Alexandria Real Estate Equities, Inc. Reports Fourth Quarter and Year Ended December 31, 2013 Financial and Operating Results

EPS - Diluted of $0.51 for 4Q13

FFO Per Share - Diluted, as Adjusted, of $1.16 for 4Q13

Total Revenues of $168.8 Million for 4Q13

NOI of $118.9 Million for 4Q13

Strong Demand in Key Cluster Submarkets Drives Record Leasing Activity

Feb 03, 2014, 16:05 ET from Alexandria Real Estate Equities, Inc.

PASADENA, Calif., Feb. 3, 2014 /PRNewswire/ -- Alexandria Real Estate Equities, Inc. (NYSE: ARE) today announced financial and operating results for the fourth quarter and year ended December 31, 2013.

"We are very pleased to announce our fourth quarter and year ended December 31, 2013, financial and operating results.  Our per share results for the fourth quarter and year ended December 31, 2013, reflected 1) the strength of our core operations, 2) completion of significant high value Class A development projects in AAA locations in urban science and technology cluster markets, and 3) the completion of many significant and important improvements in our long-term capital structure.  Monetization of significant non-income-producing land parcels (Alexandria Center™ for Science and Technology located in Mission Bay, Alexandria Center™ at Kendall Square located in Cambridge, and Alexandria Center™ for Life Science located in New York City) through lease-up and development, and through selective sales has generated significant long-term asset value.  In 2012 and 2013, we sold certain non-strategic income-producing assets and land for approximately $275 million.  Proceeds from these sales, including the $55 million from the sale of a land parcel in late 2013, were invested into high value/low cap rate Class A development projects with an estimated value of approximately $450 million, representing an increase of almost $175 million above the value of the properties sold.  We are also pleased with the successful execution of our second 10-year unsecured bond offering in early 2013 at a rate of 3.90%.  The capital generated from the sales of properties and issuance of long-term debt and common stock resulted in short-term per share dilution, improved our long-term capital structure and funded our Class A developments, among others, at Alexandria Center™ at Kendall Square located in Cambridge.  We are optimistic about our ability to deliver solid and stable per share earnings growth and continue to increase long-term asset value in 2014 and beyond," said Joel S. Marcus, Chief Executive Officer, and Founder of Alexandria Real Estate Equities, Inc.

Results

  • Net income attributable to Alexandria Real Estate Equities, Inc.'s ("Alexandria's") common stockholders – diluted:
    • $36.2 million, or $0.51 per share, for 4Q13 compared to $21.0 million, or $0.33 per share, for 4Q12
    • $108.8 million, or $1.60 per share, for YE 2013 compared to $67.6 million, or $1.09 per share, for YE 2012
  • Funds from operations ("FFO") attributable to Alexandria's common stockholders – diluted, as adjusted:
    • $82.5 million, or $1.16 per share, for 4Q13 compared to $72.9 million, or $1.16 per share, for 4Q12
    • $299.1 million, or $4.40 per share, for YE 2013 compared to $272.1 million, or $4.38 per share, for YE 2012

Core operating metrics

  • Total revenues:
    • $168.8 million for 4Q13, up 11.6%, compared to $151.3 million for 4Q12
    • $631.2 million for YE 2013, up 9.9%, compared to $574.5 million for YE 2012
  • Net operating income ("NOI"):
    • $118.9 million for 4Q13, up 13.1%, compared to $105.1 million for 4Q12
    • $442.1 million for YE 2013, up 10.0%, compared to $401.7 million for YE 2012
  • Same property NOI performance:
    • 4.6% and 1.4% increases on a cash and GAAP basis, respectively, for 4Q13 compared to 4Q12
    • 5.4% and 1.8% increases on a cash and GAAP basis, respectively, for YE 2013 compared to YE 2012
  • Leasing activity at record levels for 4Q13:
    • Executed 64 leases for 1,344,687 rentable square feet ("RSF"), including 218,986 RSF of development and redevelopment space
    • Rental rate increases of 2.6% and 18.2% on a cash and GAAP basis, respectively, on renewed/re-leased space
  • Leasing activity at record levels for YE 2013:
    • Executed 212 leases for 3,645,056 RSF, including 1,174,306 RSF of development and redevelopment space
    • Rental rate increases of 4.0% and 16.2% on a cash and GAAP basis, respectively, on renewed/re-leased space
  • Occupancy for properties in North America, as of December 31, 2013:
    • 390 basis points ("bps") increase in overall occupancy of operating and redevelopment properties from YE 2012 to YE 2013
    • 95.9% for operating properties and 95.5% for operating and redevelopment properties, up 90 bps and 100 bps, respectively, compared to September 30, 2013
  • Operating margins steady at 70% for 4Q13 and YE 2013
  • 51% of total annualized base rent ("ABR") from investment-grade client tenants
  • Key leasing in 4Q13:
    • Quest Diagnostics Incorporated extended their lease for 248,186 RSF at 14225 Newbrook Drive in the Maryland market
    • The United States Government (NIH) extended their leases for 114,255 RSF at 9800 Medical Center Drive and 5 Research Court in the Maryland market
    • Tandem Diabetes Care, Inc. extended their leases for 66,442 RSF at 11025, 11035, and 11045 Roselle Street, and leased an additional 41,163 RSF at 11065 and 11075 Roselle Street in the San Diego market
    • Google Inc. leased 63,430 RSF at 2400/2450 Bayshore Parkway in the San Francisco Bay Area market
    • Medivation, Inc. leased 51,632 RSF at 499 Illinois Street in the San Francisco Bay Area market

Other key 2013 highlights

  • Highest quarter and year of leasing activity in the Company's history
  • $612 million decrease in bank facility debt
  • 9.1% average cash yields (estimate) for developments commenced in 2013
  • 600 bps decrease in non-income-producing assets as a percentage of gross investments in real estate from YE 2012 to YE 2013
  • Seven new LEED Gold certifications

Value-creation projects and external growth

Value-creation development and redevelopment projects delivered in 4Q13

  • In December 2013, we delivered a significant portion of the second building of our flagship Alexandria Center for Life Science in Manhattan at 430 East 29th Street:
    • Delivered 189,011 RSF to high-quality tenants, including Roche and New York University
    • The estimated initial stabilized cash and GAAP yields for the development project are 6.6% and 6.5%, respectively, and the estimated average cash yield is 7.1%
  • In October 2013, we delivered our redevelopment project at 4757 Nexus Center Drive in the University Town Center submarket of San Diego:
    • Delivered 57,198 RSF, or 82%, of this project to Genomatica, Inc.  The tenant will take occupancy of the remaining 12,475 RSF in 18 to 24 months
    • The estimated initial stabilized cash and GAAP yields for the entire redevelopment project are 8.1% and 8.0%, respectively, and the estimated average cash yield is 8.7%

Acquisitions

On November 12, 2013, we acquired three adjacent buildings aggregating 55,213 RSF at 11055, 11065, and 11075 Roselle Street in the Sorrento Valley submarket of San Diego for a total purchase price of $8.3 million.  The buildings are currently undergoing redevelopment and we pre-leased 75% of the space to Tandem Diabetes Care, Inc.  The estimated initial stabilized yields for this project are 7.8% and 7.9%, on a cash and GAAP basis, respectively.  The estimated average cash yield for the project is 8.0%.

On November 27, 2013, we acquired 150 Second Street, a 123,210 RSF, newly developed Class A property in the Cambridge submarket of Greater Boston for a total purchase price of $94.5 million.  The building is 85% leased to two publicly traded life science companies.  The estimated initial stabilized yields for this property are 7.3% and 7.5%, on a cash and GAAP basis, respectively.  The estimated average cash yield for the project is 8.2%.

In 4Q13 we recognized $1.4 million of expenses in connection with several acquisitions, including costs for deals we ultimately did not acquire.  The acquisitions completed in November 2013 and January 2014 were for an aggregate purchase price of $166.8 million.  See subsequent events for additional information.  The acquisition-related expenses have been classified in general and administrative expenses. 

Dispositions

On December 19, 2013, we completed the sale of our final land parcel in the Mission Bay submarket of the San Francisco Bay Area at 1600 Owens Street, along with certain parking spaces, for an aggregate sales price of $55.2 million and a gain of $4.1 million.  Ownership of the parcel was strategically important to Kaiser Foundation Health Plan, Inc. and we will earn a fee to manage the construction of a 219,000 RSF medical office building.

Balance sheet

  • Liquidity of $1.65 billion, consisting of $1.30 billion available under our unsecured senior line of credit, $295.4 million available under our construction loan commitments, and $57.7 million in cash and cash equivalents as of December 31, 2013
  • Net debt to adjusted EBITDA of 6.6x for 4Q13 (annualized)
  • Fixed charge coverage ratio of 3.2x for 4Q13 (annualized)
  • Executed additional interest rate swap agreements to provide a minimum of hedged variable-rate debt of $750 million in 2014 and $500 million in each of 2015 and 2016.
  • Non-income-producing assets (CIP and land) at 17% of gross investments in real estate as of YE 2013, down from 23% as of YE 2012, due to deliveries of development and redevelopment projects and completed land sales
  • Extended the maturity date of a $76.0 million secured note payable from April 20, 2014, to January 20, 2017

LEED certifications

During 2013, we obtained LEED Gold Certifications at seven projects.  As of December 31, 2013, our asset base had 25 LEED Certified projects, including two LEED Platinum projects, 16 LEED Gold projects, and seven LEED Silver projects.  Upon completion of an additional 21 in-process certifications, 50% of the total RSF (continuing operations) will be LEED Certified.

Subsequent events

Acquisition of 3545 Cray Court

On January 30, 2014, we acquired 3545 Cray Court, a 116,556 RSF laboratory/office property located in the Torrey Pines submarket of San Diego, for a total purchase price of $64.0 million.  The property is currently 100% occupied by The Scripps Research Institute.  The estimated initial stabilized yields for this property are 7.0% and 7.2%, on a cash and GAAP basis, respectively.  In connection with the acquisition, we assumed a $40.7 million non-recourse secured note payable with a contractual interest rate of 4.66% and a maturity date of January 2023.

Repayment of secured note payable

On January 31, 2014, we repaid our $208.7 million secured note payable related to Alexandria Technology Square®.  Our joint venture partner funded $20.9 million of the proceeds required to repay the secured note payable.

Guidance

Based on our current view of existing market conditions and other assumptions, we have updated guidance for earnings per share – diluted and FFO per share – diluted, both amounts attributable to Alexandria's common stockholders for the year ended December 31, 2014.  The table below provides a reconciliation of FFO per share – diluted, a non-GAAP measure, from earnings per share – diluted, the most directly comparable GAAP measure, as well as other key assumptions included in our guidance for the year ended December 31, 2014.  We expect that our principal liquidity needs for the year ended December 31, 2014, will be satisfied by the following multiple sources of capital as shown in the table below.  There can be no assurance that our sources and uses of capital will not be materially higher or lower than these expectations.  The key assumptions behind the sources and uses of capital are a favorable capital market environment and performance of our core operations in areas such as delivery of current and future development and redevelopment projects, leasing activity, and lease renewals.  Our expected sources and uses of capital are subject to a number of variables and uncertainties, including those discussed under the "Forward-looking statements" section under Part I and the "Risk Factors" section under Item 1A of our annual report on Form 10-K for the year ended December 31, 2012, in our subsequent quarterly reports on Form 10-Q, and in our subsequent annual report on Form 10-K for the year ended December 31, 2013.  We expect to update our forecast of sources and uses of capital on a quarterly basis.

 

2014 Guidance

EPS and FFO Per Share

Low – High

Earnings per share attributable to Alexandria's common stockholders – diluted

$1.75 – $1.95

Add back: depreciation and amortization

2.87

Other

(0.02)

FFO per share attributable to Alexandria's common stockholders – diluted

$4.60 – $4.80

 

Sources and Uses of Capital

(In thousands)

Low

High

Key Assumptions

(Dollars in thousands)

Low

High

Sources of capital:

Occupancy percentage for operating   properties at December 31, 2014:

    Unsecured senior notes payable

$

350,000

$

450,000

     North America

96.5%

97.0%

    Secured loan additions (construction       loans and assumed debt) (1)

100,000

223,000

Rental rate steps on lease renewals and

    Secured notes payable repayments (2)

(210,000)

(210,000)

  re-leasing of space:

    Activity on our unsecured senior line of       credit and senior unsecured term loan

80,000

(53,000)

    Cash basis

3%

5%

          Net sources of debt capital

320,000

410,000

    GAAP basis

8%

11%

    Net cash provided by operating activities       after dividends

100,000

120,000

Land sales/strategic joint venture capital

145,000

245,000

Same property NOI growth:

Total sources of capital

$

565,000

$

775,000

Cash basis

4%

6%

    GAAP basis

2%

4%

Uses of capital:

Straight-line rents

$

42,000

$

47,000

     Construction

$

565,000

$

625,000

General and administrative expenses

$

48,000

$

52,000

     Acquisitions

150,000

Capitalization of interest

$

35,000

$

45,000

Total uses of capital

$

565,000

$

775,000

Interest expense, net

$

77,000

$

93,000

(1)   Includes the assumption of a non-recourse secured note payable of $40.7 million in connection with the acquisition of a property in January 2014.

(2)   Represents the principal amortization payments on all of our secured notes payable, including one secured note payable related to Alexandria Technology Square® which was repaid on January 31, 2014.  This amount excludes $20.9 million that was funded by our 10% joint venture partner.

Earnings Call Information

We will host a conference call on Tuesday, February 4, 2014, at 3:00 p.m. Eastern Time ("ET")/12:00 p.m. noon Pacific Time ("PT") that is open to the general public to discuss our financial and operating results for the fourth quarter and year ended December 31, 2013.  To participate in this conference call, dial 877-440-5807 or 719-325-4940 and confirmation code 6656527, shortly before 3:00 p.m. ET/12:00 p.m. noon PT.  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 6:00 p.m. ET/3:00 p.m. PT on Tuesday, February 4, 2014.  The replay number is 888-203-1112 or 719-457-0820 and the confirmation code is 6656527.

Additionally, a copy of this Earnings Press Release and Supplemental Information for the fourth quarter and year ended December 31, 2013, is available in the "For Investors" section of our website at www.are.com or by following this link: http://www.are.com/fs/2013q4.pdf.

About the Company

Alexandria Real Estate Equities, Inc. (NYSE: ARE), a self-administered and self-managed real estate investment trust ("REIT"), is the largest and leading REIT focused principally on owning, operating, developing, redeveloping, and acquiring high-quality, sustainable real estate for the broad and diverse life science industry.  As of December 31, 2013, Alexandria's asset base consisted of 30.9 million RSF, including 17.5 million RSF of operating and current value-creation development/redevelopment assets, as well as an additional 13.4 million RSF in future ground-up development projects.  Founded by Jerry M. Sudarsky and Joel S. Marcus in 1994, Alexandria pioneered the laboratory/office niche and has become the leading life science real estate brand and dominant market presence in the top life science clusters, including Greater Boston, the San Francisco Bay Area, San Diego, Greater New York City, Maryland, Seattle, and Research Triangle Park.  Alexandria manages its properties through fully integrated regional and life science teams with unparalleled real estate and life science expertise.  As the Landlord of Choice to the Life Science Industry®, Alexandria is known for its high-quality and diverse client tenant base, which includes renowned academic and medical institutions, multinational pharmaceutical companies, public and private biotechnology entities, United States government research agencies, medical device companies, industrial biotech companies, venture capital firms, and life science product and service companies.  Alexandria has a proven and superior track record developing Class A laboratory/office assets focused primarily in key urban science center campus locations in AAA cluster locations adjacent to leading academic medical research centers, offering highly creative amenities that drive client tenant productivity and foster innovation, and gathering its longstanding and expansive network in the life science community.  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 2014 earnings per share attributable to Alexandria's common stockholders – diluted, 2014 FFO per share attributable to Alexandria's common stockholders – diluted, NOI, and our projected sources and uses of capital for the year ended December 31, 2014.  You can identify the forward-looking statements by their use of forward-looking words, such as "believes," "expects," "may," "will," "should," "seeks," "intends," "plans," "estimates," "anticipates," or "projects," 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.  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 complete and lease our existing space held for redevelopment and new properties acquired for that purpose and any properties undergoing development, 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 client tenants, general and local economic conditions, 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 February 3, 2014, the date this document was first made available on our website, and 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

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended

Year Ended

12/31/13

9/30/13

6/30/13

3/31/13

12/31/12

12/31/13

12/31/12

Revenues:

Rental

$

125,693

$

116,052

$

114,493

$

111,526

$

111,798

$

467,764

$

422,793

Tenant recoveries

39,970

38,691

35,869

35,565

35,671

150,095

133,280

Other income

3,160

3,572

3,568

2,992

3,785

13,292

18,424

Total revenues

168,823

158,315

153,930

150,083

151,254

631,151

574,497

Expenses:

Rental operations

49,892

47,684

46,277

45,186

46,132

189,039

172,756

General and administrative

12,751

11,666

12,455

11,648

12,633

48,520

47,747

Interest

17,783

16,171

15,978

18,020

17,941

67,952

69,184

Depreciation and amortization

48,084

48,866

46,344

45,829

47,280

189,123

185,687

Impairment of land parcel

2,050

2,050

Loss on early extinguishment of debt

1,432

560

1,992

2,225

Total expenses

128,510

125,819

121,614

120,683

126,036

496,626

479,649

Income from continuing operations

40,313

32,496

32,316

29,400

25,218

134,525

94,848

(Loss) income from discontinued operations:

(Loss) income from discontinued operations before impairment of real estate

(143)

(43)

249

837

5,190

900

20,216

Impairment of real estate

(1,601)

(11,400)

(Loss) income from discontinued operations, net

(143)

(43)

249

837

3,589

900

8,816

Gain on sale of land parcel

4,052

772

4,824

1,864

Net income

44,222

32,453

33,337

30,237

28,807

140,249

105,528

Net income attributable to noncontrolling interests

1,110

960

980

982

1,012

4,032

3,402

Dividends on preferred stock

6,471

6,472

6,471

6,471

6,471

25,885

27,328

Preferred stock redemption charge

5,978

Net income attributable to unvested restricted stock awards

394

442

403

342

324

1,581

1,190

Net income attributable to Alexandria's common stockholders

$

36,247

$

24,579

$

25,483

$

22,442

$

21,000

$

108,751

$

67,630

Earnings per share attributable to Alexandria's common stockholders – basic and diluted:

Continuing operations

$

0.51

$

0.35

$

0.38

$

0.35

$

0.27

$

1.59

$

0.95

Discontinued operations, net

0.01

0.06

0.01

0.14

Earnings per share – basic and diluted

$

0.51

$

0.35

$

0.38

$

0.36

$

0.33

$

1.60

$

1.09

Weighted average shares of common stock outstanding for calculating earnings per share attributable to Alexandria's common stockholders:

– Basic

71,000

70,900

66,973

63,161

63,092

68,038

62,160

– Diluted

71,000

70,900

66,973

63,161

63,092

68,038

62,160

 

 

Consolidated Balance Sheets

(In thousands)

(Unaudited)

12/31/13

9/30/13

6/30/13

3/31/13

12/31/12

Assets

Investments in real estate, net

$

6,776,914

$

6,613,761

$

6,453,379

$

6,375,182

$

6,424,578

Cash and cash equivalents

57,696

53,839

302,205

87,001

140,971

Restricted cash

27,709

30,654

30,914

30,008

39,947

Tenant receivables

9,918

8,671

7,577

9,261

8,449

Deferred rent

190,425

182,909

177,507

170,100

170,396

Deferred leasing and financing costs, net

192,658

179,805

164,362

159,872

160,048

Investments

140,288

129,163

122,605

123,543

115,048

Other assets

134,156

159,567

120,740

135,952

90,679

Total assets

$

7,529,764

$

7,358,369

$

7,379,289

$

7,090,919

$

7,150,116

Liabilities, Noncontrolling Interests, and Equity

Secured notes payable

$

708,831

$

708,653

$

711,029

$

730,714

$

716,144

Unsecured senior notes payable

1,048,230

1,048,190

1,048,395

549,816

549,805

Unsecured senior line of credit

204,000

14,000

554,000

566,000

Unsecured senior bank term loans

1,100,000

1,100,000

1,200,000

1,350,000

1,350,000

Accounts payable, accrued expenses, and tenant security deposits

435,342

452,139

368,249

367,153

423,708

Dividends payable

54,420

54,413

52,141

43,955

41,401

Total liabilities

3,550,823

3,377,395

3,379,814

3,595,638

3,647,058

Commitments and contingencies

Redeemable noncontrolling interests

14,444

14,475

14,505

14,534

14,564

Alexandria Real Estate Equities, Inc.'s stockholders' equity:

Series D cumulative convertible preferred stock

250,000

250,000

250,000

250,000

250,000

Series E cumulative redeemable preferred stock

130,000

130,000

130,000

130,000

130,000

Common stock

712

711

710

633

632

Additional paid-in capital

3,572,281

3,578,343

3,596,477

3,075,860

3,086,052

Accumulated other comprehensive loss

(36,204)

(40,026)

(39,565)

(22,890)

(24,833)

Alexandria's stockholders' equity

3,916,789

3,919,028

3,937,622

3,433,603

3,441,851

Noncontrolling interests

47,708

47,471

47,348

47,144

46,643

Total equity

3,964,497

3,966,499

3,984,970

3,480,747

3,488,494

Total liabilities, noncontrolling interests, and equity

$

7,529,764

$

7,358,369

$

7,379,289

$

7,090,919

$

7,150,116

 

Funds From Operations and Adjusted Funds From Operations

(In thousands, except per share amounts)

(Unaudited)

The following table presents a reconciliation of net income attributable to Alexandria's common stockholders – basic, the most directly comparable financial measure presented in accordance with GAAP, to FFO attributable to Alexandria's common stockholders – diluted, FFO attributable to Alexandria's common stockholders – diluted, as adjusted, and AFFO attributable to Alexandria's common stockholders – diluted.  For the computation of the weighted average shares used to compute the per share information, refer to the "Definitions and Other Information" section in our supplemental information.

Three Months Ended

Year Ended

12/31/13

9/30/13

6/30/13

3/31/13

12/31/12

12/31/13

12/31/12

Net income attributable to Alexandria's common stockholders – basic

$

36,247

$

24,579

$

25,483

$

22,442

$

21,000

$

108,751

$

67,630

Depreciation and amortization

48,101

49,102

46,580

46,995

48,072

190,778

192,005

(Gain) loss on sale of real estate

(219)

340

121

(1,564)

Impairment of real estate

1,601

11,400

Gain on sale of land parcel

(4,052)

(772)

(4,824)

(1,864)

Amount attributable to noncontrolling interests/unvested restricted stock awards:

Net income

1,504

1,402

1,383

1,324

1,336

5,613

4,592

FFO

(1,582)

(1,494)

(1,437)

(1,064)

(1,109)

(5,577)

(4,561)

FFO attributable to Alexandria's common stockholders – basic

80,218

73,589

71,018

70,037

70,900

294,862

267,638

Assumed conversion of 8.00% unsecured senior convertible notes

5

5

5

5

15

21

FFO attributable to Alexandria's common stockholders – diluted

80,218

73,594

71,023

70,042

70,905

294,877

267,659

Realized gain on equity investment primarily related to one non-tenant life science entity

(5,811)

Impairment of land parcel

2,050

2,050

Impairment of investments

853

(1)

853

Acquisition-related expenses

1,446

(2)

1,446

Loss on early extinguishment of debt

1,432

560

1,992

2,225

Preferred stock redemption charge

5,978

Allocation to unvested restricted stock awards

(12)

(11)

(12)

(19)

(35)

(39)

FFO attributable to Alexandria's common stockholders – diluted, as adjusted

82,505

75,015

71,571

70,042

72,936

299,133

272,062

Non-revenue-enhancing capital expenditures:

Maintenance building improvements

(1,047)

(1,481)

(337)

(596)

(329)

(3,461)

(2,068)

Tenant improvements and leasing commissions

(8,291)

(3)

(3,739)

(2,990)

(882)

(3,170)

(15,902)

(9,181)

Straight-line rent revenue

(7,928)

(5,570)

(8,239)

(6,198)

(9,240)

(27,935)

(28,456)

Straight-line rent expense on ground leases

445

374

539

538

471

1,896

3,285

Capitalized income from development projects

72

40

9

22

45

143

645

Amortization of acquired above and below market leases

(826)

(830)

(830)

(830)

(844)

(3,316)

(3,200)

Amortization of loan fees

2,636

2,487

2,427

2,386

2,505

9,936

9,832

Amortization of debt premiums/discounts

146

153

115

115

110

529

511

Stock compensation

4,011

3,729

4,463

3,349

3,748

15,552

14,160

Allocation to unvested restricted stock awards

94

28

50

19

63

191

127

AFFO attributable to Alexandria's common stockholders – diluted

$

71,817

$

70,206

$

66,778

$

67,965

$

66,295

$

276,766

$

257,717

Three Months Ended

Year Ended

12/31/13

9/30/13

6/30/13

3/31/13

12/31/12

12/31/13

12/31/12

Net income per share attributable to Alexandria's common stockholders – basic

$

0.51

$

0.35

$

0.38

$

0.36

$

0.33

$

1.60

$

1.09

Depreciation and amortization

0.68

0.69

0.69

0.74

0.76

2.80

3.10

Loss (gain) on sale of real estate

0.01

(0.03)

Impairment of real estate

0.03

0.18

Gain on sale of land parcel

(0.06)

(0.01)

(0.07)

(0.03)

FFO per share attributable to Alexandria's common stockholders – basic and diluted

1.13

1.04

1.06

1.11

1.12

4.33

4.31

Realized gain on equity investment primarily related to one non-tenant life science entity

(0.09)

Impairments

0.01

0.04

0.01

0.04

Acquisition-related expenses

0.02

0.02

Loss on early extinguishment of debt

0.02

0.01

0.04

0.02

Preferred stock redemption charge

0.10

FFO per share attributable to Alexandria's common stockholders – diluted, as adjusted

1.16

1.06

1.07

1.11

1.16

4.40

4.38

Non-revenue-enhancing capital expenditures

(0.13)

(0.07)

(0.05)

(0.02)

(0.06)

(0.28)

(0.18)

Straight-line rent revenue

(0.11)

(0.08)

(0.12)

(0.10)

(0.15)

(0.41)

(0.46)

Straight-line rent expense on ground leases

0.01

0.01

0.01

0.01

0.01

0.03

0.05

Amortization of acquired above and below market leases

(0.01)

(0.01)

(0.01)

(0.01)

(0.01)

(0.05)

(0.05)

Amortization of loan fees

0.03

0.03

0.03

0.04

0.04

0.14

0.16

Stock compensation

0.06

0.05

0.07

0.05

0.06

0.23

0.23

Other

0.01

0.02

AFFO per share attributable to Alexandria's common stockholders – diluted

$

1.01

$

0.99

$

1.00

$

1.08

$

1.05

$

4.07

$

4.15

(1)   Represents an impairment recognized in 4Q13 related to our investment in two private life science companies.

(2)   Represents costs classified in general and administrative expenses in connection with several acquisitions, including costs for deals we ultimately did not acquire.  The acquisitions completed in November 2013 and January 2014 were for an aggregate purchase price of $166.8 million.  See subsequent events for additional information. 

(3)   Includes $3.7 million of leasing commissions for two lease renewals aggregating 307,535 RSF, which extended the lease terms for 10 and 15 years, respectively.

 

SOURCE Alexandria Real Estate Equities, Inc.



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