Duke Realty (DRE)

FFO for the third quarter of 2009 was a loss of $1.02 compared to income of $0.65 for the third quarter of 2008. Third quarter 2009 FFO included non-cash impairment and related charges of $297.1 million ($1.28 per share), and $13.6 million ($0.06 per share) of losses on debt transactions. Excluding the impact of these items, FFO was $0.32 for the third quarter of 2009.

Net income per diluted share (EPS) for third quarter 2009 was a loss of $1.44, as compared to earnings of $0.08 for the same quarter in 2008. The loss was primarily attributable to the impairment and other non-cash charges and losses on debt transactions recognized in the third quarter of 2009.

FFO for the second quarter of 2009 was $0.29 (including $0.13 per share dilution resulting from the company’s common offering in April), compared to $0.59 for the second quarter of 2008. Second quarter 2009 FFO includes impairments and other non-cash charges of $18.7 million ($0.09 per share), partially offset by $1.5 million ($0.01 per share) of gains on the repurchase of unsecured debt obligations. Excluding the impact of these non-cash items, FFO would have been $0.37 for the second quarter of 2009.

Net income per diluted share (EPS) for the second quarter 2009 was a loss of $0.16, as compared to earnings of $0.11 for the same quarter in 2008. The loss was primarily attributable to impairment charges incurred and higher depreciation expense recognized in the second quarter of 2009.

Funds from operations (“FFO”) per share for the first quarter of 2009 were $0.71 ($0.50 per share, excluding $33.1 million of gains realized from the repurchase of the company’s unsecured bonds during the quarter). This compares with FFO per share of $0.57 realized in the first quarter of 2008, as restated for the effects of a change in accounting for interest expense attributable to the company’s exchangeable unsecured notes maturing in December 2011. The decrease in FFO per share from the first quarter of 2008 (excluding the effects of the $33.1 million of gains realized from the repurchase of the company’s unsecured bonds during the quarter) is the result of a decrease in gains from sales of built-for-sale properties and land, as well as lease termination fees.

Net income per diluted share (EPS) for the first quarter was $0.15, compared with $0.02 for the first quarter of 2008. The variance is primarily attributable to the effects of the gains realized from the repurchase of the company’s unsecured bonds during the quarter.

FFO for the fourth quarter of 2008 was $0.71 ($0.69 excluding $14.0 million of gains on the repurchase of preferred stock and $11.4 million of impairment charges), compared with $0.80 for the fourth quarter of 2007. The variance is attributable to higher gains on the sale of land in the fourth quarter of 2007 and to increased interest expense in 2008 attributable to properties that were recently placed in service. FFO for the year ended December 31, 2008 was $2.55 ($2.53 excluding the gains on the repurchase of preferred stock and impairment charges), compared with $2.74 for 2007.

Net income per diluted share (EPS) for the fourth quarter was $0.15, compared with $0.40 for the fourth quarter of 2007. The variance is primarily attributable to the land sale gains and interest expense mentioned above, and to resumption of depreciation on held-for-rental assets previously classified as held-for-sale. EPS for the year ended December 31, 2008 was $0.38, compared with $1.55 for 2007.

The company made opportunistic repurchases of $12.4 million of preferred stock during the fourth quarter, resulting in the $14.0 million gain. These transactions had a positive impact on the company’s fixed-charge ratios.

The company completed the $105 million land sale and began development of the previously announced BRAC project in Alexandria, VA, which involves relocation of various Department of Defense personnel from leased space in Northern Virginia. The project, including a portion of the gain from the land sale, contributed over $7 million to FFO from service operations during the quarter.

The company incurred charges of $3.0 million during the quarter from the write-off of costs related to development projects that it no longer intends to pursue.