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8-K - FORM 8-K - Prologis, Inc. | f58982e8vk.htm |
Exhibit 99.1
Supplemental Analyst Package 2011 First Quarter Earnings Conference Call April 20, 2011 |
2011 First Quarter Earnings Conference Call 4/20/2011 |
Company Profile |
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AMB Property Corporation® is a leading owner, operator and developer of industrial real estate,
focused on major hub and gateway distribution markets in the Americas, Europe and Asia. As of March
31, 2011, AMB owned or had investments in, on a consolidated basis or through unconsolidated joint
ventures, properties and development projects expected to total approximately 161.0 million square
feet (15.0 million square meters) in 49 markets within 15 countries.
AMB invests in properties located predominantly in the infill submarkets of its targeted markets.
AMBs portfolio is comprised primarily of High Throughput Distribution® facilities built
for efficiency and located near airports, seaports, ground transportation systems, and population
concentrations.
Through its private capital group, AMB provides real estate investment, portfolio management and
reporting services to co-investment ventures and clients. Private capital revenue consists of asset
management distributions and fees, acquisition and development fees as well as incentive
distributions.
The Americas |
Europe |
Asia |
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Operating Portfolio(1)
|
121.5 msf | Operating Portfolio(1) | 13.5 msf | Operating Portfolio(1) | 13.9 msf | |||||||
Development
Portfolio(2)(3) |
4.6 msf | Development Portfolio(2)(3) | 2.2 msf | Development Portfolio(2)(3) | 5.3 msf | |||||||
Land Inventory(3)
|
2,266 acres | Land Inventory(3) | 227 acres | Land Inventory(3) | 101 acres | |||||||
(1) | The operating portfolio includes the owned and managed portfolio and operating properties held through AMBs investments in unconsolidated joint ventures that it does not manage (excluded from the owned and managed portfolio), value-added acquisitions and the location of AMBs global headquarters. | |
(2) | Includes pre-stabilized development properties. | |
(3) | Includes investments held through unconsolidated joint ventures. |
© 2011 AMB Property Corporation | 1 |
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2011 First Quarter Earnings Conference Call 4/20/2011 |
Highlights (dollars in thousands, except per share data) |
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For the Quarters Ended March 31, | ||||||||||||
2011 | 2010 | % Change | ||||||||||
Revenues |
$ | 165,768 | $ | 154,090 | 7.6 | % | ||||||
Adjusted EBITDA(1) |
114,663 | 101,126 | 13.4 | % | ||||||||
Net income (loss) available to common stockholders |
7,821 | (4,447 | ) | n/m | ||||||||
FFO, as adjusted(1)(2) |
57,230 | 47,782 | 19.8 | % | ||||||||
Core FFO, as adjusted(1)(2) |
56,126 | 44,551 | 26.0 | % | ||||||||
Per diluted share and unit |
||||||||||||
EPS |
$ | 0.05 | $ | (0.03 | ) | n/m | ||||||
FFO, as adjusted(1)(2) |
0.33 | 0.31 | 6.5 | % | ||||||||
Core FFO, as adjusted(1)(2) |
0.32 | 0.29 | 10.3 | % | ||||||||
Dividends per common share |
0.28 | 0.28 | 0.0 | % |
Financial(3) |
More than $1.4 billion in liquidity; consisting of approximately $1.2 billion of availability
on lines of credit and approximately $204 million of unrestricted cash and cash equivalents
|
|
Operations(3) |
92.8% occupancy at the end of the first quarter; 92.4% first quarter average occupancy
0.2% first quarter cash basis same store NOI growth without lease termination fees
Record first quarter leasing, commencing 8.9 msf of leases
(12.1)% first quarter rent changes on renewals and rollover; (12.6)% for the trailing four
quarters
|
|
Capital Deployment(3) |
Commenced $300 million of development in Brazil, China, Japan and Germany
Acquired two assets for approximately $23 million in the Americas and Europe totaling 308,300
sf at a 6.2% stabilized cap rate
Completed $78 million in dispositions
Subsequent to quarter end:
Contributed $168 million of AMB real estate assets to AMB China Logistics Venture I
Acquired partners 50% interest in its AMB -SGP co-investment venture
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|
Private Capital |
A record quarter of private capital fund raising with approximately $1.1 billion in new
third-party equity in the first quarter comprising approximately:
$566 million (at March 31, 2011 exchange rate) in AMB Europe Logistics JV; and
$500 million in AMB China Logistics Venture I
Subsequent to quarter end:
Raised $87.6 million of third party equity in AMB U.S. Logistics Fund
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|
(1) | See reporting definitions and supplemental financial measures disclosures. | |
(2) | See page 5 for a reconciliation to derive FFO, as adjusted and Core FFO, as adjusted. | |
(3) | Owned and managed portfolio. | |
(4) | Includes value-added acquisitions. |
© 2011 AMB Property Corporation | 2 |
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2011 First Quarter Earnings Conference Call 4/20/2011 |
Overview of Funds From Operations, as
adjusted(1) |
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Funds From Operations, as adjusted(1)(2)
(per diluted common share and unit)
Estimated FFO, as
adjusted by Business(1)(2)
(per diluted common share and unit)
For the Quarter Ended March 31, | For the Years Ended December 31, | |||||||||||
2011 | 2010 | 2009 | ||||||||||
Real estate operations,
net of unallocated overhead |
$ | 0.29 | $ | 1.07 | $ | 1.19 | ||||||
Overhead reallocation |
0.02 | 0.29 | 0.32 | |||||||||
Real estate operations FFO,
as adjusted |
$ | 0.31 | $ | 1.36 | $ | 1.51 | ||||||
% of reported FFO, as adjusted |
93.9 | % | 107.1 | % | 72.2 | % | ||||||
Development Profits |
| 0.02 | 0.63 | |||||||||
Overhead allocation |
| (0.19 | ) | (0.21 | ) | |||||||
Development FFO, as adjusted |
$ | | $ | (0.17 | ) | $ | 0.42 | |||||
% of reported FFO, as adjusted |
0.0 | % | (13.4 | %) | 20.1 | % | ||||||
Private Capital Revenues |
0.04 | 0.18 | 0.27 | |||||||||
Overhead allocation |
(0.02 | ) | (0.10 | ) | (0.11 | ) | ||||||
Private Capital FFO, as adjusted |
$ | 0.02 | $ | 0.08 | $ | 0.16 | ||||||
% of reported FFO, as adjusted |
6.1 | % | 6.3 | % | 7.7 | % | ||||||
Total FFO, as adjusted |
$ | 0.33 | $ | 1.27 | $ | 2.09 | ||||||
Development Profits(1)(3)
(per diluted common share and unit)
Private Capital Revenue
(per diluted common share and unit)
(1) | See reporting definitions and supplemental financial measures disclosures. | |
(2) | See page 5 for a reconciliation to derive FFO, as adjusted, for the quarter ended March 31, 2011. | |
(3) | Excludes co-investment venture partners share of development gains. |
© 2011 AMB Property Corporation | 3 |
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2011 First Quarter
Earnings Conference Call 4/20/2011 |
Consolidated Statements of Operations (in thousands, except per share data) |
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For the Quarters Ended March 31, | ||||||||
2011 | 2010 | |||||||
Revenues |
||||||||
Rental revenues |
$ | 158,085 | $ | 146,645 | ||||
Private capital revenues |
7,683 | 7,445 | ||||||
Total revenues |
165,768 | 154,090 | ||||||
Costs and expenses |
||||||||
Property operating costs |
(52,062 | ) | (48,118 | ) | ||||
Depreciation and amortization |
(54,986 | ) | (47,381 | ) | ||||
General and administrative |
(30,661 | ) | (31,951 | ) | ||||
Restructuring charges |
| (2,973 | ) | |||||
Merger transaction costs |
(3,697 | ) | | |||||
Fund costs |
(241 | ) | (314 | ) | ||||
Other expenses(1) |
(946 | ) | (1,191 | ) | ||||
Total costs and expenses |
(142,593 | ) | (131,928 | ) | ||||
Other income and expenses |
||||||||
Development profits, net of taxes |
| 4,803 | ||||||
Equity in earnings of unconsolidated joint ventures, net |
7,800 | 3,875 | ||||||
Other income(1) |
1,238 | 289 | ||||||
Interest expense, including amortization |
(34,942 | ) | (32,589 | ) | ||||
Total other income and expenses, net |
(25,904 | ) | (23,622 | ) | ||||
Loss from continuing operations |
(2,729 | ) | (1,460 | ) | ||||
Discontinued operations |
||||||||
Income attributable to discontinued operations |
870 | 840 | ||||||
Development profits, net of taxes |
1,637 | | ||||||
Gains from sale of real estate interests, net of taxes |
14,544 | | ||||||
Total discontinued operations |
17,051 | 840 | ||||||
Net income (loss) |
14,322 | (620 | ) | |||||
Noncontrolling interests share of net (income) loss |
||||||||
Joint venture partners share of net (income) loss |
(2,049 | ) | 375 | |||||
Joint venture partners and limited partnership unitholders share of development profits, net of taxes |
(29 | ) | (106 | ) | ||||
Limited partnership unitholders |
(116 | ) | 200 | |||||
Total noncontrolling interests share of net (income) loss |
(2,194 | ) | 469 | |||||
Net income (loss) attributable to AMB Property Corporation |
12,128 | (151 | ) | |||||
Preferred stock dividends |
(3,952 | ) | (3,952 | ) | ||||
Allocation to participating securities(2) |
(355 | ) | (344 | ) | ||||
Net income (loss) available to common stockholders |
$ | 7,821 | $ | (4,447 | ) | |||
Net income (loss) per common share (diluted) |
$ | 0.05 | $ | (0.03 | ) | |||
Weighted average common shares (diluted) |
168,100 | 148,666 | ||||||
(1) | Includes changes in liabilities and assets associated with AMBs deferred compensation plan for the three months ended March 31, 2011 and 2010 of $775 and $919, respectively. | |
(2) | See reporting definitions and supplemental financial measures disclosures. |
© 2011 AMB Property Corporation | 4 |
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2011 First Quarter
Earnings Conference Call 4/20/2011 |
Consolidated Statements of Funds
from Operations, as adjusted(1) (in thousands, except per share data) |
|||
For the Quarters Ended March 31, | ||||||||
2011 | 2010 | |||||||
Net income (loss) available to common stockholders |
$ | 7,821 | $ | (4,447 | ) | |||
Gains from sale or contribution of real estate interests, net of taxes |
(14,544 | ) | | |||||
Depreciation and amortization |
||||||||
Total depreciation and amortization |
54,986 | 47,381 | ||||||
Discontinued operations depreciation |
28 | 1,279 | ||||||
Non-real estate depreciation |
(1,897 | ) | (2,545 | ) | ||||
Adjustment for depreciation on development profits |
(525 | ) | (1,546 | ) | ||||
Adjustments to derive FFO, as defined by NAREIT, from noncontrolling interests |
||||||||
Joint venture partners noncontrolling interests (Net income (loss)) |
2,049 | (375 | ) | |||||
Limited partnership unitholders noncontrolling interests (Net income (loss)
and development profits) |
145 | (94 | ) | |||||
FFO, as defined by NAREIT, attributable to joint venture partners noncontrolling interests |
(7,542 | ) | (5,380 | ) | ||||
Adjustments to derive FFO, as defined by NAREIT, from unconsolidated joint ventures |
||||||||
AMBs share of net income |
(7,800 | ) | (3,875 | ) | ||||
AMBs share of FFO, as defined by NAREIT |
20,881 | 14,453 | ||||||
Funds from operations, as defined by NAREIT(1) |
$ | 53,602 | $ | 44,851 | ||||
Adjustments for impairments, restructuring charges, merger transaction costs
and debt extinguishment |
||||||||
Restructuring charges |
| 2,973 | ||||||
Merger transaction costs |
3,697 | | ||||||
Allocation to participating securities(1) |
(69 | ) | (42 | ) | ||||
Funds from operations, as adjusted(1) |
$ | 57,230 | $ | 47,782 | ||||
FFO, as adjusted per common share and unit (diluted) |
$ | 0.33 | $ | 0.31 | ||||
Weighted average common shares and units (diluted) |
172,973 | 152,770 | ||||||
Core Funds From Operations, as adjusted |
||||||||
Funds from operations, as adjusted |
$ | 57,230 | $ | 47,782 | ||||
Development profits, net of taxes |
(1,112 | ) | (3,257 | ) | ||||
Joint venture partners and limited partnership unitholders share of development
profits, net of taxes |
29 | 106 | ||||||
Limited partnership unitholders noncontrolling interests (Development profits) |
(29 | ) | (106 | ) | ||||
Allocation to participating securities(1) |
8 | 26 | ||||||
Core Funds From Operations, as adjusted(1) |
$ | 56,126 | $ | 44,551 | ||||
Core FFO, as adjusted per common share and unit (diluted) |
$ | 0.32 | $ | 0.29 | ||||
Weighted average common shares and units (diluted) |
172,973 | 152,770 | ||||||
(1) | See reporting definitions and supplemental financial measures disclosures. |
© 2011 AMB Property Corporation | 5 |
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2011 First Quarter
Earnings Conference Call 4/20/2011 |
Consolidated Balance Sheets (dollars in thousands) |
|||
As of | ||||||||
March 31, 2011 | December 31, 2010 | |||||||
Assets |
||||||||
Investments in real estate |
||||||||
Total investments in properties |
$ | 6,841,289 | $ | 6,906,176 | ||||
Accumulated depreciation and amortization |
(1,313,547 | ) | (1,268,093 | ) | ||||
Net investments in properties |
5,527,742 | 5,638,083 | ||||||
Investments in unconsolidated joint ventures |
911,003 | 883,241 | ||||||
Properties held for sale or contribution, net |
346,242 | 242,098 | ||||||
Net investments in real estate |
6,784,987 | 6,763,422 | ||||||
Cash and cash equivalents and restricted cash |
235,288 | 228,415 | ||||||
Accounts receivable, net |
170,867 | 167,735 | ||||||
Other assets |
229,621 | 213,323 | ||||||
Total assets |
$ | 7,420,763 | $ | 7,372,895 | ||||
Liabilities and equity |
||||||||
Liabilities |
||||||||
Secured debt |
$ | 961,264 | $ | 962,434 | ||||
Unsecured senior debt |
1,639,823 | 1,685,956 | ||||||
Unsecured credit facilities |
402,784 | 268,933 | ||||||
Other debt |
422,180 | 413,976 | ||||||
Accounts payable and other liabilities |
294,619 | 339,474 | ||||||
Total liabilities |
3,720,670 | 3,670,773 | ||||||
Equity |
||||||||
Stockholders equity |
||||||||
Common equity |
3,079,320 | 3,097,311 | ||||||
Preferred equity |
223,412 | 223,412 | ||||||
Total stockholders equity |
3,302,732 | 3,320,723 | ||||||
Noncontrolling interests |
||||||||
Joint venture partners |
342,514 | 325,590 | ||||||
Limited partnership unitholders |
54,847 | 55,809 | ||||||
Total noncontrolling interests |
397,361 | 381,399 | ||||||
Total equity |
3,700,093 | 3,702,122 | ||||||
Total liabilities and equity |
$ | 7,420,763 | $ | 7,372,895 | ||||
© 2011 AMB Property Corporation | 6 |
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2011 First Quarter Earnings Conference Call 4/20/2011 |
Supplemental Cash Flow Information (dollars in thousands) |
|||
For the Quarters Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
AMBs Owned and Managed Portfolio:(1)(2) |
||||||||
Supplemental Information: |
||||||||
Straight-line rents and amortization of lease intangibles |
$ | 10,435 | $ | 7,785 | ||||
AMBs share of straight-line rents and amortization of lease intangibles |
$ | 6,746 | $ | 4,891 | ||||
Gross lease termination fees |
$ | 588 | $ | 820 | ||||
Net lease termination fees(3) |
$ | 490 | $ | 576 | ||||
AMBs share of net lease termination fees |
$ | 438 | $ | 466 | ||||
Recurring capital expenditures: |
||||||||
Tenant improvements |
$ | 6,690 | $ | 6,269 | ||||
Lease commissions and other lease costs |
9,169 | 8,046 | ||||||
Building improvements |
6,664 | 4,391 | ||||||
Sub-total |
22,523 | 18,706 | ||||||
Co-investment venture partners share of capital expenditures |
(8,095 | ) | (5,934 | ) | ||||
AMBs share of recurring capital expenditures |
$ | 14,428 | $ | 12,772 | ||||
AMBs Consolidated Portfolio: |
||||||||
Supplemental Information: |
||||||||
Straight-line rents and amortization of lease intangibles |
$ | 5,972 | $ | 4,289 | ||||
AMBs share of straight-line rents and amortization of lease intangibles |
$ | 5,265 | $ | 3,859 | ||||
Gross lease termination fees |
$ | 530 | $ | 638 | ||||
Net lease termination fees(3) |
$ | 432 | $ | 444 | ||||
AMBs share of net lease termination fees |
$ | 426 | $ | 425 | ||||
Recurring capital expenditures: |
||||||||
Tenant improvements |
$ | 4,281 | $ | 4,594 | ||||
Lease commissions and other lease costs |
5,953 | 4,883 | ||||||
Building improvements |
4,114 | 3,355 | ||||||
Sub-total |
14,348 | 12,832 | ||||||
Co-investment venture partners share of capital expenditures |
(2,604 | ) | (1,793 | ) | ||||
AMBs share of recurring capital expenditures |
$ | 11,744 | $ | 11,039 | ||||
(1) | See Reporting Definitions. | |
(2) | See Supplemental Financial Measures Disclosure for a discussion of owned and managed supplemental cash flow information. | |
(3) | Net lease termination fees are defined as gross lease termination fees less the associated straight-line rent balance. |
© 2011 AMB Property Corporation | 7 |
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2011 First Quarter Earnings Conference Call 4/20/2011 |
Operations Overview(1) (dollars in thousands) |
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ABR | % of ABR | Sq Ft | ||||||||||||
1 | Deutsche Post World Net (DHL) |
$ | 23,845 | 2.6 | % | 2,112,068 | ||||||||
2 | United States Government |
19,995 | 2.2 | 1,345,125 | ||||||||||
3 | Sagaw a Express |
19,495 | 2.1 | 1,172,253 | ||||||||||
4 | Nippon Express |
15,150 | 1.7 | 1,063,241 | ||||||||||
5 | FedEx Corporation |
14,042 | 1.5 | 1,238,986 | ||||||||||
6 | Kuehne + Nagel Inc. |
13,182 | 1.4 | 2,044,892 | ||||||||||
7 | Panalpina |
10,652 | 1.2 | 1,660,329 | ||||||||||
8 | Panasonic Logistics |
10,269 | 1.1 | 807,543 | ||||||||||
9 | Caterpillar Logistics Services |
8,738 | 1.0 | 543,039 | ||||||||||
10 | La Poste |
7,958 | 0.9 | 903,543 | ||||||||||
Top 10 Customers |
$ | 143,326 | 15.7 | % | 12,891,019 | |||||||||
Top 11-20 Customers |
53,487 | 5.8 | 6,645,498 | |||||||||||
Top 20 Customers |
$ | 196,813 | 21.5 | % | 19,536,517 | |||||||||
(1) | Owned and managed portfolio, not including value-added acquisitions. | |
(2) | See reporting definitions and supplemental financial measures disclosures. | |
(3) | Represents trailing four quarter data. |
© 2011 AMB Property Corporation | 8 |
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2011 First Quarter Earnings Conference Call 4/20/2011 |
Operating Statistics | |||
Owned & Managed Portfolio(1)(2) | Same Store Pool(1)(2) | |||||||||||||||
Quarter Ended | Quarter Ended | Quarter Ended | Quarter Ended | |||||||||||||
March 31, 2011 | December 31, 2010 | March 31, 2011 | December 31, 2010 | |||||||||||||
Square feet |
140,188,197 | 141,879,530 | 128,889,462 | 126,035,571 | ||||||||||||
Percentage of owned & managed square feet |
91.9 | % | 88.8 | % | ||||||||||||
Occupancy |
||||||||||||||||
Occupancy percentage at period end(2) |
92.8 | % | 93.7 | % | 92.4 | % | 93.2 | % | ||||||||
Occupancy percentage at period end (prior year) |
90.5 | % | 91.2 | % | 90.2 | % | 90.9 | % | ||||||||
Average occupancy percentage(2) |
92.4 | % | 92.6 | % | 92.0 | % | 92.2 | % | ||||||||
Average occupancy percentage (prior year) |
90.3 | % | 90.7 | % | 90.0 | % | 90.5 | % | ||||||||
Weighted average lease terms (years) |
||||||||||||||||
Original |
6.2 | 6.2 | 6.2 | 6.2 | ||||||||||||
Remaining |
3.4 | 3.3 | 3.3 | 3.2 | ||||||||||||
Owned & Managed Portfolio(1)(2) | Same Store Pool(1)(2) | |||||||||||||||
Trailing Four Quarters | Trailing Four Quarters | Trailing Four Quarters | Trailing Four Quarters | |||||||||||||
March 31, 2011 | December 31, 2010 | March 31, 2011 | December 31, 2010 | |||||||||||||
Tenant retention(2) |
61.4 | % | 69.6 | % | 61.2 | % | 63.5 | % | ||||||||
Rent change on renewals and rollovers(2) |
||||||||||||||||
Percentage |
(12.6 | %) | (11.9 | %) | (13.0 | %) | (12.6 | %) | ||||||||
Same space square footage commencing (millions) |
24.4 | 24.4 | 21.9 | 23.8 | ||||||||||||
Second generation TIs and LCs per square foot(2) |
||||||||||||||||
Retained |
$ | 1.45 | $ | 1.42 | ||||||||||||
Re-tenanted |
$ | 2.52 | $ | 2.54 | ||||||||||||
Weighted average |
$ | 2.05 | $ | 2.02 | ||||||||||||
Second generation square footage commencing (millions) |
31.5 | 31.1 | ||||||||||||||
Gross operating margin(2) |
70.9 | % | 71.1 | % | 71.8 | % | 71.9 | % | ||||||||
Consolidated Portfolio(3) | Same Store Pool(1)(2) | |||||||||||||||
Quarter Ended | Quarter Ended | |||||||||||||||
March 31, 2011 | March 31, 2011 | |||||||||||||||
Cash Basis NOI percent change(2) |
||||||||||||||||
Increase in revenues excluding lease termination fees |
1.6 | % | 1.4 | % | ||||||||||||
Increase in expenses |
3.3 | % | 4.1 | % | ||||||||||||
Increase in NOI excluding lease termination fees(2) |
0.8 | % | 0.2 | % | ||||||||||||
Increase (decrease) in NOI including lease termination fees(2) |
0.5 | % | (0.0 | %) |
(1) | Owned and managed portfolio, excluding value-added acquisitions. | |
(2) | See reporting definitions and supplemental financial measures disclosures. | |
(3) | Excludes value-added acquisitions. |
© 2011 AMB Property Corporation | 9 |
||
2011 First Quarter Earnings Conference Call 4/20/2011 |
Portfolio Overview | |||
% of Total | YTD | Trailing 4 | ||||||||||||||||||||||||||||||||||||||||||
Owned and | AMBs Share | Same Store NOI | Qrtrs Rent | |||||||||||||||||||||||||||||||||||||||||
Sq Ft | Placed in | Sq Ft | Managed Sq | of Sq | YTD | Growth w/out | Change on | |||||||||||||||||||||||||||||||||||||
as of | Acquired | Operations | Disposed | as of | Ft as of | Ft as of | Average | ABR psf as | Lease | Renewals and | ||||||||||||||||||||||||||||||||||
12/31/2010 | Sq Ft | Sq Ft(1) | Sq Ft | 3/31/2011 | 3/31/2011 | 3/31/2011 | Occupancy | 3/31/2011 | Termination Fees(2) | Rollovers(2) | ||||||||||||||||||||||||||||||||||
Southern California |
18,851,649 | 278,365 | | | 19,130,014 | 13.6 | % | 59.2 | % | 94.7 | % | $ | 6.25 | 3.0 | % | (18.0 | %) | |||||||||||||||||||||||||||
Chicago |
13,092,788 | | | | 13,092,788 | 9.3 | % | 58.5 | % | 88.9 | % | 4.90 | (15.5 | %) | (19.0 | %) | ||||||||||||||||||||||||||||
No. New Jersey/New York |
13,023,043 | | (10,000 | ) | | 13,013,043 | 9.3 | % | 60.0 | % | 90.3 | % | 7.00 | (5.5 | %) | (14.9 | %) | |||||||||||||||||||||||||||
San Francisco Bay Area |
11,049,083 | | | | 11,049,083 | 7.9 | % | 77.4 | % | 94.1 | % | 6.49 | 11.4 | % | (3.9 | %) | ||||||||||||||||||||||||||||
Seattle |
7,883,361 | | | | 7,883,361 | 5.6 | % | 57.4 | % | 89.0 | % | 5.39 | 3.5 | % | (11.9 | %) | ||||||||||||||||||||||||||||
South Florida |
7,033,688 | | | | 7,033,688 | 5.0 | % | 68.9 | % | 97.2 | % | 6.64 | (1.8 | %) | (19.1 | %) | ||||||||||||||||||||||||||||
U.S. On-Tarmac |
2,597,717 | | | | 2,597,717 | 1.9 | % | 90.1 | % | 92.4 | % | 18.59 | (10.7 | %) | (5.5 | %) | ||||||||||||||||||||||||||||
Other U.S. Markets |
28,321,937 | | (67,047 | ) | (1,916,666 | ) | 26,338,224 | 18.8 | % | 63.0 | % | 90.7 | % | 5.25 | (7.9 | %) | (20.9 | %) | ||||||||||||||||||||||||||
U.S. Total / Wtd Avg |
101,853,266 | 278,365 | (77,047 | ) | (1,916,666 | ) | 100,137,918 | 71.4 | % | 63.6 | % | 92.2 | % | $ | 6.23 | (2.7 | %) | (15.0 | %) | |||||||||||||||||||||||||
Canada |
3,564,450 | | | | 3,564,450 | 2.5 | % | 100.0 | % | 95.5 | % | $ | 5.94 | 0.4 | % | (30.3 | %) | |||||||||||||||||||||||||||
Mexico City |
4,584,491 | | | | 4,584,491 | 3.3 | % | 42.4 | % | 95.9 | % | $ | 5.57 | 31.3 | % | (6.4 | %) | |||||||||||||||||||||||||||
Guadalajara |
3,390,137 | | | | 3,390,137 | 2.4 | % | 33.0 | % | 91.5 | % | 4.49 | (0.1 | %) | (5.2 | %) | ||||||||||||||||||||||||||||
Other Mexico Markets |
1,089,347 | | | | 1,089,347 | 0.8 | % | 71.8 | % | 79.3 | % | 4.35 | 35.3 | % | (20.2 | %) | ||||||||||||||||||||||||||||
Mexico Total / Wtd Avg |
9,063,975 | | | | 9,063,975 | 6.5 | % | 42.4 | % | 92.3 | % | $ | 5.04 | 20.6 | % | (6.8 | %) | |||||||||||||||||||||||||||
The Americas Total / Wtd Avg |
114,481,691 | 278,365 | (77,047 | ) | (1,916,666 | ) | 112,766,343 | 80.4 | % | 63.0 | % | 92.0 | % | $ | 6.13 | (1.3 | %) | (14.5 | %) | |||||||||||||||||||||||||
France |
5,117,512 | | (2,013 | ) | | 5,115,499 | 3.7 | % | 45.2 | % | 94.3 | % | $ | 7.91 | (2.4 | %) | (18.7 | %) | ||||||||||||||||||||||||||
Germany |
3,935,466 | | (6,791 | ) | | 3,928,675 | 2.8 | % | 48.4 | % | 99.2 | % | 8.34 | (12.3 | %) | (4.0 | %) | |||||||||||||||||||||||||||
Benelux |
3,370,999 | 29,956 | 2,863 | | 3,403,818 | 2.4 | % | 47.2 | % | 80.5 | % | 10.39 | (15.5 | %) | (15.4 | %) | ||||||||||||||||||||||||||||
Other Europe Markets |
1,065,173 | | | | 1,065,173 | 0.8 | % | 52.9 | % | 100.0 | % | 11.27 | (1.8 | %) | n/a | |||||||||||||||||||||||||||||
Europe Total / Wtd Avg |
13,489,150 | 29,956 | (5,941 | ) | | 13,513,165 | 9.7 | % | 47.2 | % | 92.7 | % | $ | 8.87 | (9.1 | %) | (13.2 | %) | ||||||||||||||||||||||||||
Tokyo |
6,385,887 | | | | 6,385,887 | 4.6 | % | 34.1 | % | 94.0 | % | $ | 16.63 | 9.8 | % | (7.9 | %) | |||||||||||||||||||||||||||
Osaka |
2,423,978 | | | | 2,423,978 | 1.7 | % | 34.0 | % | 98.1 | % | 12.84 | 33.1 | % | 5.3 | % | ||||||||||||||||||||||||||||
Japan Total / Wtd Avg |
8,809,865 | | | | 8,809,865 | 6.3 | % | 34.0 | % | 95.2 | % | $ | 15.55 | 14.8 | % | (5.8 | %) | |||||||||||||||||||||||||||
China |
3,563,325 | | | | 3,563,325 | 2.5 | % | 100.0 | % | 95.3 | % | $ | 4.56 | 118.7 | % | (2.3 | %) | |||||||||||||||||||||||||||
Singapore |
941,601 | | | | 941,601 | 0.7 | % | 100.0 | % | 98.1 | % | 10.83 | 10.5 | % | 1.2 | % | ||||||||||||||||||||||||||||
Other Asia Markets |
593,898 | | | | 593,898 | 0.4 | % | 100.0 | % | 95.1 | % | 7.55 | 53.2 | % | (10.6 | %) | ||||||||||||||||||||||||||||
Asia Total / Wtd Avg |
13,908,689 | | | | 13,908,689 | 9.9 | % | 58.2 | % | 95.4 | % | $ | 12.03 | 38.4 | % | (2.0 | %) | |||||||||||||||||||||||||||
Owned and Managed Total / Wtd Avg(2) |
141,879,530 | 308,321 | (82,988 | ) | (1,916,666 | ) | 140,188,197 | 100.0 | % | 61.0 | % | 92.4 | % | $ | 6.99 | 0.2 | % | (12.6 | %) | |||||||||||||||||||||||||
Other Real Estate Investments(3) |
7,495,959 | | | | 7,495,959 | 51.8 | % | 84.8 | % | 5.73 | ||||||||||||||||||||||||||||||||||
Total Operating Portfolio |
149,375,489 | 308,321 | (82,988 | ) | (1,916,666 | ) | 147,684,156 | 60.6 | % | 92.0 | % | $ | 6.94 | |||||||||||||||||||||||||||||||
Development |
||||||||||||||||||||||||||||||||||||||||||||
Construction-in-Progress (CIP) |
2,174,164 | 3,129,276 | (4) | 4,144 | (5) | | (6) | 5,307,584 | 75.4 | % | ||||||||||||||||||||||||||||||||||
Pre-Stabilized Developments (PSD)(2) |
6,779,649 | | (4) | | (5) | (4,817 | )(6) | 6,774,832 | 96.5 | % | ||||||||||||||||||||||||||||||||||
Development Portfolio Subtotal |
8,953,813 | 3,129,276 | 4,144 | (4,817 | ) | 12,082,416 | 87.2 | % | ||||||||||||||||||||||||||||||||||||
Value-added acquisitions(2) |
1,228,355 | | 14,144 | | 1,242,499 | 95.4 | % | |||||||||||||||||||||||||||||||||||||
Total Global Portfolio |
159,557,657 | 3,437,597 | (64,700 | ) | (1,921,483 | ) | 161,009,071 | 62.8 | % | |||||||||||||||||||||||||||||||||||
(1) | Represents assets placed in operations from development and may include positive/(negative) remeasurements of square footage as operating assets. | |
(2) | See reporting definitions and supplemental financial measures disclosures. | |
(3) | Includes AMBs global headquarters and operating properties held through AMBs investments in unconsolidated joint ventures that it does not manage and are therefore excluded from the owned and managed portfolio. | |
(4) | For CIP, represents square footage of development starts. For PSD, represents new projects available. | |
(5) | For CIP, represents square footage of completed development projects placed in operations. For PSD, represents projects placed in operations. | |
(6) | For CIP, represents square footage of completed development projects placed in PSD or disposed. For PSD, represents projects disposed. |
© 2011 AMB Property Corporation | 10 |
||
2011 First Quarter Earnings Conference Call 4/20/2011 |
Capital Deployment Overview (dollars in millions) |
|||
(Estimated Total Investment(2))
(Estimated Total Investment(2))
(Estimated Total Investment(2))
(Acquisition Cost(2))
(1) | Includes investments held through unconsolidated co-investment ventures. Estimated total investment is before the impact of real estate impairment losses. | |
(2) | See reporting definitions and supplemental financial measures disclosures. | |
(3) | Owned and managed portfolio and value-added acquisitions, excludes land inventory purchases and mortgage debt investment. |
© 2011 AMB Property Corporation | 11 |
||
2011 First Quarter Earnings Conference Call 4/20/2011 |
Property Acquisitions(1) (dollars in thousands) |
|||
For the Quarter Ended March 31, 2011 | ||||||||||||
Acquisition | % of Total | |||||||||||
Sq Ft | Cost(2) | Acquisition Cost | ||||||||||
The Americas |
||||||||||||
United States |
278,365 | $ | 17,300 | 76.9 | % | |||||||
Other Americas |
| | 0.0 | % | ||||||||
The Americas Total |
278,365 | $ | 17,300 | 76.9 | % | |||||||
Europe |
||||||||||||
France |
| $ | | 0.0 | % | |||||||
Germany |
| | 0.0 | % | ||||||||
Benelux |
29,956 | 5,202 | 23.1 | % | ||||||||
Other Europe |
| | 0.0 | % | ||||||||
Europe Total |
29,956 | $ | 5,202 | 23.1 | % | |||||||
Asia |
||||||||||||
Japan |
| $ | | 0.0 | % | |||||||
China |
| | 0.0 | % | ||||||||
Other Asia |
| | 0.0 | % | ||||||||
Asia Total |
| $ | | 0.0 | % | |||||||
Total Acquisitions |
308,321 | $ | 22,502 | 100.0 | % | |||||||
By Entity |
||||||||||||
AMB Property Corporation |
| $ | | 0.0 | % | |||||||
AMB Europe Logistics Fund |
29,956 | 5,202 | 23.1 | % | ||||||||
AMB U.S. Logistics Fund |
278,365 | 17,300 | 76.9 | % | ||||||||
Total Acquisitions |
308,321 | $ | 22,502 | 100.0 | % | |||||||
AMBs Weighted Average Ownership Percentage |
33.9 | % | ||||||||||
Weighted Average Stabilized Cash Cap Rate(3) |
6.2 | % |
(1) | Owned and managed portfolio and value-added acquisitions, excludes mortgage debt investment. | |
(2) | Includes estimated total acquisition capital expenditures of approximately $0.1 million for the three months ended March 31, 2011. | |
(3) | Excludes the impact of straight line rents and amortization of lease intangibles. See reporting definitions and supplemental financial measures disclosures. |
© 2011 AMB Property Corporation | 12 |
||
2011 First Quarter Earnings Conference Call 4/20/2011 |
Contributions and Dispositions(1) (dollars in thousands) |
|||||
For the Quarter Ended March 31, 2011 | ||||||||
Operating Property | Development Property | |||||||
AMBs Ownership Contributed and Disposed |
100.0 | % | 15.0 | % | ||||
Contribution Value and Disposition Price |
$ | 77,203 | $ | 578 | ||||
Weighted Average Stabilized Cap Rate(2)(3) |
8.4 | % | N/A | |||||
Development Margin, before real estate
impairment losses(3) |
N/A | 11.8 | % | |||||
Development Margin, net of real estate
impairment losses(3) |
N/A | 11.8 | % |
For the Quarter Ended March 31, 2011 | ||||||||||||
Operating Property | Development Property | |||||||||||
Square Feet | Square Feet | Land Acreage(4) | ||||||||||
The Americas |
||||||||||||
United States |
1,916,666 | 4,817 | | |||||||||
Other Americas |
| | | |||||||||
The Americas Total |
1,916,666 | 4,817 | | |||||||||
Europe |
||||||||||||
France |
| | | |||||||||
Germany |
| | | |||||||||
Benelux |
| | | |||||||||
Other Europe |
| | | |||||||||
Europe Total |
| | | |||||||||
Asia |
||||||||||||
Japan |
| | | |||||||||
China |
| | | |||||||||
Other Asia |
| | | |||||||||
Asia Total |
| | | |||||||||
Total |
1,916,666 | 4,817 | | |||||||||
(1) | Includes investments held through unconsolidated co-investment ventures. | |
(2) | Excludes value-added conversions, development for sale, and land sales. | |
(3) | See reporting definitions and supplemental financial measures disclosures. | |
(4) | Represents acreage for land sales and value-added conversion projects. |
© 2011 AMB Property Corporation | 13 |
||
2011 First Quarter Earnings Conference Call 4/20/2011 |
Development Starts(1) (dollars in thousands) |
|||
Development Starts(2) | ||||||||||||
For the Quarter Ended | ||||||||||||
March 31, 2011 | ||||||||||||
Estimated | % of Total | |||||||||||
Estimated | Total | Estimated | ||||||||||
Sq Ft | Investment(2) | Investment(2) | ||||||||||
The Americas |
||||||||||||
United States |
| $ | | 0.0 | % | |||||||
Other Americas |
602,611 | 58,040 | 19.3 | % | ||||||||
The Americas Total |
602,611 | $ | 58,040 | 19.3 | % | |||||||
Europe |
||||||||||||
France |
| $ | | 0.0 | % | |||||||
Germany |
305,351 | 34,150 | 11.4 | % | ||||||||
Benelux |
| | 0.0 | % | ||||||||
Other Europe |
| | 0.0 | % | ||||||||
Europe Total |
305,351 | $ | 34,150 | 11.4 | % | |||||||
Asia |
||||||||||||
Japan |
1,143,223 | $ | 152,822 | 51.0 | % | |||||||
China |
1,078,091 | 54,922 | 18.3 | % | ||||||||
Other Asia |
| | 0.0 | % | ||||||||
Asia Total |
2,221,314 | $ | 207,744 | 69.3 | % | |||||||
Total |
3,129,276 | $ | 299,934 | 100.0 | % | |||||||
AMBs Weighted Average Ownership Percentage | 85.0 | % | ||||||||||
Weighted Average Estimated Yield(2)(3) | 8.9 | % |
(1) | Includes investments held through unconsolidated co-investment ventures. | |
(2) | See reporting definitions and supplemental financial measures disclosures. | |
(3) | Calculated using estimated total investment before the impact of cumulative real estate impairment losses. |
© 2011 AMB Property Corporation | 14 |
||
2011 First Quarter Earnings Conference Call 4/20/2011 |
Development Portfolio(1) (dollars in thousands) |
|||
2011 Expected Completions(2) | 2012 Expected Completions(2) | 2013 Expected Completions(2) | Total Construction-in-Progress | Pre-Stabilized Developments(2) | Total Development Portfolio | |||||||||||||||||||||||||||||||||||||||||||||||
Estimated | Estimated | Estimated | Estimated | Estimated | Estimated | % of Total | ||||||||||||||||||||||||||||||||||||||||||||||
Estimated | Total | Estimated | Total | Estimated | Total | Estimated | Total | Estimated | Total | Estimated | Total | Estimated | ||||||||||||||||||||||||||||||||||||||||
Sq Ft | Investment(2)(3) | Sq Ft | Investment(2)(3) | Sq Ft | Investment(2)(3) | Sq Ft | Investment(2)(3) | Sq Ft | Investment(2)(3) | Sq Ft | Investment(2)(3) | Investment(2) | ||||||||||||||||||||||||||||||||||||||||
The Americas |
||||||||||||||||||||||||||||||||||||||||||||||||||||
United States |
557,915 | $ | 66,925 | | $ | | | $ | | 557,915 | $ | 66,925 | 1,307,509 | $ | 157,349 | 1,865,424 | $ | 224,274 | 18.1 | % | ||||||||||||||||||||||||||||||||
Other Americas |
643,408 | 58,447 | 823,844 | 69,664 | | | 1,467,252 | 128,111 | 1,228,613 | 83,653 | 2,695,865 | 211,764 | 17.1 | % | ||||||||||||||||||||||||||||||||||||||
The Americas Total |
1,201,323 | $ | 125,372 | 823,844 | $ | 69,664 | | $ | | 2,025,167 | $ | 195,036 | 2,536,122 | $ | 241,002 | 4,561,289 | $ | 436,038 | 35.2 | % | ||||||||||||||||||||||||||||||||
Europe |
||||||||||||||||||||||||||||||||||||||||||||||||||||
France |
| $ | | | $ | | | $ | | | $ | | 647,976 | $ | 52,138 | 647,976 | $ | 52,138 | 4.2 | % | ||||||||||||||||||||||||||||||||
Germany |
| | 305,351 | 34,150 | | | 305,351 | 34,150 | 139,608 | 19,093 | 444,959 | 53,243 | 4.3 | % | ||||||||||||||||||||||||||||||||||||||
Benelux |
| | | | | | | | 669,881 | 100,031 | 669,881 | 100,031 | 8.1 | % | ||||||||||||||||||||||||||||||||||||||
Other Europe |
| | | | | | | | 444,043 | 47,369 | 444,043 | 47,369 | 3.8 | % | ||||||||||||||||||||||||||||||||||||||
Europe Total |
| $ | | 305,351 | $ | 34,150 | | $ | | 305,351 | $ | 34,150 | 1,901,508 | $ | 218,631 | 2,206,859 | $ | 252,781 | 20.4 | % | ||||||||||||||||||||||||||||||||
Asia |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Japan |
| $ | | | $ | | 1,143,223 | $ | 152,822 | 1,143,223 | $ | 152,822 | 1,811,434 | $ | 285,908 | 2,954,657 | $ | 438,730 | 35.4 | % | ||||||||||||||||||||||||||||||||
China |
281,218 | 13,689 | 474,534 | 20,998 | 1,078,091 | 54,922 | 1,833,843 | 89,609 | 525,768 | 22,347 | 2,359,611 | 111,956 | 9.0 | % | ||||||||||||||||||||||||||||||||||||||
Other Asia |
| | | | | | | | | | | | 0.0 | % | ||||||||||||||||||||||||||||||||||||||
Asia Total |
281,218 | $ | 13,689 | 474,534 | $ | 20,998 | 2,221,314 | $ | 207,744 | 2,977,066 | $ | 242,431 | 2,337,202 | $ | 308,255 | 5,314,268 | $ | 550,686 | 44.4 | % | ||||||||||||||||||||||||||||||||
Total |
1,482,541 | $ | 139,061 | 1,603,729 | $ | 124,812 | 2,221,314 | $ | 207,744 | 5,307,584 | $ | 471,617 | 6,774,832 | $ | 767,888 | 12,082,416 | $ | 1,239,505 | 100.0 | % | ||||||||||||||||||||||||||||||||
Real estate impairment losses | (985 | ) | (68,553 | ) | (69,538 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Estimated total investment, net of real estate impairment losses | $ | 470,632 | $ | 699,335 | $ | 1,169,967 | ||||||||||||||||||||||||||||||||||||||||||||||
Number of Projects | 5 | 5 | 2 | 12 | 25 | 37 | ||||||||||||||||||||||||||||||||||||||||||||||
AMBs Weighted Average Ownership Percentage | 36.2 | % | 65.1 | % | 100.0 | % | 72.0 | % | 96.2 | % | 87.0 | % | ||||||||||||||||||||||||||||||||||||||||
Remainder to Invest | $ | 19,916 | $ | 87,253 | $ | 167,677 | $ | 274,846 | $ | 12,701 | $ | 287,547 | ||||||||||||||||||||||||||||||||||||||||
AMBs Share of Remainder to Invest(2)(4)(5) | $ | 5,529 | $ | 54,001 | $ | 167,677 | $ | 227,207 | $ | 12,232 | $ | 239,439 | ||||||||||||||||||||||||||||||||||||||||
Weighted Average Estimated Yield(2)(5) | 9.4 | % | 10.7 | % | 7.8 | % | 9.0 | % | 6.2 | % | 7.3 | % | ||||||||||||||||||||||||||||||||||||||||
Weighted Average Estimated Yield, net of real estate impairment losses(2) | 9.4 | % | 10.8 | % | 7.8 | % | 9.0 | % | 6.8 | % | 7.7 | % | ||||||||||||||||||||||||||||||||||||||||
Percent Pre-Leased(2) | 76.9 | % | 9.6 | % | 0.0 | % | 24.4 | % | 59.7 | % | 44.2 | % |
(1) | Includes investments held through unconsolidated co-investment ventures. | |
(2) | See reporting definitions and supplemental financial measures disclosures. | |
(3) | Includes value-added conversion projects. | |
(4) | Amounts include capitalized interest as applicable. | |
(5) | Calculated using estimated total investment before the impact of cumulative real estate impairment losses. |
© 2011 AMB Property Corporation | 15 |
||
2011 First Quarter Earnings Conference Call 4/20/2011 |
Land, Value-Added Conversion, and Redevelopment Inventory(1)(2) (dollars in thousands) |
The Americas | Europe | Asia | Total | |||||||||||||||||||||||||||||
Estimated | Estimated | Estimated | Estimated | |||||||||||||||||||||||||||||
Build Out Potential | Build Out Potential | Build Out Potential | Build Out Potential | |||||||||||||||||||||||||||||
Acres | (Sq Ft) | Acres | (Sq Ft) | Acres | (Sq Ft) | Acres | (Sq Ft) | |||||||||||||||||||||||||
Balance as of December 31, 2010 |
2,296 | 38,375,121 | 227 | 4,620,004 | 118 | 4,378,384 | 2,641 | 47,373,509 | ||||||||||||||||||||||||
Acquisitions |
| | 12 | 305,351 | 13 | 1,143,223 | 25 | 1,448,574 | ||||||||||||||||||||||||
Sales |
| | | | | | | | ||||||||||||||||||||||||
Development starts |
(30 | ) | (602,611 | ) | (12 | ) | (305,351 | ) | (30 | ) | (2,221,314 | ) | (72 | ) | (3,129,276 | ) | ||||||||||||||||
Other |
| 79,772 | | 37,157 | | 716,413 | | 833,342 | ||||||||||||||||||||||||
Balance as of March 31, 2011 |
2,266 | 37,852,282 | 227 | 4,657,161 | 101 | 4,016,706 | 2,594 | (3) | 46,526,149 | |||||||||||||||||||||||
Investment in Land(4) |
$ | 654,355 | $ | 162,690 | $ | 133,441 | $ | 950,486 | ||||||||||||||||||||||||
Cumulative real estate impairment losses | $ | (152,314 | ) | |||||||||||||||||||||||||||||
Investment in land, net of cumulative real estate impairment losses | $ | 798,172 | ||||||||||||||||||||||||||||||
AMBs share of investment in land, net of cumulative real estate impairment losses |
$ | 390,377 | $ | 80,521 | $ | 130,777 | $ | 601,675 | ||||||||||||||||||||||||
AMB Cost per SF |
$ | 4.42 | $ | 14.27 | $ | 29.78 | $ | 6.11 | ||||||||||||||||||||||||
AMB Cost per Floor Area Ratio SF |
$ | 10.78 | $ | 30.63 | $ | 32.56 | $ | 14.21 | ||||||||||||||||||||||||
Weighted Average Purchase Date (in years) |
5.1 | 3.0 | 4.8 | 4.7 |
East Region | West Region | The Americas Total | ||||||||||||||||||||||
Number of | Number of | Number of | ||||||||||||||||||||||
Conversion Time Frame | Acres | Projects | Acres | Projects | Acres | Projects | ||||||||||||||||||
3 years or less |
7 | 2 | 61 | 4 | 68 | 6 | ||||||||||||||||||
3+ years |
| | 179 | 10 | 179 | 10 | ||||||||||||||||||
Total |
7 | 2 | 240 | 14 | 247 | (5) | 16 | |||||||||||||||||
West Region | The Americas Total | |||||||||||||||
Number of | Number of | |||||||||||||||
Redevelopment Time Frame | Sq Ft | Projects | Sq Ft | Projects | ||||||||||||
3 years or less |
| | | | ||||||||||||
3+ years |
998,372 | 3 | 998,372 | 3 | ||||||||||||
Total |
998,372 | 3 | 998,372 | (6) | 3 | |||||||||||
(1) | See reporting definitions and supplemental financial measures disclosures. | |
(2) | Includes investments held through unconsolidated co-investment ventures. Does not include value-added acquisitions. | |
(3) | AMBs share of acres and square feet of estimated build out including amounts held in unconsolidated co-investment ventures is 2,253 acres and 40.4 million square feet, respectively. | |
(4) | Represents actual cost incurred to date including initial acquisition, infrastructure, and associated carry costs. | |
(5) | AMBs share is 192 acres. | |
(6) | AMBs share is 676,385 square feet. |
© 2011 AMB Property Corporation | 16 |
||
2011 First Quarter Earnings Conference Call 4/20/2011 |
Private Capital Co-investment Ventures Overview (dollars in millions) |
Date | Geographic | Functional | Incentive Distribution | |||||||||
Co-investment Venture | Established | Focus | Principal Venture Investors | Currency | Frequency | Term | ||||||
AMB-SGP
|
March 2001 | United States | Subsidiary of GIC Real Estate Pte Ltd. | USD | 10 years | March 2011(1) | ||||||
AMB Institutional Alliance Fund II
|
June 2001 | United States | Various | USD | At dissolution | December 2014 (estimated) | ||||||
AMB-AMS
|
June 2004 | United States | Various | USD | At dissolution | December 2012; extendable 4 years | ||||||
AMB U.S. Logistics Fund
|
October 2004 | United States | Various | USD | 3 years (next 2Q11) | Open end | ||||||
AMB-SGP Mexico
|
December 2004 | Mexico | Subsidiary of GIC Real Estate Pte Ltd. | USD | 7 years | December 2011; extendable 7 years | ||||||
AMB Japan Fund I
|
June 2005 | Japan | Various | JPY | At dissolution | June 2013; extendable 2 years | ||||||
AMB DFS Fund I
|
October 2006 | United States | Strategic Realty Ventures, LLC | USD | Upon project sales | Upon final sale(2) | ||||||
AMB Europe Logistics Fund
|
June 2007 | Europe | Various | EUR | 3 years (next 2Q13) | Open end | ||||||
AMB Mexico Fondo Logistico
|
July 2010 | Mexico | Various | USD | At dissolution | July 2020 | ||||||
AMB Brazil Logistics Partners Fund I
|
December 2010 | Brazil | Major university endowment | BRL | At dissolution | December 2017; extendable 2 years | ||||||
AMB Europe Logistics JV
|
February 2011 | Europe | Allianz Real Estate | EUR | 3 years (next 4Q12) | Open end | ||||||
AMB China Logistics Venture I
|
March 2011 | China | HIP China Logistics Investments Limited | RMB(3) | At dissolution | March 2018 |
(1) | For AMB-SGP, the co-investment venture ended in April 2011 with AMBs acquisition of SGPs partnership interest. | |
(2) | For AMB DFS Fund I, the investment period ended in June 2009. The fund will terminate upon completion and disposition of assets currently owned and under development by the fund. | |
(3) | Capital commitments and distributions are in USD and AMBs incentive distributions are based on returns measured in USD. | |
(4) | Additions to private capital co-investment ventures include both acquisitions from third parties as well as assets contributed to co-investment ventures from AMB. | |
(5) | See reporting definitions and supplemental financial measures disclosures. |
© 2011 AMB Property Corporation | 17 |
||
2011 First Quarter Earnings Conference Call 4/20/2011 |
Joint Ventures Financial Summary (dollars in thousands) |
|||
AMBs | Gross | AMBs | Estimated | |||||||||||||||||||||||
Ownership | Square | Book | Property | Other | Net Equity | Investment | ||||||||||||||||||||
Unconsolidated Joint Ventures | Percentage | Feet(1) | Value | Debt | Debt | Investment(2) | Capacity | |||||||||||||||||||
Operating Co-Investment Ventures |
||||||||||||||||||||||||||
AMB U.S. Logistics Fund |
33% | 37,789,016 | $ | 3,452,032 | $ | 1,570,179 | $ | | $ | 375,011 | $ | 150,000 | ||||||||||||||
AMB Europe Logistics Fund |
37% | 10,887,361 | 1,418,774 | 696,832 | | 174,127 | 300,000 | |||||||||||||||||||
AMB Japan Fund I |
20% | 7,263,090 | 1,678,841 | 904,076 | 9,623 | 83,644 | | |||||||||||||||||||
AMB-SGP Mexico |
22% | 6,352,103 | 361,422 | 162,885 | 148,438 | (3) | 20,193 | | ||||||||||||||||||
Total Operating Co-investment Ventures |
30% | 62,291,570 | 6,911,069 | 3,333,972 | 158,061 | 652,975 | 450,000 | |||||||||||||||||||
Development Co-investment Ventures: |
||||||||||||||||||||||||||
AMB DFS Fund I |
15% | 195,210 | 85,553 | | | 14,303 | | |||||||||||||||||||
AMB U.S. Logistics Fund |
33% | 642,915 | 94,919 | | | 31,318 | n/a | |||||||||||||||||||
AMB Brazil Logistics Partners Fund I(4) |
25% | 639,264 | 78,293 | | | 57,975 | 350,000 | |||||||||||||||||||
Total Development Co-investment Ventures |
25% | 1,477,389 | 258,765 | | | 103,596 | 350,000 | |||||||||||||||||||
Total Unconsolidated Co-investment Ventures(5) |
30% | 63,768,959 | 7,169,834 | 3,333,972 | 158,061 | 756,571 | 800,000 | |||||||||||||||||||
Other Industrial Operating Joint Ventures |
51% | 7,419,049 | (6) | 287,535 | 152,485 | | 51,682 | n/a | ||||||||||||||||||
Total Unconsolidated Joint Ventures |
31% | 71,188,008 | $ | 7,457,369 | $ | 3,486,457 | $ | 158,061 | $ | 808,253 | $ | 800,000 | ||||||||||||||
Consolidated Joint Ventures |
||||||||||||||||||||||||||
Operating Co-investment Ventures |
||||||||||||||||||||||||||
AMB-SGP |
50% | 8,216,247 | $ | 480,302 | $ | 325,876 | $ | | ||||||||||||||||||
AMB Institutional Alliance Fund II |
24% | 7,321,372 | 521,227 | 182,849 | 54,300 | |||||||||||||||||||||
AMB-AMS |
39% | 2,170,337 | 161,205 | 75,244 | | |||||||||||||||||||||
Total Operating Co-investment Ventures |
37% | 17,707,956 | 1,162,734 | 583,969 | 54,300 | |||||||||||||||||||||
Total Consolidated Co-investment Ventures |
37% | 17,707,956 | 1,162,734 | 583,969 | 54,300 | |||||||||||||||||||||
Other Industrial Operating Joint Ventures |
83% | 2,917,634 | 348,690 | 57,435 | | |||||||||||||||||||||
Other Industrial Development Joint Ventures |
41% | 249,169 | 224,609 | 92,510 | | |||||||||||||||||||||
Total Consolidated Joint Ventures |
47% | 20,874,759 | $ | 1,736,033 | $ | 733,914 | $ | 54,300 | ||||||||||||||||||
Selected Operating Results | FFO, as | FFO, as | ||||||||||||||||||||||||||
For the Quarter Ended March 31, 2011 | Cash NOI(5) | Net Income | adjusted(5) | Share of | Cash NOI(5) | Net Income | adjusted(5) | |||||||||||||||||||||
Unconsolidated Joint Ventures |
$ | 102,288 | $ | 10,949 | (7) | $ | 55,632 | (7) | AMBs | $ | 31,768 | $ | 7,800 | $ | 20,881 | |||||||||||||
Consolidated Joint Ventures |
$ | 23,019 | $ | 4,214 | $ | 15,278 | Partners | $ | 12,321 | $ | 2,517 | $ | 7,542 |
(1) | For development properties, represents the estimated square feet upon completion for the committed phases of development projects. | |
(2) | Through AMB Property Mexico, AMB held an equity interest in various other non-core unconsolidated ventures for approximately $14.0 million as of March 31, 2011. Additionally, in December 2010, AMB entered into a mortgage debt investment joint venture with a third-party and held an equity interest of $87.6 million as of March 31, 2011. | |
(3) | Includes $89.6 million of shareholder loans. | |
(4) | Through AMB Brazil Logistics Partners Fund I, a 50% co-investment venture with a third-party partner, AMB holds a 25% equity interest in a joint venture created with its partner Cyrela Commercial Properties. | |
(5) | See reporting definitions and supplemental financial measures disclosures. | |
(6) | Includes investments in 7.3 million square feet of operating properties through AMBs investment in unconsolidated joint ventures that it does not manage which it excludes from its owned and managed portfolio. | |
(7) | Includes $3.8 million of interest expense on shareholder loans for AMB-SGP Mexico for the ended March 31, 2011. |
© 2011 AMB Property Corporation | 18 |
||
2011 First Quarter Earnings Conference Call 4/20/2011 |
Capitalization
Summary (dollars in millions) |
|||
For the Quarter Ended | ||||
March 31, 2011 | ||||
Wholly-owned fixed charge coverage(2) |
2.4 | x | ||
Fixed charge coverage(2) |
2.2 | x | ||
Interest coverage(2) |
2.7 | x | ||
Dividends per share-to-FFO, as adjusted per share(2) |
84.8 | % | ||
AMBs share of total debt-to-total market capitalization(2) |
38.6 | % | ||
AMBs share of total debt-to-AMBs share of total assets(2) |
43.0 | % |
(1) | Debt amounts represent AMBs share of debt and preferred securities. | |
(2) | See reporting definitions and supplemental financial measures disclosures. | |
(3) | In addition to the $800 million of estimated investment capacity presented on page 18, includes $600 million, $1.1 billion and $650 million of estimated investment capacity in AMB Mexico Fondo Logistico, AMB China Logistics Venture I and AMB Europe Logistics JV, respectively. |
© 2011 AMB Property Corporation | 19 |
||
2011 First Quarter Earnings Conference Call 4/20/2011 |
Capitalization Detail (dollars in thousands, except shares and share price) |
|||
AMB Wholly-Owned | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured | Total | Consolidated | Total | Unconsolidated | AMBs Share of | |||||||||||||||||||||||||||||||||||||||||||||||
Senior | Credit | Other | Secured | Wholly-Owned | Joint Venture | Consolidated | Joint | Total | Total | |||||||||||||||||||||||||||||||||||||||||||
Debt | Facilities(1) | Debt | Debt | Debt | Debt | Debt | Venture Debt | Debt | Debt | |||||||||||||||||||||||||||||||||||||||||||
2011 |
$ | 25,000 | $ | 230,512 | $ | | $ | 15,203 | $ | 270,715 | $ | 138,854 | $ | 409,569 | $ | 293,559 | $ | 703,128 | $ | 410,012 | ||||||||||||||||||||||||||||||||
2012 |
| | 150,256 | 29,598 | 179,854 | 469,805 | 649,659 | 429,864 | 1,079,523 | 473,661 | ||||||||||||||||||||||||||||||||||||||||||
2013 |
293,897 | | | 23,710 | 317,607 | 104,852 | 422,459 | 721,396 | 1,143,855 | 542,064 | ||||||||||||||||||||||||||||||||||||||||||
2014 |
| 172,272 | | 4,787 | 177,059 | 8,637 | 185,696 | 553,802 | 739,498 | 384,253 | ||||||||||||||||||||||||||||||||||||||||||
2015 |
112,491 | | 217,624 | 7,721 | 337,836 | 16,943 | 354,779 | 493,705 | 848,484 | 521,419 | ||||||||||||||||||||||||||||||||||||||||||
2016 |
250,000 | | | 79,994 | 329,994 | 15,499 | 345,493 | 171,422 | 516,915 | 392,479 | ||||||||||||||||||||||||||||||||||||||||||
2017 |
300,000 | | | 66,303 | 366,303 | 490 | 366,793 | 92,783 | 459,576 | 387,426 | ||||||||||||||||||||||||||||||||||||||||||
2018 |
300,000 | | | | 300,000 | 595 | 300,595 | 98,859 | 399,454 | 332,953 | ||||||||||||||||||||||||||||||||||||||||||
2019 |
250,000 | | | | 250,000 | 29,412 | 279,412 | 14,043 | 293,455 | 271,219 | ||||||||||||||||||||||||||||||||||||||||||
2020 |
120,294 | | | | 120,294 | 645 | 120,939 | 214,012 | 334,951 | 191,268 | ||||||||||||||||||||||||||||||||||||||||||
Thereafter |
| | | | | 2,450 | 2,450 | 476,200 | 478,650 | 158,498 | ||||||||||||||||||||||||||||||||||||||||||
Subtotal |
$ | 1,651,682 | $ | 402,784 | $ | 367,880 | $ | 227,316 | $ | 2,649,662 | $ | 788,182 | $ | 3,437,844 | $ | 3,559,645 | $ | 6,997,489 | $ | 4,065,252 | ||||||||||||||||||||||||||||||||
Unamortized net (discounts) premiums |
(11,859 | ) | | | 34 | (11,825 | ) | 32 | (11,793 | ) | (4,740 | ) | (16,533 | ) | (10,021 | ) | ||||||||||||||||||||||||||||||||||||
Subtotal |
$ | 1,639,823 | $ | 402,784 | $ | 367,880 | $ | 227,350 | $ | 2,637,837 | $ | 788,214 | $ | 3,426,051 | $ | 3,554,905 | $ | 6,980,956 | $ | 4,055,231 | ||||||||||||||||||||||||||||||||
Joint venture partners share of debt(2) |
| | | | | (448,927 | ) | (448,927 | ) | (2,476,798 | ) | (2,925,725 | ) | | ||||||||||||||||||||||||||||||||||||||
AMBs share of total debt(2) |
$ | 1,639,823 | $ | 402,784 | $ | 367,880 | $ | 227,350 | $ | 2,637,837 | $ | 339,287 | $ | 2,977,124 | $ | 1,078,107 | $ | 4,055,231 | $ | 4,055,231 | ||||||||||||||||||||||||||||||||
Weighted average interest rate |
5.5 | % | 1.5 | % | 2.1 | % | 2.9 | % | 4.2 | % | 4.8 | % | 4.4 | % | 4.5 | % | 4.4 | % | 4.4 | % | ||||||||||||||||||||||||||||||||
Weighted average remaining maturity (years) |
6.0 | 1.4 | 3.4 | 4.7 | 4.8 | 1.7 | 4.1 | 4.5 | 4.3 | 4.5 | ||||||||||||||||||||||||||||||||||||||||||
Market Equity | ||||||||||||
Security | Shares | Price | Value | |||||||||
Common Stock |
169,550,704 | (3) | $ | 35.97 | $ | 6,098,739 | ||||||
LP Units |
3,022,993 | $ | 35.97 | 108,737 | ||||||||
Total |
172,573,697 | $ | 6,207,476 | |||||||||
Total options outstanding |
9,103,685 | |||||||||||
Dilutive effect of stock options on net income
per common share(4) |
| |||||||||||
Dilutive effect of stock options on FFO,
as adjusted and Core
FFO, as adjusted per common share
and unit(4) |
1,835,124 |
Preferred Stock | ||||||||
Dividend | Liquidation | |||||||
Security | Rate | Preference | ||||||
Series L preferred stock |
6.50 | % | $ | 50,000 | ||||
Series M preferred stock |
6.75 | % | 57,500 | |||||
Series O preferred stock |
7.00 | % | 75,000 | |||||
Series P preferred stock |
6.85 | % | 50,000 | |||||
Weighted Average/Total |
6.80 | % | $ | 232,500 | ||||
Capitalization Ratios | ||||
AMBs share of total debt-to-total market capitalization(2)(5) |
38.6 | % | ||
AMBs share of total debt plus preferred-to-AMBs share of total market capitalization(2)(5) |
40.9 | % | ||
AMBs share of total debt-to-AMBs share of total assets(2) |
43.0 | % | ||
AMBs share of total debt plus preferred-to-AMBs share of total assets(2) |
45.5 | % |
(1) | Represents three credit facilities with total capacity of approximately $1.6 billion. Includes $142.0 million in U.S. dollar borrowings and $172.3 million, $64.9 million, $19.4 million and $4.2 million in Yen, Canadian dollar Singapore dollar and Euro-based borrowings outstanding at March 31, 2011, respectively, translated to U.S. dollars using the foreign exchange rates in effect on March 31, 2011. | |
(2) | See reporting definitions and supplemental financial measures disclosures. | |
(3) | Includes 1,269,422 shares of unvested restricted stock. | |
(4) | Computed using the treasury stock method and average share price of $34.04 for the quarter ended March 31, 2011. For net income per common share all stock options were anti-dilutive as of March 31, 2011. | |
(5) | Total Market Capitalization is defined as AMBs share of total debt plus preferred equity liquidation preferences plus market equity. |
© 2011 AMB Property Corporation | 20 |
||
2011 First Quarter Earnings Conference Call 4/20/2011 |
Debt Maturities(1) (dollars in thousands) |
|||
After Extension Options(2) | ||||||||||||||||
AMB Wholly-Owned Debt | 2011 | 2012 | 2013 | 2014 | ||||||||||||
Unsecured Senior Debt |
$ | 25,000 | $ | | $ | 293,897 | $ | | ||||||||
Credit Facilities |
| 230,512 | | | ||||||||||||
Other Debt |
| 150,256 | | | ||||||||||||
AMB Secured Debt |
14,233 | 27,921 | 22,410 | | ||||||||||||
Subtotal |
39,233 | 408,689 | 316,307 | | ||||||||||||
Consolidated Joint Ventures |
||||||||||||||||
AMB-AMS |
| | 39,135 | | ||||||||||||
AMB Institutional Alliance Fund II |
| 3,811 | 198,800 | 4,571 | ||||||||||||
AMB-SGP |
37,963 | 287,914 | | | ||||||||||||
Other Industrial Joint Ventures |
38,573 | 50,075 | 21,527 | 4,059 | ||||||||||||
Subtotal |
76,536 | 341,800 | 259,462 | 8,630 | ||||||||||||
Unconsolidated Joint Ventures |
||||||||||||||||
AMB-SGP Mexico |
58,825 | 162,885 | | | ||||||||||||
AMB Japan Fund I |
147,738 | 206,760 | 479,807 | | ||||||||||||
AMB Europe Logistics Fund |
| | | 434,391 | ||||||||||||
AMB U.S. Logistics Fund |
24,088 | 29,174 | 180,656 | 91,069 | ||||||||||||
Other Industrial Joint Ventures |
30,842 | | 56,916 | 30,661 | ||||||||||||
Subtotal |
261,493 | 398,819 | 717,379 | 556,121 | ||||||||||||
Total Consolidated |
115,769 | 750,489 | 575,769 | 8,630 | ||||||||||||
Total Unconsolidated |
261,493 | 398,819 | 717,379 | 556,121 | ||||||||||||
Total |
$ | 377,262 | $ | 1,149,308 | $ | 1,293,148 | $ | 564,751 | ||||||||
Total AMBs Share |
$ | 145,034 | $ | 668,683 | $ | 574,237 | $ | 208,847 |
(1) | Excludes scheduled principal amortization of debt maturing in years subsequent to 2014 as well as debt premiums and discounts. | |
(2) | Subject to certain conditions. |
© 2011 AMB Property Corporation | 21 |
||
2011 First Quarter Earnings Conference Call 4/20/2011 |
Supplemental Information for Net Asset Value Analysis (NAV) (dollars in thousands, except per share amounts) | |||
Actual | ||||||||
Quarter Ended | ||||||||
March 31, 2011 | ||||||||
Real Estate: |
||||||||
Wholly-owned property cash NOI from continuing operations(1) |
$ | 77,032 | ||||||
AMBs share of cash NOI from joint ventures: |
||||||||
Total cash NOI from joint ventures from continuing operations(1) |
$ | 124,683 | ||||||
AMBs share of joint ventures(1) |
34.2 | % | ||||||
AMBs share of cash NOI from joint ventures from continuing operations(1) |
42,672 | |||||||
Adjustments to AMBs share of cash NOI: |
||||||||
NOI attributed to construction-in-progress |
$ | (179 | ) | |||||
NOI attributed to pre-stabilized development projects(1)(2) |
(4,449 | ) | ||||||
NOI attributed to contributed developments |
| |||||||
NOI required to stabilize properties acquired and moved to operations |
65 | |||||||
Other adjustments to AMBs share of cash NOI:(3) |
5,800 | |||||||
Adjustments to AMBs share of cash NOI(4) |
1,237 | |||||||
Total AMBs share of cash NOI from continuing operations
related to operating properties(1)(5) |
$ | 120,941 | ||||||
AMBs share of average occupancy(5) |
92.3 | % | ||||||
Development platform:(4) |
||||||||
Development starts |
$ | 299,934 | ||||||
Private capital platform: |
||||||||
Total private capital revenue per common share and unit (diluted) |
$ | 0.04 |
As of | ||||
AMBs share of:(1) | March 31, 2011 | |||
Development, land, value-added acquisitions and contributed
assets, net of real estate impairment losses:(5) |
||||
Construction-in-progress (invested to date) |
$ | 111,219 | ||
Pre-stabilized development projects (invested to date)(1) |
658,453 | |||
Value-added acquisitions(1) |
37,525 | |||
Land held for future development |
601,675 | |||
Assets contributed to co-investment ventures(6) |
| |||
Total development, land, value-added acquisitions and
contributed assets, net of real estate impairment losses |
$ | 1,408,872 | ||
Debt and preferred securities:(5) |
||||
Total debt |
$ | 4,055,231 | ||
Preferred securities |
232,500 | |||
Total debt and preferred securities |
$ | 4,287,731 | ||
Other balance sheet items:(5) |
||||
Cash and cash equivalents and restricted cash |
$ | 337,787 | ||
Accounts receivable (net) and other assets |
515,959 | |||
Deferred rents receivable and deferred financing costs (net) |
(125,250 | ) | ||
Accounts payable and other liabilities |
(342,686 | ) | ||
Total other balance sheet items |
$ | 385,810 | ||
(1) | See reporting definitions and supplemental financial measures disclosures. | |
(2) | Includes an adjustment to remove any NOI generated from value-added acquisitions. | |
(3) | Other adjustments to AMBs share of cash NOI include free rent granted in the quarter and non-property related revenues and expenses. | |
(4) | Transaction activity adjustments remove NOI generated from in-progress developments, contributed developments, and projects held for sale or contribution as the value of this real estate is reflected in AMBs share of development, land, and contributed assets as detailed above. The adjustments also include stabilized NOI for acquisitions. | |
(5) | Includes investments held through unconsolidated joint ventures. | |
(6) | Represents AMBs share of assets contributed to unconsolidated co-investment ventures during the three months ended March 31, 2011. |
© 2011 AMB Property Corporation | 22 |
||
2011 First Quarter Earnings Conference Call 4/20/2011 |
Reporting Definitions / Supplemental Financial Measures | |||
Acquisition Cost includes estimated acquisition capital expenditures. Estimated acquisition
capital expenditures include immediate building improvements that are taken into consideration when
underwriting the purchase of a building or which are incurred to bring a building up to operating
standard or to stabilization and incremental building improvements and leasing costs that are
incurred in an effort to substantially increase the revenue potential of an existing building.
Adjusted EBITDA, Wholly-owned Adjusted EBITDA and AMBs share of Adjusted EBITDA. AMB uses adjusted
earnings before interest (including the amount of capitalized interest deducted from the
determination of development gains), tax, depreciation and amortization, impairment charges,
development profits related to real estate impairment losses previously recognized, restructuring charges,
merger transaction costs, losses on early extinguishment of debt, stock-based compensation amortization and other non-cash charges, and non-development gains, or adjusted
EBITDA, to measure both its operating performance and liquidity. AMB considers adjusted EBITDA to
provide investors relevant and useful information because it permits investors to view income from
its operations on an unleveraged basis before the effects of tax, non-cash depreciation and
amortization expense (including stock-based compensation amortization) or non-development gains. By
excluding interest expense, adjusted EBITDA allows investors to measure AMBs operating performance
independent of its capital structure and indebtedness and, therefore, allows for a more meaningful
comparison of its operating performance between quarters as well as annual periods and to compare
its operating performance to that of other companies, both in the real estate industry and in other
industries. AMB considers adjusted EBITDA to be a useful supplemental measure for reviewing its
comparative performance with other companies because, by excluding non-cash depreciation and
amortization expense, adjusted EBITDA can help the investing public compare the performance of a
real estate company to that of companies in other industries. The impairment charges were
principally a result of increases in estimated capitalization rates and deterioration in market
conditions that adversely impacted values. The development profits related to real estate
impairment losses previously recognized reflect adjustments to the cost basis of properties
previously impaired used to determine profits on disposition. The restructuring charges reflected
costs associated with AMBs reduction in global headcount and cost structure. The merger
transaction costs reflected costs associated with AMBs potential merger transaction with ProLogis.
Debt extinguishment losses generally included the costs of repurchasing debt securities. AMB
repurchased certain tranches of senior unsecured debt to manage its debt maturities in response to
the current financing environment, resulting in greater debt extinguishment costs. Although
difficult to predict, these items may be recurring given the uncertainty of the current economic
climate and its adverse effects on the real estate and financial markets. While not infrequent or
unusual in nature, certain of these items result from market fluctuations that can have inconsistent effects
on AMBs results of operation. The economics underlying certain of these items reflect market and financing
conditions in the short-term but can obscure AMBs performance and the value of AMBs long-term
investment decisions and strategies. Certain of these items reflect activities that are unusual in nature and have inconsistent effects on AMBs results of operations. Management believes adjusted EBITDA is significant and useful
to both it and its investors. Adjusted EBITDA more appropriately reflects the value and strength of
AMBs business model and its potential performance isolated from the volatility of the current
economic environment and unobscured by costs (or gains) resulting from AMBs management of its
financing profile in response to the tightening of the capital markets. As a liquidity measure, AMB
believes that adjusted EBITDA helps investors to analyze its ability to meet debt service
obligations and to make quarterly preferred share dividends and unit distributions. Management uses
adjusted EBITDA when measuring AMBs operating performance and liquidity; specifically when
assessing its operating performance, and comparing that performance to other companies, both in the
real estate industry and in other industries, and when evaluating its ability to meet debt service
obligations and to make quarterly preferred share dividends and unit distributions. AMB believes
investors should consider adjusted EBITDA, in conjunction with net income (the primary measure of
AMBs performance) and the other required GAAP measures of its performance and liquidity, to
improve their understanding of AMBs operating results and liquidity, and to make more meaningful
comparisons of its performance between periods and as against other companies. By excluding
interest, taxes, depreciation and amortization, impairment charges, development profits related to
real estate impairment losses previously recognized, restructuring charges, merger transaction costs, debt
extinguishment losses, stock-based compensation amortization and other non-cash charges and
non-development gains when assessing AMBs financial performance, an investor is assessing the
earnings generated by AMBs operations, but not taking into account the eliminated expenses or
non-development gains incurred in connection with such operations. As a result, adjusted EBITDA has
limitations as an analytical tool and should be used in conjunction with AMBs required GAAP
presentations. Adjusted EBITDA does not reflect AMBs historical cash expenditures or future cash
requirements for working capital, capital expenditures or contractual commitments. Adjusted EBITDA
also does not reflect the cash required to make interest and principal payments on AMBs
outstanding debt. While adjusted EBITDA is a relevant and widely used measure of operating
performance and liquidity, it does not represent net
income or cash flow from operations as defined by GAAP and it should not be considered as an
alternative to those indicators in evaluating operating performance or liquidity. Further, AMBs
computation of adjusted EBITDA may not be comparable to EBITDA reported by other companies.
Management compensates for the limitations of adjusted EBITDA by providing investors with financial
statements prepared according to U.S. GAAP, along with this detailed discussion of adjusted EBITDA
and a reconciliation of adjusted EBITDA to net income (or loss), a U.S. GAAP measurement. AMB
defines AMBs share of adjusted EBITDA to be AMB Property Corporations pro rata portion of
adjusted EBITDA based on its direct or indirect percentage of equity interests in its joint
ventures and other investments. AMB defines wholly-owned adjusted EBITDA to be that portion of
adjusted EBITDA, which is solely attributable to assets and activities that are 100% directly or
indirectly owned by AMB Property Corporation plus cash distributions from joint venture
relationships. AMB includes these distributions as they are an additional source of cash flow
available to service AMBs obligations. AMB believes these supplemental measures are useful by
providing investors with more comprehensive disclosure regarding AMBs performance and its ability
to cover its financial obligations on both a wholly owned basis and on a total portfolio basis.
The following table reconciles adjusted EBITDA, wholly-owned adjusted EBITDA and AMBs share of
adjusted EBITDA from net loss for the three months ended March 31, 2011 and 2010 (dollars in
thousands):
For the Quarters Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Net income (loss) |
$ | 14,322 | $ | (620 | ) | |||
Depreciation and amortization |
54,986 | 47,381 | ||||||
Restructuring charges |
| 2,973 | ||||||
Merger transaction costs |
3,697 | | ||||||
Stock-based compensation amortization and other non-cash charges |
6,770 | 7,286 | ||||||
Interest expense, including amortization |
34,942 | 32,589 | ||||||
Total discontinued operations, including gains, excluding development profits |
(15,414 | ) | (840 | ) | ||||
Adjustment for depreciation on development profits |
(525 | ) | (1,546 | ) | ||||
Income tax expense |
1,418 | 1,293 | ||||||
Capitalized interest attributable to development properties sold or contributed |
518 | 200 | ||||||
Discontinued operations adjusted EBITDA |
884 | 2,146 | ||||||
Less: Equity in earnings of unconsolidated joint ventures, net |
(7,800 | ) | (3,875 | ) | ||||
Less: Adjusted EBITDA attributable to consolidated joint ventures |
(25,017 | ) | (24,048 | ) | ||||
Distributions from consolidated and unconsolidated joint ventures |
11,284 | 9,942 | ||||||
Wholly-owned adjusted EBITDA |
80,065 | 72,881 | ||||||
Adjustments to derive adjusted EBITDA from consolidated joint ventures: |
||||||||
Distributions from consolidated joint ventures to AMB |
(3,182 | ) | (4,675 | ) | ||||
Adjusted EBITDA attributable to consolidated joint ventures |
25,017 | 24,048 | ||||||
Adjusted EBITDA attributable to noncontrolling interests |
(13,289 | ) | (13,215 | ) | ||||
Adjustments to derive adjusted EBITDA from unconsolidated joint ventures: |
||||||||
Distributions from unconsolidated joint ventures to AMB |
(8,102 | ) | (5,267 | ) | ||||
AMBs share of FFO, as adjusted |
20,881 | 14,453 | ||||||
AMBs share of interest expense |
13,273 | 12,901 | ||||||
AMBs share of adjusted EBITDA |
$ | 114,663 | $ | 101,126 | ||||
Allocation to participating securities. On the Consolidated Statements of Operations, this
represents net income attributable to AMB Property Corporation, net of preferred stock dividends,
allocated to outstanding unvested restricted shares. On the Consolidated Statements of Fund from
Operations, this represents FFO allocated to outstanding unvested restricted shares. For the three
months ended March 31, 2011, there were 1,269 unvested restricted shares outstanding (in
thousands). For the three months ended March 31, 2010, there were 1,228 unvested restricted shares
outstanding (in thousands).
AMBs share of calculations for certain financial measures represent the pro-rata portion of the
applicable financial measure based on AMBs percentage of equity interest in each of the
consolidated and unconsolidated co-investment ventures accounted for in the applicable financial
measure. AMB believes that AMBs share of calculations are meaningful and useful supplemental
measures, which enable both management and investors to assess the operations, earnings and growth
of AMB in light of AMBs ownership interest in its joint ventures and to compare the applicable
measure to that of other companies. In addition, it allows for a more meaningful comparison of the
applicable measure to that of other companies that do not consolidate any of their joint ventures.
AMBs share of calculations are not intended to reflect actual liability should there be a
default under loans or a liquidation of the joint ventures. AMBs computation of AMBs share of
measures may not be comparable to that of other real estate companies, as they may use different
methodologies for calculating these measures.
© 2011 AMB Property Corporation | 23 |
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2011 First Quarter Earnings Conference Call 4/20/2011 |
Reporting Definitions / Supplemental Financial Measures | |||
AMBs share of Other Balance Sheet Items. AMB believes that balance sheet
information based on GAAP provides the most appropriate information about financial
position. However, AMB considers balance sheet information reported on an owned and
managed basis (such as AMBs share of cash and cash equivalents and restricted
cash, AMBs share of accounts receivable (net) and other assets, AMBs share of
deferred rents receivable and deferred financing costs (net), and AMBs share of
accounts payable and other liabilities) to be useful supplemental measures to help
the investors better understand AMBs operating performance. See Reporting
Definitions for definitions of owned and managed and AMBs share of. AMB
believes that AMBs share of balance sheet items on an owned and managed basis
helps management and investors make a comprehensive assessment of AMBs total real
estate portfolio and provides a better understanding of AMBs operating activities.
While such information is helpful to the investor, it does not provide balance
sheet information as defined by GAAP and is not a true alternative to such GAAP
measurements. Further, AMBs computation of its share of balance sheet items on an
owned and managed basis may not be comparable to that of other real estate
companies, as they may use different methodologies for calculating these measures.
AMBs share of total debt. AMBs share of total debt is the pro rata portion of the
total debt based on its percentage of equity interest in each of the consolidated
and unconsolidated joint ventures holding the debt. AMB believes that its share of
total debt is a meaningful supplemental measure, which enables both management and
investors to analyze its leverage and to compare its leverage to that of other
companies. In addition, it allows for a more meaningful comparison of its debt to
that of other companies that do not consolidate their joint ventures. AMBs share
of total debt is not intended to reflect its actual liability should there be a
default under any or all of such loans or a liquidation of the joint ventures. See
Capitalization Detail for a reconciliation of total debt and AMBs share of total
debt.
AMBs share of total debt-to-AMBs share of total assets is calculated using the
following definitions: AMBs share of total debt is the pro rata portion of the
total debt based on AMBs percentage of equity interest in each of the consolidated
and unconsolidated joint ventures holding the debt. AMBs share of total assets is
the pro rata portion of total gross book value of assets based on AMBs percentage
of equity interest in each of the consolidated and unconsolidated joint ventures
holding the assets.
AMBs share of total debt-to-total market capitalization is calculated using the
following definitions: AMBs share of total debt is the pro rata portion of the
total debt based on AMBs percentage of equity interest in each of the consolidated
and unconsolidated joint ventures holding the debt. AMBs definition of total
market capitalization is AMBs share of total debt plus preferred equity
liquidation preferences plus market equity. AMBs definition of market equity is
the total number of outstanding shares of AMBs common stock and common limited
partnership units multiplied by the closing price per share of its common stock as
of period end.
Annualized base rent (ABR) is calculated as monthly base rent (cash basis) per the
terms of the lease, as of period end and including contractual rent escalations,
multiplied by 12. If free rent is granted, then the first positive rent value is
used. Leases denominated in foreign currencies are translated using the currency
exchange rate at period end.
Assets Under Management is AMBs estimate of the value of the real estate it wholly
owns or manages through its consolidated and unconsolidated co-investment ventures
or for clients of AMB Capital Partners. Assets under management is calculated by
adding the co-investment venture partners or clients share of the carrying value
of its real estate investment to AMBs share of total market capitalization.
Average occupancy percentage represents the daily weighted occupancy of the total
rentable square feet leased, including month-to-month leases, divided by total
rentable square feet. Space is considered leased when the tenant has either taken
physical or economic occupancy.
Carrying value is the sum of the most recent valuation of real estate investments
plus subsequently incurred capital expenditures. Generally, each real estate
investment is valued once a year.
Cash-basis NOI. Cash-basis NOI is defined as NOI less straight line rents and
amortization of lease intangibles. AMB considers cash-basis NOI to be an
appropriate and useful supplemental performance measure because cash basis NOI
reflects the operating performance of the real estate portfolio excluding the
effects of non-cash adjustments and provides a better measure of actual cash basis
rental growth for a year-over-year comparison. However, cash-basis NOI should not
be viewed as an alternative measure of financial performance since it does not
reflect general and administrative expenses, interest expenses, depreciation and
amortization costs, capital expenditures and leasing costs, or trends in
development and construction activities that could materially impact results from
operations. Further, cash-basis NOI may not be comparable to that of other real
estate investment trusts, as they may use different methodologies for calculating
cash-basis NOI.
For a reconciliation of NOI from net income for the quarter ended March 31, 2011,
refer to the SS NOI definition. The following table reconciles AMBs share of
cash-basis NOI from NOI for the quarter ended March 31, 2011 (dollars in
thousands):
For the Quarter Ended | ||||
March 31, 2011 | ||||
NOI |
$ | 106,023 | ||
Straight-line rents and amortization of lease intangibles |
(5,972 | ) | ||
Consolidated joint venture cash NOI from continuing operations |
(23,019 | ) | ||
Wholly-owned property cash NOI |
77,032 | |||
AMBs share of consolidated joint venture cash NOI |
10,698 | |||
AMBs share of unconsolidated joint venture cash NOI |
31,974 | |||
AMBs share of transaction adjustments |
1,237 | |||
AMBs share of cash-basis NOI |
$ | 120,941 | ||
Co-investment Ventures are Joint Ventures with institutional investors, managed
by AMB from which AMB receives acquisition fees for third-party acquisitions,
portfolio and asset management distributions or fees, as well as incentive
distributions or promoted interests.
Co-investment venture operating results.
For the Quarter Ended March 31, 2011 | ||||||||||||||||||||||||||||
Income | ||||||||||||||||||||||||||||
AMBs | Property | (Loss) from | ||||||||||||||||||||||||||
Ownership | Operating | Continuing | Net | FFO, as | ||||||||||||||||||||||||
Percentage | Revenues | Expenses | Operations | Income (Loss) | Cash NOI | adjusted | ||||||||||||||||||||||
Unconsolidated Co-investment Ventures |
||||||||||||||||||||||||||||
AMB U.S. Logistics Fund |
33 | % | $ | 71,051 | $ | (22,002 | ) | $ | 4,034 | $ | 4,153 | $ | 46,476 | $ | 25,769 | |||||||||||||
AMB Europe Logistics Fund |
37 | % | 26,369 | (5,708 | ) | 3,130 | 3,130 | 19,207 | 11,677 | |||||||||||||||||||
AMB Japan Fund I |
20 | % | 29,185 | (6,192 | ) | 4,037 | 4,037 | 22,930 | 13,596 | |||||||||||||||||||
AMB-SGP Mexico |
22 | % | 8,922 | (1,014 | ) | (1,881 | ) (1) | (1,881 | ) (1) | 7,646 | 824 | (1) | ||||||||||||||||
AMB DFS Fund I |
15 | % | 33 | (431 | ) | (503 | ) | (420 | ) | (397 | ) | (327 | ) | |||||||||||||||
AMB Brazil Logistics Partners Fund I |
25 | % | | | 38 | 38 | | 38 | ||||||||||||||||||||
Consolidated Co-investment Ventures |
||||||||||||||||||||||||||||
AMB-SGP |
50 | % | 11,063 | (3,834 | ) | (803 | ) | (803 | ) | 7,030 | 2,735 | |||||||||||||||||
AMB Institutional Alliance Fund II |
24 | % | 12,537 | (3,675 | ) | 1,941 | 1,941 | 8,709 | 5,500 | |||||||||||||||||||
AMB-AMS |
39 | % | 4,056 | (1,228 | ) | 501 | 501 | 2,659 | 1,560 |
(1) | Includes $3.8 million of interest expense on loans from co-investment venture partners. |
Co-investment venture partners share of calculations for certain financial
measures represent the pro-rata portion of the applicable financial measure based
on AMBs co-investment venture partners percentage of equity interest in each of
the consolidated or unconsolidated co-investment ventures accounted for in the
applicable financial measure.
Co-investment venture partners (or co-investors) share of debt is the
co-investment venture partners pro-rata portion of total debt.
Co-investment venture partners (or co-investors) share of equity is the pro-rata
portion of the co-investment venture partners share of carrying value less the
co-investment venture partners share of debt.
Completion is generally defined as properties that have reached Stabilization or
properties that have been substantially complete for at least 12 months.
Development activities include ground-up development, redevelopments, land sales
and value-added conversions.
Development margin is calculated as contribution value or disposition price less
closing costs, minus estimated total investment, before the impact of cumulative
real estate impairment losses, and any deferred rents, taxes or third party
promotes before any deferrals on contributions, divided by the estimated total
investment, before the impact of cumulative real estate impairment losses.
© 2011 AMB Property Corporation | 24 |
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2011 First Quarter Earnings Conference Call 4/20/2011 |
Reporting Definitions / Supplemental Financial Measures | |||
Estimated FFO, as adjusted, by Business. Estimated FFO, as adjusted, by Business is
FFO, as adjusted generated by AMBs Real Estate Operations, Development and Private
Capital business. Estimated Development and Private Capital FFO, as adjusted, was
determined by reducing Development Profits, net of taxes, and Private Capital
revenues by their respective estimated share of general and administrative
expenses, also defined as overhead. Developments and Private Capitals estimated
allocation of total general and administrative expenses was based on their
respective percentage of actual direct general and administrative expenses
incurred. Estimated Real Estate Operations FFO, as adjusted represents total AMB
FFO, as adjusted, less estimated FFO, as adjusted, attributable to Development and
Private Capital. Management believes estimated FFO, as adjusted, by business line
is a useful supplemental measure of its operating performance because it helps the
investing public compare the operating performance of AMBs respective businesses
to other companies comparable businesses. Further, AMBs computation of FFO, as
adjusted, by business line may not be comparable to that reported by other real
estate investment trusts as they may use different methodologies in computing such
measures.
Estimated investment capacity is AMBs estimate of the gross real estate which
could be acquired through the use of its equity commitments from co-investment
venture partners plus AMBs funding obligations and estimated debt capitalization.
Estimated total investment represents total estimated cost of development,
expansion, including initial acquisition costs, prepaid ground leases, buildings,
and associated carry costs. Estimated total investments are based on current
forecasts and are subject to change. Non-U.S. Dollar investments are translated to
U.S. Dollars using the exchange rate at period end.
Estimated yields on development projects are calculated from estimated annual cash
NOI following occupancy stabilization divided by the estimated total investment.
Yields exclude value added conversion projects and are calculated on an after-tax
basis for international projects.
Fixed charge coverage. Fixed charge coverage is defined as Adjusted EBITDA divided
by fixed charges. Fixed charges consist of interest expense less joint venture
partners share of interest expense and amortization of finance costs and debt
premiums, from continuing and discontinued operations, plus AMBs share of interest
expense from unconsolidated joint venture debt, capitalized interest, preferred
unit distributions and preferred stock dividends. AMB uses fixed charge coverage to
measure its liquidity. AMB believes fixed charge coverage is relevant and useful to
investors because it permits fixed income investors to measure AMBs ability to
meet its interest payments on outstanding debt, make distributions to its preferred
unitholders and pay dividends to its preferred shareholders. AMBs computation of
fixed charge coverage may not be comparable to fixed charge coverage reported by
other companies.
The following table details the calculation of fixed charges for three months ended
March 31, 2011 and 2010 (dollars in thousands):
For the Quarters Ended | ||||||||
March 31, | ||||||||
Fixed charge | 2011 | 2010 | ||||||
Interest expense, including amortization continuing operations |
$ | 34,942 | $ | 32,589 | ||||
Amortization of financing costs and debt premiums continuing operations |
(3,437 | ) | (3,169 | ) | ||||
Interest expense, including amortization discontinued operations |
(14 | ) | 27 | |||||
Amortization of financing costs and debt premiums discontinued operations |
| (3 | ) | |||||
Capitalized interest |
9,055 | 9,664 | ||||||
Preferred stock dividends |
3,952 | 3,952 | ||||||
Less: Fixed charge attributable to consolidated joint ventures |
(11,781 | ) | (12,802 | ) | ||||
Wholly-owned fixed charge |
32,717 | 30,258 | ||||||
Adjustments to derive fixed charge from consolidated joint ventures: |
||||||||
Fixed charge attributable to consolidated joint ventures |
11,781 | 12,802 | ||||||
Fixed charge attributable to noncontrolling interests |
(6,193 | ) | (6,899 | ) | ||||
Adjustments to derive fixed charge from unconsolidated joint ventures: |
||||||||
AMBs share of capitalized interest from unconsolidated joint ventures |
130 | 265 | ||||||
AMBs share of interest expense from unconsolidated joint ventures |
13,273 | 12,901 | ||||||
Total fixed charge |
$ | 51,708 | $ | 49,327 | ||||
Funds From Operations, as adjusted (FFO, as adjusted), Funds From Operations
Per Share and Unit, as adjusted (FFOPS, as adjusted), Core FFO, as adjusted,
Core FFO Per Share and Unit, as adjusted (Core FFOPS, as adjusted) and Funds
From Operations, as defined by NAREIT (FFO, as defined by NAREIT) (together with
FFO, as adjusted, FFOPS, as adjusted, Core FFO, as adjusted, Core FFOPS, as
adjusted, and FFO, as defined by NAREIT, the FFO Measures, as adjusted). AMB
believes that net income, as defined by U.S. GAAP, is the most appropriate
earnings measure. However, AMB considers funds from operations, as adjusted (or
FFO, as adjusted), FFO per share and unit, as adjusted (or FFOPS, as adjusted),
Core FFO, as adjusted, Core FFO per share and unit, as adjusted (or Core FFOPS, as
adjusted) and FFO, as defined by NAREIT, to be useful supplemental measures of its
operating performance. AMB defines FFOPS, as adjusted, as FFO, as adjusted, per
fully diluted weighted average share of AMBs common stock and operating
partnership units. AMB calculates FFO, as adjusted, as net income (or loss)
available to common stockholders, calculated in accordance with U.S. GAAP, less
gains (or losses) from dispositions of real estate held for investment purposes
and real estate-related depreciation, and adjustments to derive AMBs pro rata
share of FFO, as adjusted, of consolidated and unconsolidated joint ventures. AMB
defines Core FFOPS, as adjusted as Core FFO, as adjusted per fully diluted
weighted share of AMBs common stock and operating partnership units. AMB
calculates Core FFO, as adjusted as FFO, as adjusted excluding AMBs share of
development profits. These calculations also include adjustments for items as
described below.
Unless stated otherwise, AMB includes the gains from development, including those
from value-added conversion projects, before depreciation recapture, as a
component of FFO, as adjusted. AMB believes gains from development should be
included in FFO, as adjusted, to more completely reflect the performance of one of
our lines of business. AMB believes that value-added conversion dispositions are
in substance land sales and as such should be included in FFO, as adjusted,
consistent with the real estate investment trust industrys long standing practice
to include gains on the sale of land in funds from operations. However, AMBs
interpretation of FFO, as adjusted, or FFOPS, as adjusted, may not be consistent
with the views of others in the real estate investment trust industry, who may
consider it to be a divergence from the NAREIT definition, and may not be
comparable to funds from operations or funds from operations per share and unit
reported by other real estate investment trusts that interpret the current NAREIT
definition differently than AMB does. In connection with the formation of a joint
venture, AMB may warehouse assets that are acquired with the intent to contribute
these assets to the newly formed venture. Some of the properties held for
contribution may, under certain circumstances, be required to be depreciated under
U.S. GAAP. AMB includes in its calculation
of FFO, as adjusted, gains or losses related to the contribution of previously
depreciated real estate to joint ventures. Although
it is a departure from the current NAREIT definition, AMB believes such
calculation of FFO, as adjusted, better reflects the value created as a result
of the contributions.
In addition, AMB calculates FFO, as adjusted, to exclude impairment and
restructuring charges, merger transaction costs, catastrophic disaster losses,
debt extinguishment losses and the preferred unit redemption discount. The
impairment charges were principally a result of increases in estimated
capitalization rates and deterioration in market conditions that adversely
impacted values. The restructuring charges reflected costs associated with AMBs
reduction in global headcount and cost structure. Debt extinguishment losses
generally included the costs of repurchasing debt securities. AMB repurchased
certain tranches of senior unsecured debt to manage its debt maturities in
response to the current financing environment, resulting in greater debt
extinguishment costs. The preferred unit redemption discount reflects the gain
associated with the discount to liquidation preference in the preferred unit
redemption price less costs incurred as a result of the redemption. Although
difficult to predict, these items may be recurring given the uncertainty of the
current economic climate and its adverse effects on the real estate and financial
markets. While not infrequent or unusual in nature, these items result from market
fluctuations that can have inconsistent effects on AMBs results of operations.
The economics underlying these items reflect market and financing conditions in
the short-term but can obscure AMBs performance and the value of AMBs long-term
investment decisions and strategies. The merger transaction costs, which reflected costs
associated with AMBs potential merger transaction with ProLogis, represented fluctuations that can have inconsistent effects
on AMBs results of operations. Management believes FFO, as adjusted, is
significant and useful to both it and its investors. FFO, as adjusted, more
appropriately reflects the value and strength of AMBs business model and its
potential performance isolated from the volatility of the current economic
environment or unusual activities and unobscured by costs (or gains) resulting
from AMBs management of its financing profile in response to the tightening of
the capital
© 2011 AMB Property Corporation | 25 |
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2011 First Quarter Earnings Conference Call 4/20/2011 |
Reporting Definitions / Supplemental Financial Measures | |||
markets. However, in addition to the limitations of FFO Measures, as adjusted,
generally discussed below, FFO, as adjusted, does not present a comprehensive
measure of AMBs financial condition and operating performance. This measure is a
modification of the NAREIT definition of funds from operations and should not be
used as an alternative to net income or cash as defined by U.S. GAAP.
AMB believes that the FFO Measures, as adjusted, are meaningful supplemental
measures of its operating performance because historical cost accounting for real
estate assets in accordance with U.S. GAAP implicitly assumes that the value of
real estate assets diminishes predictably over time, as reflected through
depreciation and amortization expenses. However, since real estate values have
historically risen or fallen with market and other conditions, many industry
investors and analysts have considered presentation of operating results for real
estate companies that use historical cost accounting to be insufficient. Thus, the
FFO Measures, as adjusted, are supplemental measures of operating performance for
real estate investment trusts that exclude historical cost depreciation and
amortization, among other items, from net income available to common stockholders,
as defined by U.S. GAAP. AMB believes that the use of the FFO Measures, as
adjusted, combined with the required U.S. GAAP presentations, has been beneficial
in improving the understanding of operating results of real estate investment
trusts among the investing public and making comparisons of operating results
among such companies more meaningful. AMB considers the FFO Measures, as adjusted,
to be useful measures for reviewing comparative operating and financial
performance because, by excluding gains or losses related to sales of previously
depreciated operating real estate assets and real estate depreciation and
amortization, the FFO Measures, as adjusted, can help the investing public compare
the operating performance of a companys real estate between periods or as
compared to other companies. While funds from operations and funds from operations
per share are relevant and widely used measures of operating performance of real
estate investment trusts, the FFO Measures, as adjusted, do not represent cash
flow from operations or net income as defined by U.S. GAAP and should not be
considered as alternatives to those measures in evaluating AMBs liquidity or
operating performance. The FFO Measures, as adjusted, also do not consider the
costs associated with capital expenditures related to AMBs real estate assets nor
are the FFO Measures, as adjusted, necessarily indicative of cash available to
fund AMBs future cash requirements. Management compensates for the limitations of
the FFO Measures, as adjusted, by providing investors with financial statements
prepared according to U.S. GAAP, along with this detailed discussion of the FFO
Measures, as adjusted, and a reconciliation of the FFO Measures, as adjusted, to
net income available to common stockholders, a U.S. GAAP measurement.
See Consolidated Statements of Funds from Operations, as adjusted for a
reconciliation of FFO, as adjusted, from net income (loss) available to common
stockholders and a reconciliation of Core FFO, as adjusted from FFO, as adjusted.
The following table reconciles projected Core FFO, as adjusted from projected net
income available to common stockholders for the year ended December 31,
2011:
2011 | ||||||||
Low | High | |||||||
Projected net income available to common stockholders |
$ | 0.04 | $ | 0.14 | ||||
AMBs share of projected depreciation and amortization |
1.37 | 1.37 | ||||||
AMBs
share of depreciation on development profits recognized to date |
0.00 | 0.00 | ||||||
AMBs share of gains on dispositions of operating properties recognized to date |
(0.09 | ) | (0.09 | ) | ||||
Merger transaction costs |
0.02 | 0.02 | ||||||
Impact of additional dilutive securities, other, rounding |
(0.03 | ) | (0.03 | ) | ||||
Projected Funds From Operations, as adjusted (FFO, as adjusted) |
$ | 1.31 | $ | 1.41 | ||||
AMBs share of development profits recognized to date |
(0.01 | ) | (0.01 | ) | ||||
Projected Core FFO, as adjusted(1) |
$ | 1.30 | $ | 1.40 | ||||
Amounts are expressed per share, except FFO, as adjusted, and Core FFO, as
adjusted, which are expressed per share and unit.
(1) As development gains are difficult to predict in the current economic
environment, management believes Projected Core FFO, as adjusted is the more
appropriate and useful measure to reflect its assessment of AMBs projected
operating performance.
Gross book value represents the book value of the property (before accumulated
depreciation), net of impairments, owned by the joint venture and excludes net
other assets. Development book values include uncommitted land.
Gross operating margin is calculated as NOI divided by gross revenues (excluding
straight-line rents and amortization of lease intangibles, reimbursable capital
revenue and lease termination fees) for properties in the pool at period end.
Impairment charges represent the write down of assets due to estimated fair value
being lower than carry value.
Interest coverage. Interest coverage is defined as adjusted EBITDA divided by
AMBs share of interest expense which consists of consolidated interest expense
less joint venture partners share of interest expense, including amortization,
from continuing and discontinued operations and AMBs share of interest expense
from unconsolidated joint venture debt. AMB uses interest coverage to measure its
liquidity. AMB believes interest coverage is relevant and useful to investors
because it permits investors to measure AMBs ability to meet its interest
payments on outstanding debt. AMBs computation of interest coverage may not be
comparable to interest coverage reported by other companies.
The following table details AMBs share of total interest for the three months
ended March 31, 2011 and 2010 (dollars in thousands):
For the Quarters Ended | ||||||||
March 31, | ||||||||
Interest | 2011 | 2010 | ||||||
Interest expense, including amortization continuing operations |
$ | 34,942 | $ | 32,589 | ||||
Interest expense, including amortization discontinued operations |
(14 | ) | 27 | |||||
Joint venture partners share of interest expense |
(5,468 | ) | (6,583 | ) | ||||
AMBs share of interest expense from unconsolidated joint ventures |
13,273 | 12,901 | ||||||
Total interest |
$ | 42,733 | $ | 38,934 | ||||
Investment capacity represents estimated capacity based on the funds current
cash and leverage limitations as of the most recent quarter end. The estimated
investment capacities of AMB U.S. Logistics Fund and AMB Europe Logistics Fund, as
open-end funds, are not limited.
Joint Ventures are all joint ventures, including Co-Investment Ventures, with real
estate developers, other real estate operators, or institutional investors where
AMB may or may not: have control, act as the manager and/or developer, earn asset
management distributions or fees, or earn incentive distributions or promoted
interests. In certain cases, AMB might provide development, leasing, property
management and/or accounting services for which it may receive market compensation.
Joint venture partners share of calculations for certain financial measures
represent the pro-rata portion of the applicable financial measure based on AMBs
joint venture partners percentage of equity interest in each of the consolidated
or unconsolidated joint ventures accounted for in the applicable financial measure.
Market equity is defined as the total number of outstanding shares of AMBs common
stock and common limited partnership units multiplied by the closing price per
share of its common stock at period end.
Net Asset Value (NAV). AMB believes NAV is a useful supplemental measure of its
operating performance because it enables both management and investors to analyze
the fair value of its business. An assessment of the fair value of a business
involves estimates and assumptions and can be performed using various methods. AMB
has presented certain financial measures related to its business that it believes
may be useful to the investing public in calculating its NAV but has not presented
any specific methodology nor provided any guidance on assumptions or estimates that
should be used in the calculation.
Net Operating Income (NOI). See same store net operating income for discussion of
NOI and a reconciliation of NOI from net income.
© 2011 AMB Property Corporation | 26 |
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2011 First Quarter Earnings Conference Call 4/20/2011 |
Reporting Definitions / Supplemental Financial Measures | |||
Occupancy percentage at period end represents the percentage of total rentable
square feet leased, including month-to-month leases, divided by total rentable
square feet at period end. Space is considered leased when the tenant has either
taken physical or economic occupancy.
Owned and managed is defined by AMB as assets in which AMB has at least a 10%
ownership interest, is the property or asset manager, and which it intends to hold
for the long-term.
Owned and Managed Supplemental Cash Flow Information. AMB believes that cash flow
information based on GAAP provides the most appropriate cash flow information.
However, AMB considers cash flow information reported on an owned and managed basis
(such as straight-line rents and amortization of lease intangibles, AMBs share of
straight-line rents and amortization of lease intangibles, gross lease termination
fees, net lease termination fees, AMBs share of net lease termination fees, tenant
improvements, lease commissions and other lease costs, building improvements,
Co-investment partners share of capital expenditures and AMBs share of recurring
capital expenditures) to be useful supplemental measures to help the investors
better understand AMBs operating performance and cash flow. See Reporting
Definitions for definitions of owned and managed, AMBs share of and
Co-investment venture partners share of. AMB believes that owned and managed
cash flow information helps management and investors make a comprehensive
assessment of the cash flow of AMBs total real estate portfolio and provides a
better understanding of AMBs operating performance and activities. While owned and
managed supplemental cash flow information is helpful to the investor, it does not
provide cash flow information as defined by GAAP and are not true alternatives to
such GAAP measurements. Further, AMBs computation of owned and managed
supplemental cash flow information may not be comparable to that of other real
estate companies, as they may use different methodologies for calculating these
measures.
Percent pre-leased represents the executed lease percentage of total square feet as of the
reporting date.
Pre-stabilized development represents assets which have reached Completion but have
not yet reached Stabilization.
Preferred, with respect to the capitalization ratios, is defined as preferred equity liquidation
preferences.
Redevelopment projects represent those buildings that require significant capital
expenditures (generally more than 25% of acquired cost or existing basis) to bring
the buildings up to operating standards and stabilization (generally 90% leased).
Recurring capital expenditures represents non-incremental building improvements and
leasing costs required to maintain current revenues. Recurring capital expenditures
do not include estimated acquisition capital expenditures which were taken into
consideration when underwriting the purchase of a building or which are incurred to
bring a building up to operating standards.
Rent changes on renewals and rollovers are calculated as the difference, weighted
by square feet, of the net ABR due the first month of a term commencement and the
net ABR due the last month of the former tenants term. If free rent is granted,
then the first positive full rent value is used as a point of comparison. The
rental amounts exclude base stop amounts, holdover rent and premium rent charges.
If either the previous or current lease terms are under 12 months, then they are
excluded from this calculation. If the lease is first generation or there is no
prior lease for comparison, then it is excluded from this calculation.
Same Store Net Operating Income, Cash-basis SS NOI (SS NOI) and Net Operating Income (NOI).
AMB defines NOI as rental revenues, including reimbursements, less property
operating expenses. NOI excludes depreciation, amortization, general and
administrative expenses, restructuring charges, real estate impairment losses,
merger transaction costs, development profits (losses), gains (losses) from sale or
contribution of real estate interests, and interest expense. AMB believes that net
income, as defined by GAAP, is the most appropriate earnings measure. However, NOI
is a useful supplemental measure calculated to help investors understand AMBs
operating performance, excluding the effects of gains (losses), costs and expenses
which are not related to the performance of the assets. NOI is widely used by the
real estate industry as a useful supplemental measure, which helps investors
compare AMBs operating performance with that of other companies. Real estate
impairment losses have been excluded in deriving NOI because AMB does not consider
its impairment losses to be a property operating expense. AMB believes that the
exclusion of impairment losses from NOI is a common methodology used in the real
estate industry. Real estate impairment losses relate to the
changing values of AMBs assets but do not reflect the current operating
performance of the assets with respect to their revenues or expenses. AMBs real
estate impairment losses are non-cash charges which represent the write down in
the value of assets when estimated fair value over the holding period is lower
than current carrying value. The impairment charges were principally a result of
increases in estimated capitalization rates and deterioration in market
conditions that adversely impacted underlying real estate values. Therefore, the
impairment charges are not related to the current performance of AMBs real
estate operations and should be excluded from its calculation of NOI.
AMB considers SS NOI to be a useful supplemental measure of our operating
performance for properties that are considered part of the same store pool. AMB
defines Cash-basis SS NOI as NOI on a same store basis excluding straight line
rents and amortization of lease intangibles. See definition of same store pool.
AMB considers SS NOI to be an appropriate and useful supplemental performance
measure because it reflects the operating performance of the real estate
portfolio excluding effects of non-cash adjustments and provides a better measure
of actual cash basis rental growth for a year-over-year comparison. In addition,
AMB believes that SS NOI helps investors compare the operating performance of
AMBs real estate as compared to other companies. While SS NOI is a relevant and
widely used measure of operating performance of real estate investment trusts, it
does not represent cash flow from operations or net income as defined by GAAP and
should not be considered as an alternative to those measures in evaluating our
liquidity or operating performance. SS NOI also does not reflect general and
administrative expenses, interest expenses, real estate impairment losses, merger transaction costs,
depreciation and amortization costs, capital expenditures and leasing costs, or
trends in development and construction activities that could materially impact
our results from operations. Further, AMBs computation of SS NOI may not be
comparable to that of other real estate companies, as they may use different
methodologies for calculating SS NOI.
The following table reconciles consolidated cash-basis SS NOI and NOI from net
loss for the three months ended March 31, 2011 and 2010 (dollars in thousands):
For the Quarters Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Net income (loss) |
$ | 14,322 | $ | (620 | ) | |||
Private capital income |
(7,683 | ) | (7,445 | ) | ||||
Depreciation and amortization |
54,986 | 47,381 | ||||||
General and administrative and fund costs |
30,902 | 32,265 | ||||||
Restructuring charges |
| 2,973 | ||||||
Merger transaction costs |
3,697 | | ||||||
Total other income and expenses |
26,850 | 24,813 | ||||||
Total discontinued operations |
(17,051 | ) | (840 | ) | ||||
NOI |
106,023 | 98,527 | ||||||
Less non same-store NOI |
(18,888 | ) | (11,233 | ) | ||||
Less non cash adjustments(1) |
(2,279 | ) | (2,877 | ) | ||||
Cash-basis same-store NOI |
$ | 84,856 | $ | 84,417 | ||||
Less lease termination fees |
$ | (393 | ) | $ | (638 | ) | ||
Cash-basis same-store NOI, excluding lease termination fees |
$ | 84,463 | $ | 83,779 | ||||
(1) | Non-cash adjustments include straight line rents and amortization of lease
intangibles for the same store pool only. |
Same store NOI growth is the change in the NOI (excluding straight-line rents and
amortization of lease intangibles) of the same store pool from the prior year
reporting period to the current year reporting period.
Same store pool includes all properties that are owned as of the end of both the
current and prior year reporting periods and excludes development properties for
both the current and prior reporting periods. The same store pool is set annually
and excludes properties purchased and developments stabilized after December 31,
2009.
© 2011 AMB Property Corporation | 27 |
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2011 First Quarter Earnings Conference Call 4/20/2011 |
Reporting Definitions / Supplemental Financial Measures | |||
Second generation TIs and LCs per square foot are total tenant improvements, lease
commissions and other leasing costs incurred during leasing of second generation
space divided by the total square feet leased. Costs incurred prior to leasing
available space are not included until such space is leased. Second generation
space excludes newly developed square footage or square footage vacant at
acquisition.
Stabilization is generally defined as properties that are 90% occupied.
Stabilized cap rates are calculated as cash NOI or NOI, as applicable, stabilized
to market occupancy (generally 95%) divided by total acquisition cost. The total
acquisition cost basis includes the initial purchase price, the effects of marking
assumed debt to market, lease intangible adjustments, estimated acquisition
capital expenditures, and leasing costs necessary to achieve stabilization. AMB
defines cash NOI as NOI excluding straight line rents and amortization of lease
intangibles.
Tenant retention is the square footage of all leases rented by existing tenants
divided by the square footage of all expiring and rented leases during the
reporting period, excluding the square footage of tenants that default or buy-out
prior to expiration of their lease, short-term tenants and the square footage of
month-to-month leases.
Total market capitalization is defined by AMB as AMBs share of total debt plus
preferred equity liquidation preferences plus market equity (unless otherwise
noted).
Value-added acquisitions represent unstabilized properties which AMB acquires as a
part of managements current belief that the discount in pricing attributed to the
operating challenges of the property could provide greater returns, once
stabilized, than the returns of stabilized properties, which are not value added
acquisitions. Value added acquisitions generally have one or more of the following
characteristics: (i) existing vacancy, typically in excess of 20%, (ii) short-term
lease rollover, typically during the first two years of ownership, or (iii)
significant capital improvement requirements, typically in excess of 20% of the
purchase price. AMB excludes value-added acquisitions from its owned and managed
and consolidated operating statistics prior to stabilization (generally 90%
leased) in order to provide investors with data which it feels better reflects the
performance of its core portfolio.
Value-added conversion projects represent the repurposing of industrial properties
to a higher and better use, including office, residential, retail, research &
development or manufacturing. Activities required to prepare the property for
conversion to a higher and better use may include such activities as rezoning,
redesigning, reconstructing and retenanting. The sales price of the value-added
conversion project is generally based on the underlying land value based on its
ultimate use and as such, little to no residual value is ascribed to the
industrial building(s).
Wholly-owned fixed charge coverage is defined as wholly-owned adjusted EBITDA
divided by wholly-owned fixed charges. AMB believes that wholly-owned fixed charge
coverage is useful to certain investors whose focus is to understand AMBs ability
to cover those fixed charges which arise only from obligations which are solely
AMBs with adjusted EBITDA which is solely attributed to 100% owned assets and
activities plus cash distributions from joint ventures. See Fixed Charge Coverage.
© 2011 AMB Property Corporation | 28 |
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2011 First Quarter Earnings Conference Call 4/20/2011 |
Contacts | |||
Contact Name | Title | Phone | E-mail Address | |||
Hamid R. Moghadam |
Chairman & Chief Executive Officer | (415) 733-9401 | hmoghadam@amb.com | |||
Thomas S. Olinger |
Chief Financial Officer | (415) 733-9405 | tolinger@amb.com | |||
Guy F. Jaquier |
President, Europe and Asia; President, Private Capital | (415) 733-9406 | gjaquier@amb.com | |||
Eugene F. Reilly |
President, The Americas | (617) 619-9333 | ereilly@amb.com | |||
Tracy A. Ward |
Vice President, IR & Corporate Communications | (415) 733-9565 | tward@amb.com |
Corporate Headquarters | Investor Relations | Other Primary Office Locations | ||||||||
AMB Property Corporation
|
Tel: (415) 394-9000 | Amsterdam | Boston | Chicago | Los Angeles | |||||
Pier 1, Bay 1
|
Fax: (415) 394-9001 | México City | Shanghai | Singapore | Tokyo | |||||
San Francisco, CA 94111
|
E-mail: ir@amb.com | |||||||||
Tel: (415) 394-9000
|
Website: www.amb.com | |||||||||
Fax: (415) 394-9001 |
© 2011 AMB Property Corporation | 29 |
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2011 First Quarter
Earnings Conference Call 4/20/2011 |
Forward-Looking Statements | |||
Some of the information included in this report and the presentations to be held in
connection therewith contains forward-looking statements, such as those related to factors
regarding positive net absorption, renewal of our lines of credit, future financing activity,
ability to access attractive financing globally, our growth opportunities, long term prospects for
AMB and industrial real estate, scaled overhead structure, capital required for growth and funding
sources, our future debt and JV debt structure and strategies regarding average remaining terms,
average rates, floating rates, bond issuances, credit facilities and secured debt, consolidated vs.
unconsolidated debt, share of JV debt vs. wholly owned debt, NAV, compound annual growth rate,
teams fully engaged in best markets, our buying advantage and investment opportunities available to
us (including distressed or strategic transactions), utilization of low yielding assets and
acquiring assets in excess of cost of capital, recovery in leading business indicators and
fundamentals, including rental rates, occupancy, real estate values, and investor/customer
interest, FFO, as adjusted, Core FFO, as adjusted, NOI and earnings generated by increased
occupancy, rental rate recovery, lease up of the development portfolio, monetization of land bank
and development capability, and the formation of new ventures, capital deployment and other value
creating activities, the consummation of asset sales marketed, under contract or LOI, our
opportunities and plans (including those regarding our global positioning and future capital
deployment), estimated financial and performance results, our projected funds from operations,
future assets under management, same store and/or cash net operating income, occupancy, development
portfolio lease-up, revenue, G&A, overhead expenses, deployed equity and other financial and
operational guidance, our future performance compared to peers and other market indices, rent
growth, industrial and other market, GDP and trade growth, market drivers, trends and forecasts,
port opportunities, on-tarmac opportunities, hiring, performance and retention of key personnel,
leveraging of relationships, continuation and effectiveness of strategic drivers, information
regarding our development, value-added conversion, redevelopment and value-added acquisition
projects (including stabilization or completion dates, square feet at stabilization or completion,
sale or contribution dates, yields from such projects, our share of remaining funding, costs and
total investment amounts, scope, location and timing of development starts and other projects,
margins, projected gains and returns, sustainability, profitability, demand for projects, targeted
value-added conversion and acquisition projects, intent of property use, redevelopment and
conversion timelines, entitlement and repositioning potential of land), ability to deliver customer
solutions, strength of lender and customer relationships, lease expirations, performance and
value-creation of investments and market entry opportunities, real estate valuations,
capitalization rates, acquisition capital and volume, scope and build out and monetization
potential of land inventory, co-investment venture and other estimated investment capacity, terms
of the co-investment ventures, performance, revenues and returns on investment, target leverage,
timing and amounts of incentive, asset management, acquisition and other private capital
distributions, promotes and fees, private capital demand, amounts of new investment, launching of
additional joint ventures, termination of funds, planned gross capitalization, future balance sheet
capacity to cover capital requirements, our plans and ability to retire, refinance and issue
secured and unsecured debt and maintain fixed charge coverage at certain levels, ability to
exercise or maintain credit extensions, our position to maintain a solid financial position,
maintain leverage targets and address debt maturities and interest rate changes, which are made
pursuant to the safe-harbor provisions of Section 21E of the Securities Exchange Act of 1934, as
amended, and Section 27A of the Securities Act of 1933, as amended. Because these forward-looking
statements involve numerous risks and uncertainties, there are important factors that could cause
our actual results to differ materially from those in the forward-looking statements, and you
should not rely on the forward-looking statements as predictions of future events. The events or
circumstances reflected in forward-looking statements might not occur. You can identify
forward-looking statements by the use of forward-looking terminology such as believes, expects,
may, will, should, seeks, approximately, intends, plans, forecasting, pro forma,
estimates or anticipates or the negative of these words and phrases or similar words or
phrases. You can also identify forward-looking statements by discussions of strategy, plans or
intentions. Forward-looking statements should not be read as guarantees of future performance or
results, and will not necessarily be accurate indicators of whether, or the time at which, such
performance or results will be achieved. There is no assurance that the events or circumstances
reflected in forward-looking statements will occur or be achieved. Forward-looking statements are
necessarily dependent on assumptions, data or methods that may be incorrect or imprecise and we may
not be able to realize them. We caution you not to place undue reliance on forward-looking
statements, which reflect our analysis only and speak only as of the date of this report or the
dates indicated in the statements. We assume no obligation to update or supplement forward-looking
statements. The following factors, among others, could cause actual results and future events to
differ materially from those set forth or contemplated in the forward-looking statements: changes
in general economic conditions in California, the U.S. or globally (including financial market
fluctuations), global trade or in the real estate sector (including risks relating to decreasing
real estate valuations and impairment charges); risks associated with using debt to fund the
companys business activities, including refinancing and interest rate risks (including inflation
risks); the companys failure to obtain, renew, or extend necessary financing or access the debt or
equity markets; the companys failure to maintain its current credit agency ratings or comply with
its debt covenants; risk related to the proposed merger transaction with ProLogis, including litigation related to the merger,
any decreases in the price of ProLogis stock and the risk that, if completed, the merger may not achieve its
intended results; risks associated with the ability to consummate the
merger and the timing of the closing of the merger;
risks related to the companys obligations in the event of certain defaults
under co-investment venture and other debt; risks associated with equity and debt securities
financings and issuances (including the risk of dilution); defaults on or non-renewal of leases by
customers or renewal at lower than expected rent or failure to lease at all or on expected terms;
difficulties in identifying properties, portfolios of properties, or interests in real-estate
related entities or platforms to acquire and in effecting acquisitions on advantageous terms and
the failure of acquisitions to perform as the company expects; unknown liabilities acquired in
connection with the acquired properties, portfolios of properties, or interests in real-estate
related entities; the companys failure to successfully integrate acquired properties and
operations; costs or liabilities related to our potential merger
transaction with ProLogis; risks and uncertainties affecting property development, redevelopment and value-added
conversion (including construction delays, cost overruns, the companys inability to obtain
necessary permits and financing, the companys inability to lease properties at all or at favorable
rents and terms, and public opposition to these activities); the companys failure to set up
additional funds, attract additional investment in existing funds or to contribute properties to
its co-investment ventures due to such factors as its inability to acquire, develop, or lease
properties that meet the investment criteria of such ventures, or the co-investment ventures
inability to access debt and equity capital to pay for property contributions or their allocation
of available capital to cover other capital requirements; risks and uncertainties relating to the
disposition of properties to third parties and the companys ability to effect such transactions on
advantageous terms and to timely reinvest proceeds from any such dispositions; risks of doing
business internationally and global expansion, including unfamiliarity with the new markets and
currency and hedging risks; risks of changing personnel and roles; risks related to suspending,
reducing or changing the companys dividends; losses in excess of the companys insurance coverage;
changes in local, state and federal laws and regulatory requirements, including changes in real
estate, tax and zoning laws; increases in real property tax rates; risks associated with the
companys tax structuring; increases in interest rates and operating costs or greater than expected
capital expenditures; environmental uncertainties; risks related to natural disasters; and our
failure to qualify and maintain our status as a real estate investment trust. Our success also
depends upon economic trends generally, various market conditions and fluctuations and those other
risk factors discussed under the heading Risk Factors and elsewhere in our most recent annual
report on Form 10-K for the year ended December 31, 2010.
© 2011 AMB Property Corporation | 30 |
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