For Immediate Release July 30, 2003 2003-08 | For Investor Inquires, contact: Thomas K. Peck 317/808-6168 | |
For Media Inquires, contact: Donna M. Hovey 317/808-6137 |
| Duke Realty Announces Second Quarter Earnings Common Stock Dividend Increase Also Announced |
Indianapolis—Duke Realty Corporation (DRE/NYSE) reported today that net income available for common shareholders for the second quarter of 2003 was $34.5 million on revenues of $196.2 million, compared to $48.5 million on revenues of $194.6 million for the second quarter last year. On a per share basis, second quarter net income available for common shareholders was $0.25 per share compared with $0.36 per share for the second 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.
Diluted funds from operations ("FFO") were $92.0 million for the second quarter of 2003 versus $102.0 million for the same period in 2002. On a per share basis, second quarter FFO was $0.59 compared to $0.65 for the second 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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Duke also announced today that its Board of Directors increased its quarterly common stock dividend to $0.46 per share, payable on August 29, 2003, to shareholders of record on August 14, 2003. The new dividend is a 1.1 percent increase over the previous amount and equals $1.84 per share on an annualized basis. Including increases in each of the past ten years, Duke has increased its common stock dividend more than 104 percent since its October 1993 public offering.
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 | September 16, 2003 | September 30, 2003 | ||||
| Series D | DREPRD | $ | .46094 | September 16, 2003 | September 30, 2003 | ||||
| Series E | DREPRE | $ | .51563 | September 16, 2003 | September 30, 2003 | ||||
| Series I | DREPRI | $ | .52813 | September 16, 2003 | September 30, 2003 | ||||
Property information at June 30, 2003 was as follows:
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second quarter consisted of more than 109.0 million square feet that were 87.3 percent leased.
The Company also disclosed the following information for the second quarter of 2003:
Commenting on Duke's second quarter performance, Tom Hefner, Chairman and Chief Executive Officer, stated,
"Overall, our performance in the second quarter was satisfactory. Highlights for the quarter included:
With continued FFO growth anticipated for the third and fourth quarters, we remain comfortable with our $2.40 to $2.55 per share guidance range previously announced."
When used in this press release, the word "believes," "expects," "estimates" and similar expressions are intended to identify forward-looking statements. Such statements, including estimates of our future operating performance, are subject to certain risks and uncertainties identified in our reports filed with the SEC that could cause actual results to differ materially. In
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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 also advised to refer to Duke's Form 8-K Report as filed with the Securities and Exchange Commission on July 25, 2003 for additional information concerning risks about investing in our securities.
Duke Realty Corporation is the largest publicly traded office and industrial real estate company in the United States. 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 109 million square feet of properties, has over 1,000 employees and owns or controls more than 4,000 acres of undeveloped land that can support more than 63 million square feet of future development. Visit Duke on the web at www.dukerealty.com.
A copy of the Company's June 30, 2003 supplemental information fact book will be available after 7:00 p.m. EST 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 second 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 June 30 | Six Months Ended June 30 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating Results | ||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||
| Revenues from continuing operations | $ | 196,160 | $ | 194,629 | $ | 390,195 | $ | 398,205 | ||||||
| Earnings from rental operations | 46,124 | 59,810 | 89,597 | 114,293 | ||||||||||
| Earnings from service operations | 4,883 | 7,611 | 6,936 | 23,126 | ||||||||||
| Net income for common shareholders—Basic | 34,538 | 48,528 | 72,015 | 93,806 | ||||||||||
| Net income for common shareholders—Diluted | 38,298 | 54,011 | 79,900 | 105,037 | ||||||||||
| Funds from operations—Basic | 80,783 | 88,835 | 157,973 | 176,114 | ||||||||||
| Funds from operations—Diluted | 92,048 | 102,002 | 180,176 | 203,521 | ||||||||||
Per Share: | ||||||||||||||
| Net income—common shareholders—Basic | $ | 0.26 | $ | 0.36 | $ | 0.53 | $ | 0.70 | ||||||
| Net income—common shareholders—Diluted | $ | 0.25 | $ | 0.36 | $ | 0.53 | $ | 0.70 | ||||||
| Funds from operations—Basic | $ | 0.60 | $ | 0.66 | $ | 1.17 | $ | 1.32 | ||||||
| Funds from operations—Diluted | $ | 0.59 | $ | 0.65 | $ | 1.16 | $ | 1.30 | ||||||
| Dividend payout ratio of funds from operations | 78.0 | % | 70.0 | % | 78.9 | % | 69.6 | % | ||||||
| Weighted average shares outstanding | ||||||||||||||
| Basic—Net income and Funds from operations | 135,386 | 134,196 | 135,279 | 133,070 | ||||||||||
| Diluted—Net income | 151,019 | 151,092 | 150,823 | 150,682 | ||||||||||
| Diluted—Funds from operations | 156,025 | 157,546 | 155,830 | 157,136 | ||||||||||
Balance Sheet Data | June 30 2003 | December 31 2002 | ||||||||||||
| Net real estate investments | $ | 4,757,611 | $ | 4,702,788 | ||||||||||
| Total assets | 5,430,926 | 5,348,823 | ||||||||||||
| Total debt | 2,234,877 | 2,106,285 | ||||||||||||
| Shareholders' equity | 2,565,595 | 2,616,180 | ||||||||||||
| Common shares outstanding at end of period | 135,547 | 135,007 | ||||||||||||
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Reconciliation of Net Income to Funds From Operations
(in thousands, except per share data)
| | Three Months Ended June 30 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | 2003 | 2002 | |||||||||||||||
| | Amount | Wtd. Avg. Shares | Per Share | Amount | Wtd. Avg. Shares | Per Share | |||||||||||
| Net Income Available for Common Shares | $ | 34,538 | 135,386 | $ | 0.26 | $ | 48,528 | 134,196 | $ | 0.36 | |||||||
| Add back: | |||||||||||||||||
| Minority interest in earnings of unitholders | 3,760 | 14,755 | 5,483 | 15,114 | |||||||||||||
| Other common stock equivalents | 878 | 1,782 | |||||||||||||||
| Fully Diluted Net Income | 38,298 | 151,019 | $ | 0.25 | 54,011 | 151,092 | $ | 0.36 | |||||||||
| Adjustments: | |||||||||||||||||
| Depreciation and Amortization | 46,617 | 42,993 | |||||||||||||||
| Company Share of Joint Venture Depreciation and amortization | 4,774 | 4,383 | |||||||||||||||
| (Earnings) loss from depreciable property sales | (105 | ) | (2,550 | ) | |||||||||||||
| Dilutive effect of Convertible Preferred D Shares | 2,464 | 5,006 | 2,464 | 5,009 | |||||||||||||
| Dilutive effect of Convertible Preferred G Units | 0 | 0 | 701 | 1,445 | |||||||||||||
| Fully Diluted Funds From Operations | $ | 92,048 | 156,025 | $ | 0.59 | $ | 102,002 | 157,546 | $ | 0.65 | |||||||
| | Six Months Ended June 30 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | 2003 | 2002 | |||||||||||||||
| | Amount | Wtd. Avg. Shares | Per Share | Amount | Wtd. Avg. Shares | Per Share | |||||||||||
| Net Income Available for Common Shares | $ | 72,015 | 135,279 | $ | 0.53 | $ | 93,806 | 133,070 | $ | 0.70 | |||||||
| Add back: | |||||||||||||||||
| Minority interest in earnings of unitholders | 7,885 | 14,778 | 11,231 | 15,922 | |||||||||||||
| Other common stock equivalents | 766 | 1,690 | |||||||||||||||
| Fully Diluted Net Income | 79,900 | 150,823 | $ | 0.53 | 105,037 | 150,682 | $ | 0.70 | |||||||||
| Adjustments: | |||||||||||||||||
| Depreciation and Amortization | 94,289 | 85,812 | |||||||||||||||
| Company Share of Joint Venture Depreciation and amortization | 9,777 | 8,798 | |||||||||||||||
| (Earnings) loss from depreciable property sales | (8,718 | ) | (2,454 | ) | |||||||||||||
| Dilutive effect of Convertible Preferred D Shares | 4,928 | 5,007 | 4,928 | 5,009 | |||||||||||||
| Dilutive effect of Convertible Preferred G Units | 0 | 0 | 1,400 | 1,445 | |||||||||||||
| Fully Diluted Funds From Operations | $ | 180,176 | 155,830 | $ | 1.16 | $ | 203,521 | 157,136 | $ | 1.30 | |||||||
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