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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number: 1-9044 (Duke Realty Corporation) 0-20625 (Duke Realty Limited Partnership)
DRE-20200630_G1.JPG
DUKE REALTY CORPORATION
DUKE REALTY LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Its Charter)
Indiana (Duke Realty Corporation)   35-1740409  (Duke Realty Corporation)
Indiana (Duke Realty Limited Partnership) 35-1898425  (Duke Realty Limited Partnership)
(State or Other Jurisdiction
of Incorporation or Organization)
  (I.R.S. Employer
Identification Number)
8711 River Crossing Boulevard  
Indianapolis, Indiana 46240
        (Address of Principal Executive Offices)   (Zip Code)
Registrant's Telephone Number, Including Area Code:
(317) 808-6000
Securities registered pursuant to Section 12(b) of the Act:
Title of Class Trading Symbols Name of Exchange on Which Registered
Duke Realty Corporation Common Stock, $0.01 par value DRE New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Duke Realty Corporation
Yes
 No  
Duke Realty Limited Partnership
Yes 
 No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Duke Realty Corporation Yes
 No  
Duke Realty Limited Partnership
Yes 
 No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Duke Realty Corporation:
Large accelerated filer
Accelerated filer  
Non-accelerated filer  
Smaller reporting company  
Emerging growth company
Duke Realty Limited Partnership:
Large accelerated filer
Accelerated filer  
Non-accelerated filer  
Smaller reporting company  
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):
Duke Realty Corporation Yes
No  
Duke Realty Limited Partnership
Yes  
No  
The number of shares of Duke Realty Corporation's common stock outstanding at July 29, 2020 was 370,561,785.



EXPLANATORY NOTE
This report (the "Report") combines the quarterly reports on Form 10-Q for the period ended June 30, 2020 of both Duke Realty Corporation and Duke Realty Limited Partnership. Unless stated otherwise or the context otherwise requires, references to "Duke Realty Corporation" or the "General Partner" mean Duke Realty Corporation and its consolidated subsidiaries, and references to the "Partnership" mean Duke Realty Limited Partnership and its consolidated subsidiaries. The terms the "Company," "we," "us" and "our" refer to the General Partner and the Partnership, collectively, and those entities owned or controlled by the General Partner and/or the Partnership.
Duke Realty Corporation is a self-administered and self-managed real estate investment trust ("REIT") and is the sole general partner of the Partnership, owning approximately 99.1% of the common partnership interests of the Partnership ("General Partner Units") as of June 30, 2020. The remaining 0.9% of the common partnership interests ("Limited Partner Units" and, together with the General Partner Units, the "Common Units") are owned by limited partners. As the sole general partner of the Partnership, the General Partner has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Partnership.
The General Partner and the Partnership are operated as one enterprise. The management of the General Partner consists of the same members as the management of the Partnership. As the sole general partner with control of the Partnership, the General Partner consolidates the Partnership for financial reporting purposes, and the General Partner does not have any significant assets other than its investment in the Partnership. Therefore, the assets and liabilities of the General Partner and the Partnership are substantially the same.
We believe combining the quarterly reports on Form 10-Q of the General Partner and the Partnership into this single report results in the following benefits:
enhances investors' understanding of the General Partner and the Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
eliminates duplicative disclosure and provides a more streamlined and readable presentation of information since a substantial portion of the Company's disclosure applies to both the General Partner and the Partnership; and
creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
 
We believe it is important to understand the few differences between the General Partner and the Partnership in the context of how we operate as an interrelated consolidated company. The General Partner's only material asset is its ownership of partnership interests in the Partnership. As a result, the General Partner does not conduct business itself, other than acting as the sole general partner of the Partnership and issuing public equity from time to time. The General Partner does not issue any indebtedness, but does guarantee some of the unsecured debt of the Partnership. The Partnership holds substantially all the assets of the business, directly or indirectly, and holds the ownership interests related to certain of the Company's investments. The Partnership conducts the operations of the business and has no publicly traded equity. Except for net proceeds from equity issuances by the General Partner, which are contributed to the Partnership in exchange for General Partner Units or Preferred Units, the Partnership generates the capital required by the business through its operations, its incurrence of indebtedness and the issuance of Limited Partner Units to third parties.
Noncontrolling interests, shareholders' equity and partners' capital are the main areas of difference between the consolidated financial statements of the General Partner and those of the Partnership. The noncontrolling interests in the Partnership's financial statements include the interests in consolidated investees not wholly owned by the Partnership. The noncontrolling interests in the General Partner's financial statements include the same noncontrolling interests at the Partnership level, as well as the common limited partnership interests in the Partnership, which are accounted for as partners' capital by the Partnership.
In order to highlight the differences between the General Partner and the Partnership, there are separate sections in this report, as applicable, that separately discuss the General Partner and the Partnership, including separate financial statements and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure of the General Partner and the Partnership, this report refers to actions or holdings as being actions or holdings of the collective Company.




DUKE REALTY CORPORATION/DUKE REALTY LIMITED PARTNERSHIP
INDEX
    Page
Duke Realty Corporation:
3
4
5
6
Duke Realty Limited Partnership:
7
8
9
Duke Realty Corporation and Duke Realty Limited Partnership:
2


PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DUKE REALTY CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except per share amounts)
June 30,
2020
December 31,
2019
  (Unaudited)  
ASSETS
Real estate investments:
Real estate assets $ 8,293,907    $ 7,993,377   
Construction in progress 584,138    550,926   
Investments in and advances to unconsolidated joint ventures 133,795    133,074   
Undeveloped land 350,226    254,537   
9,362,066    8,931,914   
Accumulated depreciation (1,590,546)   (1,480,461)  
Net real estate investments 7,771,520    7,451,453   
Real estate investments and other assets held-for-sale —    18,463   
Cash and cash equivalents 29,870    110,891   
Accounts receivable 16,869    20,349   
Straight-line rent receivable 138,251    129,344   
Receivables on construction contracts, including retentions 53,769    25,607   
Deferred leasing and other costs, net of accumulated amortization of $211,458 and $203,857 314,715    320,444   
Restricted cash held in escrow for like-kind exchange —    1,673   
Notes receivable from property sales —    110,000   
Other escrow deposits and other assets 242,015    232,338   
$ 8,567,009    $ 8,420,562   
LIABILITIES AND EQUITY
Indebtedness:
Secured debt, net of deferred financing costs of $363 and $164 $ 50,274    $ 34,023   
Unsecured debt, net of deferred financing costs of $33,828 and $19,258 3,024,912    2,880,742   
3,075,186    2,914,765   
Liabilities related to real estate investments held-for-sale —    887   
Construction payables and amounts due subcontractors, including retentions 111,844    68,840   
Accrued real estate taxes 79,204    69,042   
Accrued interest 15,450    14,181   
Other liabilities 181,978    223,680   
Tenant security deposits and prepaid rents 45,931    48,907   
Total liabilities 3,509,593    3,340,302   
Shareholders' equity:
Common shares ($0.01 par value); 600,000 shares authorized; 370,366 and 367,950 shares issued and outstanding, respectively 3,704    3,680   
Additional paid-in capital 5,607,897    5,525,463   
Accumulated other comprehensive loss (33,346)   (35,036)  
Distributions in excess of net income (590,435)   (475,992)  
Total shareholders' equity 4,987,820    5,018,115   
Noncontrolling interests 69,596    62,145   
Total equity 5,057,416    5,080,260   
$ 8,567,009    $ 8,420,562   
See accompanying Notes to Consolidated Financial Statements
3


DUKE REALTY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Income
For the three and six months ended June 30,
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
  2020 2019 2020 2019
Revenues:
Rental and related revenue $ 226,374    $ 213,107    $ 445,129    $ 423,072   
General contractor and service fee revenue 12,137    23,919    19,751    78,883   
238,511    237,026    464,880    501,955   
Expenses:
Rental expenses 17,557    17,597    36,400    38,265   
Real estate taxes 36,763    32,375    73,490    64,817   
General contractor and other services expenses 10,406    23,189    16,974    75,775   
Depreciation and amortization 86,704    83,004    172,063    158,996   
151,430    156,165    298,927    337,853   
Other operating activities:
Equity in earnings of unconsolidated joint ventures 2,396    4,143    4,935    8,858   
Gain on sale of properties —    30,592    8,937    30,429   
Gain on land sales 6,070    1,950    6,205    2,700   
Other operating expenses (1,546)   (1,518)   (2,658)   (3,641)  
Impairment charges —    —    (5,626)   —   
Non-incremental costs related to successful leases (4,034)   (3,447)   (6,559)   (5,603)  
General and administrative expenses (13,606)   (13,420)   (35,369)   (35,403)  
(10,720)   18,300    (30,135)   (2,660)  
Operating income 76,361    99,161    135,818    161,442   
Other income (expenses):
Interest and other income, net 216    2,534    1,611    5,292   
Interest expense (22,841)   (23,510)   (46,335)   (45,642)  
Loss on debt extinguishment (14,972)   —    (32,778)   (13)  
Gain on involuntary conversion 1,283    —    1,283    2,259   
Income from continuing operations before income taxes 40,047    78,185    59,599    123,338   
Income tax benefit (expense) 150    (6,616)   210    (7,001)  
Income from continuing operations 40,197    71,569    59,809    116,337   
Discontinued operations:
Gain on sale of properties 23    99    71    254   
Income from discontinued operations 23    99    71    254   
Net income 40,220    71,668    59,880    116,591   
Net income attributable to noncontrolling interests (400)   (615)   (604)   (987)  
Net income attributable to common shareholders $ 39,820    $ 71,053    $ 59,276    $ 115,604   
Basic net income per common share:
Continuing operations attributable to common shareholders $ 0.11    $ 0.20    $ 0.16    $ 0.32   
Diluted net income per common share:
Continuing operations attributable to common shareholders $ 0.11    $ 0.20    $ 0.16    $ 0.32   
Weighted average number of common shares outstanding 368,836    359,681    368,513    359,412   
Weighted average number of common shares and potential dilutive securities 372,573    362,926    372,197    362,615   
Comprehensive income:
Net income $ 40,220    $ 71,668    $ 59,880    $ 116,591   
Other comprehensive income (loss):
Unrealized losses on interest rate swap contracts —    (14,699)   —    (24,041)  
Amortization of interest rate swap contracts 889    —    1,690    —   
Comprehensive income $ 41,109    $ 56,969    $ 61,570    $ 92,550   
See accompanying Notes to Consolidated Financial Statements
4


DUKE REALTY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the six months ended June 30,
(in thousands)
(Unaudited)
Six Months Ended
2020 2019
Cash flows from operating activities:
Net income $ 59,880    $ 116,591   
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of buildings and tenant improvements 143,922    131,878   
Amortization of deferred leasing and other costs 28,141    27,118   
Amortization of deferred financing costs 4,477    3,121   
Straight-line rental income and expense, net (8,476)   (10,466)  
Impairment charges 5,626    —   
Loss on debt extinguishment 32,778    13   
Gain on involuntary conversion (1,283)   (2,259)  
Gain on land and property sales (15,213)   (33,383)  
Third-party construction contracts, net (3,717)   15,645   
Other accrued revenues and expenses, net 11,460    10,021   
Operating distributions received in excess of (less than) equity in earnings from unconsolidated joint ventures 3,563    (487)  
Net cash provided by operating activities 261,158    257,792   
Cash flows from investing activities:
Development of real estate investments (333,212)   (205,315)  
Acquisition of buildings and related intangible assets —    (108,201)  
Acquisition of land and other real estate assets (95,859)   (200,872)  
Second generation tenant improvements, leasing costs and building improvements (17,062)   (20,463)  
Other deferred leasing costs (17,306)   (11,152)  
Other assets (10,289)   (7,224)  
Proceeds from the repayments of notes receivable from property sales 110,000    130,000   
Proceeds from land and property sales, net 34,509    97,526   
Capital distributions from unconsolidated joint ventures 13    —   
Capital contributions and advances to unconsolidated joint ventures (4,833)   (5,962)  
Net cash used for investing activities (334,039)   (331,663)  
Cash flows from financing activities:
Proceeds from issuance of common shares, net 76,678    42,128   
Proceeds from unsecured debt 663,123    —   
Payments on unsecured debt (546,972)   —   
Proceeds from secured debt financings 18,400    —   
Payments on secured indebtedness including principal amortization (1,906)   (43,502)  
Borrowings on line of credit, net —    222,000   
Distributions to common shareholders (173,131)   (154,550)  
Distributions to noncontrolling interests, net (1,566)   (1,180)  
Tax payments on stock-based compensation awards (4,051)   (5,469)  
Change in book cash overdrafts (14,444)   15,874   
Other financing activities 289    (9,920)  
Deferred financing costs (6,374)   —   
Net cash provided by financing activities 10,046    65,381   
Net decrease in cash, cash equivalents and restricted cash (62,835)   (8,490)  
Cash, cash equivalents and restricted cash at beginning of period 121,431    25,517   
Cash, cash equivalents and restricted cash at end of period $ 58,596    $ 17,027   
Non-cash activities:
Liabilities and right-of-use assets - operating leases $ 1,443    $ 37,810   
See accompanying Notes to Consolidated Financial Statements

5


DUKE REALTY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the three and six months ended June 30, 2020 and 2019
(in thousands, except per share data)
(Unaudited)
 
  Common Shareholders    
  Common
Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Distributions
in Excess of
Net Income
Noncontrolling
Interests
Total
Balance at March 31, 2020 $ 3,684    $ 5,533,806    $ (34,235)   $ (543,412)   $ 67,219    $ 5,027,062   
Net income —    —    —    39,820    400    40,220   
Other comprehensive income —    —    889    —    —    889   
Issuance of common shares 20    71,193    —    —    —    71,213   
Stock-based compensation plan activity —    2,898    —    (274)   2,760    5,384   
Distributions to common shareholders ($0.235 per share) —    —    —    (86,569)   —    (86,569)  
Distributions to noncontrolling interests —    —    —    —    (783)   (783)  
Balance at June 30, 2020 $ 3,704    $ 5,607,897    $ (33,346)   $ (590,435)   $ 69,596    $ 5,057,416   
Balance at December 31, 2019 $ 3,680    $ 5,525,463    $ (35,036)   $ (475,992)   $ 62,145    $ 5,080,260   
Net income —    —    —    59,276    604    59,880   
Other comprehensive income —    —    1,690    —    —    1,690   
Issuance of common shares 21    76,657    —    —    —    76,678   
Stock-based compensation plan activity   5,777    —    (588)   8,413    13,605   
Distributions to common shareholders ($0.47 per share) —    —    —    (173,131)   —    (173,131)  
Distributions to noncontrolling interests —    —    —    —    (1,566)   (1,566)  
Balance at June 30, 2020 $ 3,704    $ 5,607,897    $ (33,346)   $ (590,435)   $ 69,596    $ 5,057,416   
  Common Shareholders    
  Common
Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Distributions
in Excess of
Net Income
Noncontrolling
Interests
Total
Balance at March 31, 2019 $ 3,594    $ 5,250,157    $ (14,018)   $ (618,123)   $ 59,561    $ 4,681,171   
Net income —    —    —    71,053    615    71,668   
Other comprehensive loss —    —    (14,699)   —    —    (14,699)  
Issuance of common shares 12    37,624    —    —    —    37,636   
Stock-based compensation plan activity —    2,601    —    (291)   2,023    4,333   
Distributions to common shareholders ($0.215 per share) —    —    —    (77,313)   —    (77,313)  
Distributions to noncontrolling interests —    —    —    —    (675)   (675)  
Balance at June 30, 2019 $ 3,606    $ 5,290,382    $ (28,717)   $ (624,674)   $ 61,524    $ 4,702,121   
Balance at December 31, 2018 $ 3,589    $ 5,244,375    $ (4,676)   $ (585,087)   $ 55,042    $ 4,713,243   
Net income —    —    —    115,604    987    116,591   
Other comprehensive loss —    —    (24,041)   —    —    (24,041)  
Issuance of common shares 13    42,115    —    —    —    42,128   
Stock-based compensation plan activity   3,892    —    (641)   6,675    9,930   
Contributions from noncontrolling interests —    —    —    —    312    312   
Distributions to common shareholders ($0.43 per share) —    —    —    (154,550)   —    (154,550)  
Distributions to noncontrolling interests —    —    —    —    (1,492)   (1,492)  
Balance at June 30, 2019 $ 3,606    $ 5,290,382    $ (28,717)   $ (624,674)   $ 61,524    $ 4,702,121   

See accompanying Notes to Consolidated Financial Statements
6


DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
June 30,
2020
December 31,
2019
(Unaudited)
ASSETS
Real estate investments:
Real estate assets $ 8,293,907    $ 7,993,377   
     Construction in progress 584,138    550,926   
     Investments in and advances to unconsolidated joint ventures 133,795    133,074   
     Undeveloped land 350,226    254,537   
9,362,066    8,931,914   
Accumulated depreciation (1,590,546)   (1,480,461)  
              Net real estate investments 7,771,520    7,451,453   
Real estate investments and other assets held-for-sale —    18,463   
Cash and cash equivalents 29,870    110,891   
Accounts receivable 16,869    20,349   
Straight-line rent receivable 138,251    129,344   
Receivables on construction contracts, including retentions 53,769    25,607   
Deferred leasing and other costs, net of accumulated amortization of $211,458 and $203,857 314,715    320,444   
Restricted cash held in escrow for like-kind exchange —    1,673   
Notes receivable from property sales —    110,000   
Other escrow deposits and other assets 242,015    232,338   
$ 8,567,009    $ 8,420,562   
LIABILITIES AND EQUITY
Indebtedness:
Secured debt, net of deferred financing costs of $363 and $164 $ 50,274    $ 34,023   
Unsecured debt, net of deferred financing costs of $33,828 and $19,258 3,024,912    2,880,742   
3,075,186    2,914,765   
Liabilities related to real estate investments held-for-sale —    887   
Construction payables and amounts due subcontractors, including retentions 111,844    68,840   
Accrued real estate taxes 79,204    69,042   
Accrued interest 15,450    14,181   
Other liabilities 181,978    223,680   
Tenant security deposits and prepaid rents 45,931    48,907   
     Total liabilities 3,509,593    3,340,302   
Partners' equity:
Common equity (370,366 and 367,950 General Partner Units issued and outstanding, respectively) 5,021,166    5,053,151   
Limited Partners' common equity (3,330 and 3,029 Limited Partner Units issued and outstanding, respectively) 64,948    57,575   
Accumulated other comprehensive loss (33,346)   (35,036)  
            Total partners' equity 5,052,768    5,075,690   
Noncontrolling interests 4,648    4,570   
     Total equity 5,057,416    5,080,260   
$ 8,567,009    $ 8,420,562   
See accompanying Notes to Consolidated Financial Statements
7


DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Income
For the three and six months ended June 30,
(in thousands, except per unit amounts)
(Unaudited)
Three Months Ended Six Months Ended
  2020 2019 2020 2019
Revenues:
Rental and related revenue $ 226,374    $ 213,107    $ 445,129    $ 423,072   
General contractor and service fee revenue 12,137    23,919    19,751    78,883   
238,511    237,026    464,880    501,955   
Expenses:
Rental expenses 17,557    17,597    36,400    38,265   
Real estate taxes 36,763    32,375    73,490    64,817   
General contractor and other services expenses 10,406    23,189    16,974    75,775   
Depreciation and amortization 86,704    83,004    172,063    158,996   
151,430    156,165    298,927    337,853   
Other operating activities:
Equity in earnings of unconsolidated joint ventures 2,396    4,143    4,935    8,858   
Gain on sale of properties —    30,592    8,937    30,429   
Gain on land sales 6,070    1,950    6,205    2,700   
Other operating expenses (1,546)   (1,518)   (2,658)   (3,641)  
Impairment charges —    —    (5,626)   —   
Non-incremental costs related to successful leases (4,034)   (3,447)   (6,559)   (5,603)  
General and administrative expenses (13,606)   (13,420)   (35,369)   (35,403)  
(10,720)   18,300    (30,135)   (2,660)  
Operating income 76,361    99,161    135,818    161,442   
Other income (expenses):
Interest and other income, net 216    2,534    1,611    5,292   
Interest expense (22,841)   (23,510)   (46,335)   (45,642)  
Loss on debt extinguishment (14,972)   —    (32,778)   (13)  
Gain on involuntary conversion 1,283    —    1,283    2,259   
Income from continuing operations before income taxes 40,047    78,185    59,599    123,338   
Income tax benefit (expense) 150    (6,616)   210    (7,001)  
Income from continuing operations 40,197    71,569    59,809    116,337   
Discontinued operations:
Gain on sale of properties 23    99    71    254   
           Income from discontinued operations 23    99    71    254   
Net income 40,220    71,668    59,880    116,591   
Net (income) loss attributable to noncontrolling interests (44)     (78)   16   
Net income attributable to common unitholders $ 40,176    $ 71,674    $ 59,802    $ 116,607   
Basic net income per Common Unit:
Continuing operations attributable to common unitholders $ 0.11    $ 0.20    $ 0.16    $ 0.32   
Diluted net income per Common Unit:
Continuing operations attributable to common unitholders $ 0.11    $ 0.20    $ 0.16    $ 0.32   
Weighted average number of Common Units outstanding 372,167    362,826    371,790    362,517   
Weighted average number of Common Units and potential dilutive securities 372,573    362,926    372,197    362,615   
Comprehensive income:
Net income $ 40,220    $ 71,668    $ 59,880    $ 116,591   
Other comprehensive income (loss):
Unrealized losses on interest rate swap contracts —    (14,699)   —    (24,041)  
Amortization of interest rate swap contracts 889    —    1,690    —   
Comprehensive income $ 41,109    $ 56,969    $ 61,570    $ 92,550   

See accompanying Notes to Consolidated Financial Statements
8


DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the six months ended June 30,
(in thousands)
(Unaudited)
Six Months Ended
2020 2019
Cash flows from operating activities:
Net income $ 59,880    $ 116,591   
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of buildings and tenant improvements 143,922    131,878   
Amortization of deferred leasing and other costs 28,141    27,118   
Amortization of deferred financing costs 4,477    3,121   
Straight-line rental income and expense, net (8,476)   (10,466)  
Impairment charges 5,626    —   
Loss on debt extinguishment 32,778    13   
Gain on involuntary conversion (1,283)   (2,259)  
Gain on land and property sales (15,213)   (33,383)  
Third-party construction contracts, net (3,717)   15,645   
Other accrued revenues and expenses, net 11,460    10,021   
Operating distributions received in excess of (less than) equity in earnings from unconsolidated joint ventures 3,563    (487)  
Net cash provided by operating activities 261,158    257,792   
Cash flows from investing activities:
Development of real estate investments (333,212)   (205,315)  
Acquisition of buildings and related intangible assets —    (108,201)  
Acquisition of land and other real estate assets (95,859)   (200,872)  
Second generation tenant improvements, leasing costs and building improvements (17,062)   (20,463)  
Other deferred leasing costs (17,306)   (11,152)  
Other assets (10,289)   (7,224)  
Proceeds from the repayments of notes receivable from property sales 110,000    130,000   
Proceeds from land and property sales, net 34,509    97,526   
Capital distributions from unconsolidated joint ventures 13    —   
Capital contributions and advances to unconsolidated joint ventures (4,833)   (5,962)  
Net cash used for investing activities (334,039)   (331,663)  
Cash flows from financing activities:
Proceeds from the General Partner 76,678    42,128   
Proceeds from unsecured debt 663,123    —   
Payments on unsecured debt (546,972)   —   
Proceeds from secured debt financings 18,400    —   
Payments on secured indebtedness including principal amortization (1,906)   (43,502)  
Borrowings on line of credit, net —    222,000   
Distributions to common unitholders (174,697)   (155,903)  
Contributions from noncontrolling interests, net —    173   
Tax payments on stock-based compensation awards (4,051)   (5,469)  
Change in book cash overdrafts (14,444)   15,874   
Other financing activities 289    (9,920)  
Deferred financing costs (6,374)   —   
Net cash provided by financing activities 10,046    65,381   
Net decrease in cash, cash equivalents and restricted cash (62,835)   (8,490)  
Cash, cash equivalents and restricted cash at beginning of period 121,431    25,517   
Cash, cash equivalents and restricted cash at end of period $ 58,596    $ 17,027   
Non-cash activities:
Liabilities and right-of-use assets - operating leases $ 1,443    $ 37,810   
See accompanying Notes to Consolidated Financial Statements
9


DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the three and six months ended June 30, 2020 and 2019
(in thousands, except per unit data)
(Unaudited)
Common Unitholders
General Limited Accumulated
   Partner's Partners' Other Total    
  Common Equity Common Equity Comprehensive
Loss
Partners' Equity Noncontrolling
Interests
Total Equity
Balance at March 31, 2020 $ 4,994,078    $ 62,615    $ (34,235)   $ 5,022,458    $ 4,604    5,027,062   
Net income 39,820    356    —    40,176    44    40,220   
Other comprehensive income —    —    889    889    —    889   
Capital contribution from the General Partner 71,213    —    —    71,213    —    71,213   
Stock-based compensation plan activity 2,624    2,760    —    5,384    —    5,384   
Distributions to common unitholders ($0.235 per Common Unit) (86,569)   (783)   —    (87,352)   —    (87,352)  
Balance at June 30, 2020 $ 5,021,166    $ 64,948    $ (33,346)   $ 5,052,768    $ 4,648    $ 5,057,416   
Balance at December 31, 2019 $ 5,053,151    $ 57,575    $ (35,036)   $ 5,075,690    $ 4,570    5,080,260   
Net income 59,276    526    —    59,802    78    59,880   
Other comprehensive income —    —    1,690    1,690    —    1,690   
Capital contribution from the General Partner 76,678    —    —    76,678    —    76,678   
Stock-based compensation plan activity 5,192    8,413    —    13,605