For Immediate Release April 30, 2003 2003-06 | For Investor Inquires, contact: Thomas K. Peck 317/808-6168 | |
For Media Inquires, contact: Donna M. Hovey 317/808-6137 |
| Duke Realty Announces First Quarter Earnings Common and Preferred Stock Dividends Also Announced |
Indianapolis—Duke Realty Corporation (DRE/NYSE) reported today that net income available for common shareholders for the first quarter of 2003 was $37.5 million on revenues of $194.4 million, compared to $45.3 million on revenues of $204.0 million for the first quarter last year. On a per share basis, first quarter net income available for common shareholders was $0.28 per share compared with $0.34 per share for the first quarter of 2002. All per share amounts reported are diluted with basic per share information also included in the financial table accompanying this press release.
Funds from operations ("FFO") decreased 13.2 percent to $88.1 million for the first quarter of 2003 versus $101.5 million for the same period in 2002. On a per share basis, first quarter FFO decreased 12.3 percent to $0.57 compared to $0.65 for the first quarter of 2002. 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.
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Additionally, the Company's Board of Directors declared a quarterly dividend of $.455 per common share, or $1.82 per share on an annualized basis. The dividend is payable on May 30, 2003 to common shareholders of record on May 14, 2003.
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 | $ | .99875 | June 16, 2003 | June 30, 2003 | ||||
| Series D | DREPRD | $ | .46094 | June 16, 2003 | June 30, 2003 | ||||
| Series E | DREPRE | $ | .51563 | June 16, 2003 | June 30, 2003 | ||||
| Series I | DREPRI | $ | .52813 | June 16, 2003 | June 30, 2003 | ||||
Commenting on Duke's first quarter performance, Tom Hefner, Chairman and Chief Executive Officer, stated,
"Though market and economic conditions remained challenging, we were generally pleased with our performance in the first quarter as we exceeded our previous FFO guidance range of $0.54 - $0.56 per share. Our results included lease termination income of $9.5 million, which was largely offset by snow removal expenses and other weather related rental expenses that were above budget by $5.5 million and will be recovered throughout the remainder of the year. While our outlook remains cautious, we are optimistic that conditions are improving as overall occupancy was up 52 basis points during the quarter, and build-to-suit and third-party construction activity was relatively good. At this time, we see no reason to change our previous 2003 funds from operations guidance of $2.40 - $2.55 per share. With this in mind, we believe that our first quarter FFO per share of $0.57 should be the low point for the current economic downturn."
Property information at March 31, 2003 was as follows:
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The Company also disclosed the following information for the first quarter of 2003:
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 Form 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 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
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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 nearly 109 million square feet of properties, has approximately 1,000 employees and owns or controls more than 4,000 acres of undeveloped land that can support more than 62 million square feet of future development. Visit Duke on the web at www.dukerealty.com.
A copy of the Company's March 31, 2003 supplemental information fact book will be available after 7:00 p.m. EDT today in theInvestor Information section of the Company's web site atwww.dukerealty.com. Duke is also hosting a conference call tomorrow at 2:30 p.m. Eastern Daylight Time (New York time) to discuss its first quarter operating results. All investors are invited to listen to this call, which can be accessed through theInvestor Information section of the Company's web site atwww.dukerealty.com.
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Financial Highlights
(in thousands, except per share data)
| | Three Months Ended March 31 | |||||||
|---|---|---|---|---|---|---|---|---|
| Operating Results | ||||||||
| 2003 | 2002 | |||||||
| Revenues from continuing operations | $ | 194,433 | $ | 204,002 | ||||
| Earnings from rental operations | 43,599 | 54,671 | ||||||
| Earnings from service operations | 2,053 | 15,515 | ||||||
| Net income for common shareholders—Basic | 37,477 | 45,278 | ||||||
| Net income for common shareholders—Diluted | 41,602 | 51,026 | ||||||
| Funds from operations—Basic | 77,190 | 87,279 | ||||||
| Funds from operations—Diluted | 88,128 | 101,519 | ||||||
Per Share: | ||||||||
| Funds from operations—Basic | $ | 0.57 | $ | 0.66 | ||||
| Funds from operations—Diluted | $ | 0.57 | $ | 0.65 | ||||
| Net income—common shareholders—Basic | $ | 0.28 | $ | 0.34 | ||||
| Net income—common shareholders—Diluted | $ | 0.28 | $ | 0.34 | ||||
| Dividend payout ratio of funds from operations | 79.8 | % | 69.2 | % | ||||
| Weighted average shares outstanding | ||||||||
| Basic—Net income and Funds from operations | 135,170 | 131,932 | ||||||
| Diluted—Net income | 150,627 | 150,270 | ||||||
| Diluted—Funds from operations | 155,634 | 156,724 | ||||||
| Balance Sheet Data | March 31 2003 | December 31 2002 | ||||||
| Net real estate investments | $ | 4,726,814 | $ | 4,702,788 | ||||
| Total assets | 5,381,023 | 5,348,823 | ||||||
| Total debt | 2,181,635 | 2,106,285 | ||||||
| Shareholders' equity | 2,596,781 | 2,616,180 | ||||||
| Common shares outstanding at end of period | 135,270 | 135,007 | ||||||
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Reconciliation of Net Income to Funds From Operations
(in thousands, except per share data)
| | Three Months Ended March 31 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | 2003 | 2002 | |||||||||||||||
| | Amount | Wtd. Avg. Shares | Per Share | Amount | Wtd. Avg. Shares | Per Share | |||||||||||
| Net Income Available for Common Shares | $ | 37,477 | 135,170 | $ | 0.28 | $ | 45,278 | 131,932 | $ | 0.34 | |||||||
| Add back: | |||||||||||||||||
| Minority interest in earnings of unitholders | 4,125 | 14,802 | 5,748 | 16,738 | |||||||||||||
| Other common stock equivalents | 655 | 1,600 | |||||||||||||||
| Fully Diluted Net Income | 41,602 | 150,627 | $ | 0.28 | 51,026 | 150,270 | $ | 0.34 | |||||||||
| Adjustments: | |||||||||||||||||
| Depreciation and Amortization | 47,672 | 42,819 | |||||||||||||||
| Company Share of Joint Venture Depreciation and amortization | 5,003 | 4,415 | |||||||||||||||
| (Earnings) loss from depreciable property sales | (8,613 | ) | 96 | ||||||||||||||
| Dilutive effect of Convertible Preferred D Shares | 2,464 | 5,007 | 2,464 | 5,009 | |||||||||||||
| Dilutive effect of Convertible Preferred G Units | 0 | 0 | 699 | 1,445 | |||||||||||||
| Fully Diluted Funds From Operations | $ | 88,128 | 155,634 | $ | 0.57 | $ | 101,519 | 156,724 | $ | 0.65 | |||||||
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