AMB Property Corporation Announces Results for Second Quarter 2000.Business Editors SAN FRANCISCO--(BUSINESS WIRE)--July 10, 2000 AMB AMB Ambient AMB Ambassador AMB Amber AMB Ambulance AMB Associação Médica Brasileira (Brazil) AMB Ambulatory AMB Advanced Memory Buffer (FBDIMM control unit on DRAM) Property Corporation (NYSE NYSE See: New York Stock Exchange :AMB)
Highlights
-- EPS before gains and extraordinary items decreased 8.3% from 2Q99
to $0.33, due to accounting for retail assets held for sale
-- FFO per share of $0.58, reflecting an increase of 9.4% over 2Q99
-- 8.2% same store NOI growth, driven by 21.3% rental increases and a
140 basis point gain in occupancy
-- Invested $194 million in new acquisitions and completed $66
million of development projects
-- Completed early renewal of $500 million credit facility
-- Guy F. Jaquier joined AMB as Executive Vice President and Chief
Investment Officer
SAN FRANCISCO--(BUSINESS WIRE)--July 10, 2000 AMB Property Corporation (NYSE:AMB) today reported that for the quarter ended June June: see month. 30, 2000 it generated earnings per share (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) before gains from dispositions and extraordinary items of $0.33, a decrease of 8.3% from the second quarter of 1999, and year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. EPS increased 1.5% over 1999 to $0.67. Funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. (FFO FFO See: Funds from operations ) per share for the quarter increased 9.4% over the second quarter of 1999 to $0.58, and year-to-date FFO per share increased 9.7% over 1999 to $1.13. The decline in EPS for the quarter was caused by lower than normal depreciation and amortization expense in 1999. Under the required accounting for assets held for sale, the company discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: depreciation of its retail portfolio after it committed to dispose of To determine the fate of; to exercise the power of control over; to fix the condition, application, employment, etc. of; to direct or assign for a use. See also: Dispose the portfolio in March 1999. On an adjusted basis, excluding the effects of the lower depreciation, EPS increased 6.5% for the quarter and 9.8% year-to-date. The accounting for the assets held for sale did not impact reported FFO per share. The primary driver of earnings for the quarter was internal growth generated by AMB's operating properties, which generated growth of 8.2% for the quarter, measured by same store cash basis net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. . Same store growth was primarily driven by a 21.3% increase in same store base rents on leases commencing during the quarter and a 140 basis point improvement in occupancy to 97.6% in the same store portfolio. For the entire portfolio, rent increases on new leases were 22.2% and occupancy was 96.8% at quarter end. "We believe the single most important metric for measuring the progress of any real estate company is internal growth and this quarter we continued to show market leading operating performance with our growth in same store net operating income," stated Hamid R. Moghadam, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of AMB. "Our industrial portfolio, which accounts for 94% of our revenues, generated same store growth of 8.8%, our best growth since going public 11 quarters ago. Our top six hub markets continued to outperform Outperform An analyst recommendation meaning a stock is expected to do slightly better than the market return. Notes: Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. our other markets by generating exceptional internal growth of 12.0%. We believe our superior operating performance is a direct result of our High Throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. Distribution(TM) strategy." During the quarter AMB completed its planned reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. of the remaining proceeds from its retail portfolio dispositions in 1999 and made substantial investments on behalf of AMB Institutional Alliance Fund I, a co-investment fund between AMB and institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. . AMB acquired a total of 52 industrial buildings for $194 million. The acquisitions were located in AMB's target markets, with a concentration in the Northern New Jersey and New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. markets. In addition, AMB commenced eight new development and renovation projects with an expected total investment of $74 million, and completed six development and renovation projects for a total investment of $66 million. Also during the quarter, AMB exited the Denver Denver, city (1990 pop. 467,610), alt. 5,280 ft (1,609 m), state capital, coextensive with Denver co., N central Colo., on a plateau at the foot of the Front Range of the Rocky Mts., along the South Platte River where Cherry Creek meets it; inc. 1861. market by disposing of two industrial buildings for $3 million. W. Blake Baird Baird may refer to: In places:
tr.v. re·de·ployed, re·de·ploy·ing, re·de·ploys 1. To move (military forces) from one combat zone to another. 2. program continues to sharpen sharp·en tr. & intr.v. sharp·ened, sharp·en·ing, sharp·ens To make or become sharp or sharper. sharp both our geographic and asset focus. This quarter was an excellent illustration as we expanded our HTD HTD Heated HTD Heat Transfer Division HTD Haste the Day (band) HTD High Torque Drive (synchronous belt drives) HTD HEDS Technology Demonstration (NASA) HTD Hit The Deck (TM) portfolio by entering the New York City sub-market through the acquisition of 30 air cargo air cargo: see aviation. buildings immediately adjacent to the JFK International Airport, making AMB a very significant owner in this strategic air cargo market. We will continue to focus on recycling recycling, the process of recovering and reusing waste products—from household use, manufacturing, agriculture, and business—and thereby reducing their burden on the environment. assets in our industrial portfolio by exiting smaller non-strategic markets and more mature properties to reinvest re·in·vest tr.v. re·in·vest·ed, re·in·vest·ing, re·in·vests To invest (capital or earnings) again, especially to invest (income from securities or funds) in additional shares. the proceeds and further concentrate our holdings in High Throughput Distribution(TM) properties in hub distribution markets where we believe there is tremendous opportunity. The percentage of our industrial revenues coming from our six hub markets increased to 58% at quarter end, up from 55% at year end 1999." John T. Roberts, President of AMB Investment Management, Inc., stated, "We are extremely pleased with the progress we have made in deploying capital for AMB Institutional Alliance Fund I. To date, we have invested a total of $205 million, representing 50% of the Fund's total committed capital." In May, AMB obtained a new $500 million unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility, replacing its previous $500 million credit facility that was to mature in November November: see month. 2000. The new three-year facility matures in May 2003 with a one-year adj. 1. completing its life cycle within a year. Adj. 1. one-year - completing its life cycle within a year; "a border of annual flowering plants" annual phytology, botany - the branch of biology that studies plants extension option and a $200 million expansion option. The facility also has a $200 million competitive bid option. The rate on the borrowings, based on AMB's current credit rating, is LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). plus 75 basis points. In addition, there is a 15 basis point annual facility fee. This pricing is consistent with that of the old facility. "We had excellent execution through which we were able to maintain pricing and increase borrowing capacity, and I am pleased by our initiative to renew the line six months early," stated Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. A. Coke, Chief Financial Officer of AMB. "The credit facility was over-subscribed and 75% of the banks who participated in our previous facility are participants in our new facility. Additionally, we expanded our bank group from twelve participants to seventeen including eight new banks." At quarter end, AMB's debt-to-total market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. ratio was 34% and debt-to-total book capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. was 38%, with interest and fixed charge coverage ratios of 4.1x and 2.5x, respectively. On June 20, Guy F. Jaquier joined AMB as Executive Vice President and Chief Investment Officer, as well as Vice-Chairman vice-chairman n → vicepresidente m vice-chairman vice irreg n → vice-président(e) vice-chairman vice- n of AMB Investment Management, Inc. Mr. Moghadam stated, "We are very excited to have Guy on board at AMB. We have respected Guy as a worthy competitor over the years and he brings significant experience in real estate investments and private capital, and will further strengthen what we believe to be the best management team in the industrial real estate business." AMB Property Corporation will host its second quarter 2000 conference call tomorrow, July July: see month. 11, 2000 at 11:00 AM PDT/ 2:00 PM EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . You will have the opportunity to listen to the conference call over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the through AMB's website at www.amb.com. To listen to the live call, please go to the web site at least fifteen minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio software. For those who cannot 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 June 30, 2000, AMB owned, managed and had renovation and development projects totaling 85.0 million square feet in 25 U.S. metropolitan markets, including 6.1 million square feet owned with institutional investors through its subsidiary AMB Investment Management, Inc. AMB owns a majority limited partnership interest in an unconsolidated joint venture that owns 36 buildings totaling 4.0 million square feet in Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. and AMB Investment Management manages 4.5 million square feet on behalf of institutional investors. At June 30, 2000 the Company had 89.8 million common shares and units outstanding. AMB - A tradition of nontraditional thinking(TM). This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or 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 operating costs npl → gastos mpl operacionales , 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 Noun 1. cost overrun - excess of cost over budget; "the cost overrun necessitated an additional allocation of funds in the budget" cost - the total spent for goods or services including money and time and labor , 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 The Internal Revenue Code is the body of law that codifies all federal tax laws, including income, estate, gift, excise, alcohol, tobacco, and employment taxes. These laws constitute title 26 of the U.S. Code (26 U.S.C.A. § 1 et seq. , 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 Form 10-Q See 10-Q. for the quarter ended March 31, 2000.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
As of
-----
June 30, March 31, December 31,
2000 2000 1999
Assets ---- ---- ----
Investments in
real estate,
net (1)(2) $ 3,736,025 $ 3,467,663 $ 3,393,452
Cash and cash
equivalents 21,674 89,094 137,019
Other assets 95,322 99,870 91,079
----------- ----------- -----------
Total assets $ 3,853,021 $ 3,656,627 $ 3,621,550
=========== =========== ===========
Liabilities and
Stockholders' Equity
Unsecured
credit facility $ 176,000 $ 43,000 $ 83,000
Unsecured senior
debt securities 400,000 400,000 400,000
Alliance Fund I
credit facility 51,000 53,000 80,000
Secured debt 751,091 766,211 707,037
Other liabilities 136,168 128,720 89,371
----------- ----------- -----------
Total liabilities 1,514,259 1,390,931 1,359,408
Minority interests:
Separate account
co-investors 51,124 51,084 51,143
AMB Institutional
Alliance Fund I 91,053 15,341 14,259
Other joint
venture partners 20,131 19,499 18,868
Preferred units (3) 276,233 276,222 256,641
Limited Partners in OP 121,421 121,214 91,972
----------- ----------- -----------
Total minority
interests 559,962 483,360 432,883
Stockholders' equity:
Common stock 1,682,700 1,686,236 1,733,159
Preferred stock 96,100 96,100 96,100
----------- ----------- -----------
Total
stockholders'
equity 1,778,800 1,782,336 1,829,259
----------- ----------- -----------
Total Liabilities and
stockholder's equity $ 3,853,021 $ 3,656,627 $ 3,621,550
=========== =========== ===========
(1) Includes two industrial buildings, six retail centers, and one
land parcel held for divestiture with a net book value of $235,359
as of June 30, 2000.
(2) Includes two investments in unconsolidated joint ventures with a
net book value of $72,284, $67,414, and $66,391 as of June 30,
2000, March 31, 2000, and December 31, 1999, respectively.
(3) For financial reporting purposes, the preferred units are
classified as minority interests.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except share data)
For the Quarter Ended For the Six Months Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
Revenues
Rental revenues(1) $ 110,597 $ 113,530 $ 218,863 $ 221,187
Investment
management and
other income 2,882 1,847 4,939 3,762
--------- --------- --------- ---------
Total revenues 113,479 115,377 223,802 224,949
Operating Expenses
Property operating 25,088 28,355 50,061 55,759
Interest, including
amortization(2) 20,002 23,591 40,344 46,558
Depreciation
and amortization 22,631 15,178 41,823 33,602
General,
administrative
and other(3) 5,984 6,807 11,335 13,009
--------- --------- --------- ---------
Total expenses 73,705 73,931 143,563 148,928
--------- --------- --------- ---------
Income from
operations 39,774 41,446 80,239 76,021
Minority interests:
Separate account
co-investors (737) (741) (1,596) (1,800)
AMB Institutional
Alliance Fund I (848) -- (1,217) --
Other joint
venture partners (721) (554) (1,350) (910)
Preferred unit holders (5,962) (4,667) (11,572) (8,475)
Limited partners in OP (1,915) (2,183) (3,858) (3,521)
--------- --------- --------- ---------
Total minority
interests (10,183) (8,145) (19,593) (14,706)
--------- --------- --------- ---------
Net income before
gain from
disposition
of real estate 29,591 33,301 60,646 61,315
Gain from disposition
of real estate 416 11,525 405 11,525
--------- --------- --------- ---------
Net income before
extraordinary
items 30,007 44,826 61,051 72,840
Extraordinary items -- (1,509) -- (1,509)
--------- --------- --------- ---------
Net income 30,007 43,317 61,051 71,331
Preferred
stock dividends (2,125) (2,125) (4,250) (4,250)
--------- --------- --------- ---------
Net income
available
to common
stockholders $ 27,882 $ 41,192 $ 56,801 $ 67,081
========= ========= ========= =========
Net income per
common share:
Basic $ 0.33 $ 0.48 $ 0.68 $ 0.78
========= ========= ========= =========
Diluted $ 0.33 $ 0.48 $ 0.68 $ 0.78
========= ========= ========= =========
Weighted average
common shares:
Basic 83,848,883 86,286,613 83,849,020 86,143,859
========== ========= ========== ==========
Diluted(4) 84,125,277 86,468,820 83,994,238 86,244,750
========== ========= ========== ==========
(1) Includes straight-line rents of $2,183 and $2,835 for the quarters
ended June 30, 2000 and 1999, respectively, and $5,343 and $5,523
for the six months ended June 30, 2000 and 1999, respectively.
(2) Net of capitalized interest of $4,179 and $2,874 for the quarters
ended June 30, 2000 and 1999, respectively, and $7,194 and $5,457
for the six months ended June 30, 2000 and 1999, respectively.
(3) Includes internal asset management costs of $2,067 and $2,529 for
the quarters ended June 30, 2000 and 1999, respectively, and
$4,489 and $4,659 for the six months ended June 30, 2000 and 1999,
respectively.
(4) Includes the dilutive effect of stock options.
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS
(dollars in thousands, except share data)
For the Quarter For the Six Months
Ended Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
Income from operations $ 39,774 $ 41,446 $ 80,239 $ 76,021
Real estate related
depreciation and
amortization:
Total depreciation
and amortization 22,631 15,178 41,823 33,602
FF&E depreciation
and ground lease
amortization(1) (231) (250) (634) (364)
FFO attributable to
minority interests:(2)
Separate account
co-investors (1,283) (1,161) (2,547) (2,635)
AMB Institutional
Alliance Fund I (478) -- (1,234) --
Other joint
venture partners (920) (558) (1,526) (1,109)
Adjustments to derive FFO
in unconsolidated JVs:(3)
Company's share
of net income (1,317) (1,177) (2,559) (2,328)
Company's share of FFO 1,811 1,671 3,547 3,316
Preferred stock dividends (2,125) (2,125) (4,250) (4,250)
Preferred unit
distributions (5,962) (4,667) (11,572) (8,475)
--------- --------- ---------- ---------
Funds from operations $ 51,900 $ 48,357 $ 101,287 $ 93,778
========= ========= ========== =========
FFO per common
share and unit:
Basic $ 0.58 $ 0.53 $ 1.13 $ 1.03
========= ========= ========== =========
Diluted $ 0.58 $ 0.53 $ 1.13 $ 1.03
========= ========= ========== =========
Weighted average common
shares and units:
Basic 89,822,498 90,861,822 89,758,199 90,655,675
========== ========== ========== ==========
Diluted(4) 90,098,892 91,044,028 89,903,417 90,756,567
========== ========== ========== ==========
(1) 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.
(2) 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
June 30, 2000 and 1999, was $5,379 and $2,544, respectively, and
for the six months ended June 30, 2000 and 1999, was $10,141 and
$5,216, respectively.
(3) AMB's share of NOI for the quarters ended June 30, 2000 and 1999,
was $2,101 and $2,014, respectively, and for the six months ended
June 30, 2000 and 1999, was $4,109 and $3,992, respectively.
(4) Includes the dilutive effect of stock options.
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