SAN FRANCISCO, Oct. 21 /PRNewswire-FirstCall/ -- AMB Property
Corporation® (NYSE:AMB), a leading owner, operator and developer of
industrial real estate, today reported results for the third
quarter 2009. Funds from operations per fully diluted share and
unit ("FFOPS") was $0.71 for the third quarter of 2009, as compared
to $0.69 for the same quarter in 2008, driven primarily by
increased development gains and lower general and administrative
expenses. Net income available to common stockholders per fully
diluted share ("EPS") for the third quarter of 2009 was $0.43, as
compared to $0.24 for the same quarter in 2008. Owned and Managed
Portfolio Operating Results AMB's operating portfolio was 91.0
percent occupied at September 30, 2009, up 50 basis points from
June 30, 2009. Average occupancy during the quarter was 90.4
percent, compared to 95.3 percent for the same period in 2008. Cash
basis same store net operating income ("SS NOI"), without the
effects of lease termination fees, decreased 7.0 percent in the
third quarter from the comparable period, driven primarily by a
combination of lower than average same store occupancies and rent
changes on rollovers. For the trailing four quarters ended
September 30, 2009, average rent change on renewals and rollovers
in AMB's operating portfolio decreased 3.9 percent. Leasing
Activity During the third quarter of 2009, the company commenced
leases of approximately 9.9 million square feet (915,300 square
meters) in its global operating portfolio. In its development
pipeline, the company leased more than 935,000 square feet
(approximately 86,900 square meters). Disposition Activities As of
September 30, 2009, the company has completed property dispositions
and contributions of $670 million, with a stabilized capitalization
rate of 6.7 percent. During the third quarter, the company
completed dispositions totaling $209 million, with gains of
approximately $60 million and a 6.2 percent capitalization rate,
consisting of the following: -- The sale of three development and
value-added conversion properties in the Americas for an aggregate
price of $145 million and an average margin of 46.9 percent; -- The
sale of four properties from its U.S. operating portfolio for an
aggregate sales price of $32 million; and -- The transfer of two
assets to AMB Alliance Fund III in exchange for additional units
equal to the fair value of the assets, for an aggregate price of
$33 million, increasing its ownership interest in the fund to 22.7
percent from 19.3 percent. "We have addressed two of the company's
main priorities: strengthening our balance sheet and reducing our
cost structure. The improvements and progress we have made in our
business, over the last nine months, have allowed us to
successfully navigate the downturn," said Hamid R. Moghadam,
chairman & CEO. "We are now working on a number of initiatives
to take advantage of opportunities as the global economy rebounds."
Financing Activities For the nine months ending September 30, 2009,
AMB has completed approximately $1.1 billion of debt repayments,
repurchases and extensions, with approximately $122 million during
the third quarter. As of September 30, 2009, the company's share of
total debt to share of total assets was 43 percent, which includes
its share of joint venture debt. The company's liquidity was
approximately $1.3 billion, consisting of $1.1 billion of
availability on its lines of credit and approximately $201 million
of cash. Subsequent to quarter end and as previously announced, AMB
refinanced its $325 million senior unsecured term loan facility,
which was set to mature in September 2010, upsizing it to a $345
million facility, maturing October 2012. The facility now includes
Euro and Yen tranches and carries a current interest rate of 275
basis points over the applicable LIBOR index. "The lending
environment has improved for stronger and more liquid borrowers,
which has been an advantage to us given our solid balance sheet,
liquidity position and lender relationships," said Thomas S.
Olinger, AMB's chief financial officer. "We remain very
well-positioned to address our financial obligations well in
advance of their contractual maturities." Investment Activity AMB's
global development pipeline at quarter end, which included
investments held through unconsolidated joint ventures, totaled
more than 6.8 million square feet (635,900 square meters) scheduled
for delivery through 2010, with an estimated total investment cost
of $547 million. As of September 30, 2009, the company's share of
the projected remaining cash to fund the completion of its
development pipeline was reduced to $54 million. FFO Guidance The
company narrowed and increased its previous full-year 2009 FFO
guidance to $1.45 to $1.46 per share, without recognition of gains
from development activities, non-cash impairment charges or
restructuring charges. The full-year EPS guidance is a loss of
$0.29 to $0.30 per share. The company will provide details of its
outlook for 2010 guidance during its third quarter earnings
conference call. Supplemental Earnings Measures Included in the
footnotes to the company's attached financial statements is a
discussion of why management believes FFO, FFOPS and FFO, excluding
impairment charges and restructuring charges (the "FFO Measures")
are useful supplemental measures of operating performance, ways in
which investors might use the FFO Measures when assessing the
company's financial performance and the FFO Measures' limitations
as a measurement tool. Reconciliation from net income available to
common stockholders to the FFO Measures are provided in the
attached tables and published in the company's quarterly
supplemental analyst package, available on the company's website at
http://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, 2007. 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 to SS NOI is provided below (dollars in thousands)
and published in AMB's quarterly supplemental analyst package,
available on AMB's website at http://www.amb.com/. For the For the
Nine Quarters Ended Months Ended September 30, September 30,
------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ----
Net income (loss) $76,464 $34,737 $(17,858) $192,502 Private
capital income (7,886) (9,502) (27,376) (60,838) Depreciation and
amortization 47,166 45,799 128,133 126,001 Real estate impairment
losses - - 174,410 - General and administrative and fund costs
27,396 34,725 84,660 104,242 Restructuring charges - - 3,824 -
Total other income and expenses 22,486 3,055 50,402 (11,602) Total
discontinued operations (62,598) (3,028) (91,781) (11,097) -------
------ ------- ------- NOI 103,028 105,786 304,414 339,208 Less non
same-store NOI (20,876) (18,712) (53,305) (78,851) Less non cash
adjustments(1) (43) (374) 855 (2,161) --- ---- --- ------
Cash-basis same-store NOI $82,109 $86,700 $251,964 $258,196 =======
======= ======== ======== (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 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. Conference Call Information The company
will host a conference call to discuss third quarter 2009 results
on Wednesday, October 21, 2009 at 10:00 AM PDT / 1:00 PM EDT.
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 32466317. A webcast can be accessed through the
company's website at http://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 http://www.amb.com/ in the Investor Relations
section after 3:00 PM EDT / 12:00 PM PDT on Wednesday, October 21,
2009 until 8:00 PM EST / 5:00 PM PST on Friday, November 20, 2009
at 800 642 1687 (from the U.S. and Canada) or +1 706 645 9291 (from
all other countries), with the reservation code 32466317. AMB
Property Corporation.® Local partner to global trade.(TM) 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
September 30, 2009, AMB 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 47
markets within 14 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
http://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 our development projects (including completion,
timing of stabilization and delivery, our share of remaining
funding required, our ability to lease such projects, square feet
at stabilization or completion, costs and total investment
amounts), our ability to address our future capital commitments,
our ability to meet our forecasts (including our FFO, EPS and
operating guidance) and business goals, and our ability to complete
current initiatives and take advantage of opportunities, 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 press release 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
tenants or renewal at lower than expected rent or failure to lease
at all or on expected terms, decreases in real estate values and
impairment losses, our failure to obtain, renew or extend financing
or re-financing, risks related to debt and equity security
financings (including dilution risk), our failure to divest
properties we have contracted to sell or to timely reinvest
proceeds from any divestitures, failure to maintain our current
credit agency ratings or comply with our debt covenants,
international currency and hedging risks, financial market
fluctuations, changes in general economic conditions, global trade
or in the real estate sector, inflation risks, a downturn in the
U.S., California or global economy, increased interest rates and
operating costs or greater than expected capital expenditures,
risks related to suspending, reducing or changing our dividends,
our failure to contribute properties to our co-investment ventures,
risks related to our obligations in the event of certain defaults
under co-investment ventures and other debt, difficulties in
identifying properties to acquire and in effecting acquisitions,
our failure to successfully integrate acquired properties and
operations, 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,
environmental uncertainties, risks related to natural disasters,
changes in real estate and zoning laws, 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 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, 2008. CONSOLIDATED STATEMENTS OF OPERATIONS(1) (in
thousands, except per share data) For the Quarters For the Nine
Ended Months Ended September 30, September 30, ----------------
-------------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenues
Rental revenues(1) $149,649 $148,975 $443,852 $474,440 Private
capital revenues 7,886 9,502 27,376 60,838 ----- ----- ------
------ Total revenues 157,535 158,477 471,228 535,278 -------
------- ------- ------- Costs and expenses Property operating
costs(1) (46,621) (43,189) (139,438) (135,232) Depreciation and
amortization (47,166) (45,799) (128,133) (126,001) General and
administrative (27,156) (34,413) (83,836) (103,323) Restructuring
charges - - (3,824) - Fund costs (240) (312) (824) (919) Real
estate impairment losses - - (174,410) - Other expenses(2) (3,049)
1,088 (8,070) 1,926 ------ ----- ------ ----- Total costs and
expenses (124,232) (122,625) (538,535) (363,549) -------- --------
-------- -------- Other income and expenses Development profits,
net of taxes 1,220 28,026 34,506 76,248 Gains from sale or
contribution of real estate interests, net - - - 19,967 Equity in
earnings of unconsolidated joint ventures, net 3,257 5,372 7,507
14,359 Other income (expenses) (2) 4,941 (4,238) 6,498 (63)
Interest expense, including amortization (28,855) (33,303) (90,843)
(100,835) ------- ------- ------- -------- Total other income and
expenses, net (19,437) (4,143) (42,332) 9,676 ------- ------
------- ----- Income (loss) from continuing operations 13,866
31,709 (109,639) 181,405 ------ ------ -------- -------
Discontinued operations Income attributable to discontinued
operations 1,162 3,040 1,641 8,232 Development gains, net of taxes
53,002 - 53,002 - Gains from sale of real estate interests, net of
taxes 8,434 (12) 37,138 2,865 ----- --- ------ ----- Total
discontinued operations 62,598 3,028 91,781 11,097 ------ -----
------ ------ Net income (loss) 76,464 34,737 (17,858) 192,502
Noncontrolling interests' share of net income Joint venture
partners' share of net income (6,058) (4,194) (8,829) (29,881)
Joint venture partners' and limited partnership unitholders' share
of development profits (1,388) (1,090) (2,445) (7,204) Preferred
unitholders (1,431) (1,431) (4,295) (4,295) Limited partnership
unitholders (447) 129 3,543 (3,020) ---- --- ----- ------ Total
noncontrolling interests' share of net income (9,324) (6,586)
(12,026) (44,400) ------ ------ ------- ------- Net income (loss)
attributable to AMB Property Corporation 67,140 28,151 (29,884)
148,102 Preferred stock dividends (3,952) (3,952) (11,856) (11,856)
Allocation to participating securities(3) (398) (471) (773) (1,412)
---- ---- ---- ------ Net income (loss) available to common
stockholders $62,790 $23,728 $(42,513) $134,834 ======= =======
======== ======== Net income (loss) per common share (diluted)
$0.43 $0.24 $(0.33) $1.36 ===== ===== ====== ===== Weighted average
common shares (diluted) 145,659 98,832 129,860 99,268 =======
====== ======= ====== (1) On July 1, 2008, the partners of AMB
Partners II (previously, a consolidated co-investment venture)
contributed their interests in AMB Partners II to AMB Institutional
Alliance Fund III in exchange for interests in AMB Institutional
Alliance Fund III, an unconsolidated co-investment venture. Pro
forma rental revenues for the nine months ended September 30, 2008
would have been $435,053, and pro forma operating expenses for the
nine months ended September 30, 2008 would have been $125,195, if
AMB Partners II had been deconsolidated as of January 1, 2008. (2)
Includes changes in liabilities and assets associated with AMB's
deferred compensation plan for the three and nine months ended
September 30, 2009 of $2,675 and $6,854, respectively. (3)
Represents net income (loss) attributable to AMB Property
Corporation, net of preferred stock dividends, allocated to
outstanding unvested restricted shares. For the three and nine
months ended September 30, 2009, there were 920 unvested restricted
shares outstanding. For the three and nine months ended September
30, 2008, there were 905 unvested restricted shares outstanding.
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS(1) (in thousands,
except per share data) For the Quarters For the Nine Ended Months
Ended September 30, September 30, ---------------- --------------
2009 2008 2009 2008 ---- ---- ---- ---- Net income (loss) available
to common stockholders $62,790 $23,728 $(42,513) $134,834 Gains
from sale or contribution of real estate interests, net of taxes
(8,434) 12 (37,138) (22,832) Depreciation and amortization Total
depreciation and amortization 47,166 45,799 128,133 126,001
Discontinued operations' depreciation 69 1,190 1,877 3,553 Non-real
estate depreciation (1,927) (1,997) (6,017) (5,786) Adjustments to
derive FFO from consolidated joint ventures Joint venture partners'
noncontrolling interests (Net income) 6,058 4,194 8,829 29,881
Limited partnership unitholders' noncontrolling interests (Net
income (loss) ) 447 (129) (3,543) 3,020 Limited partnership
unitholders' noncontrolling interests (Development profits) 1,388
1,090 2,445 2,795 FFO attributable to noncontrolling interests
(8,587) (8,819) (19,450) (41,812) Adjustments to derive FFO from
unconsolidated joint ventures AMB's share of net income (3,257)
(5,372) (7,507) (14,359) AMB's share of FFO 11,079 11,589 30,389
32,727 Allocation to participating securities(2) (271) (173) -
(886) ---- ---- --- ---- Funds from operations $106,521 $71,112
$55,505 $247,136 ======== ======= ======= ======== FFO per common
share and unit (diluted) $0.71 $0.69 $0.42 $2.39 ===== ===== =====
===== Weighted average common shares and units (diluted) 149,088
102,802 133,351 103,241 ======= ======= ======= ======= Adjustments
for impairment and restructuring charges Real estate impairment
losses $- $- $174,410 $- Discontinued operations' real estate
impairment losses - - 7,443 - AMB's share of real estate impairment
losses from unconsolidated joint ventures - - 4,611 - Joint venture
partners' noncontrolling interest share of real estate impairment
losses - - (4,876) - --- --- ------ --- AMB's share of total
impairment charges(1) - - 181,588 - Restructuring charges(1) - -
3,824 - Allocation to participating securities(2) - - (928) - ---
--- ---- --- Funds from operations, excluding impairment and
restructuring charges $106,521 $71,112 $239,989 $247,136 ========
======= ======== ======== FFO, excluding impairment and
restructuring charges per common share and unit (diluted) $0.71
$0.69 $1.80 $2.39 ===== ===== ===== ===== Weighted average common
shares and units (diluted) 149,088 102,802 133,351 103,241 =======
======= ======= ======= (1) Funds From Operations ("FFO"), Funds
From Operations Per Share and Unit ("FFOPS") and FFO, excluding
impairment and restructuring charges (together with FFO and FFOPS,
the "FFO Measures"). AMB believes that net income, as defined by
U.S. GAAP, is the most appropriate earnings measure. However, AMB
considers funds from operations, or FFO, FFO per share and unit, or
FFOPS, and FFO, excluding impairment and restructuring charges, to
be useful supplemental measures of its operating performance. AMB
defines FFOPS as FFO per fully diluted weighted average share of
AMB's common stock and operating partnership units. AMB calculates
FFO as net income 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
of consolidated and unconsolidated joint ventures. Unless stated
otherwise, AMB includes the gains from development, including those
from value-added conversion projects, before depreciation
recapture, as a component of FFO. AMB believes gains from
development should be included in FFO 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, consistent with the real estate
investment trust industry's long standing practice to include gains
on the sale of land in FFO. However, AMB's interpretation of FFO or
FFOPS may not be consistent with the views of others in the real
estate investment trust industry, who may consider it to be a
divergence from the NAREIT definition, and may not be comparable to
FFO or FFOPS reported by other real estate investment trusts that
interpret the current NAREIT definition differently than AMB does.
In connection with the formation of a joint venture, AMB may
warehouse assets that are acquired with the intent to contribute
these assets to the newly formed venture. Some of the properties
held for contribution may, under certain circumstances, be required
to be depreciated under U.S. GAAP. If this circumstance arises, AMB
intends to include in its calculation of FFO gains or losses
related to the contribution of previously depreciated real estate
to joint ventures. Although such a change, if instituted, will be a
departure from the current NAREIT definition, AMB believes such
calculation of FFO will better reflect the value created as a
result of the contributions. To date, AMB has not included gains or
losses from the contribution of previously depreciated warehoused
assets in FFO. In addition to presenting FFO as described above,
AMB presents FFO, excluding impairment and restructuring charges.
AMB calculates FFO, excluding impairment and restructuring charges,
as FFO less impairment and restructuring charges and adjustments to
derive AMB's share of impairment charges from consolidated and
unconsolidated joint ventures. To the extent that the book value of
a land parcel or development asset exceeded the fair market value
of a property, based on its intended holding period, a non-cash
impairment charge was recognized for the shortfall. The impairment
charges were principally a result of increases in estimated
capitalization rates and deterioration in market conditions that
adversely impacted values. The restructuring charges reflected
costs associated with AMB's reduction in global headcount and cost
structure. Although difficult to predict, these charges may be
recurring given the uncertainty of the current economic climate and
its adverse effects on the real estate markets. While not
infrequent or unusual in nature, these charges are subject to
market fluctuations that can have inconsistent effects on AMB's
results of operations. The economics underlying these charges
reflect market conditions in the short-term but can obscure the
value of AMB's long-term investment decisions and strategies.
Management believes FFO, excluding impairment and restructuring
charges, is significant and useful to both it and its investors
because it more appropriately reflects the value and strength of
AMB's business model and its potential performance isolated from
the volatility of the current economic environment. However, in
addition to the limitations of FFO Measures generally discussed
below, FFO, excluding impairment and restructuring charges, does
not present a comprehensive measure of AMB's financial condition
and operating performance. This measure is a modification of the
NAREIT definition of FFO and should not be considered a replacement
of FFO as AMB defines it or used as an alternative to net income or
cash as defined by U.S. GAAP. AMB believes that the FFO Measures
are meaningful supplemental measures of its operating performance
because historical cost accounting for real estate assets in
accordance with U.S. GAAP implicitly assumes that the value of real
estate assets diminishes predictably over time, as reflected
through depreciation and amortization expenses. However, since real
estate values have historically risen or fallen with market and
other conditions, many industry investors and analysts have
considered presentation of operating results for real estate
companies that use historical cost accounting to be insufficient.
Thus, the FFO Measures are supplemental measures of operating
performance for real estate investment trusts that exclude
historical cost depreciation and amortization, among other items,
from net income available to common stockholders, as defined by
U.S. GAAP. AMB believes that the use of the FFO Measures, combined
with the required U.S. GAAP presentations, has been beneficial in
improving the understanding of operating results of real estate
investment trusts among the investing public and making comparisons
of operating results among such companies more meaningful. AMB
considers the FFO Measures to be useful measures for reviewing
comparative operating and financial performance because, by
excluding gains or losses related to sales of previously
depreciated operating real estate assets and real estate
depreciation and amortization, the FFO Measures can help the
investing public compare the operating performance of a company's
real estate between periods or as compared to other companies.
While FFO and FFOPS are relevant and widely used measures of
operating performance of real estate investment trusts, the FFO
Measures do not represent cash flow from operations or net income
as defined by U.S. GAAP and should not be considered as
alternatives to those measures in evaluating AMB's liquidity or
operating performance. The FFO Measures also do not consider the
costs associated with capital expenditures related to AMB's real
estate assets nor are the FFO Measures necessarily indicative of
cash available to fund AMB's future cash requirements. Management
compensates for the limitations of the FFO Measures by providing
investors with financial statements prepared according to U.S.
GAAP, along with this detailed discussion of the FFO Measures and a
reconciliation of the FFO Measures to net income available to
common stockholders, a U.S. GAAP measurement. See Consolidated
Statements of Funds from Operations for a reconciliation of FFO
from net income available to common stockholders. The following
table reconciles projected FFO from projected net income available
to common stockholders for the year ended December 31, 2009: 2009
------------- Low High --- ---- Projected net (loss) income
available to common stockholders $(0.30) $(0.29) AMB's share of
projected depreciation and amortization 1.30 1.30 AMB's share of
projected gains on disposition of operating properties recognized
to date (0.23) (0.23) Impact of additional dilutive securities,
other, rounding (0.03) (0.03) ----- ----- Projected Funds From
Operations (FFO) $0.74 $0.75 ===== ===== AMB's share of non-cash
impairment charges 1.32 1.32 Restructuring charges 0.03 0.03 AMB's
share of development gains recognized to date (0.64) (0.64) -----
----- Projected FFO, excluding AMB's share of non-cash impairment
charges, restructuring charges and development gains(3) $1.45 $1.46
===== ===== Amounts are expressed per share, except FFO and FFO,
excluding AMB's share of non-cash impairment charges, restructuring
charges and development gains, which is expressed per share and
unit. (2) Represents amount of FFO allocated to outstanding
unvested restricted shares. For the three and nine months ended
September 30, 2009, there were 920 unvested restricted shares. For
the three and nine months ended September 30, 2008, there were 905
unvested restricted shares. (3) As development gains are difficult
to predict in the current economic environment, management believes
Projected FFO, excluding AMB's share of non-cash impairment
charges, restructuring charges and development gains 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 ----- September December 30, 2009 31,
2008 --------- -------- Assets Investments in real estate Total
investments in properties $6,584,837 $6,603,856 Accumulated
depreciation and amortization (1,062,681) (970,737) ----------
-------- Net investments in properties 5,522,156 5,633,119
Investments in unconsolidated joint ventures 459,612 431,322
Properties held for sale or contribution, net 348,349 609,023
------- ------- Net investments in real estate 6,330,117 6,673,464
Cash and cash equivalents and restricted cash 200,696 251,231
Accounts receivable, net 135,164 160,528 Other assets 207,289
216,425 ------- ------- Total assets $6,873,266 $7,301,648
========== ========== Liabilities and equity Liabilities Secured
debt $1,398,212 $1,522,571 Unsecured senior debt 871,379 1,153,926
Unsecured credit facilities 510,951 920,850 Other debt 391,459
392,838 Accounts payable and other liabilities 351,085 345,259
------- ------- Total liabilities 3,523,086 4,335,444 Equity
Stockholders' equity Common equity 2,701,631 2,291,695 Preferred
equity 223,412 223,412 ------- ------- Total stockholders' equity
2,925,043 2,515,107 Noncontrolling interests Joint venture partners
285,108 293,367 Preferred unitholders 77,561 77,561 Limited
partnership unitholders 62,468 80,169 ------ ------ Total
noncontrolling interests 425,137 451,097 ------- ------- Total
equity 3,350,180 2,966,204 --------- --------- Total liabilities
and equity $6,873,266 $7,301,648 ========== ========== DATASOURCE:
AMB Property Corporation CONTACT: Tracy A. Ward, Vice President, IR
& Corporate Communications, +1-415-733-9565, , or Rachel E. M.
Bennett, Director, Media & Public Relations, +1-415-733-9532, ,
both of AMB Property Corporation Web Site: http://www.amb.com/
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