ALEXANDRIA REAL ESTATE EQUITIES, INC. PASADENA, Calif., Jan. 30, 2017 /PRNewswire/ -- Alexandria Real Estate Equities, Inc. (NYSE: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
(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
--- ----------
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
(4)
1455 and 1515 Third Street/San Francisco/Mission Bay/SoMa Operating 11/10/16 2 422,980 - 90,100 100.0% 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. (NYSE: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.
