SECURITIES AND EXCHANGE COMMISSION
Form 10-Q
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(Mark One)
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| For the quarterly period ended September 30, 2002 | ||
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o
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REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| Commission File Number: 001-13545 | ||
AMB Property Corporation
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Maryland
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94-3281941 | |
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(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
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Pier 1, Bay 1, San Francisco,
California
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94111 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
(415) 394-9000
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
As of October 28, 2002, there were 82,645,191 shares of the Registrant’s common stock, $0.01 par value per share, outstanding.
AMB PROPERTY CORPORATION
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| PART I. FINANCIAL INFORMATION | ||||||
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Item 1.
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Financial Statements (unaudited) | |||||
| Consolidated Balance Sheets as of September 30, 2002, and December 31, 2001 | ||||||
| Consolidated Statements of Operations for the three and nine months ended September 30, 2002 and 2001 | ||||||
| Consolidated Statements of Cash Flows for the nine months ended September 30, 2002 and 2001 | ||||||
| Consolidated Statement of Stockholders’ Equity for the nine months ended September 30, 2002 | ||||||
| Notes to Consolidated Financial Statements | ||||||
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk | |||||
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Item 4.
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Controls and Procedures | |||||
| PART II. OTHER INFORMATION | ||||||
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Item 1.
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Legal Proceedings | |||||
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Item 2.
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Changes in Securities and Use of Proceeds | |||||
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Item 3.
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Defaults Upon Senior Securities | |||||
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Item 4.
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Submission of Matters to a Vote of Security Holders | |||||
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Item 5.
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Other Information | |||||
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Item 6.
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Exhibits and Reports on Form 8-K | |||||
1
PART I
Item 1. Financial Statements
AMB PROPERTY CORPORATION
| September 30, | December 31, | |||||||||
| 2002 | 2001 | |||||||||
| (Unaudited, dollars in | ||||||||||
| thousands) | ||||||||||
| ASSETS | ||||||||||
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Investments in real estate:
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Land
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$ | 1,151,700 | $ | 1,064,422 | ||||||
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Buildings and improvements
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3,567,994 | 3,285,110 | ||||||||
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Construction in progress
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163,803 | 181,179 | ||||||||
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Total investments in properties
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4,883,497 | 4,530,711 | ||||||||
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Accumulated depreciation and amortization
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(344,949 | ) | (265,653 | ) | ||||||
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Net investments in properties
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4,538,548 | 4,265,058 | ||||||||
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Investments in unconsolidated joint ventures
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64,822 | 71,097 | ||||||||
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Properties held for divestiture, net
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105,613 | 157,174 | ||||||||
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Net investments in real estate
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4,708,983 | 4,493,329 | ||||||||
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Cash and cash equivalents
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76,094 | 73,071 | ||||||||
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Restricted cash
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14,746 | 8,661 | ||||||||
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Mortgages receivable
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13,155 | 87,214 | ||||||||
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Accounts receivable, including discontinued
operations
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81,003 | 70,794 | ||||||||
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Other assets, including discontinued operations
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48,608 | 35,874 | ||||||||
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Total assets
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$ | 4,942,589 | $ | 4,768,943 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
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Debt:
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Secured debt, including discontinued operations
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$ | 1,305,320 | $ | 1,228,214 | ||||||
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Unsecured senior debt securities
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800,000 | 780,000 | ||||||||
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Alliance Fund II credit facility
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72,500 | 123,500 | ||||||||
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Unsecured debt
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10,319 | — | ||||||||
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Unsecured credit facility
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12,000 | 12,000 | ||||||||
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Total debt
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2,200,139 | 2,143,714 | ||||||||
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Dividends payable
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42,151 | 4,960 | ||||||||
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Other liabilities, including discontinued
operations
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146,925 | 133,641 | ||||||||
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Total liabilities
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2,389,215 | 2,282,315 | ||||||||
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Commitments and contingencies (Note 12)
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— | — | ||||||||
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Minority interests
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814,921 | 734,286 | ||||||||
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Stockholders’ equity:
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Series A preferred stock, cumulative,
redeemable, $.01 par value, 4,600,000 shares authorized,
4,000,000 issued, and 3,995,800 and 4,000,000 outstanding,
$99,895 liquidation preference
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95,994 | 96,100 | ||||||||
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Common stock $.01 par value, 500,000,000 shares
authorized, 84,241,693 and 83,821,829 issued and outstanding
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842 | 838 | ||||||||
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Additional paid-in capital
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1,637,308 | 1,627,764 | ||||||||
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Retained earnings
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4,317 | 27,640 | ||||||||
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Accumulated other comprehensive loss
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(8 | ) | — | |||||||
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Total stockholders’ equity
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1,738,453 | 1,752,342 | ||||||||
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Total liabilities and stockholders’ equity
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$ | 4,942,589 | $ | 4,768,943 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
2
AMB PROPERTY CORPORATION
| For the Three Months | For the Nine Months | |||||||||||||||||||
| Ended September 30, | Ended September 30, | |||||||||||||||||||
| 2002 | 2001 | 2002 | 2001 | |||||||||||||||||
| (Unaudited, dollars in thousands, | ||||||||||||||||||||
| except per share amounts) | ||||||||||||||||||||
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REVENUES AND OTHER INCOME
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Rental revenues
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$ | 158,283 | $ | 145,140 | $ | 459,505 | $ | 418,519 | ||||||||||||
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Equity in earnings of unconsolidated joint
ventures
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1,322 | 1,636 | 4,443 | 4,365 | ||||||||||||||||
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Private capital income
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2,766 | 2,340 | 8,468 | 8,022 | ||||||||||||||||
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Interest and other income
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2,609 | 5,392 | 9,921 | 12,505 | ||||||||||||||||
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Total revenues and other income
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164,980 | 154,508 | 482,337 | 443,411 | ||||||||||||||||
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EXPENSES
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Property operating expenses
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21,738 | 17,877 | 58,770 | 50,687 | ||||||||||||||||
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Real estate taxes
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18,920 | 17,274 | 55,670 | 50,535 | ||||||||||||||||
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Interest, including amortization
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38,661 | 32,842 | 112,044 | 94,314 | ||||||||||||||||
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Depreciation and amortization
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33,749 | 28,835 | 95,186 | 82,758 | ||||||||||||||||
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General and administrative
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12,376 | 8,796 | 34,207 | 26,180 | ||||||||||||||||
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Loss on investments in other companies
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— | — | — | 20,758 | ||||||||||||||||
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Total expenses
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125,444 | 105,624 | 355,877 | 325,232 | ||||||||||||||||
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Income before minority interests
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39,536 | 48,884 | 126,460 | 118,179 | ||||||||||||||||
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Minority interests’ share of income
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Preferred units
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(6,403 | ) | (7,423 | ) | (18,770 | ) | (21,626 | ) | ||||||||||||
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Minority interests’
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(10,863 | ) | (10,556 | ) | (29,498 | ) | (26,324 | ) | ||||||||||||
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Total minority interests’ share of income
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(17,266 | ) | (17,979 | ) | (48,268 | ) | (47,950 | ) | ||||||||||||
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Income from continuing operations available to
common stockholders
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22,270 | 30,905 | 78,192 | 70,229 | ||||||||||||||||
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Gains/(losses) on developments and dispositions
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Gains on developments held for sale
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618 | 1,341 | 618 | 1,341 | ||||||||||||||||
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Gains/(losses) from dispositions of real estate,
net of minority interests
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— | (1,227 | ) | 2,480 | 33,332 | |||||||||||||||
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Total gains on developments and dispositions
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618 | 114 | 3,098 | 34,673 | ||||||||||||||||
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Income before discontinued operations
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22,888 | 31,019 | 81,290 | 104,902 | ||||||||||||||||
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Discontinued operations
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Discontinued operations
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330 | 471 | 1,349 | 1,399 | ||||||||||||||||
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Gains from dispositions of real estate, net of
minority interests
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3,944 | — | 3,944 | — | ||||||||||||||||
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Total discontinued operations
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4,274 | 471 | 5,293 | 1,399 | ||||||||||||||||
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Income before extraordinary items
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27,162 | 31,490 | 86,583 | 106,301 | ||||||||||||||||
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Extraordinary items
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(88 | ) | 87 | (356 | ) | (351 | ) | |||||||||||||
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Net income
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27,074 | 31,577 | 86,227 | 105,950 | ||||||||||||||||
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Series A preferred stock dividends
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(2,123 | ) | (2,125 | ) | (6,373 | ) | (6,375 | ) | ||||||||||||
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Preferred unit redemption discount
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412 | — | 412 | — | ||||||||||||||||
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Net income available to common stockholders
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$ | 25,363 | $ | 29,452 | $ | 80,266 | $ | 99,575 | ||||||||||||
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BASIC INCOME PER COMMON SHARE
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Income from continuing operations available to
common stockholders
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$ | 0.24 | $ | 0.34 | $ | 0.86 | $ | 0.76 | ||||||||||||
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Gains on developments and dispositions
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0.01 | — | 0.04 | 0.41 | ||||||||||||||||
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Discontinued operations
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0.05 | 0.01 | 0.06 | 0.01 | ||||||||||||||||
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Extraordinary items
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— | — | — | — | ||||||||||||||||
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Net income available to common stockholders
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$ | 0.30 | $ | 0.35 | $ | 0.96 | $ | 1.18 | ||||||||||||
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DILUTED INCOME PER COMMON SHARE
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Income from continuing operations available to
common stockholders
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$ | 0.24 | $ | 0.33 | $ | 0.84 | $ | 0.75 | ||||||||||||
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Gains on developments and dispositions
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0.01 | — | 0.04 | 0.41 | ||||||||||||||||
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Discontinued operations
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0.05 | 0.01 | 0.06 | 0.01 | ||||||||||||||||
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Extraordinary items
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— | — | — | — | ||||||||||||||||
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Net income available to common stockholders
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$ | 0.30 | $ | 0.34 | $ | 0.94 | $ | 1.17 | ||||||||||||
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
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Basic
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83,723,897 | 84,395,107 | 83,755,195 | 84,135,158 | ||||||||||||||||
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Diluted
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85,527,829 | 85,644,840 | 85,360,210 | 85,097,692 | ||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
3
AMB PROPERTY CORPORATION
| 2002 | 2001 | ||||||||||
| (Unaudited, dollars in | |||||||||||
| thousands) | |||||||||||
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net income
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$ | 86,227 | $ | 105,950 | |||||||
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Adjustments to reconcile net income to net cash
provided by operating activities:
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Depreciation and amortization
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95,186 | 82,758 | |||||||||
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Loss on investments in other companies
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— | 20,758 | |||||||||
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Straight-line rents
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