<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 7, 2000
AMB PROPERTY CORPORATION
------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Maryland 001-13545 94-3281941
------------------------------- ------------------------ ----------------------
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation) Identification Number)
</TABLE>
Pier 1, Bay 1, San Francisco, CA 94111
------------------------------------------------------
(Address of principal executive offices) (Zip Code)
415-394-9000
----------------------------------------------------
(Registrants' telephone number, including area code)
505 Montgomery Street, San Francisco, California 94111
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 5. OTHER EVENTS
We hereby amend Item 7 of our Current Report on Form 8-K filed with
the Securities and Exchange Commission on November 30, 2000 to file audited
financial statements and unaudited pro forma financial information related to
certain real estate acquisitions made by AMB Property, L.P. during 2000.
FORWARD LOOKING STATEMENTS
Some of the information included in this report contains
forward-looking statements, such as statements pertaining to the acquisition of
the Beacon Centre and our intended use of proceeds. Forward-looking statements
involve numerous risks and uncertainties and you should not rely on them 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," "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 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.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements:
(i) Combined Statements of Revenues and Certain Expenses for the J.A.
Green Portfolio in connection with the acquisition of the JFK Air
Cargo Portfolio
- Report of Independent Public Accountants
- Combined Statements of Revenues and Certain Expenses for the
J.A. Green Portfolio for the period from January 1, 2000
to May 30, 2000 (unaudited) and for the year ended
December 31, 1999
- Notes to Combined Statements of Revenues and Certain Expenses
for the J.A. Green Portfolio for the period from January
1, 2000 to May 30, 2000 (unaudited) and for the year ended
December 31, 1999.
(ii) Combined Statements of Revenues and Certain Expenses for the
Magnum Realty Corp. Portfolio in connection with the acquisition
of the JFK Air Cargo Portfolio
- Report of Independent Public Accountants
- Combined Statements of Revenues and Certain Expenses for the
Magnum Realty Corp. Portfolio for the period from January
1, 2000 to May 31, 2000 (unaudited) and for the year ended
December 31, 1999
- Notes to Combined Statements of Revenues and Certain Expenses
for the Magnum Realty Corp. Portfolio for the period from
January 1, 2000 to May 31, 2000 (unaudited) and for the
year ended December 31, 1999.
(iii) Combined Statements of Revenues and Certain Expenses for the
Beacon Centre Portfolio
- Report of Independent Public Accountants
- Combined Statements of Revenues and Certain Expenses for the
Beacon Centre Portfolio for the period from January 1,
2000 to August 30, 2000 (unaudited) and for the year ended
December 31, 1999
- Notes to Combined Statements of Revenues and Certain Expenses
for the Beacon Centre Portfolio for the period from
January 1, 2000 to August 30, 2000 (unaudited) and for the
year ended December 31, 1999.
(iv) Combined Statements of Revenues and Certain Expenses for the AFCO
Portfolio in connection with the acquisition of the AFCO Air
Cargo Portfolio
- Report of Independent Public Accountants
- Combined Statements of Revenues and Certain Expenses for the
AFCO Portfolio for the period from January 1, 2000 to
October 31, 2000 (unaudited) and for the year ended
December 31, 1999
- Notes to Combined Statements of Revenues and Certain Expenses
for the AFCO Portfolio for the period from January 1, 2000
to October 31, 2000 (unaudited) and for the year ended
December 31, 1999.
<PAGE> 3
(v) Combined Statements of Revenues and Certain Expenses for the AFCO
Investors Portfolio in connection with the acquisition of the
AFCO Air Cargo Portfolio
- Report of Independent Public Accountants
- Combined Statements of Revenues and Certain Expenses for the
AFCO Investors Portfolio for the period from January 1,
2000 to October 31, 2000 (unaudited) and for the year
ended December 31, 1999
- Notes to Combined Statements of Revenues and Certain Expenses
for the AFCO Investors Portfolio for the period from
January 1, 2000 to October 31, 2000 (unaudited) and for
the year ended December 31, 1999.
(vi) Combined Statements of Revenues and Certain Expenses for the AFCO
Cargo I Associates L.P. Portfolio in connection with the
acquisition of the AFCO Air Cargo Portfolio
- Report of Independent Public Accountants
- Combined Statements of Revenues and Certain Expenses for the
AFCO Cargo I Associates L.P. Portfolio for the period from
January 1, 2000 to October 31, 2000 (unaudited) and for
the year ended December 31, 1999
- Notes to Combined Statements of Revenues and Certain Expenses
for the AFCO Cargo I Associates L.P. Portfolio for the
period from January 1, 2000 to October 31, 2000
(unaudited) and for the year ended December 31, 1999.
(vii) Combined Statements of Revenues and Certain Expenses for the West
Pac Portfolio in connection with the acquisition of the AFCO Air
Cargo Portfolio
- Report of Independent Public Accountants
- Combined Statements of Revenues and Certain Expenses for the
West Pac Portfolio for the period from January 1, 2000 to
October 31, 2000 (unaudited) and for the year ended
December 31, 1999
- Notes to Combined Statements of Revenues and Certain Expenses
for the West Pac Portfolio for the period from January 1,
2000 to October 31, 2000 (unaudited) and for the year
ended December 31, 1999.
(b) Pro Forma Financial Information for AMB Property Corporation
(Unaudited):
- Pro Forma Condensed Consolidated Balance Sheet as of September 30,
2000
- Notes and adjustments to Pro Forma Condensed Consolidated Balance
Sheet as of September 30, 2000
- Pro Forma Condensed Consolidated Statement of Operations for the nine
months ended September 30, 2000
- Notes and adjustments to Pro Forma Condensed Consolidated Statement
of Operations for the nine months ended September 30, 2000
- Pro Forma Condensed Consolidated Statement of Operations for the year
ended December 31, 1999
- Notes and adjustments to Pro Forma Condensed Consolidated Statement
of Operations for the year ended December 31, 1999
2
<PAGE> 4
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To AMB Property Corporation:
We have audited the accompanying combined statement of revenues and
certain expenses of the J.A. Green Portfolio (as defined in Note 1) for the year
ended December 31, 1999. This combined financial statement is the responsibility
of the management of J.A. Green Development Corp. Our responsibility is to
express an opinion on this combined financial statement based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statement
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying combined statement of revenues and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Form 8-K of AMB Property
Corporation. Material amounts, described in Note 1 to the statement of revenues
and certain expenses, that would not be comparable to those resulting from the
proposed future operations of the J.A. Green Portfolio are excluded and the
financial statement is not intended to be a complete presentation of the
revenues and expenses of the J.A. Green Portfolio.
In our opinion, the combined financial statement referred to above
presents fairly, in all material respects, the revenues and certain expenses of
the J.A. Green Portfolio for the year ended December 31, 1999, in conformity
with accounting principles generally accepted in the United States.
ARTHUR ANDERSEN LLP
San Francisco, California
April 7, 2000
<PAGE> 5
J.A. GREEN PORTFOLIO
COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1999 AND FOR THE
PERIOD FROM JANUARY 1, 2000 TO MAY 31, 2000 (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the
For the five
year ended months
December ended May
31, 1999 31, 2000
---------- -----------
(unaudited)
<S> <C> <C>
REVENUES
Rental revenues $ 8,733 $ 3,643
Other income 9 --
-------- --------
8,742 2,848
CERTAIN EXPENSES
Property operating expenses 1,916 909
Real estate taxes 1,822 648
-------- --------
3,737 1,557
-------- --------
REVENUES IN EXCESS OF CERTAIN EXPENSES $ 5,005 $ 2,086
======== ========
</TABLE>
The accompanying notes are an integral part of
these combined financial statements.
<PAGE> 6
J.A. GREEN PORTFOLIO
NOTES TO COMBINED STATEMENTS OF REVENUES
AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PROPERTIES ACQUIRED
The accompanying combined statements of revenues and certain expenses
include the operations of the J.A. Green Portfolio (the "Portfolio") (see "Basis
of Presentation" below). AMB Property Corporation (the "Company") acquired the
Portfolio from an unrelated party on June 1, 2000 for a purchase price of
approximately $85,902 (unaudited). The Portfolio includes 25 industrial
buildings located in Queens, New York and aggregates approximately 0.9 million
square feet (unaudited)
BASIS OF PRESENTATION
The accompanying combined statements of revenues and certain expenses
have been prepared for the purpose of complying with Rule 3-14 of the Securities
and Exchange Commission's rules and regulations.
The accompanying combined statements of revenues and certain expense
exclude expenses such as interest, depreciation and amortization, professional
fees and other costs not directly related to the future operations of the
Portfolio, that may not be comparable to the expenses expected to be incurred by
the Company in the proposed future operations of the Portfolio. Management is
not aware of any material factors relating to the Portfolio that would cause the
reported financial information not to be indicative of future operating results.
INTERIM FINANCIAL INFORMATION
The statement of revenues and certain expenses for the period from
January 1, 2000 to May 31, 2000 is unaudited. In the opinion of management, the
unaudited financial information contains all adjustments, consisting of normal
recurring accruals, necessary for a fair presentation of the statements of
revenues and certain expenses for the Portfolio for the unaudited interim
period.
SIGNIFICANT ACCOUNTING POLICIES
The accompanying statements were prepared on the accrual basis of
accounting. All leases are classified as operating leases, and rental revenue is
recognized on a straight-line basis over the terms of the leases.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during the
periods presented. Actual results could differ from those estimates.
2. LEASING ACTIVITY
Future minimum rental income due under non-cancelable operating leases
with tenants in effect as of December 31, 1999 is as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
---- -------
<S> <C>
2000 ........................................ $ 7,909
2001 ........................................ 6,896
2002 ........................................ 5,850
2003 ........................................ 4,637
2004 ........................................ 4,022
Thereafter .................................. 7,277
-------
Total ............................... $36,591
=======
</TABLE>
In addition to minimum rental payments, tenants pay reimbursements for
their pro rata share of specified operating expenses and real estate taxes,
which amounted to $505 and $242 for the year ended December 31, 1999 and for the
five months ended May 31, 2000 (unaudited), respectively. Certain leases contain
options to renew.
<PAGE> 7
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To AMB Property Corporation:
We have audited the accompanying combined statement of revenues and
certain expenses of the Magnum Realty Corp. Portfolio (as defined in Note 1) for
the year ended December 31, 1999. This combined financial statement is the
responsibility of the management of Magnum Realty Corp. Our responsibility is to
express an opinion on this combined financial statement based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statement
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying combined statement of revenues and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Form 8-K of AMB Property
Corporation. Material amounts, described in Note 1 to the combined statement of
revenues and certain expenses, that would not be comparable to those resulting
from the proposed future operations of the Magnum Realty Corp. Portfolio are
excluded and the financial statement is not intended to be a complete
presentation of the revenues and expenses of the Magnum Realty Corp. Portfolio.
In our opinion, the combined financial statement referred to above
presents fairly, in all material respects, the revenues and certain expenses of
the Magnum Realty Corp. Portfolio for the year ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.
ARTHUR ANDERSEN LLP
San Francisco, California
April 7, 2000
<PAGE> 8
MAGNUM REALTY CORP. PORTFOLIO
COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1999 AND FOR THE
PERIOD FROM JANUARY 1, 2000 TO MAY 31, 2000 (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the
For the five
year ended months
December ended May
31, 1999 31, 2000
----------- -----------
(unaudited)
<S> <C> <C>
REVENUES
Rental revenues $ 1,470 $ 628
Other income 35 --
-------- --------
1,505 628
CERTAIN EXPENSES
Property operating expenses 379 166
Real estate taxes 372 147
-------- --------
751 313
-------- --------
REVENUES IN EXCESS OF CERTAIN EXPENSES $ 754 $ 315
======== ========
</TABLE>
The accompanying notes are an integral part of
these combined financial statements.
<PAGE> 9
MAGNUM REALTY CORP. PORTFOLIO
NOTES TO COMBINED STATEMENTS OF REVENUES
AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PROPERTIES ACQUIRED
The accompanying combined statements of revenues and certain expenses
include the operations of the Magnum Realty Corp. Portfolio (the "Portfolio")
(see "Basis of Presentation" below). AMB Property Corporation (the "Company")
acquired the Portfolio from an unrelated third party on June 1, 2000 for an
initial purchase price of approximately $12,948 (unaudited). The Portfolio
includes 4 industrial buildings and 3 parking lots located in Queens, New York
and aggregates approximately 0.2 million square feet (unaudited).
BASIS OF PRESENTATION
The accompanying combined statements of revenues and certain expenses
have been prepared for the purpose of complying with Rule 3-14 of the Securities
and Exchange Commission's rules and regulations.
The accompanying combined financial statements of revenues and certain
expenses exclude expenses such as interest, depreciation and amortization,
professional fees and other costs not directly related to the future operations
of the Portfolio, that may not be comparable to the expenses expected to be
incurred by the Company in the proposed future operations of the Portfolio.
Management is not aware of any material factors relating to the Portfolio that
would cause the reported financial information not to be indicative of future
operating results.
INTERIM FINANCIAL INFORMATION
The statement of revenues and certain expenses for the period from
January 1, 2000 to May 31, 2000 is unaudited. In the opinion of management, the
unaudited financial information contains all adjustments, consisting of normal
recurring accruals, necessary for a fair presentation of the statements of
revenues and certain expenses for the Portfolio for the unaudited interim
period.
SIGNIFICANT ACCOUNTING POLICIES
The accompanying statements were prepared on the accrual basis of
accounting. All leases are classified as operating leases, and rental revenue is
recognized on a straight-line basis over the terms of the leases.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during the
periods presented. Actual results could differ from those estimates.
2. LEASING ACTIVITY
Future minimum rental income due under non-cancelable operating leases
with tenants in effect as of December 31, 1999 is as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
---- ------
<S> <C>
2000 ......................................... $1,240
2001 ......................................... 1,148
2002 ......................................... 968
2003 ......................................... 834
2004 ......................................... 657
Thereafter ................................... 614
------
Total ................................ $5,461
======
</TABLE>
In addition to minimum rental payments, tenants pay reimbursements for
their pro rata share of specified operating expenses, which amounted to $35 and
$15 for the year ended December 31, 1999 and for the five months ended May 31,
2000 (unaudited), respectively. Certain leases contain options to renew.
<PAGE> 10
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To AMB Property Corporation:
We have audited the accompanying combined statement of revenues and
certain expenses of the Beacon Centre Portfolio (as defined in Note 1) for the
year ended December 31, 1999. This combined financial statement is the
responsibility of the management of the Beacon Centre Portfolio. Our
responsibility is to express an opinion on this combined financial statement
based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statement
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying combined statement of revenues and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Form 8-K of AMB Property
Corporation. Material amounts, described in Note 1 to the combined statement of
revenues and certain expenses, that would not be comparable to those resulting
from the proposed future operations of the Beacon Centre Portfolio are excluded
and the financial statement is not intended to be a complete presentation of the
revenues and expenses of the Beacon Centre Portfolio.
In our opinion, the combined financial statement referred to above
presents fairly, in all material respects, the revenues and certain expenses of
the Beacon Centre Portfolio for the year ended December 31, 1999, in conformity
with accounting principles generally accepted in the United States.
ARTHUR ANDERSEN LLP
San Francisco, California
June 30, 2000
<PAGE> 11
BEACON CENTRE PORTFOLIO
COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1999 AND FOR THE
PERIOD FROM JANUARY 1, 2000 TO AUGUST 30, 2000 (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the
eight
For the months
year ended ended
December August 30,
31, 1999 2000
---------- -----------
(unaudited)
<S> <C> <C>
REVENUES
Rental revenues $ 21,574 $ 13,894
Other income 39 11
-------- --------
21,613 13,905
CERTAIN EXPENSES
Property operating expenses 4,456 3,040
Real estate taxes 2,600 1,806
-------- --------
7,056 4,846
-------- --------
REVENUES IN EXCESS OF CERTAIN EXPENSES $ 14,557 $ 9,059
======== ========
</TABLE>
The accompanying notes are an integral part of
these combined financial statements.
<PAGE> 12
BEACON CENTRE PORTFOLIO
NOTES TO STATEMENTS OF REVENUES
AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PROPERTIES ACQUIRED
The accompanying statements of revenues and certain expenses include the
operations of the Beacon Centre Portfolio (the "Portfolio"). AMB Property
Corporation (the "Company") acquired the Portfolio from an unrelated party on
September 1, 2000 for a purchase price of approximately $160,600 (unaudited),
which includes the assumption of the mortgage payable (see Note 3). The
Portfolio is located in Miami, Florida, consists of 28 industrial buildings and
aggregates approximately 2.3 million square feet (unaudited).
BASIS OF PRESENTATION
The accompanying combined statements of revenues and certain expenses
have been prepared for the purpose of complying with Rule 3-14 of the Securities
and Exchange Commission's rules and regulations.
The accompanying statements of revenues and certain expenses exclude
certain expenses, such as interest, depreciation and amortization, professional
fees and other costs not directly related to the future operation of the
Portfolio, that may not be comparable to the expenses expected to be incurred by
the Company in the proposed future operations of the Portfolio. Management is
not aware of any material factors relating to the Portfolio that would cause the
reported financial information not to be indicative of future operating results.
INTERIM FINANCIAL INFORMATION
The statement of revenues and certain expenses for the period from
January 1, 2000 to August 30, 2000 is unaudited. In the opinion of management,
the unaudited financial information contains all adjustments, consisting of
normal recurring accruals, necessary for a fair presentation of the statement of
revenues and certain expenses for the Portfolio for the unaudited interim
period.
SIGNIFICANT ACCOUNTING POLICIES
The accompanying statements were prepared on the accrual basis of
accounting. All leases are classified as operating leases, and rental revenue is
recognized on a straight-line basis over the terms of the leases.
USES OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during the
periods presented. Actual results could differ from those estimates.
2. LEASING ACTIVITY
Future minimum rental income due under non-cancelable operating leases
with tenants in effect as of December 31, 1999 is as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
---- -------
<S> <C>
1999 ........................................ $17,410
2000 ........................................ 17,150
2001 ........................................ 14,182
2002 ........................................ 10,992
2003 ........................................ 7,242
Thereafter .................................. 15,281
-------
Total ............................... $82,257
=======
</TABLE>
In addition to minimum rental payments, tenants pay reimbursements for
their pro rata share of specified operating expenses and real estate taxes,
which amounted to $2,244 and $1,643 for the year ended December 31, 1999 and for
the period from January 1, 2000 to August 31, 2000 (unaudited), respectively.
Certain leases contain options to renew.
3. MORTGAGE PAYABLE
In connection with the purchase of the Portfolio, the Company assumed certain
mortgages payable with an aggregate principal value of $73,806 as of December
31, 1999. The mortgages payable require monthly principal and interest payments
and is secured by the deed of trust on the Portfolio properties. The mortgages
payable bear interest at 8.59% and is due in August 2010. The mortgages payable
have various financial and non-financial covenants.
<PAGE> 13
The scheduled maturities of the mortgage payable as of December 31, 1999
are as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
---- -------
<S> <C>
2000 ........................................ $ 1,558
2001 ........................................ 1,697
2002 ........................................ 1,848
2003 ........................................ 2,014
2004 ........................................ 2,194
Thereafter .................................. 64,495
-------
Total ............................... $73,806
=======
</TABLE>
<PAGE> 14
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To AMB Property Corporation:
We have audited the accompanying combined statement of revenues and
certain expenses of the AFCO Portfolio (as defined in Note 1) for the year ended
December 31, 1999. This combined financial statement is the responsibility of
the management of AFCO. Our responsibility is to express an opinion on this
combined financial statement based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statement
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying combined statement of revenues and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Form 8-K of AMB Property
Corporation. Material amounts, described in Note 1 to the combined statement of
revenues and certain expenses, that would not be comparable to those resulting
from the proposed future operations of the AFCO Portfolio are excluded and the
financial statement is not intended to be a complete presentation of the
revenues and expenses of the AFCO Portfolio.
In our opinion, the combined financial statement referred to above
presents fairly, in all material respects, the revenues and certain expenses of
the AFCO Portfolio for the year ended December 31, 1999, in conformity with
accounting principles generally accepted in the United States.
ARTHUR ANDERSEN LLP
San Francisco, California
March 24, 2000
<PAGE> 15
AFCO PORTFOLIO
COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1999 AND FOR THE
PERIOD FROM JANUARY 1, 2000 TO OCTOBER 31, 2000 (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the
ten
For the months
year ended ended
December October 31,
31, 1999 2000
---------- -----------
(unaudited)
<S> <C> <C>
REVENUES
Rental revenues $ 2,362 $ 2,123
Other income 256 213
-------- --------
2,618 2,336
CERTAIN EXPENSES
Property operating expenses 528 440
Real estate taxes 321 268
-------- --------
849 708
-------- --------
REVENUES IN EXCESS OF CERTAIN EXPENSES $ 1,769 $ 1,628
======== ========
</TABLE>
The accompanying notes are an integral part of
these combined financial statements.
<PAGE> 16
AFCO PORTFOLIO
NOTES TO COMBINED STATEMENTS OF REVENUES
AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PROPERTIES ACQUIRED
The accompanying combined statements of revenues and certain expenses
include the operations of the AFCO Portfolio (the Portfolio) (see "Basis of
Presentation" below). AMB Property Corporation (the Company) acquired the
Portfolio from an unrelated third party on November 1, 2000 for an initial
purchase price of approximately $15,000 (unaudited). The Portfolio includes 3
industrial buildings and three parking lots located in Albany, New York and
Jacksonville, Florida and aggregates approximately 0.2 million square feet
(unaudited).
BASIS OF PRESENTATION
The accompanying combined statements of revenues and certain expenses
have been prepared for the purpose of complying with Rule 3-14 of the Securities
and Exchange Commission's rules and regulations.
The accompanying combined financial statements of revenues and certain
expenses exclude certain expenses such as interest, depreciation and
amortization, professional fees and other costs not directly related to the
future operations of the Portfolio, that may not be comparable to the expenses
expected to be incurred by the Company in the proposed future operations of the
Portfolio. Management is not aware of any material factors relating to the
Portfolio that would cause the reported financial information not to be
indicative of future operating results.
INTERIM FINANCIAL INFORMATION
The statement of revenues and certain expenses for the period from
January 1, 2000 to October 31, 2000 is unaudited. In the opinion of management,
the unaudited financial information contains all adjustments, consisting of
normal recurring accruals, necessary for a fair presentation of the statements
of revenues and certain expenses for the Portfolio for the unaudited interim
period.
SIGNIFICANT ACCOUNTING POLICIES
The accompanying statements were prepared on the accrual basis of
accounting. All leases are classified as operating leases, and rental revenue is
recognized on a straight-line basis over the terms of the leases.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during the
periods presented. Actual results could differ from those estimates.
2. LEASING ACTIVITY
Future minimum rental income due under non-cancelable operating leases
with tenants in effect as of December 31, 1999 is as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
---- -------
<S> <C>
2000 .......................................... 2,614
2001 .......................................... 2,503
2002 .......................................... 1,904
2003 .......................................... 1,862
2004 .......................................... 1,745
Thereafter .................................... 17,224
-------
Total ................................. 27,852
=======
</TABLE>
In addition to minimum rental payments, tenants pay reimbursements for
their pro rata share of specified operating expenses, which amounted to $192 and
$160 for the year ended December 31, 1999 and for the ten months ended October
31, 2000 (unaudited), respectively. Certain leases contain options to renew.
3. MORTGAGES PAYABLE
In connection with the purchase of the Portfolio, the Company assumed
certain mortgages payable with an aggregate principal value of $13,070 as of
December 31, 1999. The mortgages payable require monthly principal and interest
payments and are secured by deeds of trust on certain of the Portfolio
properties. The mortgages payable bear fixed interest at rates ranging from
6.00% to 7.22% and are due between 2022 and 2023. The mortgages payable have
various financial and non-financial covenants. The weighted average fixed
interest rate on secured debt at December 31, 1999 was 6.92%.
The scheduled maturities of the mortgages payable as of December 31, 1999 are as
follows:
<PAGE> 17
<TABLE>
<CAPTION>
YEAR AMOUNT
---- -------
<S> <C>
2000 ........................................ $ 160
2001 ........................................ 225
2002 ........................................ 235
2003 ........................................ 250
2004 ........................................ 265
Thereafter .................................. 11,935
-------
Total ............................... $13,070
=======
</TABLE>
<PAGE> 18
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To AMB Property Corporation:
We have audited the accompanying combined statement of revenues and
certain expenses of the AFCO Investors Portfolio (as defined in Note 1) for the
year ended December 31, 1999. This combined financial statement is the
responsibility of the management of AFCO Investors, LLC. Our responsibility is
to express an opinion on this combined financial statement based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statement
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying combined statement of revenues and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Form 8-K of AMB Property
Corporation. Material amounts, described in Note 1 to the combined statement of
revenues and certain expenses, that would not be comparable to those resulting
from the proposed future operations of the AFCO Investors Portfolio are excluded
and the financial statement is not intended to be a complete presentation of the
revenues and expenses of the AFCO Investors Portfolio.
In our opinion, the combined financial statement referred to above
presents fairly, in all material respects, the revenues and certain expenses of
the AFCO Investors Portfolio for the year ended December 31, 1999, in conformity
with accounting principles generally accepted in the United States.
ARTHUR ANDERSEN LLP
San Francisco, California
March 24, 2000
<PAGE> 19
AFCO INVESTORS PORTFOLIO
COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1999 AND FOR THE
PERIOD FROM JANUARY 1, 2000 TO OCTOBER 31, 2000 (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the
For the ten months
year ended ended
December October 31,
31, 1999 2000
---------- -----------
(unaudited)
<S> <C> <C>
REVENUES
Rental revenues $ 953 $ 1,207
Other income 72 83
-------- --------
1,025 1,290
CERTAIN EXPENSES
Property operating expenses 269 224
Real estate taxes 46 38
-------- --------
315 262
-------- --------
REVENUES IN EXCESS OF CERTAIN EXPENSES $ 710 $ 1,028
======== ========
</TABLE>
The accompanying notes are an integral part of
these combined financial statements.
<PAGE> 20
AFCO INVESTORS PORTFOLIO
NOTES TO COMBINED STATEMENTS OF REVENUES
AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PROPERTIES ACQUIRED
The accompanying combined statements of revenues and certain expenses
include the operations of the AFCO Investors Portfolio (the Portfolio) (see
"Basis of Presentation" below). AMB Property Corporation (the Company) acquired
the Portfolio from an unrelated third party on November 1, 2000 for an initial
purchase price of approximately $12,500 (unaudited). The Portfolio includes 2
industrial buildings aggregating approximately 0.1 million square feet
(unaudited).
BASIS OF PRESENTATION
The accompanying combined statements of revenues and certain expenses
have been prepared for the purpose of complying with Rule 3-14 of the Securities
and Exchange Commission's rules and regulations.
The accompanying combined financial statements of revenues and certain
expenses exclude certain expenses such as interest, depreciation and
amortization, professional fees and other costs not directly related to the
future operations of the Portfolio, that may not be comparable to the expenses
expected to be incurred by the Company in the proposed future operations of the
Portfolio. Management is not aware of any material factors relating to the
Portfolio that would cause the reported financial information not to be
indicative of future operating results.
INTERIM FINANCIAL INFORMATION
The statement of revenues and certain expenses for the period from
January 1, 2000 to October 31, 2000 is unaudited. In the opinion of management,
the unaudited financial information contains all adjustments, consisting of
normal recurring accruals, necessary for a fair presentation of the statements
of revenues and certain expenses for the Portfolio for the unaudited interim
period.
SIGNIFICANT ACCOUNTING POLICIES
The accompanying statements were prepared on the accrual basis of
accounting. All leases are classified as operating leases, and rental revenue is
recognized on a straight-line basis over the terms of the leases.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during the
periods presented. Actual results could differ from those estimates.
2. LEASING ACTIVITY
Future minimum rental income due under non-cancelable operating leases
with tenants in effect as of December 31, 1999 is as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
---- ------
<S> <C>
2000 ............................................ 1,036
2001 ............................................ 754
2002 ............................................ 697
2003 ............................................ 469
2004 ............................................ 435
Thereafter ...................................... 704
------
Total ................................... 4,095
======
</TABLE>
In addition to minimum rental payments, tenants pay reimbursements for
their pro rata share of specified operating expenses, which amounted to $99 and
$83 for the year ended December 31, 1999 and for the ten months ended October
31, 2000 (unaudited), respectively. Certain leases contain options to renew.
3. MORTGAGES PAYABLE
In connection with the purchase of the Portfolio, the Company assumed
certain mortgages payable with an aggregate principal value of $8,911 as of
December 31, 1999. The mortgages payable require monthly principal and interest
payments and are secured by deeds of trust on certain of the Portfolio
properties. The mortgages payable bear interest at fixed rates ranging from
6.30% to 8.68% and are due between 2004 and 2022. The mortgages payable have
various financial and non-financial covenants. The weighted average fixed
interest rate on the mortgages payable at December 31, 1999 was 6.81%.
The scheduled maturities of the mortgages payable as of December 31, 1999 are as
follows:
<PAGE> 21
<TABLE>
<CAPTION>
YEAR AMOUNT
---- ------
<S> <C>
2000 ......................................... $ 187
2001 ......................................... 200
2002 ......................................... 194
2003 ......................................... 208
2004 ......................................... 233
Thereafter ................................... 7,889
------
Total ................................ $8,911
======
</TABLE>
<PAGE> 22
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To AMB Property Corporation:
We have audited the accompanying combined statement of revenues and
certain expenses of the AFCO Cargo I Associates, L.P. Portfolio (as defined in
Note 1) for the year ended December 31, 1999. This combined financial statement
is the responsibility of the management of AFCO Cargo I Associates, L.P. Our
responsibility is to express an opinion on this combined financial statement
based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statement
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying combined statement of revenues and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Form 8-K of AMB Property
Corporation. Material amounts, described in Note 1 to the combined statement of
revenues and certain expenses, that would not be comparable to those resulting
from the proposed future operations of the AFCO Cargo I Associates L.P.
Portfolio are excluded and the financial statement is not intended to be a
complete presentation of the revenues and expenses of the AFCO Cargo I
Associates L.P. Portfolio.
In our opinion, the combined financial statement referred to above
presents fairly, in all material respects, the revenues and certain expenses of
the AFCO Cargo I Associates L.P. Portfolio for the year ended December 31, 1999,
in conformity with accounting principles generally accepted in the United
States.
ARTHUR ANDERSEN LLP
San Francisco, California
March 24, 2000
<PAGE> 23
AFCO CARGO I ASSOCIATES L.P. PORTFOLIO
COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1999 AND FOR THE
PERIOD FROM JANUARY 1, 2000 TO OCTOBER 31, 2000 (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the
For the ten months
year ended ended
December October 31,
31, 1999 2000
---------- -----------
(unaudited)
<S> <C> <C>
REVENUES
Rental revenues $ 9,270 $ 8,330
Other income 183 123
-------- --------
9,453 8,453
CERTAIN EXPENSES
Property operating expenses 4,076 3,803
Real estate taxes 124 103
-------- --------
4,200 3,906
-------- --------
REVENUES IN EXCESS OF CERTAIN EXPENSES $ 5,253 $ 4,547
======== ========
</TABLE>
The accompanying notes are an integral part of
these combined financial statements.
<PAGE> 24
AFCO CARGO I ASSOCIATES PORTFOLIO
NOTES TO COMBINED STATEMENTS OF REVENUES
AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PROPERTIES ACQUIRED
The accompanying combined statements of revenues and certain expenses
include the operations of the AFCO Cargo I Associates Portfolio (the Portfolio)
(see "Basis of Presentation" below). AMB Property Corporation (the Company)
acquired the Portfolio from AFCO Cargo I Associates, L.P. on November 1, 2000
for an initial purchase price of approximately $62,000 (unaudited). The
Portfolio includes 8 industrial buildings located in Baltimore, Maryland,
Dallas, Texas, Los Angeles, California, and Seattle, Washington and aggregates
approximately 0.5 million square feet (unaudited).
BASIS OF PRESENTATION
The accompanying combined statements of revenues and certain expenses
have been prepared for the purpose of complying with Rule 3-14 of the Securities
and Exchange Commission's rules and regulations.
The accompanying combined financial statements of revenues and certain
expenses exclude certain expenses such as interest, depreciation and
amortization, professional fees and other costs not directly related to the
future operations of the Portfolio, that may not be comparable to the expenses
expected to be incurred by the Company in the proposed future operations of the
Portfolio. Management is not aware of any material factors relating to the
Portfolio that would cause the reported financial information not to be
indicative of future operating results.
INTERIM FINANCIAL INFORMATION
The statement of revenues and certain expenses for the period from
January 1, 2000 to October 31, 2000 is unaudited. In the opinion of management,
the unaudited financial information contains all adjustments, consisting of
normal recurring accruals, necessary for a fair presentation of the statements
of revenues and certain expenses for the Portfolio for the unaudited interim
period.
SIGNIFICANT ACCOUNTING POLICIES
The accompanying statements were prepared on the accrual basis of
accounting. All leases are classified as operating leases, and rental revenue is
recognized on a straight-line basis over the terms of the leases.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during the
periods presented. Actual results could differ from those estimates.
2. LEASING ACTIVITY
Future minimum rental income due under non-cancelable operating leases
with tenants in effect as of December 31, 1999 is as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
---- ------
<S> <C>
2000 ......................................... 6,903
2001 ......................................... 6,143
2002 ......................................... 5,276
2003 ......................................... 4,817
2004 ......................................... 3,502
Thereafter ................................... 7,616
------
Total ................................ 34,257
======
</TABLE>
In addition to minimum rental payments, tenants pay reimbursements for
their pro rata share of specified operating expenses, which amounted to $1,910
and $1,840 for the year ended December 31, 1999 and for the ten months ended
October 31, 2000 (unaudited), respectively. Certain leases contain options to
renew.
3. MORTGAGES PAYABLE
In connection with the purchase of the Portfolio, the Company assumed
certain mortgages payable with an aggregate principal value of $29,133 as of
December 31, 1999. The mortgages payable require monthly principal and interest
payments and are secured by deeds of trust on certain of the Portfolio
properties. The mortgages payable bear interest at fixed rates ranging from
7.53% to 12.00% and are due between 2005 and 2022. The mortgages payable have
various financial and non-financial covenants state in compliance. The weighted
average fixed interest rate on secured debt at December 31, 1999 was 8.54%.
<PAGE> 25
The scheduled maturities of the mortgages payable as of December 31, 1999 are as
follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
---- ------
<S> <C>
2000 ......................................... 739
2001 ......................................... 817
2002 ......................................... 888
2003 ......................................... 979
2004 ......................................... 1,068
Thereafter ................................... 24,642
------
Total ................................ 29,133
======
</TABLE>
<PAGE> 26
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To AMB Property Corporation:
We have audited the accompanying combined statement of revenues and
certain expenses of the West Pac Portfolio (as defined in Note 1) for the year
ended December 31, 1999. This combined financial statement is the responsibility
of the management of West Pac L.P. Our responsibility is to express an opinion
on this combined financial statement based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statement
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying combined statement of revenues and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Form 8-K of AMB Property
Corporation. Material amounts, described in Note 1 to the combined statement of
revenues and certain expenses, that would not be comparable to those resulting
from the proposed future operations of the West Pac Portfolio are excluded and
the financial statement is not intended to be a complete presentation of the
revenues and expenses of the West Pac Portfolio.
In our opinion, the combined financial statement referred to above
presents fairly, in all material respects, the revenues and certain expenses of
the West Pac Portfolio for the year ended December 31, 1999, in conformity with
accounting principles generally accepted in the United States.
ARTHUR ANDERSEN LLP
San Francisco, California
March 24, 2000
<PAGE> 27
WEST PAC PORTFOLIO
COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1999 AND FOR THE
PERIOD FROM JANUARY 1, 2000 TO OCTOBER 31, 2000 (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the
For the ten months
year ended ended
December October 31,
31, 1999 2000
---------- -----------
(unaudited)
<S> <C> <C>
REVENUES
Rental revenues $ 2,611 $ 2,327
Other income 15 20
-------- --------
2,626 2,347
CERTAIN EXPENSES
Property operating expenses 1,222 1,333
Real estate taxes 265 221
-------- --------
1,487 1,554
-------- --------
REVENUES IN EXCESS OF CERTAIN EXPENSES $ 1,139 $ 793
======== ========
</TABLE>
The accompanying notes are an integral part of
these combined financial statements.
<PAGE> 28
WEST PAC PORTFOLIO
NOTES TO COMBINED STATEMENTS OF REVENUES
AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PROPERTIES ACQUIRED
The accompanying combined statements of revenues and certain expenses
include the operations of the West Pac Portfolio (the Portfolio) (see "Basis of
Presentation" below). AMB Property Corporation (the Company) acquired the
Portfolio from an unrelated third party on November 1, 2000 for an initial
purchase price of approximately $9,870 (unaudited). The Portfolio includes 3
industrial buildings located in Washington, D.C. and aggregates approximately
0.1 million square feet (unaudited).
BASIS OF PRESENTATION
The accompanying combined statements of revenues and certain expenses
have been prepared for the purpose of complying with Rule 3-14 of the Securities
and Exchange Commission's rules and regulations.
The accompanying combined financial statements of revenues and certain
expenses exclude certain expenses such as interest, depreciation and
amortization, professional fees and other costs not directly related to the
future operations of the Portfolio, that may not be comparable to the expenses
expected to be incurred by the Company in the proposed future operations of the
Portfolio. Management is not aware of any material factors relating to the
Portfolio that would cause the reported financial information not to be
indicative of future operating results.
INTERIM FINANCIAL INFORMATION
The statement of revenues and certain expenses for the period from
January 1, 2000 to October 31, 2000 is unaudited. In the opinion of management,
the unaudited financial information contains all adjustments, consisting of
normal recurring accruals, necessary for a fair presentation of the statements
of revenues and certain expenses for the Portfolio for the unaudited interim
period.
SIGNIFICANT ACCOUNTING POLICIES
The accompanying statements were prepared on the accrual basis of
accounting. All leases are classified as operating leases, and rental revenue is
recognized on a straight-line basis over the terms of the leases.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during the
periods presented. Actual results could differ from those estimates.
2. LEASING ACTIVITY
Future minimum rental income due under non-cancelable operating leases
with tenants in effect as of December 31, 1999 is as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
---- ------
<S> <C>
2000 ......................................... $1,554
2001 ......................................... 1,443
2002 ......................................... 844
2003 ......................................... 800
2004 ......................................... 683
Thereafter ................................... 2,531
------
Total ................................ $7,855
======
</TABLE>
In addition to minimum rental payments, tenants pay reimbursements for
their pro rata share of specified operating expenses, which amounted to $762 and
$780 for the year ended December 31, 1999 and for the ten months ended October
31, 2000 (unaudited), respectively. Certain leases contain options to renew.
<PAGE> 29
AMB PROPERTY CORPORATION
PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
BACKGROUND
The accompanying unaudited pro forma condensed consolidated balance sheet as of
September 30, 2000 has been prepared to reflect the acquisition of the AFCO Air
Cargo Portfolio and $75 million unsecured senior notes offering subsequent to
September 30, 2000 by AMB Property, L.P., a Delaware limited partnership (the
"Operating Partnership") in which AMB Property Corporation (the "Company") is
the sole general partner, as if such transaction had occurred on September 30,
2000.
The accompanying unaudited pro forma condensed consolidated statement of
operations for the nine months ended September 30, 2000 has been prepared to
reflect: (i) the incremental effect of the acquisitions of properties by the
Operating Partnership in 2000 (the "2000 Acquisitions"), (ii) the sale of Series
F, G and H Cumulative Redeemable Preferred Units of AMB Property II, L.P., a
subsidiary of the Operating Partnership, the incremental effect of the
disposition of properties by the Operating Partnership in 2000 (the "2000
Dispositions") and the $130 million unsecured senior notes offering (the "2000
Notes Offerings") as if such transactions and adjustments had occurred on
January 1, 1999 and were carried forward through September 30, 2000.
The accompanying unaudited pro forma condensed consolidated statement of
operations for the year ended December 31, 1999 has been prepared to reflect:
(i) the incremental effect of the acquisition of properties during 1999 by the
Operating Partnership (the "1999 Property Acquisitions"), (ii) the sale of
Series D, E, F, G and H Cumulative Redeemable Preferred Units AMB Property II,
L.P., and the application of the resulting net proceeds, (iii) the divestiture
of certain properties during 1999, (iv) the 2000 Dispositions, (v) the 2000
Property Acquisitions and the 2000 Notes Offerings as if such transactions and
adjustments had occurred on January 1, 1999 and were carried forward through
December 31, 1999.
These unaudited pro forma condensed consolidated statements should be read in
connection with the historical consolidated financial statements and notes
thereto included in the Company's and Operating Partnership's Annual Reports on
Form 10-K for the year ended December 31, 1999 and Quarterly Reports on Form
10-Q for the quarter ended September 30, 2000. In the opinion of management, the
pro forma condensed consolidated financial information provides for all
adjustments necessary to reflect the effects of the above transactions.
The pro forma information is unaudited and is not necessarily indicative of the
consolidated results that would have occurred if the transactions and
adjustments reflected therein had been consummated in the period or on the date
presented, or on any particular date in the future, nor does it purport to
represent the financial position, results of operations or cash flows for future
periods.
3
<PAGE> 30
AMB PROPERTY CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2000 (UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
COMPANY(1) ACQUISITION(2) PRO FORMA
----------- -------------- -----------
<S> <C> <C> <C>
ASSETS
Investments in real estate, net ...................... $ 3,854,394 $ 99,385 $ 3,953,779
Cash and cash equivalents ............................ 18,804 -- 18,804
Restricted cash and cash equivalents ................. 19,036 -- 19,036
Other assets ......................................... 210,808 500 211,308
----------- ----------- -----------
Total assets ................................... $ 4,103,042 $ 99,885 $ 4,202,927
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Secured debt ......................................... $ 825,477 $ 48,400 $ 873,877
Unsecured credit facility ............................ 233,000 (28,415) 204,585
Unsecured senior debt securities ..................... 455,000 75,000 530,000
Other liabilities .................................... 144,104 -- 144,104
----------- ----------- -----------
Total liabilities .............................. 1,657,581 94,985 1,752,566
----------- ----------- -----------
Minority interests ................................... 672,450 4,900 677,350
----------- ----------- -----------
Stockholders' Equity
Series A Preferred Stock ........................... 96,100 -- 96,100
Common Shares ..................................... 841 -- 841
Additional paid-in capital ......................... 1,632,655 -- 1,632,655
Retained earnings .................................. 43,438 -- 43,438
Accumulated other comprehensive income ............. (23) -- (23)
----------- ----------- -----------
Total stockholders' equity ..................... 1,773,011 -- 1,773,011
----------- ----------- -----------
Total liabilities and stockholders' equity ..... $ 4,103,042 $ 99,885 $ 4,202,927
=========== =========== ===========
</TABLE>
4
<PAGE> 31
AMB PROPERTY CORPORATION
NOTES AND ADJUSTMENTS TO PRO FORMA
CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2000
(UNAUDITED, DOLLARS IN THOUSANDS)
(1.) Reflects the historical condensed consolidated balance sheet of AMB
Property Corporation (the "Company") as of September 30, 2000. See the
historical consolidated financial statements and notes thereto included in the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
1999.
(2.) Reflects the acquisition of the AFCO Air Cargo Portfolio on November 7,
2000 for approximately $98,900. The purchase consisted of approximately $48,200
in cash, $48,400 of assumed debt and $2,300 of Operating Partnership units. The
seller retained an approximate 5% interest in the portfolio. The cash portion of
the acquisition price was funded with proceeds from a $75,000 unsecured senior
notes offering.
5
<PAGE> 32
AMB PROPERTY CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
2000 PROPERTY
COMPANY(1) DISPOSITIONS(2) ACQUISITIONS(3) OTHER(4) PRO FORMA
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REVENUES
Rental revenues $ 337,356 $ (8,716) $ 39,788 $ -- $ 368,428
Equity in earnings of unconsolidated
joint venture 4,006 -- -- -- 4,006
Investment management and other income 3,811 5,036 -- -- 8,847
------------ ------------ ------------ ------------ ------------
Total revenues 345,173 (3,680) 39,788 -- 381,281
OPERATING EXPENSES
Property operating expenses
and real estate taxes 77,455 (2,662) 14,268 -- 89,061
General, administrative and other 17,322 -- -- -- 17,322
Depreciation and amortization 65,135 (123) 5,558 -- 70,570
Interest expense 62,906 -- -- 18,270 81,176
------------ ------------ ------------ ------------ ------------
Total operating expenses 222,818 (2,285) 19,826 18,270 258,129
------------ ------------ ------------ ------------ ------------
Income from operations before
minority interests 122,355 (895) 19,962 (18,270) 123,152
Minority interests' share of net
income (31,723) 54 (1,198) (1,946) (34,813)
------------ ------------ ------------ ------------ ------------
Net income before gain from divestitures 90,632 (841) 18,764 (20,216) 88,339
Preferred stock dividends (6,375) -- -- -- (6,375)
------------ ------------ ------------ ------------ ------------
Net income available to common
stockholders before gain from divestitures $ 84,257 $ (841) $ 18,764 $ (20,216) $ 81,964
============ ============ ============ ============ ============
Net income per common share:
Basic $ 1.00 $ 0.98
============ ============
Diluted $ 1.00 $ 0.97
============ ============
Weighted average common shares outstanding:
Basic 83,973,884 83,973,884
============ ============
Diluted 84,237,861 84,237,861
============ ============
</TABLE>
6
<PAGE> 33
AMB PROPERTY CORPORATION
NOTES AND ADJUSTMENTS TO PRO FORMA
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT SHARE AND UNIT DATA)
(1.) Reflects the historical condensed consolidated operations of AMB Property
Corporation (the "Company") for the nine months ended September 30, 2000. See
the historical consolidated financial statements and notes thereto included in
the Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
2000. The Company is the sole general partner of AMB Property, L.P., a Delaware
limited partnership (the "Operating Partnership").
(2.) Reflects the elimination of the historical revenues and expenses for the
applicable period related to the 2000 Dispositions. The Operating Partnership
disposed of 9 industrial and 1 retail properties during the nine month period
ended September 30, 2000 for the total proceeds of $107,900 and a net gain of
$6,200. The interest income adjustment relates to the mortgage note receivable
of $79,000 from the buyer of one of the properties.
(3.) The following reflects the incremental effects of the 2000 Property
Acquisitions during the nine month period ended September 30, 2000 based on the
historical operations of such properties for the periods prior to acquisition by
the Operating Partnership:
<TABLE>
<CAPTION>
REAL ESTATE
TAXES AND REVENUES IN
PROPERTY EXCESS OF
ACQUISITION RENTAL OPERATING CERTAIN
DATE REVENUES EXPENSES EXPENSES
----------- -------- ------------ ------------
<S> <C> <C> <C> <C>
J.A. Green Portfolio ............... 6/7/00 $ 3,643 $ 1,557 $ 2,086
Magnum Realty Corp. ................ 6/7/00 628 313 315
Beacon Centre ...................... 9/1/00 13,905 4,846 9,059
AFCO Portfolio ..................... 11/7/00 2,336 708 1,628
AFCO Investors Portfolio ........... 11/7/00 1,290 262 1,028
AFCO Cargo I ....................... 11/7/00 8,453 3,906 4,547
West Pac Portfolio ................. 11/7/00 2,347 1,554 793
-------- -------- --------
Audited total ................. 32,602 13,146 19,456
AMB Meadowlands Industrial Park .... 5/12/00 846 70 776
Gateway 58 ......................... 6/23/00 915 172 743
Bennington Corp. Center ............ 5/10/00 566 86 480
Van Nuys Distribution .............. 3/17/00 -- -- --
Chartwell Distribution ............. 5/4/00 386 64 322
Doolittle Distribution ............. 1/7/00 23 4 19
Normandie Industrial ............... 4/25/00 324 47 277
Del Amo Industrial Center .......... 9/29/00 1,530 126 1,404
DFW Airfreight ..................... 6/1/00 1,301 339 962
JFK Airport Park ................... 5/12/00 405 89 316
Atlantic Distribution Center ....... 9/28/00 558 90 468
Newark Airport I & II .............. 1/7/00 16 3 13
Meadowslands Cross Dock I .......... 3/22/00 138 29 109
Seattle Airport Industrial ......... 8/10/00 178 3 175
-------- -------- --------
$ 39,788 $ 14,268 $ 25,520
======== ======== ========
</TABLE>
The Operating Partnership purchased the 2000 Property Acquisitions with proceeds
from the sale of Manhattan Village and the issuance of Series F, G and H
Cumulative Redeemable Preferred Limited Partnership Units, borrowings on the
unsecured credit facility, the $130,000 unsecured senior notes offerings and the
assumption of mortgage indebtedness. The adjustments reflect additional interest
expense related to borrowings on the unsecured credit facility and assumption of
mortgage indebtedness related to the 2000 Property Acquisitions.
The Van Nuys Distribution was vacant upon acquisition and is in the process of
being leased. As such, no property operations have been reflected in the
accompanying pro forma statement of operations related to this acquisition.
Also reflects the estimated incremental depreciation and amortization for the
2000 Property Acquisitions based on estimated useful lives of 40 years.
The Operating Partnership acquired their interest in Beacon Centre through a
special purpose entity and title of the property is expected to transfer from
the special purpose entity to the Operating Partnership before March 27, 2001.
(4.) On September 1, 2000, AMB Property II, L.P., one of the Operating
Partnership's subsidiaries, issued and sold 840,000 8.125% Series H Cumulative
Redeemable Preferred Limited Partnership Units at a price of $50.00 per unit in
a private placement. Distributions are cumulative from the date of issuance and
payable quarterly in arrears at a rate per unit equal to $4.0625 per annum. The
Series H Preferred Units are redeemable by AMB Property II, L.P. on or after
September 1, 2005, subject to certain conditions, for cash at a redemption price
equal to $50.00 per unit, plus accumulated and unpaid distributions thereon, if
any, to the redemption date. The Series H Preferred Units are exchangeable, at
specified times and subject to certain conditions, on a one-for-one basis, for
shares of the Company's Series H Preferred Stock. The Operating Partnership used
the funds to partially repay borrowings under its unsecured credit facility and
for general corporate purposes.
On August 29, 2000, AMB Property II, L.P. issued and sold 20,000 7.95% Series G
Cumulative Redeemable Preferred Limited Partnership Units at a price of $50.00
per unit in a private placement. Distributions are cumulative from the date of
issuance and payable quarterly in arrears at a rate per unit equal to $3.975 per
annum. The Series G Preferred Units are redeemable by AMB Property II, L.P. on
or after August 29, 2005, subject to certain conditions, on a one-for-one basis,
for shares of the Company's Series G Preferred Stock. The Operating Partnership
used the funds for general corporate purposes.
On March 22, 2000, AMB Property II, L.P. issued and sold 397,439 7.95% Series F
Cumulative Redeemable Preferred Limited Partnership Units at a price of $50.00
per unit in a private placement. Distributions are cumulative from the date of
issuance and payable quarterly in arrears at a rate per unit equal to $3.975 per
annum. The Series F Preferred Units are redeemable by AMB Property II, L.P. on
or after March 22, 2005, subject to certain conditions, for cash at a redemption
price equal to $50.00 per unit, plus accumulated and unpaid distributions
thereon, if any, to the redemption date. The Series F Preferred Units are
exchangeable, at specified times and subject to certain conditions, on a
one-for-one basis, for shares of the Company's Series F Preferred Stock. The
Operating Partnership used the funds to partially repay borrowings under its
unsecured credit facility and for general corporate purposes.
The adjustments reflect an adjustment to interest expense related to borrowings
on the credit facility to fund acquisitions net of pay downs on the credit
facility with proceeds from the dispositions, the Preferred Unit offerings and
the $130,000 unsecured notes offerings. The adjustments also reflect $2,723
related to Series F, G and H Preferred Unit distributions.
7
<PAGE> 34
AMB PROPERTY CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
2000
1999 PROPERTY 1999 2000 PROPERTY PRO
COMPANY ACQUISITIONS DISPOSITIONS DISPOSITIONS ACQUISITIONS OTHER FORMA
(1) (2) (3) (4) (5) (6) (7)
------------ ------------- ----------- ------------ -------------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
Rental revenues ...................... $ 439,658 $ 29,497 $(69,789) $(11,622) $ 65,582 $ -- $ 453,326
Investment management and other
Income ............................. 8,525 -- -- 6,715 -- -- 15,240
------------ -------- -------- -------- -------- -------- ---------
Total revenues ..................... 448,183 29,497 (69,789) (4,907) 65,582 -- 468,566
------------ -------- -------- -------- -------- -------- ---------
OPERATING EXPENSES
Real estate taxes and property
Operating expenses .............. 107,923 7,671 (19,125) (3,586) 21,393 10,237 114,276
Interest expense ..................... 88,681 -- -- -- -- -- 98,918
Depreciation and amortization ........ 67,505 4,204 (4,609) (304) 9,511 -- 76,307
General, administrative and
other .............................. 25,223 -- -- -- -- -- 25,223
------------ -------- -------- -------- -------- -------- ---------
Total operating expenses .... 289,332 11,875 (23,734) (3,890) 30,904 10,237 314,724
------------ -------- -------- -------- -------- -------- ---------
Income from operations before
minority interests .............. 158,851 17,622 (46,055) (1,017) 34,678 (10,237) 153,842
------------ -------- -------- -------- -------- -------- ---------
Minority interests' share of
net income ...................... (31,478) (881) 2,303 51 (1,734) (7,858) (39,597)
------------ -------- -------- -------- -------- -------- ---------
Net income before gain from
disposition of real
estate..................... 127,373 16,741 (43,752) (966) 32,944 (18,095) 114,245
Preferred stock dividends ............ (8,500) -- -- -- -- -- (8,500)
============ ======== ======== ======== ======== ======== =========
Net income available to common
stockholders before gain from
Divestiture and extraordinary
items ............................ $ 118,873 $ 16,741 $(43,752) $ (966) $ 32,944 $(18,095) $ 105,745
============ ======== ======== ======== ======== ======== =========
Net income per common share
before gain from Divestiture
and extraordinary items:
Basic .............................. $ 1.38 $ 1.21
============ ==========
Diluted ............................ $ 1.38 $ 1.20
============ ==========
Weighted average common shares:
Outstanding
Basic .............................. $ 86,271,862 87,748,862
============ ==========
Diluted ............................ $ 86,347,487 87,824,487
============ ==========
</TABLE>
<PAGE> 35
AMB PROPERTY CORPORATION
NOTES AND ADJUSTMENTS TO PRO FORMA
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT SHARE AND UNIT DATA)
(1.) Reflects the condensed historical consolidated operations of AMB Property
Corporation (the "Company") for the year ended December 31, 1999. See the
historical consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999.
(2.) The following reflects the incremental effects of properties acquired
during the year ended December 31, 1999 (the "1999 Property Acquisitions") based
on the historical operations of such properties for the periods prior to
acquisition by the Operating Partnership:
<TABLE>
<CAPTION>
REAL ESTATE
TAXES AND REVENUES IN
PROPERTY EXCESS OF
ACQUISITION RENTAL OPERATING CERTAIN
DATE REVENUES EXPENSES EXPENSES
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Columbia Business Center ........ 2/01/99 $ 150 $ (55) $ 95
Manekin Portfolio ............... 2/01/99 1,053 (376) 677
Technology Park II .............. 4/30/99 1,649 (304) 1,345
WOCAC Portfolio ................. 5/26/99 4,432 (1,342) 3,090
Junction Industrial Park ........ 6/23/99 1,493 (256) 1,237
Miami Airport Business Center ... 6/28/99 1,825 (617) 1,208
----------- ----------- -----------
Audited total .............. 10,602 (2,950) 7,652
Shawnee Industrial .............. 3/26/99 200 (32) 168
141 Campanelli Drive ............ 5/21/99 64 (10) 54
Sylvan Industrial ............... 6/30/99 558 (80) 478
Wilmington Avenue Warehouse ..... 8/11/99 784 (115) 669
Pardee Drive .................... 8/26/99 168 (79) 89
Murray Hill Parkway ............. 9/15/99 146 (41) 105
East Valley Warehouse ........... 9/29/99 - - -
Pioneer Alburtis ................ 9/29/99 813 (182) 631
Williams & Burroughs ............ 9/30/99 865 (270) 595
Beltway Distribution Center ..... 10/20/99 1,247 (229) 1,018
AMB O'Hare Center ............... 10/26/99 1,739 (780) 959
Willingham Drive ................ 10/19/99 109 (293) (184)
Meadow Lane ..................... 11/5/99 431 (126) 305
Carson Industrial ............... 12/14/99 2,025 (350) 1,675
Los Nietos Business Center ...... 12/22/99 1,179 (305) 874
Southfield Industrial ........... 12/7/99 6,026 (912) 5,114
Wood Dale Industrial ............ 12/16/99 1,536 (626) 910
Murray Hill Parkway ............ 12/3/99 523 (181) 342
Linden Industrial ............... 12/30/99 483 (111) 372
----------- ----------- -----------
$ 29,497 $ (7,671) $ 21,826
=========== =========== ===========
</TABLE>
The Operating Partnership purchased the 1999 Property Acquisitions with proceeds
from the Divestiture (as defined below), borrowings on the unsecured credit
facility, the assumption of mortgage indebtedness and the issuance of Operating
Partnership units. The adjustments reflect additional interest expense related
to borrowings on the unsecured credit facility and assumption of mortgage
indebtedness related to the 1999 Property Acquisitions.
The East Valley Warehouse was vacant upon acquisition and is in the process of
being leased. As such, no property operations have been reflected in the
accompanying pro forma statement of operations related to this acquisition.
Also reflects the estimated incremental depreciation and amortization for the
1999 Property Acquisitions based on estimated useful lives of 40 years.
The Operating Partnership contributed the WOCAC Portfolio to AMB Institutional
Alliance Fund I, L.P. (the "Alliance Fund I") on September 24, 1999. The
Operating Partnership is projected to hold an approximate 20% general
partnership interest therein upon final closing of the Alliance Fund I. The
Operating Partnership consolidates the Alliance Fund I for financial reporting
purposes. The Alliance Fund I obtained an $80,000 secured credit facility to
acquire the WOCAC Portfolio from the Operating Partnership. The adjustments also
reflect additional interest expense related to this secured credit facility. The
Operating Partnership received approximately $100,000 from the Alliance Fund I
for its contribution of the WOCAC Portfolio. The Operating Partnership used the
$100,000 in proceeds to partially repay amounts outstanding under the unsecured
credit facility. The adjustments also include a reduction of interest expense
related to this transaction. Minority interest of $768 has been reflected in the
accompanying pro forma statement of operations related to the WOCAC Portfolio.
10
<PAGE> 36
(3.) On March 9, 1999, the Operating Partnership signed three definitive
agreements with BPP Retail, LLC ("BPP Retail"), a co-investment entity between
Burnham Pacific Properties ("BPP") and the California Public Employees'
Retirement System ("CalPERS"), pursuant to which, if fully consummated, BPP
Retail would have acquired up to 28 retail shopping centers from the Operating
Partnership, totaling 5.1 million square feet, for an aggregate price of
$663,400. The disposition of three of the properties was subject to the consent
of one of the Operating Partnership's joint venture partners, which did not
consent to the sale of these properties. As a result, the price with respect to
the 25 remaining properties, totaling approximately 4.3 million square feet, was
approximately $560,300. Pursuant to the agreements, BPP Retail acquired the 25
centers in three separate transactions (the "Divestiture"). Under the
agreements, the Operating Partnership had the right to extend the closing dates
for a period of up to either 20 or 50 days. The Operating Partnership exercised
this right with respect to the first and second transactions, which closed on
June 15, 1999 and August 4, 1999, respectively. Pursuant to the closing of the
first transaction, BPP Retail acquired nine retail shopping centers, totaling
approximately 1.4 million square feet, for an aggregate price of approximately
$207,400. The Operating Partnership used the net proceeds from the first
transaction to repay secured debt of $35,100 (including prepayment penalties of
$3,300) related to the properties divested, to partially pay down $96,400 under
the Operating Partnership's unsecured credit facility, and $72,200 for property
acquisitions and for general corporate purposes. The first transaction resulted
in an approximate gain of $11,600 and an approximate extraordinary loss of
$1,500, consisting of prepayment penalties with an off-set for the write-off of
debt premiums related to the indebtedness extinguished. On August 4, 1999, the
second transaction with BPP Retail closed. Pursuant to the closing of the second
transaction, BPP Retail acquired 12 of the Operating Partnership's retail
shopping centers, totaling approximately 2.0 million square feet, for an
aggregate price of $245,800. The Operating Partnership used the proceeds from
the second transaction to repay secured debt of $23,600 (including prepayment
penalties of $1,800) related to the properties divested, to partially pay down
$111,700 under the Operating Partnership's unsecured credit facility, to pay
$1,000 in transaction expenses, and $107,200 for potential property acquisitions
and/or like-kind exchanges and for general corporate purposes. The second
transaction resulted in an approximate gain of $21,500 and an extraordinary loss
of approximately $1,300, consisting of prepayment penalties of approximately
$1,800 offset by the write-off of approximately $500 in debt premiums related to
the indebtedness extinguished. In addition, the Operating Partnership entered
into a definitive agreement, subject to a financing condition, with BPP,
pursuant to which, if fully consummated, BPP would have acquired up to six
additional retail centers, totaling approximately 1.5 million square feet, for
approximately $284,400. On June 30, 1999, this agreement was terminated pursuant
to its terms as a result of BPP's decision not to waive the financing condition.
The Operating Partnership closed the third transaction of the Divestiture on
December 1, 1999. The Operating Partnership used the proceeds of approximately
$107,100 from the third transaction to pay $1,000 in transaction expenses, and
$106,100 for potential property acquisitions and/or like-kind exchanges and for
general corporate purposes. The adjustments reflect the elimination of the real
estate assets being divested in connection with the third transaction of the
Divestiture. Of the pro forma balance in cash and cash equivalents,
approximately $94,500 represents cash in escrow. The third transaction resulted
in an estimated gain of approximately $12,000. The gain has been allocated among
the Company and the limited partners based on their respective ownership of the
Operating Partnership as of September 30, 1999, resulting in minority interest
of $598.
Reflects the elimination of the historical revenues and expenses for the year
ended December 31, 1999 related to the real estate assets divested in connection
with the Divestiture. The interest expense adjustment consists of a reduction of
interest related to the mortgage debt on the properties divested of $4,928 and
interest related to the partial pay down of the unsecured credit facility with
proceeds from the first and second transactions related to the Divestiture of
$6,075.
(4.) Reflects the elimination of the historical revenues and expenses for 1999
related to the 2000 dispositions.
(5.) The following reflects the historical operations for 2000 related to the
2000 Property Acquisitions:
<PAGE> 37
<TABLE>
<CAPTION>
REAL ESTATE
TAXES AND REVENUES IN
PROPERTY EXCESS OF
ACQUISITION RENTAL OPERATING CERTAIN
DATE REVENUES EXPENSES EXPENSES
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
J.A. Green Portfolio ............ 6/7/00 $ 8,742 $ 3,737 $ 5,005
Magnum Realty Corp. ............. 6/7/00 1,505 751 754
Beacon Centre .................. 9/1/00 21,613 7,056 14,557
AFCO Portfolio ................. 11/7/00 2,618 849 1,769
AFCO Investors Portfolio ........ 11/7/00 1,025 315 710
AFCO Cargo I ................... 11/7/00 9,453 4,200 5,253
West Pac Portfolio .............. 11/7/00 2,626 1,487 1,139
---------- ----------- -----------
Audited total .............. 47,582 18,395 29,187
AMB MeadowLands Industrial Park.. 5/12/00 2,340 194 2,146
Gateway 58 ...................... 6/23/00 1,917 358 1,559
Bennington Corp. Center ......... 5/10/00 1,590 242 1,348
Van Nuys Distribution ........... 3/17/00 -- -- --
Chartwell Distribution........... 5/4/00 1,137 189 948
Doolittle Distribution........... 1/7/00 1,191 199 992
Normandie Industrial ........... 4/25/00 1,028 150 878
Del Amo Industrial Center ....... 9/29/00 2,040 168 1,872
DFW Airfreight .................. 6/1/00 3,144 817 2,328
JFK Airport Park ................ 5/12/00 1,121 246 875
Atlantic Distribution Center..... 9/28/00 744 120 624
Newark Airport I & II ........... 1/7/00 833 181 652
Meadowslands Cross Dock I ....... 3/22/00 622 130 492
Seattle Airport Industrial....... 8/10/00 293 5 288
----------- ----------- -----------
$ 65,582 $ 21,393 $ 44,189
=========== =========== ===========
</TABLE>
The Operating Partnership purchased the 2000 Property Acquisitions with proceeds
from the dispositions, the issuance of preferred units, borrowings on the
unsecured credit facility, the unsecured notes offerings and the assumption of
mortgage indebtedness.
Also reflects the estimated incremental depreciation and amortization for the
2000 Property Acquisitions based on estimated useful lives of 40 years.
(6.) In May 1999, AMB Property II, L.P., a partnership in which a wholly owned
subsidiary of the Company owns an approximate 1% general partnership interest
and the Operating Partnership owns an approximate 99% common limited partnership
interest, issued and sold 1,595,337 units of 7.75% Series D Cumulative
Redeemable Preferred Units at a price of $50.00 per unit (the "Series D
Preferred Units") in a private placement. Distributions are cumulative from the
date of original issuance and are payable quarterly in arrears at a rate per
unit equal to $3.875 per annum. The Series D Preferred Units are redeemable by
AMB Property II, L.P. on or after May 5, 2004, subject to certain conditions,
for cash at a redemption price equal to $50.00 per unit, plus accumulated and
unpaid distributions thereon, if any, to the redemption date. The Series D
Preferred Units are exchangeable, at specified times and subject to certain
conditions, on a one-for-one basis, for shares of the Company's Series D
Preferred Stock. The Operating Partnership used the funds to partially repay
borrowings under the unsecured credit facility.
In August 1999, AMB Property II, L.P. issued and sold 220,440 units of 7.75%
Series E Cumulative Redeemable Preferred Units at a price of $50.00 per unit
(the "Series E Preferred Units") in a private placement. Distributions are
cumulative from the date of original issuance and are payable quarterly in
arrears at a rate per unit equal to $3.875 per annum. The Series E Preferred
Units are redeemable by AMB Property II, L.P. on or after August 31, 2004,
subject to certain conditions, for cash at a redemption price equal to $50.00
per unit, plus accumulated and unpaid distributions thereon, if any, to the
redemption date. The Series E Preferred Units are exchangeable, at specified
times and subject to certain conditions, on a one-for-one basis, for shares of
the Company's Series E Preference Stock. The Operating Partnership used the
funds to partially repay amounts outstanding under the unsecured credit facility
and for general corporate purposes.
As discussed in Note 2 to the Company's unaudited pro forma statement of
operations for the nine months ended September 30, 2000, AMB Property II, L.P.
issued Series F, G and H Cumulative Redeemable Preferred Limited Partnership
Units during 2000.
The adjustments reflect an adjustment to interest expense related to borrowings
on the credit facility to fund acquisitions net of pay downs on the credit
facility with proceeds from the preferred offerings, the dispositions, the
preferred unit offerings, and the $130,000 unsecured notes offerings. The
adjustments also reflect $7,835 related to Series D, E, F, G and H Preferred
Unit Distributions.
(7.) The pro forma taxable income of the Company for the year ended December 31,
1999 is approximately $88,000.
During December 1999, the Company repurchased approximately 1.4 million shares
of its common stock. The share repurchases are reflected in the number of pro
forma shares outstanding.
12
<PAGE> 38
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
AMB Property Corporation
(Registrant)
Date: December 14, 2000 By: /s/ MICHAEL A COKE
------------------------------------------
Michael A. Coke
Chief Financial Officer
and Executive Vice President
(Duly Authorized Officer and Principal
Financial and Accounting Officer
