SAN FRANCISCO, Feb. 3, 2011 /PRNewswire/ -- AMB Property
Corporation® (NYSE: AMB), a leading owner, operator and developer
of global industrial real estate, today reported results for the
fourth quarter and full year 2010. Core FFO, as adjusted, which
excludes the recognition of development gains, was $0.32 for the fourth quarter of 2010 and
$1.22 for the full year 2010 compared
to $0.32 and $1.46 respectively for the same periods in
2009. Funds from operations, as adjusted, per fully diluted
share and unit ("FFOPS, as adjusted"), which includes the
recognition of development gains, was $0.33 for the fourth quarter 2010 and
$1.27 for the full year 2010 compared
to $0.32 and $2.09 respectively for the same periods in 2009.
The year-over-year change in FFO, as adjusted, was primarily due to
higher development gains recognized in 2009.
Net income (loss) available to common stockholders per fully
diluted share ("EPS") for the fourth quarter of 2010 was
$0.03, as compared to a loss of
$(0.05) for the same quarter in 2009.
EPS for the full year 2010 was $0.06
as compared to a loss of $(0.37) for
2009.
"We made significant progress on our top priorities for the year
as reflected in our financial performance. Due to the efforts of
our teams around the world, we leased a record 32 million square
feet, and our cash-basis same store NOI turned positive for the
first time in two years," said Hamid R.
Moghadam, chairman and CEO. "As the leading indicators of
demand for industrial real estate continue to strengthen and
customer sentiment further improves, we believe this will lead to
an increase in space utilization and new demand in 2011."
Owned and Managed Portfolio Operating Results
The company's operating results were slightly higher than
expectations for the fourth quarter. AMB's operating portfolio was
93.7 percent occupied at December 31,
2010, up 110 basis points from September 30, 2010. Cash-basis same store net
operating income ("SS NOI"), without the effects of lease
termination fees, increased 0.9 percent during the fourth quarter
of 2010 compared with the same period in 2009, driven by increases
in occupancy. This increase in quarterly SS NOI marked the first
positive year-over-year performance since the fourth quarter of
2008. SS NOI for the full year 2010 decreased 3.2 percent. Average
rent on renewals and rollovers in AMB's operating portfolio
decreased 11.9 percent for the trailing four quarters ended
December 31, 2010.
Leasing Activity
During the fourth quarter, the company leased a total of 7.7
million square feet (715,400 square meters) of its operating
portfolio, consistent with leasing volume in the fourth quarter of
2009. The company leased a record 32.0 million square feet (2.9
million square meters) in the full year 2010. The company leased
1.2 million square feet (115,000 square meters) of its development
portfolio in the fourth quarter and more than 5.7 million square
feet (530,500 square meters) in the full year 2010.
Capital Deployment
During 2010, the company continued to invest capital
opportunistically. During the fourth quarter, the company deployed
approximately $230.2 million of
capital. For the year ended December 31,
2010, capital deployment totaled $832.2 million, which included:
- $343.3 million in acquisitions at
a stabilized capitalization rate of 7.0 percent, composed of 16
properties totaling approximately 4.8 million square feet;
- $300.0 million into its open-end
funds, consisting of $200.0 million
in AMB U.S. Logistics Fund and $100
million in AMB Europe Logistics Fund;
- $102.9 million of new development
starts in Brazil, China and Mexico; and
- $86.0 million in mezzanine
debt.
The company completed dispositions totaling $56.0 million in the fourth quarter at a
stabilized capitalization rate of 7.4 percent, and completed
dispositions and contributions totaling $153.3 million in the full year 2010, at a
stabilized capitalization rate of 7.3 percent.
Private Capital Activity
During the fourth quarter, the company raised $355.1 million of new third-party capital. For
the year ended December 31, 2010, new
commitments in the company's co-investment vehicles totaled
approximately $1.4 billion, including
$781.4 million of new third-party
equity, AMB's investment of $300
million into the company's open-end funds and AMB's
commitment of $280 million to AMB
Mexico Fondo Logistico and AMB Brazil Logistics Partners Fund
I.
New third-party equity raised in 2010 included:
- $312.3 million committed to the
company's two open-end funds, AMB U.S. Logistics Fund and AMB
Europe Logistics Fund;
- $252.2 million (3.3 billion Pesos) contributed to AMB Mexico
Fondo Logistico, which was formed in the third quarter. The
venture's overall equity commitment is $315.3 million, including AMB's 20 percent
co-investment; and
- $216.9 million (R$360 million) committed to AMB Brazil Logistics
Partners Fund I, which was formed in fourth quarter. The fund
overall equity commitment is $433.8
million (R$720 million),
including AMB's 50 percent co-investment.
Financing Activities
The company completed more than $1.9
billion of financings during the fourth quarter. This
activity included $1.5 billion of
wholly-owned debt consisting of the renewal of its two lines of
credit, a corporate term loan, a new bond issuance, and
$391 million for its co-investment
ventures in Europe, Japan and the U.S. For the year ended
December 31, 2010, the company
completed financings of approximately $4.0
billion. These transactions further improved and extended
the weighted average remaining life of the company's share of debt
to 4.8 years from 3.8 years at an average interest rate of 4.6
percent. As of December 31, 2010, the
company's share of total debt to share of total assets was 43
percent, which includes its share of joint venture debt.
"We had a busy year on the financing front as we successfully
took the opportunity to lock in favorable interest rates to further
enhance our debt maturity profile," said Thomas S. Olinger, AMB’s chief financial
officer. "We completed approximately $3
billion of activity in the second half of 2010, which was a
record for us."
As of December 31, 2010, the
company's liquidity was approximately $1.6
billion, consisting of approximately $1.4 billion of availability on its lines of
credit and more than $260 million of
unrestricted cash and cash equivalents.
FFO Guidance
The company maintains its previous full-year 2011 Core FFO, as
adjusted, guidance of $1.30 to $1.40
per share, which excludes the recognition of gains and losses from
development activities, early debt extinguishment costs and
restructuring charges. The company's 2011 Core FFO, as adjusted,
guidance excludes any impact from the proposed merger with
ProLogis.
Conference Call Information
The company will host a conference call to discuss the quarterly
and full year 2010 results on Thursday,
February 3 at 10:00 AM PST /
1:00 PM EST. Stockholders and
interested parties may listen to a live broadcast of the conference
call by dialing 877 447 8218 (from the U.S. and Canada) or +1 706 643 7823 (from all other
countries) and using reservation code 35044740. A webcast can be
accessed through the company's website at www.amb.com in the
Investor Relations section.
If you are unable to listen to the live conference call, a
telephone and webcast replay will be available through the
company's website at www.amb.com in the Investor Relations section
until 8:00 PM EST / 5:00 PM PST on Friday,
March 4, 2011 at 800 642 1687 (from the U.S. and
Canada) or +1 706 645 9291 (from
all other countries) with the reservation code 35044740. The
webcast and podcast will be available for the same time period and
can be accessed through the company's website at www.amb.com in the
Investor Relations section.
Supplemental Earnings Measures
Included in the footnotes to the company's attached financial
statements is a discussion of why management believes FFO, as
adjusted, FFOPS, as adjusted, Core FFO, as adjusted, and Core
FFOPS, as adjusted (the "FFO Measures, as adjusted"), are useful
supplemental measures of operating performance, ways in which
investors might use the FFO Measures, as adjusted when assessing
the company's financial performance and the limitations of the FFO
Measures, as adjusted, as a measurement tool. Reconciliation from
net income (loss) available to common stockholders to the FFO
Measures, as adjusted are provided in the attached tables and
published in the company's quarterly supplemental analyst package,
available on the company's website at www.amb.com.
AMB defines net operating income ("NOI") as rental revenues,
including reimbursements, less property operating expenses. NOI
excludes depreciation, amortization, general and administrative
expenses, restructuring charges, real estate impairment losses,
development profits (losses), gains (losses) from sale or
contribution of real estate interests, and interest expense. AMB
believes that net income, as defined by GAAP, is the most
appropriate earnings measure. However, NOI is a useful supplemental
measure calculated to help investors understand AMB's operating
performance, excluding the effects of costs and expenses which are
not related to the performance of the assets. NOI is widely used by
the real estate industry as a useful supplemental measure, which
helps investors compare AMB's operating performance with that of
other companies. Real estate impairment losses have been excluded
in deriving NOI because AMB does not consider its impairment losses
to be a property operating expense. AMB believes that the exclusion
of impairment losses from NOI is a common methodology used in the
real estate industry. Real estate impairment losses relate to the
changing values of AMB's assets but do not reflect the current
operating performance of the assets with respect to their revenues
or expenses. AMB's real estate impairment losses are non-cash
charges which represent the write down in the value of assets when
estimated fair value over the holding period is lower than current
carrying value. The impairment charges were principally a result of
increases in estimated capitalization rates and deterioration in
market conditions that adversely impacted underlying real estate
values. Therefore, the impairment charges are not related to the
current performance of AMB's real estate operations and should be
excluded from its calculation of NOI.
AMB considers cash-basis same store net operating income ("SS
NOI") to be a useful supplemental measure of our operating
performance for properties that are considered part of the same
store pool. AMB defines SS NOI as NOI on a same store basis
excluding straight line rents and amortization of lease
intangibles. Same store pool includes all properties that are owned
as of the end of both the current and prior year reporting periods
and excludes development properties for both the current and prior
reporting periods. The same store pool is set annually and excludes
properties purchased and developments stabilized after December 31, 2008. AMB considers SS NOI to be an
appropriate and useful supplemental performance measure because it
reflects the operating performance of the real estate portfolio
excluding effects of non-cash adjustments and provides a better
measure of actual cash basis rental growth for a year-over-year
comparison. In addition, AMB believes that SS NOI helps investors
compare the operating performance of AMB's real estate as compared
to other companies. While SS NOI is a relevant and widely used
measure of operating performance of real estate investment trusts,
it does not represent cash flow from operations or net income as
defined by GAAP and should not be considered as an alternative to
those measures in evaluating our liquidity or operating
performance. SS NOI also does not reflect general and
administrative expenses, interest expenses, real estate impairment
losses, depreciation and amortization costs, capital expenditures
and leasing costs, or trends in development and construction
activities that could materially impact our results from
operations. Further, AMB's computation of SS NOI may not be
comparable to that of other real estate companies, as they may use
different methodologies for calculating SS NOI. A reconciliation
from net income (loss) to SS NOI is provided below (dollars in
thousands) and published in AMB's quarterly supplemental analyst
package, available on AMB's website at www.amb.com.
|
For the
Quarters Ended
|
|
For the
Years Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Net income (loss)
|
$
11,309
|
|
$
(10,102)
|
|
$
33,594
|
|
$
(27,960)
|
|
Private capital
income
|
(9,001)
|
|
(10,615)
|
|
(30,860)
|
|
(38,013)
|
|
Depreciation and
amortization
|
51,353
|
|
50,718
|
|
196,636
|
|
175,334
|
|
Real estate impairment
losses
|
-
|
|
-
|
|
-
|
|
172,059
|
|
General and administrative and
fund costs
|
33,783
|
|
31,369
|
|
125,155
|
|
116,404
|
|
Restructuring charges
|
-
|
|
2,544
|
|
4,874
|
|
6,368
|
|
Total other income and
expenses
|
27,852
|
|
39,693
|
|
108,773
|
|
89,170
|
|
Total discontinued
operations
|
(5,698)
|
|
(2,938)
|
|
(24,242)
|
|
(96,222)
|
|
NOI
|
109,598
|
|
100,669
|
|
413,930
|
|
397,140
|
|
Less non same-store
NOI
|
(22,592)
|
|
(15,805)
|
|
(73,535)
|
|
(47,582)
|
|
Less non cash
adjustments(1)
|
(2,129)
|
|
(1,596)
|
|
(9,045)
|
|
(2,803)
|
|
Cash-basis same-store
NOI
|
$
84,877
|
|
$
83,268
|
|
$
331,350
|
|
$
346,755
|
|
Less lease termination
fees
|
$
(177)
|
|
$
(247)
|
|
$
(3,059)
|
|
$
(2,692)
|
|
Cash-basis same-store NOI,
excluding lease termination fees
|
$
84,700
|
|
$
83,021
|
|
$
328,291
|
|
$
344,063
|
|
|
|
|
|
|
|
|
|
|
(1) Non-cash
adjustments include straight line rents and amortization of lease
intangibles for the same store pool only (dollars in
thousands).
|
|
|
|
|
|
|
|
|
|
"Owned and managed" is defined by the company as assets in which
the company has at least a 10 percent ownership interest, is the
property or asset manager, and which it currently intends to hold
for the long-term.
AMB Property Corporation.® Local partner to global
trade.™
AMB Property Corporation® is a leading owner, operator and
developer of industrial real estate, focused on major hub and
gateway distribution markets in the Americas, Europe and Asia. As of December
31, 2010, AMB owned, or had investments in, on a
consolidated basis or through unconsolidated joint ventures,
properties and development projects expected to total approximately
159.6 million square feet (14.8 million square meters) in 49
markets within 15 countries. AMB invests in properties located
predominantly in the infill submarkets of its targeted markets. The
company's portfolio is comprised of High Throughput Distribution®
facilities—industrial properties built for speed and located near
airports, seaports and ground transportation systems.
AMB's press releases are available on the company website at
www.amb.com or by contacting the Investor Relations department at
+1 415 394 9000.
Some of the information included in this press release contains
forward-looking statements, such as those related to positive net
absorption, future investments in our co-investment ventures and
joint ventures, renewal of our lines of credit, future financing
activity, ability to access attractive financing globally, taking
advantage of current interest rates and term out our debt
maturities, our growth opportunities, retention of our target
leverage levels, operating forecasts, the recovery of our operating
performance, improvements in the operating environment and customer
demand, long term prospects for AMB and industrial real estate, the
recovery of leading business indicators, estimated build-out
potential of AMB's acquisitions, estimated total investment of
development starts, and 2010 and 2011 results and Core FFO, as
adjusted, guidance, which are made pursuant to the safe-harbor
provisions of Section 21E of the Securities Exchange Act of 1934,
as amended, and Section 27A of the Securities Act of 1933, as
amended. Because these forward-looking statements involve numerous
risks and uncertainties, there are important factors that could
cause our actual results to differ materially from those in the
forward-looking statements, and you should not rely on the
forward-looking statements as predictions of future events. The
events or circumstances reflected in forward-looking statements
might not occur. You can identify forward-looking statements by the
use of forward-looking terminology such as "believes," "expects,"
"may," "will," "should," "seeks," "approximately," "intends,"
"plans," "forecasting", "pro forma," "estimates" or "anticipates"
or the negative of these words and phrases or similar words or
phrases. You can also identify forward-looking statements by
discussions of strategy, plans or intentions. Forward-looking
statements should not be read as guarantees of the future
performance or results, and will not necessarily be accurate
indicators of whether, or the time at which, such performance of
results will be achieved. There is no assurance that the events or
circumstances reflected in forward-looking statements will occur or
be achieved. Forward-looking statements are necessarily
dependent on assumptions, data or methods that may be incorrect or
imprecise and we may not be able to realize them. We caution you
not to place undue reliance on forward-looking statements, which
reflect our analysis only and speak only as of the date of this
report or the dates indicated in the statements. We assume no
obligation to update or supplement forward-looking statements. The
following factors, among others, could cause actual results and
future events to differ materially from those set forth or
contemplated in the forward-looking statements: changes in general
economic conditions in California,
the U.S. or globally (including financial market fluctuations),
global trade or in the real estate sector (including risks relating
to decreasing real estate valuations and impairment charges); risks
associated with using debt to fund the company's business
activities, including refinancing and interest rate risks
(including inflation risks); the company's failure to obtain,
renew, or extend necessary financing or access the debt or equity
markets; the company's failure to maintain its current credit
agency ratings or comply with its debt covenants; risks related to
the company's obligations in the event of certain defaults under
co-investment venture and other debt; risks associated with equity
and debt securities financings and issuances (including the risk of
dilution); defaults on or non-renewal of leases by customers or
renewal at lower than expected rent or failure to lease at all or
on expected terms; difficulties in identifying properties,
portfolios of properties, or interests in real-estate related
entities or platforms to acquire and in effecting acquisitions on
advantageous terms and the failure of acquisitions to perform as
the company expects; unknown liabilities acquired in connection
with the acquired properties, portfolios of properties, or
interests in real-estate related entities; the company's failure to
successfully integrate acquired properties and operations; risks
and uncertainties affecting property development, redevelopment and
value-added conversion (including construction delays, cost
overruns, the company's inability to obtain necessary permits and
financing, the company's inability to lease properties at all or at
favorable rents and terms, and public opposition to these
activities); the company's failure to set up additional funds,
attract additional investment in existing funds or to contribute
properties to its co-investment ventures due to such factors as its
inability to acquire, develop, or lease properties that meet the
investment criteria of such ventures, or the co-investment
ventures' inability to access debt and equity capital to pay for
property contributions or their allocation of available capital to
cover other capital requirements; risks and uncertainties relating
to the disposition of properties to third parties and the company's
ability to effect such transactions on advantageous terms and to
timely reinvest proceeds from any such dispositions; risks of doing
business internationally and global expansion, including
unfamiliarity with the new markets and currency and hedging risks;
risks of changing personnel and roles; risks related to suspending,
reducing or changing the company's dividends; losses in excess of
the company's insurance coverage; changes in local, state law and
regulatory requirements, including changes in real estate, tax and
zoning laws; increases in real property tax rates; risks associated
with the company's tax structuring; increases in interest rates and
operating costs or greater than expected capital expenditures;
environmental uncertainties; risks related to natural disasters;
and our failure to qualify and maintain our status as a real estate
investment trust. Our success also depends upon economic
trends generally, various market conditions and fluctuations and
those other risk factors discussed under the heading "Risk Factors"
and elsewhere in our most recent annual report on Form 10-K for the
year ended December 31, 2009.
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
For the
Quarters ended
|
|
For the
Years ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Revenues
|
|
|
|
|
|
|
|
|
Rental revenues
|
$156,057
|
|
$149,052
|
|
$602,640
|
|
$580,411
|
|
Private capital
revenues
|
9,001
|
|
10,615
|
|
30,860
|
|
38,013
|
|
Total revenues
|
165,058
|
|
159,667
|
|
633,500
|
|
618,424
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
Property operating
costs
|
(46,459)
|
|
(48,383)
|
|
(188,710)
|
|
(183,271)
|
|
Depreciation and
amortization
|
(51,353)
|
|
(50,718)
|
|
(196,636)
|
|
(175,334)
|
|
General and
administrative
|
(33,605)
|
|
(31,131)
|
|
(124,364)
|
|
(115,342)
|
|
Restructuring
charges
|
-
|
|
(2,544)
|
|
(4,874)
|
|
(6,368)
|
|
Fund costs
|
(178)
|
|
(238)
|
|
(791)
|
|
(1,062)
|
|
Real estate impairment
losses
|
-
|
|
-
|
|
-
|
|
(172,059)
|
|
Other
expenses(1)
|
(1,946)
|
|
(2,176)
|
|
(3,197)
|
|
(8,681)
|
|
Total costs and
expenses
|
(133,541)
|
|
(135,190)
|
|
(518,572)
|
|
(662,117)
|
|
Other income
and expenses
|
|
|
|
|
|
|
|
|
Development profits, net
of taxes
|
1,020
|
|
1,368
|
|
6,739
|
|
35,874
|
|
Equity in earnings of
unconsolidated joint ventures, net
|
4,956
|
|
3,824
|
|
17,372
|
|
11,331
|
|
Other income
(expense)(1)
|
1,507
|
|
(323)
|
|
3,543
|
|
3,440
|
|
Interest expense,
including amortization
|
(33,036)
|
|
(30,772)
|
|
(130,338)
|
|
(118,867)
|
|
Loss on early
extinguishment of debt
|
(353)
|
|
(11,614)
|
|
(2,892)
|
|
(12,267)
|
|
Total other income and
expenses, net
|
(25,906)
|
|
(37,517)
|
|
(105,576)
|
|
(80,489)
|
|
Income (loss) from
continuing operations
|
5,611
|
|
(13,040)
|
|
9,352
|
|
(124,182)
|
|
Discontinued
operations
|
|
|
|
|
|
|
|
|
Income attributable to
discontinued operations
|
1,193
|
|
1,358
|
|
3,994
|
|
4,502
|
|
Development profits, net
of taxes
|
-
|
|
-
|
|
-
|
|
53,002
|
|
Gains from sale of real
estate interests, net of taxes
|
4,505
|
|
1,580
|
|
20,248
|
|
38,718
|
|
Total discontinued
operations
|
5,698
|
|
2,938
|
|
24,242
|
|
96,222
|
|
Net income
(loss)
|
11,309
|
|
(10,102)
|
|
33,594
|
|
(27,960)
|
|
Noncontrolling interests' share
of net income (loss)
|
|
|
|
|
|
|
|
|
Joint venture partners'
share of net income
|
(2,058)
|
|
(2,234)
|
|
(6,278)
|
|
(11,063)
|
|
Joint venture partners' and limited partnership unitholders' share of development profits, net of taxes
|
(16)
|
|
(942)
|
|
(109)
|
|
(3,308)
|
|
Preferred
unitholders
|
-
|
|
-
|
|
-
|
|
(4,295)
|
|
Limited partnership
unitholders
|
(83)
|
|
161
|
|
(88)
|
|
3,625
|
|
Total noncontrolling
interests' share of net income (loss)
|
(2,157)
|
|
(3,015)
|
|
(6,475)
|
|
(15,041)
|
|
Net income (loss)
attributable to AMB Property Corporation
|
9,152
|
|
(13,117)
|
|
27,119
|
|
(43,001)
|
|
Preferred stock
dividends
|
(3,950)
|
|
(3,950)
|
|
(15,806)
|
|
(15,806)
|
|
Preferred unit redemption
discount
|
-
|
|
9,759
|
|
-
|
|
9,759
|
|
Allocation to
participating securities(2)
|
(337)
|
|
(257)
|
|
(1,346)
|
|
(1,029)
|
|
Net income (loss) available to
common stockholders
|
$
4,865
|
|
$ (7,565)
|
|
$
9,967
|
|
$ (50,077)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common
share (diluted)
|
$
0.03
|
|
$
(0.05)
|
|
$
0.06
|
|
$
(0.37)
|
|
Weighted average common shares
(diluted)
|
167,311
|
|
147,047
|
|
161,988
|
|
134,321
|
|
|
|
|
|
|
|
|
|
|
(1) Includes
changes in liabilities and assets associated with AMB's deferred
compensation plan for the three and twelve months ended
December 31, 2010 of $1,069 and
$1,460, respectively, and for the three and twelve months ended
December 31, 2009 of $969 and $7,823, respectively
(2) Represents
net income attributable to AMB Property Corporation, net of
preferred stock dividends, allocated to outstanding unvested
restricted shares. For the three and twelve months ended December
31, 2010, there were 1,202 unvested restricted shares outstanding.
For the three and twelve months ended December 31, 2009, there were
920 unvested restricted shares outstanding.
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF FUNDS FROM OPERATIONS, AS ADJUSTED (1)
|
|
(in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
For the
Quarters Ended December 31,
|
|
For the
Years Ended December 31,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Net income
(loss) available to common stockholders
|
$ 4,865
|
|
$ (7,565)
|
|
$ 9,967
|
|
$ (50,077)
|
|
Gains from sale or
contribution of real estate interests, net of taxes
|
(4,505)
|
|
(1,580)
|
|
(20,248)
|
|
(38,718)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
Total depreciation and
amortization
|
51,353
|
|
50,718
|
|
196,636
|
|
175,334
|
|
Discontinued operations'
depreciation
|
69
|
|
1,208
|
|
3,447
|
|
6,602
|
|
Non-real estate
depreciation
|
(1,906)
|
|
(2,576)
|
|
(8,432)
|
|
(8,593)
|
|
Adjustment for
depreciation on development profits
|
-
|
|
-
|
|
(1,546)
|
|
-
|
|
Adjustments to derive FFO,
as adjusted from noncontrolling interests
|
|
|
|
|
|
|
|
|
Joint venture partners'
noncontrolling interests (Net income)
|
2,058
|
|
2,234
|
|
6,278
|
|
11,063
|
|
Limited partnership
unitholders' noncontrolling interests (Net income
(loss))
|
83
|
|
(161)
|
|
88
|
|
(3,625)
|
|
Limited partnership
unitholders' noncontrolling interests (Development
profits)
|
16
|
|
11
|
|
133
|
|
2,377
|
|
FFO, as adjusted
attributable to joint venture partners' noncontrolling
interests
|
(7,454)
|
|
(7,245)
|
|
(28,251)
|
|
(31,571)
|
|
Adjustments to derive FFO,
as adjusted from unconsolidated joint ventures
|
|
|
|
|
|
|
|
|
AMB's share of net
income
|
(4,956)
|
|
(3,824)
|
|
(17,372)
|
|
(11,331)
|
|
AMB's share of FFO, as
adjusted
|
16,070
|
|
12,549
|
|
61,903
|
|
47,549
|
|
Adjustments for
impairments, restructuring charges and debt
extinguishment
|
|
|
|
|
|
|
|
|
Real estate impairment
losses
|
-
|
|
-
|
|
-
|
|
172,059
|
|
Discontinued operations'
real estate impairment losses
|
-
|
|
-
|
|
-
|
|
9,794
|
|
Restructuring
charges
|
-
|
|
2,544
|
|
4,874
|
|
6,368
|
|
Loss on early
extinguishment of debt
|
353
|
|
11,614
|
|
2,892
|
|
12,267
|
|
Preferred unit redemption
discount
|
-
|
|
(9,759)
|
|
-
|
|
(9,759)
|
|
Allocation to
participating securities(2)
|
(58)
|
|
(37)
|
|
(182)
|
|
(898)
|
|
Funds from operations, as
adjusted(1)
|
$ 55,988
|
|
$ 48,131
|
|
$ 210,187
|
|
$ 288,841
|
|
|
|
|
|
|
|
|
|
|
FFO, as adjusted per common
share and unit (diluted)
|
$ 0.33
|
|
$ 0.32
|
|
$
1.27
|
|
$
2.09
|
|
Weighted average common shares
and units (diluted)
|
171,752
|
|
150,993
|
|
166,127
|
|
137,904
|
|
|
|
|
|
|
|
|
|
|
Core Funds From Operations, as
adjusted
|
|
|
|
|
|
|
|
|
Funds from operations, as
adjusted
|
$ 55,988
|
|
$ 48,131
|
|
$ 210,187
|
|
$ 288,841
|
|
Development profits, net
of taxes
|
(1,020)
|
|
(1,368)
|
|
(6,739)
|
|
(88,876)
|
|
Joint venture partners' and limited partnership unitholders' share of development profits, net of taxes
|
16
|
|
942
|
|
61
|
|
3,308
|
|
Limited partnership
unitholders' noncontrolling interests (Development
profits)
|
(16)
|
|
(11)
|
|
(133)
|
|
(2,377)
|
|
AMB's share of development
gains from unconsolidated joint ventures
|
-
|
|
248
|
|
(9)
|
|
(271)
|
|
Allocation to
participating securities(2)
|
7
|
|
1
|
|
49
|
|
585
|
|
Core Funds From Operations, as
adjusted(1)
|
$ 54,975
|
|
$ 47,943
|
|
$ 203,416
|
|
$ 201,210
|
|
|
|
|
|
|
|
|
|
|
Core FFO, as adjusted per common
share and unit (diluted)
|
$ 0.32
|
|
$ 0.32
|
|
$
1.22
|
|
$
1.46
|
|
Weighted average common shares
and units (diluted)
|
171,752
|
|
150,993
|
|
166,127
|
|
137,904
|
|
|
|
|
|
|
|
|
|
|
(1) Funds From
Operations, as adjusted, (“FFO, as adjusted,”), Funds From
Operations, Per Share and Unit, as adjusted (“FFOPS, as
adjusted”), Core FFO, as adjusted, and Core FFO Per Share and Unit,
as adjusted (“Core FFOPS, as adjusted” ) (together with FFO, as
adjusted, FFOPS, as adjusted, Core FFO, as adjusted and Core FFOPS,
as adjusted, the “FFO Measures, as adjusted”). AMB believes that
net income, as defined by U.S. GAAP, is the most appropriate
earnings measure. However, AMB considers funds from operations, as
adjusted (or FFO, as adjusted), FFO per share and unit, as adjusted
(or FFOPS, as adjusted), Core FFO, as adjusted and Core FFO per
share and unit, as adjusted (or Core FFOPS, as adjusted) to be
useful supplemental measures of its operating performance. AMB
defines FFOPS, as adjusted, as FFO, as adjusted, per fully diluted
weighted average share of AMB’s common stock and operating
partnership units. AMB calculates FFO, as adjusted, as net income (
or loss) available to common stockholders, calculated in accordance
with U.S. GAAP, less gains (or losses) from dispositions of real
estate held for investment purposes and real estate-related
depreciation, and adjustments to derive AMB’s pro rata share of
FFO, as adjusted, of consolidated and unconsolidated joint
ventures. AMB defines Core FFOPS, as adjusted as Core FFO, as
adjusted per fully diluted weighted share of AMB’s common stock and
operating partnership units. AMB calculates Core FFO, as adjusted
as FFO, as adjusted excluding AMB’s share of development profits.
These calculations also include adjustments for items as described
below.
Unless stated otherwise, AMB
includes the gains from development, including those from
value-added conversion projects before depreciation recapture, as a
component of FFO, as adjusted. AMB believes gains from development
should be included in FFO, as adjusted, to more completely reflect
the performance of one of our lines of business. AMB believes that
value-added conversion dispositions are in substance land sales and
as such should be included in FFO, as adjusted, consistent with the
real estate investment trust industry's long standing practice to
include gains on the sale of land in funds from operations.
However, AMB's interpretation of FFO, as adjusted, or FFOPS, as
adjusted, may not be consistent with the views of others in the
real estate investment trust industry, who may consider it to be a
divergence from the NAREIT definition, and may not be comparable to
funds from operations or funds from operations per share and unit
reported by other real estate investment trusts that interpret the
current NAREIT definition differently than AMB does. In connection
with the formation of a joint venture, AMB may warehouse assets
that are acquired with the intent to contribute these assets to the
newly formed venture. Some of the properties held for contribution
may, under certain circumstances, be required to be depreciated
under U.S. GAAP. If this circumstance arises, AMB intends to
include in its calculation of FFO, as adjusted, gains or losses
related to the contribution of previously depreciated real estate
to joint ventures. Although such a change, if instituted, will be a
departure from the current NAREIT definition, AMB believes such
calculation of FFO, as adjusted, will better reflect the value
created as a result of the contributions. To date, AMB has not
included gains or losses from the contribution of previously
depreciated warehoused assets in FFO as adjusted.
In addition, AMB calculates FFO,
as adjusted, to exclude impairment and restructuring charges, debt
extinguishment losses and the Series D preferred unit redemption
discount. The impairment charges were principally a result of
increases in estimated capitalization rates and deterioration in
market conditions that adversely impacted values. The restructuring
charges reflected costs associated with AMB's reduction in global
headcount and cost structure. Debt extinguishment losses generally
included the costs of repurchasing debt securities. AMB repurchased
certain tranches of senior unsecured debt to manage its debt
maturities in response to the current financing environment,
resulting in greater debt extinguishment costs. The Series D
preferred unit redemption discount reflects the gain associated
with the discount to liquidation preference in the Series D
preferred unit redemption price less costs incurred as a result of
the redemption. Although difficult to predict, these items may be
recurring given the uncertainty of the current economic climate and
its adverse effects on the real estate and financial markets. While
not infrequent or unusual in nature, these items result from market
fluctuations that can have inconsistent effects on AMB's results of
operations. The economics underlying these items reflect market and
financing conditions in the short-term but can obscure AMB's
performance and the value of AMB's long-term investment decisions
and strategies. Management believes FFO, as adjusted, is
significant and useful to both it and its investors. FFO, as
adjusted, more appropriately reflects the value and strength of
AMB's business model and its potential performance isolated from
the volatility of the current economic environment and unobscured
by costs (or gains) resulting from AMB's management of its
financing profile in response to the tightening of the capital
markets. However, in addition to the limitations of FFO Measures,
as adjusted, generally discussed below, FFO, as adjusted, does not
present a comprehensive measure of AMB's financial condition and
operating performance. This measure is a modification of the NAREIT
definition of funds from operations and should not be used as an
alternative to net income or cash as defined by U.S.
GAAP.
AMB believes that the FFO
Measures, as adjusted, are meaningful supplemental measures of its
operating performance because historical cost accounting for real
estate assets in accordance with U.S. GAAP implicitly assumes that
the value of real estate assets diminishes predictably over time,
as reflected through depreciation and amortization expenses.
However, since real estate values have historically risen or fallen
with market and other conditions, many industry investors and
analysts have considered presentation of operating results for real
estate companies that use historical cost accounting to be
insufficient. Thus, the FFO Measures, as adjusted, are supplemental
measures of operating performance for real estate investment trusts
that exclude historical cost depreciation and amortization, among
other items, from net income available to common stockholders, as
defined by U.S. GAAP. AMB believes that the use of the FFO
Measures, as adjusted, combined with the required U.S. GAAP
presentations, has been beneficial in improving the understanding
of operating results of real estate investment trusts among the
investing public and making comparisons of operating results among
such companies more meaningful. AMB considers the FFO Measures, as
adjusted, to be useful measures for reviewing comparative operating
and financial performance because, by excluding gains or losses
related to sales of previously depreciated operating real estate
assets and real estate depreciation and amortization, the FFO
Measures, as adjusted, can help the investing public compare the
operating performance of a company's real estate between periods or
as compared to other companies. While funds from operations and
funds from operations per share are relevant and widely used
measures of operating performance of real estate investment trusts,
the FFO Measures, as adjusted, do not represent cash flow from
operations or net income as defined by U.S. GAAP and should not be
considered as alternatives to those measures in evaluating AMB's
liquidity or operating performance. The FFO Measures, as adjusted,
also do not consider the costs associated with capital expenditures
related to AMB's real estate assets nor are the FFO Measures, as
adjusted, necessarily indicative of cash available to fund AMB's
future cash requirements. Management compensates for the
limitations of the FFO Measures, as adjusted, by providing
investors with financial statements prepared according to U.S.
GAAP, along with this detailed discussion of the FFO Measures, as
adjusted, and a reconciliation of the FFO Measures, as adjusted, to
net income available to common stockholders, a U.S. GAAP
measurement.
See Consolidated Statements of
Funds from Operations, as adjusted for a reconciliation of FFO, as
adjusted, from net income (loss) available to common stockholders
and a reconciliation of Core FFO, as adjusted from FFO, as
adjusted.
The following table reconciles
projected Core FFO, as adjusted, from projected net income (loss)
available to common stockholders for the year ended December 31,
2011:
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
|
Low
|
|
High
|
|
|
|
|
|
|
Projected net (loss) income
available to common stockholders
|
$ (0.03)
|
|
$ 0.07
|
|
AMB's share of projected
depreciation and amortization
|
1.36
|
|
1.36
|
|
AMB's share of depreciation on
development profits recognized to date
|
-
|
|
-
|
|
AMB's share of gains on
dispositions of operating properties recognized to date
|
-
|
|
-
|
|
Loss on early extinguishment of
debt
|
-
|
|
-
|
|
Restructuring charges
|
-
|
|
-
|
|
Impact of additional dilutive
securities, other, rounding
|
(0.03)
|
|
(0.03)
|
|
Projected Funds From Operations,
as adjusted (FFO, as adjusted)
|
$ 1.30
|
|
$ 1.40
|
|
|
|
|
|
|
AMB's share of development gains
recognized to date
|
-
|
|
-
|
|
Projected Core FFO, as
adjusted(3)
|
$ 1.30
|
|
$ 1.40
|
|
|
|
|
|
|
Amounts are expressed per share,
except FFO, as adjusted and Core FFO, as adjusted, which are
expressed per share and unit.
(2) Represents
amount of FFO, as adjusted allocated to outstanding unvested
restricted shares. For the three and twelve months ended December
31, 2010, there were 1,202 unvested restricted shares.
For the three and twelve months
ended December 31, 2009, there were 920 unvested restricted
shares.
(3) As development gains are
difficult to predict in the current economic environment,
management believes Core FFO, as adjusted, is the more appropriate
and useful measure to reflect its assessment of AMB's projected
operating performance.
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
(dollars in
thousands)
|
|
|
As
of
|
|
|
December 31,
2010
|
|
December 31,
2009
|
|
Assets
|
|
|
|
|
Investments in real
estate
|
|
|
|
|
Total investments in
properties
|
$
6,906,176
|
|
$
6,708,660
|
|
Accumulated depreciation
and amortization
|
(1,268,093)
|
|
(1,113,808)
|
|
Net investments in
properties
|
5,638,083
|
|
5,594,852
|
|
Investments in
unconsolidated joint ventures
|
883,241
|
|
462,130
|
|
Properties held for sale
or contribution, net
|
242,098
|
|
214,426
|
|
Net investments in real
estate
|
6,763,422
|
|
6,271,408
|
|
Cash and cash equivalents
and restricted cash
|
228,415
|
|
206,077
|
|
Accounts receivable,
net
|
167,735
|
|
155,958
|
|
Other assets
|
213,323
|
|
208,515
|
|
Total assets
|
$
7,372,895
|
|
$
6,841,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and equity
|
|
|
|
|
Liabilities
|
|
|
|
|
Secured debt
|
$
962,434
|
|
$
1,096,554
|
|
Unsecured senior
debt
|
1,685,956
|
|
1,155,529
|
|
Unsecured credit
facilities
|
268,933
|
|
477,630
|
|
Other debt
|
413,976
|
|
482,883
|
|
Accounts payable and other
liabilities
|
339,474
|
|
338,042
|
|
Total
liabilities
|
3,670,773
|
|
3,550,638
|
|
Equity
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Common equity
|
3,097,311
|
|
2,716,604
|
|
Preferred
equity
|
223,412
|
|
223,412
|
|
Total stockholders'
equity
|
3,320,723
|
|
2,940,016
|
|
Noncontrolling
interests
|
|
|
|
|
Joint venture
partners
|
325,590
|
|
289,909
|
|
Limited partnership
unitholders
|
55,809
|
|
61,395
|
|
Total noncontrolling
interests
|
381,399
|
|
351,304
|
|
Total
equity
|
3,702,122
|
|
3,291,320
|
|
Total liabilities and
equity
|
$
7,372,895
|
|
$
6,841,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE AMB Property Corporation