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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
_________________________
FORM 8-K
_________________________
CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):
February 11, 2020
_________________________
American Assets Trust, Inc.
(Exact name of registrant as specified in its charter)
_________________________

Maryland
001-35030
27-3338708
(State or other jurisdiction
of incorporation)
(Commission
File No.)
(I.R.S. Employer
Identification No.)

11455 El Camino Real, Suite 200
San Diego, California 92130
(Address of principal executive offices and Zip Code)

(858) 350-2600
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report.)

_________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Securities registered pursuant to Section 12(b) of the Act:
Name of Registrant
Title of each class
Trading Symbol
Name of each exchange on which registered
American Assets Trust, Inc.
Common Stock, par value $0.01 per share
AAT
New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.






Item 2.02
Results of Operations and Financial Condition.

On February 11, 2020, American Assets Trust, Inc. (the “Company”) issued a press release regarding its financial results for the quarter and fiscal year ending December 31, 2019. Also on February 11, 2020, the Company made available on the "Investors" page of its website at www.americanassetstrust.com certain supplemental information concerning the Company’s financial results and operations for the quarter and fiscal year ending December 31, 2019. Copies of the press release and supplemental information are attached hereto as Exhibits 99.1 and 99.2, respectively.

Exhibits 99.1 and 99.2, are being furnished pursuant to Item 2.02 and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.


Item 7.01
Regulation FD Disclosure.

As discussed in Item 2.02 above, the Company issued a press release regarding its financial results for the quarter and fiscal year ending December 31, 2019 and made available on its website certain supplement information relating thereto.

The information being furnished pursuant to Item 7.01 and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.


Item 9.01
Financial Statements and Exhibits.
(d)    Exhibits:
The following exhibits are filed herewith:
Exhibit Number
 
Exhibit Description
99.1**
 
99.2**
 
104
 
Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document).
_____________________
** Furnished herewith


3


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
American Assets Trust, Inc.
 
By:
/s/ Robert F. Barton
 
Robert F. Barton
Executive Vice President, CFO
February 11, 2020
 
 


4
Exhibit


https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-aat2019q3a17.jpg

American Assets Trust, Inc. Reports Fourth Quarter and Year-End 2019 Financial Results

Net income available to common stockholders of $12.8 million and $45.7 million for the three months and year ended December 31, 2019, respectively, or $0.22 and $0.84 per diluted share, respectively
Funds From Operations per diluted share increased 19% and 5% year-over-year for the three months and year ended December 31, 2019, respectively, or $0.56 and $2.20 per diluted share, respectively
Same-store cash NOI increased 2.8% and decreased 0.1% year-over-year for the three months and year ended December 31, 2019, respectively

SAN DIEGO, California - 2/11/2020 - American Assets Trust, Inc. (NYSE: AAT) (the “company”) today reported financial results for its fourth quarter and year ended December 31, 2019.

Fourth Quarter Highlights
Net income available to common stockholders of $12.8 million and $45.7 million for the three months and year ended December 31, 2019, respectively, or $0.22 and $0.84 per diluted share, respectively
Funds From Operations increased 19% and 5% year-over-year to $0.56 and $2.20 per diluted share for the three months and year ended December 31, 2019, respectively, compared to the same periods in 2018
Same-store cash NOI increased 2.8% and decreased 0.1% year-over-year for the three months and year ended December 31, 2019, respectively, compared to the same periods in 2018. Excluding lease termination fees for the three months and year ended December 31, 2019, same-store cash NOI would have been 2.3% and 1.3%, respectively.
Leased approximately 81,000 comparable office square feet at an average straight-line basis and cash-basis contractual rent increase of 59% and 28%, respectively, during the three months ended December 31, 2019
Leased approximately 33,000 comparable retail square feet at an average straight-line basis and cash-basis contractual rent increase of 8% and decrease of 4%, respectively, during the three months ended December 31, 2019


Financial Results
Net income attributable to common stockholders was $12.8 million, or $0.22 per basic and diluted share for the three months ended December 31, 2019 compared to $6.7 million, or $0.14 per basic and diluted share for the three months ended December 31, 2018. For the year ended December 31, 2019, net income attributable to common stockholders was $45.7 million, or $0.84 per basic and diluted share compared to $19.7 million, or $0.42 per basic and diluted share, for the year ended December 31, 2018. The quarter-over-quarter and year-over-year increase is primarily due to a decrease in depreciation and demolition expense at Waikele Center attributed to the redevelopment of the former Kmart space, an increase in lease termination fees at Carmel Mountain Plaza attributed to the termination of our former ground lease, and an increase in annualized base rents at The Landmark at One Market, City Center Bellevue, and Lloyd District Portfolio.

During the fourth quarter of 2019, the company generated funds from operations (“FFO”) for common stockholders of $42.9 million, or $0.56 per diluted share, compared to $30.2 million, or $0.47 per diluted share, for the fourth quarter of 2018. For the year ended December 31, 2019, the company generated FFO for common stockholders of $155.4 million, or $2.20 per diluted share, compared to $134.0 million, or $2.09 per diluted share, for the year ended December 31, 2018. The increase in FFO from the corresponding periods in 2018 was primarily due to the

1



increase in annualized base rents at The Landmark at One Market, City Center Bellevue, and Lloyd District Portfolio, an increase in lease termination fees at Carmel Mountain Plaza attributed to the termination of our former ground lease, and the acquisition of La Jolla Commons on June 20, 2019 partially offset by the expiration of the Kmart lease at Waikele Center on June 30, 2018.

FFO is a non-GAAP supplemental earnings measure which the company considers meaningful in measuring its operating performance. A reconciliation of FFO to net income is attached to this press release.

Leasing
The portfolio leased status as of the end of the indicated quarter was as follows:
 
December 31, 2019
September 30, 2019
December 31, 2018
Total Portfolio
 
 
 
Office
95.0%
94.7%
90.9%
Retail
97.8%
98.0%
93.9%
Multifamily
92.8%
90.5%
93.6%
Mixed-Use:
 
 
 
Retail
97.9%
98.0%
96.1%
Hotel
91.7%
92.1%
93.0%
 
 
 
 
Same-Store Portfolio
 
 
Office (1)
93.9%
95.5%
90.9%
Retail (2)
97.6%
97.7%
92.9%
Multifamily
92.8%
90.5%
93.6%
(1) Same-store office leased percentages includes the 830 building at Lloyd District Portfolio which was placed into operations on August 1, 2019 after renovating the building. Same-store office leased percentages excludes La Jolla Commons, which was acquired on June 20, 2019. La Jolla Commons will be included in same-store office leased percentages commencing in the third quarter of 2020.
(2) Same-store retail leased percentages exclude Waikele Center, due to significant redevelopment activity.

During the fourth quarter of 2019, the company signed 30 leases for approximately 193,300 square feet of office and retail space, as well as 483 multifamily apartment leases. Renewals accounted for 56% of the comparable office leases, 80% of the comparable retail leases, and 53% of the residential leases.


2



Office and Retail
On a comparable space basis (i.e. leases for which there was a former tenant) during the fourth quarter of 2019 and trailing four quarters ended December 31, 2019, our retail and office leasing spreads are shown below:
 
 
Number of Leases Signed
Comparable Leased Sq. Ft.
Average Cash Basis % Change Over Prior Rent
Average Cash Contractual Rent Per Sq. Ft.
Prior Average Cash Contractual Rent Per Sq. Ft.
Straight-Line Basis % Change Over Prior Rent
Office
Q4 2019
9
81,000
 
28.1%
 
$56.13
$43.82
 
58.5%
 
Last 4 Quarters
45
276,000
 
17.2%
 
$52.76
$45.04
 
34.1%
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
Q4 2019
10
33,000
 
(3.9)%
 
$53.80
$55.97
 
8.0%
 
Last 4 Quarters
52
149,000
 
2.0%
 
$47.82
$46.86
 
11.4%
 

Multifamily
The average monthly base rent per leased unit for same-store properties for the fourth quarter of 2019 was $2,089 compared to an average monthly base rent per leased unit of $2,048 for the fourth quarter of 2018, an increase of approximately 2%.

Same-Store Cash Net Operating Income
For the three months and year ended December 31, 2019, same-store cash NOI increased 2.8% and decreased 0.1%, respectively, compared to the three months and year ended December 31, 2018. The same-store cash NOI by segment was as follows (in thousands):
 
Three Months Ended (2)
 
 
 
 
Year Ended (3)
 
 
 
 
December 31,
 
 
 
 
December 31,
 
 
 
 
2019
 
2018
 
Change
 
2019
 
2018
 
Change
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
 
 
Office (1)
19,049

 
17,461

 
9.1

 
 
75,116

 
73,601

 
2.1

 
Retail (1)
$
15,896

 
$
15,897

 

%
 
$
60,774

 
$
62,574

 
(2.9
)
%
Multifamily
6,938

 
7,388

 
(6.1
)
 
 
30,291

 
30,236

 
0.2

 
Mixed-Use

 

 

 
 

 

 

 
Same-store Cash NOI (4)
$
41,883

 
$
40,746

 
2.8

%
 
$
166,181

 
$
166,411

 
(0.1
)
%

(1)
Same-store cash NOI for the three months and year ended December 31, 2018 includes cash lease termination fees received of $0.2 million and $3.5 million, respectively. However, the lease termination fees for the year ended December 31, 2019 recognized at Carmel Mountain Plaza during the first quarter 2019 were non-cash lease termination fees. Excluding lease termination fees for the three months and year ended December 31, 2019, Office same-store cash NOI would have been 7.4% and 4.5%, respectively.

(2)
Same-store portfolio excludes (i) Waikele Center due to significant redevelopment activity; (ii) La Jolla Commons, which was acquired on June 20, 2019; (iii) Waikiki Beach Walk - Embassy Suites™ and Waikiki Beach Walk - Retail, due to significant spalling repair activity; and (iv) land held for development.

(3)
Same-store portfolio excludes (i) Waikele Center due to significant redevelopment activity; (ii) Torrey Point, which was placed into operations and became available for occupancy in August 2018; (iii) La Jolla Commons, which was acquired on June 20, 2019; (iv) Waikiki Beach Walk - Embassy Suites™ and Waikiki Beach Walk - Retail, due to significant spalling repair activity; and (v) land held for development.

(4)
Excluding lease termination fees for the three months and year ended December 31, 2019, same-store cash NOI would have been 2.3% and 1.3%, respectively.

Same-store cash NOI is a non-GAAP supplemental earnings measure which the company considers meaningful in measuring its operating performance. A reconciliation of same-store cash NOI to net income is attached to this press release.

3



Balance Sheet and Liquidity
At December 31, 2019, the company had gross real estate assets of $3.2 billion and liquidity of $449.3 million, comprised of cash and cash equivalents of $99.3 million and $350.0 million of availability on its line of credit.

For the quarter ended December 31, 2019, the company issued 29,825 shares of common stock through its at-the-market equity program at a weighted average price per share of $47.53, resulting in net proceeds of $1.3 million. We intend to use the proceeds primarily to fund development activities at Lloyd District Portfolio, Waikele Center and La Jolla Commons.

Dividends
The company declared dividends on its shares of common stock of $0.30 per share for the fourth quarter of 2019. The dividends were paid on December 26, 2019.

In addition, the company has declared a dividend on its common stock of $0.30 per share for the first quarter of 2020. The dividend will be paid on March 26, 2020 to stockholders of record on March 12, 2020.

Guidance
The company affirms its guidance range for 2020 FFO per diluted share of $2.38 to $2.46 per share, a midpoint increase of 10% from 2019 FFO per diluted share of $2.20 per share. The company's guidance excludes any impact from future acquisitions, dispositions, equity issuances or repurchases, future debt financings or repayments, except that the company assumes the payoff of the mortgage debt on Torrey Reserve - VCI, VCII, VCIII, Solana Crossing I-II and Solana Beach Towne Centre without penalty or premium.

The foregoing estimates are forward-looking and reflect management's view of current and future market conditions, including certain assumptions with respect to leasing activity, rental rates, occupancy levels, interest rates, credit spreads and the amount and timing of acquisition and development activities. The company's actual results may differ materially from these estimates.

Conference Call
The company will hold a conference call to discuss the results for the fourth quarter and year end of 2019 on Wednesday, February 12, 2020 at 8:00 a.m. Pacific Time (“PT”). To participate in the event by telephone, please dial 1-877-868-5513 and use the pass code 8154834. A telephonic replay of the conference call will be available beginning at 2:00 p.m. PT on Wednesday, February 12, 2020 through Wednesday, February 19, 2020. To access the replay, dial 1-855-859-2056 and use the pass code 8154834. A live on-demand audio webcast of the conference call will be available on the company's website at www.americanassetstrust.com. A replay of the call will also be available on the company's website.

Supplemental Information
Supplemental financial information regarding the company's fourth quarter and year end 2019 results may be found on the “Investors” page of the company's website at www.americanassetstrust.com. This supplemental information provides additional detail on items such as property occupancy, financial performance by property and debt maturity schedules.

4



Financial Information
American Assets Trust, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share Data)
 
December 31, 2019
 
December 31, 2018
Assets
 
 
 
 

Real estate, at cost
 
 

 
 
 

Operating real estate
$
3,096,886

 
$
2,549,571

Construction in progress
 
91,264

 
 
71,228

Held for development
 
547

 
 
9,392

 
 
3,188,697

 
 
2,630,191

Accumulated depreciation
 
(665,222
)
 
 
(590,338
)
Net real estate
 
2,523,475

 
 
2,039,853

Cash and cash equivalents
 
99,303

 
 
47,956

Restricted cash
 
10,148

 
 
9,316

Accounts receivable, net
 
12,016

 
 
9,289

Deferred rent receivables, net
 
52,171

 
 
39,815

Other assets, net
 
93,220

 
 
52,021

Total assets
$
2,790,333

 
$
2,198,250

Liabilities and equity
 
 

 
 
 

Liabilities:
 
 

 
 
 

Secured notes payable, net
$
161,879

 
$
182,572

Unsecured notes payable, net
 
1,195,780

 
 
1,045,863

Unsecured line of credit, net
 

 
 
62,337

Accounts payable and accrued expenses
 
62,576

 
 
46,616

Security deposits payable
 
8,316

 
 
8,844

Other liabilities and deferred credits, net
 
68,110

 
 
49,547

Total liabilities
 
1,496,661

 
 
1,395,779

Commitments and contingencies
 
 

 
 
 

Equity:
 
 

 
 
 

American Assets Trust, Inc. stockholders' equity
 
 
 
 
 
Common stock, $0.01 par value, 490,000,000 shares authorized, 60,068,228 and 47,335,409 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively
 
601

 
 
474

Additional paid-in capital
 
1,452,014

 
 
920,661

Accumulated dividends in excess of net income
 
(144,378
)
 
 
(128,778
)
Accumulated other comprehensive income
 
5,680

 
 
10,620

Total American Assets Trust, Inc. stockholders' equity
 
1,313,917

 
 
802,977

Noncontrolling interests
 
(20,245
)
 
 
(506
)
Total equity
 
1,293,672

 
 
802,471

Total liabilities and equity
$
2,790,333

 
$
2,198,250


5



American Assets Trust, Inc.
Unaudited Consolidated Statements of Operations
(In Thousands, Except Shares and Per Share Data)
 
Three Months Ended December 31,
 
Year Ended December 31,
 
2019
 
2018
 
2019
 
2018
Revenue:
 
 
 
 
 
 
 
Rental income
$
94,231

 
$
78,365

 
$
343,865

 
$
309,537

Other property income
4,716

 
4,240

 
22,876

 
21,330

Total revenue
98,947

 
82,605

 
366,741

 
330,867

Expenses:
 
 
 
 
 
 
 
Rental expenses
25,356

 
23,797

 
91,967

 
86,482

Real estate taxes
10,750

 
9,012

 
40,013

 
34,973

General and administrative
6,376

 
6,645

 
24,871

 
22,784

Depreciation and amortization
26,472

 
21,060

 
96,205

 
107,093

Total operating expenses
68,954

 
60,514

 
253,056

 
251,332

Operating income
29,993

 
22,091

 
113,685

 
79,535

Interest expense
(13,796
)
 
(12,861
)
 
(54,008
)
 
(52,248
)
Gain on sale of real estate

 

 
633

 

Other income (expense), net
288

 
(21
)
 
(122
)
 
(85
)
Net income
16,485

 
9,209

 
60,188

 
27,202

Net income attributable to restricted shares
(104
)
 
(96
)
 
(381
)
 
(311
)
Net income attributable to unitholders in the Operating Partnership
(3,536
)
 
(2,440
)
 
(14,089
)
 
(7,205
)
Net income attributable to American Assets Trust, Inc. stockholders
$
12,845

 
$
6,673

 
$
45,718

 
$
19,686

 
 
 
 
 
 
 
 
Net income per share
 
 
 
 
 
 
 
Basic income attributable to common stockholders per share
$
0.22

 
$
0.14

 
$
0.84

 
$
0.42

Weighted average shares of common stock outstanding - basic
59,663,771

 
46,967,778

 
54,110,949

 
46,950,812

 
 
 
 
 
 
 
 
Diluted income attributable to common stockholders per share
$
0.22

 
$
0.14

 
$
0.84

 
$
0.42

Weighted average shares of common stock outstanding - diluted
76,054,319

 
64,145,386

 
70,786,132

 
64,136,559

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.30

 
$
0.28

 
$
1.14

 
$
1.09

 
 
 
 
 
 
 
 


6



Reconciliation of Net Income to Funds From Operations
The company's FFO attributable to common stockholders and operating partnership unitholders and reconciliation to net income is as follows (in thousands except shares and per share data, unaudited):
 
Three Months Ended
 
Year Ended
 
December 31, 2019
 
December 31, 2019
Funds From Operations (FFO)
 
 
 
 
 
Net income
$
16,485

 
$
60,188

Depreciation and amortization of real estate assets
 
26,472

 
 
96,205

Gain on sale of real estate
 

 
 
(633
)
FFO, as defined by NAREIT
$
42,957

 
$
155,760

Less: Nonforfeitable dividends on restricted stock awards
 
(103
)
 
 
(376
)
FFO attributable to common stock and units
$
42,854

 
$
155,384

FFO per diluted share/unit
$
0.56

 
$
2.20

Weighted average number of common shares and units, diluted
 
76,056,823

 
 
70,788,597


Reconciliation of Same-Store Cash NOI to Net Income
The company's reconciliation of Same-Store Cash NOI to Net Income is as follows (in thousands, unaudited):
 
Three Months Ended (1)
 
Year Ended (2)
 
December 31,
 
December 31,
 
2019
 
2018
 
2019
 
2018
Same-store cash NOI
$
41,883

 
$
40,746

 
$
166,181

 
$
166,411

Non-same-store cash NOI
14,573

 
7,727

 
46,132

 
37,259

Tenant improvement reimbursements (3)
3,471

 
54

 
11,420

 
4,275

Cash NOI
$
59,927

 
$
48,527

 
$
223,733

 
$
207,945

Non-cash revenue and other operating expenses (4)
2,914

 
1,269

 
11,028

 
1,467

General and administrative
(6,376
)
 
(6,645
)
 
(24,871
)
 
(22,784
)
Depreciation and amortization
(26,472
)
 
(21,060
)
 
(96,205
)
 
(107,093
)
Interest expense
(13,796
)
 
(12,861
)
 
(54,008
)
 
(52,248
)
Gain on sale of real estate

 

 
633

 

Other income (expense), net
288

 
(21
)
 
(122
)
 
(85
)
Net income
$
16,485

 
$
9,209

 
$
60,188

 
$
27,202

 
 
 
 
 
 
 
 
Number of properties included in same-store analysis
25
 
25
 
24
 
23
(1)
Same-store portfolio includes the 830 building at Lloyd District Portfolio which was placed into operations on August 1, 2019 after renovating the building. Same-store portfolio excludes (i) Waikele Center, due to significant redevelopment activity; (ii) La Jolla Commons, which was acquired on June 20, 2019; (iii) Waikiki Beach Walk - Embassy Suites™ and Waikiki Beach Walk - Retail, due to significant spalling repair activity and (iv) land held for development.
(2)
Same-store portfolio includes the 830 building at Lloyd District Portfolio which was placed into operations on August 1, 2019 after renovating the building. Same-store portfolio excludes (i) Waikele Center, due to significant redevelopment activity; (ii) Torrey Point, which was placed into operations and became available for occupancy in August 2018; (iii) La Jolla Commons, which was acquired on June 20, 2019; (iv) Waikiki Beach Walk - Embassy Suites™ and Waikiki Beach Walk - Retail, due to significant spalling repair activity and (v) land held for development.
(3)
Tenant improvement reimbursements are excluded from same-store cash NOI to provide a more accurate measure of operating performance.
(4)
Represents adjustments related to the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances; the amortization of above (below) market rents, the amortization of lease incentives paid to tenants, the amortization of other lease intangibles, lease termination fees at Carmel Mountain Plaza, and straight-line rent expense for our lease of the Annex at The Landmark at One Market.
 


Reported results are preliminary and not final until the filing of the company's Form 10-K with the Securities and Exchange Commission and, therefore, remain subject to adjustment.

7



Use of Non-GAAP Information
Funds from Operations
The company calculates FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT. FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, impairment losses, real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures.

FFO is a supplemental non-GAAP financial measure. Management uses FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring the company's operational performance. Specifically, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year-over-year, captures trends in occupancy rates, rental rates and operating costs. The company also believes that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare the company's operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of the company's properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of the company's properties, all of which have real economic effects and could materially impact the company's results from operations, the utility of FFO as a measure of the company's performance is limited. In addition, other equity REITs may not calculate FFO in accordance with the NAREIT definition as the company does, and, accordingly, the company's FFO may not be comparable to such other REITs' FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of the company's performance. FFO should not be used as a measure of the company's liquidity, nor is it indicative of funds available to fund the company's cash needs, including the company's ability to pay dividends or service indebtedness. FFO also should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP.

Cash Net Operating Income
The company uses cash net operating income ("NOI") internally to evaluate and compare the operating performance of the company's properties. The company believes cash NOI provides useful information to investors regarding the company's financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level, and when compared across periods, can be used to determine trends in earnings of the company's properties as this measure is not affected by (1) the non-cash revenue and expense recognition items, (2) the cost of funds of the property owner, (3) the impact of depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP or (4) general and administrative expenses and other gains and losses that are specific to the property owner. The company believes the exclusion of these items from net income is useful because the resulting measure captures the actual revenue generated and actual expenses incurred in operating the company's properties as well as trends in occupancy rates, rental rates and operating costs. Cash NOI is a measure of the operating performance of the company's properties but does not measure the company's performance as a whole. Cash NOI is therefore not a substitute for net income as computed in accordance with GAAP.

Cash NOI, is a non-GAAP financial measure of performance. The company defines cash NOI as operating revenues (rental income, tenant reimbursements, lease termination fees, ground lease rental income and other property income) less property and related expenses (property expenses, ground lease expense, property marketing costs, real estate taxes and insurance), adjusted for non-cash revenue and operating expense items such as straight-line rent, amortization of lease intangibles, amortization of lease incentives and other adjustments. Cash NOI also excludes general and administrative expenses, depreciation and amortization, interest expense, other nonproperty income and losses, acquisition-related expense, gains and losses from property dispositions, extraordinary items, tenant improvements, and leasing commissions. Other REITs may use different methodologies for calculating cash NOI, and accordingly, the company's cash NOI may not be comparable to the cash NOIs of other REITs.


8



About American Assets Trust, Inc.
American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust, or REIT, headquartered in San Diego, California. The company has over 50 years of experience in acquiring, improving, developing and managing premier retail, office and residential properties throughout the United States in some of the nation’s most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Oregon, Washington, Texas and Hawaii.  The company's retail portfolio comprises approximately 3.1 million rentable square feet, and its office portfolio comprises approximately 3.4 million square feet. In addition, the company owns one mixed-use property (including approximately 97,000 rentable square feet of retail space and a 369-room all-suite hotel) and 2,112 multifamily units. In 2011, the company was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes. For additional information, please visit www.americanassetstrust.com.

Forward Looking Statements
This press release may contain forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. While forward-looking statements reflect the company's good faith beliefs, assumptions and expectations, they are not guarantees of future performance. For a further discussion of these and other factors that could cause the company's future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the company's most recent annual report on Form 10-K, and other risks described in documents subsequently filed by the company from time to time with the Securities and Exchange Commission. The company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.

Source: American Assets Trust, Inc.

Investor and Media Contact:
American Assets Trust
Robert F. Barton
Executive Vice President and Chief Financial Officer
858-350-2607


9
Exhibit
 
 
 
FOURTH QUARTER 2019
 
Supplemental Information
 
 



https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-supplementcoverq42019v2a01.jpg

   

 
https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-aat2019q3a17.jpg
 
 
Investor and Media Contact
American Assets Trust, Inc.
Robert F. Barton
Executive Vice President and Chief Financial Officer
858-350-2607


 
 
 
https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-aat2019q3a17.jpg
 
 

American Assets Trust, Inc.'s Portfolio is concentrated in high-barrier-to-entry markets
with favorable supply/demand characteristics
 
 
 
 
 
 
 
 
 
 
 
 
            https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-map2019q4a05.jpg
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Office
 
Retail
 
Multifamily
Mixed-Use
Market
 
 Square Feet
 
 Square Feet
 
 Units
 Square Feet
 
Suites
San Diego
 
1,549,860

 
1,322,817

 
1,455

(1)

 

 
 
 
 
 
 
 
 
 
 
 
San Francisco
 
520,040

 
35,159

 

 

 

 
 
 
 
 
 
 
 
 
 
 
Oahu
 

 
429,718

 

 
96,707

 
369

 
 
 
 
 
 
 
 
 
 
 
Monterey
 

 
673,572

 

 

 

 
 
 
 
 
 
 
 
 
 
 
San Antonio
 

 
588,148

 

 

 

 
 
 
 
 
 
 
 
 
 
 
Portland
 
876,491

 
44,236

 
657

 

 

 
 
 
 
 
 
 
 
 
 
 
Seattle
 
497,488

 

 

 

 

 
 
 
 
 
 
 
 
 
 
 
Total
 
3,443,879

 
3,093,650

 
2,112

 
96,707

 
369

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Square Feet
 
%
 
NOI % (2)
Note: Circled areas represent all markets in which American Assets Trust, Inc. currently owns and operates its real estate properties. Size of circle denotes approximation of square feet / units. Net rentable square footage may be adjusted from the prior periods to reflect re-measurement of leased space at the properties.
 
Office
 
3.4

million
 
52%
 
49%
 
Retail
 
3.1

million
 
48%
 
29%
Data is as of December 31, 2019.
 
Totals
 
6.5

million
 
 
 
 
(1) Includes 122 RV spaces.
 
 
 
 
 
 
 
 
 
(2) Percentage of Net Operating Income (NOI) calculated for the three months ended December 31, 2019. Reconciliation of NOI to net income is included in the Glossary of Terms.
 
 
 
 
 
 
 
 
 

Fourth Quarter 2019 Supplemental Information
                               Page 2

 
 
INDEX
https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-aat2019q3a17.jpg
 
 

 
FOURTH QUARTER 2019 SUPPLEMENTAL INFORMATION
 
1.
FINANCIAL HIGHLIGHTS
 
 
Consolidated Balance Sheets
 
Consolidated Statements of Operations
 
Funds From Operations (FFO), FFO As Adjusted & Funds Available for Distribution
 
Same-Store Net Operating Income (NOI)
 
Same-Store Cash NOI Comparison excluding Redevelopment
 
Same-Store Cash NOI Comparison with Redevelopment
 
Cash NOI By Region
 
Cash NOI Breakdown
 
Property Revenue and Operating Expenses
 
Segment Capital Expenditures
 
Summary of Outstanding Debt
 
Market Capitalization
 
Summary of Development Opportunities
2.
PORTFOLIO DATA
 
 
Property Report
 
Office Leasing Summary
 
Retail Leasing Summary
 
Multifamily Leasing Summary
 
Mixed-Use Leasing Summary
 
Lease Expirations
 
Portfolio Leased Statistics
 
Top Tenants - Office
 
Top Tenants - Retail
3.
APPENDIX
 
 
Glossary of Terms
This Supplemental Information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act). Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: adverse economic or real estate developments in our markets; our failure to generate sufficient cash flows to service our outstanding indebtedness; defaults on, early terminations of or non-renewal of leases by tenants, including significant tenants; difficulties in identifying properties to acquire and completing acquisitions; difficulties in completing dispositions; our failure to successfully operate acquired properties and operations; our inability to develop or redevelop our properties due to market conditions; fluctuations in interest rates and increased operating costs; risks related to joint venture arrangements; our failure to obtain necessary outside financing; on-going litigation; general economic conditions; financial market fluctuations; risks that affect the general retail, office, multifamily and mixed-use environment; the competitive environment in which we operate; decreased rental rates or increased vacancy rates; conflicts of interests with our officers or directors; lack or insufficient amounts of insurance; environmental uncertainties and risks related to adverse weather conditions and natural disasters; other factors affecting the real estate industry generally; limitations imposed on our business and our ability to satisfy complex rules in order for us to continue to qualify as a REIT for U.S. federal income tax purposes; and changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates and taxation of REITs.
While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, or new information, data or methods, future events or other changes. For a further discussion of these and other factors that could impact our future results, refer to our most recent Annual Report on Form 10-K and other risks described in documents subsequently filed by us from time to time with the Securities and Exchange Commission.

Fourth Quarter 2019 Supplemental Information
                               Page 3

 
 
 
https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-aat2019q3a17.jpg
 
 






FINANCIAL HIGHLIGHTS





Fourth Quarter 2019 Supplemental Information
                               Page 4

 
 
CONSOLIDATED BALANCE SHEETS
https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-aat2019q3a17.jpg
 
 

(Amounts in thousands, except shares and per share data)
December 31, 2019
 
December 31, 2018
 
 
 
 
ASSETS
 
 
 
Real estate, at cost
 
 
 
Operating real estate
$
3,096,886

 
$
2,549,571

Construction in progress
91,264

 
71,228

Held for development
547

 
9,392

 
3,188,697

 
2,630,191

Accumulated depreciation
(665,222
)
 
(590,338
)
Net real estate
2,523,475

 
2,039,853

Cash and cash equivalents
99,303

 
47,956

Restricted cash
10,148

 
9,316

Accounts receivable, net
12,016

 
9,289

Deferred rent receivable, net
52,171

 
39,815

Other assets, net
93,220

 
52,021

TOTAL ASSETS
$
2,790,333

 
$
2,198,250

LIABILITIES AND EQUITY
 
 
 
LIABILITIES:
 
 
 
Secured notes payable, net
$
161,879

 
$
182,572

Unsecured notes payable, net
1,195,780

 
1,045,863

Unsecured line of credit, net

 
62,337

Accounts payable and accrued expenses
62,576

 
46,616

Security deposits payable
8,316

 
8,844

Other liabilities and deferred credits, net
68,110

 
49,547

Total liabilities
1,496,661

 
1,395,779

Commitments and contingencies
 
 
 
EQUITY:
 
 
 
American Assets Trust, Inc. stockholders' equity
 
 
 
Common stock, $0.01 par value, 490,000,000 shares authorized, 60,068,228 and 47,335,409 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively
601

 
474

Additional paid in capital
1,452,014

 
920,661

Accumulated dividends in excess of net income
(144,378
)
 
(128,778
)
Accumulated other comprehensive income
5,680

 
10,620

Total American Assets Trust, Inc. stockholders' equity
1,313,917

 
802,977

Noncontrolling interests
(20,245
)
 
(506
)
Total equity
1,293,672

 
802,471

TOTAL LIABILITIES AND EQUITY
$
2,790,333

 
$
2,198,250


Fourth Quarter 2019 Supplemental Information
                               Page 5

 
 
CONSOLIDATED STATEMENTS OF OPERATIONS
https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-aat2019q3a17.jpg
 
 

(Amounts in thousands, except shares and per share data)
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2019
 
2018
 
2019
 
2018
REVENUE:
 
 
 
 
 
 
 
Rental income
$
94,231

 
$
78,365

 
$
343,865

 
$
309,537

Other property income
4,716

 
4,240

 
22,876

 
21,330

Total revenue
98,947

 
82,605

 
366,741

 
330,867

EXPENSES:
 
 
 
 
 
 
 
Rental expenses
25,356

 
23,797

 
91,967

 
86,482

Real estate taxes
10,750

 
9,012

 
40,013

 
34,973

General and administrative
6,376

 
6,645

 
24,871

 
22,784

Depreciation and amortization
26,472

 
21,060

 
96,205

 
107,093

Total operating expenses
68,954

 
60,514

 
253,056

 
251,332

OPERATING INCOME
29,993

 
22,091

 
113,685

 
79,535

Interest expense
(13,796
)
 
(12,861
)
 
(54,008
)
 
(52,248
)
Gain on sale of real estate

 

 
633

 

Other (expense) income, net
288

 
(21
)
 
(122
)
 
(85
)
NET INCOME
16,485

 
9,209

 
60,188

 
27,202

Net income attributable to restricted shares
(104
)
 
(96
)
 
(381
)
 
(311
)
Net income attributable to unitholders in the Operating Partnership
(3,536
)
 
(2,440
)
 
(14,089
)
 
(7,205
)
NET INCOME ATTRIBUTABLE TO AMERICAN ASSETS TRUST, INC. STOCKHOLDERS
$
12,845

 
$
6,673

 
$
45,718

 
$
19,686

 
 
 
 
 
 
 
 
EARNINGS PER COMMON SHARE
 
 
 
 
 
 
 
Basic income from operations attributable to common stockholders per share
$
0.22

 
$
0.14

 
$
0.84

 
$
0.42

Weighted average shares of common stock outstanding - basic
59,663,771

 
46,967,778

 
54,110,949

 
46,950,812

Diluted income from continuing operations attributable to common stockholders per share
$
0.22

 
$
0.14

 
$
0.84

 
$
0.42

Weighted average shares of common stock outstanding - diluted
76,054,319

 
64,145,386

 
70,786,132

 
64,136,559


Fourth Quarter 2019 Supplemental Information
                               Page 6

 
 
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION
https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-aat2019q3a17.jpg
 
 

(Amounts in thousands, except shares and per share data)
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2019
 
2018
 
2019
 
2018
Funds from Operations (FFO) (1)
 
 
 
 
 
 
 
Net income
$
16,485

 
$
9,209

 
$
60,188

 
$
27,202

Depreciation and amortization of real estate assets
26,472

 
21,060

 
96,205

 
107,093

Gain on sale of real estate

 

 
(633
)
 

FFO, as defined by NAREIT
42,957

 
30,269

 
155,760

 
134,295

Less: Nonforfeitable dividends on restricted stock awards
(103
)
 
(94
)
 
(376
)
 
(305
)
FFO attributable to common stock and common units
$
42,854

 
$
30,175

 
$
155,384

 
$
133,990

 
 
 
 
 
 
 
 
FFO per diluted share/unit
$
0.56

 
$
0.47

 
$
2.20

 
$
2.09

 
 
 
 
 
 
 
 
Weighted average number of common shares and common units, diluted (2)
76,056,823

 
64,148,261

 
70,788,597

 
64,139,437

 
 
 
 
 
 
 
 
Funds Available for Distribution (FAD) (1)
$
17,311

 
$
8,136

 
$
58,115

 
$
83,437

 
 
 
 
 
 
 
 
Dividends
 
 
 
 
 
 
 
Dividends declared and paid
$
22,938

 
$
18,064

 
$
80,605

 
$
70,228

Dividends declared and paid per share/unit
$
0.30

 
$
0.28

 
$
1.14

 
$
1.09


Fourth Quarter 2019 Supplemental Information
                               Page 7

 
 
FUNDS FROM OPERATIONS, FFO AS ADJUSTED & FUNDS AVAILABLE FOR DISTRIBUTION (CONTINUED)
https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-aat2019q3a17.jpg
 
 

(Amounts in thousands, except shares and per share data)
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2019
 
2018
 
2019
 
2018
Funds Available for Distribution (FAD) (1)
 
 
 
 
 
 
 
FFO
$
42,957

 
$
30,269

 
$
155,760

 
$
134,295

Adjustments:
 
 
 
 
 
 
 
Tenant improvements, leasing commissions and maintenance capital expenditures
(24,118
)
 
(21,994
)
 
(92,185
)
 
(53,655
)
Net effect of straight-line rents (3)
(2,011
)
 
89

 
(3,102
)
 
2,123

Amortization of net above (below) market rents (4)
(1,005
)
 
(1,349
)
 
(3,786
)
 
(3,570
)
Net effect of other lease assets (5)
102

 
(9
)
 
(4,140
)
 
(20
)
Amortization of debt issuance costs and debt fair value adjustment
371

 
365

 
1,467

 
1,530

Non-cash compensation expense
1,118

 
859

 
4,477

 
3,039

Nonforfeitable dividends on restricted stock awards
(103
)
 
(94
)
 
(376
)
 
(305
)
FAD
$
17,311

 
$
8,136

 
$
58,115

 
$
83,437

 
 
 
 
 
 
 
 
Summary of Capital Expenditures
 
 
 
 
 
 
 
Tenant improvements and leasing commissions
$
12,687

 
$
14,979

 
$
52,924

 
$
33,118

Maintenance capital expenditures
11,431

 
7,015

 
39,261

 
20,537

 
$
24,118

 
$
21,994

 
$
92,185

 
$
53,655


Notes:
(1)
See Glossary of Terms.
(2)
For the three months and year ended December 31, 2019 and 2018, the weighted average common shares and common units used to compute FFO per diluted share/unit include operating partnership common units and unvested restricted stock awards that are subject to time vesting. The shares/units used to compute FFO per diluted share/unit include additional shares/units which were excluded from the computation of diluted EPS, as they were anti-dilutive for the periods presented.
(3)
Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.
(4)
Represents the adjustment related to the acquisition of buildings with above (below) market rents.
(5)
Represents adjustments related to amortization of lease incentives paid to tenants, amortization of lease intangibles, lease termination fees at Carmel Mountain Plaza and straight-line rent expense for our leases at the Annex at The Landmark at One Market.

Fourth Quarter 2019 Supplemental Information
                               Page 8

 
 
SAME-STORE NET OPERATING INCOME (NOI)
https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-aat2019q3a17.jpg
 
 

(Amounts in thousands)
 
 
Three Months Ended December 31, 2019
 
Office
 
Retail
 
Multifamily
 
Mixed-Use
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
Same-store
$
33,950

 
$
22,175

 
$
12,615

 
$

 
$
68,740

Non-same store (1)
9,917

 
4,273

 

 
16,017

 
30,207

Total
43,867

 
26,448

 
12,615

 
16,017

 
98,947

Real estate expenses
 
 
 
 
 
 
 
 
 
Same-store
10,113

 
6,345

 
5,540

 

 
21,998

Non-same store (1)
2,736

 
1,597

 

 
9,775

 
14,108

Total
12,849

 
7,942

 
5,540

 
9,775

 
36,106

Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
Same-store
23,837

 
15,830

 
7,075

 

 
46,742

Non-same store (1)
7,181

 
2,676

 

 
6,242

 
16,099

Total
$
31,018

 
$
18,506

 
$
7,075

 
$
6,242

 
$
62,841

Same-store NOI
$
23,837

 
$
15,830

 
$
7,075

 
$

 
$
46,742

Net effect of straight-line rents (2)
(987
)
 
397

 
(137
)
 

 
(727
)
Amortization of net above (below) market rents (3)
(423
)
 
(331
)
 

 

 
(754
)
Net effect of other lease intangibles (4)
93

 

 

 

 
93

Tenant improvement reimbursements (5)
(3,471
)
 

 

 

 
(3,471
)
Same-store cash NOI (5)
$
19,049

 
$
15,896

 
$
6,938

 
$

 
$
41,883


Notes:
(1)
Same-store and non-same store classifications are determined based on properties held on December 31, 2019 and 2018. See Glossary of Terms.
(2)
Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.
(3)
Represents the adjustment related to the acquisition of buildings with above (below) market rents.
(4)
Represents adjustments related to amortization of lease incentives paid to tenants, amortization of lease intangibles and straight-line rent expense for our leases at the Annex at The Landmark at One Market.
(5)
Tenant improvement reimbursements are excluded from same-store cash NOI to provide a more accurate measure of operating performance.


NOI and same-store cash NOI are non-GAAP supplemental earnings measures which we consider meaningful in measuring our operating performance. Reconciliations of NOI and same-store cash NOI to net income are included in the Glossary of Terms.


Fourth Quarter 2019 Supplemental Information
                               Page 9

 
 
SAME-STORE NET OPERATING INCOME (NOI) (CONTINUED)
https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-aat2019q3a17.jpg
 
 

(Amounts in thousands)
Year Ended December 31, 2019
 
Office
 
Retail
 
Multifamily
 
Mixed-Use
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
Same-store
$
122,178

 
$
91,630

 
$
51,066

 
$

 
$
264,874

Non-same store (1)
22,505

 
15,974

 

 
63,388

 
101,867

Total
144,683

 
107,604

 
51,066

 
63,388

 
366,741

Real estate expenses
 
 
 
 
 
 
 
 
 
Same-store
34,972

 
24,369

 
20,863

 

 
80,204

Non-same store (1)
7,262

 
6,264

 

 
38,250

 
51,776

Total
42,234

 
30,633

 
20,863

 
38,250

 
131,980

Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
Same-store
87,206

 
67,261

 
30,203

 

 
184,670

Non-same store (1)
15,243

 
9,710

 

 
25,138

 
50,091

Total
$
102,449

 
$
76,971

 
$
30,203

 
$
25,138

 
$
234,761

Same-store NOI
$
87,206

 
$
67,261

 
$
30,203

 
$

 
$
184,670

Net effect of straight-line rents (2)
737

 
(621
)
 
88

 

 
204

Amortization of net above (below) market rents (3)
(1,662
)
 
(1,443
)
 

 

 
(3,105
)
Net effect of other lease assets (4)
238

 
(4,406
)
 

 

 
(4,168
)
Tenant improvement reimbursements (5)
(11,403
)
 
(17
)
 

 

 
(11,420
)
Same-store cash NOI (5) 
$
75,116

 
$
60,774

 
$
30,291

 
$

 
$
166,181


Notes:
(1)
Same-store and non-same store are determined based on properties held on December 31, 2019 and 2018. See Glossary of Terms.
(2)
Represents the straight-line rent income recognized during the period offset by cash received during the period and the provision for bad debts recorded for deferred rent receivable balances.
(3)
Represents the adjustment related to the acquisition of buildings with above (below) market rents.
(4)
Represents adjustments related to amortization of lease incentives paid to tenants, amortization of lease intangibles, lease termination fees at Carmel Mountain Plaza and straight-line rent expense for our leases at the Annex at The Landmark at One Market.
(5)
Tenant improvement reimbursements are excluded from Same-store Cash NOI to provide a more accurate measure of operating performance.

NOI and same-store cash NOI are non-GAAP supplemental earnings measures which we consider meaningful in measuring our operating performance. Reconciliations of NOI and same-store cash NOI to net income are included in the Glossary of Terms.




Fourth Quarter 2019 Supplemental Information
                               Page 10

 
 
SAME-STORE CASH NOI COMPARISON EXCLUDING REDEVELOPMENT
https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-aat2019q3a17.jpg
 
 

(Amounts in thousands)
Three Months Ended
 
 
 
Year Ended
 
 
 
December 31,
 
 
 
December 31,
 
 
 
2019
 
2018
 
Change
 
2019
 
2018
 
Change
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
Office
19,049

 
17,461

 
9.1
 %
 
75,116

 
73,601

 
2.1
 %
Retail
$
15,896

 
$
15,897

 

 
$
60,774

 
$
62,574

 
(2.9
)
Multifamily
6,938

 
7,388

 
(6.1
)
 
30,291

 
30,236

 
0.2

Mixed-Use

 

 

 

 

 

Same-store Cash NOI (1)(2)
$
41,883

 
$
40,746

 
2.8
 %
 
$
166,181

 
$
166,411

 
(0.1
)%

Notes:
(1)
Excluding lease termination fees, for the three months and year ended December 31, 2019 and 2018, same-store cash NOI would be 2.3% and 1.3%, respectively.
(2)
See Glossary of Terms.


Same-store cash NOI is a non-GAAP supplemental earnings measure which we consider meaningful in measuring our operating performance. A reconciliation of same-store cash NOI to net income is included in the Glossary of Terms.


Fourth Quarter 2019 Supplemental Information
                               Page 11

 
 
SAME-STORE CASH NOI COMPARISON WITH REDEVELOPMENT
https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-aat2019q3a17.jpg
 
 

(Amounts in thousands)
Three Months Ended
 
 
 
Year Ended
 
 
 
December 31,
 
 
 
December 31,
 
 
 
2019
 
2018
 
Change
 
2019
 
2018
 
Change
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
Office
18,963

 
17,350

 
9.3
 %
 
74,665

 
73,190

 
2.0
 %
Retail
$
18,356

 
$
17,551

 
4.6

 
$
69,890

 
$
74,217

 
(5.8
)
Multifamily
6,938

 
7,388

 
(6.1
)
 
30,291

 
30,236

 
0.2

Mixed-Use

 

 

 

 

 

Same-store Cash NOI with Redevelopment (1)(2)
$
44,257

 
$
42,289

 
4.7
 %
 
$
174,846

 
$
177,643

 
(1.6
)%

Notes:
(1)
Excluding lease termination fees, for the three months and year ended December 31, 2019 and 2018, same-store cash NOI with redevelopment would be 4.2% and (0.3)%, respectively.
(2)
See Glossary of Terms.


Same-store cash NOI with redevelopment is a non-GAAP supplemental earnings measure which we consider meaningful in measuring our operating performance. A reconciliation of same-store cash NOI with redevelopment to net income is included in the Glossary of Terms.





Fourth Quarter 2019 Supplemental Information
                               Page 12

 
 
CASH NOI BY REGION
https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-aat2019q3a17.jpg
 
 

(Amounts in thousands)
Three Months Ended December 31, 2019
 
Office
 
Retail
 
Multifamily
 
Mixed-Use
 
Total
Cash Basis:
 
 
 
 
 
 
 
 
 
Southern California
10,709

 
8,707

 
5,426

 

 
24,842

Northern California
5,263

 
3,295

 

 

 
8,558

Hawaii

 
2,915

 

 
6,041

 
8,956

Oregon
6,226

 
131

 
1,512

 

 
7,869

Texas

 
3,306

 

 

 
3,306

Washington
6,396

 

 

 

 
6,396

Total Cash NOI
$
28,594

 
$
18,354

 
$
6,938

 
$
6,041

 
$
59,927



Cash NOI is a non-GAAP supplemental earnings measure which we consider meaningful in measuring our operating performance. A reconciliation of cash NOI to net income is included in the Glossary of Terms.



Fourth Quarter 2019 Supplemental Information
                               Page 13

 
 
CASH NOI BREAKDOWN
https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-aat2019q3a17.jpg
 
 

Three Months Ended December 31, 2019
Cash NOI Breakdown
 
 
 
 
 
Portfolio Diversification by Geographic Region
 
Portfolio Diversification by Segment
    
https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-chart-1b8c8cc04fa050268d0.jpg    https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-chart-d2eec643ffbe5ca1b80.jpg



 

Cash NOI is a non-GAAP supplemental earnings measure which we consider meaningful in measuring our operating performance. A reconciliation of cash NOI to net income is included in the Glossary of Terms.

Fourth Quarter 2019 Supplemental Information
                               Page 14

 
 
PROPERTY REVENUE AND OPERATING EXPENSES
https://cdn.kscope.io/2a6945f36844cc4a44722b9141182972-aat2019q3a17.jpg
 
 

(Amounts in thousands)
 
Three Months Ended December 31, 2019
 
 
 
 
 
 
 
 
Additional
 
 
 
Property