10-QPeriod: Q3 FY2009

Prologis, Inc. Quarterly Report for Q3 Ended Sep 30, 2009

Filed October 30, 2009For Securities:PLDPLDGP

Summary

AMB Property Corporation (AMB) reported its third-quarter results for 2009, facing continued challenges in the economic environment. While total revenues remained relatively flat year-over-year for the quarter, the nine-month period saw a decline, primarily driven by a significant decrease in private capital revenues. The company incurred substantial real estate impairment losses totaling $181.9 million during the first nine months of 2009, reflecting the impact of deteriorating market conditions on asset valuations. Despite these challenges, the company has focused on strengthening its balance sheet and liquidity, reducing debt and increasing available credit. Management is also implementing cost-reduction measures, including a reduction in global headcount, to navigate the current economic climate and position the company for future opportunities.

Key Highlights

  • 1Total revenues for the nine months ended September 30, 2009, decreased by 12.0% to $471.2 million, largely due to a 54.9% drop in private capital revenues.
  • 2The company recognized significant real estate impairment losses of $181.9 million during the first nine months of 2009, reflecting adverse market conditions.
  • 3Total costs and expenses increased by 48.1% for the nine-month period, primarily driven by the recognition of real estate impairment losses and restructuring charges.
  • 4Net income available to common stockholders was a loss of $42.5 million for the nine months ended September 30, 2009, a significant decrease from a net income of $134.8 million in the prior year period.
  • 5The company reduced its total debt by approximately $750 million during the first nine months of 2009 and had $1.1 billion available under its credit facilities as of September 30, 2009.
  • 6Same-store rental revenues decreased by 10.9% for the first nine months of 2009, reflecting lower occupancy and rent changes on renewals and rollovers.

Frequently Asked Questions

For the nine months ended September 30, 2009, AMB Property Corporation experienced a challenging financial period. Total revenues decreased by 12.0% to $471.2 million. The company incurred substantial real estate impairment losses of $181.9 million and saw total costs and expenses increase significantly. Consequently, net income available to common stockholders was a loss of $42.5 million, a considerable decline from the $134.8 million net income reported in the same period of the previous year.

AMB Property Corporation has prioritized strengthening its balance sheet and liquidity. During the first nine months of 2009, the company reduced its total debt by approximately $750 million and increased the availability under its lines of credit by approximately $431 million. As of September 30, 2009, the company had $1.1 billion available under its credit facilities, indicating a strong liquidity position.

The company recognized significant real estate impairment losses totaling $181.9 million during the first nine months of 2009. These charges reflect the impact of deteriorating market conditions, decreased leasing and rental rates, and rising vacancies on asset valuations. These impairment losses contributed to the substantial increase in total costs and expenses and the net loss reported for the period.

The decrease in rental revenues, particularly in the same-store portfolio, is primarily attributed to lower occupancy rates and negative rent changes on lease renewals and rollovers during the period. The company experienced a 10.9% decrease in same-store rental revenues for the first nine months of 2009.