U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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): July 21, 2010
AMB PROPERTY CORPORATION
(Exact name of registrant as specified in its charter)
|
|
|
|
|
Maryland
|
|
001-13545
|
|
94-3281941
|
|
|
|
|
|
(State or other jurisdiction of
|
|
(Commission file number)
|
|
(I.R.S. employer identification
|
incorporation)
|
|
|
|
number)
|
Pier 1, Bay 1, San Francisco, California 94111
(Address of principal executive offices) (Zip code)
415-394-9000
(Registrants 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))
|
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On July 21, 2010, we issued a press release entitled AMB Property Corporation Announces Second
Quarter 2010 Results, which sets forth disclosure regarding our results of operations for the
second quarter 2010. A copy of the press release is attached hereto as Exhibit 99.1. This section
and the attached exhibit are provided under Item 2.02 of Form 8-K and are furnished to, but not
filed with, the U.S. Securities and Exchange Commission.
ITEM 8.01 OTHER EVENTS.
On July 21, 2010, we reported results for the second quarter 2010. Funds from operations, as
adjusted, per fully diluted share and unit was $0.30 for the second quarter of 2010, as compared to
$0.37 for the same quarter in 2009. FFO, as adjusted for the second quarter of 2010, excludes $0.01
of restructuring and debt extinguishment charges.
Net income available to common stockholders per fully diluted share for the second quarter of
2010 was $0.02, as compared to $0.12 for the same quarter in 2009. The year-over-year change
was primarily due to higher depreciation expense and lower gains from disposition of operating
properties.
Owned and Managed Portfolio Operating Results
Occupancy in our operating portfolio was 91.8 percent at June 30, 2010, up 130 basis points from
March 31, 2010. Average occupancy during the second quarter was 90.1 percent. Cash-basis same
store net operating income, without the effect of lease termination fees, decreased 6.0 percent in
the second quarter of 2010 compared with the same period in 2009, driven primarily by lower
average same store occupancy and increased levels of free rent. Average rent on renewals and
rollovers in our operating portfolio decreased 11.2 percent for the trailing four quarters ended
June 30, 2010.
Leasing Activity
We commenced leases totaling approximately 7.9 million square feet (735,400 square meters) in
our global operating portfolio during the quarter and 33.9 million square feet (3.2 million square
meters) for the trailing four quarters ended June 30, 2010.
In addition, we leased approximately 1.6 million square feet (149,300 square meters) in
our global development portfolio during the quarter.
Investment Activity
During the quarter, acquisitions totaled $42.7 million, including $29.4 million for AMB Europe
Fund I and $13.3 million for our wholly-owned portfolio. We also acquired a land parcel
in Brazil, the second acquisition through our joint venture with Cyrela Commercial Properties
(CCP). The 48 acres have estimated build-out potential of 728,800 square feet (67,700 square
meters).
Subsequent to quarter end, our two open-ended funds received capital commitments comprising:
|
■
|
|
$50.5 million in third-party equity in AMB U.S. Logistics Fund; and
|
|
|
■
|
|
$42.8 million in third-party equity in AMB Europe Fund I.
|
Disposition Activities
During the second quarter, we completed property
dispositions and contributions of
$35 million, with a 6.0 percent capitalization rate, comprising:
■
|
|
The sale of five properties in the Americas for an aggregate price of $12.6
million; and
|
|
■
|
|
The transfer of two assets to AMB Europe Fund I in exchange for additional units
equal to the fair value of the assets, of $22.4 million.
|
|
During the first half of 2010, we
completed property dispositions and contributions of $57.9 million, with a stabilized
capitalization rate of 6.9 percent.
|
Financing Activities
On April 12, 2010, we completed the issuance and sale of
approximately 18.2 million shares of our common stock in a public offering at a price of
$27.50 per share, generating approximately $479 million in net proceeds. We used the proceeds
for general corporate purposes, including the reduction of borrowings on our lines of credit and
the funding of equity investments into AMB U.S. Logistics Fund.
We completed more than $428 million of debt repayments and extensions during the second
quarter and $678 million year to date. Our share of total debt was reduced by approximately $264
million during the quarter, and at June 30, 2010, our share of total debt to share of
total assets was 40.5 percent, as compared to 44.8 percent at the end of the first quarter of 2010.
Our liquidity at June 30, 2010 was approximately $1.5 billion, consisting of more than $1.2
billion of availability on our lines of credit and approximately $292 million of unrestricted cash
and cash equivalents.
Subsequent to quarter end, we closed two yen-denominated financing transactions in Japan totaling
$189 million (USD equivalent). The financings consisted of a $113 million 10-year unsecured
corporate term-loan at a fixed rate of 3.25 percent and a $76 million non-recourse seven-year
mortgage loan at a 2.9 percent fixed rate. The proceeds from both financings were used to pay down
borrowings on our yen line of credit.
SUPPLEMENTAL EARNINGS MEASURES
Included in the footnotes to our attached financial statements is a discussion of why
management believes FFO, as adjusted, and FFOPS, as adjusted (or, 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 our financial performance and the limitations of the FFO
Measures, as adjusted, as a measurement tool. Reconciliation from net income to the FFO Measures,
as adjusted, is provided in the attached tables.
We define 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. We believe 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 our operating performance, excluding the effects of gains (losses), 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 our operating
performance with that of other companies. Real estate impairment losses have been excluded in
deriving NOI because we do not consider our impairment losses to be a property operating expense.
We believe 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 our assets but
do not reflect the current operating performance of the assets with respect to their revenues or
expenses. Our 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 our
real estate operations and should be excluded from our calculation of NOI.
We consider SS NOI to be a useful supplemental measure of our operating performance for properties
that are considered part of the same store pool. We define Cash-basis 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. 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
investors compare the operating performance of our 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, 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. Reconciliation from net income to SS NOI is provided in the attached tables.
The
following table reconciles consolidated cash-basis SS NOI and NOI
from net loss for the three and six months ended June 30, 2010 and
2009 (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarters Ended
|
|
|
For the Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
Net income (loss)
|
|
$
|
9,313
|
|
|
$
|
29,034
|
|
|
$
|
8,693
|
|
|
$
|
(94,322
|
)
|
Private capital income
|
|
|
(6,845
|
)
|
|
|
(7,795
|
)
|
|
|
(14,290
|
)
|
|
|
(19,490
|
)
|
Depreciation and amortization
|
|
|
48,278
|
|
|
|
38,523
|
|
|
|
96,667
|
|
|
|
80,427
|
|
Real estate impairment losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
175,887
|
|
General and administrative and fund costs
|
|
|
30,246
|
|
|
|
25,963
|
|
|
|
62,511
|
|
|
|
57,538
|
|
Restructuring charges
|
|
|
872
|
|
|
|
3,824
|
|
|
|
3,845
|
|
|
|
3,824
|
|
Total other income and expenses
|
|
|
26,094
|
|
|
|
20,824
|
|
|
|
50,931
|
|
|
|
26,778
|
|
Total discontinued operations
|
|
|
(4,659
|
)
|
|
|
(12,549
|
)
|
|
|
(4,904
|
)
|
|
|
(31,418
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI
|
|
|
103,299
|
|
|
|
97,824
|
|
|
|
203,453
|
|
|
|
199,224
|
|
Less non same-store NOI
|
|
|
(17,894
|
)
|
|
|
(9,562
|
)
|
|
|
(33,440
|
)
|
|
|
(20,293
|
)
|
Less non cash adjustments(1)
|
|
|
(2,698
|
)
|
|
|
77
|
|
|
|
(5,219
|
)
|
|
|
(350
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash-basis same-store NOI
|
|
$
|
82,707
|
|
|
$
|
88,339
|
|
|
$
|
164,794
|
|
|
$
|
178,581
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less lease termination fees
|
|
$
|
(596
|
)
|
|
$
|
(478
|
)
|
|
$
|
(1,233
|
)
|
|
$
|
(1,261
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash-basis same-store NOI, excluding lease termination fees
|
|
$
|
82,111
|
|
|
$
|
87,861
|
|
|
$
|
163,561
|
|
|
$
|
177,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Non-cash adjustments include straight line rents and amortization of lease
intangibles for the same store pool only.
|
Owned and managed is defined by us as assets in which we have at least a
10 percent ownership interest, are the property or asset manager, and which we currently intend to
hold for the long-term.
We are an owner, operator and developer of global industrial real estate, focused on major hub and
gateway distribution markets in the Americas, Europe and Asia. As of June 30, 2010, we owned, or
had investments in, on a consolidated basis or through unconsolidated joint ventures, properties
and development projects expected to total approximately 156.1 million square feet (14.5 million
square meters) in 48 markets within 15 countries. We invest in properties located predominantly in
the infill submarkets of our targeted markets. Our portfolio comprises High Throughput
Distribution
®
facilitiesindustrial properties built for speed and located near airports, seaports
and ground transportation systems.
FORWARD LOOKING STATEMENTS
Some of
the information included in this report contains forward-looking statements, such as
those related to estimated build-out potential of our acquisitions, 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 future
performance or results, and will not necessarily be accurate
indicators of whether, or the time at which, such performance or
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 our business activities, including refinancing
and interest rate risks (including inflation risks); our failure to obtain, renew, or extend
necessary financing or access the debt or equity markets; our failure to maintain our current
credit agency ratings or comply with our debt covenants; risks related to our 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 we expect; unknown liabilities
acquired in connection with the acquired properties, portfolios of properties, or interests in
real-estate related entities; our failure to successfully integrate acquired properties and
operations; risks and uncertainties affecting property development, redevelopment and value-added
conversion (including construction delays, cost overruns, our inability to obtain necessary permits
and financing, our inability to lease properties at all or at favorable rents and terms, and public
opposition to these activities); our failure to set up additional funds, attract additional
investment in existing funds or to contribute properties to our co-investment ventures due to such
factors as our 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 our 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 our dividends; losses in excess of our
insurance coverage; changes in local, state and federal regulatory requirements, including changes
in real estate and zoning laws; increases in real property tax rates; risks associated with our 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 June 30,
|
|
|
For the Six Months Ended June 30,
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues
|
|
$
|
151,773
|
|
|
$
|
140,777
|
|
|
$
|
301,306
|
|
|
$
|
291,253
|
|
Private capital revenues
|
|
|
6,845
|
|
|
|
7,795
|
|
|
|
14,290
|
|
|
|
19,490
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
158,618
|
|
|
|
148,572
|
|
|
|
315,596
|
|
|
|
310,743
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating costs
|
|
|
(48,474
|
)
|
|
|
(42,953
|
)
|
|
|
(97,853
|
)
|
|
|
(92,029
|
)
|
Depreciation and amortization
|
|
|
(48,278
|
)
|
|
|
(38,523
|
)
|
|
|
(96,667
|
)
|
|
|
(80,427
|
)
|
General and administrative
|
|
|
(30,093
|
)
|
|
|
(25,641
|
)
|
|
|
(62,043
|
)
|
|
|
(56,954
|
)
|
Restructuring charges
|
|
|
(872
|
)
|
|
|
(3,824
|
)
|
|
|
(3,845
|
)
|
|
|
(3,824
|
)
|
Fund costs
|
|
|
(153
|
)
|
|
|
(322
|
)
|
|
|
(468
|
)
|
|
|
(584
|
)
|
Real estate impairment losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(175,887
|
)
|
Other expenses(1)
|
|
|
1,271
|
|
|
|
(4,207
|
)
|
|
|
80
|
|
|
|
(3,545
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses
|
|
|
(126,599
|
)
|
|
|
(115,470
|
)
|
|
|
(260,796
|
)
|
|
|
(413,250
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development profits, net of taxes
|
|
|
199
|
|
|
|
|
|
|
|
5,002
|
|
|
|
33,286
|
|
Equity in earnings of unconsolidated joint ventures, net
|
|
|
5,193
|
|
|
|
4,284
|
|
|
|
9,068
|
|
|
|
4,250
|
|
Other income(1)
|
|
|
448
|
|
|
|
7,528
|
|
|
|
737
|
|
|
|
459
|
|
Interest expense, including amortization
|
|
|
(32,626
|
)
|
|
|
(27,772
|
)
|
|
|
(65,239
|
)
|
|
|
(60,571
|
)
|
Loss on early extinguishment of debt
|
|
|
(579
|
)
|
|
|
(657
|
)
|
|
|
(579
|
)
|
|
|
(657
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income and expenses, net
|
|
|
(27,365
|
)
|
|
|
(16,617
|
)
|
|
|
(51,011
|
)
|
|
|
(23,233
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
4,654
|
|
|
|
16,485
|
|
|
|
3,789
|
|
|
|
(125,740
|
)
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income attributable to discontinued operations
|
|
|
411
|
|
|
|
2,459
|
|
|
|
656
|
|
|
|
2,714
|
|
Gains from sale of real estate interests, net of taxes
|
|
|
4,248
|
|
|
|
10,090
|
|
|
|
4,248
|
|
|
|
28,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total discontinued operations
|
|
|
4,659
|
|
|
|
12,549
|
|
|
|
4,904
|
|
|
|
31,418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
9,313
|
|
|
|
29,034
|
|
|
|
8,693
|
|
|
|
(94,322
|
)
|
Noncontrolling interests share of net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint venture partners share of net income
|
|
|
(2,068
|
)
|
|
|
(4,949
|
)
|
|
|
(1,693
|
)
|
|
|
(2,771
|
)
|
Joint venture partners and limited partnership unitholders share of development profits
|
|
|
21
|
|
|
|
|
|
|
|
(85
|
)
|
|
|
(1,108
|
)
|
Preferred unitholders
|
|
|
|
|
|
|
(1,432
|
)
|
|
|
|
|
|
|
(2,864
|
)
|
Limited partnership unitholders
|
|
|
(75
|
)
|
|
|
(1,279
|
)
|
|
|
125
|
|
|
|
4,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noncontrolling interests share of net income (loss)
|
|
|
(2,122
|
)
|
|
|
(7,660
|
)
|
|
|
(1,653
|
)
|
|
|
(2,702
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to AMB Property Corporation
|
|
|
7,191
|
|
|
|
21,374
|
|
|
|
7,040
|
|
|
|
(97,024
|
)
|
Preferred stock dividends
|
|
|
(3,952
|
)
|
|
|
(3,952
|
)
|
|
|
(7,904
|
)
|
|
|
(7,904
|
)
|
Allocation to participating securities(2)
|
|
|
(342
|
)
|
|
|
(260
|
)
|
|
|
(684
|
)
|
|
|
(521
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common stockholders
|
|
$
|
2,897
|
|
|
$
|
17,162
|
|
|
$
|
(1,548
|
)
|
|
$
|
(105,449
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share (diluted)
|
|
$
|
0.02
|
|
|
$
|
0.12
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.86
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares (diluted)
|
|
|
165,658
|
|
|
|
145,380
|
|
|
|
156,793
|
|
|
|
121,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Includes changes in liabilities and assets associated with AMBs deferred
compensation plan for the three and six months ended June 30, 2010 of $(1,615) and $(696),
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 six months
ended June 30, 2010, there were 1,222 unvested restricted shares outstanding. For the three and six
months ended June 30, 2009, there were 930 unvested restricted shares outstanding.
|
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS, AS ADJUSTED
(1)
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarters Ended June 30,
|
|
|
For the Six Months Ended June 30,
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
Net income (loss) available to common stockholders
|
|
$
|
2,897
|
|
|
$
|
17,162
|
|
|
$
|
(1,548
|
)
|
|
$
|
(105,449
|
)
|
Gains from sale or contribution of real estate interests, net of taxes
|
|
|
(4,248
|
)
|
|
|
(10,090
|
)
|
|
|
(4,248
|
)
|
|
|
(28,704
|
)
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total depreciation and amortization
|
|
|
48,278
|
|
|
|
38,523
|
|
|
|
96,667
|
|
|
|
80,427
|
|
Discontinued operations depreciation
|
|
|
243
|
|
|
|
793
|
|
|
|
514
|
|
|
|
2,348
|
|
Non-real estate depreciation
|
|
|
(2,012
|
)
|
|
|
(1,953
|
)
|
|
|
(4,557
|
)
|
|
|
(4,090
|
)
|
Adjustment for depreciation on development profits
|
|
|
|
|
|
|
|
|
|
|
(1,546
|
)
|
|
|
|
|
Adjustments to derive FFO, as adjusted from consolidated joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint venture partners noncontrolling interests (Net income)
|
|
|
2,068
|
|
|
|
4,949
|
|
|
|
1,693
|
|
|
|
2,771
|
|
Limited partnership unitholders noncontrolling interests (Net income (loss))
|
|
|
75
|
|
|
|
1,279
|
|
|
|
(125
|
)
|
|
|
(4,041
|
)
|
Limited partnership unitholders noncontrolling interests (Development (losses) profits)
|
|
|
(2
|
)
|
|
|
|
|
|
|
104
|
|
|
|
1,108
|
|
FFO, as adjusted attributable to noncontrolling interests
|
|
|
(7,562
|
)
|
|
|
(7,151
|
)
|
|
|
(12,942
|
)
|
|
|
(15,739
|
)
|
Adjustments to derive FFO, as adjusted from unconsolidated joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMBs share of net income
|
|
|
(5,193
|
)
|
|
|
(4,284
|
)
|
|
|
(9,068
|
)
|
|
|
(4,250
|
)
|
AMBs share of FFO, as adjusted
|
|
|
15,444
|
|
|
|
11,786
|
|
|
|
29,897
|
|
|
|
23,921
|
|
Adjustments for impairments, restructuring charges and debt extinguishment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate impairment losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
175,887
|
|
Discontinued operations real estate impairment losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,966
|
|
Restructuring charges
|
|
|
872
|
|
|
|
3,824
|
|
|
|
3,845
|
|
|
|
3,824
|
|
Loss on early extinguishment of debt
|
|
|
579
|
|
|
|
657
|
|
|
|
579
|
|
|
|
657
|
|
Allocation to participating securities(2)
|
|
|
(31
|
)
|
|
|
(86
|
)
|
|
|
(73
|
)
|
|
|
(474
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations, as adjusted(1)
|
|
$
|
51,408
|
|
|
$
|
55,409
|
|
|
$
|
99,192
|
|
|
$
|
134,162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO, as adjusted per common share and unit (diluted)
|
|
$
|
0.30
|
|
|
$
|
0.37
|
|
|
$
|
0.62
|
|
|
$
|
1.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares and units (diluted)
|
|
|
169,006
|
|
|
|
148,815
|
|
|
|
160,941
|
|
|
|
125,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Funds From Operations, as adjusted (FFO, as adjusted) and Funds From
Operations Per Share and Unit, as adjusted (FFOPS, as adjusted) (together with FFO, as adjusted
and 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) and FFO, as adjusted, per share and unit (or 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 AMBs 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 AMBs pro rata share of FFO, as adjusted, of consolidated and unconsolidated
joint ventures. This calculation also includes 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 industrys long standing practice to include gains
on the sale of land in funds from operations. However, AMBs 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 AMBs 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 AMBs results of operations. The economics underlying these items reflect market and financing
conditions in the short-term but can obscure AMBs performance and the value of AMBs 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 AMBs business model and its potential performance isolated from the volatility of the
current economic environment and unobscured by costs (or gains) resulting from AMBs 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 AMBs 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 companys real estate between periods or as compared to other companies. While
funds from operations and funds from operations per share and unit 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 AMBs liquidity or operating
performance. The FFO Measures, as adjusted, also do not consider the costs associated with capital
expenditures related to AMBs real estate assets nor are the FFO Measures, as adjusted, necessarily
indicative of cash available to fund AMBs 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.
|
|
(2)
|
|
Represents amount of FFO allocated to outstanding unvested restricted shares. For
the three and six months ended June 30, 2010, there were 1,222 unvested restricted shares. For the
three and six months ended June 30, 2009, there were 930 unvested restricted shares.
|
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
June 30, 2010
|
|
|
December 31, 2009
|
|
Assets
|
|
|
|
|
|
|
|
|
Investments in real estate
|
|
|
|
|
|
|
|
|
Total investments in properties
|
|
$
|
6,834,736
|
|
|
$
|
6,708,660
|
|
Accumulated depreciation and amortization
|
|
|
(1,196,321
|
)
|
|
|
(1,113,808
|
)
|
|
|
|
|
|
|
|
Net investments in properties
|
|
|
5,638,415
|
|
|
|
5,594,852
|
|
Investments in unconsolidated joint ventures
|
|
|
687,201
|
|
|
|
462,130
|
|
Properties held for sale or contribution, net
|
|
|
131,155
|
|
|
|
214,426
|
|
|
|
|
|
|
|
|
Net investments in real estate
|
|
|
6,456,771
|
|
|
|
6,271,408
|
|
Cash and cash equivalents and restricted cash
|
|
|
240,694
|
|
|
|
206,077
|
|
Accounts receivable, net
|
|
|
156,655
|
|
|
|
155,958
|
|
Other assets
|
|
|
205,872
|
|
|
|
208,515
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
7,059,992
|
|
|
$
|
6,841,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Secured debt
|
|
$
|
944,787
|
|
|
$
|
1,096,554
|
|
Unsecured senior debt
|
|
|
1,156,361
|
|
|
|
1,155,529
|
|
Unsecured credit facilities
|
|
|
422,483
|
|
|
|
477,630
|
|
Other debt
|
|
|
471,024
|
|
|
|
482,883
|
|
Accounts payable and other liabilities
|
|
|
346,027
|
|
|
|
338,042
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
3,340,682
|
|
|
|
3,550,638
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Stockholders equity
|
|
|
|
|
|
|
|
|
Common equity
|
|
|
3,127,926
|
|
|
|
2,716,604
|
|
Preferred equity
|
|
|
223,412
|
|
|
|
223,412
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
|
3,351,338
|
|
|
|
2,940,016
|
|
Noncontrolling interests
|
|
|
|
|
|
|
|
|
Joint venture partners
|
|
|
306,414
|
|
|
|
289,909
|
|
Limited partnership unitholders
|
|
|
61,558
|
|
|
|
61,395
|
|
|
|
|
|
|
|
|
Total noncontrolling interests
|
|
|
367,972
|
|
|
|
351,304
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
3,719,310
|
|
|
|
3,291,320
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
7,059,992
|
|
|
$
|
6,841,958
|
|
|
|
|
|
|
|
|
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits:
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
|
|
|
|
99.1
|
|
|
AMB Property Corporation Press Release dated July 21, 2010.
|
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: July 21, 2010
|
By:
|
/s/ Tamra D. Browne
|
|
|
|
Tamra D. Browne
|
|
|
|
Senior Vice President, General
Counsel and Secretary
|
|
Exhibits
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
|
|
|
|
99.1
|
|
|
AMB Property Corporation Press Release dated July 21, 2010.
|
Amb Properties (NYSE:AMB)
Historical Stock Chart
From Jun 2024 to Jul 2024
Amb Properties (NYSE:AMB)
Historical Stock Chart
From Jul 2023 to Jul 2024