U.S. SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): November 17, 2008
AMB PROPERTY CORPORATION
(Exact name of registrant as specified in its charter)
| |
|
|
|
|
| Maryland
|
|
001-13545
|
|
94-3281941 |
|
|
|
|
|
|
(State or other jurisdiction of
incorporation)
|
|
(Commission file number)
|
|
(I.R.S. employer identification
number) |
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):
| o |
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
| o |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
ITEM
2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION AND
ITEM 7.01 REGULATION FD DISCLOSURE
On November 17, 2008, we issued a press release entitled “AMB Property Corporation Provides Update
on Liquidity, Financial Resources and Changes in Dividend Policy,” which sets forth disclosure
regarding our announcement to take steps to further strengthen the company’s financial position and
address the subject of liquidity and financial condition. A copy of the press release is attached
hereto as Exhibit 99.1. In addition, a copy of materials discussing the company’s financial
position is posted on the company’s website at www.amb.com and attached hereto as Exhibit 99.2.
This section and the attached exhibits are provided under Items 2.02 and 7.01 of Form 8-K and are furnished
to, but not filed with, the Securities and Exchange Commission.
ITEM 8.01 OTHER EVENTS
On November 17, 2008, we announced steps taken to further strengthen the company’s financial
position and to address the subject of liquidity and financial
condition.
New Dividend Policy
Our Board of Directors has decided to align the company’s regular dividend payments with the
projected taxable income from recurring operations alone. Therefore, our Board of Directors currently
expects the company’s common stock dividend rate in 2009 to be $1.12 per share. We intend to make special
distributions going forward, as necessary, related to taxable income associated with any asset
dispositions and gain activity.
In addition, our Board of Directors has decided to suspend the fourth quarter 2008 dividend as we
project that the company has already met its 2008 dividend distribution requirement. Together,
these actions are expected to improve our cash position on a
go-forward basis. These dividend changes will allow us to retain
$53 million of cash in the fourth quarter of 2008 and an additional $98
million over the course of 2009.
Development Pipeline
We are further curtailing our development activities; at present the company is only going forward
with starts for fully committed or previously negotiated build-to-suit agreements until the
financial markets stabilize. Our development pipeline of approximately $1.6 billion was 76 percent funded as of October 31,
2008. The development pipeline consists of more than $1.0 billion of assets that are shell complete
and in the process of lease-up, with the balance of approximately $636 million under construction.
Our share of the remaining funding required to complete the $1.6 billion pipeline is expected to be
$338 million.
Debt Maturities & Liquidity
Our analysis indicates that we have sufficient capacity to complete the build-out of our
development pipeline without the reliance on proceeds from property dispositions. We also currently
have the capacity to hold all of our development assets upon completion as well as our
development and operating properties held for sale or contribution, and to maintain compliance with
our various financial covenants.
As of
October 31, 2008, our total debt maturities through the end of
2008 were approximately $106 million. We have exercised an
option to extend $93 million of these 2008 debt maturities,
which subject to the fulfillment of certain conditions, will extend
the maturity date to December 2009. As of October 31, 2008, our total consolidated debt
maturities for 2009 were $660 million.
After considering all available extension options, our total 2009 consolidated debt maturities will
be reduced to $342 million, comprised of the following:
| |
§ |
|
$213 million is scheduled to be paid off at maturity or upon contribution. The remaining
$129 million in various loans includes a diverse group of assets and maturities that will
be either refinanced or retired upon sale or contribution. |
As of
October 31, 2008, we had approximately $927 million of
capacity consisting of $238 million of
consolidated cash and cash equivalents and $689 million of
availability on our lines of credit. In addition, we have approximately
$850 million of our share of properties held for sale or contribution to our co-investment joint
ventures in Japan, Europe, Canada, Mexico and the U.S.
As of October 31, 2008, our total unconsolidated debt maturities for 2009 were $276 million. After
considering all available extension options, the total unconsolidated
debt maturities will be reduced
to $237 million, comprised of the following:
| |
§ |
|
$113 million relates to the retirement of a subscription line which will either be
refinanced or repaid with available uncalled equity commitments at maturity. The remaining $124 million is
comprised of four separate loans, which are in the process of being refinanced or scheduled for
repayment. |
Looking forward to 2010, subject to certain conditions, we have the option to extend our $230
million secured term facility and two of our three revolving credit facilities, which as of October
31, 2008, carried a balance of $584 million against a capacity of $1.1 billion.
Executive Trading Disclosure
To address questions we have received, and consistent with our industry-leading corporate
governance practices, none of our executives have bought AMB securities on margin, nor used AMB
securities as collateral for margin loans. Our insider trading policies have never allowed trading
activities that are aggressive or speculative by nature, including buying securities on margin or
using AMB securities as collateral for margin loans.
Preferred Dividend Declaration
Our Board of Directors also declared a dividend of $0.40625 per share on the company’s 6.5 percent
Series L Cumulative Redeemable Preferred Stock (NYSE: AMB PrL) for the period commencing on and
including October 15, 2008 and ending on and including January 14, 2009. The dividend will be
payable on January 15, 2009 to Series L stockholders of record at the close of business on January
5, 2009.
Our Board further declared a dividend of $0.421875 per share on the company’s 6.75 percent Series M
Cumulative Redeemable Preferred Stock (NYSE: AMB PrM) for the period commencing on and including
October 15, 2008 and ending on and including January 14, 2009. The dividend will be payable on
January 15, 2009 to Series M stockholders of record at the close of business on January 5, 2009.
Our Board further declared a dividend of $0.4375 per share on the company’s 7.0 percent Series O
Cumulative Redeemable Preferred Stock (NYSE: AMB PrO) for the period
commencing on
and including October 15, 2008 and ending on and including January 14, 2009. The dividend will be
payable on January 15, 2009 to Series O stockholders of record at the close of business on January
5, 2009.
Our Board further declared a dividend of $0.428125 per share on the company’s 6.85 percent Series P
Cumulative Redeemable Preferred Stock (NYSE: AMB PrP) for the period commencing on and including
October 15, 2008 and ending on and including January 14, 2009. The dividend will be payable on
January 15, 2009 to Series P stockholders of record at the close of business on January 5, 2009.
Forward-Looking Statements
Some of the information included in this report and the presentations to be held in connection
therewith contains forward-looking statements, such as expected dividend payments and
distributions, expectations regarding future cash flow, financial position, debt maturity
schedules, options to extend, and debt capacity, compliance with
financial covenants, actions regarding
development deployment and expenses, future development funding costs
and future development completions,
and the company’s ability to meet future customer demand, which are made pursuant to the
safe-harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and
Section 27A of the Securities Act of 1933, as amended. Because these forward-looking statements
involve risks and uncertainties, there are important factors that could cause our actual results to
differ materially from those in the forward-looking statements, and you should not rely on the
forward-looking statements as predictions of future events. The events or circumstances reflected
in forward-looking statements might not occur. You can identify forward-looking statements by the
use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,”
“approximately,” “intends,” “plans,” “pro forma,” “estimates” or “anticipates” or the negative of
these words and phrases or similar words or phrases. You can also identify forward-looking
statements by discussions of strategy, plans or intentions. Forward-looking statements are
necessarily dependent on assumptions, data or methods that may be incorrect or imprecise and we may
not be able to realize them. We caution you not to place undue reliance on forward-looking
statements, which reflect our analysis only and speak only as of the date of this report or the
dates indicated in the statements. We assume no obligation to update or supplement forward-looking
statements. The following factors, among others, could cause actual results and future events to
differ materially from those set forth or contemplated in the forward-looking statements: defaults
on or non-renewal of leases by customers or renewal at lower than expected rent, increased interest
rates and operating costs or greater than expected capital expenditures, our failure to obtain
necessary outside financing, re-financing
risks, risks related to our obligations in the event of certain defaults under co-investment
ventures and other debt, risks related to debt and equity security financings (including dilution
risk), difficulties in identifying properties to acquire and in effecting acquisitions, our failure
to successfully integrate acquired properties and operations, our failure to divest properties we
have contracted to sell or to timely reinvest proceeds from any divestitures, risks and
uncertainties affecting property development, value-added conversions, redevelopment and
construction (including construction delays, cost overruns, our inability to obtain necessary
permits and public opposition to these activities), our failure to qualify and maintain our status
as a real estate investment trust, risks related to our tax structuring, failure to maintain our
current credit agency ratings, environmental uncertainties, risks related to natural disasters,
financial market fluctuations, changes in general economic conditions or in the real estate sector,
inflation risks, changes in real estate and zoning laws, a continued or prolonged downturn in the
U.S., California or global economy, risks related to doing business internationally and global
expansion, risks of opening offices globally, risks of changing personnel and roles, losses in
excess of our insurance coverage, unknown liabilities acquired in connection with acquired
properties or otherwise and increases in real property tax rates. Our success also depends upon
economic trends generally, including interest rates, income tax laws, governmental regulation,
legislation, population changes, various market conditions and certain other matters discussed under the heading “Risk
Factors” and elsewhere in our annual report on Form 10-K for the year ended December 31, 2007 and
in our quarterly report on Form 10-Q for the quarter ended September 30, 2008.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
| |
|
|
| Exhibit |
|
|
| Number |
|
Description |
99.1
|
|
AMB Property Corporation Press Release dated November 17, 2008 |
99.2
|
|
AMB Property Corporation Liquidity
and Financial Resources Disclosures dated November 17, 2008 |
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: November 17, 2008 |
By: |
/s/ Thomas S. Olinger
|
|
| |
|
Thomas S. Olinger |
|
| |
|
Chief Financial Officer |
|
Exhibits
| |
|
|
| Exhibit |
|
|
| Number |
|
Description |
99.1
|
|
AMB Property Corporation Press Release dated November 17, 2008 |
99.2
|
|
AMB Property Corporation Liquidity and Financial Resources Disclosures dated November 17, 2008 |