AMB Property Corporation
Funds from Operations (FFO) rose to a record $2.32 per fully diluted share for the full-year 2000, a 10.5% increase over 1999. Fourth quarter FFO per fully diluted share increased 11.1% over the fourth quarter of 1999 to $0.60. Since going public in the fourth quarter of 1997, AMB has grown FFO per share by an average of 11.9% per year.
The strength of AMB's operating properties, located in major metropolitan markets, was illustrated by an 8.4% increase in internal growth for the year and 11.2% for the quarter, measured by same store cash basis net operating income. Same store growth for the year was driven by a 28.0% increase in same store base rents on leases commencing during the year and 58.9% tenant retention at the same-store properties. For the entire portfolio, rent increases on new leases signed during the year were 26.5% and occupancy was 96.3% at year-end, up from 95.9% at year-end 1999.
"The strong fourth quarter and full-year 2000 financial results, in the face of an economic slowdown and significant stock market declines, affirm our strategy to dispose of nearly $1 billion of retail assets and focus our investment strategy on industrial real estate located in supply-constrained markets nationwide," stated Hamid R. Moghadam, chairman and CEO of AMB.
During the year, AMB continued to sharpen its hub market HTD(TM) focus by exiting smaller, non-strategic markets and through the disposition of non-core assets. Dispositions totaled $176 million in 2000, including $68 million in the fourth quarter. W. Blake Baird, president of AMB, stated "Our long-term capital recycling and private equity funding efforts are on track and we have made significant progress this past year executing our investment strategy."
AMB acquired 57 industrial buildings totaling 4.8 million square feet for $322 million during the fourth quarter, including the acquisition of a 95% interest in 20 on-tarmac air cargo facilities at eight U.S. airports from investors in Aviation Facilities Company (AFCO). This acquisition makes AMB one of the largest owners of on-tarmac air cargo facilities in the U.S. and allows AMB to better serve existing customers and to expand relationships with new airport-related customers.
AMB acquired $730 million of HTD(TM) industrial assets in 2000, totaling 10.5 million square feet. "The AFCO acquisition and the presence we established surrounding New York's JFK airport exemplify our strategy," said Baird.
AMB completed and stabilized 12 industrial development and renovation projects for a total investment of $144 million, including five projects in the fourth quarter totaling $70 million. The company's industrial development pipeline currently stands at $306 million and consists of 5.5 million square feet, of which $163 million, or 53%, has been funded.
AMB Institutional Alliance Fund I, a multi-investor fund including 16 pension funds, foundations and endowments that have co-invested alongside AMB, has invested $315 million in operating assets and committed $63 million to renovation and development projects. "AMB has been able to grow our core business through access to private capital sources," said John T. Roberts, president of AMB Investment Management. "Our private capital strategy continues an 18-year tradition of meeting institutional investors real estate needs, and today, allows us to maximize value for our public stockholders."
Financing activity during the quarter strengthened the balance sheet and provided additional flexibility to the debt maturity schedule. During the fourth quarter AMB issued $75 million of 10-year notes at a fixed rate of 8.0% and $150 million of five-year notes at a fixed rate of 7.2%. In 2000, AMB issued a total of $280 million of notes under the medium-term note (MTN) program at an average rate of 7.6%. "Despite the capital market pressure that the REIT industry faces, AMB has successfully managed its balance sheet through its capital recycling program, the repayment of mortgage debt and by opportunistically tapping the public debt market through our MTN program," said Michael A. Coke, chief financial officer.
AMB will host its fourth quarter 2000 conference call tomorrow, January 23, 2001 at 11:00 A.M. PDT/ 2:00 P.M. EDT. You will have the opportunity to listen to 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 from 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, 2000, AMB owned, managed and had renovation and development projects totaling 92 million square feet and 1005 buildings in 27 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 our status as a real estate investment trust under the Internal Revenue Code, environmental uncertainties, risks related to natural disasters, financial market fluctuations, 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, 2000.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2000 2000 2000 2000 1999
Assets
Investments
in real estate:
Total
investments in
properties $4,026,597 $3,787,451 $3,564,744 $3,288,333 $3,249,452
Accumulated
depreciation (177,467) (160,880) (142,037) (120,193) (103,558)
Net investments
in properties 3,849,130 3,626,571 3,422,707 3,168,140 3,145,894
Investment in
unconsolidated
joint ventures 80,432 77,981 77,959 67,414 66,357
Properties held
for divestiture,
net 197,146 149,842 235,359 232,109 181,201
Net investments
in real estate 4,126,708 3,854,394 3,736,025 3,467,663 3,393,452
Cash and cash
equivalents 42,722 37,840 21,674 89,094 137,019
Mortgage
receivables 115,969 77,920 -- -- --
Accounts
receivable, net 69,874 67,667 55,157 54,064 35,516
Investments in
affiliated
companies 35,731 27,388 3,436 10,349 150
Investments in
other companies,
net 15,965 22,371 25,321 25,575 43,512
Other assets 18,657 15,462 11,408 9,882 11,901
Total assets $4,425,626 $4,103,042 $3,853,021 $3,656,627 $3,621,550
Liabilities and Stockholders' Equity
Unsecured credit
facility $216,000 $233,000 $176,000 $43,000 $83,000
Unsecured senior
debt securities 680,000 455,000 400,000 400,000 400,000
Alliance Fund I
credit facility -- -- 51,000 53,000 80,000
Secured debt 940,276 825,477 751,091 766,211 707,037
Other liabilities 147,042 144,104 136,168 128,720 89,371
Total
liabilities 1,983,318 1,657,581 1,514,259 1,390,931 1,359,408
Minority
interests:
Preferred units 318,053 318,176 276,233 276,222 256,641
Minority
interests 356,325 354,274 283,729 207,138 176,242
Total minority
interests 674,378 672,450 559,962 483,360 432,883
Stockholders'
equity:
Common stock 1,671,830 1,676,911 1,682,700 1,686,236 1,733,159
Preferred stock 96,100 96,100 96,100 96,100 96,100
Total
stockholders'
equity 1,767,930 1,773,011 1,778,800 1,782,336 1,829,259
Total
liabilities and
stockholders'
equity $4,425,626 $4,103,042 $3,853,021 $3,656,627 $3,621,550
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS
(dollars in thousands, except share data)
For the Quarters For the Years
Ended Ended
December 31, December 31,
2000 1999 2000 1999
Income from
operations $37,344 $40,775 $ 159,699 $ 158,851
Real estate
related depreciation
and amortization:
Total depreciation
and amortization 31,123 18,210 96,258 67,505
FF&E depreciation
and ground lease
amortization (A) (257) (353) (1,114) (1,002)
FFO attributable
to minority
interests: (B)
Separate account
co-investors (1,258) (1,147) (4,935) (5,148)
AMB Institutional
Alliance Fund I (3,854) (677) (7,752) (804)
Other joint
venture partners (374) (539) (2,368) (2,230)
Adjustments to
derive FFO in
unconsolidated
JV: (C)
Company's share
of net income (1,206) (1,122) (5,212) (4,701)
Company's share
of FFO 1,700 1,616 7,188 6,677
Preferred stock
dividends (2,125) (2,125) (8,500) (8,500)
Preferred unit
distributions (6,835) (5,601) (24,613) (19,501)
Funds from
operations $54,258 $49,037 $ 208,651 $ 191,147
FFO per common
share and unit:
Basic $0.61 $0.54 $2.33 $2.11
Diluted $0.60 $0.54 $2.32 $2.10
Weighted average
common shares
and units:
Basic 89,619,042 90,779,163 89,566,375 90,792,310
Diluted (D) 90,332,931 90,779,163 90,024,511 90,867,934
(A) Ground lease amortization represents the straight-line amortization of
the Company's investments in ground leased properties, for which the
Company does not have a purchase option.
(B) Represents FFO allocated 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,
2000 and 1999, was $8,042 and $4,326, respectively, and for the years
ended December 31, 2000 and 1999, was $24,979 and $12,535,
respectively.
(C) AMB's share of NOI for the quarters ended December 31, 2000 and 1999,
was $1,998 and $1,935, respectively, and for the years ended
December 31, 2000 and 1999, was $8,338 and $7,983, respectively.
(D) Includes the dilutive effect of stock options.
Consolidated Statements of Operations
(dollars in thousands, except share data)
For the Quarters Ended For the Years Ended
December 31 December 31
2000 1999 2000 1999
Revenues
Rental Revenues (A) $126,808 $108,763 $464,164 $439,658
Equity in earnings of
unconsolidated joint
ventures 1,206 1,121 5,212 4,701
Investment management and
other income 4,520 1,566 8,331 3,824
Total revenues 132,534 111,450 477,707 448,183
Operating Expenses
Property operating 30,275 25,382 107,730 107,923
Interest, including
amortization (B) 27,364 20,976 90,270 88,681
Depreciation and
amortization 31,123 18,210 96,258 67,505
General, administrative,
and other 6,428 6,107 23,750 25,223
Total expenses 95,190 70,675 318,008 289,332
Income from operations 37,344 40,775 159,699 158,851
Minority interests:
Preferred units (6,835) (5,601) (24,613) (19,501)
Minority units (5,449) (4,043) (20,348) (14,510)
Total minority interests (12,284) (9,644) (44,961) (34,011)
Net income before gain
from disposition of
real estate 25,060 31,131 114,738 124,840
Gain from disposition of
real estate 824 22,409 7,044 55,466
Net income before
extraordinary items 25,884 53,540 121,782 180,306
Extraordinary items -- (1,347) -- (4,203)
Net income 25,884 52,193 121,782 176,103
Preferred stock dividends (2,125) (2,125) (8,500) (8,500)
Net income available to
common stockholders $23,759 $50,068 $113,282 $167,603
Net income per common share:
Basic $0.28 $0.58 $1.35 $1.94
Diluted $0.28 $0.58 $1.35 $1.94
Weighted average common
shares:
Basic 83,814,658 86,262,815 83,697,170 86,271,862
Diluted (C) 84,528,547 86,262,815 84,155,306 86,347,487
(A)Includes straight-line rents of $4,018 and $3,324 for the quarters and
$10,203 and $10,848 for years ended December 31, 2000 and 1999,
respectively.
(B) Net of capitalized interest of $3,938 and $2,574 for the quarters and
$15,461 and $10,872 for the years ended December 31, 2000 and 1999,
respectively.
(C) Includes the dilutive effect of stock options
SOURCE: AMB Property Corporation
Contact: investors, Victoria A. Robinson, Director, Investor Relations,
877-285-3111, or fax, 415-394-9001, or
Christine G. Schadlich, Vice President, Marketing & Corporate Communications,
415-733-5233, or fax, 415-394-9001, or
Website: http://www.amb.com/
