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 Alexandria Real Estate Equities, Inc. Reports Fourth Quarter and Year Ended December 31, 2016 Financial and Operating Results
   Monday, January 30, 2017 4:10:00 PM ET

Alexandria Real Estate Equities, Inc. (ARE ) announced financial and operating results for the fourth quarter and year ended December 31, 2016.

Key highlights:

Solid internal growth

-- Total revenues of $249.2 million, up 11.3%, for 4Q16, compared to $224.0 million for 4Q15 and total revenues of $921.7 million, up 9.3%, for 2016, compared to $843.5 million for 2015;

-- Solid leasing activity in light of minimal contractual lease expirations at the beginning of 2016 and a highly leased value-creation pipeline:

                                         4Q16       2016
Total leasing activity - RSF             1,501,376  3,390,067
Lease renewals and re-leasing of space:
Rental rate increases                    25.8%      27.6%
Rental rate increases (cash basis)       9.5%       12.0%
RSF                                      671,222    2,129,608

-- Same property net operating income growth:

-- 3.2% and 4.9% (cash basis) for 4Q16, compared to 4Q15

-- 4.7% and 6.0% (cash basis) for 2016, compared to 2015

Solid external growth; disciplined allocation of capital to highly leased value-creation pipeline

-- Deliveries of Class A properties in urban innovation clusters from our value-creation pipeline is expected to significantly increase net operating income:

Delivery Date  RSF        Percentage Leased  Incremental Annual Net Operating Income
YTD 3Q16       1,003,795  99%                $55 million
4Q16           890,133    89%                $37 million
2017           1,405,117  80%                $95 million to $105 million

-- 4Q16 key development, redevelopment, and other projects placed into service:

-- 422,980 RSF, 100% leased to Uber Technologies, Inc. at 1455 and 1515 Third Street;

-- 305,006 RSF, 100% leased to Eli Lilly and Company at 10290 Campus Point Drive;

-- 61,755 RSF, 100% leased to Otonomy, Inc. at 4796 Executive Drive; and

-- Executed a 293,855 RSF 15-year build-to-suit lease with Merck & Co., Inc. at 213 East Grand Avenue in our South San Francisco submarket; we anticipate commencing development 2Q17.

Increased common stock dividend

-- Common stock dividend for 2016 of $3.23 per common share, up 18 cents, or 6%, over 2015; continuation of our strategy to share growth in cash flows from operating activities with our stockholders while also retaining a significant portion for reinvestment.

Operating results 4Q16          4Q15        Change  2016           2015         Change
Net (loss) income attributable to Alexandria’s common stockholders - diluted:
In Millions       $    (25.1)   $    35.1   N/A     $    (151.1)   $    116.9   N/A
Per Share         $    (0.31)   $    0.49   N/A     $    (1.99)    $    1.63    N/A
Funds from operations attributable to Alexandria’s common stockholders - diluted, as adjusted:
In Millions       $    115.5    $    95.8   20.6%   $    421.3     $    375.8   12.1%
Per Share         $    1.42     $    1.33   6.8%    $    5.51      $    5.25    5.0%
Items included in net (loss) income attributable to Alexandria’s common stockholders:
(amounts are shown after deducting any amounts attributable to noncontrolling interests)
(In millions, except per share amounts) Amount                 Per Share - Diluted     Amount                     Per Share - Diluted
                                        4Q16         4Q15      4Q16         4Q15       2016          2015         2016         2015
Gain on sales of real estate - rental   $   3.7      $  12.4   $   0.05     $   0.17   $   3.8       $   12.4     $   0.05     $   0.17
properties and land parcels
Impairment of:
Real estate - rental properties         (3.5)        (8.7)     (0.04)       (0.12)     (98.2)        (23.3)       (1.29)       (0.33)
Real estate - land parcels and non-     (12.5)       --        (0.16)       --         (113.5)       --           (1.49)       --
real estate investments
Loss on early extinguishment of debt    --           --        --           --         (3.2)         (0.2)        (0.04)       --
Preferred stock redemption charge       (35.7)       --        (0.44)       --         (61.3)        --           (0.81)       --
Total                                   $   (48.0)   $  3.7    $   (0.59)   $   0.05   $   (272.4)   $   (11.1)   $   (3.58)   $   (0.16)
Weighted-average shares of common       80.8         71.8                              76.1          71.5
stock outstanding - diluted

Core operating metrics and internal growth

-- Percentage of annual rental revenue from investment-grade tenants as of 4Q16: 49%

-- Percentage of annual rental revenue from Class A properties in AAA locations as of 4Q16: 79%

-- Occupancy for operating properties in North America at 96.6% as of 4Q16

-- Operating margin at 71% for 4Q16

-- Adjusted EBITDA margin at 67% for 4Q16

-- See "Solid internal growth" in the Key Highlights section (left side of page) of this Earnings Press Release for information on our leasing activity and same property net operating income growth.

External growth

Disciplined allocation of capital to visible, multiyear, highly leased value-creation pipeline

-- See page 1 of this earnings press release for key highlights.

Strategic acquisitions

-- In November 2016, we acquired the remaining 49% interest in our real estate joint venture with Uber Technologies, Inc. for $90.1 million. The real estate joint venture owned land parcels located at 1455 and 1515 Third Street and a parking garage structure in our Mission Bay/SoMa submarket of San Francisco.

-- The former real estate joint venture was expected to complete the development of two new Class A properties in 2018, pursuant to leases with Uber.

-- As a result of the acquisition of the remaining 49% ownership interest, we own a 100% fee simple interest in both land parcels and the parking garage and are no longer obligated to fund the development of the two Class A properties.

-- In connection with the acquisition of the remaining interest in the land and parking garage, we leased these assets to Uber for 75 years, beginning in November 2016. Uber will develop and own 100% of the two Class A properties on the land parcels.

-- The $90.1 million purchase price includes $56.8 million payable in 2017.

-- Initial stabilized yields on our total project investment of $155.0 million (including our investment in our initial 51% interest) are 14.4% and 7.0% (cash basis). Cash rents commence in February 2017.

-- In November 2016, we acquired One Kendall Square, a 644,771 RSF, nine-building collaborative life science and technology campus located in the east side of our Cambridge submarket of Greater Boston, for a purchase price of $725.0 million, including the assumption of a $203.0 million secured note payable. The campus is 97.3% occupied, and we expect to achieve an initial stabilized yield (cash basis) of 6.2% upon completion of near-term renewals and re-leasing of space (see below). This acquisition provides us with a significant opportunity to increase cash flows through the following:

-- $47/RSF average in-place annual rents (mix of office gross rents and lab triple net rents), significantly below-market;

-- 55% contractual lease expirations through 2019;

-- Conversion of campus office space into office/laboratory space through redevelopment; and

-- Entitled land parcel for near-term ground-up development of an additional building aggregating 172,500 square feet.

-- In October 2016, we acquired Torrey Ridge Science Center, a 294,993 RSF, three-building collaborative life science campus located in the heart of our Torrey Pines submarket of San Diego, for a purchase price of $182.5 million. The campus is 87.1% occupied, and we expect to achieve an initial stabilized yield (cash basis) of 6.8% at stabilization in 1H18 upon completion of near-term renewals/re-leasing of acquired below-market leases and the conversion of 75,953 RSF of existing shell and office space into office/laboratory space.

Strategic dispositions

-- During 4Q16, we completed the dispositions of our remaining operating properties and land parcels in India for an aggregate sales price of approximately $53.4 million. As of December 31, 2016, we had no remaining investments in real estate in India.

Balance sheet management

Improvement in balance sheet leverage and liquidity

-- $14.2 billion total market capitalization as of 4Q16;

-- $2.2 billion of liquidity as of 4Q16;

-- Net debt to Adjusted EBITDA:

-- 4Q16 annualized: 6.1x; 4Q16 trailing 12 months: 6.6x;

-- 4Q17 annualized target range: 5.5x to 6.0x;

-- Fixed-charge coverage ratio:

-- 4Q16 annualized: 3.8x; 4Q16 trailing 12 months: 3.6x;

-- 4Q17 annualized target: greater than 4.0x;

-- Repurchased 3.0 million shares of our 7.00% Series D cumulative convertible preferred stock at an aggregate price of $108.2 million, or $36.12 per share, and recognized a preferred stock redemption charge of $35.7 million in 4Q16;

-- In October 2016, we filed an "at the market" common stock offering program, which allows us to sell up to an aggregate of $600.0 million of our common stock. During 4Q16, we sold an aggregate of 3.4 million shares of common stock for gross proceeds of $354.2 million, or $105.73 per share, and net proceeds of approximately $348.4 million;

-- In December 2016, we sold an aggregate of 7.5 million shares of our common stock to settle our forward equity sales agreements executed in July 2016. Net proceeds, after issuance costs and underwriters’ discount, of $715.9 million were used to fund the acquisition of One Kendall Square, located in East Cambridge, to lower net debt to Adjusted EBITDA by 0.3x, and fund construction;

-- Raised $380.9 million in 2016 from (i) completed dispositions aggregating $274.6 million and (ii) funding from our joint venture partner aggregating $106.3 million, primarily in 2016, related to the sale of a partial interest in 10290 Campus Point Drive. See page 4 of this earnings press release for additional information;

-- Current and future value-creation pipeline was 10% of gross investments in real estate in North America as of 4Q16, with a 4Q17 target of less than 10%; and

-- 4% unhedged variable-rate debt as a percentage of total debt as of 4Q16.

Sustainability and health and wellness

-- 51% of annual rental revenue expected from Leadership in Energy and Environmental Design ("LEED") certified projects upon completion of in-process projects.

-- In November 2016, we became the first REIT to be named a first-in-class Fitwel Champion to promote health and wellness in the workplace and to earn Fitwel building certifications.

Subsequent events in January 2017

-- Acquired land parcels aggregating 2.6 acres at 88 Bluxome Street in our Mission Bay/SoMa submarket of San Francisco for a purchase price of $130.0 million. We are currently obtaining entitlements for the development of this site and anticipate an aggregate of 1,070,925 RSF to be available for construction of two buildings in separate phases. We have leased the property back to the seller until we obtain entitlements.

-- Executed lease extensions with Novartis AG aggregating 302,626 RSF at 100 and 200 Technology Square in our Cambridge submarket of Greater Boston.

Incremental Annual Net Operating Income from Development and Redevelopment of New Class A Properties December 31, 2016

https://mma.prnewswire.com/media/462466/Alexandria_Real_Estate_Equities_Net_Operating.jpg

(1) Represents incremental annual net operating income upon stabilization of our development and redevelopment of new Class A properties, including only our share of real estate joint venture projects. RSF and percentage leased represent 100% of each property.

Dispositions in 2016 December 31, 2016 (Dollars in thousands)

                                                                                                                         Net                 Net                     Classification
                                                                                                                         Operating           Operating Income
                                                                                                                         Income              (Cash)
Property/Market/Submarket                                                         Date of Sale  RSF/Acres                               (1)                     (1)  Construction Funding   Asset
                                                                                                                                                                                            Sales
Dispositions completed 1Q16 to 3Q16:
16020 Industrial Drive/Maryland/Gaithersburg                                      4/21/2016     71,000 RSF               $   1,022           $     896               $      --              $  6,400
Land parcels in North America (Gaithersburg/Non-cluster)                          Various       5.9 acres                N/A                 N/A                     --                        8,700
Land parcels in India                                                             Various       28 acres                 N/A                 N/A                     --                        12,767 (2)
                                                                                                                                                                     --                        27,867
Two joint ventures - 45% partial interest sales:
10290 Campus Point Drive/San Diego/University Town Center                         6/29/16       305,006 RSF              $   15,832 (3)      $     14,665 (3)        106,263        (4)        --
10300 Campus Point Drive/San Diego/University Town Center                         12/15/16      449,759 RSF                                                          --                        150,008(4)
Dispositions completed in 4Q16:
306 Belmont Street and 350 Plantation Street/Greater Boston/ Route 495/Worcester  12/9/16       90,690 RSF               $   1,558           $     1,348             --                        17,550
560 Eccles Avenue/San Francisco/South San Francisco                               12/21/16      3.3 acres                N/A                 N/A                     --                        12,000
7990 Enterprise Street/Canada                                                     12/15/16      66,000 RSF               965                 957                     --                        13,836
Operating properties and land parcels in India                                    4Q16          566,355 RSF / 168 acres  363                 391                     --                        53,364 (2)
                                                                                                                                                                     --                        96,750
                                                                                                                                                                     $      106,263         $  274,625
(1) Represents annualized amounts for the quarter ended prior to the date of sale. Cash net operating income excludes straight-line rent and amortization of acquired below-market leases.
(2) Represents the completion of the sale of all of our investments in real estate in India. During 2016, we recognized impairments of real estate related to the dispositions of assets in Asia aggregating $194.3 million. Refer to page 43 of our Supplemental Information for additional information.
(3) Represents a 45% partial interest share of net operating income and cash net operating income: (i) anticipated upon stabilization of the redevelopment of 10290 Campus Point Drive and (ii) realized for 10300 Campus Point Drive during 3Q16.
(4) Aggregate proceeds of $256.3 million, including gross proceeds of $68.6 million received as of 3Q16, $153.0 million received during 4Q16, and additional future proceeds of $34.7 million to be received primarily in 1Q17.

Acquisitions in 2016 December 31, 2016 (Dollars in thousands)

                                                                        Date of Purchase                        Square Footage                            Occupancy         Unlevered Yields
Property/Market/Submarket                                  Type                           Number of Properties  Operating  Future          Purchase                         Initial      Initial Stabilized
                                                                                                                           Value-Creation  Price                            Stabilized
                                                                                                                                                                 Cash Basis Cash Basis
Torrey Ridge Science Center/San Diego/Torrey Pines         Operating    10/3/16           3                     294,993    --              $  182,500     87.1%             6.8%  (1)    7.1%      (1)
One Kendall Square/Greater Boston/Cambridge (2)            Operating/   11/7/16           9                     644,771    172,500         725,000        97.3%             6.2%  (3)    6.4%      (3)
                                                           Development
1455 and 1515 Third Street/San Francisco/Mission Bay/SoMa  Operating    11/10/16          2                     422,980    --              90,100     (4) 100.0%            N/A   (5)    N/A       (5)
(acquisition of remaining 49% interest)
                                                                                          14                    1,362,744  172,500         $  997,600
(1) At stabilization in 1H18, upon completion of near-term renewals/re-leasing of acquired below-market leases and the conversion of 75,953 RSF of existing shell and office space into office/laboratory space.
(2) Refer to pages 5-7 of our Earnings Press Release and Supplemental Information for the Second Quarter Ended June 30, 2016, for additional discussion on our acquisition of One Kendall Square.
(3) Upon stabilization at completion of the ground-up development of our entitled land parcel.
(4) The purchase price includes $56.8 million payable in 2017.
(5) See page 2 of our Earnings Press Release for discussion of our overall project investment and yields after our acquisition of the 49% noncontrolling interest.

Guidance December 31, 2016 (Dollars in millions, except per share amounts)

The following updated guidance is based on our current view of existing market conditions and assumptions for the year ending December 31, 2017. There can be no assurance that actual amounts will be materially higher or lower than these expectations. See our discussion of "forward-looking statements" on page 7.

Earnings per Share and Funds From Operations per Share Attributable to Alexandria’s Common
Stockholders - Diluted
Earnings per share                              $1.49 to $1.69
Depreciation and amortization (1)                                  4.45
Allocation to unvested restricted stock awards                     (0.04)
Funds from operations per share                 $5.90 to $6.10
Key Assumptions                                                Low     High
Occupancy percentage in North America as of December 31, 2017  96.6%   97.2%
Lease renewals and re-leasing of space:
Rental rate increases                                          18.5%   21.5%
Rental rate increases (cash basis)                             6.5%    9.5%
Same property performance:
Net operating income increase                                  1.5%    3.5%
Net operating income increase (cash basis)                     5.5%    7.5%
Straight-line rent revenue (4)                                 $ 107   $ 112
General and administrative expenses (5)                        $ 68    $ 73
Capitalization of interest                                     $ 42    $ 52
Interest expense                                               $ 131   $ 141
Key Credit Metrics                                                               2017 Guidance
Net debt to Adjusted EBITDA - 4Q17 annualized                                    5.5x to 6.0x
Net debt and preferred stock to Adjusted EBITDA - 4Q17 annualized                5.5x to 6.0x
Fixed-charge coverage ratio - 4Q17 annualized                                    Greater than 4.0x
Value-creation pipeline percentage of gross real estate as of December 31, 2017  Less than 10%
Key Sources and Uses of Capital                            Range                 Midpoint
Sources of capital:
Net cash provided by operating activities after dividends  $  115     $  135     $  125
Incremental debt                                           460        440        450
Real estate dispositions and common equity (2)             450        720        585
Total sources of capital                                   $  1,025   $  1,295   $  1,160
Uses of capital:
Construction                                               $  815     $  915     $  865
Acquisitions (3)                                           150        250        200
7.00% Series D preferred stock repurchases                 60         130        95
Total uses of capital                                      $  1,025   $  1,295   $  1,160
Incremental debt (included above):
Issuance of unsecured senior notes payable                 $  375     $  475     $  425
Borrowings - secured construction loans                    200        250        225
Repayments of secured notes payable                        (5)        (10)       (8)
Repayment of unsecured senior term loan                    (200)      (200)      (200)
$1.65 billion unsecured senior line of credit/other        90         (75)       8
Incremental debt                                           $  460     $  440     $  450
(1) Includes depreciation related to the final purchase price allocations for the acquisitions of Torrey Ridge Science Center and One Kendall Square that closed in 4Q16.
(2) Includes our share of the proceeds from the anticipated sale of a condo interest in 203,090 RSF of our unconsolidated real estate joint venture development project at 360 Longwood Avenue, aggregating approximately $65.7 million, pursuant to the exercise of a purchase option by the anchor tenant. The sale is expected to close in mid-2017.
(3) Includes the acquisition of 88 Bluxome Street in our Mission Bay/SoMa submarket of San Francisco for $130.0 million, which closed in January 2017, and $56.8 million related to 1455 and 1515 Third Street in our Mission Bay/SoMa submarket (see page 5).
(4) Straight-line rent revenue includes free rent and rent escalations. For competitive reasons, we do not provide disclosure of free rent included in straight-line rent revenue on expected deliveries in anticipation of future negotiations with potential tenants. During 4Q16, approximately 84% of straight-line rent revenue related to initial free rent concessions granted on value-creation projects recently placed into service. Initial free rent concessions granted on value-creation projects recently placed into service as a percentage of straight-line rent revenue for the year ending December 31, 2017 is expected to be consistent with 4Q16.
(5) General and administrative expenses as a percentage of total assets and total revenues for the year ending December 31, 2017, are expected to be consistent with 2016.

Earnings Call Information and About the Company December 31, 2016

We will host a conference call on Tuesday, January 31, 2017, at 3:00 p.m. Eastern Time ("ET")/noon Pacific Time ("PT"), which is open to the general public to discuss our financial and operating results for the fourth quarter and year ended December 31, 2016. To participate in this conference call, dial (866) 524-3160 or (412) 317-6760 shortly before 3:00 p.m. ET/noon PT and ask the operator to join the Alexandria Real Estate Equities, Inc. call. The audio webcast can be accessed at www.are.com, in the "For Investors" section. A replay of the call will be available for a limited time from 5:00 p.m. ET/2:00 p.m. PT on Tuesday, January 31, 2017. The replay number is (877) 344-7529 or (412) 317-0088, and the confirmation code is 10096814.

Additionally, a copy of this Earnings Press Release and Supplemental Information for the fourth quarter and year ended December 31, 2016, is available in the "For Investors" section of our website at www.are.com or by following this link: http://www.are.com/fs/2016q4.pdf .

About the Company

Alexandria Real Estate Equities, Inc. (ARE ) is an urban office real estate investment trust ("REIT") uniquely focused on collaborative life science and technology campuses in AAA innovation cluster locations, with a total market capitalization of $14.2 billion and an asset base in North America of 25.2 million square feet as of December 31, 2016. The asset base in North America includes 19.9 million RSF of operating properties and development and redevelopment of new Class A properties (under construction or pre-construction), and 5.3 million square feet of future ground-up development projects. Alexandria pioneered this niche in 1994 and has since established a significant market presence in key locations, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland, and Research Triangle Park. Alexandria has a longstanding and proven track record of developing Class A properties clustered in urban life science and technology campuses that provide its innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity and success. We believe these advantages result in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. For additional information on Alexandria, please visit www.are.com.

***********

This document includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements regarding our 2017 earnings per share attributable to Alexandria’s common stockholders - diluted, 2017 funds from operations per share attributable to Alexandria’s common stockholders - diluted, net operating income, and our projected sources and uses of capital. You can identify the forward-looking statements by their use of forward-looking words, such as "forecast," "guidance," "projects," "estimates," "anticipates," "believes," "expects," "intends," "may," "plans," "seeks," "should," or "will," or the negative of those words or similar words. These forward-looking statements are based on our current expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts, as well as a number of assumptions concerning future events. There can be no assurance that actual results will not be materially higher or lower than these expectations. These statements are subject to risks, uncertainties, assumptions, and other important factors that could cause actual results to differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, without limitation, our failure to obtain capital (debt, construction financing, and/or equity) or refinance debt maturities, increased interest rates and operating costs, adverse economic or real estate developments in our markets, our failure to successfully place into service and lease any properties undergoing development or redevelopment and our existing space held for future development or redevelopment (including new properties acquired for that purpose), our failure to successfully operate or lease acquired properties, decreased rental rates, increased vacancy rates or failure to renew or replace expiring leases, defaults on or non-renewal of leases by tenants, adverse general and local economic conditions, an unfavorable capital market environment, decreased leasing activity or lease renewals, and other risks and uncertainties detailed in our filings with the Securities and Exchange Commission ("SEC"). Accordingly, you are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements are made as of the date of this earnings press release, and unless otherwise stated, we assume no obligation to update this information and expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. For more discussion relating to risks and uncertainties that could cause actual results to differ materially from those anticipated in our forward-looking statements, and risks to our business in general, please refer to our SEC filings, including our most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.

Consolidated Statements of Income December 31, 2016 (In thousands, except per share amounts)

                                                                              Three Months Ended                                                          Year Ended
                                                                              12/31/16        9/30/16        6/30/16          3/31/16       12/31/15      12/31/16         12/31/15
Revenues:
Rental                                                                        $    187,315    $    166,591   $    161,638     $   158,276   $   158,100   $    673,820     $    608,824
Tenant recoveries                                                             58,270          58,681         54,107           52,597        54,956        223,655          209,063
Other income                                                                  3,577           5,107          10,331           5,216         10,899        24,231           25,587
Total revenues                                                                249,162         230,379        226,076          216,089       223,955       921,706          843,474
Expenses:
Rental operations                                                             73,244          72,002         67,325           65,837        68,913        278,408          261,232
General and administrative                                                    17,458          15,854         15,384           15,188        15,102        63,884           59,621
Interest                                                                      31,223          25,850         25,025           24,855        28,230        106,953          105,813
Depreciation and amortization                                                 95,222          77,133         70,169           70,866        72,245        313,390          261,289
Impairment of real estate                                                     16,024          8,114          156,143          28,980        8,740         209,261          23,250
Loss on early extinguishment of debt                                          --              3,230          --               --            --            3,230            189
Total expenses                                                                233,171         202,183        334,046          205,726       193,230       975,126          711,394
Equity in earnings (losses) of unconsolidated real estate joint ventures      86              273            (146)            (397)         (174)         (184)            1,651
Gain on sales of real estate - rental properties                              3,715           --             --               --            12,426        3,715            12,426
Income (loss) from continuing operations                                      19,792          28,469         (108,116)        9,966         42,977        (49,889)         146,157
Loss from discontinued operations                                             --              --             --               --            --            --               (43)
Gain on sales of real estate - land parcels                                   --              90             --               --            --            90               --
Net income (loss)                                                             19,792          28,559         (108,116)        9,966         42,977        (49,799)         146,114
Net income attributable to noncontrolling interests                           (4,488)         (4,084)        (3,500)          (4,030)       (972)         (16,102)         (1,897)
Net income (loss) attributable to Alexandria Real Estate Equities, Inc.’s     15,304          24,475         (111,616)        5,936         42,005        (65,901)         144,217
stockholders
Dividends on preferred stock                                                  (3,835)         (5,007)        (5,474)          (5,907)       (6,246)       (20,223)         (24,986)
Preferred stock redemption charge                                             (35,653)        (13,095)       (9,473)          (3,046)       --            (61,267)         --
Net income attributable to unvested restricted stock awards                   (943)           (921)          (1,085)          (801)         (628)         (3,750)          (2,364)
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s     $    (25,127)   $    5,452     $    (127,648)   $   (3,818)   $   35,131    $    (151,141)   $    116,867
common stockholders
Net (loss) income per share attributable to Alexandria Real Estate Equities,  $    (0.31)     $    0.07      $    (1.72)      $   (0.05)    $   0.49      $    (1.99)      $    1.63
Inc.’s common stockholders - basic and diluted
Weighted-average shares of common stock outstanding:
Basic                                                                         80,800          76,651         74,319           72,584        71,833        76,103           71,529
Diluted                                                                       80,800          77,402         74,319           72,584        71,833        76,103           71,529
Dividends declared per share of common stock                                  $    0.83       $    0.80      $    0.80        $   0.80      $   0.77      $    3.23        $    3.05

Consolidated Balance Sheets December 31, 2016 (In thousands)

                                                                  12/31/16             9/30/16          6/30/16          3/31/16          12/31/15
Assets
Investments in real estate                                        $    9,077,972       $    7,939,179   $    7,774,608   $    7,741,466   $    7,629,922
Investments in unconsolidated real estate joint ventures          50,221          (1)  133,580          132,433          127,165          127,212
Cash and cash equivalents                                         125,032              157,928          256,000          146,197          125,098
Restricted cash                                                   16,334               16,406           13,131           14,885           28,872
Tenant receivables                                                9,744                9,635            9,196            9,979            10,485
Deferred rent                                                     335,974              318,286          303,379          293,144          280,570
Deferred leasing costs                                            195,937              191,765          191,619          192,418          192,081
Investments                                                       342,477              320,989          360,050          316,163          353,465
Other assets                                                      201,197              206,133          104,414          130,115          133,312
Total assets                                                      $    10,354,888      $    9,293,901   $    9,144,830   $    8,971,532   $    8,881,017
Liabilities, Noncontrolling Interests, and Equity
Secured notes payable                                             $    1,011,292       $    789,450     $    722,794     $    816,578     $    809,818
Unsecured senior notes payable                                    2,378,262            2,377,482        2,376,713        2,031,284        2,030,631
Unsecured senior line of credit                                   28,000               416,000          72,000           299,000          151,000
Unsecured senior bank term loans                                  746,471              746,162          945,030          944,637          944,243
Accounts payable, accrued expenses, and tenant security deposits  731,671         (1)  605,181          593,628          628,467          589,356
Dividends payable                                                 76,914               66,705           67,188           64,275           62,005
Total liabilities                                                 4,972,610            5,000,980        4,777,353        4,784,241        4,587,053
Commitments and contingencies
Redeemable noncontrolling interests                               11,307               9,012            9,218            14,218           14,218
Alexandria Real Estate Equities, Inc.’s stockholders’ equity:
7.00% Series D cumulative convertible preferred stock             86,914               161,792          188,864          213,864          237,163
6.45% Series E cumulative redeemable preferred stock              130,000              130,000          130,000          130,000          130,000
Common stock                                                      877                  768              766              729              725
Additional paid-in capital                                        4,672,650            3,649,263        3,693,807        3,529,660        3,558,008
Accumulated other comprehensive income (loss)                     5,355                (31,745)         8,272            (8,533)          49,191
Alexandria’s stockholders’ equity                                 4,895,796            3,910,078        4,021,709        3,865,720        3,975,087
Noncontrolling interests                                          475,175              373,831          336,550          307,353          304,659
Total equity                                                      5,370,971            4,283,909        4,358,259        4,173,073        4,279,746
Total liabilities, noncontrolling interests, and equity           $    10,354,888      $    9,293,901   $    9,144,830   $    8,971,532   $    8,881,017
(1) See page 2 of our Earnings Press Release for additional information on our acquisition of the remaining 49% interest in our real estate joint venture with Uber.

Funds From Operations and Funds From Operations Per Share December 31, 2016 (In thousands, except per share amounts)

The following tables present a reconciliation of net (loss) income attributable to Alexandria’s common stockholders - basic, the most directly comparable financial measure presented in accordance with generally accepted accounting principles ("GAAP"), including our share of amounts from consolidated and unconsolidated real estate joint ventures, to funds from operations attributable to Alexandria’s common stockholders - diluted, and funds from operations attributable to Alexandria’s common stockholders - diluted, as adjusted, for the periods below:

                                                                                         Three Months Ended                                                       Year Ended
                                                                                         12/31/16       9/30/16       6/30/16         3/31/16       12/31/15      12/31/16           12/31/15
Net (loss) income attributable to Alexandria’s common stockholders                       $   (25,127)   $   5,452     $   (127,648)   $   (3,818)   $    35,131   $   (151,141)      $    116,867
Depreciation and amortization                                                            95,222         77,133        70,169          70,866        72,245        313,390            261,289
Noncontrolling share of depreciation and amortization from consolidated real estate JVs  (2,598)        (2,224)       (2,226)         (2,301)       (372)         (9,349)            (372)
Our share of depreciation and amortization from unconsolidated real estate JVs           655            658           651             743           655           2,707              1,734
Gain on sales of real estate - rental properties                                         (3,715)        --            --              --            (12,426)      (3,715)            (12,426)
Gain on sales of real estate - land parcels                                              --             (90)          --              --            --            (90)               --
Impairment of real estate - rental properties                                            3,506          6,293         88,395          --            8,740         98,194        (1)  23,250
Allocation to unvested restricted stock awards                                           --             (438)         --              (80)          (522)         --                 (1,758)
Funds from operations attributable to Alexandria’s common stockholders -                 67,943         86,784        29,341          65,410        103,451       249,996            388,584
basic and diluted (2)
Non-real estate investment income                                                        --             --            (4,361)         --            (7,731)       (4,361)            (13,109)
Impairments of land parcels and non-real estate investments                              12,511         4,886         67,162          28,980        --            113,539       (1)  --
Loss on early extinguishment of debt                                                     --             3,230         --              --            --            3,230              189
Preferred stock redemption charge                                                        35,653         13,095        9,473           3,046         --            61,267             --
Allocation to unvested restricted stock awards                                           (605)          (359)         (530)           (358)         85            (2,356)            110
Funds from operations attributable to Alexandria’s common stockholders -                 $   115,502    $   107,636   $   101,085     $   97,078    $    95,805   $   421,315        $    375,774
diluted, as adjusted
(1) Includes impairment of real estate aggregating $209.3 million and impairment of non-real estate investment aggregating approximately $3.1 million, net of amounts attributable to noncontrolling interests.
(2) Calculated in accordance with standards established by the Advisory Board of Governors of the National Association of Real Estate Investment Trusts (the "NAREIT Board of Governors") in its April 2002 White Paper and related implementation guidance.

Funds From Operations and Funds From Operations Per Share (continued) December 31, 2016 (In thousands)

The following table presents a reconciliation of net (loss) income per share attributable to Alexandria’s common stockholders - basic, the most directly comparable financial measure presented in accordance with GAAP, including our share of amounts from consolidated and unconsolidated real estate joint ventures, to funds from operations per share attributable to Alexandria’s common stockholders - diluted, and funds from operations per share attributable to Alexandria’s common stockholders - diluted, as adjusted, for the periods below. Amounts allocable to unvested restricted stock awards are not material and are not presented separately within the table below. Per share amounts may not add due to rounding.

                                                                                           Three Months Ended                                                 Year Ended
                                                                                           12/31/16        9/30/16       6/30/16      3/31/16      12/31/15   12/31/16        12/31/15
Net (loss) income per share attributable to Alexandria’s common stockholders               $   (0.31)      $   0.07      $   (1.72)   $   (0.05)   $   0.49   $   (1.99)      $   1.63
Depreciation and amortization                                                              1.15            0.97          0.92         0.95         1.00       4.02            3.64
Gain on sales of real estate - rental properties                                           (0.05)          --            --           --           (0.17)     (0.05)          (0.17)
Impairment of real estate - rental properties                                              0.05            0.08          1.19         --           0.12       1.29            0.33
Funds from operations per share attributable to Alexandria’s common stockholders -         0.84            1.12          0.39         0.90         1.44       3.27            5.43
basic and diluted (1)
Non-real estate investment income                                                          --              --            (0.06)       --           (0.11)     (0.06)          (0.18)
Impairments of land parcels and non-real estate investments                                0.15            0.06          0.90         0.40         --         1.47            --
Loss on early extinguishment of debt                                                       --              0.04          --           --           --         0.04            --
Preferred stock redemption charge                                                          0.43            0.17          0.13         0.04         --         0.79            --
Funds from operations per share attributable to Alexandria’s common stockholders -         $   1.42        $   1.39      $   1.36     $   1.34     $   1.33   $   5.51        $   5.25
diluted, as adjusted
Weighted-average shares of common stock outstanding for calculating funds from operations  81,280     (2)  77,402   (2)  74,319       72,584       71,833     76,412     (2)  71,529
per share and funds from operations, as adjusted, per share - diluted
(1) Calculated in accordance with standards established by the NAREIT Board of Governors in its April 2002 White Paper and related implementation guidance.
(2) Includes weighted average shares related to our forward equity sales agreements. See page 2 of our Earnings Press Release for additional information on our forward equity sales agreements and page 54 of our Supplemental Information for the definition of weighted-average shares of common stock outstanding - diluted.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/alexandria-real-estate-equities-inc-reports-fourth-quarter-and-year-ended-december-31-2016-financial-and-operating-results-300398874.html

SOURCE Alexandria Real Estate Equities, Inc.

https://rt.prnewswire.com/rt.gif?NewsItemId=NY99240&Transmission_Id=201701301610PR_NEWS_USPR_____NY99240&DateId=20170130



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