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AMB Property Corp. Reports Operating Results (10-K)

February 29, 2012 | About:

AMB Property Corp. (AMB) filed Annual Report for the period ended 2011-12-31.

Amb Property Corp. has a market cap of $5.77 billion; its shares were traded at around $34.07 with a P/E ratio of 27.2 and P/S ratio of 9.1. The dividend yield of Amb Property Corp. stocks is 3.2%.

Highlight of Business Operations:

During the first part of 2011, we had lower debt balances as a result of repayment and repurchases of debt made in 2010 with proceeds from asset sales and the November 2010 equity offering. We reduced our outstanding debt at December 31, 2010 to $6.5 billion. In connection with the Merger and PEPR Acquisition, we added approximately $5.9 billion of debt at fair value at the beginning of June 2011 and approximately seven months of related interest expense in 2011. At December 31, 2011, our debt balance was $11.4 billion, a decrease from $12.1 billion at June 30, 2011, primarily due to repayments funded by proceeds received from the dispositions of properties. All of these activities have resulted in a lower weighted average effective interest rate (including amortization of premiums, discounts and deferred loan costs) of 5.58% in 2011, as compared with 6.48% in 2010.

We recognized net earnings of $59.9 million, $23.7 million and $28.1 million for the years ended December 31, 2011, 2010 and 2009, respectively. These earnings relate to our investment in unconsolidated investees that are accounted for on the equity method. The primary reason for the increase in 2011 over 2010 is due to the investments we acquired through the Merger, partially offset by the consolidation of PEPR. The earnings we recognize are impacted by: (i) variances in revenues and expenses of the entity; (ii) the size and occupancy rate of the portfolio of properties owned by the entity; (iii) our ownership interest in the entity; and (iv) fluctuations in foreign currency exchange rates used to translate our share of net earnings to U.S. dollars, if applicable. We manage the majority of the properties in which we have an ownership interest as part of our total owned and managed portfolio. See discussion of our portfolio results in the section, Portfolio Information. See also Note 6 to our Consolidated Financial Statements in Item 8 for further breakdown of our share of net earnings recognized.

In 2011, 2010 and 2009, we recorded impairment charges of $126.4 million, $44.3 million and $163.6 million, respectively, on certain of our investments in and advances to unconsolidated investees, notes receivable and other assets, as we did not believe these amounts to be recoverable based on the present value of the estimated future cash flows associated with these assets, including estimated sales proceeds or we believed the decline in fair value to be other than temporary.

If the intercompany debt is deemed short-term in nature, when the debt is remeasured, we recognize a gain or loss in earnings. We recognized net foreign currency exchange losses of $5.9 million and losses of $11.5 million in 2011 and 2010, respectively, and gains of $58.2 million in 2009, related to the remeasurement of debt. Predominantly the gains or losses recognized in earnings relate to the remeasurement of intercompany loans between the U.S. parent and certain consolidated subsidiaries in Japan and Europe and result from fluctuations in the exchange rates of U.S. dollars to the euro, Japanese yen, British pound sterling and Singapore dollar. In addition, we recognized net foreign currency exchange gains of $2.1 million and $0.4 million and losses of $22.6 million from the settlement of transactions with third parties during December 31, 2011, 2010 and 2009, respectively.

FFO, as defined by Prologis, attributable to common shares was $411.7 million, a negative $974.2 million and $185.5 million for 2011, 2010 and 2009, respectively. Core FFO attributable to common shares as defined by us was $593.9 million, $237.4 million and $416.7 million for the years ended 2011, 2010 and 2009, respectively. The increase in Core FFO is primarily due to the Merger and PEPR Acquisition, both of which substantially increased our investments in real estate properties directly and through our unconsolidated investments as discussed earlier. The reconciliations of Core FFO and FFO, as defined by Prologis, attributable to common shares to net earnings attributable to common shares computed under GAAP are as follows for the periods indicated (in thousands):

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