October 31, 2012 at 16:10 PM EDT
Duke Realty Reports Third Quarter 2012 Results
Core FFO per Share of $0.26

INDIANAPOLIS, IN -- (Marketwire) -- 10/31/12 -- Duke Realty Corporation (NYSE: DRE), a leading industrial, suburban and medical office property REIT, today reported results for the third quarter of 2012.

"Solid operational results, continued progress on our asset repositioning strategy and opportunistic capital raising resulted in a strong third quarter," said Denny Oklak, Chairman and CEO. "Core FFO was $0.26 per share and AFFO was $0.20 per share. We completed 7.4 million square feet of leasing activity and maintained an in-service portfolio occupancy of 92.5 percent. We achieved strong same-property net operating income growth of 3.5 percent as compared to the twelve months ended September 30, 2011. There was continued strong momentum in new development starts during the quarter with five build-to-suit projects and two strategic speculative development projects under construction, all with solid risk-adjusted yields. We also completed significant medical office acquisition activity during the quarter and in early October, substantially advancing our asset repositioning strategy. We continued to lower our cost of capital with the issuance of $300 million of ten-year, senior unsecured notes at a company record low 3.93 percent effective rate, in addition to raising $85 million of proceeds from our at-the-market common equity program. Overall, we are pleased with a very successful third quarter."

Quarterly Highlights

Core Funds from Operations ("Core FFO") per diluted share was $0.26 for the quarter. Funds from Operations ("FFO") per diluted share, as defined by the National Association of Real Estate Investment Trusts ("NAREIT"), was also $0.26 for the quarter.

Solid operating results:

  • Total in-service portfolio occupancy of 92.5 percent and bulk industrial in-service occupancy of 94.0 percent at September 30, 2012;
  • Total leasing activity of approximately 7.4 million square feet in the third quarter of 2012, including a company record high tenant retention rate of 90.1 percent;
  • Same-property net operating income growth of 3.5 percent for the twelve months ended September 30, 2012 and 2.0 percent for the three months ended September 30, 2012, as compared to the comparable periods ended September 30, 2011.

Progress on asset and capital strategies:

  • Completed approximately $92 million of acquisitions during the quarter;
  • Closed on the acquisition of a $342 million medical office portfolio in October 2012;
  • Began over $115 million of new developments, consisting of three industrial developments totaling 1.2 million square feet, three medical office buildings totaling 181,000 square feet and one office building totaling 158,000 square feet;
  • Completed $34 million of dispositions;
  • Issued $300 million of 3.875 percent ten-year, senior unsecured notes, with an effective rate of 3.93 percent;
  • During the quarter, issued approximately 5.8 million new shares of common stock under our ATM program, generating net proceeds of approximately $85 million;
  • At September 30, 2012, $113 million of cash on hand and no balance on our line of credit.

Financial Performance

  • Core FFO for the third quarter of 2012 of $0.26 per share compared to $0.29 per share for the third quarter of 2011. The change was primarily attributable to lower property portfolio income due to the impact of asset repositioning activities. A reconciliation of FFO, as defined by NAREIT, to Core FFO is included in the financial tables included in this release.
  • FFO as defined by NAREIT, of $0.26 per share for the third quarter 2012 and $0.27 per share for the third quarter 2011. In addition to the impacts outlined in Core FFO above, FFO as defined by NAREIT, was reduced by acquisition-related costs. A reconciliation of FFO, as defined by NAREIT, to Core FFO is included in the financial tables included in this release.
  • Adjusted FFO ("AFFO") for the third quarter of 2012 of $0.20 per share compared to $0.18 from the third quarter of 2011. Our shift in asset mix from suburban office properties to bulk distribution resulted in significant reduction in second generation capital expenditures contributing to this AFFO increase. A reconciliation of FFO, as defined by NAREIT, to AFFO is included in the financial tables included in this release.
  • Net loss of $0.11 per diluted share for the third quarter of 2012 compared to net loss of $0.13 per diluted share for the same quarter in 2011.

Operating Performance Highlights

  • In-service portfolio occupancy on September 30, 2012 of 92.5 percent compared to 92.2 percent on June 30, 2012.
  • In-service occupancy in the bulk distribution portfolio on September 30, 2012 of 94.0 percent compared to 93.6 percent on June 30, 2012.
  • In-service occupancy in the medical office portfolio of 91.9 percent on September 30, 2012 compared to 90.7 percent on June 30, 2012.
  • In-service occupancy in the suburban office portfolio of 86.1 percent at quarter end compared to 85.9 percent on June 30, 2012.
  • Tenant retention for the quarter of approximately 90 percent with overall positive rental rate growth of 1.0 percent.
  • Same-property net operating income growth of 3.5 percent for the twelve months ended September 30, 2012 and 2.0 percent for the three months ended September 30, 2012, as compared to the comparable periods ended September 30, 2011. This positive same-property performance was primarily driven by lease-up of assets while rental rate growth improved modestly.

Real Estate Investment Activity

An acquisition of a seven building, 334,000 square foot medical office portfolio located in Northwest Georgia for $92 million closed during the third quarter of 2012. The portfolio was 100 percent leased to Harbin Clinic, LLC, one of the largest independent multi-specialty physician practices in the state of Georgia.

Following the end of the third quarter, the Company closed on the acquisition of a $342 million medical office portfolio. The geographically diversified portfolio includes fourteen facilities totaling over 1.2 million square feet that were 89.4 percent leased at closing. The acquisition included the assumption of $60 million of secured debt.

Development

The third quarter included the following development activity:

Wholly-Owned Properties

  • During the quarter, three new industrial developments were started: two 100 percent pre-leased expansion projects in Columbus, OH and Chicago, IL, totaling 582,000 square feet, and one 600,000 square foot speculative bulk distribution facility in Indianapolis, IN. Three 100 percent pre-leased medical office projects in Atlanta, GA, Cincinnati, OH, and Indianapolis, IN, totaling 181,000 square feet were also started. Also during the quarter, a 158,000 square foot speculative suburban office project was started in Houston, TX.
  • Our wholly-owned development projects under construction on September 30, 2012 consisted of seven medical office projects totaling 537,000 square feet, six industrial projects totaling 2.5 million square feet and two office projects totaling 502,000 square feet. These projects were 83 percent pre-leased in the aggregate.
  • During the quarter, two medical office buildings totaling 158,000 square feet that were on average 92 percent pre-leased were placed in service.

Joint Venture Properties

  • Our joint-venture-owned development projects under construction at September 30, 2012 consisted of two industrial projects totaling 976,000 square feet and one medical office project totaling 274,000 square feet. These projects were 52 percent pre-leased.

Dispositions

Proceeds from property dispositions totaled $34 million during the quarter, of which $9.4 million was from two non-core industrial assets (12 percent occupied), $8 million from two office assets (73 percent occupied), $9.3 million from a medical office property held in a joint venture (100 percent occupied) and the remaining from sales of undeveloped land. The industrial and office dispositions comprised approximately 221,700 and 134,500 square feet, respectively, with a weighted average age of over 22 years.

2012 Earnings Guidance

The company tightened Core FFO guidance for 2012 from $0.98 to $1.06 to $1.00 to $1.04.

Dividends Declared

Our board of directors declared a quarterly cash dividend on our common stock of $0.17 per share, or $0.68 per share on an annualized basis. The third quarter dividend will be payable November 30, 2012 to shareholders of record on November 14, 2012. The board also declared the following dividends on our outstanding preferred stock:

---------------------------------------------------------------------------
                       Quarterly
  Class  NYSE Symbol  Amount/Share     Record Date         Payment Date
---------------------------------------------------------------------------
Series J    DREPRJ     $0.4140625    November 14, 2012   November 30, 2012
---------------------------------------------------------------------------
Series K    DREPRK      $0.40625     November 14, 2012   November 30, 2012
---------------------------------------------------------------------------
Series L    DREPRL      $0.4125      November 14, 2012   November 30, 2012
---------------------------------------------------------------------------
Series O    DREPRO     $0.523437     December 17, 2012   December 31, 2012
---------------------------------------------------------------------------

FFO and AFFO Reporting Definitions

Funds from Operations ("FFO"): FFO is computed in accordance with standards established by the National Association of Real Estate Investment Trusts ("NAREIT"). NAREIT defines FFO as net income (loss) excluding gains (losses) on sales of depreciable property, impairment charges related to depreciable real estate assets, and extraordinary items (computed in accordance with generally accepted accounting principles ("GAAP")); 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 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 Funds from Operations ("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 impairment charges, tax expenses or benefit 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, adjustments on the repurchase of preferred stock, gains (losses) on and related costs of acquisitions, and severance charges related to 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.

Adjusted Funds from Operations ("AFFO"): AFFO is defined by the company as Core FFO (as defined above), less recurring building improvements and 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) and adjusted for certain non-cash items including straight line rental income, 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 does not believe same-property net operating income growth to be a primary measure of overall company operating performance. The company utilizes same-property net income growth as a supplemental measure to evaluate property-level performance, without differentiating or making adjustment as to whether a property is consolidated or jointly controlled.

A description of the properties that are excluded from the company's same-property measure is included on page 21 of our September 30, 2012 supplemental information.

About Duke Realty

Duke Realty owns and operates approximately 142 million rentable square feet of industrial and office assets, including medical office, in 18 major U.S. cities. Duke Realty is publicly traded on the NYSE under the symbol DRE and is listed on the S&P MidCap 400 Index. More information about Duke Realty is available at www.dukerealty.com.

Third Quarter Earnings Call and Supplemental Information

Duke Realty is hosting a conference call tomorrow, November 1, 2012, at 3:00 p.m. EDT to discuss its third 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. EDT 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, tornados and hurricanes; and (xvi) the effect of any damage to our reputation resulting from developments relating to any of items (i) - (ix). 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, 2011. 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.


                          Duke Realty Corporation
                          Statement of Operations
                             September 30, 2012
                  (In thousands, except per share amounts)


                                 --------------------  --------------------
                                  Three Months Ended     Nine Months Ended
                                     September 30,         September 30,
                                 --------------------  --------------------
                                    2012       2011       2012       2011
                                 ---------  ---------  ---------  ---------
Revenues:
  Rental and related revenue     $ 208,957  $ 184,581  $ 616,451  $ 554,752
  General contractor and service
   fee revenue                      93,932    127,708    226,507    409,617
                                 ---------  ---------  ---------  ---------
                                   302,889    312,289    842,958    964,369
                                 ---------  ---------  ---------  ---------
Expenses:
  Rental expenses                   39,659     35,105    111,477    108,224
  Real estate taxes                 28,676     26,355     85,255     79,866
  General contractor and other
   services expenses                87,719    120,547    209,519    379,180
  Depreciation and amortization     95,117     81,068    279,136    242,043
                                 ---------  ---------  ---------  ---------
                                   251,171    263,075    685,387    809,313
                                 ---------  ---------  ---------  ---------
Other operating activities:
  Equity in earnings of
   unconsolidated companies          2,280      3,104      4,056      5,890
  Gain on sale of properties           403     (1,437)       245     66,910
  Undeveloped land carrying
   costs                            (2,140)    (2,259)    (6,606)    (7,021)
  Other operating expenses            (130)       (60)      (591)      (171)
  General and administrative
   expenses                         (8,934)    (9,493)   (32,367)   (29,231)
                                 ---------  ---------  ---------  ---------
                                    (8,521)   (10,145)   (35,263)    36,377
                                 ---------  ---------  ---------  ---------

    Operating income                43,197     39,069    122,308    191,433

Other income (expenses):
  Interest and other income, net       150        172        394        543
  Interest expense                 (61,539)   (54,528)  (183,623)  (161,765)
  Acquisition-related activity        (954)      (342)    (2,563)    (1,525)
                                 ---------  ---------  ---------  ---------
    Income (loss) from
     continuing operations
     before income taxes           (19,146)   (15,629)   (63,484)    28,686
  Income tax benefit                   103        194        103        194
                                 ---------  ---------  ---------  ---------
    Income (loss) from
     continuing operations         (19,043)   (15,435)   (63,381)    28,880

Discontinued operations:
  Loss before gain on sales           (114)    (1,522)    (1,185)    (9,223)
  Gain on sale of depreciable
   properties                        1,608      2,088     11,179     16,405
                                 ---------  ---------  ---------  ---------
    Income from discontinued
     operations                      1,494        566      9,994      7,182

Net income (loss)                  (17,549)   (14,869)   (53,387)    36,062
Dividends on preferred shares      (11,081)   (14,399)   (35,356)   (46,347)
Adjustments for
 redemption/repurchase of
 preferred shares                        -     (3,633)    (5,730)    (3,796)
Net loss attributable to
 noncontrolling interests              400        825      1,371        532
                                 ---------  ---------  ---------  ---------
    Net loss attributable to
     common shareholders         $ (28,230) $ (32,076) $ (93,102) $ (13,549)
                                 =========  =========  =========  =========

Basic net income (loss) per
 common share:
  Continuing operations
   attributable to common
   shareholders                  $   (0.11) $   (0.13) $   (0.40) $   (0.09)
  Discontinued operations
   attributable to common
   shareholders                  $    0.00  $    0.00  $    0.04  $    0.03
                                 ---------  ---------  ---------  ---------
Total                            $   (0.11) $   (0.13) $   (0.36) $   (0.06)
                                 =========  =========  =========  =========

Diluted net income (loss) per
 common share:
  Continuing operations
   attributable to common
   shareholders                  $   (0.11) $   (0.13) $   (0.40) $   (0.09)
  Discontinued operations
   attributable to common
   shareholders                  $    0.00  $    0.00  $    0.04  $    0.03
                                 ---------  ---------  ---------  ---------
Total                            $   (0.11) $   (0.13) $   (0.36) $   (0.06)
                                 =========  =========  =========  =========



                          Duke Realty Corporation
                     Statement of Funds From Operations
                             September 30, 2012
                  (In thousands, except per share amounts)


                                       Three Months Ended
                                         September 30,
                                          (Unaudited)
                    -------------------------------------------------------
                               2012                         2011
                    --------------------------  ---------------------------
                                 Wtd.                        Wtd.
                                 Avg.     Per                Avg.      Per
                     Amount     Shares   Share   Amount     Shares    Share
                    --------  --------- ------  --------  ---------- ------
Net Loss
 Attributable to
 Common
 Shareholders       $(28,230)                   $(32,076)
Less: Dividends on
 participating
 securities             (680)                       (811)
                    --------                    --------
Net Loss Per Common
 Share- Basic        (28,910)   270,289 $(0.11)  (32,887)    252,802 $(0.13)
Add back:
   Noncontrolling
    interest in
    earnings of
    unitholders            -          -                -           -
   Other
    potentially
    dilutive
    securities                        -                            -
                    --------  ---------         --------  ----------
Net Loss
 Attributable to
 Common
 Shareholders-
 Diluted            $(28,910)   270,289 $(0.11) $(32,887)    252,802 $(0.13)
                    ========  =========         ========  ==========

Reconciliation to
 Funds From
 Operations ("FFO")
Net Loss
 Attributable to
 Common
 Shareholders       $(28,230)   270,289         $(32,076)    252,802
Adjustments:
   Depreciation and
    amortization      95,139                      97,335
   Company share of
    joint venture
    depreciation
   and amortization    8,782                       8,531
   Earnings from
    depreciable
    property sales-
    wholly owned,
    discontinued
    operations        (1,608)                     (2,088)
   Earnings from
    depreciable
    property sales-
    wholly owned,
    continuing
    operations          (403)                      1,437
   Earnings from
    depreciable
    property sales-
    JV                (2,065)                          -
   Noncontrolling
    interest share
    of adjustments    (1,638)                     (2,835)
                    --------  ---------         --------  ----------
Funds From
 Operations- Basic    69,977    270,289 $ 0.26    70,304     252,802 $ 0.28
   Noncontrolling
    interest in
    loss of
    unitholders         (459)     4,511             (868)      7,064
   Noncontrolling
    interest share
    of adjustments     1,638                       2,835
   Other
    potentially
    dilutive
    securities                    3,187                        3,344
                    --------  ---------         --------  ----------
Funds From
 Operations-
 Diluted            $ 71,156    277,987 $ 0.26  $ 72,271     263,210 $ 0.27
   Adjustments for
    redemption/repu
    rchase of
    preferred
    shares                 -                       3,633
   Acquisition-
    related
    activity             954                         342
   Other income tax
    items               (103)                       (194)
                    --------  ---------         --------  ----------
Core Funds From
 Operations-
 Diluted            $ 72,007    277,987 $ 0.26  $ 76,052     263,210 $ 0.29
                    ========  =========         ========  ==========

Adjusted Funds From
 Operations
Core Funds From
 Operations-
 Diluted            $ 72,007    277,987 $ 0.26  $ 76,052     263,210 $ 0.29
Adjustments:
   Straight-line
    rental income     (8,123)                     (8,346)
   Amortization of
    above/below
    market rents
    and concessions    1,582                       3,263
   Stock based
    compensation
    expense            1,695                       2,367
   Noncash interest
    expense            2,527                       3,267
   Second
    generation
    concessions         (243)                     (1,214)
   Second
    generation
    tenant
    improvements      (5,852)                    (16,034)
   Second
    generation
    leasing
    commissions       (5,650)                     (9,143)
   Building
    improvements      (2,119)                     (3,428)
                    --------  ---------         --------  ----------
Adjusted Funds From
 Operations -
 Diluted            $ 55,824    277,987 $ 0.20  $ 46,784     263,210 $ 0.18
                    ========  =========         ========  ==========



                                       Nine Months Ended
                                         September 30,
                                          (Unaudited)
                    -------------------------------------------------------
                               2012                         2011
                    --------------------------  ---------------------------
                                 Wtd.                        Wtd.
                                 Avg.     Per                Avg.      Per
                     Amount     Shares   Share   Amount     Shares    Share
                    --------  --------- ------  --------  ---------- ------
Net Loss
 Attributable to
 Common
 Shareholders       $(93,102)                   $(13,549)
Less: Dividends on
 participating
 securities           (2,388)                     (2,416)
                    --------                    --------
Net Loss Per Common
 Share- Basic        (95,490)   265,153 $(0.36)  (15,965)    252,618 $(0.06)
Add back:
   Noncontrolling
    interest in
    earnings of
    unitholders            -          -                -           -
   Other
    potentially
    dilutive
    securities                        -                            -
                    --------  ---------         --------  ----------
Net Loss
 Attributable to
 Common
 Shareholders-
 Diluted            $(95,490)   265,153 $(0.36) $(15,965)    252,618 $(0.06)
                    ========  =========         ========  ==========

Reconciliation to
 Funds From
 Operations ("FFO")
Net Loss
 Attributable to
 Common
 Shareholders       $(93,102)   265,153         $(13,549)    252,618
Adjustments:
   Depreciation and
    amortization     280,338                     292,429
   Company share of
    joint venture
    depreciation
   and amortization   26,008                      24,798
   Earnings from
    depreciable
    property sales-
    wholly owned,
    discontinued
    operations       (11,179)                    (16,405)
   Earnings from
    depreciable
    property sales-
    wholly owned,
    continuing
    operations          (245)                    (66,910)
   Earnings from
    depreciable
    property sales-
    JV                (2,065)                        (91)
   Noncontrolling
    interest share
    of adjustments    (5,358)                     (6,206)
                    --------  ---------         --------  ----------
Funds From
 Operations- Basic   194,397    265,153 $ 0.73   214,066     252,618 $ 0.85
   Noncontrolling
    interest in
    income (loss)
    of unitholders    (1,736)     4,942             (369)      6,887
   Noncontrolling
    interest share
    of adjustments     5,358                       6,206
   Other
    potentially
    dilutive
    securities                    3,182                        3,398
                    --------  ---------         --------  ----------
Funds From
 Operations-
 Diluted            $198,019    273,277 $ 0.72  $219,903     262,903 $ 0.84
   Adjustments for
    redemption/repu
    rchase of
    preferred
    shares             5,730                       3,796
   Acquisition-
    related
    activity           2,563                       1,525
   Other income tax
    items               (103)                       (194)
                    --------  ---------         --------  ----------
Core Funds From
 Operations-
 Diluted            $206,209    273,277 $ 0.75  $225,030     262,903 $ 0.86
                    ========  =========         ========  ==========

Adjusted Funds From
 Operations
Core Funds From
 Operations-
 Diluted            $206,209    273,277 $ 0.75  $225,030     262,903 $ 0.86
Adjustments:
   Straight-line
    rental income    (19,739)                    (22,666)
   Amortization of
    above/below
    market rents
    and concessions    5,753                       9,428
   Stock based
    compensation
    expense           10,468                      10,342
   Noncash interest
    expense            6,924                       9,740
   Second
    generation
    concessions         (933)                     (2,710)
   Second
    generation
    tenant
    improvements     (18,917)                    (40,884)
   Second
    generation
    leasing
    commissions      (18,736)                    (29,147)
   Building
    improvements      (3,824)                     (5,756)
                    --------  ---------         --------  ----------
Adjusted Funds From
 Operations -
 Diluted            $167,205    273,277 $ 0.61  $153,377     262,903 $ 0.58
                    ========  =========         ========  ==========



                          Duke Realty Corporation
                               Balance Sheet
                             September 30, 2012
                  (In thousands, except per share amounts)




                                               September 30,   December 31,
                                                    2012           2011
                                               -------------  -------------
ASSETS:

  Rental Property                              $   6,255,740  $   6,038,107
  Less: Accumulated Depreciation                  (1,246,853)    (1,127,595)
  Construction in Progress                           219,931         44,497
  Undeveloped Land                                   613,183        622,635
                                               -------------  -------------
    Net Real Estate Investments                    5,842,001      5,577,644

  Cash                                               113,152        213,809
  Accounts Receivable                                 29,737         22,428
  Straight-line Rents Receivable                     117,016        108,392
  Receivables on Construction Contracts               36,413         40,247
  Investments in and Advances to
   Unconsolidated Companies                          367,221        364,859
  Deferred Financing Costs, Net                       42,095         42,268
  Deferred Leasing and Other Costs, Net              465,588        463,983
  Escrow Deposits and Other Assets                   176,894        170,807
                                               -------------  -------------

    Total Assets                               $   7,190,117  $   7,004,437
                                               =============  =============

LIABILITIES AND EQUITY:

  Secured Debt                                 $   1,096,455  $   1,173,233
  Unsecured Notes                                  3,043,690      2,616,063
  Unsecured Lines of Credit                                0         20,293
  Construction Payables and Amounts due
   Subcontractors                                     80,934         55,916
  Accrued Real Estate Taxes                          102,646         69,470
  Accrued Interest                                    36,666         58,904
  Other Accrued Expenses                              41,661         60,230
  Other Liabilities                                  122,776        131,735
  Tenant Security Deposits and Prepaid Rents          40,248         38,935
                                               -------------  -------------

    Total Liabilities                              4,565,076      4,224,779
                                               -------------  -------------

  Preferred Stock                                    625,638        793,910
  Common Stock and Additional Paid-in Capital      3,873,890      3,597,117
  Accumulated Other Comprehensive Income               2,177            987
  Distributions in Excess of Net Income           (1,912,802)    (1,677,328)
                                               -------------  -------------

    Total Shareholders' Equity                     2,588,903      2,714,686

  Noncontrolling Interest                             36,138         64,972
                                               -------------  -------------

    Total Liabilities and Equity               $   7,190,117  $   7,004,437
                                               =============  =============

Contact Information:

Investors:
Ron Hubbard
317.808.6060

Media:
Helen McCarthy
317.708.8010

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