AMB Property Corporation today reported earnings per fully diluted share (EPS) of $0.30 for the fourth quarter 2001 and $1.47 for the year ended December 31, 2001, reflecting an increase of 7.1% and 8.9%, respectively, from the same periods in 2000. Operating earnings per fully diluted share (Operating EPS), which excludes extraordinary items, preferred unit redemption premium and gains and losses on property dispositions and impairments, was $0.34 for the fourth quarter 2001, flat over the fourth quarter 2000 and $1.10 for the year ended December 31, 2001, reflecting a decrease of 17.3% from full year 2000. EPS and Operating EPS for the years ended December 31, 2001 and 2000 were negatively impacted by previously disclosed non-cash charges for impairment reserves on all of the company's private equity investments in technology and e-commerce companies of $0.24 and $0.03 per share, respectively.

Funds from Operations per fully diluted share and unit (FFOPS) rose to $0.74 for the fourth quarter 2001 and $2.37 for the full year 2001; a 23.3% and 2.2% increase, respectively, over the same periods in 2000. FFOPS for fourth quarter and full year 2001 include, respectively, $0.13 and $0.15 of net gains from Headlands Realty, the company's subsidiary for development and redevelopment of projects held for sale. Full year 2001 and 2000 FFOPS was negatively impacted by non-cash charges for impairment reserves on all of the company's private equity investments of $0.23 and $0.03, respectively.

Internal growth, measured by same store cash basis net operating income, was 6.3% for the year and 3.5% for the quarter and was driven by strong rental increases as a result of leasing activity in both 2000 and 2001. For the entire industrial portfolio, the company had rental increases on renewals and rollovers of 4.3% and 20.4% for the fourth quarter and full year, respectively, and tenant retention of 65.0% and 66.8% for the fourth quarter and full year, respectively. Occupancy for the company's industrial portfolio was at 94.5% as of December 31, 2001, down 210 basis points (bps) from the third quarter. The decline in occupancy during the quarter was in line with expectations and was primarily the result of vacancies related to a previously disclosed bankrupt tenant (86 bps), acquired vacancy (44 bps) and developments placed in service prior to stabilized occupancy (38 bps).

Chairman and CEO Hamid R. Moghadam stated, "In 2001 we entered the first recession in a decade and industrial real estate nationally saw an occupancy drop of approximately 300 basis points. In that environment AMB grew its EPS 8.9% and FFO 2.2% for the year, including a $20.8 million non-cash write off of our venture capital investments, while our same store NOI grew over 6%. Our results continue to benefit from our focused infill investment strategy, our alliance-based operating model and the power of our investment management business. In addition to the strong operating results of our industrial assets within infill sub-markets, we demonstrated an additional benefit of those locations during 2001 with higher and better use conversions and the subsequent realization of tremendous gains in an otherwise slow economy. Illustrating this, our Watertown project just outside of Boston was acquired in 1998 and, through redevelopment and new development over the last three years, provided a total economic gain of $21 million in 2001, over our total investment of $33 million."

During the full year 2001, AMB sold properties for an aggregate price of $193.4 million, totaling 3.2 million square feet, of less-strategic assets and assets in non-core markets, including $3.0 million, totaling 25,000 square feet, in the fourth quarter. Full year 2001 property acquisitions totaled $428.3 million and 6.8 million square feet, including $144.8 million in assets, totaling 2.3 million square feet, in the fourth quarter. Additionally, property contributions to co-investment ventures during the full year 2001 totaled $539.2 million. "We continued to execute our capital deployment strategy with a goal of improving the strategic fit of our portfolio by disposing of assets that do not fit our investment strategy and acquiring properties in our supply constrained hub and gateway markets," commented AMB President, W. Blake Baird.

AMB placed in service 11 industrial developments and renovation projects during 2001, for a total of 2.3 million square feet and a total investment of $148.0 million, including four projects in the fourth quarter totaling 839,000 square feet for a total investment of $57.3 million. AMB's current committed development pipeline, with deliveries through 2003, stands at $154.4 million and consists of 3.1 million square feet, of which $100.3 million, or 65%, has been funded to date and 54% has been preleased.

AMB Investment Management, Inc. was renamed AMB Capital Partners, LLC as of January 1, 2002 to better reflect its role as a partner with private and institutional investors. AMB Capital Partners, LLC, a wholly owned subsidiary of AMB, raised $320 million in private equity capital during 2001.

AMB repurchased 323,000 common shares for a total cost of $7.6 million during the fourth quarter at an average cost of $23.38 per share, bringing total share repurchases under the previously announced share repurchase plan to 2.8 million shares for a total price of $60.0 million, or an average cost of $21.17 per share. AMB's Board of Directors approved a new $100 million common stock repurchase plan during the fourth quarter which will expire in December 2003; the new plan replaced the original plan, created in 1999, which expired in December 2001. In addition, the company repurchased all of its outstanding 8.75% Series C Cumulative Redeemable Preferred Limited Partnership Units for $115.7 million.

AMB also announced the addition of Frank Wade and J. Thomas Mercer as Senior Vice Presidents. Mr. Wade, previously with a major international airport and logistics facility development consultation firm, will lead AMB's international business development initiatives. Mr. Mercer has over 15 years of development experience with both public and private national industrial development organizations and will be responsible for AMB's customer-driven development opportunities. "We have added resources to our team to take advantage of two opportunities we see in the current marketplace. Tom will coordinate development of properties for our customers, many of whom we cannot accommodate in our existing portfolio. Frank will, working with our key integrator, logistics and freight forwarder customers, target airport-adjacent capital deployment opportunities at the largest non-US air cargo airports, " commented Mr. Baird.

In addition, AMB announced three officer promotions: Daniel L. Anderson to Senior Vice President, Regional Manager; Gayle P. Starr to Senior Vice President, Capital Markets; and Fritz E. Wyler to Vice President, Customer Alliances.

AMB will host its fourth quarter 2001 conference call tomorrow, January 23, 2002 at 11:00 AM PST/ 2:00 PM EST. Stockholders and interested parties may listen to a live broadcast of the call by dialing 719-457-2679 and using reservation code 582817. You may also access the conference call over the Internet through AMB's website at http://www.amb.com/. To listen to the call live, please go to the web site at least fifteen minutes early to register, download and install any necessary audio software. For those who are not able to listen to the live broadcast, a replay will be available on our website shortly after the call.

AMB Property Corporation is one of the leading owners and operators of industrial real estate nationwide. As of December 31, 2001, AMB owned, managed and had renovation and development projects totaling 94.1 million square feet and 1,017 buildings in 26 metropolitan markets. AMB targets industrial properties located near airports, seaports and ground transportation systems. The company's portfolio is comprised of High Throughput Distribution(R) facilities -- industrial properties built for speed and benefiting from barriers to entry due to their infill locations and proximity to large customer bases. AMB -- A tradition of nontraditional thinking(R).

NOTE: AMB's press releases are available on the company website at http://www.amb.com/ or by contacting the Investor Relations department toll-free at 877-285-3111.

This press release contains forward-looking statements about business strategy and future plans, which are made pursuant to the safe-harbor provisions of Section 21E of the Securities Exchange Act of 1934. Forward-looking statements involve numerous risks and uncertainties and should not be relied upon as predictions of future events. The events or circumstances reflected in our forward-looking statements might not occur. In particular, a number of factors could cause AMB's actual results to differ materially from those anticipated, including, among other things, defaults on or non-renewal of leases by tenants, increased interest rates and operating costs, AMB's failure to obtain necessary outside financing, difficulties in identifying properties to acquire and in effecting acquisitions, AMB's failure to successfully integrate acquired properties and operations, AMB's failure to timely reinvest proceeds from any such dispositions, risks and uncertainties affecting property development and construction (including construction delays, cost overruns, AMB's inability to obtain necessary permits and public opposition to these activities), AMB's failure to qualify and maintain its status as a real estate investment trust under the Internal Revenue Code, environmental uncertainties, risks related to natural disasters, financial market fluctuations, risks arising from the California energy shortage, changes in real estate and zoning laws and increases in real property tax rates. AMB's success also depends upon economic trends generally, including interest rates, income tax laws, governmental regulation, legislation and population changes. For further information on these and other factors that could impact AMB and the statements contained herein, reference should be made to AMB's filings with the Securities and Exchange Commission, including AMB's quarterly report on Form 10-Q for the quarter ended September 30, 2001.

                       Consolidated Balance Sheets
                          (dollars in thousands)


                                                        As of
                                        December 31,  September 30, June 30,
                                            2001         2001         2001
  Assets
  Investments in real estate:
    Total investments in properties      $4,530,711  $4,433,847  $4,361,498
    Accumulated depreciation               (265,653)   (239,144)   (213,923)
      Net investments in properties       4,265,058   4,194,703   4,147,575
    Investment in unconsolidated joint
     ventures                                71,097      85,707      83,865
    Properties held for divestiture, net    157,174     106,054      96,209
      Net investments in real estate      4,493,329   4,386,464   4,327,649
  Cash and cash equivalents                  81,732     256,872     176,584
  Mortgage receivables                       87,214      92,232      92,250
  Accounts receivable, net                   70,794      68,811      68,982
  Investments in affiliated companies(A)         --          --          --
  Investments in other companies, net            --          --          --
  Other assets                               27,824      27,245      56,700
       Total assets                      $4,760,893  $4,831,624  $4,722,165

  Liabilities and Stockholders' Equity
  Secured debt                           $1,220,164  $1,102,801  $1,058,247
  Unsecured senior debt securities          780,000     780,000     755,000
  Unsecured credit facility                  12,000          --          --
  Alliance Fund II credit facility          123,500     125,000      98,100
  Other liabilities                         138,601     197,377     201,031
      Total liabilities                   2,274,265   2,205,178   2,112,378
  Minority interests:
    Preferred units                         275,987     381,834     342,966
    Minority interests                      458,299     477,224     476,937
      Total minority interests              734,286     859,058     819,903
  Stockholders' equity:
    Common stock                          1,656,242   1,671,288   1,693,784
    Preferred stock                          96,100      96,100      96,100
      Total stockholders' equity          1,752,342   1,767,388   1,789,884
       Total liabilities and
        stockholders' equity             $4,760,893  $4,831,624  $4,722,165

  (A) On May 31, 2001, the Company acquired all of the voting stock of
  Headlands Realty and AMB Investment Management.  The Company began
  consolidating Headlands Realty Corporation and its Investment Management
  Division for financial reporting purposes effective May 31, 2001.


                       Consolidated Balance Sheets
                          (dollars in thousands)


                                                          As of
                                               March 31,        December 31,
                                                  2001              2000
  Assets
  Investments in real estate:
    Total investments in properties           $4,084,799        $4,026,597
    Accumulated depreciation                    (202,188)         (177,467)
      Net investments in properties            3,882,611         3,849,130
    Investment in unconsolidated joint
     ventures                                     85,317            80,432
    Properties held for divestiture,
     net                                         236,746           197,146
      Net investments in real estate           4,204,674         4,126,708
  Cash and cash equivalents                      152,224            42,722
  Mortgage receivables                           121,297           115,969
  Accounts receivable, net                        67,482            69,874
  Investments in affiliated companies(A)          47,285            35,731
  Investments in other companies, net             15,343            15,965
  Other assets                                    29,839            18,657
       Total assets                           $4,638,144        $4,425,626

  Liabilities and Stockholders' Equity
  Secured debt                                $1,014,054          $940,276
  Unsecured senior debt securities               755,000           680,000
  Unsecured credit facility                       94,000           216,000
  Alliance Fund II credit facility                    --                --
  Other liabilities                              177,915           147,042
      Total liabilities                        2,040,969         1,983,318
  Minority interests:
    Preferred units                              342,911           318,053
    Minority interests                           457,372           356,325
      Total minority interests                   800,283           674,378
  Stockholders' equity:
    Common stock                               1,700,792         1,671,830
    Preferred stock                               96,100            96,100
      Total stockholders' equity               1,796,892         1,767,930
       Total liabilities and
        stockholders' equity                  $4,638,144        $4,425,626

  (A) On May 31, 2001, the Company acquired all of the voting stock of
  Headlands Realty and AMB Investment Management.  The Company began
  consolidating Headlands Realty Corporation and its Investment Management
  Division for financial reporting purposes effective May 31, 2001.


                   Consolidated Statement of Operations
                (dollars in thousands, except share data)


                                  For the Quarters        For the Twelve
                                      Ended                Months Ended
                                    December 31,            December 31,
                                  2001        2000        2001        2000
  Revenues
  Rental revenues(A)           $146,641    $126,808    $568,066    $464,164
  Equity in earnings of
   unconsolidated joint
   ventures                       1,102       1,206       5,467       5,212
  Investment management
   income                         2,950       2,122      10,972       4,282
  Interest and other income       3,835       4,898      16,340       6,549
    Total revenues              154,528     135,034     600,845     480,207
  Operating Expenses
  Property operating             36,287      30,275     138,196     107,730
  Interest, including
   amortization(B)               34,231      27,364     128,985      90,270
  Depreciation and
   amortization                  28,276      25,223     111,414      90,358
  General, administrative,
   and other                      9,640       6,428      35,820      23,750
  Loss on investments in
   other companies                   --       2,500      20,758       2,500
    Total expenses              108,434      91,790     435,173     314,608
       Income before
        minority interests
        and gains (losses)       46,094      43,244     165,672     165,599
  Minority interests share
   of income:
    Preferred units              (7,056)     (6,835)    (28,682)    (24,613)
    Minority interests           (8,535)     (5,449)    (34,859)    (20,348)
       Total minority
        interests               (15,591)    (12,284)    (63,541)    (44,961)
  Gain (loss) from
   disposition of real
   estate, net of minority
   interests:
    Gains on developments
     held for sale               11,828          --      13,169          --
    Gain (loss) from
     disposition of real
     estate, net(C)             (10,073)     (5,076)     23,259       1,144
       Total Gain (loss)
        from disposition of
        real estate               1,755      (5,076)     36,428       1,144
       Net income before
        extraordinary items      32,258      25,884     138,559     121,782
  Extraordinary items (early
   debt extinguishments)           (255)         --        (606)         --
       Net income                32,003      25,884     137,953     121,782
  Preferred stock dividends      (2,125)     (2,125)     (8,500)     (8,500)
  Preferred unit redemption
   premium                       (4,400)         --      (4,400)         --
  Net income available to
   common stockholders          $25,478     $23,759    $125,053    $113,282
  Net income per common
   share:
    Basic                         $0.31       $0.28       $1.49       $1.35
    Diluted                       $0.30       $0.28       $1.47       $1.35
  Weighted average common
   shares:
    Basic                    83,264,975  83,814,658  84,174,644  83,697,170
    Diluted                  84,338,812  84,528,547  85,214,066  84,155,306

  (A) Includes straight-line rents of $2,514 and $4,018 for the quarters and
  $10,093 and $10,203 for the twelve months ended December 31, 2001 and
  2000, respectively.
  (B) Net of capitalized interest of $2,836 and $3,938 for the quarters and
  $13,650 and $15,461 for the twelve months ended December 31, 2001 and
  2000, respectively.
  (C) Includes impairment write-downs on assets held for sale and other
  operating properties of $8,600 and $5,900 for the quarters and $18,600 and
  $5,900 for the twelve months ended December 31, 2001 and 2000,
  respectively.


             Consolidated Statements of Funds from Operations
                (dollars in thousands, except share data)


                                  For the Quarters        For the Twelve
                                      Ended                Months Ended
                                    December 31,            December 31,
                                  2001        2000        2001        2000

  Income before minority
   interest and gains (losses)  $46,094     $43,244    $165,672    $165,599

  Gains on developments held
   for sale                      11,828          --      13,169          --
  Real estate related
   depreciation and
   amortization:
    Total depreciation and
     amortization                28,276      25,223     111,414      90,358
    FF& E Depreciation and
     ground lease
     amortization(A)               (507)       (257)     (1,963)     (1,114)
  FFO attributable to
   minority interests(B)        (11,025)     (5,486)    (40,144)    (15,055)

  Adjustments to derive FFO
   from unconsolidated JV's:(C)
    Company's share of net
     income                      (1,102)     (1,206)     (5,467)     (5,212)
    Company's share of FFO        1,526       1,700       8,014       7,188
  Preferred stock dividends      (2,125)     (2,125)     (8,500)     (8,500)
  Preferred units
   distributions                 (7,056)     (6,835)    (28,682)    (24,613)

  Funds from operations         $65,909     $54,258    $213,513    $208,651

  FFO per common share and
   unit:
    Basic                         $0.75       $0.61       $2.40       $2.33
    Diluted(D)                    $0.74       $0.60       $2.37       $2.32

  Weighted average common
   shares and units:
    Basic                    88,243,249  89,619,042  88,915,176  89,566,375
    Diluted(D)               89,317,086  90,332,931  89,954,598  90,024,511

  (A) Ground lease amortization represents the amortization of the Company's
  investments in ground leased properties, for which the Company does not
  have a purchase option.
  (B) Represents FFO attributable to minority interests in consolidated
  joint ventures whose interests are not exchangeable into common stock.
  The minority interest's share of NOI for the quarters ended December 31,
  2001 and 2000, was $20,587 and $8,042, respectively, and for the twelve
  months ended December 31, 2001 and 2000, was $65,010 and $24,979,
  respectively.
  (C) AMB's share of NOI for the quarters ended December 31, 2001 and 2000,
  was $2,357 and $1,998, respectively, and for the twelve months ended
  December 31, 2001 and 2000, was $10,181 and $8,338, respectively.
  (D) Includes the dilutive effect of stock options.

 

SOURCE: AMB Property Corp.

Contact: investors, Michael A. Coke or Michelle C. Wells, toll free,
1-877-285-3111, or +1-415-394-9000, or fax, +1-415-394-9001, or [email protected], or
media, Sara J. Butz, Marketing & Corporate Communications, +1-415-733-5233, or
fax, +1-415-394-9001, or [email protected], all of AMB Property Corp.

Media contact & resources

Jennifer Nelson

VP, Head of Global Corporate Communications
+1 (415) 733 9409
[email protected]
San Francisco, California USA

Corporate Profile

Older Press Release
AMB Property Corporation Plans to Announce Fourth Quarter and Full-Year 2001 Earnings January 22, 2002
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