U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): January 29, 2009
AMB PROPERTY CORPORATION
(Exact name of registrant as specified in charter)
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| Maryland
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001-13545
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94-3281941 |
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(Commission file number)
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(I.R.S. employer |
| incorporation)
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identification number) |
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Pier 1, Bay 1, San Francisco, California 94111
(Address of principal executive offices) (Zip code)
415-394-9000
(Registrant’s telephone number, including area code)
n/a
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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TABLE OF CONTENTS
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On January 29, 2009, we furnished to the SEC an Exhibit 99.1 to our current report on Form 8-K
containing our earnings release announcing our fourth quarter and full year 2008 results. This
amendment is being furnished to correct information contained in Exhibit 99.1 to our current report
on Form 8-K furnished on January 29, 2009 to conform to
information presented in our Form 10-K for the year ended December
31, 2008. This Amendment replaces in its entirety the first three
paragraphs of the earnings release, the Consolidated Statements of Operations, the Consolidated
Statements of Funds from Operations and Consolidated Balance Sheets with the following (corrected
text is presented in blue):
“SAN FRANCISCO, January 29, 2009 — AMB Property Corporation® (NYSE: AMB), a leading
owner, operator and developer of industrial real estate, today reported results for the fourth
quarter and full year 2008. Funds from operations per fully diluted
share and unit (“FFOPS”) were a $1.68 loss for the fourth quarter of 2008 and income of $0.78 for the full year 2008 compared to
income of $1.20 and $3.51 for the same periods in 2007.
Consistent with its previous announcement, the company recognized charges in the fourth quarter
2008 related to the valuation of its development program and reduction in personnel of
approximately $220 million or $2.17 per share; these charges were almost entirely non-cash.
Excluding the impact of the impairments and restructuring charges, FFO would have been $0.49 for
the fourth quarter and $2.92 for the full year 2008.
Net income available to common stockholders per fully diluted share (“EPS”) was a loss of $2.06 for
the fourth quarter of 2008 compared to income of $0.92 for the same period in 2007. The loss was
primarily attributable to impairment charges and restructuring costs that the company incurred in
the quarter. For the full year 2008 EPS was a loss of $0.67 compared to income of $2.96 for the
same period in 2007.”
The
remainder of Item 2.02 is unchanged, with the exception of the following tables (corrected
numbers are presented in blue).
CONSOLIDATED STATEMENTS OF OPERATIONS(1)
(in thousands, except per share data)
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For the Quarters ended |
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For the Years ended |
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December 31, |
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December 31, |
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2008 |
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2007 |
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2008 |
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2007 |
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Revenues |
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Rental revenues |
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$ |
157,112 |
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$ |
162,668 |
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$ |
646,575 |
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$ |
639,583 |
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Private capital revenues(2) |
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7,632 |
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9,700 |
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68,470 |
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31,707 |
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Total revenues |
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164,744 |
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172,368 |
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715,045 |
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671,290 |
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Costs and expenses |
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Property operating costs |
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(45,732 |
) |
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(45,021 |
) |
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(184,700 |
) |
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(174,406 |
) |
Depreciation and amortization |
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(39,641 |
) |
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(40,183 |
) |
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(169,145 |
) |
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(162,311 |
) |
General and administrative(3) |
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(40,651 |
) |
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(34,251 |
) |
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(143,982 |
) |
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(129,510 |
) |
Restructuring charges(4) |
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(12,306 |
) |
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— |
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(12,306 |
) |
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— |
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Fund costs |
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(159 |
) |
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(297 |
) |
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(1,078 |
) |
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(1,076 |
) |
Real estate impairment losses |
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(193,918 |
) |
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(900 |
) |
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(193,918 |
) |
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(1,157 |
) |
Other expenses(5)(6) |
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(2,446 |
) |
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(2,117 |
) |
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(520 |
) |
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(5,112 |
) |
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Total costs and expenses |
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(334,853 |
) |
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(122,769 |
) |
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(705,649 |
) |
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(473,572 |
) |
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Other income and expenses |
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Development profits, net of taxes |
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4,836 |
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34,802 |
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81,084 |
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124,288 |
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(Losses) gains from sale or contribution of real estate interests, net |
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— |
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(1,407 |
) |
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19,967 |
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73,436 |
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Equity in earnings of unconsolidated joint ventures, net |
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2,762 |
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181 |
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17,121 |
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7,467 |
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Other (expenses) income(6) |
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(3,144 |
) |
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2,316 |
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(3,195 |
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22,252 |
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Interest expense, including amortization |
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(33,228 |
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(30,551 |
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(133,533 |
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(126,968 |
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Total other income and expenses, net |
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(28,774 |
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5,341 |
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(18,556 |
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100,475 |
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(Loss) income before minority interests and discontinued operations |
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(198,883 |
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54,940 |
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(9,160 |
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298,193 |
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Minority interests’ share of loss (income)
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Joint venture partners’ share of income before discontinued operations |
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(2,917 |
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(6,603 |
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(32,310 |
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(27,691 |
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Joint venture partners’ and limited partnership unitholders’ share of development profits |
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(1,924 |
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(8,835 |
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(9,041 |
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(13,934 |
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Preferred unitholders |
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(1,432 |
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(1,432 |
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(5,727 |
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(8,042 |
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Limited partnership unitholders |
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8,144 |
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(57 |
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5,442 |
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(5,158 |
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Total minority interests’ share of loss (income) |
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1,871 |
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(16,927 |
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(41,636 |
) |
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(54,825 |
) |
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(Loss) income from continuing operations |
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(197,012 |
) |
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38,013 |
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(50,796 |
) |
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243,368 |
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Discontinued operations |
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(Loss) income attributable to discontinued operations, net of minority interests |
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(94 |
) |
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1,504 |
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(401 |
) |
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|
8,879 |
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Development gains, net of taxes and minority interests |
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— |
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49,905 |
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— |
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49,905 |
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(Losses) gains from sale of real estate, net of minority interests |
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(306 |
) |
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|
7,777 |
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|
1,887 |
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12,108 |
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Total discontinued operations |
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(400 |
) |
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|
59,186 |
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1,486 |
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70,892 |
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Net (loss) income |
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(197,412 |
) |
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|
97,199 |
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(49,310 |
) |
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|
314,260 |
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Preferred stock dividends |
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(3,950 |
) |
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(3,950 |
) |
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(15,806 |
) |
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|
(15,806 |
) |
Preferred unit redemption issuance costs |
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|
— |
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|
— |
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— |
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|
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(2,930 |
) |
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Net (loss) income available to common stockholders |
|
$ |
(201,362 |
) |
|
$ |
93,249 |
|
|
$ |
(65,116 |
) |
|
$ |
295,524 |
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Net (loss) income per common share (diluted) |
|
$ |
(2.06 |
) |
|
$ |
0.92 |
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|
$ |
(0.67 |
) |
|
$ |
2.96 |
|
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|
|
|
|
|
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|
Weighted average common shares (diluted) |
|
|
97,584 |
|
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|
101,121 |
|
|
|
97,404 |
|
|
|
99,808 |
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|
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| (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. |
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| (2) |
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Includes incentive and promote distributions for 2008 of $33.0 million for AMB
Institutional Alliance Fund III received during the quarter ended June 30, 2008 and of $1.0 million
for the dissolution of AMB Erie co-investment venture received during the quarter ended March 31,
2008. |
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| (3) |
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For the quarter and year ended December 31, 2008, includes an impairment charge of
$5.0 million for a reserve against tax assets. |
| |
| (4) |
|
Restructuring charges represent costs related to the exit of selected markets as
well as severance expense related to the general reorganization of the company. |
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| (5) |
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For the quarter and year ended December 31, 2008, includes $6.8 million to write-off
pursuit costs. |
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| (6) |
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Includes changes in liabilities and assets associated with AMB’s deferred
compensation plan. |
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS(1)
(in thousands, except per share data)
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For the Quarters ended |
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For the Years ended |
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December 31, |
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December 31, |
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2008 |
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2007 |
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2008 |
|
|
2007 |
|
Net (loss) income available to common stockholders |
|
$ |
(201,362 |
) |
|
$ |
93,249 |
|
|
$ |
(65,116 |
) |
|
$ |
295,524 |
|
Losses (gains) from sale or contribution of real estate, net of minority interests |
|
|
306 |
|
|
|
(6,370 |
) |
|
|
(21,854 |
) |
|
|
(85,544 |
) |
Depreciation and amortization |
|
|
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|
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|
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Total depreciation and amortization |
|
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39,641 |
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|
40,183 |
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|
169,145 |
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|
162,311 |
|
Discontinued operations’ depreciation |
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4 |
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|
49 |
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|
54 |
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|
1,415 |
|
Non-real estate depreciation |
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(1,484 |
) |
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|
(1,658 |
) |
|
|
(7,270 |
) |
|
|
(5,623 |
) |
Adjustments to derive FFO from consolidated joint ventures |
|
|
|
|
|
|
|
|
|
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|
|
|
|
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Joint venture partners’ minority interests (Net income) |
|
|
2,917 |
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|
|
6,603 |
|
|
|
32,310 |
|
|
|
27,691 |
|
Limited partnership unitholders’ minority interests (Net (loss) income) |
|
|
(8,144 |
) |
|
|
57 |
|
|
|
(5,442 |
) |
|
|
5,158 |
|
Limited partnership unitholders’ minority interests (Development profits) |
|
|
114 |
|
|
|
3,384 |
|
|
|
2,822 |
|
|
|
7,148 |
|
Discontinued operations’ minority interests (Net (loss) income) |
|
|
(4 |
) |
|
|
66 |
|
|
|
217 |
|
|
|
390 |
|
FFO attributable to minority interests |
|
|
(9,036 |
) |
|
|
(15,555 |
) |
|
|
(49,957 |
) |
|
|
(62,902 |
) |
Adjustments to derive FFO from unconsolidated joint ventures |
|
|
|
|
|
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|
|
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|
|
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AMB’s share of net income |
|
|
(2,762 |
) |
|
|
(181 |
) |
|
|
(17,121 |
) |
|
|
(7,467 |
) |
AMB’s share of FFO |
|
|
10,015 |
|
|
|
6,083 |
|
|
|
42,742 |
|
|
|
27,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations |
|
$ |
(169,795 |
) |
|
$ |
125,910 |
|
|
$ |
80,530 |
|
|
$ |
365,492 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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FFO per common share and unit (diluted) |
|
$ |
(1.68 |
) |
|
$ |
1.20 |
|
|
$ |
0.78 |
|
|
$ |
3.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Weighted average common shares and units (diluted) |
|
|
101,102 |
|
|
|
105,130 |
|
|
|
102,856 |
|
|
|
104,169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
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Adjustments for impairment and restructuring charges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate impairment losses |
|
$ |
193,918 |
|
|
|
|
|
|
$ |
193,918 |
|
|
|
|
|
Pursuit costs and tax reserve |
|
|
11,834 |
|
|
|
|
|
|
|
11,834 |
|
|
|
|
|
AMB’s share of real estate impairment losses from unconsolidated joint ventures |
|
|
1,847 |
|
|
|
|
|
|
|
1,847 |
|
|
|
|
|
Joint venture partners’ minority interest share of real estate impairment losses |
|
|
(424 |
) |
|
|
|
|
|
|
(424 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total impairment charges(3) |
|
|
207,175 |
|
|
|
|
|
|
|
207,175 |
|
|
|
|
|
Restructuring charges(4) |
|
|
12,306 |
|
|
|
|
|
|
|
12,306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations, excluding impairment and restructuring charges |
|
$ |
49,686 |
|
|
|
|
|
|
$ |
300,011 |
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
|
|
|
|
|
|
|
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|
FFO, excluding impairment and restructuring charges per common share and unit (diluted) |
|
$ |
0.49 |
|
|
|
|
|
|
$ |
2.92 |
|
|
|
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|
|
|
|
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| (1) |
|
Funds From Operations (“FFO”), Funds From Operations Per Share and Unit (“FFOPS”)
and FFO, excluding impairment and restructuring charges (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, excluding impairment and restructuring charges, 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, 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. |
AMB includes the gains from development, including those from value-added conversion projects,
before depreciation recapture, as a component of FFO. 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, excluding impairment and
restructuring charges. AMB calculates FFO, excluding impairment and restructuring charges, as FFO
less impairment and restructuring charges and adjustments to derive AMB’s share of impairment
charges from consolidated and unconsolidated joint ventures.
To the extent that the book value of a land parcel or development asset exceeded the fair market
value of a property, based on its intended holding period, a non-cash impairment charge was
recognized for the shortfall. The impairment charges were principally a result of increases in
estimated capitalization rates and deterioration in market conditions that adversely impacted
values. AMB also
recognized charges to write-off pursuit costs related to development projects it
no longer plans to commence and to establish a reserve against tax assets associated with the
reduction of its development activities. The restructuring charges reflected costs associated with
AMB’s reduction in global headcount and cost structure. Although difficult to predict, these
charges may be recurring given the uncertainty of the current economic climate and its adverse
effects on the real estate markets. While not infrequent or unusual in nature, these charges are
subject to market fluctuations that can have inconsistent effects on AMB’s results of operations.
The economics underlying these charges reflect market conditions in the short-term but can obscure
the value of AMB’s long-term investment decisions and strategies. Management believes FFO,
excluding impairment and restructuring charges, is significant and useful to both it and its
investors because it 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.
However, in addition to the limitations of FFO Measures generally discussed below, FFO, excluding
impairment and restructuring charges, 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, 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, a U.S. GAAP measurement.
See Consolidated Statements of Funds from Operations for a reconciliation of FFO from net income.
The following table reconciles projected FFO from projected net income for the year ended December
31, 2009:
| |
|
|
|
|
|
|
|
|
| |
|
2009 |
|
| |
|
Low |
|
|
High |
|
Projected net income |
|
$ |
0.55 |
|
|
$ |
0.65 |
|
AMB’s share of projected depreciation and amortization |
|
|
1.55 |
|
|
|
1.55 |
|
Impact of additional dilutive securities, other, rounding |
|
|
(0.05 |
) |
|
|
(0.05 |
) |
|
|
|
|
|
|
|
Projected Funds From Operations (FFO) |
|
$ |
2.05 |
|
|
$ |
2.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMB’s share of development gains recognized in January 2009 |
|
|
0.25 |
|
|
|
0.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Projected FFO, excluding AMB’s share of development gains(2) |
|
$ |
1.80 |
|
|
$ |
1.90 |
|
|
|
|
|
|
|
|
|
|
|
| Amounts are expressed per share, except FFO which is expressed per share and unit. |
| |
| (2) |
|
As Development gains are difficult to predict in the current economic environment,
management believes Projected FFO, excluding AMB’s share of development gains is the more
appropriate and useful measure to reflect its assessment of AMB’s projected operating performance. |
| |
| (3) |
|
Impairment charges represent the write down of assets due to estimated fair value
being lower than carry value, as well as certain other charges associated with pursuit costs, tax
asset reserves and restructuring costs. |
| |
| (4) |
|
Restructuring charges represent costs related to the exit of selected markets
as well as severance expense related to the general reorganization of the company. |
CONSOLIDATED BALANCE SHEETS(1)(2)
(dollars in thousands)
| |
|
|
|
|
|
|
|
|
| |
|
As of |
|
| |
|
December 31, 2008 |
|
|
December 31, 2007 |
|
Assets |
|
|
|
|
|
|
|
|
Investments in real estate |
|
|
|
|
|
|
|
|
Total investments in properties |
|
$ |
6,603,856 |
|
|
$ |
6,709,545 |
|
Accumulated depreciation and amortization |
|
|
(970,737 |
) |
|
|
(916,686 |
) |
|
|
|
|
|
|
|
Net investments in properties |
|
|
5,633,119 |
|
|
|
5,792,859 |
|
Investments in unconsolidated joint ventures |
|
|
431,322 |
|
|
|
356,194 |
|
Properties held for contribution, net |
|
|
600,852 |
|
|
|
488,339 |
|
Properties held for divestiture, net |
|
|
8,171 |
|
|
|
40,513 |
|
|
|
|
|
|
|
|
Net investments in real estate |
|
|
6,673,464 |
|
|
|
6,677,905 |
|
Cash and cash equivalents and restricted cash |
|
|
251,231 |
|
|
|
250,416 |
|
Accounts receivable, net |
|
|
160,528 |
|
|
|
184,270 |
|
Other assets |
|
|
216,425 |
|
|
|
149,812 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
7,301,648 |
|
|
$ |
7,262,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
|
Secured debt |
|
$ |
1,522,571 |
|
|
$ |
1,471,087 |
|
Unsecured senior debt |
|
|
1,153,926 |
|
|
|
1,003,123 |
|
Unsecured credit facilities |
|
|
920,850 |
|
|
|
876,105 |
|
Other debt |
|
|
392,838 |
|
|
|
144,529 |
|
Accounts payable and other liabilities |
|
|
345,259 |
|
|
|
306,196 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
4,335,444 |
|
|
|
3,801,040 |
|
Minority interests |
|
|
|
|
|
|
|
|
Joint venture partners |
|
|
293,367 |
|
|
|
517,572 |
|
Preferred unitholders |
|
|
77,561 |
|
|
|
77,561 |
|
Limited partnership unitholders |
|
|
80,169 |
|
|
|
102,278 |
|
|
|
|
|
|
|
|
Total minority interests |
|
|
451,097 |
|
|
|
697,411 |
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
Common equity |
|
|
2,291,695 |
|
|
|
2,540,540 |
|
Preferred equity |
|
|
223,412 |
|
|
|
223,412 |
|
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
2,515,107 |
|
|
|
2,763,952 |
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
7,301,648 |
|
|
$ |
7,262,403 |
|
|
|
|
|
|
|
|
|
|
|
| (1) |
|
During the quarter ended September 30, 2008, AMB acquired the remaining equity
interest (approximately 42%) in G. Accion, a Mexican real estate company. Total assets and total
liabilities include $174,206 and $126,003, respectively, related to G. Accion as of December 31,
2008. |
| |
| (2) |
|
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. |
ITEM 8.01 OTHER EVENTS.
On January 29, 2009, we filed information from our earnings release announcing our fourth quarter
and full year 2008 results in Item 8.01 Other Events on our current report on Form 8-K. This
amendment is being filed to correct information contained in Item 8.01 of our current report on
Form 8-K filed on January 29, 2009 to conform to
information presented in our Form 10-K for the year ended December
31, 2008. This Amendment replaces in its entirety the first three paragraphs
of Item 8.01, the Consolidated Statements of Operations, the Consolidated Statements of Funds from
Operations, the Consolidated Balance Sheets and the Supplemental
Earnings Measures with the following (corrected text is presented in
blue):
“On January 29, 2009, we reported results for the fourth quarter and full year 2008. Funds from
operations per fully diluted share and unit (“FFOPS”) were a $1.68 loss for the fourth quarter of
2008 and income of $0.78 for the full year 2008 compared to income of $1.20 and $3.51 for the same
periods in 2007.
Consistent with our previous announcement, we recognized charges in the fourth quarter 2008 related
to the valuation of our development program and reduction in personnel of approximately $220
million or $2.17 per share; these charges were almost entirely non-cash. Excluding the impact of the
impairments and restructuring charges, funds from operations (“FFO”) would have been $0.49 for the
fourth quarter and $2.92 for the full year 2008.
Net income available to common stockholders per fully diluted share (“EPS”) was a loss of $2.06 for
the fourth quarter of 2008 compared to income of $0.92 for the same period in 2007. The loss was
primarily attributable to impairment charges and restructuring costs that we incurred in the
quarter. For the full year 2008 EPS was a loss of $0.67 compared to income of $2.96 for the same
period in 2007.”
The remainder of Item 8.01 is unchanged, with the exception of the following tables (corrected
numbers are presented in blue).
SUPPLEMENTAL EARNINGS MEASURES
Included in the footnotes to our attached financial statements is a discussion of why management
believes FFO, FFOPS and FFO, excluding impairment and restructuring charges (the “FFO Measures”)
are useful supplemental measures of operating performance, ways in which investors might use the
FFO Measures when assessing our financial performance and the FFO Measures’ limitations as a
measurement tool. Reconciliation from net income to the FFO Measures are provided in the attached
tables and published in our quarterly supplemental analyst package.
We believe that net income, as defined by GAAP, is the most appropriate earnings measure. However,
we consider cash-basis same store net operating income (SS NOI) to be a useful supplemental measure
of our operating performance. Properties that are considered part of the same store pool include
all properties that were owned as of the end of both the current and prior year reporting periods
and exclude 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, 2006. In deriving SS NOI, we define NOI as rental revenues, including reimbursements, less
property operating expenses, both of which are calculated in accordance with GAAP. Property
operating expenses exclude depreciation, amortization, general and administrative expenses and
interest expense. We define SS NOI to also exclude straight-line rents and amortization of lease
intangibles. We consider 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, we believe that SS NOI helps the investing public compare
our operating performance with that of 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 expense, 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, our 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 to SS NOI is
provided below (dollars in thousands).
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
For the Quarters ended |
|
|
For the Years ended |
|
| |
|
December 31, |
|
|
December 31, |
|
| |
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
Net (loss) income |
|
$ |
(197,412 |
) |
|
$ |
97,199 |
|
|
$ |
(49,310 |
) |
|
$ |
314,260 |
|
Private capital income |
|
|
(7,632 |
) |
|
|
(9,700 |
) |
|
|
(68,470 |
) |
|
|
(31,707 |
) |
Depreciation and amortization |
|
|
39,641 |
|
|
|
40,183 |
|
|
|
169,145 |
|
|
|
162,311 |
|
Impairment losses |
|
|
193,918 |
|
|
|
900 |
|
|
|
193,918 |
|
|
|
1,157 |
|
General and administrative and fund costs |
|
|
40,810 |
|
|
|
34,548 |
|
|
|
145,060 |
|
|
|
130,586 |
|
Restructuring charges |
|
|
12,306 |
|
|
|
— |
|
|
|
12,306 |
|
|
|
— |
|
Total other income and expenses |
|
|
31,220 |
|
|
|
(3,224 |
) |
|
|
19,076 |
|
|
|
(95,363 |
) |
Total minority interests’ share of income |
|
|
(1,871 |
) |
|
|
16,927 |
|
|
|
41,636 |
|
|
|
54,825 |
|
Total discontinued operations |
|
|
400 |
|
|
|
(59,186 |
) |
|
|
(1,486 |
) |
|
|
(70,892 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI |
|
|
111,380 |
|
|
|
117,647 |
|
|
|
461,875 |
|
|
|
465,177 |
|
Less non same-store NOI |
|
|
(17,021 |
) |
|
|
(25,477 |
) |
|
|
(95,486 |
) |
|
|
(106,524 |
) |
Less non cash adjustments(1) |
|
|
1,167 |
|
|
|
(562 |
) |
|
|
456 |
|
|
|
(4,019 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash-basis same-store NOI |
|
$ |
95,526 |
|
|
$ |
91,608 |
|
|
$ |
366,845 |
|
|
$ |
354,634 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
|
Non-cash adjustments include straight line rents and amortization of lease
intangibles for the same store pool only. |
CONSOLIDATED STATEMENTS OF OPERATIONS(1)
(in thousands, except per share data)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
For the Quarters ended |
|
|
For the Years ended |
|
| |
|
December 31, |
|
|
December 31, |
|
| |
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues |
|
$ |
157,112 |
|
|
$ |
162,668 |
|
|
$ |
646,575 |
|
|
$ |
639,583 |
|
Private capital revenues(2) |
|
|
7,632 |
|
|
|
9,700 |
|
|
|
68,470 |
|
|
|
31,707 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
164,744 |
|
|
|
172,368 |
|
|
|
715,045 |
|
|
|
671,290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating costs |
|
|
(45,732 |
) |
|
|
(45,021 |
) |
|
|
(184,700 |
) |
|
|
(174,406 |
) |
Depreciation and amortization |
|
|
(39,641 |
) |
|
|
(40,183 |
) |
|
|
(169,145 |
) |
|
|
(162,311 |
) |
General and administrative(3) |
|
|
(40,651 |
) |
|
|
(34,251 |
) |
|
|
(143,982 |
) |
|
|
(129,510 |
) |
Restructuring charges(4) |
|
|
(12,306 |
) |
|
|
— |
|
|
|
(12,306 |
) |
|
|
— |
|
Fund costs |
|
|
(159 |
) |
|
|
(297 |
) |
|
|
(1,078 |
) |
|
|
(1,076 |
) |
Real estate impairment losses |
|
|
(193,918 |
) |
|
|
(900 |
) |
|
|
(193,918 |
) |
|
|
(1,157 |
) |
Other expenses(5)(6) |
|
|
(2,446 |
) |
|
|
(2,117 |
) |
|
|
(520 |
) |
|
|
(5,112 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses |
|
|
(334,853 |
) |
|
|
(122,769 |
) |
|
|
(705,649 |
) |
|
|
(473,572 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development profits, net of taxes |
|
|
4,836 |
|
|
|
34,802 |
|
|
|
81,084 |
|
|
|
124,288 |
|
(Losses) gains from sale or contribution of real estate interests, net |
|
|
— |
|
|
|
(1,407 |
) |
|
|
19,967 |
|
|
|
73,436 |
|
Equity in earnings of unconsolidated joint ventures, net |
|
|
2,762 |
|
|
|
181 |
|
|
|
17,121 |
|
|
|
7,467 |
|
Other (expenses) income(6) |
|
|
(3,144 |
) |
|
|
2,316 |
|
|
|
(3,195 |
) |
|
|
22,252 |
|
Interest expense, including amortization |
|
|
(33,228 |
) |
|
|
(30,551 |
) |
|
|
(133,533 |
) |
|
|
(126,968 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income and expenses, net |
|
|
(28,774 |
) |
|
|
5,341 |
|
|
|
(18,556 |
) |
|
|
100,475 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before minority interests and discontinued operations |
|
|
(198,883 |
) |
|
|
54,940 |
|
|
|
(9,160 |
) |
|
|
298,193 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority interests’ share of loss (income)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint venture partners’ share of income before discontinued operations |
|
|
(2,917 |
) |
|
|
(6,603 |
) |
|
|
(32,310 |
) |
|
|
(27,691 |
) |
Joint venture partners’ and limited partnership unitholders’ share of development profits |
|
|
(1,924 |
) |
|
|
(8,835 |
) |
|
|
(9,041 |
) |
|
|
(13,934 |
) |
Preferred unitholders |
|
|
(1,432 |
) |
|
|
(1,432 |
) |
|
|
(5,727 |
) |
|
|
(8,042 |
) |
Limited partnership unitholders |
|
|
8,144 |
|
|
|
(57 |
) |
|
|
5,442 |
|
|
|
(5,158 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total minority interests’ share of loss (income) |
|
|
1,871 |
|
|
|
(16,927 |
) |
|
|
(41,636 |
) |
|
|
(54,825 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations |
|
|
(197,012 |
) |
|
|
38,013 |
|
|
|
(50,796 |
) |
|
|
243,368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income attributable to discontinued operations, net of minority interests |
|
|
(94 |
) |
|
|
1,504 |
|
|
|
(401 |
) |
|
|
8,879 |
|
Development gains, net of taxes and minority interests |
|
|
— |
|
|
|
49,905 |
|
|
|
— |
|
|
|
49,905 |
|
(Losses) gains from sale of real estate, net of minority interests |
|
|
(306 |
) |
|
|
7,777 |
|
|
|
1,887 |
|
|
|
12,108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total discontinued operations |
|
|
(400 |
) |
|
|
59,186 |
|
|
|
1,486 |
|
|
|
70,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
|
(197,412 |
) |
|
|
97,199 |
|
|
|
(49,310 |
) |
|
|
314,260 |
|
Preferred stock dividends |
|
|
(3,950 |
) |
|
|
(3,950 |
) |
|
|
(15,806 |
) |
|
|
(15,806 |
) |
Preferred unit redemption issuance costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,930 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income available to common stockholders |
|
$ |
(201,362 |
) |
|
$ |
93,249 |
|
|
$ |
(65,116 |
) |
|
$ |
295,524 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per common share (diluted) |
|
$ |
(2.06 |
) |
|
$ |
0.92 |
|
|
$ |
(0.67 |
) |
|
$ |
2.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares (diluted) |
|
|
97,584 |
|
|
|
101,121 |
|
|
|
97,404 |
|
|
|
99,808 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (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. |
| |
| (2) |
|
Includes incentive and promote distributions for 2008 of $33.0 million for AMB
Institutional Alliance Fund III received during the quarter ended June 30, 2008 and of $1.0 million
for the dissolution of AMB Erie co-investment venture received during the quarter ended March 31,
2008. |
| |
| (3) |
|
For the quarter and year ended December 31, 2008, includes an impairment charge of
$5.0 million for a reserve against tax assets. |
| |
| (4) |
|
Restructuring charges represent costs related to the exit of selected markets as
well as severance expense related to the general reorganization of the company. |
| |
| (5) |
|
For the quarter and year ended December 31, 2008, includes $6.8 million to write-off
pursuit costs. |
| |
| (6) |
|
Includes changes in liabilities and assets associated with AMB’s deferred
compensation plan. |
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS(1)
(in thousands, except per share data)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
For the Quarters ended |
|
|
For the Years ended |
|
| |
|
December 31, |
|
|
December 31, |
|
| |
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
Net (loss) income available to common stockholders |
|
$ |
(201,362 |
) |
|
$ |
93,249 |
|
|
$ |
(65,116 |
) |
|
$ |
295,524 |
|
Losses (gains) from sale or contribution of real estate, net of minority interests |
|
|
306 |
|
|
|
(6,370 |
) |
|
|
(21,854 |
) |
|
|
(85,544 |
) |
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total depreciation and amortization |
|
|
39,641 |
|
|
|
40,183 |
|
|
|
169,145 |
|
|
|
162,311 |
|
Discontinued operations’ depreciation |
|
|
4 |
|
|
|
49 |
|
|
|
54 |
|
|
|
1,415 |
|
Non-real estate depreciation |
|
|
(1,484 |
) |
|
|
(1,658 |
) |
|
|
(7,270 |
) |
|
|
(5,623 |
) |
Adjustments to derive FFO from consolidated joint ventures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint venture partners’ minority interests (Net income) |
|
|
2,917 |
|
|
|
6,603 |
|
|
|
32,310 |
|
|
|
27,691 |
|
Limited partnership unitholders’ minority interests (Net (loss) income) |
|
|
(8,144 |
) |
|
|
57 |
|
|
|
(5,442 |
) |
|
|
5,158 |
|
Limited partnership unitholders’ minority interests (Development profits) |
|
|
114 |
|
|
|
3,384 |
|
|
|
2,822 |
|
|
|
7,148 |
|
Discontinued operations’ minority interests (Net (loss) income) |
|
|
(4 |
) |
|
|
66 |
|
|
|
217 |
|
|
|
390 |
|
FFO attributable to minority interests |
|
|
(9,036 |
) |
|
|
(15,555 |
) |
|
|
(49,957 |
) |
|
|
(62,902 |
) |
Adjustments to derive FFO from unconsolidated joint ventures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMB’s share of net income |
|
|
(2,762 |
) |
|
|
(181 |
) |
|
|
(17,121 |
) |
|
|
(7,467 |
) |
AMB’s share of FFO |
|
|
10,015 |
|
|
|
6,083 |
|
|
|
42,742 |
|
|
|
27,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations |
|
$ |
(169,795 |
) |
|
$ |
125,910 |
|
|
$ |
80,530 |
|
|
$ |
365,492 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FFO per common share and unit (diluted) |
|
$ |
(1.68 |
) |
|
$ |
1.20 |
|
|
$ |
0.78 |
|
|
$ |
3.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Weighted average common shares and units (diluted) |
|
|
101,102 |
|
|
|
105,130 |
|
|
|
102,856 |
|
|
|
104,169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for impairment and restructuring charges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate impairment losses |
|
$ |
193,918 |
|
|
|
|
|
|
$ |
193,918 |
|
|
|
|
|
Pursuit costs and tax reserve |
|
|
11,834 |
|
|
|
|
|
|
|
11,834 |
|
|
|
|
|
AMB’s share of real estate impairment losses from unconsolidated joint ventures |
|
|
1,847 |
|
|
|
|
|
|
|
1,847 |
|
|
|
|
|
Joint venture partners’ minority interest share of real estate impairment losses |
|
|
(424 |
) |
|
|
|
|
|
|
(424 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
impairment charges(2) |
|
|
207,175 |
|
|
|
|
|
|
|
207,175 |
|
|
|
|
|
Restructuring charges(3) |
|
|
12,306 |
|
|
|
|
|
|
|
12,306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations, excluding impairment and restructuring charges |
|
$ |
49,686 |
|
|
|
|
|
|
$ |
300,011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO, excluding impairment and restructuring charges per common share and unit (diluted) |
|
$ |
0.49 |
|
|
|
|
|
|
$ |
2.92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
|
Funds From Operations (“FFO”), Funds From Operations Per Share and Unit (“FFOPS”)
and FFO, excluding impairment and restructuring charges (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, excluding impairment and restructuring charges, 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, 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. |
AMB includes the gains from development, including those from value-added conversion projects,
before depreciation recapture, as a component of FFO. 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, excluding impairment and
restructuring charges. AMB calculates FFO, excluding impairment and restructuring charges, as FFO
less impairment and restructuring charges and adjustments to derive AMB’s share of impairment
charges from consolidated and unconsolidated joint ventures.
To the extent that the book value of a land parcel or development asset exceeded the fair market
value of a property, based on its intended holding period, a non-cash impairment charge was
recognized for the shortfall. The impairment charges were principally a result of increases in
estimated capitalization rates and deterioration in market conditions that adversely impacted
values. AMB also
recognized charges to write-off pursuit costs related to development projects it
no longer plans to commence and to establish a reserve against tax assets associated with the
reduction of its development activities. The restructuring charges reflected costs associated with
AMB’s reduction in global headcount and cost structure. Although difficult to predict, these
charges may be recurring given the uncertainty of the current economic climate and its adverse
effects on the real estate markets. While not infrequent or unusual in nature, these charges are
subject to market fluctuations that can have inconsistent effects on AMB’s results of operations.
The economics underlying these charges reflect market conditions in the short-term but can obscure
the value of AMB’s long-term investment decisions and strategies. Management believes FFO,
excluding impairment and restructuring charges, is significant and useful to both it and its
investors because it 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.
However, in addition to the limitations of FFO Measures generally discussed below, FFO, excluding
impairment and restructuring charges, 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, 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, a U.S. GAAP measurement.
See Consolidated Statements of Funds from Operations for a reconciliation of FFO from net income.
|
|
|
| (2) |
|
Impairment charges represent the write down of assets due to estimated fair value
being lower than carry value, as well as certain other charges associated with pursuit costs, tax
asset reserves and restructuring costs. |
| |
| (3) |
|
Restructuring charges represent costs related to the exit of selected markets
as well as severance expense related to the general reorganization of the company. |
CONSOLIDATED BALANCE SHEETS(1)(2)
(dollars in thousands)
| |
|
|
|
|
|
|
|
|
| |
|
As of |
|
| |
|
December 31, 2008 |
|
|
December 31, 2007 |
|
Assets |
|
|
|
|
|
|
|
|
Investments in real estate |
|
|
|
|
|
|
|
|
Total investments in properties |
|
$ |
6,603,856 |
|
|
$ |
6,709,545 |
|
Accumulated depreciation and amortization |
|
|
(970,737 |
) |
|
|
(916,686 |
) |
|
|
|
|
|
|
|
Net investments in properties |
|
|
5,633,119 |
|
|
|
5,792,859 |
|
Investments in unconsolidated joint ventures |
|
|
431,322 |
|
|
|
356,194 |
|
Properties held for contribution, net |
|
|
600,852 |
|
|
|
488,339 |
|
Properties held for divestiture, net |
|
|
8,171 |
|
|
|
40,513 |
|
|
|
|
|
|
|
|
Net investments in real estate |
|
|
6,673,464 |
|
|
|
6,677,905 |
|
Cash and cash equivalents and restricted cash |
|
|
251,231 |
|
|
|
250,416 |
|
Accounts receivable, net |
|
|
160,528 |
|
|
|
184,270 |
|
Other assets |
|
|
216,425 |
|
|
|
149,812 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
7,301,648 |
|
|
$ |
7,262,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
|
Secured debt |
|
$ |
1,522,571 |
|
|
$ |
1,471,087 |
|
Unsecured senior debt |
|
|
1,153,926 |
|
|
|
1,003,123 |
|
Unsecured credit facilities |
|
|
920,850 |
|
|
|
876,105 |
|
Other debt |
|
|
392,838 |
|
|
|
144,529 |
|
Accounts payable and other liabilities |
|
|
345,259 |
|
|
|
306,196 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
4,335,444 |
|
|
|
3,801,040 |
|
Minority interests |
|
|
|
|
|
|
|
|
Joint venture partners |
|
|
293,367 |
|
|
|
517,572 |
|
Preferred unitholders |
|
|
77,561 |
|
|
|
77,561 |
|
Limited partnership unitholders |
|
|
80,169 |
|
|
|
102,278 |
|
|
|
|
|
|
|
|
Total minority interests |
|
|
451,097 |
|
|
|
697,411 |
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
Common equity |
|
|
2,291,695 |
|
|
|
2,540,540 |
|
Preferred equity |
|
|
223,412 |
|
|
|
223,412 |
|
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
2,515,107 |
|
|
|
2,763,952 |
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
7,301,648 |
|
|
$ |
7,262,403 |
|
|
|
|
|
|
|
|
|
|
|
| (1) |
|
During the quarter ended September 30, 2008, AMB acquired the remaining equity
interest (approximately 42%) in G. Accion, a Mexican real estate company. Total assets and total
liabilities include $174,206 and $126,003, respectively, related to G. Accion as of December 31,
2008. |
| |
| (2) |
|
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. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
| |
|
|
|
|
| |
AMB Property Corporation
(Registrant)
|
|
| Date: February 27, 2009 |
By: |
/s/ Tamra D. Browne
|
|
| |
|
Tamra D. Browne |
|
| |
|
Senior Vice President, General
Counsel and Secretary |
|
| |