Alexandria Real Estate Equities, Inc. Reports Third Quarter Ended September 30, 2013 Financial and Operating Results

EPS - Diluted of $0.35

FFO Per Share - Diluted, as Adjusted, of $1.06

AFFO Per Share - Diluted of $0.99

Total Revenues of $158.6 Million

NOI of $110.9 Million

Significant Delivery of Value-Creation Projects

28 Oct, 2013, 16:05 ET from Alexandria Real Estate Equities, Inc.

PASADENA, Calif., Oct. 28, 2013 /PRNewswire/ -- Alexandria Real Estate Equities, Inc. (NYSE: ARE) today announced financial and operating results for the third quarter ended September 30, 2013.

Results

  • Net income attributable to Alexandria Real Estate Equities, Inc.'s ("Alexandria's") common stockholders – diluted:
    • $24.6 million, or $0.35 per share, for 3Q13 compared to $10.6 million, or $0.17 per share, for 3Q12
    • $72.5 million, or $1.08 per share, for YTD 3Q13 compared to $46.6 million, or $0.75 per share, for YTD 3Q12
  • Funds from operations ("FFO") attributable to Alexandria common stockholders – diluted, as adjusted:
    • $75.0 million, or $1.06 per share, for 3Q13 compared to $67.1 million, or $1.08 per share, for 3Q12
    • $216.6 million, or $3.23 per share, for YTD 3Q13 compared to $199.1 million, or $3.22 per share, for YTD 3Q12
  • Adjusted funds from operations ("AFFO") attributable to Alexandria's common stockholders – diluted:
    • $70.2 million, or $0.99 per share, for 3Q13 compared to $65.0 million, or $1.04 per share, for 3Q12
    • $205.0 million, or $3.06 per share, for YTD 3Q13 compared to $191.4 million, or $3.09 per share, for YTD 3Q12

Core operating metrics

  • Total revenues from continuing operations:
    • $158.6 million for 3Q13, up 11.0%, compared to $142.9 million for 3Q12
    • $463.2 million YTD 3Q13, up 9.2%, compared to $424.2 million for YTD 3Q12
  • Net operating income ("NOI") from continuing operations:
    • $110.9 million for 3Q13, up 12.4%, compared to $98.6 million for 3Q12
    • $324.0 million for YTD 3Q13, up 8.9%, compared to $297.4 million for YTD 3Q12
  • Same property NOI performance:
    • 4.7% and 1.9% increases on a cash and GAAP basis, respectively, for 3Q13 compared to 3Q12
    • 6.5% and 2.0% increases on a cash and GAAP basis, respectively, for YTD 3Q13 compared to YTD 3Q12
  • Leasing activity strong during the three months ended September 30, 2013:
    • Executed 57 leases for 829,533 rentable square feet ("RSF"), including 228,311 RSF of development and redevelopment space
    • Rental rate increase of 4.1% and 16.5% on a cash and GAAP basis, respectively, on renewed/re-leased space
  • Occupancy for North American properties, as of September 30, 2013:
    • 95.0% for operating properties and 94.5% for operating and redevelopment properties, up 40 basis points ("bps") and 160 bps, respectively, compared to June 30, 2013
  • Operating margins steady at 70% for 3Q13 and YTD 3Q13
  • Investment-grade client tenants represent 50% of total annualized base rent ("ABR")

Value-creation projects and external growth

Value-creation development and redevelopment projects delivered in 3Q13

  • On September 30, 2013, we delivered a build-to-suit development project located at 225 Binney Street in the Greater Boston market:
    • 305,212 RSF, 100% leased to Biogen Idec Inc. for 15 years
    • Initial stabilized yields of 7.7% and 8.2% for cash and GAAP, respectively; average cash yield of 8.2%
  • During the quarter ended September 30, 2013, we delivered an aggregate of 155,818 RSF at four redevelopment projects in North America:
    • Total redevelopment spaces aggregating 222,082 RSF with occupancy of 83%, including 155,818 RSF delivered in 3Q13 at an average occupancy of 76%, and 66,264 RSF placed in service prior to 3Q13 with occupancy of 100%
    • Average initial stabilized yields for the 222,082 RSF of 7.0% and 7.1% for cash and GAAP, respectively; average cash yield of 7.3%

Acquisitions

On September 16, 2013, we acquired 407 Davis Drive, a Class A laboratory/office property in our Research Triangle Park market for a total purchase price of $19.4 million.  The building consists of 81,956 RSF and is 100% leased to Bayer AG, an existing client tenant of the Company.  The initial stabilized cash and GAAP yields are 7.8% and 8.7%, respectively.  The average cash yield for the project is 8.7%.

On July 5, 2013, we acquired 10121/10151 Barnes Canyon Road, a 115,895 RSF office property located in the Sorrento Mesa submarket of San Diego, for a total purchase price of $13.1 million.  The property is currently 100% occupied with leases that expire in 2014 and 2015.  We intend to convert the existing office space through redevelopment when the spaces become available.  Initial stabilized yields and average cash yield will be provided upon commencement of the redevelopment.

Dispositions

On July 2, 2013, we executed a purchase and sale agreement to sell our land parcel at 1600 Owens Street in the Mission Bay submarket of the San Francisco Bay Area for an aggregate sales price of $55.2 million.  Ownership of the parcel was strategically important to the buyer and we will earn a fee to manage the building construction.  This sale is expected to close in December 2013.

Balance sheet

  • Reduced outstanding debt under our unsecured senior line of credit and unsecured senior bank term loans by $802.0 million since December 31, 2012
  • Closed a secured construction loan with aggregate commitments of $245.4 million at a rate of LIBOR + 1.35%, for our development project at 75/125 Binney Street in the Greater Boston market
  • Liquidity of $1.54 billion, consisting of $1.49 billion available under our unsecured senior line of credit and $53.8 million in cash and cash equivalents as of September 30, 2013
  • Net debt to adjusted EBITDA of 6.8x for the three months ended September 30, 2013 (annualized)
  • Fixed charge coverage ratio of 2.8x for the three months ended September 30, 2013 (annualized)
  • Unhedged variable rate debt at 10% of total consolidated debt as of September 30, 2013
  • Non-income-producing assets (CIP and land) at 19% of gross investments in real estate as of September 30, 2013, down from 23% as of December 31, 2012, due to deliveries of development and redevelopment projects noted above

Unsecured senior bank loan financings and repayments

On July 26, 2013, we amended our 2016 unsecured senior bank term loan ("2016 Unsecured Senior Bank Term Loan") to reduce the interest rate on outstanding borrowings.  We expect to repay the loan over the next one to three years.  In addition, on August 30, 2013, we amended our $1.5 billion unsecured senior line of credit and our 2019 unsecured senior bank term loan ("2019 Unsecured Senior Bank Term Loan") to reduce the interest rate on outstanding borrowings, extend the maturity dates, and amend certain financial covenants.  Also on August 30, 2013, we amended our 2016 Unsecured Senior Bank Term Loan to conform certain financial covenants to those contained in the amended credit agreement related to the unsecured senior line of credit and the 2019 Unsecured Senior Bank Term Loan.  The maturity dates below reflect available extension options that we control.

Balance at 9/30/13

Maturity Date

Applicable Rate

Facility Fee

Facility

Prior

Amended

Prior

Amended

Prior

Amended

2016 Unsecured Senior Bank Term Loan

$500 million

June 2016

July 2016

L +1.75%

L +1.20%

N/A

N/A

2019 Unsecured Senior Bank Term Loan

$600 million

January 2017

January 2019

L +1.50%

L +1.20%

N/A

N/A

$1.5 billion unsecured senior line of credit

$14 million

April 2017

January 2019

L +1.20%

L +1.10%

0.25%

0.20%

On September 30, 2013, we paid down $100 million on our 2016 Unsecured Senior Bank Term Loan to a total outstanding balance of $500 million.  During the three months ended September 30, 2013, in conjunction with the refinancing of our unsecured senior bank term loans and the partial repayment of $100 million of our 2016 Unsecured Senior Bank Term Loan, we recognized a loss on early extinguishment of debt totaling $1.4 million, due to the write-off of unamortized loan fees.

Subsequent events

Update on our ground-up development at 499 Illinois Street

In October 2013, we executed a 10-year lease with a high-quality biopharmaceutical company for 43,625 RSF at 499 Illinois Street in the Mission Bay submarket of the San Francisco Bay Area which is now 77% pre-leased.

Update on our ground-up development at 75/125 Binney Street

During the third quarter of 2013, ARIAD Pharmaceuticals, Inc. ("Ariad") executed an amendment to their lease at 75/125 Binney Street and increased their RSF by 141,988 to a total of 386,111 RSF, or 99.4% of the entire property.  This project represents a ground-up development of two buildings consisting of 167,909 RSF at 75 Binney Street and 220,361 RSF at 125 Binney Street.  Each building may accommodate flexible laboratory/office multi-tenancy with relatively minor modifications.  During the third quarter of 2013, we updated the design and budget for the expansion requirements for Ariad.  Based upon the preliminary design and budget for Ariad's interior improvements, we expect an increase in both estimated net operating income and estimated cost at completion, with no significant change in our initial cash and GAAP yields and average cash yields.  We expect to finalize the design and budget for the interior improvements in the future and will provide an update on our estimated cost at completion and targeted yields.

In October 2013, Ariad announced changes in the clinical development program of Iclusig and discontinuation of the phase 3 Evaluation of Ponatinib versus Imatinib in Chronic Myeloid Leukemia ("EPIC") trial of Iclusig (ponatinib) in patients with newly diagnosed chronic myeloid leukemia.  Ariad's chief scientific officer stated in a recent press release that their decision to stop the EPIC trial was based on the current evaluation of safety data in the trial.  Ariad further announced that Iclusig is commercially available in the U.S. and EU for patients with resistant or intolerant CML and Philadelphia-chromosome positive acute lymphoblastic leukemia.  Additionally, in a recent investor conference call, management of Ariad indicated that they are working on a substantially revised financial plan.  Due to the recent nature of these events, it is too early to predict the impact of these events and we will continue to intensively monitor Ariad's plans.

Guidance

Based on our current view of existing market conditions and other assumptions, we have updated guidance for earnings per share attributable to Alexandria's common stockholders – diluted, FFO per share attributable to Alexandria's common stockholders – diluted, and FFO per share attributable to Alexandria's common stockholders – diluted, as adjusted, each for the year ended December 31, 2013.  The table below provides a reconciliation of FFO per share attributable to Alexandria's common stockholders – diluted, and FFO per share attributable to Alexandria's common stockholders – diluted, as adjusted, non-GAAP measures, to earnings per share, the most directly comparable GAAP measure, as well as other key assumptions included in our guidance for the year ended December 31, 2013.

Guidance for the Year Ended December 31, 2013

Reported on

October 28, 2013

Reported on

July 29, 2013

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

$

1.54 - 1.58

$

1.53 - 1.63

Add back: depreciation and amortization

2.81 - 2.85

2.76 - 2.86

Less: gain on sale of real estate

(0.01)

(0.01)

Other

(0.01)

(0.01)

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

4.35 - 4.39

4.32 - 4.42

Add back: loss on early extinguishment of debt

0.03

0.03

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

$

4.38 - 4.42

$

4.35 - 4.45

Key projection assumptions:

Same property NOI growth – cash basis

5% - 7%

5% - 7%

Same property NOI growth – GAAP basis

1% - 3%

1% - 3%

Rental rate steps on lease renewals and re-leasing of space – cash basis

3% - 5%

3% - 5%

Rental rate steps on lease renewals and re-leasing of space – GAAP basis

14% - 16%

11% - 13%

Occupancy percentage for operating properties at December 31, 2013

94.3% - 94.8%

94.3% - 94.7%

Straight-line rents

$

24 - 26 million

$

24 - 26 million

Amortization of above and below market leases

$

3 - 4 million

$

3 - 4 million

General and administrative expenses

$

48 - 51 million

$

48 - 51 million

Capitalization of interest

$

51 - 57 million

$

51 - 57 million

Interest expense, net

$

71 - 81 million

$

71 - 81 million

Net debt to adjusted EBITDA – three months ended December 31, 2013 – annualized

6.5x

6.5x

Fixed charge coverage ratio – three months ended December 31, 2013 – annualized

3.0x

3.0x

Non-income-producing assets as a percentage of gross real estate as of December 31, 2013

15% - 17%

15% - 17%

We expect that our principal liquidity needs for the year ended December 31, 2013, 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.

Sources and Uses of Capital for the Year Ended December 31, 2013 (in millions)

Reported on

October 28, 2013

Reported on July 29, 2013

Completed

Projected

Total

Total

Sources of capital:

Net cash provided by operating activities less dividends

$

93

$

32 - 42

$

125 - 135

$

130 - 150

Land sales

18

55

73

149 - 189

Income-producing asset sales

129

129

129 - 134

Secured construction loan borrowings

26

14 - 34

40 - 60

45 - 65

Secured loans assumed in connection with acquisitions

48

48

Unsecured senior notes payable

500

500

500

Common stock offering

536

536

536

Available cash and borrowings on unsecured senior line of credit

271

58 - 108

329 - 379

324 - 369

Total sources of capital

$

1,573

$

207 - 287

$

1,780 - 1,860

$

1,813 - 1,943

Uses of capital:

Development, redevelopment, and construction

$

429

$

137 - 167

$

566 - 596

$

599 - 629

Seller financing of asset sales

39

39

39

Acquisitions

33

67 - 117

100 - 150

200 - 300

Secured notes payable repayments

34

3

37

37

Unsecured senior bank term loan repayment

250

250

150

Excess cash retained from issuance of unsecured senior notes       payable/paydown of unsecured senior line of credit

788

788

788

Total uses of capital

$

1,573

$

207 - 287

$

1,780 - 1,860

$

1,813 - 1,943

The key assumptions behind the sources and uses of capital in the table above 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 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, and in subsequent quarterly reports on Form 10-Q.  We expect to update our forecast of sources and uses of capital on a quarterly basis.

Earnings call information

We will host a conference call on Tuesday, October 29, 2013, 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 three months ended September 30, 2013.  To participate in this conference call, dial 888-637-7738 or 913-312-0403 and confirmation code 7917011, 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, October 29, 2013.  The replay number is 888-203-1112 or 719-457-0820 and the confirmation code is 7917011.

Additionally, a copy of this Earnings Press Release and Supplemental Information for the third quarter ended September 30, 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/2013q3.pdf.

About the Company

Alexandria Real Estate Equities, Inc. (NYSE: ARE), a self-administered and self-managed investment-grade 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.

  • Pioneered Labspace® niche in 1994, leading to considerable first-mover advantage in AAA cluster locations
  • Core life science cluster locations, including Greater Boston, the San Francisco Bay Area, San Diego, New York City, Seattle, Suburban Washington, D.C., and Research Triangle Park
  • High quality Class A laboratory/office assets and operations
  • High-credit client tenants spanning the life science industry, including:
    • 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
    • Life science product and service companies
  • Unparalleled real estate and life science management expertise and experience with fully-integrated regional teams
  • Unique and proven proprietary products, services, and amenities designed to foster life science collaboration, innovation, productivity and wellness
  • Global network of deep and longstanding relationships
  • Landlord of choice to the life science industry

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 2013 earnings per share attributable to Alexandria's common stockholders – diluted, 2013 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, 2013.  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 or 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 October 28, 2013, 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

Nine Months Ended

9/30/13

6/30/13

3/31/13

12/31/12

9/30/12

9/30/13

9/30/12

Revenues:

Rental

$

116,302

$

114,743

$

111,776

$

112,048

$

106,216

$

342,821

$

311,746

Tenant recoveries

38,757

35,923

35,611

35,721

34,006

110,291

97,769

Other income

3,571

3,569

2,993

3,785

2,628

10,133

14,639

Total revenues

158,630

154,235

150,380

151,554

142,850

463,245

424,154

Expenses:

Rental operations

47,742

46,323

45,224

46,176

44,203

139,289

126,758

General and administrative

11,666

12,472

11,648

12,635

12,470

35,786

35,125

Interest

16,171

15,978

18,020

17,941

17,092

50,169

51,240

Depreciation and amortization

49,102

46,580

46,065

47,515

46,584

141,747

139,111

Impairment of land parcel

2,050

Loss on early extinguishment of debt

1,432

560

1,992

2,225

Total expenses

126,113

121,913

120,957

126,317

120,349

368,983

354,459

Income from continuing operations

32,517

32,322

29,423

25,237

22,501

94,262

69,695

(Loss) income from discontinued operations:

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

(64)

243

814

5,171

5,603

993

14,961

Impairment of real estate

(1,601)

(9,799)

(9,799)

(Loss) income from discontinued operations, net

(64)

243

814

3,570

(4,196)

993

5,162

Gain on sale of land parcel

772

772

1,864

Net income

32,453

33,337

30,237

28,807

18,305

96,027

76,721

Net income attributable to noncontrolling interests

960

980

982

1,012

828

2,922

2,390

Dividends on preferred stock

6,472

6,471

6,471

6,471

6,471

19,414

20,857

Preferred stock redemption charge

5,978

Net income attributable to unvested restricted stock awards

442

403

342

324

360

1,187

866

Net income attributable to Alexandria's common stockholders

$

24,579

$

25,483

$

22,442

$

21,000

$

10,646

$

72,504

$

46,630

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

Continuing operations

$

0.35

$

0.38

$

0.35

$

0.27

$

0.24

$

1.07

$

0.67

Discontinued operations, net

0.01

0.06

(0.07)

0.01

0.08

Earnings per share – basic and diluted

$

0.35

$

0.38

$

0.36

$

0.33

$

0.17

$

1.08

$

0.75

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

– Basic

70,900

66,973

63,161

63,092

62,364

67,040

61,847

– Diluted

70,900

66,973

63,161

63,092

62,364

67,040

61,847

 

 

Consolidated Balance Sheets

(In thousands)

(Unaudited)

9/30/13

6/30/13

3/31/13

12/31/12

9/30/12

Assets

Investments in real estate, net

$

6,613,761

$

6,453,379

$

6,375,182

$

6,424,578

$

6,300,027

Cash and cash equivalents

53,839

302,205

87,001

140,971

94,904

Restricted cash

30,654

30,914

30,008

39,947

44,863

Tenant receivables

8,671

7,577

9,261

8,449

10,124

Deferred rent

182,909

177,507

170,100

170,396

160,914

Deferred leasing and financing costs, net

179,805

164,362

159,872

160,048

152,021

Investments

129,163

122,605

123,543

115,048

107,808

Other assets

159,567

120,740

135,952

90,679

94,356

Total assets

$

7,358,369

$

7,379,289

$

7,090,919

$

7,150,116

$

6,965,017

Liabilities, Noncontrolling Interests, and Equity

Secured notes payable

$

708,653

$

711,029

$

730,714

$

716,144

$

719,350

Unsecured senior notes payable

1,048,190

1,048,395

549,816

549,805

549,794

Unsecured senior line of credit

14,000

554,000

566,000

413,000

Unsecured senior bank term loans

1,100,000

1,200,000

1,350,000

1,350,000

1,350,000

Accounts payable, accrued expenses, and tenant    security deposits

452,139

368,249

367,153

423,708

376,785

Dividends payable

54,413

52,141

43,955

41,401

39,468

Total liabilities

3,377,395

3,379,814

3,595,638

3,647,058

3,448,397

Commitments and contingencies

Redeemable noncontrolling interests

14,475

14,505

14,534

14,564

15,610

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

711

710

633

632

632

Additional paid-in capital

3,578,343

3,596,477

3,075,860

3,086,052

3,094,987

Accumulated other comprehensive loss

(40,026)

(39,565)

(22,890)

(24,833)

(19,729)

Alexandria's stockholders' equity

3,919,028

3,937,622

3,433,603

3,441,851

3,455,890

Noncontrolling interests

47,471

47,348

47,144

46,643

45,120

Total equity

3,966,499

3,984,970

3,480,747

3,488,494

3,501,010

Total liabilities, noncontrolling interests, and equity

$

7,358,369

$

7,379,289

$

7,090,919

$

7,150,116

$

6,965,017

 

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 periods below:

Three Months Ended

Nine Months Ended

9/30/13

6/30/13

3/31/13

12/31/12

9/30/12

9/30/13

9/30/12

Net income attributable to Alexandria's common stockholders – basic

$

24,579

$

25,483

$

22,442

$

21,000

$

10,646

$

72,504

$

46,630

Depreciation and amortization

49,102

46,580

46,995

48,072

48,173

142,677

143,933

(Gain) loss on sale of real estate

(219)

340

(1,562)

121

(1,564)

Impairment of real estate

1,601

9,799

9,799

Gain on sale of land parcel

(772)

(772)

(1,864)

Amount attributable to noncontrolling interests/unvested restricted stock awards:

Net income

1,402

1,383

1,324

1,336

1,188

4,109

3,256

FFO

(1,494)

(1,437)

(1,064)

(1,109)

(1,148)

(3,995)

(3,452)

FFO attributable to Alexandria's common stockholders – basic

73,589

71,018

70,037

70,900

67,096

214,644

196,738

Assumed conversion of 8.00% unsecured senior convertible notes

5

5

5

5

5

15

16

FFO attributable to Alexandria's common stockholders – diluted

73,594

71,023

70,042

70,905

67,101

214,659

196,754

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

(5,811)

Impairment of land parcel

2,050

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

(11)

(12)

(19)

(23)

(21)

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

75,015

71,571

70,042

72,936

67,101

216,628

199,125

Non-revenue-enhancing capital expenditures:

Maintenance building improvements

(1,481)

(337)

(596)

(329)

(935)

(2,414)

(1,739)

Tenant improvements and leasing commissions

(3,739)

(2,990)

(882)

(3,170)

(1,844)

(7,611)

(6,011)

Straight-line rent revenue

(5,570)

(8,239)

(6,198)

(9,240)

(5,225)

(20,007)

(19,216)

Straight-line rent expense on ground leases

374

539

538

471

201

1,451

2,814

Capitalized income from development projects

40

9

22

45

50

71

600

Amortization of acquired above and below market leases

(830)

(830)

(830)

(844)

(778)

(2,490)

(2,356)

Amortization of loan fees

2,487

2,427

2,386

2,505

2,470

7,300

7,327

Amortization of debt premiums/discounts

153

115

115

110

112

383

401

Stock compensation

3,729

4,463

3,349

3,748

3,845

11,541

10,412

Allocation to unvested restricted stock awards

28

50

19

63

19

105

67

AFFO attributable to Alexandria's common stockholders – diluted

$

70,206

$

66,778

$

67,965

$

66,295

$

65,016

$

204,957

$

191,424

The following table presents the reconciliation above on a per share basis.  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

Nine Months Ended

9/30/13

6/30/13

3/31/13

12/31/12

9/30/12

9/30/13

9/30/12

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

$

0.35

$

0.38

$

0.36

$

0.33

$

0.17

$

1.08

$

0.75

Depreciation and amortization

0.69

0.69

0.74

0.76

0.78

2.13

2.34

Loss (gain) on sale of real estate

0.01

(0.03)

(0.03)

Impairment of real estate

0.03

0.16

0.16

Gain on sale of land parcel

(0.01)

(0.01)

(0.03)

Amount attributable to noncontrolling interests/unvested restricted stock awards:

Net income

0.02

0.02

0.02

0.02

0.02

0.06

0.05

FFO

(0.02)

(0.02)

(0.02)

(0.02)

(0.02)

(0.06)

(0.06)

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

1.04

1.06

1.11

1.12

1.08

3.20

3.18

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

(0.09)

Impairment of land parcel

0.04

Loss on early extinguishment of debt

0.02

0.01

0.03

0.03

Preferred stock redemption charge

0.10

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

1.06

1.07

1.11

1.16

1.08

3.23

3.22

Non-revenue-enhancing capital expenditures:

Maintenance building improvements

(0.02)

(0.01)

(0.01)

(0.01)

(0.01)

(0.04)

(0.03)

Tenant improvements and leasing commissions

(0.05)

(0.04)

(0.01)

(0.05)

(0.03)

(0.11)

(0.10)

Straight-line rent revenue

(0.08)

(0.12)

(0.10)

(0.15)

(0.08)

(0.30)

(0.31)

Straight-line rent expense on ground leases

0.01

0.01

0.01

0.01

0.02

0.05

Amortization of acquired above and below market leases

(0.01)

(0.01)

(0.01)

(0.01)

(0.01)

(0.04)

(0.04)

Amortization of loan fees

0.03

0.03

0.04

0.04

0.03

0.12

0.11

Stock compensation

0.05

0.07

0.05

0.06

0.06

0.17

0.17

Other

0.01

0.02

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

$

0.99

$

1.00

$

1.08

$

1.05

$

1.04

$

3.06

$

3.09

 

 

SOURCE Alexandria Real Estate Equities, Inc.



RELATED LINKS

http://www.are.com