(FRONT COVER)


 

         
(AMB LOGO)
  Company Profile   SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
AMB Property Corporation® is a leading owner, operator and developer of industrial real estate, focused on major hub and gateway distribution markets in the Americas, Europe and Asia. As of December 31, 2009, AMB owned or had investments in, on a consolidated basis or through unconsolidated joint ventures, properties and development projects expected to total approximately 155.1 million square feet (14.4 million square meters) in 47 markets within 14 countries.
AMB invests in properties located predominantly in the infill submarkets of its targeted markets. AMB’s portfolio is comprised primarily of High Throughput Distribution® facilities built for efficiency and located near airports, seaports, ground transportation systems, and population concentrations.
Through its private capital group, AMB provides real estate investment, portfolio management and reporting services to co-investment ventures and clients. The private capital revenue consists of asset management distributions and fees, acquisition and development fees as well as incentive distributions.
                         

The Americas

   
Europe

   
Asia

 
 
                       
  Operating Portfolio(1)
  118.9 msf     Operating Portfolio(1)   10.9 msf     Operating Portfolio(1)   10.4 msf
  Development Portfolio(2)(3)
  6.0 msf     Development Portfolio(2)(3)   3.1 msf     Development Portfolio(2)(3)   5.8 msf
  Land Inventory(3)
  2,126 acres     Land Inventory(3)   221 acres     Land Inventory(3)   141 acres
 
                       
(MAPS)
(1)   The operating portfolio includes the owned and managed portfolio and operating properties held through AMB’s investments in unconsolidated joint ventures that it does not manage (excluded from the owned and managed portfolio) and the location of AMB’s global headquarters.
(2)   Includes pre-stabilized development properties.
(3)   Includes investments held through unconsolidated joint ventures.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  1


 

         
(AMB LOGO)
  Highlights
(dollars in thousands, except per share data)
  SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
                                                 
    For the Quarters Ended December 31,   For the Years Ended December 31,
    2009   2008   % Change   2009   2008   % Change
Revenues(1)
  $ 163,402     $ 159,238       2.6 %   $ 633,842     $ 693,563       (8.6 %)
Adjusted EBITDA(2)
    98,785       95,705       3.2 %     489,998       496,980       (1.4 %)
Net loss available to common stockholders     (7,565 )     (201,362 )     96.2 %     (50,077 )     (66,451 )     24.6 %
FFO(2)
    43,759       (169,795 )     125.8 %     99,275       79,195       25.4 %
FFO, as adjusted(3)
    48,131       49,399       (2.6 %)     288,841       298,276       (3.2 %)
Per diluted share and unit
                                               
EPS
  $ (0.05 )   $ (2.06 )     97.6 %   $ (0.37 )   $ (0.68 )     45.6 %
FFO(2)
    0.29       (1.68 )     117.3 %     0.72       0.77       (6.5 %)
FFO, as adjusted(3)
    0.32       0.49       (34.7 %)     2.09       2.90       (27.9 %)
Dividends per common share
    0.28             100.0 %     1.12       1.56       (28.2 %)
     
Financial(4)  
    $1.4 billion in liquidity
    Completed financing activities of more than $1.6 billion of debt extensions, repurchases, repayments and refinances in the fourth quarter; totaling $2.7 billion in 2009
 
   
Operations(4)  
    90.7% fourth quarter average occupancy; 91.4% for the full year
    (7.3)% fourth quarter cash basis same store NOI;(2) (4.5)% for the full year
    Commenced 7.8 msf of leases in the fourth quarter; totaling more than 29.0 msf for the full year
    (11.5)% fourth quarter rent changes on renewals and rollover; (6.9)% for the trailing four quarters
 
   
Capital Deployment(4)  
    Reduced vacancy by 2.5 msf in the development portfolio during the fourth quarter and more than 4.9 msf for the full year
    Approximately 6.9 msf of vacancy remaining to stabilize the development portfolio
    Completed $93 million in dispositions in the fourth quarter and $763 million for the full year
    Stabilized capitalization rate on dispositions in 2009 was 6.8%
 
   
Private Capital(5)   Subsequent to year end, completed $267 million in net capital transactions for the company’s two open-ended funds including:
    $150 million investment by AMB consisting of $100 million in AMB Institutional Alliance Fund III and $50 million in AMB Europe Fund I;
    $50 million in new third-party equity in AMB Institutional Alliance Fund III; and
    $67 million in investor redemption rescissions; the remaining redemption queue currently totals $15 million.
 
(1)   On July 1, 2008, the partners of AMB Partners II (previously, a consolidated co-investment venture) contributed their interests in AMB Partners II to AMB Institutional Alliance Fund III in exchange for interests in AMB Institutional Alliance Fund III, an unconsolidated co-investment venture. Pro forma rental revenues for the year ended December 31, 2008 would have been $585,706 if AMB Partners II had been deconsolidated as of January 1, 2008.
(2)   See reporting definitions and supplemental financial measures disclosures.
(3)   See page 5 for a reconciliation to derive FFO, as adjusted.
(4)   Owned and managed portfolio.
(5)   As of February 1, 2010.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  2


 

         
(AMB LOGO)
  Funds From Operations(1) Overview   SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
Funds From Operations(1)(2)(3)
(per diluted common share and unit)
(BAR CHART)
Estimated FFO by Business(1)(2)(6)
(per diluted common share and unit)
                         
    For the Years Ended December 31,  
    2007     2008     2009  
Real estate operations, net of unallocated overhead
  $ 1.63     $ 1.53     $ 1.19  
Overhead reallocation
    0.44       0.46       0.24  
 
                 
Real estate operations FFO
  $ 2.07     $ 1.99     $ 1.43  
% of reported FFO
    58.8 %     68.6 %     68.4 %
Development Gains
    1.60       0.72       0.63  
Overhead allocation
    (0.32 )     (0.33 )     (0.13 )
 
                 
Development FFO
  $ 1.28     $ 0.39     $ 0.50  
% of reported FFO
    36.4 %     13.4 %     23.9 %
Private Capital Revenues
    0.29       0.65       0.27  
Overhead allocation
    (0.12 )     (0.13 )     (0.11 )
 
                 
Private Capital FFO
  $ 0.17     $ 0.52     $ 0.16  
% of reported FFO
    4.8 %     17.9 %     7.7 %
 
                 
Total FFO, as adjusted
  $ 3.52     $ 2.90     $ 2.09  
 
                 
Development Gains(1)(2)(5)
(per diluted common share and unit)
(BAR CHART)
Private Capital Revenue(2)
(per diluted common share and unit)
(BAR CHART)
(1)   See reporting definitions and supplemental financial measures disclosures.
(2)   For all years presented, amounts per diluted common share and unit have been restated in accordance with FASB Staff Position No. EITF 03-6-1, effective January 1, 2009, to present amounts net of allocation to participating securities for unvested restricted shares outstanding at each respective period end. Previously reported FFO per diluted common share and unit for 2008, 2007, 2006, 2005 and 2004 were $0.78, $3.51, $3.12, $2.75 and $2.30, respectively. Previously reported development gains per diluted common share and unit for 2008, 2007, 2006, 2005 and 2004 were $0.73, $1.61, $1.11, $0.47 and $0.09, respectively. Previously reported estimated FFO by business per diluted common share and unit for 2008 and 2007 were $2.92 and $3.51, respectively. Previously reported private capital revenue per diluted common share and unit for 2008, 2007, 2006, 2005 and 2004 were $0.67, $0.30, $0.48, $0.47 and $0.14, respectively.
(3)   For a reconciliation of FFO from net income for the years ended December 31, 2008, 2007, 2006, 2005, and 2004, refer to our annual report on Form 10-K for the year ended December 31, 2008.
(4)   FFO, as adjusted per diluted common share and unit is $2.09 and $2.90 year-to-date for 2009 and 2008, respectively. See page 5 for a reconciliation to derive FFO, as adjusted.
(5)   Excludes co-investment venture partners’ share of development gains.
(6)   See page 5 for a reconciliation to derive FFO, as adjusted.
(7)   Management revenues consist of asset management distributions or fees, acquisition fees for third party acquisitions and priority distributions, as well as market compensation for development and other services.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  3


 

         
(AMB LOGO)
  Consolidated Statements of Operations(1)
(in thousands, except per share data)
  SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
                                 
    For the Quarters Ended December 31,     For the Years Ended December 31,  
    2009     2008     2009     2008  
Revenues
                               
Rental revenues(1)
  $ 152,899     $ 151,606     $ 595,963     $ 625,093  
Private capital revenues
    10,503       7,632       37,879       68,470  
 
                       
Total revenues
    163,402       159,238       633,842       693,563  
 
                       
Costs and expenses
                               
Property operating costs(1)
    (49,865 )     (44,313 )     (189,056 )     (179,370 )
Depreciation and amortization
    (51,869 )     (38,233 )     (179,894 )     (164,188 )
General and administrative
    (31,131 )     (40,643 )     (115,253 )     (143,962 )
Restructuring charges
    (2,544 )     (12,306 )     (6,368 )     (12,306 )
Fund costs
    (238 )     (159 )     (1,062 )     (1,078 )
Real estate impairment losses
          (183,754 )     (174,410 )     (183,754 )
Other expenses(2)
    (2,176 )     (2,446 )     (10,247 )     (520 )
 
                       
Total costs and expenses
    (137,823 )     (321,854 )     (676,290 )     (685,178 )
 
                       
Other income and expenses
                               
Development profits, net of taxes
    1,368       4,836       35,874       81,084  
Gains from sale or contribution of real estate interests, net
                      19,967  
Equity in earnings of unconsolidated joint ventures, net
    3,824       2,762       11,331       17,121  
Other (expenses) income(2)
    (222 )     (3,061 )     6,284       (3,124 )
Interest expense, including amortization
    (30,790 )     (33,775 )     (121,459 )     (133,955 )
Loss on early extinguishment of debt
    (11,614 )     (131 )     (12,267 )     (786 )
 
                       
Total other income and expenses, net
    (37,434 )     (29,369 )     (80,237 )     (19,693 )
 
                       
Loss from continuing operations
    (11,855 )     (191,985 )     (122,685 )     (11,308 )
Discontinued operations
                               
Income (loss) attributable to discontinued operations
    173       (6,996 )     3,005       1,964  
Development profits, net of taxes
                53,002        
Gains (losses) from sale of real estate interests, net of taxes
    1,580       (281 )     38,718       2,594  
 
                       
Total discontinued operations
    1,753       (7,277 )     94,725       4,558  
 
                       
Net loss
    (10,102 )     (199,262 )     (27,960 )     (6,750 )
Noncontrolling interests’ share of net (income) loss
                               
Joint venture partners’ share of net income
    (2,234 )     (2,954 )     (11,063 )     (32,855 )
Joint venture partners’ and limited partnership unitholders’ share of development profits
    (942 )     (1,924 )     (3,308 )     (9,041 )
Preferred unitholders
          (1,432 )     (4,295 )     (5,727 )
Limited partnership unitholders
    161       8,160       3,625       5,063  
 
                       
Total noncontrolling interests’ share of net (income) loss
    (3,015 )     1,850       (15,041 )     (42,560 )
 
                       
Net loss attributable to AMB Property Corporation
    (13,117 )     (197,412 )     (43,001 )     (49,310 )
Preferred stock dividends
    (3,950 )     (3,950 )     (15,806 )     (15,806 )
Preferred unit redemption discount
    9,759             9,759        
Allocation to participating securities(3)
    (257 )           (1,029 )     (1,335 )
 
                       
Net loss available to common stockholders
  $ (7,565 )   $ (201,362 )   $ (50,077 )   $ (66,451 )
 
                       
Net loss per common share (diluted)
  $ (0.05 )   $ (2.06 )   $ (0.37 )   $ (0.68 )
 
                       
Weighted average common shares (diluted)
    147,047       97,584       134,321       97,404  
 
                       
(1)   On July 1, 2008, the partners of AMB Partners II (previously, a consolidated co-investment venture) contributed their interests in AMB Partners II to AMB Institutional Alliance Fund III in exchange for interests in AMB Institutional Alliance Fund III, an unconsolidated co-investment venture. Pro forma rental revenues for the year ended December 31, 2008 would have been $585,706, and pro forma operating expenses for the year ended December 31, 2008 would have been $169,333, if AMB Partners II had been deconsolidated as of January 1, 2008.
(2)   Includes changes in liabilities and assets associated with AMB’s deferred compensation plan for the three and twelve months ended December 31, 2009 of $969 and $7,823, respectively, and for the three and twelve months ended December 31, 2008 of $(4,460) and $(7,828), respectively.
(3)   Represents net income attributable to AMB Property Corporation, net of preferred stock dividends, allocated to outstanding unvested restricted shares. For the three and twelve months ended December 31, 2009, there were 919 unvested restricted shares outstanding. For the three and twelve months ended December 31, 2008, there were 856 unvested restricted shares outstanding.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  4


 

         
(AMB LOGO)
  Consolidated Statements of Funds from Operations(1)
(in thousands, except per share data)
  SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
                                 
    For the Quarters Ended December 31,     For the Years Ended December 31,  
    2009     2008     2009     2008  
Net loss available to common stockholders
  $ (7,565 )   $ (201,362 )   $ (50,077 )   $ (66,451 )
(Gains) losses from sale or contribution of real estate interests, net of taxes
    (1,580 )     281       (38,718 )     (22,561 )
Depreciation and amortization
                               
Total depreciation and amortization
    51,869       38,233       179,894       164,188  
Discontinued operations’ depreciation
    57       1,412       2,042       5,011  
Non-real estate depreciation
    (2,576 )     (1,484 )     (8,593 )     (7,270 )
Adjustments to derive FFO from consolidated joint ventures
                               
Joint venture partners’ noncontrolling interests (Net income)
    2,234       2,954       11,063       32,855  
Limited partnership unitholders’ noncontrolling interests (Net loss)
    (161 )     (8,160 )     (3,625 )     (5,063 )
Limited partnership unitholders’ noncontrolling interests (Development profits)
    11       114       2,377       2,822  
FFO attributable to noncontrolling interests
    (7,245 )     (9,036 )     (26,695 )     (49,957 )
Adjustments to derive FFO from unconsolidated joint ventures
                               
AMB’s share of net income
    (3,824 )     (2,762 )     (11,331 )     (17,121 )
AMB’s share of FFO
    12,549       10,015       42,938       42,742  
Allocation to participating securities(2)
    (10 )                  
 
                       
Funds from operations
  $ 43,759     $ (169,795 )   $ 99,275     $ 79,195  
 
                       
FFO per common share and unit (diluted)
  $ 0.29     $ (1.68 )   $ 0.72     $ 0.77  
 
                       
Weighted average common shares and units (diluted)
    150,993       101,102       137,904       102,735  
 
                       
 
                               
Adjustments for impairment charges, restructuring charges, preferred unit redemption discount and debt extinguishment
                               
Real estate impairment losses
  $     $ 183,754     $ 174,410     $ 183,754  
Discontinued operations’ real estate impairment losses
          10,164       7,443       10,164  
Pursuit costs and tax reserve
          11,834             11,834  
AMB’s share of real estate impairment losses from unconsolidated joint ventures
          1,847       4,611       1,847  
Joint venture partners’ noncontrolling interest share of real estate impairment losses
          (424 )     (4,876 )     (424 )
 
                       
AMB’s share of total impairment charges(1)
          207,175       181,588       207,175  
Restructuring charges(1)
    2,544       12,306       6,368       12,306  
Loss on early extinguishment of debt
    11,614       131       12,267       786  
Preferred unit redemption discount
    (9,759 )           (9,759 )      
Allocation to participating securities(2)
    (27 )     (418 )     (898 )     (1,186 )
 
                       
Funds from operations, as adjusted(1)
  $ 48,131     $ 49,399     $ 288,841     $ 298,276  
 
                       
FFO, as adjusted per common share and unit (diluted)
  $ 0.32     $ 0.49     $ 2.09     $ 2.90  
 
                       
Weighted average common shares and units (diluted)
    150,993       101,112       137,904       102,735  
 
                       
(1)   See reporting definitions and supplemental financial measures disclosures.
(2)   Represents amount of FFO allocated to outstanding unvested restricted shares. For the three and twelve months ended December 31, 2009, there were 919 unvested restricted shares. For the three and twelve months ended December 31, 2008, there were 856 unvested restricted shares.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  5


 

         
(AMB LOGO)
  Consolidated Balance Sheets
(dollars in thousands)
  SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
                 
    As of  
    December 31, 2009     December 31, 2008  
Assets
               
Investments in real estate
               
Total investments in properties
  $ 6,708,660     $ 6,603,856  
Accumulated depreciation and amortization
    (1,113,808 )     (970,737 )
 
           
Net investments in properties
    5,594,852       5,633,119  
Investments in unconsolidated joint ventures
    462,130       431,322  
Properties held for sale or contribution, net
    214,426       609,023  
 
           
Net investments in real estate
    6,271,408       6,673,464  
Cash and cash equivalents and restricted cash
    206,077       251,231  
Accounts receivable, net
    155,958       160,528  
Other assets
    208,515       216,425  
 
           
Total assets
  $ 6,841,958     $ 7,301,648  
 
           
 
               
Liabilities and equity
               
Liabilities
               
Secured debt
  $ 1,096,554     $ 1,522,571  
Unsecured senior debt
    1,155,529       1,153,926  
Unsecured credit facilities
    477,630       920,850  
Other debt
    482,883       392,838  
Accounts payable and other liabilities
    338,042       345,259  
 
           
Total liabilities
    3,550,638       4,335,444  
Equity
               
Stockholders’ equity
               
Common equity
    2,716,604       2,291,695  
Preferred equity
    223,412       223,412  
 
           
Total stockholders’ equity
    2,940,016       2,515,107  
Noncontrolling interests
               
Joint venture partners
    289,909       293,367  
Preferred unitholders
          77,561  
Limited partnership unitholders
    61,395       80,169  
 
           
Total noncontrolling interests
    351,304       451,097  
 
           
Total equity
    3,291,320       2,966,204  
 
           
Total liabilities and equity
  $ 6,841,958     $ 7,301,648  
 
           
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  6


 

         
(AMB LOGO)
  Supplemental Cash Flow Information
(dollars in thousands)
  SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
                                 
    For the Quarters Ended     For the Years Ended  
    December 31,     December 31,  
    2009     2008     2009     2008  
AMB’s Owned and Managed Portfolio:(1)(2)
                               
Supplemental Information:
                               
Straight-line rents and amortization of lease intangibles
  $ 9,040     $ 5,285     $ 29,181     $ 24,031  
AMB’s share of straight-line rents and amortization of lease intangibles
  $ 4,599     $ 1,498     $ 14,099     $ 12,065  
Gross lease termination fees
  $ 581     $ 5,772     $ 6,067     $ 6,428  
Net lease termination fees(3)
  $ 407     $ 4,777     $ 4,324     $ 5,185  
AMB’s share of net lease termination fees
  $ 232     $ 4,318     $ 2,076     $ 4,652  
 
                               
Recurring capital expenditures:
                               
Tenant improvements
  $ 6,488     $ 5,276     $ 20,185     $ 17,377  
Lease commissions and other lease costs
    6,936       6,949       26,452       27,149  
Building improvements
    11,796       12,688       25,415       39,908  
 
                       
Sub-total
    25,220       24,913       72,052       84,434  
Co-investment venture partners’ share of capital expenditures
    (8,728 )     (7,043 )     (26,219 )     (24,425 )
 
                       
AMB’s share of recurring capital expenditures
  $ 16,492     $ 17,870     $ 45,833     $ 60,009  
 
                       
 
                               
AMB’s Consolidated Portfolio:
                               
Supplemental Information:
                               
Straight-line rents and amortization of lease intangibles
  $ 3,628     $ 1,499     $ 10,531     $ 10,549  
AMB’s share of straight-line rents and amortization of lease intangibles
  $ 3,407     $ 764     $ 10,279     $ 9,519  
Gross lease termination fees
  $ 320     $ 5,077     $ 3,134     $ 5,634  
Net lease termination fees(3)
  $ 195     $ 4,266     $ 1,792     $ 4,585  
AMB’s share of net lease termination fees
  $ 187     $ 4,216     $ 1,509     $ 4,534  
 
                               
Recurring capital expenditures:
                               
Tenant improvements
  $ 4,032     $ 4,118     $ 11,969     $ 13,757  
Lease commissions and other lease costs
    4,038       4,725       17,312       21,444  
Building improvements
    9,759       10,033       19,872       32,495  
 
                       
Sub-total
    17,829       18,876       49,153       67,696  
Co-investment venture partners’ share of capital expenditures
    (2,993 )     (2,075 )     (7,661 )     (10,691 )
 
                       
AMB’s share of recurring capital expenditures
  $ 14,836     $ 16,801     $ 41,492     $ 57,005  
 
                       
(1)   See Reporting Definitions.
(2)   See Supplemental Financial Measures Disclosure for a discussion of owned and managed supplemental cash flow information.
(3)   Net lease termination fees are defined as gross lease termination fees less the associated straight-line rent balance.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  7


 

         
(AMB LOGO)
  Operations Overview(1)
(dollars in thousands)
  SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
YTD Same Store Cash-basis NOI Growth Without Lease Termination Fees(2)
(SAME STORE CASH)
YTD Average Occupancy(2)
(AVERAGE OCCUPANCY)
Rent Change on Renewals and Rollovers(2)(3)
(RENT CHANGE)
Lease Expirations as % of Annualized Base Rent (ABR)(2)
(LEASE EXPIRATIONS)
Top Customers
                                 
            Square              
  Feet     ABR     % of ABR  
  1    
Deutsche Post World Net (DHL)
    3,545,758     $ 30,668       3.6 %
  2    
United States Government
    1,355,450     $ 20,287       2.4 %
  3    
FedEx Corporation
    1,400,090     $ 14,687       1.7 %
  4    
Sagaw a Express
    828,552     $ 13,825       1.6 %
  5    
Nippon Express
    1,029,170     $ 13,578       1.6 %
  6    
BAX Global/Schenker/Deutsche Bahn
    1,127,451     $ 10,450       1.2 %
  7    
La Poste
    902,391     $ 8,829       1.0 %
  8    
Panalpina
    1,316,351     $ 8,636       1.0 %
  9    
Caterpillar Logistics Services
    543,039     $ 7,810       0.9 %
  10    
CEVA Logistics, Inc.
    1,032,000     $ 6,933       0.8 %
       
 
                 
       
Subtotal
    13,080,252     $ 135,703       15.8 %
       
 
                       
       
Top 11-20 Customers
    6,634,092       46,682       5.6 %
       
 
                 
       
Total
    19,714,344     $ 182,385       21.4 %
       
 
                 
(1)   Owned and managed portfolio.
(2)   See reporting definitions and supplemental financial measures disclosures.
(3)   Represents trailing four quarter data.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  8


 

         
(AMB LOGO)
  Operating Statistics(1)   SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
                                 
    Owned & Managed Portfolio(2)     Same Store Pool(2)  
    Quarter Ended     Quarter Ended     Quarter Ended     Quarter Ended  
    December 31, 2009     September 30, 2009     December 31, 2009     September 30, 2009  
 
 
                               
Square feet
    132,639,328       131,789,032       113,692,509       114,643,564  
Percentage of owned & managed square feet
                    85.7 %     87.0 %
 
                               
Occupancy
                               
Occupancy percentage at period end(2)
    91.2 %     91.0 %     90.9 %     90.8 %
Occupancy percentage at period end (prior year)
    95.1 %     95.4 %     95.1 %     95.6 %
 
                               
Average occupancy percentage(2)
    90.7 %     90.4 %     90.5 %     90.3 %
Average occupancy percentage (prior year)
    94.9 %     95.3 %     94.6 %     95.1 %
 
                               
Weighted average lease terms (years)
                               
Original
    6.3       6.3       6.2       6.2  
Remaining
    3.5       3.6       3.2       3.2  
 
                               
Trailing four quarters statistics
                               
Tenant retention(2)
    61.2 %     61.1 %     61.1 %     59.5 %
 
                               
Rent change on renewals and rollovers(2)
                               
Percentage
    (6.9 %)     (3.9 %)     (7.7 %)     (4.8 %)
Same space square footage commencing (millions)
    21.7       19.6       20.2       17.5  
 
                               
Second generation TIs and LCs per square foot(2)
                               
Retained
  $ 1.14     $ 1.19                  
Re-tenanted
  $ 2.61     $ 2.80                  
Weighted average
  $ 1.73     $ 1.80                  
Second generation square footage commencing (millions)
    27.0       25.3                  
 
                               
Gross operating margin(2)
    70.9 %     72.0 %     71.9 %     72.0 %
                                 
                    Same Store Pool(2)  
                    Quarter Ended     Year Ended  
Cash Basis NOI percent change(2)                   December 31, 2009     December 31, 2009  
Increase (decrease) in revenues excluding lease termination fees(3)
                  (5.9 %)     (2.5 %)
Increase (decrease) in expenses(3)
                    (2.0 %)     2.8 %
Increase (decrease) in NOI excluding lease termination fees(2)(3)
                    (7.3 %)     (4.5 %)
Increase (decrease) in NOI including lease termination fees(2)(3)
                    (10.1 %)     (4.6 %)
(1)   Owned and managed portfolio.
(2)   See reporting definitions and supplemental financial measures disclosures.
(3)   For the quarter ended December 31, 2009, on a consolidated basis, the percent change was (7.9)%, (2.9)%, (10.0)% and (14.7)%, respectively, for decrease in revenues excluding lease termination fees, decrease in expenses, decrease in NOI excluding lease termination fees and decrease in NOI including lease termination fees. For the year ended December 31, 2009, on a consolidated basis, the percent change was (2.8)%, 1.9%, (4.8)% and (5.5)%, respectively, for decrease in revenues excluding lease termination fees, increase in expenses, decrease in NOI excluding lease termination fees and decrease in NOI including lease termination fees.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  9


 

         
(AMB LOGO)
  Portfolio Overview   SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
                                                                                         
                                            % of Total                             Year-to-Date     Trailing Four  
                                            Owned and     AMB’s Share             Annualized     Same Store NOI     Quarters Rent  
    Square Feet             Placed in             Square Feet     Managed Square     of Square     Year-to-Date     Base Rent     Growth Without     Change on  
    as of     Acquired     Operations     Disposed     as of     Feet as of     Feet as of     Average     psf as of     Lease     Renewals and  
    9/30/2009     Square Feet     Square Feet(1)     Square Feet     12/31/2009     12/31/2009     12/31/2009     Occupancy     12/31/2009     Termination Fees(2)     Rollovers(2)  
 
 
                                                                                       
Southern California
    18,917,656                         18,917,656       14.3 %     55.6 %     92.0 %   $ 6.34       (1.8 %)     (6.5 %)
Chicago
    13,106,975             11,878             13,118,853       9.9 %     54.0 %     90.4 %     5.14       (2.2 %)     (15.6 %)
No. New Jersey/New York
    11,640,549             (2,127 )           11,638,422       8.8 %     50.8 %     90.2 %     7.65       (9.5 %)     (5.5 %)
San Francisco Bay Area
    10,994,284             2,645       (38,256 )     10,958,673       8.3 %     76.3 %     90.1 %     6.33       (5.2 %)     (1.8 %)
Seattle
    7,882,881             277             7,883,158       5.9 %     51.6 %     94.1 %     5.48       (5.2 %)     (0.7 %)
South Florida
    6,363,198                         6,363,198       4.8 %     72.8 %     94.4 %     7.37       (1.0 %)     (12.4 %)
U.S. On-Tarmac
    2,463,001             89             2,463,090       1.9 %     92.4 %     89.7 %     19.85       (4.2 %)     1.0 %
Other U.S. Markets
    28,863,627             206,368       (567,748 )     28,502,247       21.4 %     62.5 %     88.9 %     5.52       (7.6 %)     (11.0 %)
 
                                                                 
U.S. Subtotal / Wtd Avg
    100,232,171             219,130       (606,004 )     99,845,297       75.3 %     60.8 %     90.9 %   $ 6.43       (5.1 %)     (7.5 %)
 
                                                                                       
Canada
    3,564,059                         3,564,059       2.7 %     100.0 %     95.3 %   $ 5.49       (28.6 %)     3.4 %
 
                                                                                       
Mexico City
    3,590,942             574,943             4,165,885       3.1 %     36.9 %     91.4 %     5.59       (18.7 %)     (14.8 %)
Guadalajara
    2,890,526                         2,890,526       2.2 %     21.6 %     96.7 %     4.42       (2.2 %)     (13.2 %)
Other Mexico Markets
    609,182             284,318             893,500       0.7 %     65.6 %     90.5 %     4.63       (26.0 %)     (8.0 %)
 
                                                                 
Mexico Subtotal / Wtd Avg
    7,090,650             859,261             7,949,911       6.0 %     34.5 %     93.5 %   $ 5.08       (12.2 %)     (14.1 %)
 
                                                                                       
 
                                                                 
The Americas Total / Wtd Avg
    110,886,880             1,078,391       (606,004 )     111,359,267       84.0 %     60.1 %     91.1 %   $ 6.30       (5.4 %)     (8.2 %)
 
                                                                 
 
                                                                                       
France
    3,785,368             275,340             4,060,708       3.0 %     32.7 %     97.6 %   $ 8.70       (0.7 %)     (14.3 %)
Germany
    3,191,810             818             3,192,628       2.4 %     30.2 %     96.9 %     8.98       (5.5 %)     (1.8 %)
Benelux
    3,267,362                         3,267,362       2.5 %     31.2 %     91.9 %     9.90       (15.1 %)     1.2 %
Other Europe Markets
    343,077                         343,077       0.3 %     61.9 %     100.0 %     14.92       n/a       n/a  
 
                                                                 
Europe Subtotal / Wtd Avg
    10,587,617             276,158             10,863,775       8.2 %     32.4 %     95.7 %   $ 9.32       (4.7 %)     (3.9 %)
 
                                                                 
 
                                                                                       
Tokyo
    5,263,053             101,751             5,364,804       4.0 %     21.5 %     91.6 %   $ 14.80       4.4 %     (3.1 %)
Osaka
    2,000,037                         2,000,037       1.5 %     20.0 %     90.5 %     11.96       (3.2 %)     6.7 %
Other Japan Markets
                                  0.0 %     0.0 %     0.0 %           0.0 %     n/a  
 
                                                                 
Japan Subtotal / Wtd Avg
    7,263,090             101,751             7,364,841       5.5 %     21.1 %     91.3 %   $ 14.07       3.4 %     (0.6 %)
 
                                                                                       
China
    1,897,400                         1,897,400       1.4 %     100.0 %     86.1 %   $ 4.54       3.5 %     14.1 %
Singapore
    935,926                         935,926       0.7 %     100.0 %     98.4 %     9.41       (0.2 %)     (4.2 %)
Other Asia Markets
    218,119                         218,119       0.2 %     100.0 %     85.2 %     5.96       0.0 %     (15.7 %)
 
                                                                 
Asia Total / Wtd Avg
    10,314,535             101,751             10,416,286       7.8 %     44.2 %     91.0 %   $ 11.95       1.1 %     (1.6 %)
 
                                                                 
 
                                                                                       
Owned and Managed Total / Wtd Avg(2)
    131,789,032             1,456,300       (606,004 )     132,639,328       100.0 %     56.6 %     91.4 %   $ 6.98       (4.5 %)     (6.9 %)
 
                                                                                     
 
                                                                                       
Other Real Estate Investments(3)
    7,495,959                         7,495,959               51.8 %     86.7 %     5.31                  
 
                                                                       
Total Operating Portfolio
    139,284,991             1,456,300       (606,004 )     140,135,287               56.4 %     91.1 %   $ 6.90                  
 
                                                                                 
 
                                                                                       
Development
                                                                                       
Construction-in-Progress
    6,845,041       559,605 (4)     (638,758 )(5)     (1,504,958 )(6)     5,260,930               86.6 %                                
Pre-Stabilized Developments(2)
    9,971,598       1,431,891 (4)     (695,924 )(5)     (1,039,790 )(6)     9,667,775               97.0 %                                
 
                                                                           
Development Portfolio Subtotal
    16,816,639       1,991,496       (1,334,682 )     (2,544,748 )     14,928,705               93.3 %                                
 
                                                                                       
 
                                                                           
Total Global Portfolio
    156,101,630       1,991,496       121,618       (3,150,752 )     155,063,992               59.9 %                                
 
                                                                           
(1)   Represents assets placed in operations from development and may include positive/(negative) remeasurements of square footage as operating assets.
(2)   See reporting definitions and supplemental financial measures disclosures.
(3)   Includes operating properties held through AMB’s investments in unconsolidated joint ventures that it does not manage and are therefore excluded from the owned and managed portfolio and the location of AMB’s global headquarters.
(4)   For construction-in-progress, represents square footage of development starts. For pre-stabilized developments, represents new projects available.
(5)   For construction-in-progress, represents square footage of completed development projects placed in operations. For pre-stabilized developments, represents projects placed in operations.
(6)   For construction-in-progress, represents square footage of completed development projects placed in pre-stabilized developments or disposed. For pre-stabilized developments, represents projects disposed.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  10


 

         
(AMB LOGO)
  Capital Deployment Overview
(dollars in millions)
  SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
Development Portfolio by Region as of December 31, 2009(1)
(Estimated Total Investment(2))
(PIE CHART)
Development Starts(1)
(Estimated Total Investment(2))
(BAR CHART)
Acquisition Volume(3)
(Acquisition Cost(2))
(BAR CHART)
(1)   Includes investments held through unconsolidated co-investment ventures. Estimated total investment is before the impact of real estate impairment losses.
(2)   See reporting definitions and supplemental financial measures disclosures.
(3)   Owned and managed portfolio, excludes land inventory purchases.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  11


 

         
(AMB LOGO)
  Contributions and Dispositions(1)
(dollars in thousands)
  SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
                                 
    For the Quarter Ended December 31, 2009   For the Year Ended December 31, 2009
    Operating Property   Development Property   Operating Property   Development Property
 
 
                               
AMB’s Ownership Contributed and Disposed
    88.7 %     53.1 %     66.8 %     83.4 %
Contribution Value and Disposition Price
  $ 23,213     $ 69,693     $ 198,135     $ 564,768 (2)
Weighted Average Stabilized Cap Rate(3)(4)
    8.3 %     8.1 %     8.2 %     6.3 %
Development Margin(4)
    N/A       8.6 %     N/A       16.4 %
Square Footage or Acreage Contributed or Sold
                                                 
    For the Quarter Ended December 31, 2009     For the Year Ended December 31, 2009  
    Operating Property     Development Property     Operating Property     Development Property  
    Square Feet     Square Feet     Land Acreage(5)     Square Feet     Square Feet     Land Acreage(5)  
 
 
                                               
The Americas
                                               
United States
    403,141       1,247,897       9       2,883,207       3,100,676       35  
Other Americas
                            318,850        
 
                                   
The Americas Total
    403,141       1,247,897       9       2,883,207       3,419,526       35  
 
                                               
Europe
                                               
France
                                   
Germany
                                   
Benelux
          67,813                   67,813        
Other Europe
                                   
 
                                   
Europe Total
          67,813                   67,813        
 
                                               
Asia
                                               
Japan
                            981,162        
China
                                   
Other Asia
                                   
 
                                   
Asia Total
                            981,162        
 
                                               
 
                                   
Total
    403,141       1,315,710       9       2,883,207       4,468,501       35  
 
                                   
(1)   Includes investments held through unconsolidated co-investment ventures.
(2)   Includes the transfer of two assets to AMB Alliance Fund III in exchange for units in the fund.
(3)   Excludes value-added conversions, development for sale, and land sales.
(4)   See reporting definitions and supplemental financial measures disclosures.
(5)   Represents acreage for land sales and value-added conversion projects.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  12


 

         
(AMB LOGO)
  Development Starts and Completions(1)
(dollars in thousands)
  SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
                                                                                                 
    Development Starts(2)     Development Completions(2)  
    For the Quarter Ended December 31, 2009     For the Year Ended December 31, 2009     For the Quarter Ended December 31, 2009     For the Year Ended December 31, 2009  
            Estimated     % of Total             Estimated     % of Total                                          
    Estimated     Total     Estimated     Estimated     Total     Estimated             Total     % of Total             Total     % of Total  
    Square Feet     Investment(2)     Investment(2)     Square Feet     Investment(2)     Investment(2)     Square Feet     Investment(3)     Investment(2)     Square Feet     Investment(3)     Investment(2)  
 
 
                                                                                               
The Americas
                                                                                               
United States
        $       0.0 %     96,250     $ 7,248       12.0 %     451,494     $ 25,209       19.6 %     5,480,272     $ 402,692       42.5 %
Other Americas
                0.0 %     189,337       12,116       20.0 %     957,846       52,923       41.0 %     4,199,238       260,513       27.5 %
 
                                                                       
The Americas Total
        $       0.0 %     285,587     $ 19,364       32.0 %     1,409,340     $ 78,132       60.6 %     9,679,510     $ 663,205       70.0 %
 
                                                                                               
Europe
                                                                                               
France
        $       0.0 %     274,802     $ 17,118       28.2 %     274,802     $ 19,018       14.8 %     376,263     $ 33,332       3.5 %
Germany
                0.0 %                 0.0 %                 0.0 %                 0.0 %
Benelux
                0.0 %     125,227       24,121       39.8 %     67,813       11,727       9.1 %     600,960       65,529       6.9 %
Other Europe
                0.0 %                 0.0 %                 0.0 %     436,916       40,563       4.3 %
 
                                                                       
Europe Total
        $       0.0 %     400,029     $ 41,239       68.0 %     342,615     $ 30,745       23.9 %     1,414,139     $ 139,424       14.7 %
 
                                                                                               
Asia
                                                                                               
Japan
        $       0.0 %         $       0.0 %         $       0.0 %     685,757     $ 115,280       12.2 %
China
                0.0 %                 0.0 %     392,581       20,005       15.5 %     598,850       29,760       3.1 %
Other Asia
                0.0 %                 0.0 %                 0.0 %                 0.0 %
 
                                                                       
Asia Total
        $       0.0 %         $       0.0 %     392,581     $ 20,005       15.5 %     1,284,607     $ 145,040       15.3 %
 
                                                                       
 
                                                                                               
Total
        $       0.0 %     685,616     $ 60,603       100.0 %     2,144,536     $ 128,882       100.0 %     12,378,256     $ 947,669       100.0 %
 
                                                                       
 
                                                                                               
AMB’s Weighted Average Ownership Percentage
                  80 %                     99.6 %                     92.0 %        
Weighted Average Estimated Yield(2)(4)
                  8.1 %                     7.6 %                     7.2 %        
(1)   Includes investments held through unconsolidated co-investment ventures.
(2)   See reporting definitions and supplemental financial measures disclosures.
(3)   Includes value-added conversions.
(4)   Calculated using estimated total investment before the impact of cumulative real estate impairment losses.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  13


 

         
(AMB LOGO)
  Development Portfolio(1)
(dollars in thousands)
  SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
                                                                                         
    2010 Expected Completions(2)     2011 Expected Completions(2)     Total Construction-in-Progress     Pre-Stabilized Developments(2)     Total Development Portfolio  
            Estimated             Estimated             Estimated             Estimated             Estimated     % of Total  
    Estimated     Total     Estimated     Total     Estimated     Total     Estimated     Total     Estimated     Total     Estimated  
    Square Feet     Investment(2)(3)     Square Feet     Investment(2)(3)     Square Feet     Investment(2)(3)     Square Feet     Investment(2)(3)     Square Feet     Investment(2)(3)     Investment(2)  
 
The Americas
                                                                                       
United States
    389,767     $ 36,601       559,605     $ 67,537       949,372     $ 104,138       2,716,297     $ 237,578       3,665,669     $ 341,716       22.2 %
Other Americas
    607,202       46,487                   607,202       46,487       1,715,452       96,415       2,322,654       142,902       9.2 %
 
                                                                 
The Americas Total
    996,969     $ 83,088       559,605     $ 67,537       1,556,574     $ 150,625       4,431,749     $ 333,993       5,988,323     $ 484,618       31.4 %
 
                                                                                       
Europe
                                                                                       
France
    692,754     $ 59,927           $       692,754     $ 59,927       37,760     $ 5,085       730,514     $ 65,012       4.2 %
Germany
    426,552       50,170                   426,552       50,170       139,608       19,320       566,160       69,490       4.5 %
Benelux
    573,352       81,649                   573,352       81,649       207,232       35,061       780,584       116,710       7.6 %
Other Europe
                                        1,022,887       115,045       1,022,887       115,045       7.5 %
 
                                                                 
Europe Total
    1,692,658     $ 191,746           $       1,692,658     $ 191,746       1,407,487     $ 174,511       3,100,145     $ 366,257       23.8 %
 
                                                                                       
Asia
                                                                                       
Japan
    420,847     $ 54,574           $       420,847     $ 54,574       2,835,609     $ 501,942       3,256,456     $ 556,516       36.1 %
China
    523,793       22,251       1,067,058       56,525       1,590,851       78,776       598,850       29,854       2,189,701       108,630       7.0 %
Other Asia
                                        394,080       25,749       394,080       25,749       1.7 %
 
                                                                 
Asia Total
    944,640     $ 76,825       1,067,058     $ 56,525       2,011,698     $ 133,350       3,828,539     $ 557,545       5,840,237     $ 690,895       44.8 %
 
                                                                 
 
                                                                                       
Total
    3,634,267     $ 351,659       1,626,663     $ 124,062       5,260,930     $ 475,721       9,667,775     $ 1,066,049       14,928,705     $ 1,541,770       100.0 %
 
                                                                 
                    Real estate impairment losses
    (28,160 )             (84,245 )             (112,405 )        
 
                                                                                 
          Estimated total investment, net of real estate impairment losses
  $ 447,561             $ 981,804             $ 1,429,365          
 
                                                                                 
 
                                                                                       
Number of Projects
    13               2               15               33               48          
AMB’s Weighted Average Ownership Percentage
    90.7 %             57.9 %             82.2 %             97.1 %             92.5 %        
Remainder to Invest
  $ 23,661             $ 31,160             $ 54,821             $ 28,841             $ 83,662          
AMB’s Share of Remainder to Invest(2)(4)(5)
  $ 18,300             $ 23,833             $ 42,133             $ 27,014             $ 69,147          
Weighted Average Estimated Yield(2)(5)
    6.6 %             7.6 %             6.8 %             6.8 %             6.8 %        
Percent Pre-Leased(2)
    15.1 %             14.8 %             15.0 %             59.9 %             44.1 %        
(1)   Includes investments held through unconsolidated co-investment ventures.
(2)   See reporting definitions and supplemental financial measures disclosures.
(3)   Includes value-added conversion projects.
(4)   Amounts include capitalized interest as applicable.
(5)   Calculated using estimated total investment before the impact of cumulative real estate impairment losses.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  14


 

         
(AMB LOGO)
  Land, Value-Added Conversion, and Redevelopment Inventory(1)(2)
(dollars in thousands)
  SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
Land Inventory
                                                                 
    The Americas     Europe     Asia     Total  
            Estimated             Estimated             Estimated             Estimated  
            Build Out Potential             Build Out Potential             Build Out Potential             Build Out Potential  
    Acres     (square feet)     Acres     (square feet)     Acres     (square feet)     Acres     (square feet)  
 
 
                                                               
Balance as of September 30, 2009
    2,146       35,665,530       219       4,336,270       150       5,678,820       2,515       45,680,620  
Acquisitions
                2       67,805                   2       67,805  
Sales
    (9 )     (60,000 )                             (9 )     (60,000 )
Development starts
                                               
Other
    (11 )                 (56,139 )     (9 )     (533,899 )     (20 )     (590,038 )
 
                                               
 
                                                               
Balance as of December 31, 2009
    2,126       35,605,530       221       4,347,936       141       5,144,921       2,488 (3)     45,098,387  
 
                                               
 
                                                               
Investment in Land(4)
          $ 575,117             $ 118,646             $ 143,564             $ 837,327  
 
                                                               
        Cumulative real estate impairment losses
  $ (152,686 )
 
                                                             
 
                                                               
        Investment in land, net of cumulative real estate impairment losses
  $ 684,641  
 
                                                             
 
                                                               
AMB’s share of investment in land, net of cumulative real estate impairment losses
  $ 532,239  
 
                                                             
Value-Added Conversion Inventory(1)(5)
                                                                 
    East Region     West Region     Central Region     The Americas  
            Number of             Number of             Number of             Number of  
Conversion Time Frame   Acres     Projects     Acres     Projects     Acres     Projects     Acres     Projects  
 
 
                                                               
3 years or less
                9       1                   9       1  
3+ years
    7       2       213       12                   220       14  
 
                                               
Total
    7       2       222       13                   229 (6)     15  
 
                                               
Redevelopment Inventory(1)(5)
                                                                 
    East Region     West Region     Central Region     The Americas  
    Square     Number of     Square     Number of     Square     Number of     Square     Number of  
Redevelopment Time Frame   Feet     Projects     Feet     Projects     Feet     Projects     Feet     Projects  
 
 
                                                               
3 years or less
    40,800       1                               40,800       1  
3+ years
                998,372       3                   998,372       3  
 
                                               
Total
    40,800       1       998,372       3                   1,039,172 (7)     4  
 
                                               
(1)   See reporting definitions and supplemental financial measures disclosures.
(2)   Includes investments held through unconsolidated co-investment ventures.
(3)   AMB’s share of acres and square feet of estimated build out including amounts held in unconsolidated co-investment ventures is 2,258 acres and 41.1 million square feet, respectively.
(4)   Represents actual cost incurred to date including initial acquisition, infrastructure, and associated carry costs.
(5)   East, West and Central regions represent AMB’s geographic division of the Americas.
(6)   AMB’s share is 190 acres.
(7)   AMB’s share is 691,171 square feet.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  15


 

         
(AMB LOGO)
  Private Capital Co-investment Ventures Overview
(dollars in millions)
  SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
                         
    Date   Geographic       Functional   Incentive Distribution    
Co-investment Venture   Established   Focus   Principal Venture Investors   Currency   Frequency   Term
 
 
                       
AMB-SGP
  March 2001   United States   Subsidiary of GIC Real Estate Pte Ltd.   USD   10 years   March 2011; extendable 10 years
AMB Institutional Alliance Fund II
  June 2001   United States   Various   USD   At dissolution   December 2014 (estimated)
AMB-AMS
  June 2004   United States   Various   USD   At dissolution   December 2012; extendable 4 years
AMB Institutional Alliance Fund III
  October 2004   United States   Various   USD   3 years (next 2Q11)   Open end
AMB-SGP Mexico
  December 2004   Mexico   Subsidiary of GIC Real Estate Pte Ltd.   USD   7 years   December 2011; extendable 7 years
AMB Japan Fund I
  June 2005   Japan   Various   JPY   At dissolution   June 2013; extendable 2 years
AMB DFS Fund I
  October 2006   United States   GE Real Estate   USD   Upon project sales   Perpetual(1)
AMB Europe Fund I
  June 2007   Europe   Various   EUR   3 years (next 2Q10)   Open end
YTD Additions to Private Capital Co-investment Ventures(2)
(YTD PRIVATE CAPITAL)
Gross Carrying Value of Private Capital Co-investment Ventures(3)
(GROSS PRIVATE CAPITAL)
(1)   For AMB DFS Fund I, the investment period ended in June 2009. The fund will terminate upon completion and disposition of assets currently owned and under development by the fund.
(2)   Additions to private capital co-investment ventures include both acquisitions from third parties as well as assets contributed to co-investment ventures from AMB.
(3)   See reporting definitions and supplemental financial measures disclosures.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  16


 

         
(AMB LOGO)
  Joint Ventures Financial Summary
(dollars in thousands)
  SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
                                                                 
    AMB’s           Gross                     AMB’s     Estimated     Planned  
    Ownership   Square     Book     Property     Other     Net Equity     Investment     Gross  
Unconsolidated Joint Ventures   Percentage   Feet(1)     Value(2)     Debt     Debt     Investment(3)     Capacity     Capitalization  
 
 
                                                               
Operating Co-Investment Ventures
                                                               
AMB Institutional Alliance Fund III(4)
    23 %     36,057,101     $ 3,269,614     $ 1,720,405     $     $ 209,999     $     $ 3,270,000  
AMB Europe Fund I(4)
    21 %     9,236,984       1,260,362       719,431             60,177             1,260,000  
AMB Japan Fund I
    20 %     7,263,090       1,498,044       832,370       8,601       80,074             1,498,000  
AMB-SGP Mexico
    22 %     6,331,990       357,493       167,180       58,825       19,014       245,000       602,000  
 
                                                 
Total Operating Co-investment Ventures
    22 %     58,889,165       6,385,513       3,439,386       67,426       369,264       245,000       6,630,000  
 
                                                               
Development Co-investment Ventures:
                                                               
AMB DFS Fund I
    15 %     200,027       85,270                   14,259             85,000  
AMB Institutional Alliance Fund III(4)
    23 %     559,605       82,547       42,376             9,122       n/a       n/a  
 
                                                 
Total Development Co-investment Ventures
    19 %     759,632       167,817       42,376             23,381             85,000  
 
                                                 
Total Unconsolidated Co-investment Ventures(5)
    22 %     59,648,797       6,553,330       3,481,762       67,426       392,645       245,000       6,715,000  
 
                                                               
Other Industrial Operating Joint Ventures
    51 %     7,419,049 6)     280,432       160,290             50,741       n/a       n/a  
 
                                                 
Total Unconsolidated Joint Ventures
    23 %     67,067,846     $ 6,833,762     $ 3,642,052     $ 67,426     $ 443,386     $ 245,000     $ 6,715,000  
 
                                                 
 
                                                               
Consolidated Joint Ventures
                                                               
                                                                 
Operating Co-investment Ventures
                                                               
AMB-SGP
    50 %     8,288,663     $ 470,740     $ 335,764     $                          
AMB Institutional Alliance Fund II
    20 %     7,318,208       513,450       194,980       50,000                          
AMB-AMS
    39 %     2,172,137       158,865       79,756                                
 
                                                       
Total Operating Co-investment Ventures
    35 %     17,779,008       1,143,055       610,500       50,000                          
Total Consolidated Co-investment Ventures
    35 %     17,779,008       1,143,055       610,500       50,000                          
 
                                                               
Other Industrial Operating Joint Ventures
    89 %     2,436,591       230,463       32,186                                
Other Industrial Development Joint Ventures
    60 %     770,442       272,237       128,374                                
 
                                                       
Total Consolidated Joint Ventures
    47 %     20,986,041     $ 1,645,755     $ 771,060     $ 50,000                          
 
                                                       
 
                                                               
Selected Operating Results                                                  
For the Quarter Ended December 31, 2009           Cash NOI(7)     Net Income     FFO(7)     Share of     Cash NOI(7)     Net Income     FFO(7)  
             
Unconsolidated Joint Ventures
          $ 99,109     $ 7,180 (8)   $ 50,387 (8)   AMB’s   $ 23,496     $ 3,824     $ 12,549  
Consolidated Joint Ventures
          $ 26,494     $ 5,522     $ 15,709     Partner’s   $ 14,538     $ 3,291     $ 8,176  
 
                                                               
Selected Operating Results                                                  
For the Year Ended December 31, 2009           Cash NOI(7)     Net Income     FFO(7)     Share of     Cash NOI(7)     Net Income     FFO(7)  
             
Unconsolidated Joint Ventures
          $ 397,117     $ 14,702 (8)   $ 179,514 (8)   AMB’s   $ 88,958     $ 11,331     $ 42,938  
Consolidated Joint Ventures
          $ 107,907     $ 18,409     $ 52,419     Partner’s   $ 59,534     $ 14,028     $ 27,626  
(1)   For development properties, represents the estimated square feet upon completion for the committed phases of development projects.
(2)   Represents the book value of the property (before accumulated depreciation), net of impairments, owned by the joint venture and excludes net other assets. Development book values include uncommitted land.
(3)   Through AMB Property Mexico, AMB holds an equity interest in various other non-core unconsolidated ventures for approximately $18.7 million.
(4)   The estimated investment capacity and planned gross capitalizations and investment capacities of AMB Institutional Alliance Fund III and AMB Europe Fund I, as open-end funds, are not limited. The planned gross capitalization represents the gross book value of real estate assets as of the most recent quarter end, and the investment capacity represents estimated capacity based on the fund’s current cash and leverage limitations as of the most recent quarter end.
(5)   See reporting definitions and supplemental financial measures disclosures for unconsolidated co-investment venture operating results.
(6)   Includes investments in 7.3 million square feet of operating properties through AMB’s investment in unconsolidated joint ventures that it does not manage which it excludes from its owned and managed portfolio.
(7)   See reporting definitions and supplemental financial measures disclosures.
(8)   Excludes $3.8 million and $15.3 million of interest expense on shareholder loans for AMB-SGP Mexico for the quarter and year ended December 31, 2009, respectively.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  17


 

         
(AMB LOGO)
  Capitalization Summary
(dollars in millions)
  SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
Value
(BAR CHART)
Coverage and Debt Ratios
                 
    For the Quarter Ended     For the Year Ended  
    December 31, 2009     December 31, 2009  
Interest coverage(2)
    2.8 x     3.6 x
Fixed charge coverage(2)
    2.2 x     2.6 x
Dividends per share-to-FFO, as adjusted per share(2)
    87.5 %     53.6 %
AMB’s share of total debt-to-total market capitalization(2)
    46.4 %     46.4 %
AMB’s share of total debt-to-AMB’s share of total assets(2)
    43.6 %     43.6 %
Capital Structure(1)
(PIE CHART)
(PIE CHART)
(1)   Debt amounts represent AMB’s share of debt and preferred securities.
(2)   See reporting definitions and supplemental financial measures disclosures.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  18


 

         
(AMB LOGO)
  Capitalization Detail
(dollars in thousands, except shares and share price)
  SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
                                                                                 
    AMB Wholly-Owned     Consolidated Joint Venture                            
    Unsecured                               Total        Unconsolidated            
    Senior     Credit     Other     Secured     Secured     Other       Consolidated       Joint       Total    
    Debt     Facilities(1)     Debt     Debt     Debt     Debt       Debt       Venture Debt       Debt    
                     
2010
  $ 65,000     $ 238,429     $ 2,112     $ 189,562     $ 131,497     $       $ 626,600       $ 197,198       $ 823,798    
2011
    69,000       239,201       2,186       88,284       120,355               519,026         620,324         1,139,350    
2012
                426,385       27,764       388,113       50,000         892,262         449,870         1,342,132    
2013
    293,897             920       19,611       49,938               364,366         712,750         1,077,116    
2014
                616             5,659               6,275         855,551         861,826    
2015
    112,491             664             17,610               130,765         264,519         395,284    
2016
    250,000                         16,231               266,231         73,102         339,333    
2017
                            1,272               1,272         351,639         352,911    
2018
    125,000                         1,455               126,455         183,194         309,649    
2019
    250,000                                       250,000                 250,000    
Thereafter
                            39,154               39,154         5,844         44,998    
 
                                                             
Subtotal
  $ 1,165,388     $ 477,630     $ 432,883     $ 325,221     $ 771,284     $ 50,000       $ 3,222,406       $ 3,713,991       $ 6,936,397    
Unamortized (discount) premium
    (9,859 )                 273       (224 )             (9,810 )       (4,513 )       (14,323 )  
 
                                                             
Subtotal
  $ 1,155,529     $ 477,630     $ 432,883     $ 325,494     $ 771,060     $ 50,000       $ 3,212,596       $ 3,709,478       $ 6,922,074    
Joint venture partners’ share of debt(2)
                            (433,601 )     (40,000 )       (473,601 )       (2,868,120 )       (3,341,721 )  
 
                                                             
AMB’s share of total debt(2)
  $ 1,155,529     $ 477,630     $ 432,883     $ 325,494     $ 337,459     $ 10,000       $ 2,738,995       $ 841,358       $ 3,580,353    
 
                                                             
 
                                                                               
Weighted average interest rate
    6.4 %     0.8 %     3.9 %     3.5 %     4.9 %     5.8 %       4.6 %       4.8 %       4.7 %  
Weighted average maturity (years)
    6.1       1.0       2.8       1.0       2.7       2.7         3.5         4.1         3.8    
                         
Market Equity  
Security   Shares     Price     Value  
   
   
Common Stock
    149,258,376 (3)   $ 25.55     $ 3,813,552  
LP Units
    3,376,141     $ 25.55       86,260  
 
                   
Total
    152,634,517             $ 3,899,812  
 
                   
 
                       
Total options outstanding             8,107,697  
Dilutive effect of stock options(4)              
                 
Preferred Stock
    Dividend     Liquidation  
Security   Rate     Preference  
 
 
Series L preferred stock
    6.50 %     50,000  
Series M preferred stock
    6.75 %     57,500  
Series O preferred stock
    7.00 %     75,000  
Series P preferred stock
    6.85 %     50,000  
 
           
Weighted Average/Total
    6.80 %   $ 232,500  
 
           
         
Capitalization Ratios        
AMB’s share of total debt-to-total market capitalization(2)(5)
    46.4 %
AMB’s share of total debt plus preferred-to-AMB’s share of total market capitalization(2)(5)
    49.4 %
AMB’s share of total debt-to-AMB’s share of total assets(2)
    43.6 %
AMB’s share of total debt plus preferred-to-AMB’s share of total assets(2)
    46.4 %
(1)   Represents three credit facilities with total capacity of approximately $1.6 billion. Includes $175.5 million of U.S. Dollar borrowings, as well as $182.9 million, $93.0 million, and $26.2 million in Yen, Canadian dollar and Singapore dollar-based borrowings outstanding at December 31, 2009, respectively, translated to U.S. dollars using the foreign exchange rates in effect on December 31, 2009.
(2)   See reporting definitions and supplemental financial measures disclosures.
(3)   Includes 918,753 shares of unvested restricted stock.
(4)   Computed using the treasury stock method and an average share price of $23.74 for the quarter ended December 31, 2009. All stock options were anti-dilutive as of December 31, 2009.
(5)   Total Market Capitalization is defined as total debt plus preferred equity liquidation preferences plus market equity.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  19


 

         
(AMB LOGO)
  Debt Maturities(1)
(dollars in thousands)
  SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 
                                 
    After Extension Options(2)  
AMB Wholly-owned Debt   2010     2011     2012     2013  
Unsecured Senior Debt
  $ 65,000     $ 69,000     $     $ 293,897  
Credit Facilities
          238,429       239,201        
Other Debt
                427,635       1,916  
AMB Secured Debt
    188,445       87,667       28,648       20,466  
 
                       
Subtotal
    253,445       395,096       695,484       316,279  
 
                               
Consolidated Joint Ventures
                               
AMB-AMS
    2,559                   39,786  
AMB Institutional Alliance Fund II
    10,029       31,022       5,555       93,712  
AMB-SGP
          42,064       293,700        
Other Industrial Operating Joint Ventures
    56,408       42,353       8,506        
 
                       
Subtotal
    68,996       115,439       307,761       133,498  
 
                               
Unconsolidated Joint Ventures
                               
AMB Institutional Alliance Fund III
    27,157       184,580       77,660       287,002  
AMB Japan Fund I
    112,004       204,502       179,852       344,432  
AMB-SGP Mexico
          58,825       167,180        
Other Industrial Operating Joint Ventures
    9,059       31,995             58,771  
AMB Europe Fund I
                6,381       5,018  
 
                       
Subtotal
    148,220       479,902       431,073       695,223  
 
                               
Total Consolidated
    322,441       510,535       1,003,245       449,777  
Total Unconsolidated
    148,220       479,902       431,073       695,223  
 
                       
Total
  $ 470,661     $ 990,437     $ 1,434,318     $ 1,145,000  
 
                       
 
                               
Total AMB’s Share
  $ 323,530     $ 558,967     $ 940,365     $ 513,611  
(1)   Excludes scheduled principal amortization of debt maturing in years subsequent to 2013 as well as debt premiums and discounts.
(2)   Subject to certain conditions.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  20


 

         
(AMB LOGO)
  Supplemental Information for Net Asset Value Analysis (NAV)
(dollars in thousands, except per share amounts)
  SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 

Income Items
                 
            Actual  
            Quarter Ended  
            December 31, 2009  
Real Estate:
               
Wholly owned property cash NOI from continuing operations(1)
          $ 72,912  
AMB’s share of cash NOI from joint ventures:
               
Total cash NOI from joint ventures from continuing operations(1)
  $ 125,642          
AMB’s share of joint ventures(1)
    28.2 %        
 
             
AMB’s share of cash NOI from joint ventures from continuing operations(1)
            35,444  
Adjustments to AMB’s share of cash NOI:
               
NOI attributed to construction-in-progress
  $ (136 )        
NOI attributed to pre-stabilized development projects(1)
    (6,819 )        
NOI attributed to contributed developments
             
NOI required to stabilize properties acquired during the quarter
             
Other adjustments to AMB’s share of cash NOI:(2)
    3,257          
 
             
Adjustments to AMB’s share of cash NOI(3)
            (3,698 )
 
             
Total AMB’s share of cash NOI from continuing operations related to operating properties(1)(4)
          $ 104,658  
 
               
Development platform:(3)
               
Development starts
          $  
 
               
Private capital platform:
               
Total private capital revenue per common share and unit (diluted)
          $ 0.07  
Assets & Liabilities
         
    As of  
AMB’s share of:(1)   December 31, 2009  
Development, land, and contributed assets:(4)
       
Construction-in-progress (invested to date)(5)
  $ 320,923  
Pre-stabilized development projects(1)
    925,143  
Land held for future development(5)
    532,239  
Assets contributed to co-investment ventures(6)
     
 
     
Total development, land and contributed assets
  $ 1,778,305  
 
       
Debt and preferred securities:(4)
       
Total debt
  $ 3,580,353  
Preferred securities
    232,500  
 
     
Total debt and preferred securities
  $ 3,812,853  
 
       
Other balance sheet items:(4)
       
Cash and cash equivalents and restricted cash
  $ 257,647  
Accounts receivable (net) and other assets
    363,261  
Deferred rents receivable and deferred financing costs (net)
    (93,484 )
Accounts payable and other liabilities
    (331,014 )
 
     
Total other balance sheet items
  $ 196,410  


(1)   See reporting definitions and supplemental financial measures disclosures.
(2)   Other adjustments to AMB’s share of cash NOI include free rent granted in the quarter and non-property related revenues and expenses.
(3)   Transaction activity adjustments remove NOI generated from in-progress developments, contributed developments, and projects held for sale or contribution as the value of this real estate is reflected in AMB’s share of development, land, and contributed assets as detailed above. The adjustments also include stabilized NOI for acquisitions.
(4)   Includes investments held through unconsolidated joint ventures.
(5)   Assets are net of cumulative real estate impairment losses.
(6)   Represents AMB’s share of assets contributed to unconsolidated co-investment ventures during the three months ended December 31, 2009.
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  21


 

         
(AMB LOGO)
  Reporting Definitions / Supplemental Financial Measures   SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 

Acquisition Cost includes estimated acquisition capital expenditures. Estimated acquisition capital expenditures include immediate building improvements that are taken into consideration when underwriting the purchase of a building or which are incurred to bring a building up to operating standard or to stabilization and incremental building improvements and leasing costs that are incurred in an effort to substantially increase the revenue potential of an existing building.
Adjusted EBITDA. AMB uses adjusted earnings before interest (including the amount of capitalized interest deducted from the determination of development gains), tax, depreciation and amortization, impairment charges, restructuring, losses on early extinguishment of debt and other non-cash charges, stock based compensation amortization, and non-development gains, or adjusted EBITDA, to measure both its operating performance and liquidity. AMB considers adjusted EBITDA to provide investors relevant and useful information because it permits investors to view income from its operations on an unleveraged basis before the effects of tax, non-cash depreciation and amortization expense (including stock-based compensation amortization) or non-development gains. By excluding interest expense, adjusted EBITDA allows investors to measure AMB’s operating performance independent of its capital structure and indebtedness and, therefore, allows for a more meaningful comparison of its operating performance between quarters as well as annual periods and to compare its operating performance to that of other companies, both in the real estate industry and in other industries. AMB considers adjusted EBITDA to be a useful supplemental measure for reviewing its comparative performance with other companies because, by excluding non-cash depreciation and amortization expense, adjusted EBITDA can help the investing public compare the performance of a real estate company to that of companies in other industries. The impairment charges were principally a result of increases in estimated capitalization rates and deterioration in market conditions that adversely impacted values. The restructuring charges reflected costs associated with AMB’s reduction in global headcount and cost structure. Debt extinguishment losses generally included the costs of repurchasing debt securities. AMB repurchased certain tranches of senior unsecured debt to manage its debt maturities in response to the current financing environment, resulting in greater debt extinguishment costs. Although difficult to predict, these items may be recurring given the uncertainty of the current economic climate and its adverse effects on the real estate and financial markets. While not infrequent or unusual in nature, these items result from market fluctuations that can have inconsistent effects on AMB’s results of operations. The economics underlying these items reflect market and financing conditions in the short-term but can obscure AMB’s performance and the value of AMB’s long-term investment decisions and strategies. Management believes adjusted EBITDA is significant and useful to both it and its investors. Adjusted EBITDA more appropriately reflects the value and strength of AMB’s business model and its potential performance isolated from the volatility of the current economic environment and unobscured by costs (or gains) resulting from AMB’s management of its financing profile in response to the tightening of the capital markets. As a liquidity measure, AMB believes that adjusted EBITDA helps investors to analyze its ability to meet debt service obligations and to make quarterly preferred share dividends and unit distributions. Management uses adjusted EBITDA when measuring AMB’s operating performance and liquidity; specifically when assessing its operating performance, and comparing that performance to other companies, both in the real estate industry and in other industries, and when evaluating its ability to meet debt service obligations and to make quarterly preferred share dividends and unit distributions. AMB believes investors should consider adjusted EBITDA, in conjunction with net income (the primary measure of AMB’s performance) and the other required GAAP measures of its performance and liquidity, to improve their understanding of AMB’s operating results and liquidity, and to make more meaningful comparisons of its performance between periods and as against other companies. By excluding interest, taxes, depreciation and amortization, impairment charges, restructuring, debt extinguishment losses, stock-based compensation amortization and other non-cash charges and non-development gains when assessing AMB’s financial performance, an investor is assessing the earnings generated by AMB’s operations, but not taking into account the eliminated expenses or non-development gains incurred in connection with such operations. As a result, adjusted EBITDA has limitations as an analytical tool and should be used in conjunction with AMB’s required GAAP presentations. Adjusted EBITDA does not reflect AMB’s historical cash expenditures or future cash requirements for working capital, capital expenditures or contractual commitments. Adjusted EBITDA also does not reflect the cash required to make interest and principal payments on AMB’ s outstanding debt. While adjusted EBITDA is a relevant and widely used measure of operating performance and liquidity, it does not represent net income or cash flow from operations as defined by GAAP and it should not be considered as an alternative to those indicators in evaluating operating performance or liquidity. Further, AMB’s computation of adjusted EBITDA may not be comparable to EBITDA reported by other companies. Management compensates for the limitations of adjusted EBITDA by providing investors with financial statements prepared according to U.S. GAAP, along with this detailed discussion of adjusted EBITDA and a reconciliation of adjusted EBITDA to net (loss) income, a U.S. GAAP measurement.
The following table reconciles adjusted EBITDA from net (loss) income for the quarters and years ended December 31, 2009 and 2008 (dollars in thousands):
                                 
    For the Quarters Ended     For the Years Ended  
    December 31,     December 31,  
    2009     2008     2009     2008  
Net loss
  $ (10,102 )   $ (199,262 )   $ (27,960 )   $ (6,750 )
Depreciation and amortization
    51,869       38,233       179,894       164,188  
Impairment charges
          183,754       174,410       183,754  
Non-cash restructuring charges
    2,544       12,306       6,368       12,306  
Loss on early extinguishment of debt
    11,614       131       12,267       786  
Stock-based compensation amortization and other non-cash charges
    6,754       13,807       23,819       30,548  
Adjustments to derive adjusted EBITDA from unconsolidated joint ventures:
                               
AMB’s share of net income
    (3,824 )     (2,762 )     (11,331 )     (17,121 )
AMB’s share of FFO
    12,549       10,015       42,938       42,742  
AMB’s share of interest expense
    10,714       10,031       40,473       34,461  
Interest expense, including amortization
    30,790       33,775       121,459       133,955  
Total discontinued operations, including gains
    (1,753 )     7,277       (41,723 )     (24,525 )
Adjusted EBITDA attributable to noncontrolling interests
    (14,256 )     (15,617 )     (58,801 )     (92,454 )
Capitalized interest attributable to development properties sold or contributed
    1,691       99       16,412       19,143  
Discontinued operations’ adjusted EBITDA
    195       3,918       11,773       15,947  
 
                       
Adjusted EBITDA
  $ 98,785     $ 95,705     $ 489,998     $ 496,980  
 
                       
AMB’s share of calculations for certain financial measures represent the pro-rata portion of the applicable financial measure based on AMB’s percentage of equity interest in each of the consolidated and unconsolidated co-investment ventures accounted for in the applicable financial measure. AMB believes that “AMB’s share of” calculations are meaningful and useful supplemental measures, which enable both management and investors to assess the operations, earnings and growth of AMB in light of AMB’s ownership interest in its joint ventures and to compare the applicable measure to that of other companies. In addition, it allows for a more meaningful comparison of the applicable measure to that of other companies that do not consolidate any of their joint ventures. “AMB’s share of” calculations are not intended to reflect actual liability should there be a default under loans or a liquidation of the joint ventures. AMB’s computation of “AMB’s share of” measures may not be comparable to that of other real estate companies, as they may use different methodologies for calculating these measures.
AMB’s share of Other Balance Sheet Items. AMB believes that balance sheet information based on GAAP provides the most appropriate information about financial position. However, AMB considers balance sheet information reported on an owned and managed basis (such as AMB’s share of cash and cash equivalents and restricted cash, AMB’s share of accounts receivable (net) and other assets, AMB’s share of deferred rents receivable and deferred financing costs (net), and AMB’s share of accounts payable and other liabilities) to be useful supplemental measures to help the investors better understand AMB’s operating performance. See Reporting Definitions for definitions of “owned and managed” and “AMB’s share of.” AMB believes that AMB’s share of balance sheet items on an owned and managed basis helps management and investors make a comprehensive assessment of AMB’s total real estate portfolio and provides a better understanding of AMB’s operating activities. While such information is helpful to the investor, it does not provide balance sheet information as defined by GAAP and is not a true alternative to such GAAP measurements. Further, AMB’s computation of its share of balance sheet items on an owned and managed basis may not be comparable to that of other real estate companies, as they may use different methodologies for calculating these measures.
AMB’s share of total debt. AMB’s share of total debt is the pro rata portion of the total debt based on its percentage of equity interest in each of the consolidated and unconsolidated joint ventures holding the debt. AMB believes that its share of total debt is a meaningful supplemental measure, which enables both management and investors to analyze its leverage and to compare its leverage to that of other companies. In addition, it allows for a more meaningful comparison of its debt to that of other companies that do not consolidate their joint ventures. AMB’s share of total debt is not intended to reflect its actual liability should there be a default under any or all of such loans or a liquidation of the joint ventures. See Capitalization Detail for a reconciliation of total debt and AMB’s share of total debt.
AMB’s share of total debt-to-AMB’s share of total assets is calculated using the following definitions: AMB’s share of total debt is the pro rata portion of the total debt based on AMB’s percentage of equity interest in each of the consolidated and unconsolidated joint ventures holding the debt. AMB’s share of total assets is the pro rata portion of total gross book value of assets based on AMB’s percentage of equity interest in each of the consolidated and unconsolidated joint ventures holding the assets.
AMB’s share of total debt-to-total market capitalization is calculated using the following definitions: AMB’s share of total debt is the pro rata portion of the total debt based on AMB’s percentage of equity interest in each of the consolidated and unconsolidated joint ventures holding the debt. AMB’s definition of “total market capitalization” is AMB’s share of total debt plus preferred equity liquidation preferences plus market equity. AMB’s definition of “market equity” is the total number of outstanding shares of AMB’s common stock and common limited partnership units multiplied by the closing price per share of its common stock as of the period end.
Annualized base rent (ABR) is calculated as monthly base rent (cash basis) per the lease, as of a certain date, multiplied by 12. If free rent is granted, then the first positive rent value is used. Leases denominated in foreign currencies are translated using the currency exchange rate at period end.
Assets Under Management is AMB’s estimate of the value of the real estate it wholly owns or manages through its consolidated and unconsolidated co-investment ventures or for clients of AMB Capital Partners. Assets under management is calculated by adding the co-investment venture partner‘s or client‘s share of the carrying value of its real estate investment to AMB’s share of total market capitalization.


                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  22


 

         
(AMB LOGO)
  Reporting Definitions / Supplemental Financial Measures   SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 

Average occupancy percentage represents the daily weighted occupancy of the total rentable square feet leased, including month-to-month leases, divided by total rentable square feet. Space is considered leased when the tenant has either taken physical or economic occupancy.
Carrying value is the sum of the most recent valuation of real estate investments plus subsequently incurred capital expenditures. Generally, each real estate investment is valued once a year.
Cash-basis NOI. Cash-basis NOI is defined as NOI less straight line rents and amortization of lease intangibles. AMB considers cash-basis NOI to be an appropriate and useful supplemental performance measure because cash basis NOI reflects the operating performance of the real estate portfolio excluding the effects of non-cash adjustments and provides a better measure of actual cash basis rental growth for a year-over-year comparison. However, cash-basis NOI should not be viewed as an alternative measure of financial performance since it does not reflect general and administrative expenses, interest expenses, depreciation and amortization costs, capital expenditures and leasing costs, or trends in development and construction activities that could materially impact results from operations. Further, cash-basis NOI may not be comparable to that of other real estate investment trusts, as they may use different methodologies for calculating cash-basis NOI.
For a reconciliation of NOI from net income for the quarter ended December 31, 2009, refer to the SS NOI definition. The following table reconciles AMB’s share of cash-basis NOI from NOI for the quarter ended December 31, 2009 (dollars in thousands):
         
    For the Quarter Ended  
    December 31, 2009  
NOI
  $ 103,034  
Straight-line rents and amortization of lease intangibles
    (3,628 )
Consolidated joint venture cash NOI from continuing operations
    (26,494 )
 
     
Wholly-owned property cash NOI
    72,912  
AMB’s share of consolidated joint venture cash NOI
    11,956  
AMB’s share of unconsolidated joint venture cash NOI
    23,488  
AMB’s share of transaction adjustments
    (3,698 )
 
     
AMB’s share of cash-basis NOI
  $ 104,658  
 
     
Co-investment Ventures are Joint Ventures with institutional investors, managed by AMB from which AMB receives acquisition fees for third-party acquisitions, portfolio and asset management distributions or fees, as well as incentive distributions or promoted interests.
Co-investment venture partner’s (or co-investor’s) share of debt is the co-investment venture partner’s pro-rata portion of total debt.
Co-investment venture partner’s (or co-investor’s) share of equity is the pro-rata portion of the co-investment venture partner’s share of carrying value less the co-investment venture partner’s share of debt.
Completion is generally defined as properties that have reached Stabilization or properties that have been substantially complete for at least 12 months.
Development activities include ground-up development, redevelopments, renovations, land sales and value-added conversions.
Development margin is calculated as contribution value or disposition price less closing costs, minus estimated total investment, before the impact of cumulative real estate impairment losses, and any deferred rents, taxes or third party promotes before any deferrals on contributions, divided by the estimated total investment, before the impact of cumulative real estate impairment losses.
Estimated FFO by Business. Estimated FFO by Business is FFO, as adjusted generated by AMB’s Real Estate Operations, Development and Private Capital business. Estimated Development and Private Capital FFO was determined by reducing Development Profits, net of taxes, and Private Capital revenues by their respective estimated share of general and administrative expenses, also defined as overhead. Development’s and Private Capital’s estimated allocation of total general and administrative expenses was based on their respective percentage of actual direct general and administrative expenses incurred. Estimated Real Estate Operations FFO represents total AMB FFO, as adjusted less estimated FFO, as adjusted attributable to Development and Private Capital. Management believes estimated FFO by business line is a useful supplemental measure of its operating performance because it helps the investing public compare the operating performance of AMB’s respective businesses to other companies’ comparable businesses. Further, AMB’s computation of FFO by business line may not be comparable to that reported by other real estate investment trusts as they may use different methodologies in computing such measures.
Estimated investment capacity is AMB’s estimate of the gross real estate which could be acquired through the use of its equity commitments from co-investment venture partners plus AMB’s funding obligations and estimated debt capitalization.
Estimated total investment represents total estimated cost of development, renovation, or expansion, including initial acquisition costs, prepaid ground leases, buildings, and associated carry costs. Estimated total investments are based on current forecasts and are subject to change. Non-U.S. Dollar investments are translated to U.S. Dollars using the exchange rate at period end.


Co-investment venture operating results.
                                                         
For the Quarter Ended December 31, 2009
                            Income            
    AMB's           Property   (Loss) from            
    Ownership           Operating   Continuing   Net        
    Percentage(1)   Revenues   Expenses   Operations   Income (Loss)   Cash NOI   FFO
Unconsolidated Co-investment Ventures
                                                       
AMB Institutional Alliance Fund III
    23 %   $ 67,332     $ (17,775 )   $ 3,110     $ 3,885     $ 46,201     $ 23,674  
AMB Europe Fund I
    21 %     25,233       (4,440 )     (196 )     (196 )     19,967       10,717  
AMB Japan Fund I
    20 %     25,909       (5,864 )     2,866       2,866       19,703       10,100  
AMB-SGP Mexico
    22 %     9,534       (2,260 )     (1,233 )(1)     (1,233 )(1)     6,504       1,862 (1)
AMB DFS Fund I
    15 %           (434 )     (819 )     (819 )     (439 )     (819 )
Consolidated Co-investment Ventures
                                                       
AMB-SGP
    50 %     11,276       (3,286 )     (231 )     (231 )     7,620       3,208  
AMB Institutional Alliance Fund II
    20 %     12,834       (3,244 )     2,423       2,423       9,549       5,760  
AMB-AMS
    39 %     3,982       (1,043 )     531       531       2,924       1,591  
(1) Excludes $3.8 million of interest expense on loans from co-investment venture partners.


Co-investment venture partner’s share of calculations for certain financial measures represent the pro-rata portion of the applicable financial measure based on AMB’s co-investment venture partners’ percentage of equity interest in each of the consolidated or unconsolidated co-investment ventures accounted for in the applicable financial measure.
Estimated yields on development projects are calculated from estimated annual cash NOI following occupancy stabilization divided by the estimated total investment. Yields exclude value added conversion projects and are calculated on an after-tax basis for international projects.
Fixed charge coverage. Fixed charge coverage is defined as Adjusted EBITDA divided by fixed charges. Fixed charges consist of interest expense less joint venture partner’s share of interest expense and amortization of finance costs and debt premiums, from continuing and discontinued operations, plus AMB’s share of interest expense from unconsolidated joint venture debt, capitalized interest, preferred unit distributions and preferred stock dividends. AMB uses fixed charge coverage to measure its liquidity. AMB believes fixed charge coverage is relevant and useful to investors because it permits fixed income investors to measure AMB’s ability to meet its interest payments on outstanding debt, make distributions to its preferred unitholders and pay dividends to its preferred shareholders. AMB’s computation of fixed charge coverage may not be comparable to fixed charge coverage reported by other companies.


                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  23


 

         
(AMB LOGO)
  Reporting Definitions / Supplemental Financial Measures   SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 

The following table details the calculation of fixed charges for the quarters and years ended December 31, 2009 and 2008 (dollars in thousands):
                                 
    For the Quarters Ended     For the Years Ended  
    December 31,     December 31,  
Fixed charge   2009     2008     2009     2008  
Interest expense, including amortization — continuing operations
  $ 30,790     $ 33,775     $ 121,459     $ 133,955  
Amortization of financing costs and debt premiums — continuing operations
    (3,048 )     (2,681 )     (11,695 )     (9,068 )
Interest expense, including amortization — discontinued operations
    35       662       706       1,192  
Amortization of financing costs and debt premiums — discontinued operations
          (3 )     (4 )     (13 )
Joint venture partner’s share of interest expense
    (6,814 )     (8,003 )     (26,684 )     (40,930 )
AMB’s share of interest expense from unconsolidated joint ventures
    10,714       10,031       40,473       34,461  
Capitalized interest
    9,068       15,447       42,683       64,354  
Preferred unit distributions
          1,432       4,295       5,727  
Preferred stock dividends
    3,950       3,950       15,806       15,806  
 
                       
Total fixed charge
  $ 44,695     $ 54,610     $ 187,039     $ 205,484  
 
                       
Funds From Operations (“FFO”), Funds From Operations Per Share and Unit (“FFOPS”) and FFO, as adjusted (together with FFO and FFOPS, the “FFO Measures”). AMB believes that net income, as defined by U.S. GAAP, is the most appropriate earnings measure. However, AMB considers funds from operations, or FFO, FFO per share and unit, or FFOPS, and FFO, as adjusted to be useful supplemental measures of its operating performance. AMB defines FFOPS as FFO per fully diluted weighted average share of AMB’s common stock and operating partnership units. AMB calculates FFO as net income available to common stockholders, calculated in accordance with U.S. GAAP, less gains (or losses) from dispositions of real estate held for investment purposes and real estate-related depreciation, and adjustments to derive AMB’s pro rata share of FFO of consolidated and unconsolidated joint ventures.
Unless stated otherwise, AMB includes the gains from development, including those from value-added conversion projects, before depreciation recapture, as a component of FFO. AMB believes gains from development should be included in FFO to more completely reflect the performance of one of our lines of business. AMB believes that value-added conversion dispositions are in substance land sales and as such should be included in FFO, consistent with the real estate investment trust industry’s long standing practice to include gains on the sale of land in FFO. However, AMB’s interpretation of FFO or FFOPS may not be consistent with the views of others in the real estate investment trust industry, who may consider it to be a divergence from the NAREIT definition, and may not be comparable to FFO or FFOPS reported by other real estate investment trusts that interpret the current NAREIT definition differently than AMB does. In connection with the formation of a joint venture, AMB may warehouse assets that are acquired with the intent to contribute these assets to the newly formed venture. Some of the properties held for contribution may, under certain circumstances, be required to be depreciated under U.S. GAAP. If this circumstance arises, AMB intends to include in its calculation of FFO gains or losses related to the contribution of previously depreciated real estate to joint ventures. Although such a change, if instituted, will be a departure from the current NAREIT definition, AMB believes such calculation of FFO will better reflect the value created as a result of the contributions. To date, AMB has not included gains or losses from the contribution of previously depreciated warehoused assets in FFO.
In addition to presenting FFO as described above, AMB presents FFO, as adjusted. AMB calculates FFO, as adjusted, as FFO less impairment and restructuring charges, debt extinguishment losses and the Series D preferred unit redemption discount. The impairment charges were principally a result of increases in estimated capitalization rates and deterioration in market conditions that adversely impacted values. The restructuring charges reflected costs associated with AMB’s reduction in global headcount and cost structure. Debt extinguishment losses generally included the costs of repurchasing debt securities. AMB repurchased certain tranches of senior unsecured debt to manage its debt maturities in response to the current financing environment, resulting in greater debt extinguishment costs. The Series D preferred unit redemption discount reflects the gain associated with the discount to liquidation preference in the Series D preferred unit redemption price less costs incurred as a result of the redemption. Although difficult to predict, these items may be recurring given the uncertainty of the current economic climate and its adverse effects on the real estate and financial markets. While not infrequent or unusual in nature, these items result from market fluctuations that can have inconsistent effects on AMB’s results of operations. The economics underlying these items reflect market and financing conditions in the short-term but can obscure AMB’s performance and the value of AMB’s long-term
investment decisions and strategies. Management believes FFO, as adjusted, is significant and useful to both it and its investors. FFO, as adjusted, more appropriately reflects the value and strength of AMB’s business model and its potential performance isolated from the volatility of the current economic environment and unobscured by costs (or gains) resulting from AMB’s management of its financing profile in response to the tightening of the capital markets. However, in addition to the limitations of FFO Measures generally discussed below, FFO, as adjusted, does not present a comprehensive measure of AMB’s financial condition and operating performance. This measure is a modification of the NAREIT definition of FFO and should not be considered a replacement of FFO as AMB defines it or used as an alternative to net income or cash as defined by U.S. GAAP.
AMB believes that the FFO Measures are meaningful supplemental measures of its operating performance because historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time, as reflected through depreciation and amortization expenses. However, since real estate values have historically risen or fallen with market and other conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient. Thus, the FFO Measures are supplemental measures of operating performance for real estate investment trusts that exclude historical cost depreciation and amortization, among other items, from net income available to common stockholders, as defined by U.S. GAAP. AMB believes that the use of the FFO Measures, combined with the required U.S. GAAP presentations, has been beneficial in improving the understanding of operating results of real estate investment trusts among the investing public and making comparisons of operating results among such companies more meaningful. AMB considers the FFO Measures to be useful measures for reviewing comparative operating and financial performance because, by excluding gains or losses related to sales of previously depreciated operating real estate assets and real estate depreciation and amortization, the FFO Measures can help the investing public compare the operating performance of a company’s real estate between periods or as compared to other companies. While FFO and FFOPS are relevant and widely used measures of operating performance of real estate investment trusts, the FFO Measures do not represent cash flow from operations or net income as defined by U.S. GAAP and should not be considered as alternatives to those measures in evaluating AMB’s liquidity or operating performance. The FFO Measures also do not consider the costs associated with capital expenditures related to AMB’s real estate assets nor are the FFO Measures necessarily indicative of cash available to fund AMB’s future cash requirements. Management compensates for the limitations of the FFO Measures by providing investors with financial statements prepared according to U.S. GAAP, along with this detailed discussion of the FFO Measures and a reconciliation of the FFO Measures to net income available to common stockholders, a U.S. GAAP measurement.
See Consolidated Statements of Funds from Operations for a reconciliation of FFO from net income available to common stockholders.
The following table reconciles projected FFO, as adjusted excluding AMB’s share of development gains (or “Core FFO“) from projected net income available to common stockholders for the year ended December 31, 2010:
                 
    2010  
    Low     High  
Projected net income available to common stockholders
  $ 0.03     $ 0.10  
AMB’s share of projected depreciation and amortization
    1.27       1.27  
AMB’s share of projected gains on disposition of operating properties recognized to date
    (0.01 )     (0.01 )
Impact of additional dilutive securities, other, rounding
    (0.03 )     (0.03 )
 
           
Projected Funds From Operations (FFO)
  $ 1.26     $ 1.33  
 
           
 
               
Restructuring charges
    0.02       0.02  
AMB’s share of development gains recognized to date
    (0.02 )     (0.02 )
 
           
Projected FFO, as adjusted excluding AMB’s share of development gains (or “Core FFO”)(1)
  $ 1.26     $ 1.33  
 
           
Amounts are expressed per share, except FFO and FFO, as adjusted excluding AMB’s share of development gains, which is expressed per share and unit.
(1) As development gains are difficult to predict in the current economic environment, management believes Projected FFO, as adjusted excluding AMB’s share of development gains is the more appropriate and useful measure to reflect its assessment of AMB’s projected operating performance.


                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  24


 

         
(AMB LOGO)
  Reporting Definitions / Supplemental Financial Measures   SUPPLEMENTAL ANALYST PACKAGE
2009 Fourth Quarter Earnings Conference Call
 

Gross operating margin is calculated as NOI divided by gross revenues (excluding straight-line rents and amortization of lease intangibles, reimbursable capital revenue and lease termination fees) for properties in the pool at period end.
Impairment charges represent the write down of assets due to estimated fair value being lower than carry value.
Interest coverage. Interest coverage is defined as adjusted EBITDA divided by AMB’s share of interest expense which consists of consolidated interest expense less joint venture partner’s share of interest expense, including amortization, from continuing and discontinued operations and AMB’s share of interest expense from unconsolidated joint venture debt. AMB uses interest coverage to measure its liquidity. AMB believes interest coverage is relevant and useful to investors because it permits investors to measure AMB’s ability to meet its interest payments on outstanding debt. AMB’s computation of interest coverage may not be comparable to interest coverage reported by other companies.
The following table details AMB’s share of total interest for the quarters and years ended December 31, 2009 and 2008 (dollars in thousands):
                                 
    For the Quarters Ended     For the Years Ended  
    December 31,     December 31,  
Interest   2009     2008     2009     2008  
Interest expense, including amortization — continuing operations
  $ 30,790     $ 33,775     $ 121,459     $ 133,955  
Interest expense, including amortization — discontinued operations
    35       662       706       1,192  
Joint venture partners’ share of interest expense
    (6,814 )     (8,003 )     (26,684 )     (40,930 )
AMB’s share of interest expense from unconsolidated co-investment ventures
    10,714       10,031       40,473       34,461  
 
                       
Total interest
  $ 34,725     $ 36,465     $ 135,954     $ 128,678  
 
                       
Joint Ventures are all joint ventures, including Co-Investment Ventures, with real estate developers, other real estate operators, or institutional investors where AMB may or may not: have control, act as the manager and/or developer, earn asset management distributions or fees, or earn incentive distributions or promoted interests. In certain cases, AMB might provide development, leasing, property management and/or accounting services for which it may receive market compensation.
Joint venture partner’s share of calculations for certain financial measures represent the pro-rata portion of the applicable financial measure based on AMB’s joint venture partners’ percentage of equity interest in each of the consolidated or unconsolidated joint ventures accounted for in the applicable financial measure.
Market equity is defined as the total number of outstanding shares of AMB’s common stock and common limited partnership units multiplied by the closing price per share of its common stock at period end.
Net Asset Value (“NAV”). AMB believes NAV is a useful supplemental measure of its operating performance because it enables both management and investors to analyze the fair value of its business. An assessment of the fair value of a business involves estimates and assumptions and can be performed using various methods. AMB has presented certain financial measures related to its business that it believes may be useful to the investing public in calculating its NAV but has not presented any specific methodology nor provided any guidance on assumptions or estimates that should be used in the calculation.
Net Operating Income (“NOI”). See same store net operating income for discussion of NOI and a reconciliation of NOI from net income.
Occupancy percentage at period end represents the percentage of total rentable square feet leased, including month-to-month leases, divided by total rentable square feet at period end. Space is considered leased when the tenant has either taken physical or economic occupancy.
Owned and managed is defined by AMB as assets in which AMB has at least a 10% ownership interest, is the property or asset manager, and which it intends to hold for the long-term.
Owned and Managed Supplemental Cash Flow Information. AMB believes that cash flow information based on GAAP provides the most appropriate cash flow information. However, AMB considers cash flow information reported on an owned and managed basis (such as straight-line rents and amortization of lease
intangibles, AMB’s share of straight-line rents and amortization of lease intangibles, gross lease termination fees, net lease termination fees, AMB’s share of net lease termination fees, tenant improvements, lease commissions and other lease costs, building improvements, Co-investment partners’ share of capital expenditures and AMB’s share of recurring capital expenditures) to be useful supplemental measures to help the investors better understand AMB’s operating performance and cash flow. See Reporting Definitions for definitions of “owned and managed”, “AMB’s share of” and “Co-investment venture partners’ share of”. AMB believes that owned and managed cash flow information helps management and investors make a comprehensive assessment of the cash flow of AMB’s total real estate portfolio and provides a better understanding of AMB’s operating performance and activities. While owned and managed supplemental cash flow information is helpful to the investor, it does not provide cash flow information as defined by GAAP and are not true alternatives to such GAAP measurements. Further, AMB’s computation of owned and managed supplemental cash flow information may not be comparable to that of other real estate companies, as they may use different methodologies for calculating these measures.
Percent pre-leased represents the executed lease percentage of total square feet as of the reporting data.
Pre-stabilized development represents assets which have reached Completion but have not yet reached Stabilization.
Preferred, with respect to the capitalization ratios, is defined as preferred equity liquidation preferences.
Renovation projects represent projects where the acquired buildings are less than 75% leased and require significant capital expenditures (generally ranging from 10% — 25% of acquisition cost) to bring the buildings up to operating standards and stabilization (generally 90% leased).
Redevelopment projects represent those buildings that require significant capital expenditures (generally more than 25% of acquired cost or existing basis) to bring the buildings up to operating standards and stabilization (generally 90% leased).
Recurring capital expenditures represents non-incremental building improvements and leasing costs required to maintain current revenues. Recurring capital expenditures do not include estimated acquisition capital expenditures which were taken into consideration when underwriting the purchase of a building or which are incurred to bring a building up to operating standards.
Rent changes on renewals and rollovers are calculated as the difference, weighted by square feet, of the net ABR due the first month of a term commencement and the net ABR due the last month of the former tenant’s term. If free rent is granted, then the first positive full rent value is used as a point of comparison. The rental amounts exclude base stop amounts, holdover rent and premium rent charges. If either the previous or current lease terms are under 12 months, then they are excluded from this calculation. If the lease is first generation or there is no prior lease for comparison, then it is excluded from this calculation.
Same Store Net Operating Income, Cash-basis SS NOI (“SS NOI”) and Net Operating Income (“NOI”). AMB defines NOI as rental revenues, including reimbursements, less property operating expenses. NOI excludes depreciation, amortization, general and administrative expenses, restructuring charges, real estate impairment losses, development profits (losses), gains (losses) from sale or contribution of real estate interests, and interest expense. AMB believes that net income, as defined by GAAP, is the most appropriate earnings measure. However, NOI is a useful supplemental measure calculated to help investors understand AMB’s operating performance, excluding the effects of costs and expenses which are not related to the performance of the assets. NOI is widely used by the real estate industry as a useful supplemental measure, which helps investors compare AMB’s operating performance with that of other companies. Real estate impairment losses have been excluded in deriving NOI because AMB does not consider its impairment losses to be a property operating expense. AMB believes that the exclusion of impairment losses from NOI is a common methodology used in the real estate industry. Real estate impairment losses relate to the changing values of AMB’s assets but do not reflect the current operating performance of the assets with respect to their revenues or expenses. AMB’s real estate impairment losses are non-cash charges which represent the write down in the value of assets when estimated fair value over the holding period is lower than current carrying value. The impairment charges were principally a result of increases in estimated capitalization rates and deterioration in market conditions that adversely impacted underlying real estate values. Therefore, the impairment charges are not related to the current performance of AMB’s real estate operations and should be excluded from its calculation


                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  25


 

         
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  Reporting Definitions / Supplemental Financial Measures   SUPPLEMENTAL ANALYST PACKAGE
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of NOI.
AMB considers SS NOI to be a useful supplemental measure of our operating performance for properties that are considered part of the same store pool. AMB defines Cash-basis SS NOI as NOI on a same store basis excluding straight line rents and amortization of lease intangibles. See definition of “same store pool.” AMB considers SS NOI to be an appropriate and useful supplemental performance measure because it reflects the operating performance of the real estate portfolio excluding effects of non-cash adjustments and provides a better measure of actual cash basis rental growth for a year-over-year comparison. In addition, AMB believes that SS NOI helps investors compare the operating performance of AMB’s real estate as compared to other companies. While SS NOI is a relevant and widely used measure of operating performance of real estate investment trusts, it does not represent cash flow from operations or net income as defined by GAAP and should not be considered as an alternative to those measures in evaluating our liquidity or operating performance. SS NOI also does not reflect general and administrative expenses, interest expenses, real estate impairment losses, depreciation and amortization costs, capital expenditures and leasing costs, or trends in development and construction activities that could materially impact our results from operations. Further, AMB’s computation of SS NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating SS NOI.
The following table reconciles consolidated cash-basis SS NOI and NOI from net income for the quarters and years ended December 31, 2009 and 2008 (dollars in thousands):
                                 
    For the Quarters Ended     For the Years Ended  
    December 31,     December 31,  
    2009     2008     2009     2008  
Net loss
  $ (10,102 )   $ (199,262 )   $ (27,960 )   $ (6,750 )
Private capital income
    (10,503 )     (7,632 )     (37,879 )     (68,470 )
Depreciation and amortization
    51,869       38,233       179,894       164,188  
Real estate impairment losses
          183,754       174,410       183,754  
General and administrative and fund costs
    31,369       40,802       116,315       145,040  
Restructuring charges
    2,544       12,306       6,368       12,306  
Total other income and expenses
    39,610       31,815       90,484       20,213  
Total discontinued operations
    (1,753 )     7,277       (94,725 )     (4,558 )
 
                       
NOI
    103,034       107,293       406,907       445,723  
Less non same-store NOI
    (23,937 )     (17,385 )     (77,719 )     (96,766 )
Less non cash adjustments(1)
    (1,379 )     1,215       (398 )     (891 )
 
                       
Cash-basis same-store NOI
  $ 77,718     $ 91,123     $ 328,790     $ 348,066  
 
                       
(1)   Non-cash adjustments include straight line rents and amortization of lease intangibles for the same store pool only.
Same store NOI growth is the change in the NOI (excluding straight-line rents and amortization of lease intangibles) of the same store pool from the prior year reporting period to the current year reporting period.
Same store pool includes all properties that are owned as of the end of both the current and prior year reporting periods and excludes development properties for both the current and prior reporting periods. The same store pool is set annually and excludes properties purchased and developments stabilized after December 31, 2007.
Second generation TIs and LCs per square foot are total tenant improvements, lease commissions and other leasing costs incurred during leasing of second generation space divided by the total square feet leased. Costs incurred prior to leasing available space are not included until such space is leased. Second generation space excludes newly developed square footage or square footage vacant at acquisition.
Stabilization is generally defined as properties that are 90% occupied.
Stabilized cap rates are calculated as cash NOI stabilized to market occupancy (generally 95%) divided by total acquisition cost. The total acquisition cost basis includes the initial purchase price, the effects of marking assumed debt to market, buyer’s due diligence and closing costs, lease intangible adjustments, estimated acquisition capital expenditures, and leasing costs necessary to achieve stabilization.
Tenant retention is the square footage of all leases rented by existing tenants divided by the square footage of all expiring and rented leases during the reporting period, excluding the square footage of tenants that default or buy-out prior to expiration of their lease, short-term tenants and the square footage of month-to-month leases.
Total market capitalization is defined by AMB as AMB’s share of total debt plus preferred equity liquidation preferences plus market equity (unless otherwise noted).
Value-added conversion projects represent the repurposing of industrial properties to a higher and better use, including office, residential, retail, research & development or manufacturing. Activities required to prepare the property for conversion to a higher and better use may include such activities as rezoning, redesigning, reconstructing and retenanting. The sales price of the value-added conversion project is generally based on the underlying land value based on its ultimate use and as such, little to no residual value is ascribed to the industrial building(s).


                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  26


 

         
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Contact Name   Title   Phone   E-mail Address
 
           
Hamid R. Moghadam
  Chairman & Chief Executive Officer   (415) 733-9401   hmoghadam@amb.com
 
           
Thomas S. Olinger
  Chief Financial Officer   (415) 733-9405   tolinger@amb.com
 
           
Guy F. Jaquier
  President, Europe and Asia; President, Private Capital   (415) 733-9406   gjaquier@amb.com
 
           
Eugene F. Reilly
  President, The Americas   (617) 619-9333   ereilly@amb.com
 
           
Tracy A. Ward
  Vice President, IR & Corporate Communications   (415) 733-9565   tward@amb.com
                     
Corporate Headquarters   Investor Relations   Other Primary Office Locations
 
                   
AMB Property Corporation
  Tel: (415) 394-9000   Amsterdam   Boston   Chicago   Los Angeles
Pier 1, Bay 1
  Fax: (415) 394-9001   México City   Shanghai   Singapore   Tokyo
San Francisco, CA 94111
  E-mail: ir@amb.com                
Tel: (415) 394-9000
  Website: www.amb.com                
Fax: (415) 394-9001
                   
                 
Overview Financial Results Operations  Capital Deployment  Private Capital Capitalization NAV  Reporting Definitions  27


 

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  Forward-Looking Statements   SUPPLEMENTAL ANALYST PACKAGE
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Some of the information included in this report and the presentations to be held in connection therewith contains forward-looking statements, such as those related to reinstatement of fund investor distributions, our investments in co-investment funds, acquisition opportunities and advantages at attractive pricing, stabilization of private market valuations, consummation of acquisitions accretive to company on leverage neutral basis, recovery in fundamentals including rental rates, occupancy, real estate values, and investor/customer interest, FFO generated by increased occupancy, rental rate recovery, lease up of the development portfolio, monetization of land bank and development capability, and the formation of new ventures, pursuit of distressed and strategic acquisitions, consolidations and other situations, utilization of development capacity to recover G&A, our ability to outperform national occupancy rates, implementation of leasing strategies, our ability to maintain leverage targets, cash sources to cover future capital requirements, the consummation of asset sales marketed, under contract or LOI, our plans to retire, extend and refinance debt and maintain fixed charge coverage at certain levels, our opportunities and plans (including those regarding our global positioning and future capital deployment), our projected funds from operations, future assets under management, same store and/or cash net operating income, occupancy and other financial and operational guidance, our capabilities to drive growth, our future performance compared to peers and other market indices, rent growth, industrial and other market, GDP and trade growth, market drivers, trends and forecasts, port opportunities, on-tarmac opportunities, hiring, performance and retention of key personnel, access to resources, leveraging of relationships, continuation and effectiveness of strategic drivers, information regarding our development, value-added conversion, redevelopment and renovation projects (including stabilization or completion dates, square feet at stabilization or completion, sale or contribution dates, yields from such projects, our share of remaining funding, costs and total investment amounts, scope, location and timing of development starts, margins, projected gains and returns, sustainability, profitability, scope and scale of and demand for projects, targeted value-added conversion projects, redevelopment and conversion timelines, entitlement and repositioning potential of land), ability to deliver customer solutions, strength of lender and customer relationships, lease expirations, performance and value-creation of investments and market entry opportunities, real estate valuations, capitalization rates, acquisition capital and volume, scope and build out and monetization potential of land inventory, co-investment venture and other estimated investment capacity, terms of the co-investment ventures, performance, revenues and returns on investment, target leverage, future incentive distribution, asset management, acquisition and other private capital distributions and fees, timing of incentive distributions, private capital demand, launching of additional funds, termination of funds, planned gross capitalization, future balance sheet capacity, ability to maintain credit extensions, our position to maintain a solid financial position and address debt maturities, interest rate changes, transition to open-end funds, and access to secured and non-secured financings, which are made pursuant to the safe-harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ materially from those in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future events. The events or circumstances reflected in forward-looking statements might not occur. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements are necessarily dependent on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. We caution you not to place undue reliance on forward-looking statements, which reflect our analysis only and speak only as of the date of this report or the dates indicated in the statements. We assume no obligation to update or supplement forward-looking statements. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: defaults on or non-renewal of leases by tenants or renewal at lower than expected rent or failure to lease at all or on expected terms, decreases in real estate values and impairment losses, our failure to obtain, renew or extend financing or re-financing, risks related to debt and equity security financings (including dilution risk), our failure to divest properties we have contracted to sell or to timely reinvest proceeds from any divestitures, failure to maintain our current credit agency ratings or comply with our debt covenants, international currency and hedging risks, financial market fluctuations, changes in general economic conditions, global trade or in the real estate sector, inflation risks, a downturn in the U.S., California or global economy, increased interest rates and operating costs or greater than expected capital expenditures, risks related to suspending, reducing, or changing our dividends, our failure to contribute properties to our co-investment ventures, risks related to our obligations in the event of certain defaults under co-investment ventures and other debt, difficulties in identifying properties to acquire and in effecting acquisitions, our failure to successfully integrate acquired properties and operations, risks and uncertainties affecting property development, value-added conversions, redevelopment and construction (including construction delays, cost overruns, our inability to obtain necessary permits and public opposition to these activities), our failure to qualify and maintain our status as a real estate investment trust, risks related to our tax structuring, environmental uncertainties, risks related to natural disasters, changes in real estate and zoning laws, risks related to doing business internationally and global expansion, risks of opening offices globally, risks of changing personnel and roles, losses in excess of our insurance coverage, unknown liabilities acquired in connection with acquired properties or otherwise and increases in real property tax rates. Our success also depends upon economic trends generally, including interest rates, income tax laws, governmental regulation, legislation, population changes and certain other matters discussed under the heading “Risk Factors” and elsewhere in our annual report on Form 10-K for the year ended December 31, 2008 and our quarterly reports on Form 10-Q for the quarters ended March 31, 2009, June 30, 2009 and September 30, 2009.