As filed with the Securities and Exchange Commission on June 25, 1997
=====================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE,
SAVINGS AND SIMILAR PLANS PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
---------- ----------
Commission file number: 1-9044
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
DUKE REALTY PROFIT SHARING AND SALARY DEFERRAL PLAN
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
DUKE REALTY INVESTMENTS, INC.
8888 KEYSTONE CROSSING, SUITE 1200
INDIANAPOLIS, INDIANA 46240
<PAGE>
DUKE REALTY PROFIT SHARING
AND SALARY DEFERRAL PLAN
Financial Statements with
Supplemental Schedules
December 31, 1996 and 1995
(With Independent Auditors' Report Thereon)
<PAGE>
DUKE REALTY PROFIT SHARING
AND SALARY DEFERRAL PLAN
December 31, 1996 and 1995
Index
Page
----
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available for Plan Benefits 2
Statements of Changes in Net Assets Available for
Plan Benefits 3
Notes to Financial Statements 4-11
Schedule
--------
Schedule of Assets Held for Investment Purposes 1
Schedule of Reportable Transactions 2
<PAGE>
INDEPENDENT AUDITORS' REPORT
- ----------------------------
The Employee Benefits Committee
DUKE REALTY PROFIT SHARING AND SALARY DEFERRAL PLAN:
We have audited the accompanying statements of net assets available
for plan benefits of Duke Realty Profit Sharing and Salary Deferral Plan
as of December 31, 1996 and 1995, and the related statements of changes
in net assets available for plan benefits for the years then
ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan
benefits of Duke Realty Profit Sharing and Salary Deferral Plan as of
December 31, 1996 and 1995, and the changes in net assets available for
plan benefits for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules
of assets held for investment purposes and reportable transactions are
presented for the purpose of additional analysis and are not a required
part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in
all material respects in relation to the basic financial
statements taken as a whole.
KPMG Peat Marwick LLP
Indianapolis, Indiana
May 9, 1997
-1-
<PAGE>
DUKE REALTY PROFIT SHARING AND SALARY DEFERRAL PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
----------- ----------
<S> <C> <C>
Assets held by Trustee:
Investments, at fair value:
Collective trust $ 797,095 $ 902,492
Mutual funds 7,828,543 6,256,990
Common stock 3,604,986 2,395,518
Loans to participants 316,614 161,010
Cash held for investment 5,442 519
Contributions receivable:
Participants 54,616 65,538
Employer 15,204 34,393
---------- ---------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $12,622,500 $9,816,460
========== =========
</TABLE>
See accompanying notes to financial statements.
-2-
<PAGE>
DUKE REALTY PROFIT SHARING AND SALARY DEFERRAL PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Years ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Additions to net assets:
Contributions:
Participants' salary deferral $ 930,370 $ 712,307
Employer matching of salary deferral 312,324 236,752
Participants' rollover 335,061 71,531
Contributions receivable 69,820 99,931
--------- ---------
1,647,575 1,120,521
--------- ---------
Investment income:
Net appreciation in fair value of
investments 1,119,217 1,066,047
Interest and dividends 833,903 754,102
Increase in insurance cash surrender
value - 12,156
--------- ---------
1,953,120 1,832,305
--------- ---------
Total additions 3,600,695 2,952,826
--------- ---------
Deductions from net assets:
Benefits paid to participants 794,655 256,292
Life insurance premium payments - 12,838
Administrative expenses - 8,010
--------- ---------
Total deductions 794,655 277,140
--------- ---------
Net increase 2,806,040 2,675,686
Net assets available for plan benefits:
Beginning of year 9,816,460 7,140,774
---------- ---------
End of year $12,622,500 $9,816,460
========== =========
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE>
DUKE REALTY PROFIT SHARING AND SALARY DEFERRAL PLAN
Notes to Financial Statements
(1) DESCRIPTION OF PLAN
-------------------
The following description of the Duke Realty Profit Sharing and
Salary Deferral Plan (the Plan) provides only general information.
Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
General
-------
The Plan is a defined contribution plan sponsored by Duke
Realty Services Limited Partnership and predecessor companies (the
Employer) covering all full-time employees who have completed one-
half year of service as defined by the Plan and are age 21 years
or older. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
Contributions
-------------
Eligible participants may elect to defer a percentage of
their compensation to be contributed to their Employee Deferral
Account. Each year the Employee Benefits Committee (the Committee)
fixes the minimum and maximum percent that may be contributed, not
to exceed 15% of the participants' compensation for each plan
year subject to limitations imposed by the Internal Revenue
Service. The Employer matches participant contributions annually
up to a maximum of the greater of $500 or 2% of total
compensation. The Employer matching contribution is limited to
the participant's first $150,000 of compensation, and the
contribution is invested in the common stock of Duke Realty
Investments, Inc., the parent of the general partner of the
Employer.
The Employer may also make discretionary contributions of a portion
of its profits to the Plan to be invested in the common stock of
Duke Realty Investments, Inc. The Employer made no profit
sharing contributions in 1996 and 1995.
Participants' Accounts
---------------------
Each participant's account is credited with the participant's
contribution, the Employer matching contribution, allocations of
the Employer's profit sharing contribution (when applicable),
Plan earnings, and forfeitures of terminated participants' non-
vested accounts upon the distribution of the vested portion
of their accounts. The benefit to which a participant is
entitled is the benefit that can be provided from the
participant's account.
-4-
<PAGE>
DUKE REALTY PROFIT SHARING AND SALARY DEFERRAL PLAN
Notes to Financial Statements
Vesting
------
Participants are immediately vested in elective salary
reduction contributions, Employer matching contributions and the
actual earnings thereon. Vesting in both the profit sharing contribution
and forfeiture allocation and the earnings thereon is based upon the
years of service of the participant. A year of service means a plan
year in which the participant completes at least 1,000 hours of
service. A participant becomes 20% vested after three years of
service and vests an additional 20% for each year of service
thereafter and is 100% vested after seven years of service.
Benefits
--------
When a distribution is made upon termination of service or
retirement, a participant's vested account balance is to be
distributed in a lumpsum payment within 60 days after completion of
the Plan valuation date for the period in which the event giving
rise to the distribution occurred.
Forfeitures
-----------
Participants who terminate employment and receive distribution of
the vested portion of their profit sharing account forfeit any non-
vested portion of their account. These forfeitures are allocated
to other participants in the same manner as the profit sharing
contributions.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Use of Estimates
----------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires estimates and
assumptions that affect the reported amounts of net assets
available for plan benefits and disclosure of commitments at the
date of financial statements and the changes in net assets
available for plan benefits during the reporting period. Actual
results could differ from those estimates.
Investment Valuation
--------------------
Mutual fund and common stock investments are stated at fair
market value as determined by quoted market prices. The
collective trust investment is stated at fair market value as
reported by the trustee. The amount recorded as loans is stated
at the loaned amount and approximates fair value because the
interest rates charged approximate current market rates.
-5-
<PAGE>
DUKE REALTY PROFIT SHARING AND SALARY DEFERRAL PLAN
Notes to Financial Statements
Administrative Expenses
-----------------------
Prior to 1996, the Trustee fees were paid by the Plan as incurred
and the other expenses of the Plan were paid directly by the
Employer. Effective January 1996, all administrative expenses of
the Plan are paid directly by the Employer.
Tax Status
----------
The Plan has received a favorable determination letter from
the Internal Revenue Service that the Plan qualifies under Section
401(a) of the Internal Revenue Code and is exempt from federal
income taxes under the provisions of Section 501(a).
(3) PLAN TERMINATION
----------------
Although it has not expressed any intent to do so, the Employer
has the right under the Plan to discontinue its contributions at
any time and to terminate the Plan subject to the provisions of
ERISA. In the event of Plan termination, participants will become
100% vested in their accounts.
(4) INVESTMENTS
-----------
Merrill Lynch Trust Company serves as trustee of the Plan.
The following individual investments comprise at least five percent
of the fair market value of net assets available for plan
benefits as of December 31:
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Merrill Lynch Retirement Preservation Trust $ 797,095 $ 902,492
AIM Constellation Fund 1,365,596 599,745
Merrill Lynch Capital Fund, Inc.
Class D Shares 4,052,836 4,551,280
Merrill Lynch Growth Fund Class D Shares 1,516,451 703,175
Templeton Foreign Fund 788,353 359,809
Duke Realty Investments, Inc. 3,604,986 2,395,518
</TABLE>
(5) CASH HELD FOR INVESTMENT
------------------------
Cash held for investment primarily represents contributions
received by Merrill Lynch, but not yet invested in the respective
funds. The cash held for investment is maintained in an interest
bearing account until it is transferred into the appropriate
directed fund.
-6-
<PAGE>
DUKE REALTY PROFIT SHARING AND SALARY DEFERRAL PLAN
Notes to Financial Statements
(6) LOANS
-----
In March 1995, the Committee authorized the Trustee to make loans
to participants. Participant loans are limited to the lesser of
$50,000 or 50% of the participants vested account balance. Under
terms of the loan agreements, loans must be repaid in not more
than five years, unless used to acquire a principal residence.
Interest rates are fixed at the commercial lending rates.
(7) BENEFITS PAYABLE
----------------
At December 31, 1996 and 1995, benefits payable to
participants amounted to $1,770 and $50,441, respectively.
(8) RECONCILIATION BETWEEN FINANCIAL STATEMENTS AND FORM 5500
---------------------------------------------------------
At December 31, 1996 and 1995, net assets available for plan
benefits reported in the financial statements were greater than
reported on Form 5500 by $1,770 and $50,441, respectively, which
resulted from Form 5500 including a liability for benefits payable.
(9) PARTY-IN-INTEREST TRANSACTIONS
------------------------------
The following investment funds are sponsored by the Trustee:
Retirement Preservation Trust, Capital Fund, Inc. Class D Shares, and
Growth Fund Class D Shares. In addition, investments are made in Duke
Realty Investments, Inc. common stock which is the parent of the
general partner of the Employer.
-7-
<PAGE>
DUKE REALTY PROFIT SHARING AND SALARY DEFERRAL PLAN
Notes to Financial
Statements
(10) NET ASSETS BY FUND
------------------
Net assets of the Plan by fund as of December 31, 1996 follow:
<TABLE>
<CAPTION>
AIM AIM Capital Fund, Growth Templeton
Constellation Limited Inc. Class Fund Class Foreign
Fund Maturity Fund D Shares D Shares Fund
------------- ------------- ------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Investments
held by
Trustee
Collective
trust $ - - - - -
Mutual funds 1,365,596 105,307 4,052,836 1,516,451 788,353
Common stock - - - - -
Loans to
participants - - - - -
Cash held for
investment - - - - -
--------- ------- --------- --------- -------
1,365,596 105,307 4,052,836 1,516,451 788,353
Contributions
receivable 14,633 2,653 9,129 10,984 7,751
--------- ------- --------- --------- -------
NET ASSETS
AVAILABLE FOR
PLAN BENEFITS $1,380,229 107,960 4,061,965 1,527,435 796,104
========= ======= ========= ========= =======
</TABLE>
<TABLE>
<CAPTION>
Retirement
Stock Preservation Loan
Fund Trust Fund Total
----- ------------ ------- ---------
<S> <C> <C> <C> <C>
Investments held
by Trustee
Collective trust $ - 797,095 - 797,095
Mutual funds - - - 7,828,543
Common stock 3,604,986 - - 3,604,986
Loans to participants - - 316,614 316,614
Cash held for
investment - 5,442 - 5,442
--------- ------- ------- ----------
3,604,986 802,537 316,614 12,552,680
Contributions
receivable 22,383 2,287 - 69,820
--------- ------- ------- ----------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $3,627,369 804,824 316,614 12,622,500
========= ======= ======= ==========
</TABLE>
- 8 -
<PAGE>
DUKE REALTY PROFIT SHARING AND SALARY DEFERRAL PLAN
Notes to Financial Statements
(10) NET ASSETS BY FUND
------------------
Net assets of the Plan by fund as of December 31, 1995 follow:
<TABLE>
<CAPTION>
AIM AIM Capital Fund, Growth Templeton
Constellation Limited Inc. Class Fund Class Foreign
Fund Maturity Fund D Shares D Shares Fund
------------- ------------- ------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Investments
held by
Trustee
Collective
trust $ - - - - -
Mutual funds 599,745 42,981 4,551,280 703,175 359,809
Common stock - - - - -
Loans to
participants - - - - -
Cash held for
investment - - - - -
--------- ------- --------- ------- -------
599,745 42,981 4,551,280 703,175 359,809
Contributions
receivable 14,406 1,963 10,747 15,043 9,511
--------- ------- --------- ------- -------
NET ASSETS
AVAILABLE FOR
PLAN BENEFITS $ 614,151 44,944 4,562,027 718,218 369,320
========= ======= ========= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Retirement
Stock Preservation Loan
Fund Trust Fund Total
----- ------------ --------- ----------
<S> <C> <C> <C> <C>
Investments held by
Trustee
Collective trust $ - 902,492 - 902,492
Mutual funds - - - 6,256,990
Common stock 2,395,518 - - 2,395,518
Loans to participants - - 161,010 161,010
Cash held for investment - 519 - 519
--------- ------- ------- --------
2,395,518 903,011 161,010 9,716,529
Contributions receivable 44,481 3,780 - 99,931
--------- ------- ------- ---------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $2,439,999 906,791 161,010 9,816,460
========= ======= ======= =========
</TABLE>
- 9 -
<PAGE>
DUKE REALTY PROFIT SHARING AND SALARY DEFERRAL PLAN
Notes to Financial Statements
(11) INVESTMENT FUND CHANGES
-----------------------
A summary of changes in Plan assets by fund for the year ended
December 31, 1996 follows:
<TABLE>
<CAPTION>
AIM AIM Capital Fund, Growth Templeton
Constellation Limited Inc. Class Fund Class Foreign
Fund Maturity Fund D Shares D Shares Fund
------------- ------------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C>
Plan assets
at December
31, 1995 $ 614,151 44,944 4,562,027 718,218 369,320
Additions:
Participants'
salary
deferrals 238,772 35,462 151,633 210,115 136,430
Employer
matching - - - - -
Participants'
rollover 71,389 24,153 49,653 87,836 54,069
Forfeitures
allocated - - (9,909) - -
Loan
repayments 10,230 1,918 10,464 12,663 9,234
Interest and
dividends 46,352 3,958 405,578 110,934 32,481
Net appreciation
(depreciation)
in fair value of
investments 116,573 (166) 87,018 201,073 70,862
Contribution
receivable 14,633 2,653 9,129 10,984 7,751
--------- ------- --------- ------- -------
Total additions 497,949 67,978 703,566 633,605 310,827
--------- ------- --------- ------- -------
Deductions:
Benefits paid to
participants (29,669) (1,923) (293,794) (79,885) (15,703)
Administrative
expenses - - - - -
Loans (31,546) (1,978) (90,233) (29,037) (16,292)
--------- ------ --------- --------- -------
Total
deductions (61,215) (3,901) (384,027) (108,922) (31,995)
Transfers between
funds 329,344 (1,061) (819,601) 284,534 147,952
--------- ------ --------- --------- -------
Plan assets at
December
31, 1996 $1,380,229 107,960 4,061,965 1,527,435 796,104
========= ======= ========= ========= =======
</TABLE>
- 10 -
<PAGE>
DUKE REALTY PROFIT SHARING AND SALARY DEFERRAL PLAN
Notes to Financial Statements
(11) INVESTMENT FUND CHANGES
-----------------------
A summary of changes in Plan assets by fund for the year
ended December 31, 1996 follows:
<TABLE>
<CAPTION>
Retirement
Stock Preservation Loan
Fund Trust Fund Total
----- ------------ ------- ----------
<S> <C> <C> <C> <C>
Plan assets at December
31, 1995 $2,439,999 906,791 161,010 9,816,460
Additions:
Participants' salary
deferrals 118,745 39,213 - 930,370
Employer matching 312,583 (259) - 312,324
Participants' rollover 41,940 6,021 - 335,061
Forfeitures allocated 9,732 177 - -
Loan repayments 25,974 6,383 (76,866) -
Interest and dividends 167,806 43,383 23,411 833,903
Net appreciation
(depreciation) in fair
value of investments 643,857 - - 1,119,217
Contribution receivable 22,383 2,287 - 69,820
--------- ------- -------- ----------
Total additions 1,343,020 97,205 (53,455) 3,600,695
--------- ------- -------- ----------
Deductions:
Benefits paid to
participants (191,548) (147,216) (34,917) (794,655)
Administrative expenses - - - -
Loans (36,441) (38,449) 243,976 -
---------- -------- -------- ----------
Total deductions (227,989) (185,665) 209,059 (794,655)
Transfers between funds 72,339 (13,507) - -
---------- -------- -------- ----------
Plan assets at December
31, 1996 3,627,369 804,824 316,614 12,622,500
========== ======= ======= ==========
</TABLE>
- 11 -
Schedule 1
----------
DUKE REALTY PROFIT SHARING AND SALARY DEFERRAL PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1996
<TABLE>
<CAPTION>
Current
Identity Description of Investment Shares Cost Value
- ------------- ------------------------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Collective trust:
*Merrill Retirement Preservation
Lynch Trust 797,095 $ 797,095 $ 797,095
======= ========= =========
Mutual funds:
*Merrill Lynch Capital Fund, Inc.
Class D Shares 130,652 3,676,301 4,052,836
*Merrill Lynch Growth Fund
Class D Shares 58,168 1,307,236 1,516,451
AIM Family AIM Limited Maturity
of Funds Fund 10,499 105,226 105,307
AIM Family AIM Equity Constellation
of Funds Fund 54,062 1,234,349 1,365,596
Templeton Family Templeton Foreign Fund
of Funds 76,096 739,167 788,353
------- --------- --------
329,477 $7,062,270 $7,828,543
======= ========= =========
Common stock:
*Duke Realty
Investments,
Inc. Common stock 93,636 $2,790,921 $3,604,986
======= ========= =========
Loans to
participants:
*N/A Participant Loans - $ 316,614 $ 316,614
======= ========= =========
* Denotes a party-in-interest
</TABLE>
<PAGE>
Schedule 2
----------
DUKE REALTY PROFIT SHARING AND SALARY DEFERRAL PLAN
Item 27d-Schedule of Reportable Transactions
Year ended December 31, 1996
<TABLE>
<CAPTION>
Identity Description Purchase Selling Lease Expense
of Issue of Asset Fund Price Price Rental Incurred
- ----------- ----------- ------------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Series of
Transactions
of the Same
Issue
- ------------
AIM Family Common Stocks AIM
of Funds and Bonds Constellation $800,409 $ - - -
Merrill Common Stocks Capital Fund,
Lynch and Bonds Inc. Class D
Shares 676,779 - - -
Merrill Common Stocks Capital Fund,
Lynch and Bonds Inc. Class D
Shares - 1,262,240 - -
Merrill Common Stocks Growth Fund
Lynch and Bonds D Shares 855,892 - - -
Merrill Common Stocks Stock Fund
Lynch 947,553 - - -
</TABLE>
==============================================================================
<TABLE>
<CAPTION>
Current
Value on
Identity Description Cost of Transaction Gain/
of Issue of Asset Fund Asset Date (Loss)
- ---------------- ------------ ------------------ --------- ----------- ------
<S> <C> <C> <C> <C> <C>
Series of
Transactions
of the Same
Issue
- -------------
AIM Family Common Stocks AIM Constellation
of Funds and Bonds $ 800,409 $ - $ -
Merrill Lynch Common Stocks Capital Fund, Inc.
and Bonds Class D Shares 676,779 - -
Merrill Lynch Common Stocks Capital Fund, Inc.
and Bonds Class D Shares 1,262,102 1,262,240 138
Merrill Lynch Common Stocks Growth Fund Class
and Bonds D Shares 855,892 - -
Merrill Lynch Common Stocks Stock Fund 947,553 - -
</TABLE>
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange
Act of 1934, the trustees (or other persons who administer the employee
benefit plan) have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
DUKE REALTY PROFIT SHARING AND SALARY DEFERRAL PLAN
Date: June 25, 1997 /s/ Dennis D. Oklak
-------------------------------------------
Dennis D. Oklak
Plan Administrator
<PAGE>
The Board of Directors
DUKE REALTY INVESTMENTS, INC.:
We consent to incorporation by reference in the registration statement
(No. 33-55727) on Form S-8 of Duke Realty Investments, Inc. of our report
dated May 9, 1997, relating to the statements of net assets available
for plan benefits of Duke Realty Profit Sharing and Salary Deferral
Plan as of December 31, 1996 and 1995, and the related statements of
changes in net assets available for plan benefits for each of the years
then ended, and the related supplemental schedules of assets held for
investment purposes and reportable transactions, which report appears
in the December 31, 1996, annual report on Form 11-K of Duke
Realty Profit Sharing and Salary Deferral Plan.
KPMG Peat Marwick LLP
Indianapolis, Indiana
June 23, 1997
