AMB Property Corporation , a leading owner and operator of industrial real estate, today reported fourth quarter and full-year 2002 results. Earnings per share (EPS) for the fourth quarter were $0.43, including $0.16 per share in net gains; EPS for the full year was $1.37, including $0.24 per share in net gains. Fourth quarter and full-year 2002 EPS were positively impacted by lease termination fees of $0.10 and $0.13 per share, respectively, net of related charges for straight line rents and capitalized leasing costs. Fourth quarter 2002 EPS increased 43.3% from EPS of $0.30 in the same period of 2001; full-year 2002 EPS decreased 6.8% from EPS of $1.47 in the same period of 2001.

AMB's industrial portfolio, predominantly located in infill submarkets of major distribution markets, was 94.6% leased as of December 31, 2002, 20 basis points above portfolio occupancy as of September 30, 2002 and December 31, 2001. The Company's same store cash basis net operating income increased 10.1% during the quarter and 3.5% during the year. Tenant retention was 74.2% during 2002, while rents on renewals and rollovers decreased by 1.0% during the year.

Chairman and CEO, Hamid R. Moghadam, commented, "We are pleased with our full-year results in what turned out to be a difficult operating environment. Our unique investment and operating strategies led to results that we believe will set the standard for occupancy and same store net operating income growth in the industrial sector." Moghadam added, "Based on available data since 1989, the national industrial real estate market did not post a single year of negative net absorption prior to 2001. Following an unprecedented two consecutive years of negative net absorption in 2001 and 2002, we are seeing indications of increased leasing demand which we believe will lead to positive -- albeit modest -- net absorption in 2003."

Investment Activity

During the fourth quarter, AMB acquired seven properties for a total investment of $157.2 million, disposed of a 4.4 million square foot industrial portfolio in Houston and Dallas for an aggregate price of $155.3 million and sold an additional $73.2 million co-investment partnership interest to an existing partner. Other industrial sales activity in the quarter included two development for sale projects for $5.9 million. During the quarter, AMB also completed and stabilized five industrial development projects, totaling 1.7 million square feet for a total investment of $57.8 million. The industrial development and renovation pipeline through 2004 currently stands at $106.8 million and consists of an estimated 1.7 million square feet, of which $57.8 million, or 54.1%, has been funded and 28% is preleased. AMB's full-year 2002 transaction activity included $403.3 million in acquisitions, $394.1 million in dispositions and contributions to joint ventures and $135.4 million in development completions.

W. Blake Baird, AMB president, commented, "We are optimizing our portfolio through strategic dispositions domestically, including exiting certain non-strategic markets, and targeted acquisitions in the U.S. and abroad. Although our net dispositions of more than $50 million in the fourth quarter are dilutive in the short-term, we believe capital redeployment into investments more closely aligned with our investment focus will offer superior long-term total returns." Baird added, "Importantly, our fourth quarter transaction activity included the entry into Guadalajara, Paris and Singapore and the exit from one-third of our facilities in Dallas and all but our on- tarmac activities in Houston."

Additional investment activity in the quarter included the repurchase of 2.2 million shares of AMB's common stock for a total investment of $57.9 million, at a weighted average purchase price of $26.08 per share. During the fourth quarter, the board of directors increased the Company's common share repurchase plan to $200 million, from $100 million; $130.6 million of repurchase capacity remains under the updated plan. Since its IPO, the Company has repurchased a total of 5.4 million shares of common stock for a total investment of $129.3 million, at a weighted average purchase price of $23.72 per share.

AMB's private capital activity in the quarter consisted of an additional $110 million equity commitment from long-standing joint venture partner, the City and County of San Francisco Employees' Retirement System (CCSFERS). The new equity increases CCSFERS' ownership in the existing partnership from 50% to 80% and provides the partnership with additional capital for further investment in distribution facilities nationwide.

AMB renewed its $500 million unsecured revolving line of credit during the quarter. The three-year credit facility includes a multi-currency component under which up to $150 million can be drawn in British pounds sterling, euros or yen. The line of credit matures in December 2005 and replaces the Company's previous $500 million credit facility, which was to mature in May 2003.

Company Director and Officer Changes

AMB's board of directors appointed J. Michael Losh as an independent director to the Company's board. Losh, who joined the board of directors and audit committee on January 1, 2003, brings to AMB 36 years of financial and international expertise, most recently as General Motor's chief financial officer.

"AMB is committed to market-leading corporate governance. We take pride in our strong, independent and active board and consider Mike an important addition. He brings an extensive combination of operating, financial and international business experience to our board and we look forward to working with him," noted Moghadam.

The Company also announced officer promotions for the new year: Mo Barzegar was promoted to senior vice president, international; Tamra Browne to senior vice president and general counsel; Steve Campbell to senior vice president, environmental and engineering; John Meyer to senior vice president, airport facilities; Jill Blechschmidt to vice president, regional manager; Dave King to vice president, regional manager; and Steve Lueck, to vice president, regional manager.

"We are pleased to recognize this group of talented individuals for their sustained contributions to our business. They are integral to our pursuit of enduring excellence," noted Baird.

Supplemental Reporting Measure

AMB provides supplemental financial data -- including an analysis of funds from operations -- in its supplemental analyst package, located on the Investor Information section of its web site (www.amb.com).

Conference Call

AMB will host a conference call to discuss its fourth quarter and full-year 2002 results on Wednesday, January 15, 2003 at 11:00 AM PST/2:00 PM EST. Stockholders and interested parties may listen to a live broadcast of the conference call by dialing (719) 457-2633 and using reservation code 493454 or by webcast through a link on the Company's website at www.amb.com. If you are unable to listen to the live conference call, a telephone and webcast replay will be available after 5 PM PST on Wednesday, January 15, 2003. The telephone replay will be available until 5:00 PM PST on Wednesday, February 19, 2003 and can be accessed by dialing (719) 457-0820 and using reservation code 493454. The webcast can be accessed through a link on the Company's website at www.amb.com and will be available until 5 PM PST on Wednesday, February 19, 2003.

AMB Property Corporation is a leading owner and operator of industrial real estate, in North America, Europe and Asia. As of December 31, 2002 AMB owned, managed and had renovation and development projects totaling 94.6 million square feet (8.8 million square meters) and 992 buildings in 30 markets. AMB invests in industrial properties located predominantly in infill submarkets of major hub and gateway distribution markets. The Company's portfolio is comprised largely of High Throughput Distribution(R) 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 toll-free at 877-285-3111.

                         CONSOLIDATED BALANCE SHEETS
                            (dollars in thousands)

                              As of
                             Dec. 31,      Sept. 30,       June 30,
                               2002           2002           2002
  Assets
  Investments in
   real estate:
    Total investments
     in properties          $4,925,982     $4,883,497     $4,732,321
    Accumulated
     depreciation            (362,540)      (344,949)      (311,058)
      Net investments
       in properties         4,563,442      4,538,548      4,421,263
    Investment in
     unconsolidated
     joint ventures             64,428         64,822         64,083
    Properties held for
     divestiture, net          107,871        105,613        133,934
      Net investments
       in real estate        4,735,741      4,708,983      4,619,280
  Cash and cash
   equivalents                 117,214         90,840        119,287
  Mortgage receivables          13,133         13,155         87,175
  Accounts receivable, net      74,207         81,003         80,366
  Other assets, including
   discontinued operations      52,199         48,608         39,390
      Total assets          $4,992,494     $4,942,589     $4,945,498

  Liabilities and
   Stockholders' Equity
  Secured debt              $1,284,675     $1,305,320     $1,360,436
  Unsecured senior
   debt securities             800,000        800,000        800,000
  Unsecured debt                10,186         10,319             --
  Alliance Fund II
   credit facility              45,500         72,500         52,000
  Unsecured credit facility     95,000         12,000             --
  Other liabilities, including
   discontinued operations     181,716        189,076        162,629
      Total liabilities      2,417,077      2,389,215      2,375,065
  Minority interests:
    Preferred units            308,369        308,388        315,847
    Minority interests         582,898        506,533        508,577
      Total minority
       interests               891,267        814,921        824,424
  Stockholders' equity:
    Common stock             1,588,156      1,642,459      1,649,909
    Preferred stock             95,994         95,994         96,100
      Total stockholders'
       equity                1,684,150      1,738,453      1,746,009
      Total liabilities
       and stockholders'
       equity               $4,992,494     $4,942,589     $4,945,498


                         CONSOLIDATED BALANCE SHEETS
                            (dollars in thousands)

                                    March 31, 2002      Dec. 31, 2001
  Assets
  Investments in real estate:
    Total investments
     in properties                    $4,566,951          $4,530,711
    Accumulated depreciation           (289,701)           (265,653)
      Net investments in
       properties                      4,277,250           4,265,058
    Investment in unconsolidated
     joint ventures                       71,137              71,097
    Properties held for
     divestiture, net                    139,370             157,174
      Net investments in
       real estate                     4,487,757           4,493,329
  Cash and cash equivalents               99,492              81,732
  Mortgage receivables                    87,214              87,214
  Accounts receivable, net                75,399              70,794
  Other assets, including
   discontinued operations                39,392              35,874
      Total assets                    $4,789,254          $4,768,943

  Liabilities and Stockholders' Equity
  Secured debt                        $1,237,564          $1,228,214
  Unsecured senior debt securities       800,000             780,000
  Unsecured debt                              --                  --
  Alliance Fund II credit facility       116,000             123,500
  Unsecured credit facility                   --              12,000
  Other liabilities, including
   discontinued operations               155,568             138,601
      Total liabilities                2,309,132           2,282,315
  Minority interests:
    Preferred units                      275,987             275,987
    Minority interests                   455,428             458,299
      Total minority interests           731,415             734,286
  Stockholders' equity:
    Common stock                       1,652,607           1,656,242
    Preferred stock                       96,100              96,100
      Total stockholders' equity       1,748,707           1,752,342
      Total liabilities and
       stockholders' equity           $4,789,254          $4,768,943


                    CONSOLIDATED STATEMENTS OF OPERATIONS
                  (dollars in thousands, except share data)

                           For the Quarters        For the Twelve Months
                                 Ended                    Ended
                              December 31,             December 31,
                           2002         2001        2002        2001
  Revenues
  Rental revenues        $157,262    $136,581     $588,522    $530,041
  Equity in earnings
   of unconsolidated
   joint ventures           1,231       1,102        5,674       5,467
  Private capital
   income                   2,725       2,950       11,193      10,972
  Interest and
   other income               539       3,826       10,454      16,297
    Total revenues        161,757     144,459      615,843     562,777
  Expenses
  Property operating       39,164      33,590      145,870     127,753
  Interest, including
   amortization            37,442      33,019      147,101     124,866
  Depreciation and
   amortization            37,286      26,504      127,160     104,838
  General administrative
   and other (A)           13,000       9,640       47,207      35,820
  Loss on investments
   in other companies          --         ---          ---      20,758
    Total expenses        126,892     102,753      467,338     414,035
      Income before
       minority
       interests
       and gains           34,865      41,706      148,505     148,742
  Minority interests'
   share of income:
    Preferred units       (6,379)     (7,056)     (25,149)    (28,682)
    Minority interests    (8,324)     (8,526)     (37,806)    (34,835)
      Total minority
       interests         (14,703)    (15,582)     (62,955)    (63,517)
      Net income before
       discontinued
       operations and
       gains from
       dispositions        20,162      26,124       85,550      85,225
  Gains on developments
   and dispositions
   and discontinued
   operations:
    Gains on developments
     held for sale            414      11,828        1,032      13,169
    Gains/(losses) from
     disposition of
     real estate, net
     of minority
     interests (B)          5,309    (10,073)        7,789      23,259
    Discontinued
     operations             4,697       4,124       18,494      16,300
    Gains from
     disposition
     of real estate,
     discontinued
     operations             7,428          --       11,372          --
      Total gains on
       developments and
       dispositions and
       discontinued
       operations          17,848       5,879       38,687      52,728
      Net income           38,010      32,003      124,237     137,953
  Preferred stock
   dividends              (2,123)     (2,125)      (8,496)     (8,500)
  Preferred unit
   redemption
   discount/(premium)          --     (4,400)          412     (4,400)
  Net income available
   to common
   stockholders           $35,887     $25,478     $116,153    $125,053

  Net income per
   common share
   (diluted)                $0.43       $0.30        $1.37       $1.47

  Weighted average
   common shares
   (diluted)           83,648,772  84,338,812   84,795,987  85,214,066


   (A) Prior to May 31, 2001, G&A did not include expenses incurred by two
       unconsolidated preferred stock subsidiaries, Headlands Realty
       Corporation and AMB Capital Partners.  Adjusted G&A for the twelve
       months ended December 31, 2001, would have been $39,353 had the
       subsidiaries been consolidated beginning January 1, 2001.
   (B) Includes unrealized losses of $1.2 million and $8.6 million for the
       quarters ended December 31, 2002 and 2001, respectively and $1.2
       million and $18.6 million for the twelve months ended December 31,
       2002 and 2001, respectively.


               CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS
                    AND SUPPLEMENTAL CASH FLOW INFORMATION
                  (dollars in thousands, except share data)


                         Quarters              Months Ended
                       December 31,             December 31,
                           2002         2001        2002        2001
  Income before minority
   interests and gains    $34,865     $41,706     $148,505    $148,742
  Gains on developments
   held for sale              414      11,828        1,032      13,169
  Total depreciation
   and amortization        37,286      26,504      127,160     104,838
  FF& E depreciation,
   ground lease
   amortization
   and other (A)            (708)       (507)      (2,450)     (1,963)
  Discontinued
   operations' FFO          6,613       5,905       26,023      22,900
  FFO attributable to
   minority interests    (14,298)    (11,025)     (52,051)    (40,144)
  Adjustments to
   derive FFO from
   unconsolidated JVs:
    AMB's share of
     net income           (1,231)     (1,102)      (5,674)     (5,467)
    AMB's share of FFO      2,117       1,526        8,728       8,014
  Preferred stock
   dividends              (2,123)     (2,125)      (8,496)     (8,500)
  Preferred units
   distributions          (6,379)     (7,056)     (25,149)    (28,682)
  Funds from
   operations             $56,556     $65,654     $217,628    $212,907

  Weighted average
   common shares and
   units (diluted)     88,495,159  89,317,086   89,689,310  89,954,598

  Supplemental Cash
   Flow Information:
  Straight-line rents        $628      $2,514      $11,013     $10,093
  AMB's share of
   unconsolidated
   JV's NOI                $2,713      $2,357      $11,055     $10,181
  JV Partners' share
   of cash basis NOI      $24,914     $20,587      $86,482     $65,010
  Discontinued
   operations' NOI         $7,650      $7,372      $29,949     $27,642
  Stock-based
   compensation
   amortization            $1,315        $797       $5,265      $2,725
  Capitalized interest     $1,762      $2,836       $6,919     $13,650

  Recurring capital
   expenditures:
    Tenant
     improvements          $4,340      $2,149      $18,977      $8,168
    Lease commissions
     and other
     lease costs            3,910       3,779       17,684      19,822
    Building
     improvements           4,725       8,716       18,270      19,852
      Sub-total            12,975      14,644       54,931      47,842
    JV Partners' share
     of capital
     expenditures         (1,955)     (2,995)      (9,547)     (5,824)
      AMB's share of
       recurring
       capital
       expenditures       $11,020     $11,649      $45,384     $42,018


   (1) 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.

SOURCE: AMB Property Corporation

CONTACT: Investors/Analysts, Michelle C. Wells, Investor Relations,
+1-877-285-3111, or fax, +1-415-394-9001, or [email protected], or Media,
Sara J. Butz, Media Relations, +1-415-733-9478, or fax, +1-415-394-9001, or
[email protected], both of AMB Property Corporation

Media contact & resources

Jennifer Nelson

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

Corporate Profile

Park Grande, Building

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