Specifically, the idustrial REIT says earnings growth from $17.8 million (21 cents per share) in asset disposition gains was offset by non-cash charges of $16.1 million (18 cents per share) for impairment reserves on all of the company's private equity investments in technology and e-commerce companies, and a $1.4 million (2 cents per share) depreciation charge for capitalized lease costs related to leases with Webvan Group Inc.
As a result, owner, manager, developer of some 93.7 million sf in 26 markets posted earnings per share of 33 cents, flat against the second quarter of 2000. Still, when combined with the first quarter, AMB remains 20.6% ahead of 2000's results through the first half of the year. Funds from Operations for the second quarter were 43 cents per share after charges, down more than 25% from the second quarter of 2000, and down 11.5% when comparing the two half-years.
Webvan -- AMB's third largest customer at quarter-end -- is ceasing operations in all markets and selling off its assets and business. As of June 30, 2001 Webvan had four leases totaling 843,970 sf with AMB, accounting for 0.8% or $3.6 million of annualized base rents. In addition to the depreciation charge, AMB wrote-off $1.4 million of straight-line rents receivable during the quarter.
With regard to the private equity investment, AMB chairman and CEO Hamid R. Moghadam says that in order to reflect changes in market conditions, "we decided to fully reserve against our remaining net investments in these companies and take the charge against earnings this quarter. We learned a great deal about the impact of technology on our business and are disappointed that these equity investments did not meet our financial expectations, but we believe that we have now put these challenges behind us."
On the upside, AMB reduced its share of total debt outstanding by $56 million, finishing the quarter with no outstanding borrowings on its $500 million unsecured credit facility and over $175 million of cash on its balance sheet. AMB's share of total debt-to-total market capitalization declined from the first quarter of 2001 by 170 basis points to 36.2%.
Shares of AMB were selling for $24.89 apiece in afternoon trading, off 21 cents from Tuesday's close. The company's 52-week stock price range is $22.50-$26.06.
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