Increased In-Service Occupancy to 97.0
percent
Duke Realty Corporation (NYSE:DRE), the largest pure-play, domestic
only, industrial REIT in the United States, today reported results
for the first quarter 2018.
Jim Connor, Chairman and Chief Executive Officer
said, "We started 2018 with strong leasing activity, executing over
6.9 million square feet of total leases. We renewed 68
percent of expiring leases and, after considering expiring leases
with immediate backfills, we re-leased 94 percent of our
expirations. New and renewal leases executed during the
quarter will result in rent growth of 12 percent on a cash
basis and nearly 26 percent growth in annualized net effective
rents. We expect growth in same property net operating
income, which was 3.4 percent when compared to the first three
months of 2017, to continue to increase as the year progresses due
mainly to the commencement of leases signed in late 2017 and early
2018, which have a significant increase in rental rates.
These solid operating results, with expectations for continued
out-performance for the remainder of the year, resulted in several
2018 guidance changes."
Mark Denien, Executive Vice President and Chief
Financial Officer, stated, "We generated significant disposition
proceeds during the first quarter of 2018, which we used to repay
the outstanding borrowings on our line of credit in early
April. We believe we will be able to continue to self-fund
development activity well into 2019 without any equity needs, while
still maintaining our very strong capital position."
Quarterly Highlights
• A complete reconciliation, in dollars and per share amounts,
of net income to funds from operations ("FFO"), as defined by
NAREIT, as well as to Core FFO, is included in the financial tables
included in this release.
• Net income was $0.20 per diluted share, or $73 million, for
the first quarter of 2018, consistent with $0.20 per diluted share
for the first quarter of 2017.
• FFO, as defined by NAREIT, was $0.31 per diluted share, or
$112 million, for the first quarter of 2018, compared to $0.32 per
diluted share for the first quarter of 2017.
• Core FFO was $0.30 per diluted share, or $109 million, for the
first quarter of 2018, compared to $0.32 per diluted share for the
first quarter of 2017. The decrease in Core FFO is due to the first
quarter of 2017 including the operations of our medical office
properties, which the company sold in a series of transactions in
mid to late 2017. This decrease to Core FFO was partially
offset by lower interest expense in the first quarter of 2018, due
to using a portion of the proceeds from the medical office sales to
reduce leverage, as well as from re-investing a portion of such
proceeds into new industrial properties, along with overall
improved operations.
• Operating performance within the company's industrial
portfolio:
- Total stabilized occupancy at March 31, 2018 of 98.5 percent
compared to 98.5 percent at December 31, 2017 and 98.7 percent at
March 31, 2017
- Total in-service occupancy at March 31, 2018 of 97.0 percent
compared to 95.7 percent at December 31, 2017 and 97.9 percent at
March 31, 2017
- Total occupancy, including properties under development, of
94.4 percent at March 31, 2018 compared to 93.8 percent at December
31, 2017 and 95.9 percent at March 31, 2017
- Tenant retention of 68 percent and re-lease of 94 percent of
all expiring leases for the quarter
- Same-property net operating income growth of 3.4 percent
for the three months ended March 31, 2018 compared to the same
period in 2017
- Total leasing activity of 6.9 million square feet for the
quarter
- Overall cash and annualized net effective rent growth on new
and renewal leases of 12.0 percent and 25.6 percent, respectively,
for the quarter
• Successful execution of capital transactions in the first
quarter:
- Completed $170 million of building dispositions
- Completed $23 million of building acquisitions
- Started six new industrial development projects with expected
costs of $226 million
Real Estate Investment Activity
Mr. Connor further stated, "We started $226
million of developments during the quarter, totaling 2.5 million
square feet, which were 45 percent pre-leased. We also started
three additional development projects in early April, totaling 2.0
million square feet with expected costs of $111 million that are 91
percent pre-leased. Due to the $337 million of development
starts to date, as well as our stronger than expected pipeline of
development prospects for the rest of the year, we are increasing
our annual guidance for developments to a range of $650 million to
$850 million."
Development
The first quarter included the following development
activity:
- During the quarter, the company started $226 million of wholly
owned development projects totaling 2.5 million square feet, which
were 45 percent pre-leased in total. These wholly owned
development starts were comprised of a 855,000 square foot build to
suit development project in St. Louis; a speculative project in
Atlanta totaling 590,000 square feet; a speculative project in
Tampa totaling 443,000 square feet; a build to suit development
project in Minneapolis totaling 277,000 square feet; a 194,000
square foot speculative project in Northern New Jersey that is
being constructed on land purchased in the 2017 portfolio
acquisition from Bridge Development Partners, and a 146,000 square
foot speculative project in South Florida.
- Three projects totaling 1.5 million square feet, which were 87
percent leased, were placed in service during the
quarter.
Acquisitions
The company acquired two industrial properties
in an infill location in Southern California near the Ports of Los
Angeles and Long Beach totaling 119,000 square feet, which were 100
percent leased. The seller of these properties purchased one of the
company's industrial properties in Nashville, Tennessee in order to
effectuate a tax-free exchange.
Building Dispositions
Building dispositions totaled $170 million in
the first quarter and included the following:
Wholly Owned Properties
- Three data centers in the Washington D.C. market, totaling
447,000 square feet, which were placed in service in late 2017
- One industrial property in Nashville, Tennessee totaling
161,000 square feet
Joint Venture Properties
- Three industrial properties in Columbus totaling 1.1 million
square feet, sold by a 50 percent-owned joint venture
- One industrial property in Indianapolis totaling 251,000 square
feet, sold upon completion by a 50 percent-owned joint venture
Distributions Declared
The company's board of directors declared a
quarterly cash distribution on its common stock of $0.20 per share,
or $0.80 per share on an annualized basis. The first quarter
dividend will be payable on May 31, 2018 to shareholders of record
on May 16, 2018. Revisions to 2018
Guidance
A reconciliation of the company's guidance for
diluted net income per common share to FFO, as defined by NAREIT
and to Core FFO is included in the financial tables to this
release. The company revised its guidance for net income to $0.71
to $1.09 per diluted share from its previous guidance of $0.68 to
$0.98 per diluted share. The company revised its guidance for
FFO, as defined by NAREIT, to $1.26 to $1.34 per diluted share from
its previous guidance of $1.24 to $1.32.
Commenting on the revision to company's 2018
guidance, Mr. Connor stated, "We are increasing our guidance for
Core FFO to a range of $1.26 to $1.32 per diluted share, from the
previous range of $1.24 to $1.30 per diluted share. Our
progress to date on the lease up of our development pipeline and
recent acquisitions has been quicker than anticipated. This
increased occupancy in our newer properties was the basis for
increasing our occupancy and earnings guidance. We are also
revising our guidance for growth in adjusted funds from operations
("AFFO"), on a share adjusted basis, to a range of 4.5 percent to
10.0 percent, from the previous range of 2.7 percent to 8.2
percent, for the same reasons."
A summary of all guidance changes are as
follows:
- The guidance for Core FFO was increased to a range of $1.26 to
$1.32 per diluted share from the previous range of $1.24 to $1.30
per diluted share.
- The guidance for growth in AFFO, on a share adjusted basis, was
increased to a range of 4.5 percent to 10.0 percent from the
previous range of 2.7 percent to 8.2 percent.
- The estimate for average percent leased within the company's
stabilized portfolio was increased to a range of 97.5 percent to
98.5 percent from the previous range of 97.1 percent to 98.1
percent.
- The estimate for average percent leased, for all of the
company's in-service properties, was increased to a range of 96.0
percent to 97.0 percent from the previous range of 95.5 percent to
96.5 percent.
- The estimate for building dispositions was increased to a range
of $350 million to $550 million from the previous range of $300
million to $500 million.
- The estimate for development starts was increased to a range of
$650 million to $850 million from the previous range of $500
million to $700 million.
- Guidance for effective leverage was revised to a range of 33
percent to 29 percent from the previous range of 34 percent to 30
percent.
- Guidance for net debt to EBITDA was revised to a range of 5.3
times to 4.8 times from the previous range of 5.5 times to 5.0
times.
An updated version of the company's 2018
guidance will be available by 6:00 p.m. Eastern Time today through
the Investor Relations section of the company's website.
FFO and AFFO Reporting Definitions
FFO: FFO is computed in
accordance with standards established by NAREIT. NAREIT
defines FFO as net income (loss) excluding gains (losses) on sales
of depreciable property, impairment charges related to depreciable
real estate assets; plus real estate related depreciation and
amortization, and after similar adjustments for unconsolidated
joint ventures. The company believes FFO to be most directly
comparable to net income as defined by generally accepted
accounting principles ("GAAP"). The company believes that FFO
should be examined in conjunction with net income (as defined by
GAAP) as presented in the financial statements accompanying this
release. FFO does not represent a measure of liquidity, nor is it
indicative of funds available for the company’s cash needs,
including the company’s ability to make cash distributions to
shareholders.
Core FFO: Core FFO is computed
as FFO adjusted for certain items that are generally non-cash in
nature and that materially distort the comparative measurement of
company performance over time. The adjustments include gains on
sale of undeveloped land, impairment charges not related to
depreciable real estate assets, tax expenses or benefits related to
(i) changes in deferred tax asset valuation allowances, (ii)
changes in tax exposure accruals that were established as the
result of the adoption of new accounting principles, or (iii)
taxable income (loss) related to other items excluded from FFO or
Core FFO (collectively referred to as “other income tax items”),
gains (losses) on debt transactions, gains (losses) on and related
costs of acquisitions, gains on sale of merchant buildings, promote
income and severance charges related to major overhead
restructuring activities. Although the company’s calculation of
Core FFO differs from NAREIT’s definition of FFO and may not be
comparable to that of other REITs and real estate companies, the
company believes it provides a meaningful supplemental measure of
its operating performance.
AFFO: AFFO is a supplemental
performance measure defined by the company as Core FFO (as defined
above), less recurring building improvements and total second
generation capital expenditures (the leasing of vacant space that
had previously been under lease by the company is referred to as
second generation lease activity) related to leases commencing
during the reporting period and adjusted for certain non-cash items
including straight line rental income and expense, non-cash
components of interest expense and stock compensation expense, and
after similar adjustments for unconsolidated partnerships and joint
ventures. Same-Property
Performance
The company includes same-property net operating
income growth as a property-level supplemental measure of
performance. The company utilizes same-property net operating
income growth as a supplemental measure to evaluate property-level
performance, and jointly-controlled properties are included at the
company's ownership percentage.
A reconciliation of net income from continuing
operations to same property net operating income is included in the
financial tables to this release. A description of the
properties that are excluded from the company’s same-property net
operating income measure is included on page 16 of its March 31,
2018 supplemental information. About Duke
Realty Corporation
Duke Realty Corporation owns and operates
approximately 149 million rentable square feet of industrial assets
in 20 major logistics markets. Duke Realty Corporation is publicly
traded on the NYSE under the symbol DRE and is listed on the
S&P 500 Index. More information about Duke Realty Corporation
is available at www.dukerealty.com.
First Quarter Earnings Call and Supplemental
Information
Duke Realty Corporation is hosting a conference
call tomorrow, April 26, 2018, at 3:00 p.m. ET to discuss its first
quarter operating results. All investors and other interested
parties are invited to listen to the call. Access is available
through the Investor Relations section of the company's
website. A copy of the company's supplemental
information will be available by 6:00 p.m. ET today through the
Investor Relations section of the company's website.
Cautionary Notice Regarding Forward-Looking
Statements
This news release may contain forward-looking
statements within the meaning of the federal securities laws.
All statements, other than statements of historical facts,
including, among others, statements regarding the company’s future
financial position or results, future dividends, and future
performance, are forward-looking statements. Those statements
include statements regarding the intent, belief, or current
expectations of the company, members of its management team, as
well as the assumptions on which such statements are based, and
generally are identified by the use of words such as "may," "will,"
"seeks," "anticipates," "believes," "estimates," "expects,"
"plans," "intends," "should," or similar expressions.
Forward-looking statements are not guarantees of future performance
and involve risks and uncertainties that actual results may differ
materially from those contemplated by such forward-looking
statements. Many of these factors are beyond the company’s
abilities to control or predict. Such factors include, but are not
limited to, (i) general adverse economic and local real estate
conditions; (ii) the inability of major tenants to continue paying
their rent obligations due to bankruptcy, insolvency or a general
downturn in their business; (iii) financing risks, such as the
inability to obtain equity, debt or other sources of financing or
refinancing on favorable terms, if at all; (iv) the company’s
ability to raise capital by selling its assets; (v) changes in
governmental laws and regulations; (vi) the level and volatility of
interest rates and foreign currency exchange rates; (vii) valuation
of joint venture investments; (viii) valuation of marketable
securities and other investments; (ix) valuation of real estate;
(x) increases in operating costs; (xi) changes in the dividend
policy for the company’s common stock; (xii) the reduction in the
company’s income in the event of multiple lease terminations by
tenants; (xiii) impairment charges, (xiv) the effects of
geopolitical instability and risks such as terrorist attacks; (xv)
the effects of weather and natural disasters such as floods,
droughts, wind, tornadoes and hurricanes; and (xvi) the effect of
any damage to our reputation resulting from developments relating
to any of items (i) – (xv). Additional information concerning
factors that could cause actual results to differ materially from
those forward-looking statements is contained from time to time in
the company's filings with the Securities and Exchange
Commission. The company refers you to the section entitled
“Risk Factors” contained in the company's Annual Report on Form
10-K for the year ended December 31, 2017. Copies of each filing
may be obtained from the company or the Securities and Exchange
Commission.
The risks included here are not exhaustive and
undue reliance should not be placed on any forward-looking
statements, which are based on current expectations. All written
and oral forward-looking statements attributable to the company,
its management, or persons acting on their behalf are qualified in
their entirety by these cautionary statements. Further,
forward-looking statements speak only as of the date they are made,
and the company undertakes no obligation to update or revise
forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating
results over time unless otherwise required by law.
Contact Information:
Investors:Ron Hubbard317.808.6060
Media:Helen McCarthy317.708.8010
Duke Realty Corporation and Subsidiaries |
Consolidated Statement of Operations |
(Unaudited and in thousands, except per share amounts) |
|
|
|
|
|
Three Months Ended |
|
March 31, |
|
2018 |
|
2017 |
Revenues: |
|
|
|
|
|
|
|
|
Rental and related
revenue |
$ |
193,456 |
|
|
$ |
171,676 |
|
|
General contractor and
service fee revenue |
|
41,101 |
|
|
|
9,399 |
|
|
|
234,557 |
|
|
|
181,075 |
|
Expenses: |
|
|
|
|
|
|
|
|
Rental expenses |
|
20,396 |
|
|
|
16,237 |
|
|
Real estate taxes |
|
31,146 |
|
|
|
26,511 |
|
|
General contractor and
other services expenses |
|
40,409 |
|
|
|
7,624 |
|
|
Depreciation and
amortization |
|
77,529 |
|
|
|
62,023 |
|
|
|
169,480 |
|
|
|
112,395 |
|
Other
operating activities: |
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated joint ventures |
|
8,287 |
|
|
|
4,749 |
|
|
Gain on sale of
properties |
|
44,886 |
|
|
|
37,046 |
|
|
Gain on land sales |
|
2,949 |
|
|
|
1,505 |
|
|
Other operating
expenses |
|
(786 |
) |
|
|
(738 |
) |
|
Impairment charges |
|
— |
|
|
|
(859 |
) |
|
General and
administrative expenses |
|
(21,023 |
) |
|
|
(19,232 |
) |
|
|
34,313 |
|
|
|
22,471 |
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
99,390 |
|
|
|
91,151 |
|
|
|
|
|
|
|
|
|
|
Other
income (expenses): |
|
|
|
|
|
|
|
|
Interest and other
income, net |
|
4,463 |
|
|
|
533 |
|
|
Interest expense |
|
(20,000 |
) |
|
|
(24,162 |
) |
|
Gain on debt
extinguishment |
|
— |
|
|
|
25 |
|
Income from
continuing operations, before income taxes |
|
83,853 |
|
|
|
67,547 |
|
|
Income tax expense |
|
(10,329 |
) |
|
|
(2,132 |
) |
|
Income
from continuing operations |
|
73,524 |
|
|
|
65,415 |
|
|
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
(Loss) income before
gain on sales and income taxes |
|
(8 |
) |
|
|
5,366 |
|
|
Gain on sale of
depreciable properties |
|
132 |
|
|
|
— |
|
|
Income from
discontinued operations |
|
124 |
|
|
|
5,366 |
|
|
|
|
|
|
|
|
|
|
Net
income |
|
73,648 |
|
|
|
70,781 |
|
Net income
attributable to noncontrolling interests |
|
(685 |
) |
|
|
(581 |
) |
|
Net income attributable
to common shareholders |
$ |
72,963 |
|
|
$ |
70,200 |
|
|
|
|
|
|
|
|
|
|
Basic net
income per common share: |
|
|
|
|
|
|
|
|
Continuing operations
attributable to common shareholders |
$ |
0.20 |
|
|
$ |
0.18 |
|
|
Discontinued operations
attributable to common shareholders |
|
— |
|
|
|
0.02 |
|
Total |
$ |
0.20 |
|
|
$ |
0.20 |
|
|
|
|
|
|
|
|
|
|
Diluted net
income per common share: |
|
|
|
|
|
|
|
|
Continuing operations
attributable to common shareholders |
$ |
0.20 |
|
|
$ |
0.18 |
|
|
Discontinued operations
attributable to common shareholders |
|
— |
|
|
|
0.02 |
|
Total |
$ |
0.20 |
|
|
$ |
0.20 |
|
|
Duke Realty Corporation and Subsidiaries |
Consolidated Balance Sheets |
(Unaudited and in thousands) |
|
|
|
March 31, |
|
December 31, |
|
2018 |
|
2017 |
Assets |
|
|
|
|
|
|
|
Real estate
investments: |
|
|
|
|
|
|
|
Real
estate assets |
$ |
6,608,594 |
|
|
$ |
6,593,567 |
|
Construction in progress |
|
441,484 |
|
|
|
401,407 |
|
Investments in and advances to unconsolidated joint ventures |
|
121,576 |
|
|
|
126,487 |
|
Undeveloped land |
|
259,842 |
|
|
|
226,987 |
|
|
|
7,431,496 |
|
|
|
7,348,448 |
|
Accumulated depreciation |
|
(1,238,688 |
) |
|
|
(1,193,905 |
) |
|
|
|
|
|
|
Net
real estate investments |
|
6,192,808 |
|
|
|
6,154,543 |
|
|
|
|
|
|
|
|
|
Real estate investments
and other assets held-for-sale |
|
21,740 |
|
|
|
17,550 |
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
160,861 |
|
|
|
67,562 |
|
Accounts receivable,
net |
|
21,939 |
|
|
|
19,427 |
|
Straight-line rents
receivable, net |
|
97,266 |
|
|
|
93,005 |
|
Receivables on
construction contracts, including retentions |
|
16,692 |
|
|
|
13,480 |
|
Deferred leasing and
other costs, net |
|
297,103 |
|
|
|
292,682 |
|
Restricted cash held in
escrow for like-kind exchange |
|
59,196 |
|
|
|
116,405 |
|
Notes receivable from
property sales |
|
386,789 |
|
|
|
426,657 |
|
Other escrow deposits
and other assets |
|
173,280 |
|
|
|
186,885 |
|
|
|
|
|
|
|
|
|
|
$ |
7,427,674 |
|
|
$ |
7,388,196 |
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
|
Indebtedness: |
|
|
|
|
|
|
|
Secured
debt, net of deferred financing costs |
$ |
310,070 |
|
|
$ |
311,349 |
|
Unsecured
debt, net of deferred financing costs |
|
2,111,386 |
|
|
|
2,111,542 |
|
Unsecured
line of credit |
|
75,000 |
|
|
|
— |
|
|
|
2,496,456 |
|
|
|
2,422,891 |
|
|
|
|
|
|
|
|
|
Liabilities related to
real estate investments held-for-sale |
|
1,327 |
|
|
|
1,163 |
|
|
|
|
|
|
|
|
|
Construction payables
and amounts due subcontractors, including retentions |
|
53,339 |
|
|
|
54,545 |
|
Accrued real estate
taxes |
|
71,234 |
|
|
|
67,374 |
|
Accrued interest |
|
27,166 |
|
|
|
17,911 |
|
Other liabilities |
|
152,358 |
|
|
|
210,825 |
|
Tenant security
deposits and prepaid rents |
|
44,610 |
|
|
|
39,109 |
|
Total
liabilities |
|
2,846,490 |
|
|
|
2,813,818 |
|
|
|
|
|
|
|
|
|
Shareholders'
equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
shares |
|
3,570 |
|
|
|
3,564 |
|
Additional paid-in-capital |
|
5,204,855 |
|
|
|
5,205,316 |
|
Distributions in excess of net income |
|
(674,920 |
) |
|
|
(676,036 |
) |
Total
shareholders' equity |
|
4,533,505 |
|
|
|
4,532,844 |
|
|
|
|
|
|
|
|
|
Noncontrolling
interests |
|
47,679 |
|
|
|
41,534 |
|
Total
equity |
|
4,581,184 |
|
|
|
4,574,378 |
|
|
|
|
|
|
|
|
|
|
$ |
7,427,674 |
|
|
$ |
7,388,196 |
|
|
|
|
|
|
|
|
|
|
Duke Realty Corporation and Subsidiaries |
|
Summary of EPS, FFO and AFFO |
|
Three Months Ended March 31, |
|
(Unaudited and in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
2017 |
|
|
|
|
|
Wtd. |
|
|
|
|
|
|
Wtd. |
|
|
|
|
|
|
|
Avg. |
Per |
|
|
|
|
Avg. |
Per |
|
Amount |
Shares |
Share |
|
Amount |
Shares |
Share |
Net
income attributable to common shareholders |
$ |
72,963 |
|
|
|
|
|
$ |
70,200 |
|
|
|
Less
dividends on participating securities |
|
(437 |
) |
|
|
|
|
|
(542 |
) |
|
Net
income per common share-basic |
|
72,526 |
|
356,740 |
$ |
0.20 |
|
|
69,658 |
|
355,282 |
$ |
0.20 |
Add
back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest in earnings of unitholders |
|
683 |
|
3,355 |
|
|
|
|
652 |
|
3,316 |
|
|
Other
potentially dilutive securities |
|
— |
|
305 |
|
|
|
|
305 |
|
2,102 |
|
Net
income attributable to common shareholders-diluted |
$ |
73,209 |
|
360,400 |
$ |
0.20 |
|
|
70,615 |
|
360,700 |
$ |
0.20 |
Reconciliation to funds from operations
("FFO") |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income attributable to common shareholders |
$ |
72,963 |
|
356,740 |
|
|
|
$ |
70,200 |
|
355,282 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
77,529 |
|
|
|
|
|
|
81,557 |
|
|
|
|
|
Company
share of joint venture depreciation, amortization and other |
|
2,161 |
|
|
|
|
|
|
2,495 |
|
|
|
|
|
Impairment charges - depreciable property |
|
— |
|
|
|
|
|
|
859 |
|
|
|
|
|
Gains on
depreciable property sales - discontinued operations |
|
(132 |
) |
|
|
|
|
|
— |
|
|
|
|
|
Gains on
depreciable property sales - continuing operations |
|
(44,886 |
) |
|
|
|
|
|
(37,046 |
) |
|
|
|
|
Income
tax expense triggered by depreciable property sales |
|
10,329 |
|
|
|
|
|
|
— |
|
|
|
|
|
Gains on
depreciable property sales - unconsolidated joint ventures |
|
(6,217 |
) |
|
|
|
|
|
(1,798 |
) |
|
|
|
|
Noncontrolling interest share of adjustments |
|
(361 |
) |
|
|
|
|
|
(427 |
) |
|
|
|
NAREIT FFO attributable to common shareholders -
basic |
|
111,386 |
|
356,740 |
$ |
0.31 |
|
|
115,840 |
|
355,282 |
$ |
0.33 |
|
Noncontrolling interest in income of unitholders |
|
683 |
|
3,355 |
|
|
|
|
652 |
|
3,316 |
|
|
Noncontrolling interest share of adjustments |
|
361 |
|
|
|
|
|
|
427 |
|
|
|
|
|
Other
potentially dilutive securities |
|
2,206 |
|
|
3,163 |
|
NAREIT FFO attributable to common shareholders -
diluted |
$ |
112,430 |
|
362,301 |
$ |
0.31 |
|
$ |
116,919 |
|
361,761 |
$ |
0.32 |
|
Gains on
land sales |
|
(2,949 |
) |
|
|
|
|
|
(1,505 |
) |
|
|
|
|
Gain on
debt extinguishment |
|
— |
|
|
|
|
|
|
(25 |
) |
|
|
|
Core FFO attributable to common shareholders -
diluted |
$ |
109,481 |
|
362,301 |
$ |
0.30 |
|
$ |
115,389 |
|
361,761 |
$ |
0.32 |
AFFO |
|
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO -
diluted |
$ |
109,481 |
|
362,301 |
$ |
0.30 |
|
$ |
115,389 |
|
361,761 |
$ |
0.32 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Straight-line rental income and expense |
|
(6,534 |
) |
|
|
|
|
|
(3,319 |
) |
|
|
|
|
Amortization of above/below market rents and concessions |
|
(545 |
) |
|
|
|
|
|
542 |
|
|
|
|
|
Stock
based compensation expense |
|
12,462 |
|
|
|
|
|
|
10,480 |
|
|
|
|
|
Noncash
interest expense |
|
1,399 |
|
|
|
|
|
|
1,555 |
|
|
|
|
|
Second
generation tenant improvements |
|
(2,459 |
) |
|
|
|
|
|
(2,812 |
) |
|
|
|
|
Second
generation leasing costs |
|
(5,416 |
) |
|
|
|
|
|
(2,409 |
) |
|
|
|
|
Building
improvements |
|
(583 |
) |
|
|
|
|
|
(1,244 |
) |
|
|
|
AFFO - diluted |
$ |
107,805 |
|
362,301 |
|
$ |
118,182 |
|
361,761 |
|
|
|
|
|
|
|
|
|
|
|
|
Duke Realty Corporation and Subsidiaries |
Reconciliation of Same Property Net Operating Income
Growth |
(Unaudited and in thousands) |
|
|
Three Months Ended |
|
March 31, 2018 |
|
March 31, 2017 |
|
Income from continuing
operations before income taxes |
$ |
83,853 |
|
|
$ |
67,547 |
|
Share of same property
NOI from unconsolidated joint ventures |
|
4,008 |
|
|
|
3,954 |
|
Income and expense
items not allocated to segments |
|
59,625 |
|
|
|
63,739 |
|
Earnings from service
operations |
|
(692 |
) |
|
|
(1,775 |
) |
Properties not included
and other adjustments |
|
(28,056 |
) |
|
|
(18,666 |
) |
Same property NOI |
$ |
118,738 |
|
|
$ |
114,799 |
|
|
Percent Change |
|
3.4 |
% |
|
|
|
|
|
|
|
|
|
Duke Realty Corporation and Subsidiaries |
Reconciliation of 2018 FFO Guidance |
(Unaudited) |
|
|
Pessimistic |
|
|
Optimistic |
|
Net income per common
share, diluted |
$ |
0.71 |
|
|
$ |
1.09 |
|
Depreciation and gains
on sales of depreciated property (including share of joint
venture) |
|
0.55 |
|
|
|
0.25 |
|
FFO per share -
diluted, as defined by NAREIT |
$ |
1.26 |
|
|
$ |
1.34 |
|
Gains on land
sales |
|
— |
|
|
|
(0.02 |
) |
Core FFO per share -
diluted |
$ |
1.26 |
|
|
$ |
1.32 |
|
|
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