Exhibit 99.1
For Immediate Release | | | For Investor Inquiries, contact |
January 31, 2007 | | | Shona L. Bedwell | Randy A. Henry |
2007-03 | | | 317.808.6169 | 317.808.6060 |
| | | |
| | | For Media Inquiries, contact: |
| | | Ken Turchi |
| | | 317.808.6358 |
Duke Realty Announces Fourth Quarter Earnings
Common and Preferred Stock Dividends Declared
Indianapolis - Duke Realty Corporation (DRE: NYSE) reported today results for the fourth quarter and year ended December 31, 2006.
Funds from operations available to common shareholders (diluted) (“FFO”) was $0.76 per share for the fourth quarter of 2006, as compared to $0.61 per share for the same quarter in 2005, an increase of 24.6 percent. FFO for the year ended December 31, 2006 was $2.48 per share, as compared to $2.40 per share in 2005, an increase of 3.3 percent.
Net income available for common shareholders (diluted) (“EPS”) was $0.37 per share for the fourth quarter of 2006, as compared to $0.22 per share for the same quarter in 2005. EPS for the year was $1.07 per share, as compared to $2.17 per share for 2005. Included in 2005 EPS is $1.33 from gains on depreciable property sales primarily from the sale of a 212 property light industrial portfolio completed in September 2005.
Denny Oklak, Chairman and Chief Executive Officer, commenting on Duke’s fourth quarter performance, stated,
“With nearly 25.0 percent growth in FFO this quarter, we were pleased to close 2006 on such a strong note. Our level of development starts for the year totaled more than $1 billion and leasing activity is strong across all of our markets. In fact, our stabilized in-service occupancy now stands at 95.4 percent, the highest level since 1995.
Our strategic initiatives that we implemented in 2006 continue to provide us with earnings growth momentum and we look forward to continued growth in 2007. We remain comfortable with our FFO per share guidance of $2.62 to $2.76 for 2007 and expect FFO per share of $0.52 to $0.55 for the first quarter of 2007.”
-more-
Dividends
Additionally, the Company’s Board of Directors declared its quarterly common stock dividend of $0.475 per share, or $1.90 per share on an annualized basis. The dividend is payable on February 28, 2007, to shareholders of record on February 14, 2007.
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 B | | Not Listed | | $.998750 | | March 16, 2007 | | March 30, 2007 |
Series J | | DREPRJ | | $.414063 | | February 14, 2007 | | February 28, 2007 |
Series K | | DREPRK | | $.406250 | | February 14, 2007 | | February 28, 2007 |
Series L | | DREPRL | | $.412500 | | February 14, 2007 | | February 28, 2007 |
Series M | | DREPRM | | $.434375 | | March 16, 2007 | | March 30, 2007 |
Series N | | DREPRN | | $.453125 | | March 16, 2007 | | March 30, 2007 |
Fourth Quarter Operating Statistics
· The Company’s 677 stabilized in-service properties totaling 104.2 million square feet were 95.4 percent leased compared to 94.6 percent and 93.8 percent leased at September 30, 2006 and year-end 2005, respectively.
· The Company’s value creation pipeline at year-end totaled $1.3 billion, including $449 million of joint venture developments in which the Company has an approximate 50 percent ownership interest. The pipeline includes $435 million of developments with an expected stabilized return of 9.4 percent that Duke plans to own indefinitely after completion, $772 million of developments with an expected stabilized return of 8.6 percent that the Company plans to sell upon completion and stabilization, and a $79 million backlog of third-party construction volume with a 12.8 percent fee.
· Including 9.6 million square feet of projects either under development or unstabilized in-service, the Company’s total portfolio at the end of the fourth quarter consisted of 721 properties totaling nearly 114 million square feet that were 89.6 percent leased.
· Duke renewed 82.8 percent of leases up for renewal, totaling 1.8 million square feet, on which net effective rents increased 3.1 percent. For the year, the Company renewed 7.5 million square feet, or 80.0 percent of leases up for renewal, increasing net effective rents by 3.1 percent.
-more-
· Same property net operating income increased by 8.2 percent for the three months ended December 31, 2006 and 7.0 percent for all of 2006.
· Property sales in the fourth quarter totaled $182.9 million, including $149.8 million of held-for-sale dispositions at an average stabilized capitalization rate of 6.6 percent. The remaining sales included $33.2 million of held-for-rental properties at an average stabilized capitalization rate of 8.2 percent.
· The Company’s interest and fixed-charge coverage ratios in the fourth quarter were 3.5 and 2.5, respectively, and its debt-to-total market capitalization ratio was 37.4 percent at December 31, 2006.
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, 2006 for additional information concerning these risks.
Supplemental Earnings Measure
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. A reconciliation of FFO to GAAP net income is included in the financial tables accompanying this press release.
-more-
About Duke Realty Corporation
Founded in 1972, Duke Realty Corporation develops commercial real estate in strategically selected markets by leveraging the expertise of local sales, construction and operations professionals. Duke is the largest publicly traded, vertically integrated office/industrial real estate company in the United States. Duke’s properties encompass approximately 114 million rentable square feet leased by more than 3,500 tenants. We own or control more than 6,400 acres of undeveloped land that can support approximately 93 million square feet of additional development. Duke common stock is listed on the New York Stock Exchange 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 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.
-more-
