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Duke Realty Reports Second Quarter 2022 Earnings

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Duke Realty Corporation
Duke Realty Corporation

INDIANAPOLIS, July 27, 2022 (GLOBE NEWSWIRE) -- Duke Realty Corporation (NYSE: DRE), the largest domestic-only logistics REIT, today reported earnings for the second quarter of 2022.

Quarterly Highlights

Complete reconciliations, in dollars and per share amounts, of (i) net income to funds from operations ("FFO"), as defined by Nareit, as well as to Core FFO, and (ii) earnings before income taxes to same property net operating income, on a cash basis, ("SPNOI - Cash") are included in the financial tables included in this release. The company's financial results for the quarter were as follows:

 

Three Months
Ended June
30, 2022

 

Six Months
Ended June
30, 2022

 

 

 

 

Net Income per Diluted Share

$

0.27

 

 

$

0.91

 

FFO per Diluted Share

$

0.45

 

 

$

0.82

 

Core FFO per Diluted Share

$

0.48

 

 

$

0.92

 

Growth in SPNOI - Cash

 

5.9

%

 

 

6.5

%

Distributions

The company's board of directors will approve the quarterly cash distribution on its common stock in a future meeting. Pursuant to the terms of the merger agreement, the dividend is expected to have the same record and payment dates as the Prologis second quarter dividend.

2022 Earnings Guidance   

In light of the company’s proposed merger with Prologis announced in June 2022, the Company will no longer provide guidance nor is it affirming past guidance.
   
FFO and AFFO Reporting Definitions

FFO: FFO is a non-GAAP performance measure computed in accordance with standards established by the National Association of Real Estate Investment Trusts (“Nareit"). It is calculated as net income attributable to common shareholders computed in accordance with generally accepted accounting principles (“GAAP"), excluding depreciation and amortization related to real estate, gains and losses on sales of real estate assets (including real estate assets incidental to our business), gains and losses from change in control, impairment charges related to real estate assets (including real estate assets incidental to our business) and similar adjustments for unconsolidated joint ventures and partially owned consolidated entities, all net of related taxes. We believe FFO to be most directly comparable to net income attributable to common shareholders as defined by GAAP. FFO does not represent a measure of liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions to shareholders.
  
Core FFO: Core FFO is computed as FFO adjusted for certain items that can create significant earnings volatility and do not directly relate to our core business operations.  The adjustments include gains or losses on debt transactions, gains or losses from involuntary conversion from weather events or natural disasters, promote income, severance and other charges related to major overhead restructuring activities, costs directly attributable to our proposed merger with Prologis, the expense impact of non-incremental costs attributable to successful leasing activities, mark-to-market adjustments associated with derivative financial instruments and similar adjustments for unconsolidated joint ventures and partially owned consolidated entities. Although our 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, we believe it provides a meaningful supplemental measure of our operating performance. 
             
AFFO: AFFO is defined by the company as the 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, amortization of above and below market lease intangibles and lease concession, non-cash components of interest expense including interest rate hedge amortization, 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 income before income taxes 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 19 of its June 30, 2022 supplemental information.

About Duke Realty Corporation

Duke Realty Corporation owns and operates approximately 167.3 million rentable square feet of industrial assets in 19 major logistics markets. Duke Realty Corporation is publicly traded on the NYSE under the symbol DRE and is a member of the S&P 500 Index. More information about Duke Realty Corporation is available at www.dukerealty.com.

Second Quarter Earnings Call and Supplemental Information

Due to the company's proposed merger with Prologis, a second quarter 2022 conference call will not be held. 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

The statements in this communication that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which Prologis and Duke Realty operate as well as beliefs and assumptions of Prologis and Duke Realty. Such statements involve uncertainties that could significantly impact Prologis’ or Duke Realty’s financial results. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” and “estimates,” including variations of such words and similar expressions, are intended to identify such forward-looking statements, which generally are not historical in nature. All statements that address operating performance, events or developments that Prologis or Duke Realty expects or anticipates will occur in the future — including statements relating to any possible transaction between Prologis and Duke Realty, rent and occupancy growth, acquisition and development activity, contribution and disposition activity, general conditions in the geographic areas where Prologis or Duke Realty operate, Prologis’ and Duke Realty’s respective debt, capital structure and financial position, Prologis’ and Duke Realty’s respective ability to earn revenues from co-investment ventures, form new co-investment ventures and the availability of capital in existing or new co-investment ventures — are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although Prologis and Duke Realty believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, neither Prologis nor Duke Realty can give assurance that its expectations will be attained and, therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Some of the factors that may affect outcomes and results include, but are not limited to: (i) Prologis’ and Duke Realty’s ability to complete the proposed transaction on the proposed terms or on the anticipated timeline, or at all, including risks and uncertainties related to securing the necessary shareholder approvals and satisfaction of other closing conditions to consummate the proposed transaction; (ii) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement relating to the proposed transaction; (iii) risks related to diverting the attention of Prologis and Duke Realty management from ongoing business operations; (iv) failure to realize the expected benefits of the proposed transaction; (v) significant transaction costs and/or unknown or inestimable liabilities; (vi) the risk of shareholder litigation in connection with the proposed transaction, including resulting expense or delay; (vii) the risk that Duke Realty’s business will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; (viii) risks related to future opportunities and plans for the combined company, including the uncertainty of expected future financial performance and results of the combined company following completion of the proposed transaction; (ix) the effect of the announcement of the proposed transaction on the ability of Prologis and Duke Realty to operate their respective businesses and retain and hire key personnel and to maintain favorable business relationships; (x) risks related to the market value of the Prologis common stock to be issued in the proposed transaction; (xi) other risks related to the completion of the proposed transaction and actions related thereto; (xii) national, international, regional and local economic and political climates and conditions; (xiii) changes in global financial markets, interest rates and foreign currency exchange rates; (xiv) increased or unanticipated competition for Prologis’ or Duke Realty’s properties; (xv) risks associated with acquisitions, dispositions and development of properties, including increased development costs due to additional regulatory requirements related to climate change; (xvi) maintenance of Real Estate Investment Trust status, tax structuring and changes in income tax laws and rates; (xvii) availability of financing and capital, the levels of debt that Prologis and Duke Realty maintain and their credit ratings; (xviii) risks related to Prologis’ and Duke Realty’s investments in co-investment ventures, including Prologis’ and Duke Realty’s ability to establish new co-investment ventures; (xix) risks of doing business internationally, including currency risks; (xx) environmental uncertainties, including risks of natural disasters; (xxi) risks related to the coronavirus pandemic; and (xxii) those additional factors discussed under Part I, Item 1A. Risk Factors in Prologis’ and Duke Realty’s respective Annual Reports on Form 10-K for the year ended December 31, 2021. Neither Prologis nor Duke Realty undertakes any duty to update any forward-looking statements appearing in this communication except as may be required by law.

Additional Information
In connection with the proposed transaction, Prologis will file with the Securities and Exchange Commission (“SEC”) a registration statement on Form S-4 (“Form S-4”), which will include a document that serves as a prospectus of Prologis and a joint proxy statement of Prologis and Duke Realty (the “joint proxy statement/prospectus”), and each party will file other documents regarding the proposed transaction with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE FORM S-4 AND THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. A definitive joint proxy statement/prospectus will be sent to Prologis’ and Duke Realty’s shareholders. Investors and security holders will be able to obtain the Form S-4 and the joint proxy statement/prospectus free of charge from the SEC’s website or from Prologis or Duke Realty. The documents filed by Prologis with the SEC may be obtained free of charge at Prologis’ website at the SEC Filings section of www.ir.prologis.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Prologis by requesting them from Investor Relations by mail at Pier 1, Bay 1, San Francisco, CA 94111. The documents filed by Duke Realty with the SEC may be obtained free of charge at Duke Realty’s website at the SEC Filings section of http://investor.dukerealty.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Duke Realty by requesting them from Investor Relations by mail at 8711 River Crossing Blvd. Indianapolis, IN 46240.
  
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Participants in the Solicitation
Prologis and Duke Realty and their respective directors, executive officers and other members of management may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about Prologis’ directors and executive officers is available in Prologis’ Annual Report on Form 10-K for the fiscal year ended December 31, 2021, its proxy statement dated March 25, 2022, for its 2022 Annual Meeting of Shareholders and its Current Report on Form 8-K/A filed with the SEC on April 5, 2022. Information about Duke Realty’s directors and executive officers is available in Duke Realty’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, its proxy statement dated March 2, 2022, for its 2022 Annual Meeting of Shareholders and its Current Report on Form 8-K filed with the SEC on April 27, 2022. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the proposed transaction when they become available. Investors should read the joint proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from Prologis or Duke Realty as indicated above.
   
Contact Information:
    
Investors:
Ron Hubbard
317.808.6060
    
Media:
Gene Miller
317.808.6195



Duke Realty Corporation and Subsidiaries

Consolidated Statement of Operations

(Unaudited and in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2022

2021

 

2022

2021

Revenues:

 

 

 

 

 

 

 

Rental and related revenue

 

$

280,145

 

$

253,971

 

 

$

555,359

 

$

512,150

 

 

General contractor and service fee revenue

 

 

5,143

 

 

17,721

 

 

 

8,092

 

 

48,834

 

 

 

 

 

285,288

 

 

271,692

 

 

 

563,451

 

 

560,984

 

Expenses:

 

 

 

 

 

 

 

Rental expenses

 

 

21,240

 

 

18,515

 

 

 

46,526

 

 

46,645

 

 

Real estate taxes

 

 

43,728

 

 

41,368

 

 

 

87,656

 

 

82,538

 

 

General contractor and other services expenses

 

 

3,730

 

 

14,066

 

 

 

5,199

 

 

43,529

 

 

Depreciation and amortization

 

 

93,944

 

 

91,729

 

 

 

187,945

 

 

185,302

 

 

 

 

 

162,642

 

 

165,678

 

 

 

327,326

 

 

358,014

 

Other operating activities:

 

 

 

 

 

 

 

Equity in earnings of unconsolidated joint ventures

 

 

5,565

 

 

10,590

 

 

 

9,380

 

 

26,858

 

 

Gain on sale of properties

 

 

24,832

 

 

95,183

 

 

 

235,579

 

 

116,543

 

 

Gain on land sales

 

 

2,025

 

 

9,900

 

 

 

3,117

 

 

11,138

 

 

Other operating expenses

 

 

(531

)

 

(338

)

 

 

(1,310

)

 

(1,483

)

 

Impairment charges

 

 

(1,563

)

 

-

 

 

 

(1,563

)

 

-

 

 

Non-incremental costs related to successful leases

 

 

(3,502

)

 

(4,027

)

 

 

(9,014

)

 

(6,985

)

 

General and administrative expenses

 

 

(27,496

)

 

(15,879

)

 

 

(51,409

)

 

(40,096

)

 

 

 

 

(670

)

 

95,429

 

 

 

184,780

 

 

105,975

 

 

 

 

 

 

 

 

 

 

Operating income

 

121,976

 

 

201,443

 

 

 

420,905

 

 

308,945

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

Interest and other income, net

 

 

939

 

 

1,673

 

 

 

1,764

 

 

2,136

 

 

Interest expense

 

 

(18,734

)

 

(21,072

)

 

 

(38,733

)

 

(43,579

)

 

Loss on debt extinguishment

 

 

-

 

 

(3,938

)

 

 

(21,948

)

 

(4,008

)

 

Gain on involuntary conversion

 

 

-

 

 

3,222

 

 

 

-

 

 

3,222

 

Income before income taxes

 

 

104,181

 

 

181,328

 

 

 

361,988

 

 

266,716

 

 

Income tax expense

 

 

(493

)

 

(3,672

)

 

 

(6,823

)

 

(8,856

)

Net income

 

103,688

 

 

177,656

 

 

 

355,165

 

 

257,860

 

Net income attributable to noncontrolling interests

 

 

(1,218

)

 

(1,839

)

 

 

(3,774

)

 

(2,681

)

Net income attributable to common shareholders

$

102,470

 

$

175,817

 

 

$

351,391

 

$

255,179

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to common shareholders-basic

 

$

0.27

 

$

0.47

 

 

$

0.91

 

$

0.68

 

 

 

 

 

 

 

 

Net income per share attributable to common shareholders-diluted

 

$

0.27

 

$

0.47

 

 

$

0.91

 

$

0.68

 

 

 

 

 

 

 

 

 



 

Duke Realty Corporation and Subsidiaries

 

Consolidated Balance Sheets

 

(Unaudited and in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 

 

 

2022

 

2021

 

 

Assets

 

 

 

 

 

Real estate investments:

 

 

 

 

 

 

Real estate assets

 

$

9,994,446

 

 

$

9,616,076

 

 

 

Construction in progress

 

 

997,320

 

 

 

744,871

 

 

 

Investments in and advances to unconsolidated joint ventures

 

 

207,977

 

 

 

168,336

 

 

 

Undeveloped land

 

 

600,292

 

 

 

473,317

 

 

 

 

 

 

11,800,035

 

 

 

11,002,600

 

 

 

Accumulated depreciation

 

 

(1,808,388

)

 

 

(1,684,413

)

 

 

 

 

 

 

 

 

 

Net real estate investments

 

9,991,647

 

 

 

9,318,187

 

 

 

 

 

 

 

 

 

Real estate investments and other assets held-for-sale

 

 

-

 

 

 

144,651

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

44,195

 

 

 

69,752

 

 

Accounts receivable

 

 

13,208

 

 

 

13,449

 

 

Straight-line rents receivable

 

 

194,474

 

 

 

172,225

 

 

Receivables on construction contracts, including retentions

 

 

35,651

 

 

 

57,258

 

 

Deferred leasing and other costs, net

 

 

341,923

 

 

 

337,936

 

 

Other escrow deposits and other assets

 

 

337,184

 

 

 

332,197

 

 

 

 

 

 

 

 

 

 

Total assets

$

10,958,282

 

 

$

10,445,655

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

Indebtedness:

 

 

 

 

 

 

Secured debt, net of deferred financing costs

 

$

57,150

 

 

$

59,418

 

 

 

Unsecured debt, net of deferred financing costs

 

 

3,831,530

 

 

 

3,629,864

 

 

 

 

 

 

3,888,680

 

 

 

3,689,282

 

 

Liabilities related to real estate investments held-for-sale

 

 

 

 

 

 

 

-

 

 

 

6,278

 

 

 

 

 

 

 

 

 

Construction payables and amounts due subcontractors, including retentions

 

 

123,428

 

 

 

107,009

 

 

Accrued real estate taxes

 

 

87,569

 

 

 

77,464

 

 

Accrued interest

 

 

22,925

 

 

 

20,815

 

 

Other liabilities

 

 

365,680

 

 

 

339,023

 

 

Tenant security deposits and prepaid rents

 

 

62,247

 

 

 

66,823

 

 

 

Total liabilities

 

4,550,529

 

 

 

4,306,694

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares

 

 

3,848

 

 

 

3,825

 

 

 

Additional paid-in capital

 

 

6,262,634

 

 

 

6,143,147

 

 

 

Accumulated other comprehensive loss

 

 

(26,233

)

 

 

(28,011

)

 

 

Retained earnings (distributions in excess of net income)

 

 

60,571

 

 

 

(75,210

)

 

 

Total shareholders' equity

 

6,300,820

 

 

 

6,043,751

 

 

 

 

 

 

 

 

 

Noncontrolling interests

 

 

106,933

 

 

 

95,210

 

 

 

Total equity

 

 

6,407,753

 

 

 

6,138,961

 

 

 

 

 

 

 

 

 

 

Total liabilities and equity

$

10,958,282

 

 

$

10,445,655

 

 

 

 

 

 

 

 

 



 

Duke Realty Corporation and Subsidiaries

 

Summary of EPS, FFO and AFFO

 

Three Months Ended June 30,

 

(Unaudited and in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

2021

 

 

 

 Wtd.

 

 

 Wtd.

 

 

 

 

 Avg.

Per

 

 Avg.

Per

 

 

Amount

 Shares

Share

Amount

 Shares

Share

Net income attributable to common shareholders

$

102,470

 

 

 

$

175,817

 

 

 

Less dividends on participating securities

 

(319

)

 

 

 

(365

)

 

 

Net income per common share-basic

 

102,151

 

384,519

$

0.27

 

175,452

 

376,020

$

0.47

Add back:

 

 

 

 

 

 

 

Noncontrolling interest in earnings of unitholders

 

1,128

 

4,022

 

 

1,738

 

3,770

 

 

Other potentially dilutive securities

 

-

 

658

 

 

365

 

1,831

 

Net income attributable to common shareholders-diluted

$

103,279

 

389,199

$

0.27

 

177,555

 

381,621

$

0.47

Reconciliation to FFO

 

 

 

 

 

 

Net income attributable to common shareholders

$

102,470

 

384,519

 

$

175,817

 

376,020

 

Adjustments:

 

 

 

 

 

 

 

Depreciation and amortization

 

93,944

 

 

 

 

91,729

 

 

 

 

Depreciation, amortization and other - unconsolidated joint ventures

 

2,999

 

 

 

 

2,012

 

 

 

 

Gain on sales of properties

 

(24,832

)

 

 

 

(95,183

)

 

 

 

Gain on land sales

 

(2,025

)

 

 

 

(9,900

)

 

 

 

Impairment charges

 

1,563

 

 

 

 

-

 

 

 

 

Income tax expense not allocable to FFO

 

493

 

 

 

 

3,672

 

 

 

 

Gain on sales of real estate assets - unconsolidated joint ventures

 

(1,497

)

 

 

 

(7,360

)

 

 

 

Noncontrolling interest share of adjustments

 

(731

)

 

 

 

149

 

 

 

Nareit FFO attributable to common shareholders - basic

 

172,384

 

384,519

$

0.45

 

160,936

 

376,020

$

0.43

 

Noncontrolling interest in income of unitholders

 

1,128

 

4,022

 

 

1,738

 

3,770

 

 

Noncontrolling interest share of adjustments

 

731

 

 

 

 

(149

)

 

 

 

Other potentially dilutive securities

 

1,727

 

 

1,831

 

Nareit FFO attributable to common shareholders - diluted

$

174,243

 

390,268

$

0.45

$

162,525

 

381,621

$

0.43

 

Gain on involuntary conversion

 

-

 

 

 

 

(3,222

)

 

 

 

Loss on debt extinguishment - including share of unconsolidated joint venture

 

-

 

 

 

 

3,938

 

 

 

 

Non-incremental costs related to successful leases

 

3,502

 

 

 

 

4,027

 

 

 

 

Unconsolidated joint ventures share of unrealized derivative gain

 

(224

)

 

 

 

-

 

 

 

 

Merger related costs

 

10,000

 

 

 

 

-

 

 

 

Core FFO attributable to common shareholders - diluted

$

187,521

 

390,268

$

0.48

$

167,268

 

381,621

$

0.44

AFFO

 

 

 

 

 

 

Core FFO - diluted

$

187,521

 

390,268

$

0.48

$

167,268

 

381,621

$

0.44

Adjustments:

 

 

 

 

 

 

 

Straight-line rental income and expense

 

(11,642

)

 

 

 

(6,571

)

 

 

 

Amortization of above/below market rents and concessions

 

(3,513

)

 

 

 

(2,611

)

 

 

 

Stock based compensation expense

 

2,309

 

 

 

 

5,625

 

 

 

 

Noncash interest expense

 

2,496

 

 

 

 

2,378

 

 

 

 

Second generation concessions

 

(213

)

 

 

 

(1,355

)

 

 

 

Second generation tenant improvements

 

(8,387

)

 

 

 

(4,604

)

 

 

 

Second generation leasing costs

 

(8,666

)

 

 

 

(8,297

)

 

 

 

Building improvements

 

(3,860

)

 

 

 

(1,814

)

 

 

AFFO - diluted

$

156,045

 

390,268

 

$

150,019

 

381,621

 

 



 

Duke Realty Corporation and Subsidiaries

 

Summary of EPS, FFO and AFFO

 

Six Months Ended June 30,

 

(Unaudited and in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

2021

 

 

 

 Wtd.

 

 

 Wtd.

 

 

 

 

 Avg.

Per

 

 Avg.

Per

 

 

Amount

 Shares

Share

Amount

 Shares

Share

Net income attributable to common shareholders

$

351,391

 

 

 

$

255,179

 

 

 

Less dividends on participating securities

 

(645

)

 

 

 

(735

)

 

 

Net income per common share-basic

 

350,746

 

383,619

$

0.91

 

254,444

 

374,850

$

0.68

Add back:

 

 

 

 

 

 

 

Noncontrolling interest in earnings of unitholders

 

3,591

 

3,915

 

 

2,499

 

3,673

 

 

Other potentially dilutive securities

 

645

 

1,731

 

 

735

 

1,811

 

Net income attributable to common shareholders-diluted

$

354,982

 

389,265

$

0.91

$

257,678

 

380,334

$

0.68

Reconciliation to FFO

 

 

 

 

 

 

Net income attributable to common shareholders

$

351,391

 

383,619

 

$

255,179

 

374,850

 

Adjustments:

 

 

 

 

 

 

 

Depreciation and amortization

 

187,945

 

 

 

 

185,302

 

 

 

 

Depreciation, amortization and other - unconsolidated joint ventures

 

6,297

 

 

 

 

4,269

 

 

 

 

Gain on sales of properties

 

(235,579

)

 

 

 

(116,543

)

 

 

 

Gain on land sales

 

(3,117

)

 

 

 

(11,138

)

 

 

 

Income tax expense not allocable to FFO

 

6,823

 

 

 

 

8,856

 

 

 

 

Impairment charges

 

1,563

 

 

 

 

-

 

 

 

 

Gain on sales of real estate assets - unconsolidated joint ventures

 

(1,497

)

 

 

 

(20,108

)

 

 

 

Noncontrolling interest share of adjustments

 

379

 

 

 

 

(492

)

 

 

Nareit FFO attributable to common shareholders - basic

 

314,205

 

383,619

$

0.82

 

305,325

 

374,850

$

0.81

 

Noncontrolling interest in income of unitholders

 

3,591

 

3,915

 

 

2,499

 

3,673

 

 

Noncontrolling interest share of adjustments

 

(379

)

 

 

 

492

 

 

 

 

Other potentially dilutive securities

 

1,731

 

 

1,811

 

Nareit FFO attributable to common shareholders - diluted

$

317,417

 

389,265

$

0.82

$

308,316

 

380,334

$

0.81

 

Gain on involuntary conversion

 

-

 

 

 

 

(3,222

)

 

 

 

Loss on debt extinguishment - including share of unconsolidated joint venture

 

22,031

 

 

 

 

4,071

 

 

 

 

Non-incremental costs related to successful leases

 

9,014

 

 

 

 

6,985

 

 

 

 

Unconsolidated joint ventures share of unrealized derivative gain

 

(787

)

 

 

 

-

 

 

 

 

Merger related costs

 

10,000

 

 

 

 

-

 

 

 

Core FFO attributable to common shareholders - diluted

$

357,675

 

389,265

$

0.92

$

316,150

 

380,334

$

0.83

AFFO

 

 

 

 

 

 

Core FFO - diluted

$

357,675

 

389,265

$

0.92

$

316,150

 

380,334

$

0.83

Adjustments:

 

 

 

 

 

 

 

Straight-line rental income and expense

 

(22,113

)

 

 

 

(15,204

)

 

 

 

Amortization of above/below market rents and concessions

 

(6,416

)

 

 

 

(5,466

)

 

 

 

Stock based compensation expense

 

20,408

 

 

 

 

20,004

 

 

 

 

Noncash interest expense

 

5,059

 

 

 

 

4,747

 

 

 

 

Second generation concessions

 

(1,114

)

 

 

 

(1,636

)

 

 

 

Second generation tenant improvements

 

(11,531

)

 

 

 

(8,527

)

 

 

 

Second generation leasing costs

 

(15,675

)

 

 

 

(16,769

)

 

 

 

Building improvements

 

(4,438

)

 

 

 

(3,118

)

 

 

AFFO - diluted

$

321,855

 

389,265

 

$

290,181

 

380,334

 

 



Duke Realty Corporation and Subsidiaries

Reconciliation of Same Property Net Operating Income Growth

(Unaudited and in thousands)

 

 

 

 

 

Three Months Ended

 

June 30, 2022

June 30, 2021

 

 

 

 

 

Income before income taxes

$

104,181

 

$

181,328

 

 

Share of same property NOI from unconsolidated joint ventures

 

6,754

 

 

6,599

 

 

Income and expense items not allocated to segments

 

112,491

 

 

16,294

 

 

Earnings from service operations

 

(1,413

)

 

(3,655

)

 

Properties not included and other adjustments

 

(39,993

)

 

(28,704

)

 

Same property NOI - Cash Basis

$

182,020

 

$

171,862

 

 

 

 

 

 

Percent Change

 

5.9

%

 

 

 

 

 

 

 

Six Months Ended

 

June 30, 2022

June 30, 2021

 

 

 

 

 

Income from continuing operations before income taxes

$

361,988

 

$

266,716

 

 

Share of same property NOI from unconsolidated joint ventures

 

13,354

 

 

13,145

 

 

Income and expense items not allocated to segments

 

61,956

 

 

121,309

 

 

Earnings from service operations

 

(2,893

)

 

(5,305

)

 

Properties not included and other adjustments

 

(74,789

)

 

(58,332

)

 

Same property NOI - Cash Basis

$

359,616

 

$

337,533

 

 

 

 

 

 

Percent Change

 

6.5

%