How has AMB's core industrial portfolio performed in terms of occupancy and rent growth?

At December 31, 2001, industrial properties were 94.5% leased, down from 96.4% a year earlier. Cash base rents on leases signed or renewed in 2001 rose 20.4% over expiring rents, though this was below the 25.6% rise in 2000. Same-store cash NOI grew 6.3%, with the San Francisco Bay Area and Southern California showing the strongest results. Lease expirations are concentrated, with 14.9% of annualized base rent expiring in 2002 and 16.3% in 2003.

How much debt does AMB carry, and what are the key risks?

Total consolidated debt was $2.14 billion at year-end 2001, including $1.22 billion of secured debt (of which $759 million is joint venture debt), $780 million of unsecured senior notes, $123.5 million under the Alliance Fund II facility, and $12 million under the unsecured credit facility. Most debt is fixed-rate, with variable-rate exposure of about $188 million. Risks include refinancing needs (about $225 million maturing in 2003 and $350 million in 2005), cross-default and cross-collateralization provisions on $552 million of non-recourse loans, and reliance on capital markets and co-investment partners.

What is the role of the co-investment joint ventures?

AMB uses co-investment partnerships with institutional investors, such as Alliance Fund I and II, AMB Partners II, AMB-SGP (with GIC), and AMB/Erie, to fund acquisitions and developments. AMB typically holds at least 20% of each venture and acts as managing general partner, earning fees and controlling major decisions. Five such ventures are consolidated, and the company contributed $539.2 million of properties to them in 2001, recognizing a $17.8 million gain. Dependence on attracting new partners is a noted risk.

What does the filing reveal about the dividend and capital allocation?

The company paid $1.58 per common share in 2001, up from $1.48 in 2000, with the quarterly dividend at $0.395. AMB repurchased 1.39 million shares at an average of $23.62 during 2001 under its 1999 program, which expired in December 2001. A new $100 million repurchase program was authorized, running through December 2003, though no repurchases were made under it in 2001. Preferred units were issued during 2001 (Series I and J) and Series C units were redeemed for $115.7 million.

PLD/PLDGP 10-K FY2001 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K filed April 1, 2002. Cited figures are marked; the original filing is the authoritative source.

AMB Property Corporation's annual report for fiscal 2001 (signed March 28, 2002) describes a REIT focused on owning and operating industrial distribution properties in supply-constrained, in-fill markets.

As of December 31, 2001, it owned 905 industrial buildings and seven retail centers totaling about 81.6 million square feet across 26 markets, 94.5% leased. Total revenues rose 25% to $600.8 million^a, and net income available to common stockholders was $125.1 million, or $1.47 diluted per share, versus $1.35 in 2000. Funds from operations (FFO) was $213.5 million, up 2.3%.

Growth was driven by acquisitions, development, and co-investment joint ventures. Same-store cash net operating income grew 6.3%^b, and cash rent increases on renewals and rollovers averaged 20.4%. The balance sheet carries more leverage and reliance on partners.

Total consolidated debt was $2.14 billion^c, and the company reported a debt-to-total market capitalization of 44.7%, close to its 45% policy ceiling. Roughly $759 million of secured debt sits in joint ventures, and the company consolidates five co-investment ventures with about $1.3 billion of gross book value. Investors should note a $20.8 million loss on investments in other companies (including Webvan), the company's dependence on third-party capital, and a risk disclosure about its auditor, Arthur Andersen, which had been indicted in March 2002.

Management is pursuing a strategy of disposing of non-core retail and industrial assets and redeploying proceeds into high-throughput distribution properties near airports, seaports, and highways. The company paid a regular quarterly dividend of $0.395^d per share ($1.58 for 2001), and it authorized a new $100 million stock repurchase program. Note that the document's header lists a 12/31/2002 period, but the content covers fiscal year 2001.

02—Key points

Key Highlights

Revenue grew 25% to $600.8 million in 2001 (from $480.2 million), led by rental revenue growth of 22.4%, including $71.5 million from 2000 acquisitions.
Net income available to common stockholders was $125.1 million ($1.49 basic, $1.47 diluted EPS), up from $113.3 million ($1.35) in 2000. FFO rose to $213.5 million from $208.7 million.
Portfolio of 905 industrial buildings (81.6 million sq ft) was 94.5% leased, with same-store cash NOI up 6.3% and cash rent increases of 20.4% on renewals and rollovers.
Total consolidated debt was $2.14 billion, with debt-to-total market capitalization of 44.7% versus a policy target of about 45% or less; weighted average fixed-rate secured debt cost was 7.3%.
Five consolidated co-investment joint ventures ($1.3 billion gross book value) with institutional partners, including GIC and CCSFERS, provide a major capital source; the company owns at least 20% of each.
A $20.8 million loss on investments in other companies, including Webvan, was recognized in 2001, and the company disposed of 26 buildings for $193.4 million.
Quarterly dividend held at $0.395 per share ($1.58 annual), with an unused $488 million under the $500 million unsecured credit facility at year-end 2001.

03—Questions

Frequently Asked Questions

How has AMB's core industrial portfolio performed in terms of occupancy and rent growth?
At December 31, 2001, industrial properties were 94.5% leased, down from 96.4% a year earlier. Cash base rents on leases signed or renewed in 2001 rose 20.4% over expiring rents, though this was below the 25.6% rise in 2000. Same-store cash NOI grew 6.3%, with the San Francisco Bay Area and Southern California showing the strongest results. Lease expirations are concentrated, with 14.9% of annualized base rent expiring in 2002 and 16.3% in 2003.
How much debt does AMB carry, and what are the key risks?
Total consolidated debt was $2.14 billion at year-end 2001, including $1.22 billion of secured debt (of which $759 million is joint venture debt), $780 million of unsecured senior notes, $123.5 million under the Alliance Fund II facility, and $12 million under the unsecured credit facility. Most debt is fixed-rate, with variable-rate exposure of about $188 million. Risks include refinancing needs (about $225 million maturing in 2003 and $350 million in 2005), cross-default and cross-collateralization provisions on $552 million of non-recourse loans, and reliance on capital markets and co-investment partners.
What is the role of the co-investment joint ventures?
AMB uses co-investment partnerships with institutional investors, such as Alliance Fund I and II, AMB Partners II, AMB-SGP (with GIC), and AMB/Erie, to fund acquisitions and developments. AMB typically holds at least 20% of each venture and acts as managing general partner, earning fees and controlling major decisions. Five such ventures are consolidated, and the company contributed $539.2 million of properties to them in 2001, recognizing a $17.8 million gain. Dependence on attracting new partners is a noted risk.
What does the filing reveal about the dividend and capital allocation?
The company paid $1.58 per common share in 2001, up from $1.48 in 2000, with the quarterly dividend at $0.395. AMB repurchased 1.39 million shares at an average of $23.62 during 2001 under its 1999 program, which expired in December 2001. A new $100 million repurchase program was authorized, running through December 2003, though no repurchases were made under it in 2001. Preferred units were issued during 2001 (Series I and J) and Series C units were redeemed for $115.7 million.

04—Continue

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