Duke Realty Announces Second Quarter Earnings; Common Stock Dividend Increase Announced.INDIANAPOLIS Indianapolis (ĭn'dēənă`pəlĭs), city (1990 pop. 731,327), state capital and seat of Marion co., central Ind., on the White River; selected 1820 as the site of the state capital (which was moved there in 1825), inc. 1847. -- 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 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 $78.8 million for the second quarter of 2006 versus $87.8 million for the same period in 2005. On a per share basis, second quarter FFO was $0.58 per share compared with $0.61 per share for the second quarter of 2005. Second quarter 2005 results included income from the 212 properties that were sold as part of the industrial portfolio sale in September September: see month. 2005. In addition, FFO for the second quarter of 2005 included $0.05 per share of gains on undepreciated property sales. 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. E[acute accent acute accent n. A mark (´) indicating: a. that a vowel is close or tense, as é in French été. b. that a vowel or syllable has a high or rising pitch, as in Chinese or Ancient Greek. c. ]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. E[acute accent]Net income available for common shareholders for the second quarter of 2006 was $21.7 million compared to $40.3 million for the second quarter of 2005. On a per share basis, second quarter 2006 net income available for common shareholders was $0.16 per share compared with $0.28 per share for the second quarter of 2005. Similar to FFO, net income for the second quarter of 2006 was diluted by the effects of the September 2005 industrial portfolio sale. In addition, second quarter 2005 results included $0.16 per share of gains on property sales as compared to $0.05 per share in the second quarter of this year. E[acute accent]Denny Denny may refer to:
E[acute accent]Dividends E[acute accent]Duke also announced today that its Board of Directors increased its quarterly common stock dividend to $0.475 per share, payable on August 31, 2006, to shareholders of record on August 14, 2006. Equal to $1.90 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 new dividend provides a 1.1 percent increase over the previous amount and represents the thirteenth consecutive annual increase since the Company's October October: see month. 1993 public offering. E[acute accent]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
-------- -------- ------------ ------------------- ------------------
Not
Series B Listed $.998750 September 15, 2006 September 29, 2006
Series J DREPRJ $.414063 August 17, 2006 August 31, 2006
Series K DREPRK $.406250 August 17, 2006 August 31, 2006
Series L DREPRL $.412500 August 17, 2006 August 31, 2006
Series M DREPRM $.434375 September 15, 2006 September 29, 2006
Series N DREPRN $.458160 September 15, 2006 September 29, 2006
E[acute accent]Completion of Consent Solicitation Consent Solicitation A solicitation by one party to the stakeholders of a particular security for the consent of a material change. Notes: Should the majority of stakeholders provide valid consent prior to the consent expiry date, the issuer may then follow through with E[acute accent]The Company also announced that on July July: see month. 21, 2006 Duke Realty Limited Partnership, an operating partnership of which the Company is the sole general partner, had successfully obtained the requisite consents of holders to amend the terms of certain series of its outstanding notes issued prior to May 22, 2003. The financial covenants were changed to make them consistent with the financial covenants in each series of notes issued by Duke Realty Limited Partnership on or after May 22, 2003. This amendment provides more than $300 million of additional debt capacity and greater capital structure flexibility to the Company. E[acute accent]Second Quarter Operating Statistics E[acute accent]--The Company's 715 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 totaling 107.6 million square feet were 92.3 percent leased compared to 93.2 percent and 90.7 percent leased at March 31, 2006 and June 30, 2005, respectively. E[acute accent]--The Company's value creation pipeline totaled $976 million, including $383 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 9.4 percent that Duke plans to own indefinitely in·def·i·nite adj. Not definite, especially: a. Unclear; vague. b. Lacking precise limits: an indefinite leave of absence. c. after completion; $514 million of developments with an expected stabilized return of 8.8 percent that the Company plans to sell within approximately one year of completion; and a $79 million backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of third-party construction volume with a 10.1 percent fee. E[acute accent]--Including 6.3 million square feet of projects under development that were 24.8 percent pre-leased, the Company's total portfolio at the end of the second quarter consisted of 737 properties totaling approximately 114 million square feet that were 88.6 percent leased. E[acute accent]--Duke renewed 81 percent of leases up for renewal, totaling 1.9 million square feet, on which net effective rents increased 3.7 percent. E[acute accent]--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 3.1 percent. E[acute accent]--Property sales in the second quarter totaled $40.1 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 8.4 percent. E[acute accent]--Acquisitions in the second quarter totaled $5.3 million. E[acute accent]--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 second 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 38.8 percent at June 30, 2006. E[acute accent]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 Annual Report on 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. as filed with the Securities and Exchange Commission on March 6, 2006 for additional information concerning these risks. E[acute accent]About Duke Realty Corporation E[acute accent]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 approximately 114 million rentable square feet that are leased by more than 3,600 tenants, and more than 6,300 acres of undeveloped land that can support over 90 million square feet of additional development. Duke provides a full range of services in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. , 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. E[acute accent]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 Relations Investor relations The process by which the corporation communicates with its investors. 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 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.
Financial Highlights
(in thousands, except per share data)
------------------- ----------------------
Three Months Ended Six Months Ended
June 30 June 30
------------------- ----------------------
Operating Results 2006 2005 2006 2005
----------------------------------------------- ----------------------
Revenues from continuing
operations $220,677 $198,409 $430,507 $384,299
Earnings from rental
operations 31,850 35,547 64,461 61,081
Earnings from service
operations 3,476 13,046 7,926 24,884
Net income available for
common shareholders - Basic 21,717 40,299 33,165 65,780
Net income available for
common shareholders -
Diluted 23,881 44,128 36,478 72,096
Funds from operations
available for common
shareholders - Basic 78,756 87,841 146,433 169,466
Funds from operations
available for common
shareholders - Diluted 86,542 96,133 160,956 185,682
Per Share:
Net income available for
common shareholders - Basic $0.16 $0.28 $0.25 $0.46
Net income available for
common shareholders -
Diluted $0.16 $0.28 $0.24 $0.46
Funds from operations
available for common
shareholders - Basic $0.58 $0.61 $1.09 $1.18
Funds from operations
available for common
shareholders - Diluted $0.58 $0.61 $1.08 $1.18
Dividend payout ratio of
funds from operations 81.9% 77.1% 87.5% 79.2%
Weighted average shares
outstanding
Basic - Net income and
Funds From Operations 134,969 143,480 134,876 143,286
Diluted - Net income and
Funds From Operations 149,364 157,696 149,273 157,711
-----------------------
June 30 December 31
Balance Sheet Data 2006 2005
----------------------------------------------------------------------
Net real estate investments $5,916,199 $4,733,100
Total assets 7,014,473 5,647,560
Total debt 3,833,934 2,600,651
Shareholders' equity 2,614,048 2,452,798
Common shares outstanding at
end of period 135,074 134,697
Reconciliation of Net Income to Funds From Operations
(in thousands, except per share data)
Three Months Ended
June 30
(Unaudited)
-----------------------------------------------
2006 2005
----------------------- -----------------------
Wtd. Wtd.
Avg. Per Avg. Per
Amount Shares Share Amount Shares Share
----------------------- -----------------------
Net Income Available
for Common Shares $21,717 134,969 $0.16 $40,299 143,480 $0.28
Add back:
Minority interest
in earnings of
unitholders 2,164 13,304 3,829 13,506
Other common stock
equivalents 1,091 710
----------------- -----------------
Diluted Net Income
Available for Common
Shares $23,881 149,364 $0.16 $44,128 157,696 $0.28
======================= =======================
Reconciliation to Funds
From Operations
("FFO")
Net Income Available
for Common Shares $21,717 134,969 $0.16 $40,299 143,480 $0.28
Adjustments:
Depreciation and
Amortization 65,167 64,124
Company Share of
Joint Venture
Depreciation
and amortization 4,425 4,943
Earnings from
depreciable
property sales-
wholly owned (1,531) (5,888)
Earnings from
depreciable
property sales-JV (5,400) (11,174)
Minority interest
share of
adjustments (5,622) (4,463)
----------------- -----------------
Basic Funds From
Operations 78,756 134,969 $0.58 87,841 143,480 $0.61
Minority interest
in earnings of
unitholders 2,164 13,304 3,829 13,506
Minority interest
share of
adjustments 5,622 4,463
Other common stock
equivalents 1,091 710
----------------- -----------------
Diluted Funds From
Operations $86,542 149,364 $0.58 $96,133 157,696 $0.61
======================= =======================
Six Months Ended
June 30
(Unaudited)
-----------------------------------------------
2006 2005
----------------------- -----------------------
Wtd. Wtd.
Avg. Per Avg. Per
Amount Shares Share Amount Shares Share
----------------------- -----------------------
Net Income Available
for Common Shares $33,165 134,876 $0.25 $65,780 143,286 $0.46
Add back:
Minority interest
in earnings of
unitholders 3,313 13,348 6,316 13,681
Other common stock
equivalents 1,049 744
----------------- -----------------
Diluted Net Income
Available for Common
Shares $36,478 149,273 $0.24 $72,096 157,711 $0.46
======================= =======================
Reconciliation to Funds
From Operations
("FFO")
Net Income Available
for Common Shares $33,165 134,876 $0.25 $65,780 143,286 $0.46
Adjustments:
Depreciation and
Amortization 125,749 127,350
Company Share of
Joint Venture
Depreciation
and amortization 9,127 9,808
Earnings from
depreciable
property sales-
wholly owned (2,036) (12,398)
Earnings from
depreciable
property sales-
share of joint
venture (8,362) (11,174)
Minority interest
share of
adjustments (11,210) (9,900)
----------------- -----------------
Basic Funds From
Operations 146,433 134,876 $1.09 169,466 143,286 $1.18
Minority interest
in earnings of
unitholders 3,313 13,348 6,316 13,681
Minority interest
share of
adjustments 11,210 9,900
Other common stock
equivalents 1,049 744
----------------- -----------------
Diluted Funds From
Operations $160,956 149,273 $1.08 $185,682 157,711 $1.18
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