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Duke also announced today that its Board of Directors increased its quarterly common stock dividend to $0.485 per share, payable on August 29, 2008 to shareholders of record on August 14, 2008. Equal to $1.94 per share on an annualized basis, the new dividend provides a 1.0 percent increase over the previous amount and represents the fifteenth consecutive annual increase since the Company's October 1993 public offering.
Denny Oklak, Chairman and Chief Executive Officer, commenting on Duke's second quarter performance, stated: "Even though the economic environment is challenging, our stabilized in-service portfolio increased to 93.1 percent leased and we were able to improve our overall portfolio occupancy by 1.2 percent to 87.2 percent during the quarter. We are also pleased with our fifteenth consecutive annual dividend increase."
Looking forward for the remainder of 2008, Mr. Oklak stated,
"Our 2008 annual guidance for FFO per share is $2.60 to $2.90. Based on our current expectations of economic conditions for the remainder of the year, we anticipate that FFO per share will be at the lower end of our guidance."
The Company also announced the election of Ms. Lynn C. Thurber to its Board of Directors, effective immediately. Ms. Thurber is the non-Executive Chairman of LaSalle Investment Management, a global real estate money management firm investing in private real estate as well as publicly-traded real estate companies on behalf of institutional and individual investors, which is a part of Jones Lang LaSalle Inc. Prior to becoming Chairman, Ms. Thurber was the Chief Executive Officer of LaSalle Investment Management from March 2000 to December 2006 and Co-President from December 1994 to March 2000. Ms. Thurber holds an A.B. degree from Wellesley College and an M.B.A. from Harvard Business School.
"We are extremely pleased to have Lynn Thurber join our Board of Directors," Mr. Oklak said. "Lynn has outstanding experience in the real estate industry through her tenure at LaSalle Investment Management, ABKB Realty Advisors and Morgan Stanley. Her expertise in the fund management business and international investment experience will be of great value as we execute on our strategic plan."
The Board also declared today the following dividends on the Company's outstanding preferred stock:
NYSE Quarterly Class Symbol Amount/Share Record Date Payment Date ---------- ------------ ------------------ ------------------ Series J DREPRJ $ .414063 August 15, 2008 August 29, 2008 Series K DREPRK $ .406250 August 15, 2008 August 29, 2008 Series L DREPRL $ .412500 August 15, 2008 August 29, 2008 Series M DREPRM $ .434375 September 16, 2008 September 30, 2008 Series N DREPRN $ .453125 September 16, 2008 September 30, 2008 Series O DREPRO $ .523438 September 16, 2008 September 30, 2008
Second Quarter Operating Statistics
-- At the end of the second quarter, the Company's 673 stabilized in- service properties, totaling 109.2 million square feet, were 93.1 percent leased compared to 92.9 percent at March 31, 2008. -- The Company's value creation pipeline totaled $1.7 billion, including $377 million of developments with an expected stabilized return of 8.9 percent that Duke plans to own indefinitely after completion; $1.3 billion of developments with an expected stabilized return of 8.2 percent that the Company plans to sell within approximately one year of completion; and a $106 million backlog of third-party construction contracts with an average overall profit margin of 16.1 percent. -- In addition to its 673 stabilized in-service properties, the Company owns 32 recently completed development properties, with a total 9.7 million square feet, that are 34.1 percent leased. The company owns 18 properties under development, with a total of 3.1 million square feet, that are 42.4 percent pre-leased. -- The Company renewed 76 percent of all leases expiring in the second quarter, for a total of 1.8 million square feet, with average net effective rent increases of 3.4 percent. -- Same property net operating income increased 2.2 percent for the three months ended June 30, 2008. -- Property sales in the second quarter totaled $102.4 million, at an average stabilized capitalization rate of 7.1 percent. -- The Company completed acquisitions of properties totaling $7.4 million, with an overall stabilized yield of 7.6 percent.
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 February 29, 2008 for additional information concerning these risks.
About Duke Realty Corporation
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. The company owns, manages or has under development more than 131 million rentable square feet in 24 major U.S. cities. Duke, which controls over 7,400 acres of land for more than 110 million square feet of future development, also provides nationwide real estate solutions through its national development division.
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 on Thursday, July 31 at 3:00 p.m. New York 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 2008 2007 2008 2007 --------- --------- ----------- ----------- Revenues from continuing operations $ 242,232 $ 222,719 $ 479,131 $ 446,120 Earnings from rental operations 21,945 26,734 41,223 51,476 Earnings from service operations 10,390 12,018 14,803 18,952 Net income available for common shareholders - Basic 17,797 37,076 21,845 105,639 Net income available for common shareholders - Diluted 18,751 39,694 23,019 113,167 Funds from operations available for common shareholders - Basic 88,094 87,282 172,736 173,609 Funds from operations available for common shareholders - Diluted 92,710 93,479 181,898 185,979 Per Share: Funds from operations available for common shareholders - Basic $ 0.60 $ 0.64 $ 1.18 $ 1.27 Funds from operations available for common shareholders - Diluted $ 0.60 $ 0.63 $ 1.17 $ 1.26 Net income available for common shareholders - Basic $ 0.12 $ 0.27 $ 0.15 $ 0.77 Net income available for common shareholders - Diluted $ 0.12 $ 0.27 $ 0.15 $ 0.76 Dividend payout ratio of funds from operations 80.8% 76.2% 82.5% 75.8% Weighted average shares outstanding Basic - Net income and Funds From Operations 146,741 136,921 146,536 136,873 Diluted - Net income and Funds From Operations 155,064 148,129 154,894 148,170 --------- --------- ----------- ----------- June 30, December 31, Balance Sheet Data 2008 2007 --------- --------- ----------- ----------- Net real estate investments $ 6,237,870 $ 6,101,332 Total assets 7,833,069 7,661,981 Total debt 4,346,822 4,316,460 Shareholders' equity 2,935,021 2,750,033 Common shares outstanding at end of period 146,869 146,175 Reconciliation of Net Income to Funds From Operations (in thousands, except per share data) Three Months Ended June 30, (Unaudited) -------------------------------------------------- 2008 2007 ------------------------- ------------------------- Wtd. Wtd. Avg. Per Avg. Per Amount Shares Share Amount Shares Share --------- ------- ------ --------- ------- ------ Net Income Available for Common Shares $ 17,797 146,741 $ 0.12 $ 37,076 136,921 $ 0.27 Add back: Minority interest in earnings of unitholders 954 7,684 2,618 9,782 Other common stock equivalents 639 1,426 --------- ------- --------- ------- Diluted Net Income Available for Common Shares $ 18,751 155,064 $ 0.12 $ 39,694 148,129 $ 0.27 ========= ======= ====== ========= ======= ====== Reconciliation to Funds From Operations ("FFO") Net Income Available for Common Shares $ 17,797 146,741 $ 0.12 $ 37,076 136,921 $ 0.27 Adjustments: Depreciation and Amortization 76,575 68,407 Company Share of Joint Venture Depreciation and amortization 7,391 5,610 Earnings from depreciable property sales-wholly owned (9,531) (20,361) Earnings from depreciable property sales-JV (476) 129 Minority interest share of adjustments (3,662) (3,579) --------- ------- --------- ------- Basic Funds From Operations 88,094 146,741 $ 0.60 87,282 136,921 $ 0.64 Minority interest in earnings of unitholders 954 7,684 2,618 9,782 Minority interest share of adjustments 3,662 3,579 Other common stock equivalents 639 1,426 --------- ------- --------- ------- Diluted Funds From Operations $ 92,710 155,064 $ 0.60 $ 93,479 148,129 $ 0.63 ========= ======= ====== ========= ======= ====== Six Months Ended June 30, (Unaudited) -------------------------------------------------- 2008 2007 ------------------------- ------------------------- Wtd. Wtd. Avg. Per Avg. Per Amount Shares Share Amount Shares Share --------- ------- ------ --------- ------- ------ Net Income Available for Common Shares $ 21,845 146,536 $ 0.15 $ 105,639 136,873 $ 0.77 Add back: Minority interest in earnings of unitholders 1,174 7,771 7,528 9,755 Other common stock equivalents 587 1,542 --------- ------- --------- ------- Diluted Net Income Available for Common Shares $ 23,019 154,894 $ 0.15 $ 113,167 148,170 $ 0.76 ========= ======= ====== ========= ======= ====== Reconciliation to Funds From Operations ("FFO") Net Income Available for Common Shares $ 21,845 146,536 $ 0.15 $ 105,639 136,873 $ 0.77 Adjustments: Depreciation and Amortization 155,696 136,146 Company Share of Joint Venture Depreciation and amortization 14,319 10,578 Earnings from depreciable property sales-wholly owned (10,641) (72,081) Earnings from depreciable property sales-share of joint venture (495) (1,831) Minority interest share of adjustments (7,988) (4,842) --------- ------- --------- ------- Basic Funds From Operations 172,736 146,536 $ 1.18 173,609 136,873 $ 1.27 Minority interest in earnings of unitholders 1,174 7,771 7,528 9,755 Minority interest share of adjustments 7,988 4,842 Other common stock equivalents 587 1,542 --------- ------- --------- ------- Diluted Funds From Operations $ 181,898 154,894 $ 1.17 $ 185,979 148,170 $ 1.26 ========= ======= ====== ========= ======= ======
Investor Relations Contacts: Shona L. Bedwell 317.808.6169 Email Contact Randy A. Henry 317.808.6060 Email Contact News Media Contact: Joel Reuter 317.808.6137 Email Contact
SOURCE: Duke Realty Corporation
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