also included in the financial table accompanying this press release. Additionally, the Company's Board of Directors declared a quarterly dividend of $.455 per common share, or $1.82 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 February February: see month. 28, 2003 to common shareholders of record on February 14, 2003. The Board also declared today the following dividends on the Company's outstanding 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. :
NYSE Quarterly
Class Symbol Amount/Share Record Date Payment Date
------- -------- ------------- ------------ -------------
Series B Not Listed $.99875 March 17, 2003 March 31, 2003
Series D DREPRD $.46094 March 17, 2003 March 31, 2003
Series E DREPRE $.51563 March 17, 2003 March 31, 2003
Series I DREPRI $.52813 March 17, 2003 March 31, 2003
Commenting on Duke's performance, Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs L. Hefner Hefner or Heffner may refer to: In music:
"Although we are still concerned about the strength of the economy, the fourth quarter provided more evidence that the declining fundamentals that we experienced in the past two years may finally have bottomed out, setting the stage for resumed earnings growth beginning late 2003 and into 2004. Specifically, as we reported two weeks ago, development starts, acquisitions, and third-party constructions starts steadily improved throughout 2002. Also, while occupancy has yet to improve, we signed 6.6 million square feet of new leases and renewals during the fourth quarter and 22.1 million square feet for all of 2002. This compares to 18.7 million square feet in 2001. Building on this momentum and driving occupancy higher is clearly our highest priority in 2003." Property information at December 31, 2002 was as follows: -- The Company's 890 stabilized in-service properties totaling 102 million square feet were 88.6 percent leased. -- The Company's value creation pipeline at year-end 2002 totaled $336 million, including $142 million of developments with an expected stabilized return of 10.4 percent that Duke plans to own indefinitely after completion; $80 million of developments with an expected stabilized return of 10.8 percent that the Company plans to sell within approximately one year of completion; and an $114 million backlog of third-party construction volume with an 11.1 percent pre-tax profit margin. -- Including projects under development, the Company's total portfolio at the end of the fourth quarter consisted of 927 properties totaling more than 108 million square feet that were 86.8 percent leased. The Company also disclosed the following information for the fourth quarter of 2002: -- In the fourth quarter, Duke renewed 71 percent of leases up for renewal, totaling 2.3 million square feet, on which it attained at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. a 1.3 percent growth in net effective rents. For the year, the Company renewed 8.7 million square feet, or 72 percent of leases up for renewal, with an average increase in net effective rents of 3.3 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. decreased 2.0 percent for the fourth quarter and increased 0.3 percent for all of 2002. -- In 2002, the Company sold $252 million of properties at an average 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 9.2 percent including $211 million from its held-for-sale portfolio. No dispositions occurred in the fourth quarter. -- Duke'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 fourth quarter were 4.0 and 3.0, 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 32.7 percent at December 31, 2002. Duke also announced today that its Board of Directors, along with Senior Management, is actively involved in succession planning Management Succession Planning In organizational development, succession planning is the process of identifying and preparing suitable employees through mentoring, training and job rotation, to replace key players — such as the chief executive officer (CEO) — for the leadership of the Company. Tom Hefner will relinquish his role as Chief Executive Officer by April 30, 2004. He will then retire as Chairman of the Board of Directors by April 30, 2005. Consistent with Tom's TOM'S Co., Ltd (株式会社トムス Kabushiki-gaisha Tomusu transition, the following organizational changes are effective immediately: -- Gary Gary, city (1990 pop. 116,646), Lake co., NW Ind., a port of entry on Lake Michigan; inc. 1909. Gary was founded by the U.S. Steel Corporation, which purchased the land in 1905 and landscaped it for a city. Burk will become a Vice Chairman of the Board of Directors and will retain his position as Executive Vice President and President of Duke Construction. -- Gene Zink (Zero INK) An inkless printing technology from ZINK Imaging, LLC., Waltham, MA (www.zink.com) that was introduced in early 2007. The ZINK paper contains layers of dye crystals that turn color when activated by heat. will also become a Vice Chairman of the Board of Directors and will retain his position as Executive Vice President and Chief Financial Officer. -- Denny Denny may refer to:
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. and will continue his duties overseeing the income side of the Company's business. -- Howard Feinsand is resigning his position on the Board of Directors to allow Gary to join the Board and not increase the number of Affiliated Directors. Howard will continue in his role as Executive Vice President and General Counsel. Commenting on this transition plan, Bill Cavanaugh, Chairman of the Company's Governance Governance makes decisions that define expectations, grant power, or verify performance. It consists either of a separate process or of a specific part of management or leadership processes. Sometimes people set up a government to administer these processes and systems. Committee and its Lead Director, said: "Duke has long been at the forefront of good 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. . This transition plan is the result of thoughtful discussions among Senior Management and the Board of Directors. Tom, Gene and Gary have all been with Duke for nearly 25 years. This evolving transition plan will insure Insure can mean:
continues to be one of the strongest in the industry for the next 25 years and beyond." 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 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. Report as filed with the Securities and Exchange Commission on December 6, 2001 for additional information concerning these risks. Duke Realty Corporation is the largest publicly traded office and 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. and a member of the Forbes Super 500. 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 108 million square feet of properties, has approximately 1,050 employees and owns or controls approximately 3,800 acres of undeveloped land that can support approximately 59 million square feet of future development. Visit Duke on the web at www.dukerealty.com. A copy of the Company's December 31, 2002 supplemental information fact book will be available by 7:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. 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 2:30 p.m. EST to discuss its fourth quarter operating results. All investors are invited to listen to this call, which can be accessed through the Company's web site at www.dukerealty.com.
Financial Highlights
(in thousands, except per share data)
------------------- ----------------------
Three Months Ended Year Ended
December 31 December 31
------------------- ----------------------
Operating Results 2002 2001 2002 2001
----------------------------------------------- ----------------------
Revenues $187,969 $190,023 $780,071 $795,198
Earnings from rental
operations 50,011 63,367 219,076 254,103
Earnings from service
operations 3,671 4,760 30,270 35,115
Net income for common
shareholders - Basic 28,294 44,420 161,272 229,967
Net income for common
shareholders - Diluted 31,328 50,130 179,840 265,853
Funds from operations -
Basic 80,888 84,520 337,651 346,747
Funds from operations -
Diluted 92,259 98,822 388,357 408,361
Per Share:
Funds from operations -
Basic $0.60 $0.65 $2.52 $2.67
Funds from operations -
Diluted $0.59 $0.63 $2.48 $2.62
Net income - common
shareholders - Basic $0.21 $0.34 $1.20 $1.77
Net income - common
shareholders - Diluted $0.21 $0.34 $1.19 $1.75
Dividend payout ratio of
funds from operations 77.1% 71.4% 73.2% 67.9%
Weighted average shares
outstanding
Basic - Net income
and Funds from
operations 134,935 130,970 133,981 129,660
Diluted - Net income 150,692 149,842 150,839 151,710
Diluted - Funds from
operations 155,700 156,296 156,854 156,075
------------------------
December 31 December 31
Balance Sheet Data 2002 2001
----------------------------------------------------------------------
Net real estate investments $4,702,788 $4,703,746
Total assets 5,348,823 5,330,033
Total debt 2,106,285 1,814,856
Shareholders' equity 2,616,180 2,785,009
Common shares outstanding at end of
period 135,007 131,416
Reconciliation of Net Income to Funds From Operations
(in thousands, except per share data)
Three Months Ended
December 31,
-----------------------------------------------
2002 2001
------------------------ ----------------------
Wtd. Wtd.
Avg. Per Avg. Per
Amount Shares Share Amount Shares Share
------------------------ ----------------------
Net Income Available
for Common Shares $28,294 134,935 $0.21 $44,420 130,970 $0.34
Add back:
Minority interest
in earnings of
unitholders 3,034 14,949 5,710 17,319
Other common stock
equivalents 808 1,553
Fully Diluted Net
Income 31,328 150,692 $0.21 50,130 149,842 $0.34
Adjustments:
Depreciation and
Amortization 44,735 41,182
Company Share of Joint
Venture Depreciation
and amortization 4,375 4,258
(Earnings) loss
from depreciable
property sales 9,358 87
Dilutive effect of
Convertible
Preferred D Shares 2,463 5,008 2,465 5,009
Dilutive effect of
Convertible
Preferred G Units 0 0 700 1,445
----------------- -----------------
Fully Diluted Funds
From Operations $92,259 155,700 $0.59 $98,822 156,296 $0.63
================= =================
Year Ended
December 31,
-----------------------------------------------
2002 2001
----------------------- -----------------------
Wtd. Wtd.
Avg. Per Avg. Per
Amount Shares Share Amount Shares Share
----------------------- -----------------------
Net Income Available
for Common Shares $161,272 133,981 $1.20 $229,967 129,660 $1.77
Add back:
Minority interest
in earnings of
unitholders 18,568 15,442 32,463 18,301
Joint venture partner
convertible ownership(1) 3,423 2,092
Other common stock
equivalents 1,416 1,657
Fully Diluted Net
Income 179,840 150,839 $1.19 265,853 151,710 $1.75
Adjustments:
Depreciation and
Amortization 175,621 159,714
Company Share of Joint
Venture Depreciation
and amortization 17,657 14,177
(Earnings) loss
from depreciable
property sales 3,430 (40,628)
Joint venture partner
convertible ownership(1) (3,423) (2,092)
Dilutive effect of
Convertible
Preferred D Shares 9,856 5,008 9,866 5,012
Dilutive effect of
Convertible
Preferred G Units 1,953 1,007 2,802 1,445
----------------- -----------------
Fully Diluted Funds
From Operations $388,357 156,854 $2.48 $408,361 156,075 $2.62
================= =================
(1) A joint venture partner has the option to convert a portion of its
ownership to Duke common shares. The effect of this option was
dilutive for EPS for the year ended December 31, 2001, but was not
dilutive for FFO purposes.
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion