EXHIBIT 99.1
FOR IMMEDIATE RELEASE
AMB PROPERTY CORPORATION ANNOUNCES RESTATEMENT OF DEPRECIATION EXPENSE FOR
PRIOR PERIODS AND THIRD QUARTER
2004 RESULTS
Prior Period Results Restated for Additional Depreciation Expenses of Leasehold
Investments; Operating Results Reflect Strengthening National Industrial Market
With Higher Occupancies and Improving Same Store Results
SAN FRANCISCO, October 12, 2004 – AMB Property Corporation (NYSE:AMB), a
leading global developer and owner of industrial real estate, announced a
restatement of depreciation expense for prior period results relating to 39
buildings in its portfolio, 38 of which are located on-tarmac. As part of the
company’s on-going review of its accounting policies and internal control over
financial reporting, the company determined that it should have depreciated
certain of its investments in buildings that reside on land subject to ground
leases over the remaining terms of the ground leases, not over 40 years as
applied to buildings that reside on land held in fee by the company. AMB did
not segregate these assets into a separate expected useful life category for
depreciation purposes. Management determined that the internal control
deficiency that gave rise to this restatement represents a material weakness,
as defined by the PCAOB’s Auditing Standard No. 2. In connection with
correcting the error, AMB believes it has taken appropriate action to modify
its system of internal control and properly remediate this internal control
deficiency. Going forward, these assets will be depreciated over the lesser of
40 years or the contractual term of the underlying ground lease.
To reflect additional depreciation expense, management will restate AMB’s
previously issued financial statements for the years ended December 31, 2003,
2002 and 2001 filed on Form 10-K and for the quarters ended March 31, 2004 and
June 30, 2004 filed on Form 10-Q. Management and the Audit Committee consulted
with the company’s independent auditors, PricewaterhouseCoopers LLP, and
determined that this was the proper approach.
The restatement affects the company’s depreciation expense, net income and
earnings per share for the prior periods. The net impact of the restatement of
depreciation expense on earnings per share results will reduce EPS by $0.02
from $1.43 to $1.41 for 2001; by $0.04 from $1.37 to $1.33 for 2002; by $0.06
from $1.47 to $1.41 for 2003. The net impact on each of the three months ended
March 31, and June 30, 2004 will reduce EPS by $0.02 from $0.19 to $0.17 and by
$0.02 from $0.22 to $0.20, respectively. The restatement reduces net income
available to stockholders from $122 million to $120 million for 2001, from $116
million to $113 million for 2002, from $122 million to $117 million for 2003,
from $16 million to $15 million for the quarter ended March 31, 2004 and from
$18 million to $17 million for the quarter ended June 30, 2004. This
restatement of depreciation expense does not impact the company’s previously
reported funds from operations (FFO) per fully diluted share and unit as, in
accordance with NAREIT’s FFO definition, the company adds back real
estate-related depreciation to calculate FFO.
Page 2
Operating Results
AMB reported third quarter 2004 earnings per share (EPS) of $0.35, exceeding
the company’s guidance for the quarter of $0.30 to $0.33 per share. The
higher-than-expected results were driven by early receipt of gains from
property dispositions and net lease termination fees, offset by delayed
development profits.
Earnings per share for the nine months ended September 30, 2004 were $0.73 per
share compared with $1.11 in the same period of 2003. EPS results for the first
nine months of 2004 included $0.14 of gains on disposition of real estate and
an adjustment of $0.03 of additional depreciation on investments in leasehold
investments related to the first six months of 2004. For the first nine months
of 2003, EPS included $0.57 of gains on dispositions of real estate and an
additional restatement of depreciation expense of $0.04 related to certain
leasehold investments.
The company’s industrial operating portfolio was 94.6% leased as of September
30, 2004, up 100 basis points from June 30, 2004, and up 260 basis points from
September 30, 2003. Preliminary data indicate U.S. industrial vacancy at the
end of the third quarter was 11.2%, representing a 20 basis point improvement
from the prior quarter — the second consecutive quarter of improving occupancy
nationally.
Cash-basis same store net operating income (NOI) increased 4.8% in third
quarter 2004, driven primarily by lease termination fees. Without the effect of
lease termination fees, same store NOI increased 0.6% in the quarter, driven by
occupancy gains offset by rental rate decreases on leases renewed or rolled
over during the past 12 months. For the year to date, same store NOI declined
1.1%; without the impact of lease termination fees, year-to-date same store NOI
decreased 1.0%.
Hamid R. Moghadam, chairman and CEO, said, “The strengthening of the industrial
markets which began earlier this year continues to take hold. On a national
basis, absorption of industrial property is estimated to have exceeded 50
million square feet, the highest level since the fourth quarter of 2000. We
believe the prospects for well-located, functional industrial real estate are
good. The ISM manufacturing index remains well above the level indicating
expansion and the recent upward revision in GDP reflects gains in business
spending and the much-anticipated restocking of inventories. These conditions
supported the strong growth in occupancy in AMB’s portfolio during the third
quarter. We are now seeing levels of customer activity in several markets which
suggests future rental rate growth.”
Investment Activity
During the third quarter, AMB acquired 590,800 square feet of distribution
facilities in two buildings for a total expected investment of $51.6 million.
Both assets are fully leased and are situated in infill locations of the
company’s target market of northern New Jersey. The transactions bring the
company’s year-to-date acquisition activity to 4.6 million square feet in 48
buildings with a total expected investment of $490.8 million.
Development starts in the quarter totaled approximately 2.7 million square feet
in seven projects in three countries with an expected total investment of
$345.7 million. The two largest projects total approximately 1.8 million square
feet of multi-story, ramp-accessed industrial facilities in the high-demand
logistics markets of Tokyo and Osaka, Japan. In Osaka, AMB’s 973,000
square-foot Amagasaki Distribution Center broke ground in August and is
approximately 50% preleased.
Page 3
During the quarter, the company stabilized 370,600 square feet of new
developments for a total expected investment of $15.4 million. The stabilized
developments include the Singapore Airport Logistics Center Building 1 adjacent
to Singapore’s Changi International Airport and Northfield Building 600,
adjacent to Dallas Fort Worth International Airport.
AMB’s president, W. Blake Baird, commented, “We continue to see outstanding
development opportunities in our global target markets, particularly in airport
and seaport locations of Japan. Our current development pipeline totals 8.6
million square feet with an estimated total investment of $689.3 million — more
than 60% of which is located in non-U.S. markets. We expect this pipeline to
provide excellent global expansion opportunities for our customers and a
growing source of value for our investors.”
The quarter included sales of seven buildings for a total disposition price of
approximately $62.8 million. In addition, the company generated $1.5 million of
net development profits in the quarter from its development-for-sale program.
Financing Activities
During the quarter, AMB Institutional Alliance Fund III (Fund III), a
wholly-owned subsidiary, obtained a seven-year, $101 million secured loan
facility which combines both fixed and floating rates terms and significant
prepayment flexibility. AMB expects to close on the first equity raise for Fund
III during the fourth quarter, reducing the company’s 100% ownership of the
fund to the 20% to 50% level. Fund III is expected to be the REIT industry’s
first open-end, commingled private capital fund with an initial asset base of
more than $400 million.
Supplemental Earnings Measure
AMB reports funds from operations per fully diluted share and unit (FFOPS) in
accordance with the standards established by NAREIT. Third quarter 2004 FFOPS
increased more than 27% to $0.61 from $0.48 at September 30, 2003, at the top
end of the company’s guidance of $0.59 — $0.61 per share. The high end of the
company’s guidance was achieved through receipt of an earlier-than-anticipated
level of net lease termination fees. The strong year-over-year results are
attributable to increased levels of capital deployment and improved core
operations. FFOPS for the nine months ended September 30, 2004 was $1.68, nine
percent ahead of FFOPS for the same period in 2003 of $1.54.
Included in the footnotes to the company’s attached financial statements is a
discussion of why management believes FFO is a useful supplemental measure of
operating performance, ways in which investors might use FFO when assessing the
company’s financial performance, and FFO’s limitations as a measurement tool.
A reconciliation from net income to funds from operations is provided in the
attached tables and published in AMB’s quarterly supplemental analyst package,
available on the company’s website at www.amb.com.
Conference Call and Supplemental Information
The company will host a conference call to discuss the quarter’s results on
Wednesday, October 13, 2004 at 1:00 PM EDT/10:00 AM PDT. Stockholders and
interested parties may listen to a live broadcast of the conference call by
dialing +1 877 359 6098 and using reservation code 1039810 or by webcast
through a link on the company’s website at www.amb.com.
Page 4
If you are unable to listen to the live conference call, a telephone and
webcast replay will be available after 12:00 PM PDT on Wednesday, October 13,
2004. The telephone replay will be available until 5:00 PM PDT on Friday,
November 12, 2004 and can be accessed by dialing +1 800 642 1687 or
+1 706 645 9291 and using reservation code 1039810. The webcast can be
accessed through a link on the company’s website at www.amb.com and will be
available until 5:00 PM PDT on Friday, November 12, 2004.
In addition, the company will post a summary of the guidance given on the call
and a supplement detailing the components of net asset value to the Investor
Information portion of its website on Wednesday, October 20, 2004 by 5:00 PM
PDT.
AMB Property Corporation. Local partner to global trade.™
AMB Property Corporation is a leading owner and operator of industrial real
estate, focused on major hub and gateway distribution markets throughout North
America, Europe and Asia. As of September 30, 2004 AMB owned, managed and had
renovation and development projects totaling 109.1 million square feet (10.1
million square meters) and 1,106 buildings in 38 markets within eight
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 +1 877 285 3111.
This document contains forward-looking statements such as the company’s
interpretation of trends regarding national and portfolio industrial space
absorption; size and timing of deliveries and total investment in development
projects; goals regarding amount of non-U.S. investment; and timing and use of
funds for planned refinancing activity, which are made pursuant to the
safe-harbor provisions of Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements involve numerous risks and uncertainties and should
not be relied upon as predictions of future events. The events or circumstances
reflected in our forward-looking statements might not occur. We assume no
obligation to update or supplement forward-looking statements. For further
information on factors that could impact AMB and the statements contained
herein, reference should be made to AMB’s filings with the Securities and
Exchange Commission, including AMB’s annual report on Form 10-K for the year
ended December 31, 2003.
AMB CONTACTS
Lauren L. Barr
Vice President, Corporate Communications
Direct +1 415 733 9477
Fax +1 415 477 2177
Email lbarr@amb.com
Evaleen G. Andamo
Director, Investor Relations
Direct +1 415 733 9565
Fax +1 415 477 2065
Email eandamo@amb.com
Page 5
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
As of
|
| |
|
September 30, 2004
|
|
June 30, 2004
|
|
March 31, 2004
|
|
December 31, 2003
|
| |
|
|
|
|
|
(restated) |
|
(restated) |
|
(restated) |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments in properties |
|
$ |
6,302,529 |
|
|
$ |
6,051,308 |
|
|
$ |
5,730,654 |
|
|
$ |
5,491,707 |
|
Accumulated depreciation |
|
|
(595,438 |
) |
|
|
(560,877 |
) |
|
|
(524,115 |
) |
|
|
(485,559 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investments in properties |
|
|
5,707,091 |
|
|
|
5,490,431 |
|
|
|
5,206,539 |
|
|
|
5,006,148 |
|
Investment in unconsolidated joint ventures |
|
|
48,601 |
|
|
|
52,579 |
|
|
|
54,006 |
|
|
|
52,009 |
|
Properties held for contribution, net |
|
|
11,854 |
|
|
|
11,143 |
|
|
|
— |
|
|
|
— |
|
Properties held for divestiture, net |
|
|
59,924 |
|
|
|
39,246 |
|
|
|
9,628 |
|
|
|
11,751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investments in real estate |
|
|
5,827,470 |
|
|
|
5,593,399 |
|
|
|
5,270,173 |
|
|
|
5,069,908 |
|
Cash and cash equivalents |
|
|
174,323 |
|
|
|
146,136 |
|
|
|
150,903 |
|
|
|
156,663 |
|
Mortgages receivable |
|
|
23,068 |
|
|
|
23,594 |
|
|
|
23,620 |
|
|
|
43,145 |
|
Accounts receivable, net |
|
|
102,078 |
|
|
|
96,524 |
|
|
|
92,081 |
|
|
|
88,452 |
|
Other assets |
|
|
94,711 |
|
|
|
76,958 |
|
|
|
69,669 |
|
|
|
51,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
6,221,650 |
|
|
$ |
5,936,611 |
|
|
$ |
5,606,446 |
|
|
$ |
5,409,559 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured debt |
|
$ |
1,617,944 |
|
|
$ |
1,552,084 |
|
|
$ |
1,457,630 |
|
|
$ |
1,363,890 |
|
Unsecured senior debt securities |
|
|
1,025,000 |
|
|
|
1,025,000 |
|
|
|
1,025,000 |
|
|
|
925,000 |
|
Unsecured debt |
|
|
9,182 |
|
|
|
9,334 |
|
|
|
9,482 |
|
|
|
9,628 |
|
Unsecured credit facilities |
|
|
583,864 |
|
|
|
428,502 |
|
|
|
261,369 |
|
|
|
275,739 |
|
Accounts payable and other liabilities |
|
|
278,350 |
|
|
|
256,574 |
|
|
|
208,614 |
|
|
|
187,095 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
3,514,340 |
|
|
|
3,271,494 |
|
|
|
2,962,095 |
|
|
|
2,761,352 |
|
Minority interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint venture partners |
|
|
701,639 |
|
|
|
698,549 |
|
|
|
662,235 |
|
|
|
658,723 |
|
Preferred unitholders |
|
|
278,378 |
|
|
|
241,899 |
|
|
|
241,873 |
|
|
|
241,899 |
|
Limited partnership unitholders |
|
|
88,026 |
|
|
|
88,190 |
|
|
|
89,036 |
|
|
|
90,448 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total minority interests |
|
|
1,068,043 |
|
|
|
1,028,638 |
|
|
|
993,144 |
|
|
|
991,070 |
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
|
1,536,063 |
|
|
|
1,533,275 |
|
|
|
1,547,995 |
|
|
|
1,553,764 |
|
Preferred stock |
|
|
103,204 |
|
|
|
103,204 |
|
|
|
103,212 |
|
|
|
103,373 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
1,639,267 |
|
|
|
1,636,479 |
|
|
|
1,651,207 |
|
|
|
1,657,137 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
6,221,650 |
|
|
$ |
5,936,611 |
|
|
$ |
5,606,446 |
|
|
$ |
5,409,559 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 6
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except share data)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
For the Quarters Ended |
|
For the Nine Months Ended |
| |
|
September 30,
|
|
September 30,
|
| |
|
2004
|
|
2003
|
|
2004
|
|
2003
|
| |
|
|
|
|
|
(restated) |
|
|
|
|
|
(restated) |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues |
|
$ |
173,803 |
|
|
$ |
145,466 |
|
|
$ |
497,000 |
|
|
$ |
434,589 |
|
Private capital income |
|
|
2,726 |
|
|
|
1,928 |
|
|
|
8,077 |
|
|
|
7,844 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
176,529 |
|
|
|
147,394 |
|
|
|
505,077 |
|
|
|
442,433 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating costs |
|
|
(43,953 |
) |
|
|
(39,129 |
) |
|
|
(128,580 |
) |
|
|
(115,550 |
) |
Depreciation and amortization |
|
|
(42,099 |
) |
|
|
(33,734 |
) |
|
|
(120,998 |
) |
|
|
(102,847 |
) |
Impairment losses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,251 |
) |
General and administrative |
|
|
(15,747 |
) |
|
|
(10,824 |
) |
|
|
(45,706 |
) |
|
|
(34,834 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses |
|
|
(101,799 |
) |
|
|
(83,687 |
) |
|
|
(295,284 |
) |
|
|
(258,482 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
74,730 |
|
|
|
63,707 |
|
|
|
209,793 |
|
|
|
183,951 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of unconsolidated joint ventures |
|
|
603 |
|
|
|
1,365 |
|
|
|
3,256 |
|
|
|
4,222 |
|
Interest income and other, net |
|
|
1,295 |
|
|
|
653 |
|
|
|
3,283 |
|
|
|
3,144 |
|
Gains from dispositions of real estate |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
7,429 |
|
Development profits, net of taxes |
|
|
1,521 |
|
|
|
5,512 |
|
|
|
4,756 |
|
|
|
5,512 |
|
Interest expense, including amortization |
|
|
(40,324 |
) |
|
|
(35,562 |
) |
|
|
(118,449 |
) |
|
|
(107,132 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income and expenses |
|
|
(36,905 |
) |
|
|
(28,032 |
) |
|
|
(107,154 |
) |
|
|
(86,825 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before minority interests and discontinued operations |
|
|
37,825 |
|
|
|
35,675 |
|
|
|
102,639 |
|
|
|
97,126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority interests’ share of income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint venture partners’ share of income |
|
|
(10,302 |
) |
|
|
(9,546 |
) |
|
|
(28,978 |
) |
|
|
(24,712 |
) |
Joint venture partners’ share of development profits |
|
|
(145 |
) |
|
|
(3,446 |
) |
|
|
(894 |
) |
|
|
(3,446 |
) |
Preferred unitholders |
|
|
(4,942 |
) |
|
|
(6,314 |
) |
|
|
(14,766 |
) |
|
|
(19,073 |
) |
Limited partnership unitholders |
|
|
(1,012 |
) |
|
|
(488 |
) |
|
|
(2,618 |
) |
|
|
(2,200 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total minority interests’ share of income |
|
|
(16,401 |
) |
|
|
(19,794 |
) |
|
|
(47,256 |
) |
|
|
(49,431 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
21,424 |
|
|
|
15,881 |
|
|
|
55,383 |
|
|
|
47,695 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) attributable to discontinued operations,
net of minority interests |
|
|
175 |
|
|
|
1,919 |
|
|
|
(171 |
) |
|
|
13,576 |
|
Gain from disposition of real estate, net of minority interests |
|
|
10,450 |
|
|
|
7,888 |
|
|
|
12,325 |
|
|
|
39,579 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total discontinued operations |
|
|
10,625 |
|
|
|
9,807 |
|
|
|
12,154 |
|
|
|
53,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
32,049 |
|
|
|
25,688 |
|
|
|
67,537 |
|
|
|
100,850 |
|
Preferred stock dividends |
|
|
(1,783 |
) |
|
|
(1,470 |
) |
|
|
(5,349 |
) |
|
|
(5,788 |
) |
Preferred stock unit redemption discount/(issuance costs) |
|
|
— |
|
|
|
(3,671 |
) |
|
|
— |
|
|
|
(3,671 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common stockholders |
|
$ |
30,266 |
|
|
$ |
20,547 |
|
|
$ |
62,188 |
|
|
$ |
91,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share (diluted) |
|
$ |
0.35 |
|
|
$ |
0.25 |
|
|
$ |
0.73 |
|
|
$ |
1.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares (diluted) |
|
|
85,395,787 |
|
|
|
82,720,130 |
|
|
|
85,012,460 |
|
|
|
82,539,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 7
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS (1)
(dollars in thousands, except share data)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
For the Quarters Ended |
|
For the Nine Months Ended |
| |
|
September 30,
|
|
September 30,
|
| |
|
2004
|
|
2003 (2)
|
|
2004
|
|
2003 (2)
|
Net income |
|
$ |
32,049 |
|
|
$ |
25,688 |
|
|
$ |
67,537 |
|
|
$ |
100,850 |
|
Gain from disposition of real estate, net of minority interests |
|
|
(10,450 |
) |
|
|
(7,888 |
) |
|
|
(12,325 |
) |
|
|
(47,008 |
) |
Real estate related depreciation and amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total depreciation and amortization |
|
|
42,099 |
|
|
|
33,734 |
|
|
|
120,998 |
|
|
|
102,847 |
|
Discontinued operations’ depreciation |
|
|
525 |
|
|
|
597 |
|
|
|
1,733 |
|
|
|
2,346 |
|
FF& E depreciation |
|
|
(172 |
) |
|
|
(170 |
) |
|
|
(508 |
) |
|
|
(548 |
) |
Adjustments to derive FFO from consolidated JVs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint venture partners’ minority interests (NI) |
|
|
10,302 |
|
|
|
9,546 |
|
|
|
28,978 |
|
|
|
24,712 |
|
Limited partnership unitholders’ minority interests (NI) |
|
|
1,012 |
|
|
|
488 |
|
|
|
2,618 |
|
|
|
2,200 |
|
Limited partnership unitholders’ minority interests
(Development profits) |
|
|
79 |
|
|
|
115 |
|
|
|
222 |
|
|
|
115 |
|
Discontinued operations’ minority interests (NI) |
|
|
2,218 |
|
|
|
1,140 |
|
|
|
2,464 |
|
|
|
3,195 |
|
FFO attributable to minority interests |
|
|
(22,193 |
) |
|
|
(17,345 |
) |
|
|
(58,172 |
) |
|
|
(47,847 |
) |
Adjustments to derive FFO from unconsolidated JVs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMB’s share of net income |
|
|
(603 |
) |
|
|
(1,365 |
) |
|
|
(3,256 |
) |
|
|
(4,222 |
) |
AMB’s share of FFO |
|
|
1,661 |
|
|
|
2,345 |
|
|
|
6,089 |
|
|
|
7,620 |
|
Preferred stock dividends |
|
|
(1,783 |
) |
|
|
(1,470 |
) |
|
|
(5,349 |
) |
|
|
(5,788 |
) |
Preferred stock unit redemption discount/(issuance costs) |
|
|
— |
|
|
|
(3,671 |
) |
|
|
— |
|
|
|
(3,671 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations |
|
$ |
54,744 |
|
|
$ |
41,744 |
|
|
$ |
151,029 |
|
|
$ |
134,801 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per common share and unit (diluted) |
|
$ |
0.61 |
|
|
$ |
0.48 |
|
|
$ |
1.68 |
|
|
$ |
1.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares and units (diluted) |
|
|
90,146,245 |
|
|
|
87,399,544 |
|
|
|
89,764,633 |
|
|
|
87,342,075 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
(1)The Company believes that net income, as defined by GAAP, is the most
appropriate earnings measure. However, the Company considers funds from
operations, or FFO, as defined by NAREIT, to be a useful supplemental measure
of its operating performance. FFO is defined as net income, calculated in
accordance with GAAP, less gains (or losses) from dispositions of real estate
held for investment purposes and real estate-related depreciation, and
adjustments to derive the Company’s pro rata share of FFO of consolidated and
unconsolidated joint ventures. Further, the Company does not adjust FFO to
eliminate the effects of non-recurring charges. The Company believes that FFO,
as defined by NAREIT, is a meaningful supplemental measure of its operating
performance because historical cost accounting for real estate assets in
accordance with 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, NAREIT
created FFO as a supplemental measure of operating performance for real estate
investment trusts that excludes historical cost depreciation and amortization,
among other items, from net income, as defined by GAAP. The Company believes
that the use of FFO, combined with the required 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. The Company considers
FFO to be a useful measure 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, FFO 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 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 the Company’s
liquidity or operating performance. FFO also does not consider the costs
associated with capital expenditures related to the Company’s real estate
assets nor is FFO necessarily indicative of cash available to fund the
Company’s future cash requirements. Further, the Company’s computation of FFO
may not be comparable to FFO reported by other real estate investment trusts
that do not define the term in accordance with the current NAREIT definition or
that interpret the current NAREIT definition differently than the Company does. |
| |
| |
|
(2)Effective January 1, 2003, the Company discontinued its practice of
deducting amortization of investments in leasehold interest from FFO as such an
adjustment is not provided for in NAREIT’s FFO definition. As a result, FFO for
the periods presented has been adjusted to reflect the changes. |