Document


As filed with the Securities and Exchange Commission on June 27, 2016
===========================================================================

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 11-K

FOR ANNUAL REPORTS OF EMPLOYEE STOCK REPURCHASE
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

For the fiscal year ended December 31, 2015

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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 401(k) PLAN

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

DUKE REALTY CORPORATION
600 East 96th Street, SUITE 100
INDIANAPOLIS, INDIANA 46240




DUKE REALTY 401(k) PLAN
Table of Contents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Schedule
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 







Report of Independent Registered Public Accounting Firm
The Associate Benefits Committee
Duke Realty 401(k) Plan:

We have audited the accompanying statements of assets available for plan benefits of the Duke Realty 401(k) Plan (the Plan) as of December 31, 2015 and 2014, and the related statements of changes in assets available for plan benefits for the years ended December 31, 2015 and 2014. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the plan's control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 assets available for benefits of the Plan as of December 31, 2015 and 2014, and the changes in assets available for benefits for the years ended December 31, 2015 and 2014, in conformity with U.S. generally accepted accounting principles.

The supplemental information in the accompanying schedule of Schedule H, Line 4i - Schedule of Assets (held at end of year) as of December 31, 2015 has been subjected to audit procedures performed in conjunction with the audit of the Plan’s 2015 financial statements. The supplemental information is presented for the purpose of additional analysis and is not a required part of the financial statements but include supplemental 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 information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information in the accompanying schedule of Schedule H, Line 4i - Schedule of Assets (held at end of year) as of December 31, 2015 is fairly stated in all material respects in relation to the 2015 financial statements as a whole.


/s/ KPMG LLP
Indianapolis, Indiana
June 27, 2016


1





DUKE REALTY 401(k) PLAN
Statements of Assets Available for Plan Benefits
December 31, 2015 and 2014
 
 
 
 
 
 
2015
 
2014
Assets held by trustee:
 
 
 
 
 
Investments, at fair value:
 
 
 
 
 
 
Common and preferred stock
 
$
32,201,422

 
$
32,555,038

 
 
Corporate bonds
 
21,248

 
35,708

 
 
Money market funds
 
5,722,740

 
6,644,699

 
 
Mutual funds
 
85,568,026

 
88,942,399

 
 
 
 
Total investments
 
123,513,436

 
128,177,844

Receivables:
 
 
 
 
 
Employee contribution
 
89,562

 

 
Employer discretionary contribution
 
940,371

 
1,275,982

 
Employer match contribution
 
121,910

 

 
Notes receivable from participants
 
1,920,974

 
2,162,462

 
Unsettled trades
 
38,241

 
53,822

 
 
 
 
Total receivables
 
3,111,058

 
3,492,266

 
 
 
 
 
 
 
 
 
 
 
 
Assets available for plan benefits
 
$
126,624,494

 
$
131,670,110

See accompanying notes to financial statements.

2




DUKE REALTY 401(k) PLAN
Statements of Changes in Assets Available for Plan Benefits
Years ended December 31, 2015 and 2014
 
 
 
 
 
 
 
 
2015
 
2014
Investment income:
 
 
 
 
 
Interest and dividends
 
$
5,793,026

 
$
6,419,794

 
Net (depreciation) appreciation in fair value of investments
 
(2,077,627
)
 
8,888,203

 
 
 
 
 
Total investment income
 
3,715,399

 
15,307,997

Interest income on notes receivable from participants
 
91,944

 
88,037

Contributions:
 
 
 
 
 
Employer discretionary
 
940,371

 
1,275,983

 
Employer matching of salary deferral
 
1,853,584

 
1,872,405

 
Participants’ salary deferral
 
5,576,801

 
5,547,670

 
Participants’ rollover
 
227,263

 
43,645

 
 
 
 
 
Total contributions
 
8,598,019

 
8,739,703

 
 
 
 
 
 
Total additions
 
12,405,362

 
24,135,737

Deductions from assets attributed to:
 
 
 
 
 
Administrative fees
 
48,730

 
45,734

 
Benefits paid to participants
 
17,402,248

 
5,268,737

 
 
 
 
 
Total deductions
 
17,450,978

 
5,314,471

 
 
 
 
 
Net (decrease) increase
 
(5,045,616
)
 
18,821,266

Assets available for plan benefits:
 
 
 
 
 
Beginning of year
 
131,670,110

 
112,848,844

 
End of year
 
$
126,624,494

 
$
131,670,110

See accompanying notes to financial statements.


3




DUKE REALTY 401(k) PLAN
Notes to Financial Statements
December 31, 2015 and 2014
(1)
Description of Plan
The following description of the Duke Realty 401(k) Plan (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.
(a)
General
The Plan is a defined contribution plan sponsored by Duke Realty Corporation (the Employer) covering all employees who are age 18 years or older. Employees are eligible to participate in the Plan on the first day of the calendar month following their hire date. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Associate Benefits Committee is responsible for oversight of the Plan, as appointed by the Executive Compensation Committee of the Board of Directors of Duke Realty Corporation. The Associate Benefits Committee determines the appropriateness of the Plan’s investment offerings, monitors investment performance and reports to the Executive Compensation Committee.
During 2015, the Employer disposed of a significant portion of its office portfolio. In conjunction with that transaction, a number of employees were terminated such that a partial plan termination occurred and these employees became immediately vested.
(b)
Contributions
Eligible participants may elect to defer a percentage of their compensation to be contributed to their Employee Deferral Account. The Plan stipulates the minimum and maximum percentage that may be contributed, not to be less than 1% and not to exceed 75% of a participant’s compensation for each plan year, subject to limitations imposed by the Internal Revenue Service. The Plan currently offers each participant investment options including a number of mutual funds, common stock of the Employer, a money market fund, and a self-directed fund, which allows participants to direct their contributions into investments of their choice. The Employer matches 50% of participant contributions annually up to 6% of total compensation. The Employer matching contribution is limited to a participant’s first $265,000 of compensation ($260,000 in 2014). Effective June 2, 2008, this contribution is invested in the common stock of the Employer unless the participant elected to have the Employer matching contribution invested in other investment options. The Employer may also make discretionary contributions to the Plan to be invested in the common stock of the Employer. Participants are able to transfer all Employer contributions to an investment option of their choice. The Employer declared a discretionary contribution of $940,371 in 2015 (paid in 2016) and $1,275,982 in 2014 (paid in 2015).
(c)
Participant Accounts
Each participant’s account is credited (debited) with the participant’s contribution and Employer matching contribution, as well as allocations of the Employer’s discretionary contribution (when applicable), and Plan earnings (losses). Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
(d)
Vesting
Participants are immediately vested in elective salary reduction contributions and the actual earnings thereon. Vesting in discretionary contributions, matching contributions, 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 one year

4



of service and vests an additional 20% for each year of service thereafter and is 100% vested after five years of service. Participants who terminate employment due to retirement after age 59½, by death, or by total or permanent disability are automatically considered fully vested.
(e)
Notes Receivable From Participants
Participants may borrow from their accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. Loan repayment periods may not exceed five years except for the loans used to acquire a principal residence, in which case the repayment period may not exceed 10 years. The loans are secured by the balance in the participant’s account and bear interest at the prime rate plus 1%, and range from 4.25% to 9.25% at December 31, 2015 and have maturities from January 2016 through April 2025. Principal and interest is paid ratably through payroll deductions.
(f)
Benefits
Upon retirement, death, disability or other termination of employment, a participant’s vested account balance is to be distributed in a single lump-sum payment, and/or they can receive Employer stock for the portion of their vested account balance that was in Employer stock within 90 days of written request.
(g)
Forfeitures
Participants who terminate employment forfeit any non-vested portion of their account. Forfeitures are used to reduce the Employer matching contributions. In 2015 and 2014, Employer contributions were reduced by $41,000 and $47,063, respectively, from forfeited non-vested accounts. As of December 31, 2015 and 2014, there are $42,807 and $50,158, respectively, of additional forfeitures that have not yet been used to reduce Employer matching contributions.
(2)
Summary of Significant Accounting Policies
(a)
Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
(b)
Basis of Accounting
The Plan’s financial statements are prepared on the accrual basis of accounting.
(c)
Investment Valuation and Income Recognition
Investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Plan's Associate Benefit Committee determines the Plan's valuation policy utilizing information provided by the investment advisers and custodian. See note 6 for discussion of fair value measurements.
Net appreciation (depreciation) in fair value of investments is reflected in the statements of changes in assets available for plan benefits and includes realized gains and losses on investments bought and sold and the change in appreciation (depreciation) from one period to the next. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Acquisition costs are included in the cost of investments purchased, and sales are recorded net of selling expenses.
(d)
Benefit Payments
Benefits are recorded when paid.


5



(e)
Administrative Expenses
In 2015 and 2014, portfolio advisory service fees, service withdrawal fees, participant loan origination fees, participant loan maintenance fees, employer stock trustee fees, and employer stock sale/purchase fees were charged to participant’s accounts as incurred and all remaining usual and reasonable expenses of the Plan were paid by the Company.
(f)
Notes Receivable From Participants
Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Delinquent notes receivable from participants are recorded as a distribution based upon the terms of the plan document.
(g)
Recent Accounting Pronouncements
In July 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient. Part I eliminates the requirements to measure the fair value of fully benefit-responsive investment contracts and provide certain disclosures. Contract value is the only required measure for fully benefit-responsive investment contracts. Part II eliminates the requirements to disclose individual investments that represent 5 percent or more of net assets available for benefits and the net appreciation or depreciation in fair value of investments by general type. Part II also simplifies the level of disaggregation of investments that are measured using fair value. Plans will continue to disaggregate investments that are measured using fair value by general type; however, plans are no longer required to also disaggregate investments by nature, characteristics and risks. Further, the disclosure of information about fair value measurements shall be provided by general type of plan asset. Part III permits employee benefit plans to elect a practical expedient of using, as an alternative measurement date for plan investments, the month-end date closest to the plan’s fiscal year-end when the fiscal year-end does not coincide with a month-end. The ASU is effective for fiscal years beginning after December 15, 2015, with early adoption permitted. Part I and Part III are not applicable to the Plan. Part II will be adopted in 2016 and is not expected to have a material impact on the financial statements.
In May 2015, the FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820), Disclosures for Investment in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). ASU 2015-07 removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. It also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. The requirements of the standard are effective for reporting periods in fiscal years that begin after December 15, 2015, with early adoption permitted. ASU 2015-07 is to be applied retrospectively. The Plan does not believe its adoption will have a material impact on its financial statements and related disclosures.
(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 by the Employer, participants will become 100% vested in their accounts.







6



(4)
Investments
The following table represents the fair value of individual investments that exceed 5% of the Plan’s assets available for plan benefits as of December 31:

 
 
2015
 
2014
Duke Realty Corporation Common Stock
 
$
29,879,054

 
$
29,707,588

Fidelity Spartan Total Market Index Fund Institutional
 
7,146,293

 
7,743,723

Invesco Growth and Income Fund - Class A
 
N/A

 
7,898,769

Invesco Growth and Income Fund - R6
 
6,754,314

 
N/A

John Hancock Disciplined Value Mid Cap Class I
 
7,142,822

 
7,712,752

Pimco Total Return Fund – Institutional Class
 
N/A

 
8,504,222

Prudential Total Return Bond Fund
 
8,203,297

 
N/A

T. Rowe Price Blue Chip Growth Fund
 
14,444,567

 
14,211,625


The Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value as follows:

 
 
2015
 
2014
Common and preferred stock
 
$
852,574

 
$
7,985,724

Corporate bonds
 
(1,461
)
 
(850
)
Mutual funds
 
(2,928,740
)
 
903,329

 
 
$
(2,077,627
)
 
$
8,888,203


(5)
Tax Status
The Internal Revenue Service has determined and informed the Company by a letter dated January 29, 2016 that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC).
Accounting principles generally accepted in the United States of America require plan management to evaluate tax positions taken by the Plan.  The financial statement effects are recognized when the Plan has taken an uncertain position that more likely than not would be sustained upon examination by the Internal Revenue Service. The Plan administrator has analyzed the tax positions taken by the Plan and has concluded that as of December 31, 2015, there are no uncertain tax positions taken.  The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress.  The Plan administrator believes the Plan is no longer subject to income tax examinations for years prior to 2012.
(6)
Fair Value Measurements
FASB Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures, provides the framework for measuring fair value.  That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and lowest priority to unobservable inputs (level 3 measurements).  The three levels of the fair value hierarchy under FASB ASC 820 are described as follows:
Level 1 – Unadjusted quoted prices accessible in active markets for identical assets or liabilities at the measurement date.
Level 2 – Unadjusted quoted prices for similar assets or liabilities in active markets or inputs (other than quoted prices) that are observable or that are derived principally from or corroborated by observable market data through correlation or other means.
Level 3 – Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate about the assumptions market

7



participants would use at the measurement date in pricing the asset or liability. Consideration is given to the risk inherent in both the method of valuation and the valuation inputs.
The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
Following is a description of the valuation methodologies used for assets at fair value.  There have been no changes in the methodologies used at December 31, 2015 and 2014.
Money market funds, equity securities, and corporate bonds: Valued at the closing price reported on the active market on which the individual investments are traded.
Mutual Funds: Valued at closing price reported on the active market on which the individual funds are traded. Mutual funds held by the Plan are open ended mutual funds that are registered with the Securities & Exchange Commission (SEC). These funds are required to publish their daily net asset value (NAV) and to transact at that price. The mutual funds held by the Plan are deemed actively traded. The Plan can redeem these investments daily, and there are currently no redemption restrictions on these investments.
The following tables summarize assets measured at fair value on a recurring basis as of December 31, 2015 and 2014.

8



December 31, 2015
Assets
 
Level 1
 
Level 2
 
Level 3
 
Total
Investments at fair value:
 
 
 
 
 
 
 
 
 
  Bank loan
 
$
36,887

 
$

 
$

 
$
36,887

 
  Bond
 
679,946

 

 

 
679,946

 
  Common and preferred stock
 
32,201,422

 

 

 
32,201,422

 
  Communications
 
16,104

 

 

 
16,104

 
  Consumer cyclical
 
19,140

 

 

 
19,140

 
  Consumer defensive
 
21,739

 

 

 
21,739

 
  Corporate bonds
 
21,248

 

 

 
21,248

 
  Diversified emerging markets
 
20,672

 

 

 
20,672

 
  Fixed income
 
11,120,082

 

 

 
11,120,082

 
  Foreign large blend
 
184,455

 

 

 
184,455

 
  Foreign large growth
 
70,717

 

 

 
70,717

 
  Foreign small/mid blend
 
245,259

 

 

 
245,259

 
  Health
 
123,831

 

 

 
123,831

 
  High yield bond
 
245,728

 

 

 
245,728

 
  Industrials
 
21,074

 

 

 
21,074

 
  Intermediate term bond
 
513,269

 

 

 
513,269

 
  International
 
6,542,868

 

 

 
6,542,868

 
  Large blend
 
323,506

 

 

 
323,506

 
  Large growth
 
148,661

 

 

 
148,661

 
  Large value
 
60,843

 

 

 
60,843

 
  Long/short equity
 
192,376

 

 

 
192,376

 
  Managed futures
 
99,562

 

 

 
99,562

 
  Market neutral
 
95,127

 

 

 
95,127

 
  Mid-cap blend
 
30,055

 

 

 
30,055

 
  Mid-cap growth
 
43,254

 

 

 
43,254

 
  Mid-cap value
 
44,747

 

 

 
44,747

 
  Mid/large cap stock
 
59,343,571

 

 

 
59,343,571

 
  Moderate allocation
 
187,659

 

 

 
187,659

 
  Money market funds
 
5,722,740

 

 

 
5,722,740

 
  Multi-sector bond
 
54,884

 

 

 
54,884

 
  Other
 
52,972

 

 

 
52,972

 
  Real estate
 
18,188

 

 

 
18,188

 
  Short term bond
 
276,958

 

 

 
276,958

 
  Small blend
 
53,712

 

 

 
53,712

 
  Small cap stock
 
4,227,756

 

 

 
4,227,756

 
  Small growth
 
23,834

 

 

 
23,834

 
  Target date 2031 - 2035
 
268,036

 

 

 
268,036

 
  Technology
 
51,858

 

 

 
51,858

 
  Utilities
 
17,988

 

 

 
17,988

 
  World allocation
 
29,183

 

 

 
29,183

 
  World stock
 
61,525

 

 

 
61,525

Outstanding at December 31, 2015
 
$
123,513,436

 
$

 
$

 
$
123,513,436



9



December 31, 2014
Assets
 
Level 1
 
Level 2
 
Level 3
 
Total
Investments at fair value:
 
 
 
 
 
 
 
 
 
  Bank loan
 
$
105,294

 
$

 
$

 
$
105,294

 
  Basket
 
214,688

 

 

 
214,688

 
  Bond
 
198,769

 

 

 
198,769

 
  Common and preferred stock
 
32,555,038

 

 

 
32,555,038

 
  Communications
 
16,618

 

 

 
16,618

 
  Consumer defensive
 
20,604

 

 

 
20,604

 
  Corporate bonds
 
35,708

 

 

 
35,708

 
  Diversified emerging markets
 
23,781

 

 

 
23,781

 
  Energy limited partnership
 
153,101

 

 

 
153,101

 
  Fixed income
 
11,722,034

 

 

 
11,722,034

 
  Foreign large blend
 
307,446

 

 

 
307,446

 
  Foreign large growth
 
78,461

 

 

 
78,461

 
  Global real estate
 
127,863

 

 

 
127,863

 
  Health
 
86,488

 

 

 
86,488

 
  High yield bond
 
149,933

 

 

 
149,933

 
  Industrials
 
20,493

 

 

 
20,493

 
  Intermediate term bond
 
221,570

 

 

 
221,570

 
  International
 
6,351,335

 

 

 
6,351,335

 
  Large blend
 
185,519

 

 

 
185,519

 
  Large growth
 
186,474

 

 

 
186,474

 
  Large value
 
101,348

 

 

 
101,348

 
  Long/short equity
 
285,483

 

 

 
285,483

 
  Mid-cap blend
 
61,557

 

 

 
61,557

 
  Mid-cap growth
 
72,558

 

 

 
72,558

 
  Mid-cap value
 
51,229

 

 

 
51,229

 
  Mid/large cap stock
 
62,320,899

 

 

 
62,320,899

 
  Miscellaneous region
 
15,281

 

 

 
15,281

 
  Moderate allocation
 
65,593

 

 

 
65,593

 
  Money market funds
 
6,644,699

 

 

 
6,644,699

 
  Multi-sector bond
 
65,930

 

 

 
65,930

 
  Other
 
102,975

 

 

 
102,975

 
  Short term bond
 
175,626

 

 

 
175,626

 
  Small blend
 
62,018

 

 

 
62,018

 
  Small cap stock
 
4,804,482

 

 

 
4,804,482

 
  Small growth
 
29,252

 

 

 
29,252

 
  Small value
 
22,561

 

 

 
22,561

 
  Tactical allocation
 
20,969

 

 

 
20,969

 
  Target date 2031 - 2035
 
88,050

 

 

 
88,050

 
  Technology
 
34,190

 

 

 
34,190

 
  Utilities
 
20,257

 

 

 
20,257

 
  World allocation
 
29,457

 

 

 
29,457

 
  World bond
 
281,756

 

 

 
281,756

 
  World stock
 
60,457

 

 

 
60,457

Outstanding at December 31, 2014
 
$
128,177,844

 
$

 
$

 
$
128,177,844



10



The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

(7)
Party-in-Interest Transactions
The following investment funds are sponsored by Fidelity Investments, the Trustee: Fidelity Retirement Money Market Portfolio, Fidelity Balanced Fund, Fidelity Freedom Funds, Fidelity Freedom Income Fund, Fidelity Inflation‑Protected Bond Fund, Fidelity Spartan International Index, and Fidelity Spartan Total Market Index Fund Institutional. Participant loans are made with individual participants of the Plan, and investments are made in the common stock of the Employer. Therefore, transactions in these investments are considered to be party-in-interest transactions.
(8)
Concentrations
At December 31, 2015 and 2014, approximately 24% and 23%, respectively, of assets available for plan benefits are invested in the Employer’s common stock.
(9)
Risks and Uncertainties
The Plan offers various investment options. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the value of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statements of assets available for plan benefits.
(10)
Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of assets available for plan benefits according to the financial statements as of December 31, 2015 and 2014, to the Form 5500:
 
 
2015
 
2014
 
 
 
 
 
Assets available for plan benefits per the financial statements
 
$
126,624,494

 
$
131,670,110

Certain deemed distributions of participant loans
 
(156,993
)
 
(147,493
)
 
 
$
126,467,501

 
$
131,522,617


The following is a reconciliation of the net increase (decrease) per the financial statements and the net income per the Form 5500 for the years ended December 31, 2015 and 2014:

 
 
2015
 
2014
 
 
 
 
 
Change in certain deemed distributions of participant loans
 
$
(9,500
)
 
$
(8,873
)
Net increase (decrease) per the financial statements
 
(5,045,616
)
 
18,821,266

 
 
$
(5,055,116
)
 
$
18,812,393


Certain deemed distributions represent active participants' loan balances that were in default and have been taxed to the participant (deemed loans). Amounts associated with deemed loans are included in the asset balance reported in the financial statements at December 31, 2015 and 2014, but are removed from the assets reported on the Form 5500.




11




11)
Subsequent Events
The Plan has evaluated subsequent events from the balance sheet date through June 27, 2016, the date at which the financial statements were available to be issued, and determined there were no additional items requiring disclosure.

12




DUKE REALTY 401(k) PLAN
Schedule H, Line 4i – Schedule of Assets (Held at End of Year)
December 31, 2015
Party-in-
 
 
 
 
 
 
 
 
Current
interest
Identity
 
Description of investment
 
value
 
Common Stock:
 
 
 
*
 
Duke Realty Corporation
 
Common stock
 
29,879,054

 
Money market funds:
 
 
 
 
 
 
*
 
Fidelity
 
Fidelity Retirement Money Market Portfolio
 
$
4,993,670

 
Mutual funds:
 
 
 
 
 
 
 
 
American Funds
 
American Funds Euro Pacific Growth Fund
 
5,126,456

*
 
Fidelity
 
Fidelity Balanced K Fund
 
4,633,330

*
 
Fidelity
 
Fidelity Freedom K 2005 Fund
 
100,041

*
 
Fidelity
 
Fidelity Freedom K 2010 Fund
 
111,214

*
 
Fidelity
 
Fidelity Freedom K 2015 Fund
 
243,547

*
 
Fidelity
 
Fidelity Freedom K 2020 Fund
 
2,890,475

*
 
Fidelity
 
Fidelity Freedom K 2025 Fund
 
2,158,189

*
 
Fidelity
 
Fidelity Freedom K 2030 Fund
 
3,365,660

*
 
Fidelity
 
Fidelity Freedom K 2035 Fund
 
2,864,732

*
 
Fidelity
 
Fidelity Freedom K 2040 Fund
 
1,729,922

*
 
Fidelity
 
Fidelity Freedom K 2045 Fund
 
1,080,365

*
 
Fidelity
 
Fidelity Freedom K 2050 Fund
 
682,529

*
 
Fidelity
 
Fidelity Freedom K 2055 Fund
 
92,176

*
 
Fidelity
 
Fidelity Freedom K 2060 Fund
 
403

*
 
Fidelity
 
Fidelity Freedom K Income Fund
 
416,407

*
 
Fidelity
 
Fidelity Inflation-Protected Bond Fund
 
2,400,337

*
 
Fidelity
 
Fidelity Spartan International Index
 
1,416,411

*
 
Fidelity
 
Fidelity Spartan Total Market Index Fund Institutional
 
7,146,293

 
 
Invesco
 
Invesco Growth and Income Fund - R6
 
6,754,314

 
 
Janus
 
Janus Small Cap Core Select Class
 
4,227,756

 
 
John Hancock
 
John Hancock Disciplined Value Mid Cap Class I
 
7,142,822

 
 
Prudential
 
Prudential Total Return Bond Fund
 
8,203,297

 
 
T. Rowe Price
 
T. Rowe Price Blue Chip Growth Fund
 
14,444,567

 
 
T. Rowe Price
 
T. Rowe Price Mid-Cap Growth Fund
 
4,003,034

 
 
 
 
 
 
 
 
 
$
81,234,277

 
 
 
 
 
 
 
 
 
 
 
Participant directed brokerage account
 
7,406,435

 
 
 
 
 
 
 
 
 
 
*
Participant loans (interest rates ranging from 4.25% to 9.25% and maturities from January 2016 through April 2025.)
 
1,920,974

 
 
 
Total
 
 
 
 
 
$
125,434,410

*
Denotes exempt party-in-interest.
Historical cost information is not required in Schedule H, Line 4i - Schedule of Assets (Held at End of Year) for participant-directed investment funds.
See accompanying report of independent registered public accounting firm.

13





SIGNATURES
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 401(k) PLAN
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Date: June 27, 2016
 
/s/ Denise K. Dank
 
 
 
 
 
 
Denise K. Dank
Chief Human Resources Officer
Chairman, Associate Benefits Committee