• Duke Realty Reports Second Quarter 2019 Results

    Source: Nasdaq GlobeNewswire / 31 Jul 2019 16:08:39   America/New_York

    28.3 Percent Growth in Rents on Leasing Activity

    $395 Million of Development Starts - 83 Percent Preleased

    Key Operating Metrics and Earnings Guidance Updated

    INDIANAPOLIS, July 31, 2019 (GLOBE NEWSWIRE) -- Duke Realty Corporation (NYSE: DRE), the largest domestic-only, logistics REIT, today reported results for the second quarter 2019.

    Jim Connor, Chairman and Chief Executive Officer, said, "We had an excellent quarter, increasing Core FFO per share by over 9 percent and same-property net operating income by 4.4 percent compared to the second quarter of 2018.  We executed 7.5 million square feet of leases, with an average size of 134,000 square feet, including five leases at 500,000 square feet or larger.  We achieved rent growth of 28.3 percent on a net effective basis and 12.0 percent on a cash basis, both at all-time record levels.

    We started $395 million of new developments during the quarter totaling 2.6 million square feet, which were 83 percent preleased.  Seventy-eight percent of these developments were located in high-barrier Tier 1 logistics markets.  In particular, we are pleased to have executed a major transaction with one of our largest customers.  We signed two leases totaling 1.3 million square feet for two build-to-suit logistics facilities for Home Depot U.S.A., Inc.  The facilities are located on an in-fill redevelopment site in the Perth Amboy submarket of Northern New Jersey.  Home Depot’s investment with us is part of their previously announced $1.2 billion supply-chain overhaul to enhance delivery to consumer and commercial customers in one day or less.  We are pleased to continue providing customized supply chain facility solutions and service to one of our leading customers.

    With $563 million of development starts to date that are 51 percent preleased, and strong prospects for the remainder of the year, we have significantly increased our 2019 guidance for development starts while maintaining our risk profile.”

    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 for the second quarter of 2019, compared to $0.54 per diluted share for the second quarter of 2018.  Net income per diluted share decreased as the result of gains on property sales recognized in the second quarter of 2018.
    • FFO, as defined by NAREIT, was $0.35 per diluted share for the second quarter of 2019, compared to $0.33 per diluted share for the second quarter of 2018.  FFO per diluted share, as defined by NAREIT, increased due to significant investments in new industrial properties over the last year and overall improved operating performance.
    • Core FFO was $0.36 per diluted share for the second quarter of 2019, compared to $0.33 per diluted share for the second quarter of 2018.
    • Operating performance within the company's industrial portfolio included:
      • The company's stabilized portfolio was 98.2 percent leased at June 30, 2019, compared to 98.4 percent leased at March 31, 2019, and 98.2 percent leased at June 30, 2018
      • The company's in-service portfolio was 95.4 percent leased at June 30, 2019, compared to 95.5 percent leased at March 31, 2019, and 97.4 percent leased at June 30, 2018
      • The company's total portfolio, including properties under development, was 93.4 percent leased at June 30, 2019, compared to 93.0 percent leased at March 31, 2019 and 94.0 percent leased at June 30, 2018
      • Tenant retention of 81.7 percent for the quarter
      • Same-property net operating income growth of 4.4 percent and 5.8 percent for the three- and six-month periods ended June 30, 2019, compared to the same periods in 2018
      • Total leasing activity of 7.5 million square feet for the quarter
      • Overall cash and annualized net effective rent growth of 12.0 percent and 28.3 percent, respectively, on new and renewal leases for the quarter
    • Capital transactions in the second quarter included:
      • Started nine new development projects with expected costs of $395 million that are 83 percent preleased
      • Completed a $33 million property acquisition
      • Issued 1.77 million shares through July 8th under the company’s at-the-market equity program, generating proceeds of $57 million
      • Completed one  property disposition with a sales price of $96 million

    Mr. Connor further stated, “We delivered 1.2 million square feet of vacancy from speculative development completions this quarter and total in-service occupancy only declined 0.1 percent due to strong leasing in our recently completed development projects.  These new spec deliveries will be a source of continued future NOI growth as they are leased.  In addition to the leasing success of recently delivered spec projects, we executed 2.3 million square feet of leases in our under development pipeline resulting in total net absorption in our overall portfolio of 3.2 million square feet and raised our total occupancy by 0.4 percent.”

    Mark Denien, Executive Vice President and Chief Financial Officer, stated, “We continue to fund the majority of our growth with internally generated cash flow.  We also have significant leverage capacity to fund growth for the next several quarters. However, given our significantly increased growth prospects from development, we issued a small amount of equity to fund a portion of this growth.”

    Development

    The second quarter included the following development activity:

    Consolidated Properties

    • The company started nine development projects with expected costs of $395 million totaling 2.6 million square feet.  These development starts included two 100 percent leased projects in New Jersey, totaling 1.3 million square feet; a 100 percent leased, 499,000 square foot project in Atlanta; four 100 percent leased projects in South Florida, Baltimore, Minneapolis and Raleigh and two speculative projects in Chicago and Southern California.
    • Six projects totaling 2.9 million square feet, which were 80 percent leased in total, were placed in service. 

    Unconsolidated Joint Venture Properties

    • Three projects totaling 1.6 million square feet, which were 60 percent leased in total, were placed in service by 50 percent-owned joint ventures.

    Acquisitions

    The company acquired a 110,000 square foot cold storage facility in an in-fill market in Northern California, which was 100 percent leased.

    Building Dispositions
       
    The company sold a 100 percent leased 855,000 square foot property in Columbus, Ohio, immediately after it was placed in service.

    Distributions Declared

    The company's board of directors declared a quarterly cash distribution on its common stock of $0.215 per share, or $0.86 per share on an annualized basis. The dividend will be payable on August 30, 2019 to shareholders of record on August 15, 2019.

    2019 Earnings 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 a range of $1.10 to $1.28 per diluted share from its previous guidance of $0.92 to $1.16 per diluted share.  The company revised its guidance for FFO, as defined by NAREIT, to a range of $1.38 to $1.46 per diluted share from its previous guidance of $1.36 to $1.46.  The company revised its guidance for Core FFO, to $1.41 to $1.45 per diluted share from its previous guidance of $1.39 to $1.45 per diluted share.

    Commenting on the company's 2019 guidance, Mr. Denien stated, "We are increasing our guidance at the mid-point for Core FFO due to better than expected leasing in our unstabilized portfolio and development pipeline, as well as better than expected rent growth on second generation lease signings during the quarter.  We are also revising our guidance for growth in Adjusted Funds from Operations ("AFFO"), on a share-adjusted basis, to a range of 8.5 percent to 11.9 percent, from the previous range of 5.9 percent to 11.0 percent.

    Finally, given our year-to-date development starts and a very strong build-to-suit prospect list and momentum heading into the second half of the year, we are raising guidance for development starts to a range of $900 million to $1.1 billion from a range of $600 million to $800 million, representing a significant $300 million increase at the mid-point. Our best-in-class development platform is firing on all cylinders, and we’re confident this should contribute to strong NOI and FFO growth in the future."

    Other guidance changes are as follows:

    • The guidance for growth in same-property net operating income was increased to a range of 4.0 percent to 5.0 percent from the previous range of 3.5 percent to 5.0 percent.
    • The estimate for acquisitions volume was decreased to a range of $100 to $200 million from a range of $100 to $300 million.
    • The estimate for average percent leased within the company's stabilized portfolio was narrowed to a range of 97.7 percent to 98.3 percent from the previous range of 97.5 percent to 98.5 percent.
    • The estimate for average percent leased, for all of the company's in-service properties, was increased to a range of 94.9 percent to 96.5 percent from the previous range of 94.5 percent to 96.5 percent.          

    More specific assumptions and components of the company's 2019 guidance will be available by 6:00 p.m. Eastern Time today through the Investor Relations section of the company's website.  A number of factors could limit our ability to deliver results in line with our assumptions, such as interest rates, the economy, the supply and demand of industrial real estate, the availability and terms of financing to the company or potential buyers of real estate, and the timing and yield for dispositions and acquisitions.  There can be no assurance that the company can achieve such results.  Except as required, the company undertakes no duty to update forward looking statements.

    FFO and AFFO Reporting Definitions

    FFO: FFO is computed in accordance with standards established by the National Association of Real Estate Investment Trusts (“NAREIT”). FFO is calculated as net income  or loss 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) and related taxes, 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.  We believe FFO to be most directly comparable to net income or loss as defined by GAAP and that FFO should be examined in conjunction with net income 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 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 are generally non-cash in nature and that materially distort the comparative measurement of company performance over time.  The adjustments include 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 previous 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 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 and the expense impact of costs attributable to successful leasing activities.  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 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 June 30, 2019 supplemental information.

    About Duke Realty Corporation

    Duke Realty Corporation owns and operates approximately 158 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.

    Second Quarter Earnings Call and Supplemental Information

    Duke Realty Corporation is hosting a conference call tomorrow, August 1, 2019, at 3:00 p.m. ET to discuss its second 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, 2018. 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 Hubbard
    317.808.6060

    Media:
    Helen McCarthy
    317.708.8010


    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,
      2019   2018   2019   2018 
                    
    Revenues: 
     Rental and related revenue$213,107  $192,093  $423,072  $385,549 
     General contractor and service fee revenue 23,919   18,465   78,883   59,566 
      237,026   210,558   501,955   445,115 
                    
    Expenses: 
     Rental expenses 17,597   16,377   38,265   36,290 
     Real estate taxes 32,375   31,196   64,817   62,342 
     General contractor and other services expenses 23,189   15,253   75,775   55,662 
     Depreciation and amortization 83,004   75,832   158,996   153,361 
      156,165   138,658   337,853   307,655 
                    
    Other operating activities: 
     Equity in earnings of unconsolidated joint ventures 4,143   1,682   8,858   9,969 
     Gain on sale of properties 30,592   149,962   30,429   194,848 
     Gain on land sales 1,950   357   2,700   3,306 
     Other operating expenses (1,518)  (1,529)  (3,641)  (2,798)
     Non-incremental costs related to successful leases (3,447)     (5,603)   
     General and administrative expenses (13,420)  (13,459)  (35,403)  (34,482)
      18,300   137,013   (2,660)  170,843 
     
     Operating income 99,161   208,913   161,442   308,303 
     
    Other income (expenses): 
     Interest and other income, net 2,534   4,727   5,292   9,190 
     Interest expense (23,510)  (20,675)  (45,642)  (40,675)
     Loss on debt extinguishment    (151)  (13)  (151)
     Gain on involuntary conversion       2,259    
    Income from continuing operations, before income taxes 78,185   192,814   123,338   276,667 
     Income tax expense (6,616)  (63)  (7,001)  (10,392)
     Income from continuing operations 71,569   192,751   116,337   266,275 
     
    Discontinued operations: 
     Income before gain on sales    31      23 
     Gain on sale of properties 99   2,889   254   3,021 
     Income from discontinued operations 99   2,920   254   3,044 
     
    Net income 71,668   195,671   116,591   269,319 
    Net income attributable to noncontrolling interests (615)  (1,826)  (987)  (2,511)
     Net income attributable to common shareholders$71,053  $193,845  $115,604  $266,808 
     
    Basic net income per common share: 
     Continuing operations attributable to common shareholders$0.20  $0.53  $0.32  $0.74 
     Discontinued operations attributable to common shareholders -   0.01   -   0.01 
    Total$0.20  $0.54  $0.32  $0.75 
     
    Diluted net income per common share: 
     Continuing operations attributable to common shareholders$0.20  $0.53  $0.32  $0.73 
     Discontinued operations attributable to common shareholders -   0.01   -   0.01 
    Total$0.20  $0.54  $0.32  $0.74 
     

     

      
     Duke Realty Corporation and Subsidiaries
     Consolidated Balance Sheets
     (Unaudited and in thousands)
     
     
     June 30, December 31,
      2019   2018 
     Assets 
    Real estate investments: 
     Real estate assets$7,669,915  $7,248,346 
     Construction in progress 423,460   477,162 
     Investments in and advances to unconsolidated joint ventures 113,987   110,795 
     Undeveloped land 368,621   360,816 
      8,575,983   8,197,119 
     Accumulated depreciation (1,427,919)  (1,344,176)
      
     Net real estate investments 7,148,064   6,852,943 
     
    Real estate investments and other assets held-for-sale 20,472   1,082 
     
    Cash and cash equivalents 8,664   17,901 
    Accounts receivable 21,229   14,254 
    Straight-line rents receivable 120,155   109,334 
    Receivables on construction contracts, including retentions 22,450   41,215 
    Deferred leasing and other costs, net 316,624   313,799 
    Notes receivable from property sales 142,550   272,550 
    Other escrow deposits and other assets 213,919   180,946 
     
     $8,014,127  $7,804,024 
     
     Liabilities and Equity 
    Indebtedness: 
     Secured debt, net of deferred financing costs$36,053  $79,563 
     Unsecured debt, net of deferred financing costs 2,550,922   2,548,938 
     Unsecured line of credit 252,000   30,000 
      2,838,975   2,658,501 
    Liabilities related to real estate investments held-for-sale 
     633    
     
    Construction payables and amounts due subcontractors, including retentions 67,062   92,288 
    Accrued real estate taxes 76,085   73,358 
    Accrued interest 22,276   16,153 
    Other liabilities 263,839   205,433 
    Tenant security deposits and prepaid rents 43,136   45,048 
     Total liabilities 3,312,006   3,090,781 
     
    Shareholders' equity: 
     
     Common shares 3,606   3,589 
     Additional paid-in-capital 5,290,382   5,244,375 
     Accumulated other comprehensive loss (28,717)  (4,676)
     Distributions in excess of net income (624,674)  (585,087)
     Total shareholders' equity 4,640,597   4,658,201 
     
    Noncontrolling interests 61,524   55,042 
     Total equity 4,702,121   4,713,243 
     
     $8,014,127  $7,804,024 
     

     

      
     Duke Realty Corporation and Subsidiaries
     Summary of EPS, FFO and AFFO
     Three Months Ended June 30,
     (Unaudited and in thousands, except per share amounts)
     
     
            
     2019
     2018
         Wtd.     Wtd.  
         Avg.Per
        Avg.Per
     AmountSharesShare AmountSharesShare
    Net income attributable to common shareholders$   71,053      $   193,845     
    Less dividends on participating securities (388)     (418)   
    Net income per common share-basic  70,665   359,681 $   0.20    193,427   357,054 $   0.54
    Add back:             
     Noncontrolling interest in earnings of unitholders 621 3,145    1,824 3,393  
     Other potentially dilutive securities  100    418 2,294  
    Net income attributable to common shareholders-diluted$   71,286   362,926 $   0.20    195,669   362,741 $   0.54
                  
    Reconciliation to FFO             
    Net income attributable to common shareholders$   71,053   359,681    $   193,845   357,054   
    Adjustments:             
     Depreciation and amortization 83,004      75,832    
     Depreciation, amortization and other - unconsolidated joint ventures 2,417      2,119    
     Gains on sales of properties (30,691)     (152,851)   
     Gains on land sales (1,950)     (357)   
     Income tax expense triggered by sales of real estate assets 6,616      63    
     Gains on sales of real estate assets - unconsolidated joint ventures (2,028)     38    
     Noncontrolling interest share of adjustments (496)     707    
    NAREIT FFO attributable to common shareholders - basic  127,925   359,681 $   0.36    119,396   357,054 $   0.33
     Noncontrolling interest in income of unitholders 621 3,145    1,824 3,393  
     Noncontrolling interest share of adjustments 496      (707)   
     Other potentially dilutive securities   1,763      2,294  
    NAREIT FFO attributable to common shareholders - diluted$   129,042   364,589 $   0.35  $   120,513   362,741 $   0.33
     Loss on debt extinguishment       151    
     Non-incremental costs related to successful leases 3,447          
    Core FFO attributable to common shareholders - diluted$   132,489   364,589 $   0.36  $   120,664   362,741 $   0.33
    AFFO             
    Core FFO - diluted$132,489 364,589$0.36 $120,664 362,741$0.33
    Adjustments:             
     Straight-line rental income and expense (4,852)     (4,780)   
     Amortization of above/below market rents and concessions (1,542)     (460)   
     Stock based compensation expense 4,242      3,568    
     Noncash interest expense 1,538      1,402    
     Second generation concession (34)     (135)   
     Second generation tenant improvements (2,855)     (5,692)   
     Second generation leasing costs (5,304)     (6,376)   
     Building improvements (1,508)     (1,165)   
    AFFO - diluted$   122,174   364,589    $   107,026   362,741   
     

     

     Duke Realty Corporation and Subsidiaries
     Summary of EPS, FFO and AFFO
     Six Months Ended June 30,
     (Unaudited and in thousands, except per share amounts)
     
     
                   
     
        
     2019
     2018
        
         Wtd.      Wtd.  
         Avg.Per Avg.Per
     AmountSharesShare AmountSharesShare
    Net income attributable to common shareholders$   115,604      $   266,808     
    Less dividends on participating securities (777)     (855)   
    Net income per common share-basic  114,827   359,412 $   0.32    265,953   356,898 $   0.75
    Add back:             
     Noncontrolling interest in earnings of unitholders 1,003 3,105    2,507 3,374  
     Other potentially dilutive securities  98    855 2,279  
    Net income attributable to common shareholders-diluted$   115,830   362,615 $   0.32  $   269,315   362,551 $   0.74
    Reconciliation to FFO             
    Net income attributable to common shareholders$   115,604   359,412    $   266,808   356,898   
    Adjustments:             
     Depreciation and amortization 158,996      153,361    
     Depreciation, amortization and other - unconsolidated joint ventures 4,770      4,280    
     Gains on sales of properties (30,683)     (197,869)   
     Gains on land sales (2,700)     (3,306)   
     Income tax expense triggered by sales of real estate assets 7,001      10,392    
     Gains on sales of real estate assets - unconsolidated joint ventures (4,527)     (6,179)   
     Noncontrolling interest share of adjustments (1,138)     369    
    NAREIT FFO attributable to common shareholders - basic  247,323   359,412 $   0.69    227,856   356,898 $   0.64
     Noncontrolling interest in income of unitholders 1,003 3,105    2,507 3,374  
     Noncontrolling interest share of adjustments 1,138      (369)   
     Other potentially dilutive securities   1,753      2,279  
    NAREIT FFO attributable to common shareholders - diluted$   249,464   364,270 $   0.68  $   229,994   362,551 $   0.63
     Gains on involuntary conversion - unconsolidated joint venture (2,259)         
     Loss on debt extinguishment 13      151    
     Non-incremental costs related to successful leases 5,603          
    Core FFO attributable to common shareholders - diluted$   252,821   364,270 $   0.69  $   230,145   362,551 $   0.63
    AFFO             
    Core FFO - diluted$252,821 364,270$0.69 $230,145 362,551$0.63
    Adjustments:             
     Straight-line rental income and expense (10,784)     (11,314)   
     Amortization of above/below market rents and concessions (2,804)     (1,005)   
     Stock based compensation expense 15,213      16,030    
     Noncash interest expense 3,064      2,801    
     Second generation concessions (34)     (135)   
     Second generation tenant improvements (5,079)     (8,151)   
     Second generation leasing commissions (8,945)     (11,792)   
     Building improvements (2,544)     (1,748)   
    AFFO - diluted$   240,908   364,270    $   214,831   362,551   
     

     

    Duke Realty Corporation and Subsidiaries
    Reconciliation of Same Property Net Operating Income Growth
    (Unaudited and in thousands)
     
     Three Months Ended
     June 30, 2019 June 30, 2018
     
    Income from continuing operations before income taxes$78,185  $192,814 
    Share of same property NOI from unconsolidated joint ventures 4,256   3,941 
    Income and expense items not allocated to segments 85,092   (44,117)
    Earnings from service operations (730)  (3,212)
    Properties not included and other adjustments (31,157)  (19,451)
    Same property NOI - Cash Basis$135,646  $129,975 
     
    Percent Change 4.4% 
     
     Six Months Ended
     June 30, 2019 June 30, 2018
     
    Income from continuing operations before income taxes$123,338  $276,667 
    Share of same property NOI from unconsolidated joint ventures 8,415   7,947 
    Income and expense items not allocated to segments 199,097   15,508 
    Earnings from service operations (3,108)  (3,904)
    Properties not included and other adjustments (57,774)  (40,966)
    Same property NOI - Cash Basis$269,968  $255,252 
     
    Percent Change 5.8% 
     
     
    Duke Realty Corporation and Subsidiaries
    Reconciliation of 2019 FFO Guidance
    (Unaudited )
     
     Pessimistic Optimistic
    Net income attributable to common shareholders - diluted$   1.10   $   1.28  
    Depreciation and gains on sales of real estate assets (including share of unconsolidated joint ventures) 0.28   0.18 
    NAREIT FFO attributable to common shareholders - diluted$   1.38   $   1.46  
    Non-incremental costs related to successful leases 0.04   0.02 
    Other reconciling items (0.01)  (0.03)
    Core FFO attributable to common shareholders - diluted$   1.41   $   1.45  
     

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