-- Earnings per share (EPS) for the quarter were $0.34, reflecting a
     12.8% decline from the third quarter 2000; year-to-date EPS increased
     10.4% to $1.17
  -- Adjusted EPS (before gains and extraordinary and one-time items)
     increased 6.3% from the third quarter of 2000 to $0.34
  -- Funds from operations (FFO) per share increased 6.8% from the
     third quarter 2000 to $0.63
  -- Same store net operating income (NOI) growth was 6.7% for the quarter
     and 7.2% year-to-date
  -- Occupancy was 96.6% in the industrial portfolio, up from 95.9% at
     June 30, 2001
  -- Industrial acquisitions totaled $118.1 million and dispositions totaled
     $97.3 million including $57.2 million of retails assets
  -- Repurchased 1.0 million shares of common stock
  -- AMB Institutional Alliance Fund II announces $195 million of
     third party equity commitments

SAN FRANCISCO, Oct. 8 /PRNewswire/ -- AMB Property Corporation today reported earnings per share (EPS) of $0.34 for the third quarter 2001, a 12.8% decline from the third quarter of 2000. Adjusted EPS (before gains and extraordinary and one-time items) was $0.34 for the quarter, reflecting a 6.3% increase over the third quarter of 2000. Year-to-date EPS increased 10.4% to $1.17 and adjusted EPS increased 5.1% to $1.03.

"I am very pleased with our strong results in this difficult operating environment. Our overall same store net operating income grew by 6.7% compared to the third quarter of 2000. Our top eight hub and gateway markets, which account for 72.7% of our total revenues, outperformed our entire portfolio with 9.6% same store NOI growth. Our strategy of focusing on the supply constrained submarkets of our hub and gateway markets helped us achieve portfolio-wide occupancy of 96.6% and increase rents by 14.4%. The San Francisco Bay Area came in as our strongest market with an overall occupancy of 99.0%," stated Hamid Moghadam, chairman & chief executive officer. "As we have said before, we anticipate that it will become increasingly difficult to continue to produce operating results at this level, however we will continue to work hard to outperform on a relative basis."

Earnings growth for the quarter was positively impacted by the sale of a value-added conversion project by AMB's subsidiary, Headlands Realty, of $1.3 million. Gains on dispositions of operating properties of $8.8 million was offset by unrealized losses taken against two retail assets held for sale totaling $10.0 million. In the third quarter 2000, AMB recognized gains of $5.8 million. Growth in earnings before gains and extraordinary and one-time items was driven by continued strong operating performance at the company's industrial properties. Same store cash basis NOI growth was 6.7% with a 16.8% increase in same store base rents on lease renewals and rollovers during the quarter, and 65.7% tenant retention at the same store properties. Year-to-date same store NOI growth was 7.2%. Rent increases on renewals and rollovers during the quarter for the entire industrial portfolio were 14.4% and tenant retention was 68.4%. Occupancy for the industrial portfolio was 96.6%, up from 95.9% at the end of the second quarter. The eight hub and gateway markets had occupancy of 97.0%.

Funds from operations (FFO) per fully diluted share were $0.63, including $0.01 per share of gains from Headlands Realty, and reflecting an increase of 6.8% over the third quarter of 2000. Excluding these gains FFO per share was $0.61, an increase of 3.4% over 2000. FFO growth for the quarter was offset by $0.04 from dilution of dispositions and contributions to co-investment ventures earlier in 2001. Year-to-date FFO per share decreased 4.1% to $1.64, negatively impacted by non-cash charges for impairment reserves of $0.23 per share. Excluding the charges, year-to-date FFO per share increased 9.4% to $1.87.

"Since the beginning of the year, AMB has continued to build liquidity by raising private equity capital, disposing of non-core assets and opportunistically raising long-term capital which has resulted in a reduction of our debt-to-book capitalization ratio by 170 basis points," stated W. Blake Baird, president. "It is important to be well positioned with a strong balance sheet in an economic downturn, and we believe this liquidity, including more than $250 million of cash on hand, will enable AMB to execute on opportunities in both the real estate and capital markets."

In the third quarter, AMB purchased 16 industrial buildings totaling 1.7 million square feet for $118.1 million and disposed of $97.3 million of non-core assets, including the largest remaining retail asset for $52.9 million. Industrial development completions totaled 336,000 square feet for $26.8 million, and retail development deliveries totaled 229,000 square feet for $38.9 million. The remaining industrial development commitments through 2003 total $204.6 million, down $49.6 million since the second quarter, and are 43% pre-leased with 67% of the total estimated investment funded. AMB's development commitments represent only 4.2% of total assets.

AMB Institutional Alliance Fund II, a multi-investor fund including pension funds, foundations, endowments and private individuals that co-invest alongside AMB, announced an additional $36 million of private equity capital commitments subsequent to June 30, 2001, bringing the expected total capitalization of Fund II to $487 million when combined with debt financings and AMB's 20% equity investment. Fund II had $136 million invested in operating properties at September 30, 2001.

During the quarter, AMB issued $40 million of fixed rate perpetual preferred units at a coupon of 7.95% and sold $25 million of 10-year notes at a fixed rate of 6.75%. At the end of the quarter, AMB had no outstanding borrowings on its $500 million line of credit. AMB repurchased 1.0 million shares of its common stock for $24.7 million. Under the company's previously announced $100 million share repurchase program, AMB has repurchased a total of 2.5 million common shares in the open market for $52.6 million.

AMB will hold its third quarter 2001 conference call tomorrow, October 9, 2001 at 2:00 p.m. EDT (11:00 a.m. PDT). Stockholders and interested parties may access a webcast of the call through AMB's website at http://www.amb.com/ or a broadcast of the call by dialing 719-457-2629 reservation code 562797. For those who are not able to listen to the live broadcast, a replay will be available for one week following the call through AMB's website at http://www.amb.com/ or by dialing 719-457-0820, reservation code 562797.

AMB Property Corporation is one of the leading owners and operators of industrial real estate nationwide. As of September 30, 2001, AMB owned, managed and had renovation and development projects totaling 92.6 million square feet and 996 buildings in 26 metropolitan markets. AMB targets High Throughput Distribution(TM) properties -- industrial properties located in major distribution markets near airports, seaports and ground transportation systems. These HTD(TM) facilities are built for speed and benefit from barriers to entry due to their supply-constrained locations and proximity to large customer bases. AMB -- A tradition of nontraditional thinking(TM).

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 June 30, 2001.

                                    Consolidated Balance Sheets
                                      (dollars in thousands)
                                              As of
                         September 30,   June 30,    March 31, December 31,
                              2001          2001       2001        2000
  Assets
  Investments in
   real estate:
    Total investments
     in properties        $4,433,847   $4,361,498   $4,084,799 $4,026,597
    Accumulated
     depreciation          (239,144)    (213,923)    (202,188)  (177,467)
      Net investments
       in properties       4,194,703    4,147,575    3,882,611  3,849,130
    Investment in
     unconsolidated joint
     ventures                 85,707       83,865       85,317     80,432
    Properties held for
     divestiture, net        106,054       96,209      236,746    197,146
      Net investments in
       real estate         4,386,464    4,327,649    4,204,674  4,126,708
  Cash and cash
   equivalents               256,872      176,584      152,224     42,722
  Mortgage receivables        92,232       92,250      121,297    115,969
  Accounts receivable, net    68,811       68,982       67,482     69,874
  Investments in affiliated
   companies (A)                  --           --       47,285     35,731
  Investments in other
   companies, net (B)             --           --       15,343     15,965
  Other assets                27,245       56,700       29,839     18,657
      Total assets        $4,831,624   $4,722,165   $4,638,144 $4,425,626

  Liabilities and
   Stockholders' Equity
  Secured debt            $1,102,801   $1,058,247   $1,014,054   $940,276
  Unsecured senior debt
   securities                780,000      755,000      755,000    680,000
  Unsecured credit facility       --           --       94,000    216,000
  Alliance Fund II credit
   facility                  125,000       98,100           --         --
  Other liabilities          197,377      201,031      177,915    147,042
      Total liabilities    2,205,178    2,112,378    2,040,969  1,983,318
  Minority interests:
    Preferred units          381,834      342,966      342,911    318,053
    Minority interests       477,224      476,937      457,372    356,325
      Total minority
       interests             859,058      819,903      800,283    674,378
  Stockholders' equity:
    Common stock           1,671,288    1,693,784    1,700,792  1,671,830
    Preferred stock           96,100       96,100       96,100     96,100
      Total stockholders'
       equity              1,767,388    1,789,884    1,796,892  1,767,930
      Total liabilities
       and stockholders'
       equity             $4,831,624   $4,722,165   $4,638,144 $4,425,626

  (A) On May 31, 2001, the Company acquired all of the voting stock of
      Headlands Realty Corporation and its Investment Management Division.
      The Company began consolidating Headlands Realty Corporation and its
      Investment Management Division for financial reporting purposes
      effective May 31, 2001.
  (B) Net of impairment reserves totaling $23.2 million at
      September 30, 2001, and June 30, 2001, $7.2 million at March 31, 2001,
      and $2.5 million at December 31, 2000.

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

                                 For the Quarters     For the Nine Months
                                       Ended                   Ended
                                     September 30,          September 30,
                                  2001        2000        2001        2000
  Revenues
  Rental revenues (A)         $146,089     $118,493    $421,425   $337,356
  Equity in earnings of
   unconsolidated joint
   ventures                      1,636        1,447       4,365      4,006
  Investment management
   income (B)                    2,340          940       8,022      2,160
  Interest and other income      5,392          491      12,505      1,651
    Total revenues             155,457      121,371     446,317    345,173
  Operating Expenses
  Property operating            35,349       27,394     101,909     77,455
  Interest, including
   amortization (C)             32,996       22,562      94,754     62,906
  Depreciation and
   amortization (D)             38,961       23,312      93,138     65,135
  General, administrative,
   and other (B)                 8,796        5,987      26,180     17,322
  Loss on investments in
   other companies                  --           --      20,758         --
    Total expenses             116,102       79,255     336,739    222,818
      Income from operations    39,355       42,116     109,578    122,355
  Minority interests:
    Preferred units            (7,423)      (6,206)    (21,626)    (17,778)
    Minority interests        (10,556)      (6,879)    (26,324)    (14,899)
      Total minority
       interests              (17,979)     (13,085)    (47,950)    (32,677)
      Net income before
       gain from disposition
       of real estate           21,376       29,031      61,628     89,678
  Gains on developments held
   for sale                      1,341           --       1,341         --
  Gain from disposition of
   real estate, net of
   minority interests            8,773        5,815      43,332      6,220
      Net income before
       extraordinary items      31,490       34,846     106,301     95,898
  Extraordinary items
   (early debt extinguishments)     87           --       (351)         --
      Net income                31,577       34,846     105,950     95,898
  Preferred stock dividends    (2,125)      (2,125)     (6,375)     (6,375)
  Net income available to
   common stockholders         $29,452      $32,721     $99,575    $89,523
  Net income per common share:
    Basic                        $0.35        $0.39       $1.18      $1.07
    Diluted                      $0.34        $0.39       $1.17      $1.06
  Weighted average common
   shares:
    Basic                   84,395,107   84,115,613  84,135,158 83,937,884
    Diluted                 85,644,840   84,725,109  85,097,692 84,237,861

  (A) Includes straight-line rents of $4,113 and $1,815 for the quarters and
      $7,579 and $7,158 for nine months ended September 30, 2001 and 2000,
      respectively.
  (B) On May 31, 2001, the Company acquired all of the voting stock of
      Headlands Realty Corporation and its Investment Management Division.
      The Company began consolidating Headlands Realty Corporation and its
      Investment Management Division for financial reporting purposes
      effective May 31, 2001.
  (C) Net of capitalized interest of $3,616 and $4,330 for the quarters and
      $10,814 and $11,524 for the nine months ended September 30, 2001 and
      2000, respectively.
  (D) Includes unrealized losses on assets held for sale of $10.0 million
      for the quarter and nine months ended September 30, 2001.

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

                                For the Quarters       For the Nine Months
                                      Ended                   Ended
                                   September 30,           September 30,
                                2001         2000        2001        2000

  Income from operations      $39,355     $42,116     $109,578    $122,355

  Gains on developments held
   for sale                     1,341          --        1,341          --
  Real estate related
   depreciation and
   amortization:
    Total depreciation and
     amortization              38,961      23,312       93,138      65,135
    FF& E Depreciation and
     ground lease
   amortization (A)             (483)       (223)      (1,456)       (857)
  FFO attributable to
   minority interests (B)    (13,393)     (4,262)     (29,119)     (9,569)

  Adjustments to derive FFO
   from unconsolidated
   JV's: (C)
    Company's share of
     net income               (1,636)     (1,447)      (4,365)     (4,006)
    Company's share of FFO      2,235       1,941        6,488       5,488
  Preferred stock dividends   (2,125)     (2,125)      (6,375)     (6,375)
  Preferred units
   distributions              (7,423)     (6,206)     (21,626)    (17,778)

  Funds from operations       $56,832     $53,106     $147,604    $154,393

  FFO per common share
   and unit:
    Basic                       $0.63       $0.59        $1.65       $1.72
    Diluted (D)                 $0.63       $0.59        $1.64       $1.71

  Weighted average common
   shares and units:
    Basic                  89,550,154  89,898,511   89,300,512  89,804,970
    Diluted (D)            90,799,887  90,508,007   90,263,046  90,104,947

  (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
      September 30, 2001 and 2000, was $18,203 and $6,796, respectively, and
      for the nine months ended September 30, 2001 and 2000, was $44,423 and
      $16,937, respectively.
  (C) AMB's share of NOI for the quarters ended September 30, 2001 and 2000,
      was $2,743 and $2,231, respectively, and for the nine months ended
      September 30, 2001 and 2000, was $7,824 and $6,340, respectively.
  (D) Includes the dilutive effect of stock options.

 

SOURCE: AMB Property Corporation

Contact: investors, Victoria R. Heffelfinger, Vice President - Investor
Relations, 877-285-3111, or fax, +1-415-394-9001, or [email protected], or media,
Christine G. Schadlich, Vice President - Corporate Communications,
+1-415-733-5233, 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

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AMB Property Corporation Declares Quarterly Dividend and Announces Repurchase Of Series C Preferred Units
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