Exhibit 99.1
FOR IMMEDIATE RELEASE
AMB PROPERTY CORPORATION® ANNOUNCES FOURTH QUARTER AND FULL YEAR 2010 RESULTS
SAN FRANCISCO, February 3, 2011 — AMB Property Corporation® (NYSE: AMB), a leading
owner, operator and developer of global industrial real estate, today reported results for the
fourth quarter and full year 2010. Core FFO, as adjusted, which excludes the recognition of
development gains, was $0.32 for the fourth quarter of 2010 and $1.22 for the full year 2010
compared to $0.32 and $1.46 respectively for the same periods in 2009. Funds from operations, as adjusted, per
fully diluted share and unit (“FFOPS, as adjusted”), which includes the recognition of development
gains, was $0.33 for the fourth quarter 2010 and $1.27 for the full year 2010 compared to $0.32 and
$2.09 respectively for the same periods in 2009. The year-over-year change in FFO, as adjusted, was
primarily due to higher development gains recognized in 2009.
Net income (loss) available to common stockholders per fully diluted share (“EPS”) for the fourth
quarter of 2010 was $0.03, as compared to a loss of $(0.05) for the same quarter in 2009. EPS for
the full year 2010 was $0.06 as compared to a loss of $(0.37) for 2009.
“We made significant progress on our top priorities for the year as reflected in our financial
performance. Due to the efforts of our teams around the world we leased a record 32 million square
feet and our cash-basis same store NOI turned positive for the first time
in two years,” said Hamid R.
Moghadam, chairman and CEO. “As the leading indicators of demand for industrial real estate
continue to strengthen and customer sentiment further improves, we believe this will lead to an
increase in space utilization and new demand in 2011.”
Owned and Managed Portfolio Operating Results
The company’s operating results were slightly higher than expectations for the fourth quarter.
AMB’s operating portfolio was 93.7 percent occupied at December 31, 2010, up 110 basis points from
September 30, 2010. Cash-basis same store net operating income (“SS NOI”), without the effects of
lease termination fees, increased 0.9 percent during the fourth quarter of 2010 compared with the
same period in 2009, driven by increases in occupancy. This increase in quarterly SS NOI marked the
first positive year-over-year performance since the fourth quarter of 2008. SS NOI for the full
year 2010 decreased 3.2 percent. Average rent on renewals and rollovers in AMB’s operating
portfolio decreased 11.9 percent for the trailing four quarters ended December 31, 2010.
Leasing Activity
During the
fourth quarter, the company leased a total of 7.7 million square feet (715,400
square meters) of its operating portfolio, consistent with leasing volume in the fourth quarter of
2009. The company leased a record 32.0 million square feet (2.9 million square meters) in the full
year 2010. The company leased 1.2 million square feet (115,000 square meters) of its development
portfolio in the fourth quarter and more than 5.7 million square feet (530,500 square meters) in
the full year 2010.
Page 2
Capital Deployment
During 2010, the company continued to invest capital opportunistically. During the fourth
quarter, the company deployed approximately $230.2 million of capital. For the year ended December
31, 2010, capital deployment totaled $832.2 million, which included:
| • |
|
$343.3 million in acquisitions at a stabilized capitalization rate of 7.0 percent,
composed of 16 properties totaling approximately 4.8 million square feet; |
| • |
|
$300.0 million into its open-end funds, consisting of $200.0 million in AMB
U.S. Logistics Fund and $100 million in AMB Europe Logistics Fund; |
| • |
|
$102.9 million of new development starts in Brazil, China and Mexico; and |
| • |
|
$86.0 million in mezzanine debt. |
The company completed dispositions totaling $56.0 million in the fourth quarter at a stabilized
capitalization rate of 7.4 percent, and completed dispositions and contributions totaling $153.3
million in the full year 2010, at a stabilized capitalization rate of 7.3 percent.
Private Capital Activity
During the fourth quarter, the company raised $355.1 million of new third-party capital. For
the year ended December 31, 2010, new commitments in the company’s co-investment vehicles totaled
approximately $1.4 billion, including $781.4 million of new third-party equity, AMB’s investment of
$300 million into the company’s open-end funds and AMB’s commitment of $280 million to AMB Mexico
Fondo Logistico and AMB Brazil Logistics Partners Fund I.
New third-party equity raised in 2010 included:
| • |
|
$312.3 million committed to the company’s two open-end funds, AMB U.S. Logistics
Fund and AMB Europe Logistics Fund; |
| • |
|
$252.2 million (3.3 billion Pesos) contributed to AMB Mexico Fondo Logistico,
which was formed in the third quarter. The venture’s overall equity commitment is $315.3
million, including AMB’s 20 percent co-investment; and |
| • |
|
$216.9 million (R$360 million) committed to AMB Brazil Logistics Partners Fund I,
which was formed in fourth quarter. The fund overall equity commitment is $433.8 million
(R$720 million), including AMB’s 50 percent co-investment. |
Financing Activities
The company completed more than $1.9 billion of financings during the fourth quarter. This
activity included $1.5 billion of wholly-owned debt consisting of the renewal of its two lines of
credit, a corporate term loan, a new bond issuance, and $391 million for its co-investment ventures
in Europe, Japan and the U.S. For the year ended December 31, 2010, the company completed
financings of approximately $4.0 billion. These transactions further improved and
extended the weighted average remaining life of the company’s share of debt to 4.8 years from 3.8
years at an
Page 3
average interest rate of 4.6 percent. As of December 31, 2010, the company’s share of total debt to
share of total assets was 43 percent, which includes its share of joint venture debt.
“We had a busy year on the financing front as we successfully took the opportunity to lock in
favorable interest rates to further enhance our debt maturity profile,” said Thomas S. Olinger,
AMB’s chief financial officer. “We completed approximately $3 billion of activity in the second half of 2010, which was a
record for us.”
As of December 31, 2010, the company’s liquidity was approximately $1.6 billion, consisting of
approximately $1.4 billion of availability on its lines of credit and more than $260 million of
unrestricted cash and cash equivalents.
FFO Guidance
The company maintains its previous full-year 2011 Core FFO, as adjusted, guidance of $1.30 to
$1.40 per share, which excludes the recognition of gains and losses from development activities,
early debt extinguishment costs and restructuring charges. The company’s 2011 Core FFO, as
adjusted, guidance excludes any impact from the proposed merger with ProLogis.
Conference Call Information
The company will host a conference call to discuss the quarterly and full year 2010 results on
Thursday, February 3 at 10:00 AM PST / 1:00 PM EST. Stockholders and interested parties may listen
to a live broadcast of the conference call by dialing 877 447 8218 (from the U.S. and Canada) or +1
706 643 7823 (from all other countries) and using reservation code 35044740. A webcast can be
accessed through the company’s website at www.amb.com in the Investor Relations section.
If you are unable to listen to the live conference call, a telephone and webcast replay will be
available through the company’s website at www.amb.com in the Investor Relations section until 8:00
PM EST / 5:00 PM PST on Friday, March 4, 2011 at 800 642 1687 (from the U.S. and Canada) or +1 706
645 9291 (from all other countries) with the reservation code 35044740. The webcast and podcast
will be available for the same time period and can be accessed through the company’s website at
www.amb.com in the Investor Relations section.
Supplemental Earnings Measures
Included in the footnotes to the
company’s attached financial statements is a discussion of
why management believes FFO, as adjusted, FFOPS, as adjusted, Core FFO,
as adjusted, and Core FFOPS, as adjusted (the “FFO
Measures, as adjusted”), are useful supplemental measures of operating performance, ways in which investors
might use the FFO Measures, as adjusted when assessing the company’s
financial performance and the limitations of the FFO Measures, as adjusted, as a measurement tool. Reconciliation from net income
(loss) available to common stockholders
to the FFO Measures, as adjusted are provided in the attached tables and published in the company’s quarterly
supplemental analyst package, available on the company’s website at www.amb.com.
AMB defines net operating income (“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
Page 4
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 of NOI.
AMB considers cash-basis same store net operating income (“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 SS NOI as NOI on a same store basis excluding straight line rents and
amortization of lease intangibles. 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, 2008. 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. A reconciliation from
net income (loss) to SS NOI is
provided below (dollars in thousands) and published in AMB’s quarterly supplemental analyst
package, available on AMB’s website at www.amb.com.
Page 5
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
For the Quarters Ended |
|
|
For the Years Ended |
|
| |
|
December 31, |
|
|
December 31, |
|
| |
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
| |
|
|
Net income (loss) |
|
$ |
11,309 |
|
|
$ |
(10,102 |
) |
|
$ |
33,594 |
|
|
$ |
(27,960 |
) |
Private capital income |
|
|
(9,001 |
) |
|
|
(10,615 |
) |
|
|
(30,860 |
) |
|
|
(38,013 |
) |
Depreciation and amortization |
|
|
51,353 |
|
|
|
50,718 |
|
|
|
196,636 |
|
|
|
175,334 |
|
Real estate impairment losses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
172,059 |
|
General and administrative and fund costs |
|
|
33,783 |
|
|
|
31,369 |
|
|
|
125,155 |
|
|
|
116,404 |
|
Restructuring charges |
|
|
— |
|
|
|
2,544 |
|
|
|
4,874 |
|
|
|
6,368 |
|
Total other income and expenses |
|
|
27,852 |
|
|
|
39,693 |
|
|
|
108,773 |
|
|
|
89,170 |
|
Total discontinued operations |
|
|
(5,698 |
) |
|
|
(2,938 |
) |
|
|
(24,242 |
) |
|
|
(96,222 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI |
|
|
109,598 |
|
|
|
100,669 |
|
|
|
413,930 |
|
|
|
397,140 |
|
Less non same-store NOI |
|
|
(22,592 |
) |
|
|
(15,805 |
) |
|
|
(73,535 |
) |
|
|
(47,582 |
) |
Less non cash adjustments(1) |
|
|
(2,129 |
) |
|
|
(1,596 |
) |
|
|
(9,045 |
) |
|
|
(2,803 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash-basis same-store NOI |
|
$ |
84,877 |
|
|
$ |
83,268 |
|
|
$ |
331,350 |
|
|
$ |
346,755 |
|
| |
Less lease termination fees |
|
$ |
(177 |
) |
|
$ |
(247 |
) |
|
$ |
(3,059 |
) |
|
$ |
(2,692 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash-basis same-store NOI, excluding lease termination fees |
|
$ |
84,700 |
|
|
$ |
83,021 |
|
|
$ |
328,291 |
|
|
$ |
344,063 |
|
| |
|
|
|
| (1) |
|
Non-cash adjustments include straight line rents and amortization of lease
intangibles for the same store pool only
(dollars in thousands). |
“Owned and managed” is defined by the company as assets in which the company has at least a
10 percent ownership interest, is the property or asset manager, and which it currently intends to
hold for the long-term.
AMB Property Corporation.® Local partner to global trade.™
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, 2010, AMB owned, or had investments in, on a consolidated basis or
through unconsolidated joint ventures, properties and development projects expected to total
approximately 159.6 million square feet (14.8 million square meters) in 49 markets within
15 countries. AMB invests in properties located predominantly in the infill submarkets of its
targeted markets. The company’s portfolio is comprised of High Throughput Distribution®
facilities—industrial properties built for speed and located near airports, seaports and ground
transportation systems.
AMB’s press releases are available on the company website at www.amb.com or by contacting the
Investor Relations department at +1 415 394 9000.
Some of the information included in this press release contains forward-looking statements,
such as those related to positive net absorption, future investments in our co-investment ventures
and joint ventures, renewal of our lines of credit, future financing activity, ability to access
attractive financing globally, taking advantage of current interest rates and term out our debt
maturities, our growth opportunities, retention of our target leverage levels, operating forecasts,
the recovery of our operating performance, improvements in the operating environment and customer
demand, long term prospects for AMB and industrial real estate, the recovery of leading business
indicators, estimated build-out potential of AMB’s acquisitions, estimated total investment of
development starts, and 2010 and 2011 results and Core FFO, as adjusted, guidance, 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 numerous 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,”
Page 6
“intends,” “plans,” “forecasting”, “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 should not be read as guarantees of the future
performance or results, and will not necessarily be accurate indicators of whether, or the
time at which, such performance of results will be achieved. There is no assurance that the events
or circumstances reflected in forward-looking statements will occur or be achieved.
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: changes in general economic conditions in California, the U.S. or
globally (including financial market fluctuations), global trade or in the real estate sector
(including risks relating to decreasing real estate valuations and impairment charges); risks
associated with using debt to fund the company’s business activities, including refinancing and
interest rate risks (including inflation risks); the company’s failure to obtain, renew, or extend
necessary financing or access the debt or equity markets; the company’s failure to maintain its
current credit agency ratings or comply with its debt covenants; risks related to the company’s
obligations in the event of certain defaults under co-investment venture and other debt; risks
associated with equity and debt securities financings and issuances (including the risk of
dilution); defaults on or non-renewal of leases by customers or renewal at lower than expected rent
or failure to lease at all or on expected terms; difficulties in identifying properties, portfolios
of properties, or interests in real-estate related entities or platforms to acquire and in
effecting acquisitions on advantageous terms and the failure of acquisitions to perform as the
company expects; unknown liabilities acquired in connection with the acquired properties,
portfolios of properties, or interests in real-estate related entities; the company’s failure to
successfully integrate acquired properties and operations; risks and uncertainties affecting
property development, redevelopment and value-added conversion (including construction delays, cost
overruns, the company’s inability to obtain necessary permits and financing, the company’s
inability to lease properties at all or at favorable rents and terms, and public opposition to
these activities); the company’s failure to set up additional funds, attract additional investment
in existing funds or to contribute properties to its co-investment ventures due to such factors as
its inability to acquire, develop, or lease properties that meet the investment criteria of such
ventures, or the co-investment ventures’ inability to access debt and equity capital to pay for
property contributions or their allocation of available capital to cover other capital
requirements; risks and uncertainties relating to the disposition of properties to third parties
and the company’s ability to effect such transactions on advantageous terms and to timely reinvest
proceeds from any such dispositions; risks of doing business internationally and global expansion,
including unfamiliarity with the new markets and currency and hedging risks; risks of changing
personnel and roles; risks related to suspending, reducing or changing the company’s dividends;
losses in excess of the company’s insurance coverage; changes in local, state law and regulatory
requirements, including changes in real estate, tax and zoning laws; increases in real property tax
rates; risks associated with the company’s tax structuring; increases in interest rates and
operating costs or greater than expected capital expenditures; environmental uncertainties; risks
related to natural disasters; and our failure to qualify and maintain our status as a real estate
investment trust. Our success also depends upon economic trends generally, various market
conditions and fluctuations and those other risk factors discussed under the heading “Risk Factors”
and elsewhere in our most recent annual report on Form 10-K for the year ended December 31, 2009.
AMB CONTACTS
| |
|
|
|
Tracy A. Ward
|
|
Jon M. Boilard |
Vice President, IR & Corporate Communications
|
|
Director, Media and Public Relations |
Direct +1 415 733 9565
|
|
Direct +1 415 733 9561 |
Email tward@amb.com
|
|
Email jboilard@amb.com |
|
|
|
|
|
|
Page 7 |
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
For the Quarters ended |
|
|
For the Years ended |
|
| |
|
December 31, |
|
December 31, |
| |
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
| |
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues |
|
$ |
156,057 |
|
|
$ |
149,052 |
|
|
$ |
602,640 |
|
|
$ |
580,411 |
|
Private capital revenues |
|
|
9,001 |
|
|
|
10,615 |
|
|
|
30,860 |
|
|
|
38,013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
165,058 |
|
|
|
159,667 |
|
|
|
633,500 |
|
|
|
618,424 |
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating costs |
|
|
(46,459 |
) |
|
|
(48,383 |
) |
|
|
(188,710 |
) |
|
|
(183,271 |
) |
Depreciation and amortization |
|
|
(51,353 |
) |
|
|
(50,718 |
) |
|
|
(196,636 |
) |
|
|
(175,334 |
) |
General and administrative |
|
|
(33,605 |
) |
|
|
(31,131 |
) |
|
|
(124,364 |
) |
|
|
(115,342 |
) |
Restructuring charges |
|
|
— |
|
|
|
(2,544 |
) |
|
|
(4,874 |
) |
|
|
(6,368 |
) |
Fund costs |
|
|
(178 |
) |
|
|
(238 |
) |
|
|
(791 |
) |
|
|
(1,062 |
) |
Real estate impairment losses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(172,059 |
) |
Other expenses(1) |
|
|
(1,946 |
) |
|
|
(2,176 |
) |
|
|
(3,197 |
) |
|
|
(8,681 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses |
|
|
(133,541 |
) |
|
|
(135,190 |
) |
|
|
(518,572 |
) |
|
|
(662,117 |
) |
Other income and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development profits, net of taxes |
|
|
1,020 |
|
|
|
1,368 |
|
|
|
6,739 |
|
|
|
35,874 |
|
Equity in earnings of unconsolidated joint ventures, net |
|
|
4,956 |
|
|
|
3,824 |
|
|
|
17,372 |
|
|
|
11,331 |
|
Other income (expense)(1) |
|
|
1,507 |
|
|
|
(323 |
) |
|
|
3,543 |
|
|
|
3,440 |
|
Interest expense, including amortization |
|
|
(33,036 |
) |
|
|
(30,772 |
) |
|
|
(130,338 |
) |
|
|
(118,867 |
) |
Loss on early extinguishment of debt |
|
|
(353 |
) |
|
|
(11,614 |
) |
|
|
(2,892 |
) |
|
|
(12,267 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income and expenses, net |
|
|
(25,906 |
) |
|
|
(37,517 |
) |
|
|
(105,576 |
) |
|
|
(80,489 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations |
|
|
5,611 |
|
|
|
(13,040 |
) |
|
|
9,352 |
|
|
|
(124,182 |
) |
Discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income attributable to discontinued operations |
|
|
1,193 |
|
|
|
1,358 |
|
|
|
3,994 |
|
|
|
4,502 |
|
Development profits, net of taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
53,002 |
|
Gains from sale of real estate interests, net of taxes |
|
|
4,505 |
|
|
|
1,580 |
|
|
|
20,248 |
|
|
|
38,718 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total discontinued operations |
|
|
5,698 |
|
|
|
2,938 |
|
|
|
24,242 |
|
|
|
96,222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
11,309 |
|
|
|
(10,102 |
) |
|
|
33,594 |
|
|
|
(27,960 |
) |
Noncontrolling interests’ share of net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint venture partners’ share of net income |
|
|
(2,058 |
) |
|
|
(2,234 |
) |
|
|
(6,278 |
) |
|
|
(11,063 |
) |
Joint venture partners’ and limited partnership unitholders’
share of development profits, net of taxes |
|
|
(16 |
) |
|
|
(942 |
) |
|
|
(109 |
) |
|
|
(3,308 |
) |
Preferred unitholders |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,295 |
) |
Limited partnership unitholders |
|
|
(83 |
) |
|
|
161 |
|
|
|
(88 |
) |
|
|
3,625 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noncontrolling interests’ share of net income (loss) |
|
|
(2,157 |
) |
|
|
(3,015 |
) |
|
|
(6,475 |
) |
|
|
(15,041 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to AMB Property Corporation |
|
|
9,152 |
|
|
|
(13,117 |
) |
|
|
27,119 |
|
|
|
(43,001 |
) |
Preferred stock dividends |
|
|
(3,950 |
) |
|
|
(3,950 |
) |
|
|
(15,806 |
) |
|
|
(15,806 |
) |
Preferred unit redemption discount |
|
|
— |
|
|
|
9,759 |
|
|
|
— |
|
|
|
9,759 |
|
Allocation to participating securities(2) |
|
|
(337 |
) |
|
|
(257 |
) |
|
|
(1,346 |
) |
|
|
(1,029 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common stockholders |
|
$ |
4,865 |
|
|
$ |
(7,565 |
) |
|
$ |
9,967 |
|
|
$ |
(50,077 |
) |
| |
Net income (loss) per common share (diluted) |
|
$ |
0.03 |
|
|
$ |
(0.05 |
) |
|
$ |
0.06 |
|
|
$ |
(0.37 |
) |
| |
Weighted average common shares (diluted) |
|
|
167,311 |
|
|
|
147,047 |
|
|
|
161,988 |
|
|
|
134,321 |
|
| |
|
|
|
| (1) |
|
Includes changes in liabilities and assets associated with AMB’s deferred compensation
plan for the three and twelve months ended December 31, 2010 of $1,069 and $1,460,
respectively, and for the three and twelve months ended December 31, 2009 of $969 and $7,823,
respectively. |
| |
| (2) |
|
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, 2010, there were 1,202 unvested restricted shares outstanding. For
the three and twelve months ended December 31, 2009, there were 920 unvested restricted shares
outstanding. |
|
|
|
|
|
|
Page 8 |
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS, AS ADJUSTED (1)
(in thousands, except per share data)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
For the Quarters Ended December 31, |
|
|
For the Years Ended December 31, |
|
| |
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
| |
|
|
Net income (loss) available to common stockholders |
|
$ |
4,865 |
|
|
$ |
(7,565 |
) |
|
$ |
9,967 |
|
|
$ |
(50,077 |
) |
Gains from sale or contribution of real estate interests, net of taxes |
|
|
(4,505 |
) |
|
|
(1,580 |
) |
|
|
(20,248 |
) |
|
|
(38,718 |
) |
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total depreciation and amortization |
|
|
51,353 |
|
|
|
50,718 |
|
|
|
196,636 |
|
|
|
175,334 |
|
Discontinued operations’ depreciation |
|
|
69 |
|
|
|
1,208 |
|
|
|
3,447 |
|
|
|
6,602 |
|
Non-real estate depreciation |
|
|
(1,906 |
) |
|
|
(2,576 |
) |
|
|
(8,432 |
) |
|
|
(8,593 |
) |
Adjustment for depreciation on development profits |
|
|
— |
|
|
|
— |
|
|
|
(1,546 |
) |
|
|
— |
|
Adjustments to derive FFO, as adjusted from noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint venture partners’ noncontrolling interests (Net income) |
|
|
2,058 |
|
|
|
2,234 |
|
|
|
6,278 |
|
|
|
11,063 |
|
Limited partnership unitholders’ noncontrolling interests (Net income (loss)) |
|
|
83 |
|
|
|
(161 |
) |
|
|
88 |
|
|
|
(3,625 |
) |
Limited partnership unitholders’ noncontrolling interests (Development profits) |
|
|
16 |
|
|
|
11 |
|
|
|
133 |
|
|
|
2,377 |
|
FFO, as adjusted attributable to joint venture partners’ noncontrolling interests |
|
|
(7,454 |
) |
|
|
(7,245 |
) |
|
|
(28,251 |
) |
|
|
(31,571 |
) |
Adjustments to derive FFO, as adjusted from unconsolidated joint ventures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMB’s share of net income |
|
|
(4,956 |
) |
|
|
(3,824 |
) |
|
|
(17,372 |
) |
|
|
(11,331 |
) |
AMB’s share of FFO, as adjusted |
|
|
16,070 |
|
|
|
12,549 |
|
|
|
61,903 |
|
|
|
47,549 |
|
Adjustments for impairments, restructuring charges and debt extinguishment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate impairment losses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
172,059 |
|
Discontinued operations’ real estate impairment losses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,794 |
|
Restructuring charges |
|
|
— |
|
|
|
2,544 |
|
|
|
4,874 |
|
|
|
6,368 |
|
Loss on early extinguishment of debt |
|
|
353 |
|
|
|
11,614 |
|
|
|
2,892 |
|
|
|
12,267 |
|
Preferred unit redemption discount |
|
|
— |
|
|
|
(9,759 |
) |
|
|
— |
|
|
|
(9,759 |
) |
Allocation to participating securities(2) |
|
|
(58 |
) |
|
|
(37 |
) |
|
|
(182 |
) |
|
|
(898 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations, as adjusted(1) |
|
$ |
55,988 |
|
|
$ |
48,131 |
|
|
$ |
210,187 |
|
|
$ |
288,841 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO, as adjusted per common share and unit (diluted) |
|
$ |
0.33 |
|
|
$ |
0.32 |
|
|
$ |
1.27 |
|
|
$ |
2.09 |
|
| |
Weighted average common shares and units (diluted) |
|
|
171,752 |
|
|
|
150,993 |
|
|
|
166,127 |
|
|
|
137,904 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Funds From Operations, as adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations, as adjusted |
|
$ |
55,988 |
|
|
$ |
48,131 |
|
|
$ |
210,187 |
|
|
$ |
288,841 |
|
Development profits, net of taxes |
|
|
(1,020 |
) |
|
|
(1,368 |
) |
|
|
(6,739 |
) |
|
|
(88,876 |
) |
Joint venture partners’ and limited partnership unitholders’ share of development
profits, net of taxes |
|
|
16 |
|
|
|
942 |
|
|
|
61 |
|
|
|
3,308 |
|
Limited partnership unitholders’ noncontrolling interests (Development profits) |
|
|
(16 |
) |
|
|
(11 |
) |
|
|
(133 |
) |
|
|
(2,377 |
) |
AMB’s share of development gains from unconsolidated joint ventures |
|
|
— |
|
|
|
248 |
|
|
|
(9 |
) |
|
|
(271 |
) |
Allocation to participating securities(2) |
|
|
7 |
|
|
|
1 |
|
|
|
49 |
|
|
|
585 |
|
| |
|
|
Core Funds From Operations, as adjusted(1) |
|
$ |
54,975 |
|
|
$ |
47,943 |
|
|
$ |
203,416 |
|
|
$ |
201,210 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO, as adjusted per common share and unit (diluted) |
|
$ |
0.32 |
|
|
$ |
0.32 |
|
|
$ |
1.22 |
|
|
$ |
1.46 |
|
| |
Weighted average common shares and units (diluted) |
|
|
171,752 |
|
|
|
150,993 |
|
|
|
166,127 |
|
|
|
137,904 |
|
| |
|
|
|
| (1) |
|
Funds From Operations, as adjusted, (“FFO, as adjusted”), Funds From
Operations, Per Share and Unit, as adjusted (“FFOPS, as adjusted”), Core FFO, as
adjusted, and Core FFO Per Share and Unit, as adjusted (“Core
FFOPS, as adjusted”) (together with FFO, as adjusted, FFOPS, as adjusted, Core FFO, as
adjusted and Core FFOPS, as adjusted, the “FFO Measures, as adjusted”). AMB believes that net
income, as defined by U.S. GAAP, is the most appropriate earnings measure. However, AMB considers
funds from operations, as adjusted (or FFO, as adjusted), FFO per share and unit, as adjusted (or
FFOPS, as adjusted), Core FFO, as adjusted and Core FFO per share and unit, as adjusted (or Core
FFOPS, as adjusted) to be useful supplemental measures of its operating performance. AMB defines
FFOPS, as adjusted, as FFO, as adjusted, per fully diluted weighted average share of AMB’s common
stock and operating partnership units. AMB calculates FFO, as adjusted, as net income ( or loss)
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, as adjusted, of consolidated and
unconsolidated joint ventures. AMB defines Core FFOPS, as adjusted as Core FFO, as adjusted per
fully diluted weighted share of AMB’s common stock and operating partnership units. AMB calculates
Core FFO, as adjusted as FFO, as adjusted excluding AMB’s share of development profits. These
calculations also include adjustments for items as described below. |
| |
| |
|
Unless stated otherwise, AMB includes the gains from development, including those from value-added
conversion projects before depreciation recapture,
as a component of FFO, as adjusted. AMB believes
gains from development should be included in FFO, as adjusted, 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, as adjusted, consistent with the
real estate investment trust industry’s long standing practice to include gains on the sale of land
in funds from operations. However, AMB’s interpretation of FFO, as adjusted, or FFOPS, as adjusted,
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 funds
from operations or funds from operations per share and unit 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 |
|
|
|
|
|
|
Page 9 |
|
|
|
| |
|
depreciated under U.S. GAAP. If
this circumstance arises, AMB intends to include in its calculation of FFO, as adjusted, 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, as adjusted, 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 as adjusted. |
| |
| |
|
In addition, AMB calculates FFO, as adjusted, to exclude 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,
as adjusted, 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 funds from operations and should not be used as an alternative to net income
or cash as defined by U.S. GAAP. |
| |
| |
|
AMB believes that the FFO Measures, as adjusted, 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, as adjusted, 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, as
adjusted, 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, as adjusted, 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, as
adjusted, can help the investing public compare the operating performance of a company’s real
estate between periods or as compared to other companies.
While funds from operations and funds from
operations per share are relevant and widely used measures of operating performance of real estate
investment trusts, the FFO Measures, as adjusted, 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, as adjusted, also do not
consider the costs associated with capital expenditures related to AMB’s real estate assets nor
are the FFO Measures, as adjusted, necessarily indicative of cash available to fund AMB’s future
cash requirements. Management compensates for the limitations of the FFO Measures, as adjusted, by
providing investors with financial statements prepared according to U.S. GAAP, along with this
detailed discussion of the FFO Measures, as adjusted, and a reconciliation of the FFO Measures, as
adjusted, to net income available to common stockholders, a U.S. GAAP measurement. |
| |
| |
|
See Consolidated Statements of Funds from Operations, as adjusted for a reconciliation of FFO,
as adjusted, from net income (loss) available to common stockholders and a reconciliation of Core FFO,
as adjusted from FFO, as adjusted. |
| |
| |
|
The following table reconciles projected Core FFO, as adjusted,
from projected net income (loss) available to common
stockholders for the year ended December 31, 2011: |
|
|
|
|
|
|
Page 10 |
| |
|
|
|
|
|
|
|
|
| |
|
2011 |
|
| |
|
Low |
|
|
High |
|
Projected net (loss) income available to common stockholders |
|
$ |
(0.03 |
) |
|
$ |
0.07 |
|
AMB’s share of projected depreciation and amortization |
|
|
1.36 |
|
|
|
1.36 |
|
AMB’s share of depreciation on development profits recognized to date |
|
|
— |
|
|
|
— |
|
AMB’s share of gains on dispositions of operating properties recognized to date |
|
|
— |
|
|
|
— |
|
Loss on early extinguishment of debt |
|
|
— |
|
|
|
— |
|
Restructuring charges |
|
|
— |
|
|
|
— |
|
Impact of additional dilutive securities, other, rounding |
|
|
(0.03 |
) |
|
|
(0.03 |
) |
|
|
|
|
|
|
|
Projected Funds From Operations, as adjusted (FFO, as adjusted) |
|
$ |
1.30 |
|
|
$ |
1.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMB’s share of development gains recognized to date |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
Projected Core FFO, as adjusted(3) |
|
$ |
1.30 |
|
|
$ |
1.40 |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Amounts are expressed per share, except FFO, as adjusted and
Core FFO, as adjusted, which are expressed per share and unit. |
| |
| (2) |
|
Represents amount of FFO, as adjusted allocated to outstanding unvested restricted shares. For the
three and twelve months ended December 31, 2010, there were 1,202 unvested restricted
shares. For the three and twelve months ended December 31, 2009, there were 920 unvested
restricted shares. |
| |
| (3) |
|
As development gains are difficult to predict in the current economic environment,
management believes Core FFO, as adjusted, is the more appropriate and useful measure to
reflect its assessment of AMB’s projected operating performance. |
|
|
|
|
|
|
Page 11 |
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
| |
|
|
|
|
|
|
|
|
| |
|
As of |
|
| |
|
December 31, 2010 |
|
|
December 31, 2009 |
|
| |
Assets |
|
|
|
|
|
|
|
|
Investments in real estate |
|
|
|
|
|
|
|
|
Total investments in properties |
|
$ |
6,906,176 |
|
|
$ |
6,708,660 |
|
Accumulated depreciation and amortization |
|
|
(1,268,093 |
) |
|
|
(1,113,808 |
) |
|
|
|
|
|
|
|
Net investments in properties |
|
|
5,638,083 |
|
|
|
5,594,852 |
|
Investments in unconsolidated joint ventures |
|
|
883,241 |
|
|
|
462,130 |
|
Properties held for sale or contribution, net |
|
|
242,098 |
|
|
|
214,426 |
|
|
|
|
|
|
|
|
Net investments in real estate |
|
|
6,763,422 |
|
|
|
6,271,408 |
|
Cash and cash equivalents and restricted cash |
|
|
228,415 |
|
|
|
206,077 |
|
Accounts receivable, net |
|
|
167,735 |
|
|
|
155,958 |
|
Other assets |
|
|
213,323 |
|
|
|
208,515 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
7,372,895 |
|
|
$ |
6,841,958 |
|
| |
|
|
|
|
|
|
|
|
|
Liabilities and equity |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Secured debt |
|
$ |
962,434 |
|
|
$ |
1,096,554 |
|
Unsecured senior debt |
|
|
1,685,956 |
|
|
|
1,155,529 |
|
Unsecured credit facilities |
|
|
268,933 |
|
|
|
477,630 |
|
Other debt |
|
|
413,976 |
|
|
|
482,883 |
|
Accounts payable and other liabilities |
|
|
339,474 |
|
|
|
338,042 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
3,670,773 |
|
|
|
3,550,638 |
|
Equity |
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
Common equity |
|
|
3,097,311 |
|
|
|
2,716,604 |
|
Preferred equity |
|
|
223,412 |
|
|
|
223,412 |
|
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
3,320,723 |
|
|
|
2,940,016 |
|
Noncontrolling interests |
|
|
|
|
|
|
|
|
Joint venture partners |
|
|
325,590 |
|
|
|
289,909 |
|
Limited
partnership unitholders |
|
|
55,809 |
|
|
|
61,395 |
|
|
|
|
|
|
|
|
Total noncontrolling interests |
|
|
381,399 |
|
|
|
351,304 |
|
|
|
|
|
|
|
|
Total equity |
|
|
3,702,122 |
|
|
|
3,291,320 |
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
7,372,895 |
|
|
$ |
6,841,958 |
|
| |
