Alexandria Real Estate Equities, Inc. Reports Fourth Quarter and Year Ended December 31, 2015 Financial and Operating Results
FFO Per Share -- Diluted, as Adjusted, of $5.25 for 2015, up 9.4% over 2014
EPS -- Diluted of $1.63 for 2015, up 61.4% over 2014
Total Revenues of $843.5 million for 2015, up 16.0% over 2014
NOI of $585.6 million for 2015, up 15.1% over 2014
Completed Sales of Partial Interest in Three Core Class A Assets in 4Q15 for $453.1 Million at an Average Cap Rate of 4.6% to a High-Quality Institutional Investor
PASADENA, Calif., Feb. 1, 2016 /PRNewswire/ -- Alexandria Real Estate Equities, Inc. (NYSE: ARE) today announced financial and operating results for the fourth quarter and year ended December 31, 2015.
Joel S. Marcus, chairman, chief executive officer, and founder of Alexandria Real Estate Equities, Inc., stated, "We concluded another very successful year where our best-in-class team delivered strong results and continued growth," including the following key highlights:
- Funds from operations ("FFO") per share – diluted, as adjusted, of $1.33, up 8.1% for 4Q15, compared to $1.23 for 4Q14; and $5.25, up 9.4%, for 2015, compared to $4.80 for 2014;
- In December 2015, we completed $453.1 million in sales of partial interest in three Class A assets at an average capitalization rate of 4.6%;
- $2.0 billion of liquidity as of 4Q15;
- 6.6x net debt to adjusted EBITDA – 4Q15 annualized; with goal of achieving less than 6.0x;
- 7.0x net debt to adjusted EBITDA – 4Q15 trailing 12 months;
- Executed leases for 1.0 million rentable square feet ("RSF") and 5.0 million RSF during 4Q15 and 2015, respectively; the highest annual leasing volume in the Company's 20-year history;
- Rental rate increases of 19.8% and 7.3% (cash basis) for 4Q15 lease renewals and re-leasing of space aggregating 0.5 million RSF (included in the 1.0 million RSF above);
- Highly leased value-creation pipeline:
- 89% leased, 1.5 million RSF, targeted for completion in 2016 (weighted toward 4Q16), expected to generate $75 to $80 million of incremental annual net operating income ("NOI") upon stabilization
- 67% leased, 1.9 million RSF, targeted for completion in 2017 and 2018, expected to generate $105 to $110 million of incremental annual NOI upon stabilization
- Same properties NOI growth of 1.3% and 2.0% (cash basis) for 4Q15, compared to 4Q14;
- Same properties NOI growth of 1.3% and 4.7% (cash basis) for 2015 compared to 2014;
- In November 2015, we completed an offering of $300.0 million of unsecured senior notes payable at a stated interest rate of 4.30% with a maturity of January 15, 2026;
- In 4Q15, proceeds from sales of equity investments and investment income from life science entities aggregated $27.5 million and $7.7 million, respectively;
- During 4Q15, we sold an aggregate of 832,982 shares of common stock under our ATM program for gross proceeds of $75.0 million, or $90.04 per share, and net proceeds of approximately $73.9 million; and
- Common stock dividend for 2015 of $3.05 per common share, up 17 cents, or 5.9%, over 2014; continuation of strategy to share growth in cash flows from operating activities with our stockholders while also importantly retaining capital for reinvestment.
Sales of partial interest in core Class A assets at 4.6% cash cap rate to TIAA-CREF
Partial Interest |
Cash Cap |
|||||||||||||
Property |
Submarket |
RSF |
Sold |
Sales Price |
||||||||||
225 Binney Street |
Cambridge |
305,212 |
70% |
$ |
190,110 |
4.5% |
||||||||
409/499 Illinois Street |
Mission Bay/SoMa |
455,069 |
40% |
189,600 |
4.5 |
|||||||||
1500 Owens Street |
Mission Bay/SoMa |
158,267 |
49.9% |
73,353 |
4.8 |
|||||||||
918,548 |
$ |
453,063 |
4.6% |
Refer to our "Dispositions" section on page 48 of our Supplemental Information package for additional information on our asset sales.
Results
- FFO attributable to Alexandria Real Estate Equities, Inc.'s ("Alexandria's") common stockholders – diluted, as adjusted:
2015 |
2014 |
Change |
|||||||||||||
In Millions |
|||||||||||||||
Fourth Quarter |
$ |
95.8 |
$ |
87.9 |
$ |
7.9 |
9.0% |
||||||||
Year |
$ |
375.8 |
$ |
341.6 |
$ |
34.2 |
10.0% |
||||||||
Per Share |
|||||||||||||||
Fourth Quarter |
$ |
1.33 |
$ |
1.23 |
$ |
0.10 |
8.1% |
||||||||
Year |
$ |
5.25 |
$ |
4.80 |
$ |
0.45 |
9.4% |
- Net income (loss) attributable to Alexandria's common stockholders – diluted:
2015 |
2014 |
Change |
|||||||||||||
In Millions |
|||||||||||||||
Fourth Quarter |
$ |
35.1 |
$ |
(16.2) |
$ |
51.3 |
N/A |
||||||||
Year |
$ |
116.9 |
$ |
72.1 |
$ |
44.8 |
62.1% |
||||||||
Per Share |
|||||||||||||||
Fourth Quarter |
$ |
0.49 |
$ |
(0.23) |
$ |
0.72 |
N/A |
||||||||
Year |
$ |
1.63 |
$ |
1.01 |
$ |
0.62 |
61.4% |
Core operating metrics
- Total revenues:
2015 |
2014 |
Change |
|||||||||||||
In Millions |
|||||||||||||||
Fourth Quarter |
$ |
224.0 |
$ |
188.7 |
$ |
35.3 |
18.7% |
||||||||
Year |
$ |
843.5 |
$ |
726.9 |
$ |
116.6 |
16.0% |
- NOI, including our pro rata share of consolidated and unconsolidated real estate joint ventures:
2015 |
2014 |
Change |
|||||||||||||
In Millions |
|||||||||||||||
Fourth Quarter |
$ |
155.2 |
$ |
132.7 |
$ |
22.5 |
16.9% |
||||||||
Year |
$ |
585.6 |
$ |
508.6 |
$ |
76.9 |
15.1% |
- Total annualized base rent ("ABR"): 54% generated from investment-grade tenants
- Top 20 tenants generate 49.4% of total ABR:
- 81% of ABR generated from investment-grade tenants
- 8.3 years weighted average remaining lease term
- Executed leases for 1.0 million RSF during 4Q15, including:
- 170,523 RSF to Vertex Pharmaceuticals Incorporated at 3115/3215 Merryfield Row in our Torrey Pines submarket
- 71,010 RSF to Juno Therapeutics, Inc. at 400 Dexter Avenue North in our Lake Union submarket
- 19.8% and 7.3% (cash basis) rental rate increases on lease renewals and re-leasing of space aggregating 480,963 RSF
- Executed leases for 5.0 million RSF during 2015, the highest annual leasing volume in the Company's 20-year history:
- 19.6% and 9.9% (cash basis) rental rate increases on lease renewals and re-leasing of space aggregating 2,209,893 RSF
- Same property NOI growth:
- 1.3% and 2.0% (cash basis) increase for 4Q15, compared to 4Q14
- 1.3% and 4.7% (cash basis) increase for 2015, compared to 2014
- Occupancy for operating properties in North America of 97.2% as of 4Q15
- Operating margin at 69% for 4Q15
- Adjusted EBITDA margin at 65% for 4Q15
External growth: visible, multiyear, highly leased value creation pipeline
- Highly leased development and redevelopment projects:
- 89% leased, 1.5 million RSF, targeted for completion in 2016 (weighted toward 4Q16), expected to generate $75 to $80 million of incremental annual NOI upon stabilization
- 67% leased, 1.9 million RSF, targeted for completion in 2017 and 2018, expected to generate $105 to $110 million of incremental annual NOI upon stabilization
- 4Q15 commencements of development and redevelopment projects, include:
- 61,755 RSF development project at 4796 Executive Drive in our University Town Center submarket; 100% leased to Otonomy, Inc.
- 48,880 RSF redevelopment project at 10151 Barnes Canyon in our Sorrento Mesa submarket
Balance sheet
- $2.0 billion of liquidity as of 4Q15
- 6.6x net debt to adjusted EBITDA – 4Q15 annualized; with goal of achieving less than 6.0x
- 6.9x net debt to adjusted EBITDA – 4Q15 annualized, excluding $7.7 million of investment income for 4Q15
- 7.0x net debt to adjusted EBITDA – 4Q15 trailing 12 months
- 3.6x fixed charge coverage ratio – 4Q15 annualized
- In November 2015, we completed an offering of $300.0 million of unsecured senior notes payable at a stated interest rate of 4.30% with a maturity of January 15, 2026
- In 4Q15, proceeds from sales of equity investments and investment income from life science entities aggregated $27.5 million and $7.7 million, respectively
- During 4Q15, we sold an aggregate of 832,982 shares of common stock under our ATM program for gross proceeds of $75.0 million, or $90.04 per share, and net proceeds of approximately $73.9 million
- In October 2015, we closed a secured construction loan with commitments available for borrowing aggregating $350.0 million, bearing interest at a rate of LIBOR+1.50%, for our 98% leased development project at 50/60 Binney Street in our Cambridge submarket
- $10.9 billion total market capitalization as of 4Q15
- 15% of gross investments in real estate in value-creation pipeline as of 4Q15, with a target range from 10% to 15% as of 4Q16
- Limited debt maturities through 2018 and well-laddered maturity profile
- 12% unhedged variable-rate debt as a percentage of total debt as of 4Q15
LEED certifications
- 57% of our total ABR will be generated from LEED projects upon completion of our in-process projects
- During 2015, we received Gold certifications at 360 Longwood Avenue in our Longwood Medical Area submarket and 3033 Science Park Road in our Torrey Pines submarket
Guidance
December 31, 2015
(Dollars in thousands, except per share amounts)
The following updated guidance is based on our current view of existing market conditions and other assumptions for the year ending December 31, 2016. 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 4.
Key sources and uses for 2016 have been updated to reflect a $100 million decrease in construction spending primarily due to the timing of construction spending related to projects expected to be placed into service in 2017 and 2018, as well as updates in the scope of several projects. The mid-point of construction of $850 million is projected to be funded by $375 million of internally generated sources (net cash provided by operating activities after dividends and debt from growth in EBITDA), $350 million of asset sales (minimum target), and $125 million of other capital, including sales of "available-for-sale" equity securities.
EPS and FFO Per Share Attributable to Alexandria's Common Stockholders – Diluted |
||
Earnings per share |
$1.44 to $1.64 |
|
Add: depreciation and amortization |
4.00 |
|
Other |
(0.03) |
|
FFO per share |
$5.41 to $5.61 |
2016 Guidance |
||||||||
Key Assumptions |
Low |
High |
||||||
Occupancy percentage for operating properties in North America as of December 31, 2016 |
96.5% |
97.1% |
||||||
Lease renewals and re-leasing of space: |
||||||||
Rental rate increases |
14.0% |
17.0% |
||||||
Rental rate increases (cash basis) |
6.0% |
9.0% |
||||||
Same Property performance: |
||||||||
NOI increase |
2.0% |
4.0% |
||||||
NOI increase (cash basis) |
3.5% |
5.5% |
||||||
Straight-line rent revenue |
$ |
51,000 |
$ |
56,000 |
||||
General and administrative expenses |
$ |
59,000 |
$ |
64,000 |
||||
Capitalization of interest |
$ |
45,000 |
$ |
55,000 |
||||
Interest expense |
$ |
108,000 |
$ |
118,000 |
Key Credit Metrics |
2016 Guidance |
|
Net debt to Adjusted EBITDA – 4Q annualized |
6.5x to 6.9x |
|
Fixed charge coverage ratio – 4Q annualized |
3.0x to 3.5x |
|
Value-creation pipeline as a percentage of gross investments in real estate as of December 31, 2016 |
10% to 15% |
2016 Guidance |
||||||||||||
Key Sources and Uses of Capital |
Low |
High |
Mid-Point |
|||||||||
Sources of capital for construction: |
||||||||||||
Net cash provided by operating activities after dividends |
$ |
115,000 |
$ |
135,000 |
$ |
125,000 |
||||||
Debt funding from growth in EBITDA |
260,000 |
240,000 |
250,000 |
|||||||||
Internally generated sources |
375,000 |
375,000 |
375,000 |
|||||||||
Asset sales (minimum target) |
300,000 |
400,000 |
350,000 |
|||||||||
Other capital/sales of "available-for-sale" equity securities |
125,000 |
125,000 |
125,000 |
|||||||||
Total sources/projected construction uses |
$ |
800,000 |
$ |
900,000 |
$ |
850,000 |
||||||
Sources of capital for acquisitions: |
||||||||||||
Debt funding from growth in EBITDA |
$ |
45,000 |
$ |
45,000 |
$ |
45,000 |
||||||
Other capital |
105,000 |
205,000 |
155,000 |
|||||||||
Total sources/projected acquisitions uses |
$ |
150,000 |
$ |
250,000 |
$ |
200,000 |
||||||
Incremental debt: |
||||||||||||
Issuance of unsecured senior notes payable |
$ |
400,000 |
$ |
550,000 |
$ |
475,000 |
||||||
Borrowings under secured construction loans |
175,000 |
225,000 |
200,000 |
|||||||||
Repayments of secured notes payable |
(120,000) |
(220,000) |
(170,000) |
|||||||||
Activity on unsecured senior line of credit/other |
(150,000) |
(270,000) |
(210,000) |
|||||||||
Incremental debt (1) |
$ |
305,000 |
$ |
285,000 |
$ |
295,000 |
||||||
(1) Included in sources of capital above. |
Earnings Call Information and About the Company
December 31, 2015
We will host a conference call on Tuesday, February 2, 2016, at 3:00 p.m. Eastern Time ("ET")/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, 2015. To participate in this conference call, dial (877) 719-9789 or (719) 325-4799 and confirmation code 3794612 shortly before 3:00 p.m. ET/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 2, 2016. The replay number is (888) 203-1112 or (719) 457-0820, and the confirmation code is 3794612.
Additionally, a copy of this Earnings Press Release and Supplemental Information for the fourth quarter and year ended December 31, 2015, is available in the "For Investors" section of our website at www.are.com or by following this link: http://www.are.com/fs/2015q4.pdf.
For any questions, please contact Joel S. Marcus, chairman, chief executive officer, and founder, at (626) 578-9693 or Dean A. Shigenaga, executive vice president and chief financial officer, at (626) 578-0777.
About the Company
Alexandria Real Estate Equities, Inc. (NYSE: ARE) is a fully integrated, self-administered and self-managed urban office real estate investment trust ("REIT") uniquely focused on collaborative science and technology campuses in AAA innovation cluster locations with a total market capitalization of $10.9 billion as of December 31, 2015, and an asset base of 32.0 million square feet, including 20.1 million RSF of operating properties and development and redevelopment projects (under construction or pre-construction), as well as an additional 11.9 million square feet of future ground-up development projects. Alexandria pioneered this niche in 1994 and has since established a dominant market presence in key locations, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland, and Research Triangle Park.
***********
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 2016 earnings per share attributable to Alexandria's common stockholders – diluted, 2016 FFO per share attributable to Alexandria's common stockholders – diluted, NOI, 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 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 tenants, general and local economic conditions, a favorable capital market environment, performance of our operations in areas such as current and future development and redevelopment projects being placed into service, leasing activity, 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, 2015 |
||||||||||||||||||||||||||||
(In thousands, except per share amounts) |
||||||||||||||||||||||||||||
Three Months Ended |
Year Ended |
|||||||||||||||||||||||||||
12/31/15 |
9/30/15 |
6/30/15 |
3/31/15 |
12/31/14 |
12/31/15 |
12/31/14 |
||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||
Rental |
$ |
158,100 |
$ |
155,311 |
$ |
151,805 |
$ |
143,608 |
$ |
140,873 |
$ |
608,824 |
$ |
544,153 |
||||||||||||||
Tenant recoveries |
54,956 |
56,119 |
49,594 |
48,394 |
45,282 |
209,063 |
173,480 |
|||||||||||||||||||||
Other income |
10,899 |
7,180 |
2,757 |
4,751 |
2,519 |
25,587 |
9,244 |
|||||||||||||||||||||
Total revenues |
223,955 |
218,610 |
204,156 |
196,753 |
188,674 |
843,474 |
726,877 |
|||||||||||||||||||||
Expenses: |
||||||||||||||||||||||||||||
Rental operations |
68,913 |
68,846 |
62,250 |
61,223 |
56,881 |
261,232 |
219,164 |
|||||||||||||||||||||
General and administrative |
15,102 |
15,143 |
14,989 |
14,387 |
13,861 |
59,621 |
53,530 |
|||||||||||||||||||||
Interest |
28,230 |
27,679 |
26,668 |
23,236 |
22,188 |
105,813 |
79,299 |
|||||||||||||||||||||
Depreciation and amortization |
72,245 |
67,953 |
62,171 |
58,920 |
57,973 |
261,289 |
224,096 |
|||||||||||||||||||||
Impairment of real estate |
8,740 |
— |
— |
14,510 |
51,675 |
23,250 |
51,675 |
|||||||||||||||||||||
Loss on early extinguishment of debt |
— |
— |
189 |
— |
— |
189 |
525 |
|||||||||||||||||||||
Total expenses |
193,230 |
179,621 |
166,267 |
172,276 |
202,578 |
711,394 |
628,289 |
|||||||||||||||||||||
Equity in (loss) earnings of unconsolidated real estate joint ventures |
(174) |
710 |
541 |
574 |
554 |
1,651 |
554 |
|||||||||||||||||||||
Gain on sales of real estate – rental properties |
12,426 |
— |
— |
— |
— |
12,426 |
— |
|||||||||||||||||||||
Income (loss) from continuing operations |
42,977 |
39,699 |
38,430 |
25,051 |
(13,350) |
146,157 |
99,142 |
|||||||||||||||||||||
(Loss) income from discontinued operations |
— |
— |
— |
(43) |
1,722 |
(43) |
1,233 |
|||||||||||||||||||||
Gain on sales of real estate – land parcels |
— |
— |
— |
— |
5,598 |
— |
6,403 |
|||||||||||||||||||||
Net income (loss) |
42,977 |
39,699 |
38,430 |
25,008 |
(6,030) |
146,114 |
106,778 |
|||||||||||||||||||||
Net income attributable to noncontrolling interests |
(972) |
(170) |
(263) |
(492) |
(1,362) |
(1,897) |
(5,204) |
|||||||||||||||||||||
Net income (loss) attributable to Alexandria Real Estate Equities, Inc. |
42,005 |
39,529 |
38,167 |
24,516 |
(7,392) |
144,217 |
101,574 |
|||||||||||||||||||||
Dividends on preferred stock |
(6,246) |
(6,247) |
(6,246) |
(6,247) |
(6,284) |
(24,986) |
(25,698) |
|||||||||||||||||||||
Preferred stock redemption charge |
— |
— |
— |
— |
(1,989) |
— |
(1,989) |
|||||||||||||||||||||
Net income attributable to unvested restricted stock awards |
(628) |
(623) |
(630) |
(483) |
(489) |
(2,364) |
(1,774) |
|||||||||||||||||||||
Net income (loss) attributable to Alexandria Real Estate Equities, Inc.'s common stockholders |
$ |
35,131 |
$ |
32,659 |
$ |
31,291 |
$ |
17,786 |
$ |
(16,154) |
$ |
116,867 |
$ |
72,113 |
||||||||||||||
Earnings per share attributable to Alexandria's common stockholders – basic and diluted: |
||||||||||||||||||||||||||||
Continuing operations |
$ |
0.49 |
$ |
0.46 |
$ |
0.44 |
$ |
0.25 |
$ |
(0.25) |
$ |
1.63 |
$ |
0.99 |
||||||||||||||
Discontinued operations |
— |
— |
— |
— |
0.02 |
— |
0.02 |
|||||||||||||||||||||
Earnings per share – basic and diluted |
$ |
0.49 |
$ |
0.46 |
$ |
0.44 |
$ |
0.25 |
$ |
(0.23) |
$ |
1.63 |
$ |
1.01 |
||||||||||||||
Weighted-average shares of common stock outstanding for calculating earnings per share attributable to Alexandria's common stockholders – basic and diluted |
71,833 |
71,500 |
71,412 |
71,366 |
71,314 |
71,529 |
71,170 |
|||||||||||||||||||||
Dividends declared per share of common stock |
$ |
0.77 |
$ |
0.77 |
$ |
0.77 |
$ |
0.74 |
$ |
0.74 |
$ |
3.05 |
$ |
2.88 |
Consolidated Balance Sheets |
||||||||||||||||||||
December 31, 2015 |
||||||||||||||||||||
(In thousands) |
||||||||||||||||||||
12/31/15 |
9/30/15 |
6/30/15 |
3/31/15 |
12/31/14 |
||||||||||||||||
Assets |
||||||||||||||||||||
Investments in real estate |
$ |
7,629,922 |
$ |
7,527,738 |
$ |
7,321,820 |
$ |
7,268,031 |
$ |
7,108,610 |
||||||||||
Investments in unconsolidated real estate joint ventures |
127,212 |
126,471 |
121,055 |
120,028 |
117,406 |
|||||||||||||||
Cash and cash equivalents |
125,098 |
76,383 |
68,617 |
90,641 |
86,011 |
|||||||||||||||
Restricted cash |
28,872 |
36,993 |
44,191 |
56,704 |
26,884 |
|||||||||||||||
Tenant receivables |
10,485 |
10,124 |
9,279 |
10,627 |
10,548 |
|||||||||||||||
Deferred rent |
280,570 |
267,954 |
257,427 |
243,459 |
234,124 |
|||||||||||||||
Deferred leasing and financing costs |
234,093 |
222,343 |
210,709 |
199,576 |
201,798 |
|||||||||||||||
Investments |
353,465 |
330,570 |
360,614 |
283,062 |
236,389 |
|||||||||||||||
Other assets |
121,403 |
138,768 |
131,179 |
133,093 |
114,266 |
|||||||||||||||
Total assets |
$ |
8,911,120 |
$ |
8,737,344 |
$ |
8,524,891 |
$ |
8,405,221 |
$ |
8,136,036 |
||||||||||
Liabilities, Noncontrolling Interests, and Equity |
||||||||||||||||||||
Secured notes payable |
$ |
818,217 |
$ |
773,619 |
$ |
771,435 |
$ |
760,476 |
$ |
652,209 |
||||||||||
Unsecured senior notes payable |
2,046,578 |
1,747,613 |
1,747,531 |
1,747,450 |
1,747,370 |
|||||||||||||||
Unsecured senior line of credit |
151,000 |
843,000 |
624,000 |
421,000 |
304,000 |
|||||||||||||||
Unsecured senior bank term loans |
950,000 |
950,000 |
950,000 |
975,000 |
975,000 |
|||||||||||||||
Accounts payable, accrued expenses, and tenant security deposits |
589,356 |
586,594 |
531,612 |
645,619 |
489,085 |
|||||||||||||||
Dividends payable |
62,005 |
61,340 |
61,194 |
58,824 |
58,814 |
|||||||||||||||
Total liabilities |
4,617,156 |
4,962,166 |
4,685,772 |
4,608,369 |
4,226,478 |
|||||||||||||||
Commitments and contingencies |
||||||||||||||||||||
Redeemable noncontrolling interests |
14,218 |
14,218 |
14,248 |
14,282 |
14,315 |
|||||||||||||||
Alexandria Real Estate Equities, Inc.'s stockholders' equity: |
||||||||||||||||||||
Series D cumulative convertible preferred stock |
237,163 |
237,163 |
237,163 |
237,163 |
237,163 |
|||||||||||||||
Series E cumulative redeemable preferred stock |
130,000 |
130,000 |
130,000 |
130,000 |
130,000 |
|||||||||||||||
Common stock |
725 |
718 |
717 |
716 |
715 |
|||||||||||||||
Additional paid-in capital |
3,558,008 |
3,356,043 |
3,371,016 |
3,383,456 |
3,461,189 |
|||||||||||||||
Accumulated other comprehensive income (loss) |
49,191 |
35,238 |
83,980 |
29,213 |
(628) |
|||||||||||||||
Alexandria's stockholders' equity |
3,975,087 |
3,759,162 |
3,822,876 |
3,780,548 |
3,828,439 |
|||||||||||||||
Noncontrolling interests |
304,659 |
1,798 |
1,995 |
2,022 |
66,804 |
|||||||||||||||
Total equity |
4,279,746 |
3,760,960 |
3,824,871 |
3,782,570 |
3,895,243 |
|||||||||||||||
Total liabilities, noncontrolling interests, and equity |
$ |
8,911,120 |
$ |
8,737,344 |
$ |
8,524,891 |
$ |
8,405,221 |
$ |
8,136,036 |
Funds From Operations and Adjusted Funds From Operations |
||||||||||||||||||||||||||||
December 31, 2015 |
||||||||||||||||||||||||||||
(In thousands) |
||||||||||||||||||||||||||||
The following table presents a reconciliation of net income (loss) attributable to Alexandria's common stockholders – basic, the most directly comparable financial measure presented in accordance with generally accepted accounting principles ("GAAP"), to FFO attributable to Alexandria's common stockholders – basic and diluted, FFO attributable to Alexandria's common stockholders – diluted, as adjusted, and adjusted funds from operations ("AFFO") attributable to Alexandria's common stockholders – diluted. Quarterly amounts allocated to unvested restricted stock awards may not sum to annual amounts due to differences in the weighted-average share calculation of each period. |
||||||||||||||||||||||||||||
Three Months Ended |
Year Ended |
|||||||||||||||||||||||||||
12/31/15 |
9/30/15 |
6/30/15 |
3/31/15 |
12/31/14 |
12/31/15 |
12/31/14 |
||||||||||||||||||||||
Net income (loss) attributable to Alexandria's common stockholders |
$ |
35,131 |
$ |
32,659 |
$ |
31,291 |
$ |
17,786 |
$ |
(16,154) |
$ |
116,867 |
$ |
72,113 |
||||||||||||||
Depreciation and amortization |
72,528 |
68,398 |
62,523 |
59,202 |
58,302 |
262,651 |
224,425 |
|||||||||||||||||||||
Impairment of real estate – rental properties |
8,740 |
(1) |
— |
— |
14,510 |
26,975 |
23,250 |
26,975 |
||||||||||||||||||||
Gain on sales of real estate – rental properties (2) |
(12,426) |
— |
— |
— |
(1,838) |
(12,426) |
(1,838) |
|||||||||||||||||||||
Gain on sales of real estate – land parcels |
— |
— |
— |
— |
(5,598) |
— |
(6,403) |
|||||||||||||||||||||
Allocation to unvested restricted stock awards |
(522) |
(698) |
(381) |
(166) |
(212) |
(1,758) |
(690) |
|||||||||||||||||||||
FFO attributable to Alexandria's common stockholders – basic and diluted (3) |
103,451 |
100,359 |
93,433 |
91,332 |
61,475 |
388,584 |
314,582 |
|||||||||||||||||||||
Investment income (4) |
(7,731) |
(5,378) |
— |
— |
— |
(13,109) |
— |
|||||||||||||||||||||
Impairment of real estate – land parcels |
— |
— |
— |
— |
24,700 |
— |
24,700 |
|||||||||||||||||||||
Loss on early extinguishment of debt |
— |
— |
189 |
— |
— |
189 |
525 |
|||||||||||||||||||||
Preferred stock redemption charge |
— |
— |
— |
— |
1,989 |
— |
1,989 |
|||||||||||||||||||||
Allocation to unvested restricted stock awards |
85 |
67 |
(2) |
— |
(259) |
110 |
(226) |
|||||||||||||||||||||
FFO attributable to Alexandria's common stockholders – diluted, as adjusted |
95,805 |
95,048 |
93,620 |
91,332 |
87,905 |
375,774 |
341,570 |
|||||||||||||||||||||
Non-revenue-enhancing capital expenditures: |
||||||||||||||||||||||||||||
Building improvements |
(2,025) |
(2,404) |
(2,743) |
(2,278) |
(1,989) |
(9,450) |
(7,429) |
|||||||||||||||||||||
Tenant improvements and leasing commissions |
(4,436) |
(5,499) |
(6,429) |
(5,775) |
(5,499) |
(22,139) |
(15,179) |
|||||||||||||||||||||
Straight-line rent revenue |
(13,517) |
(12,006) |
(14,159) |
(10,697) |
(10,023) |
(50,379) |
(45,534) |
|||||||||||||||||||||
Straight-line rent expense on ground leases |
862 |
(1,245) |
510 |
363 |
657 |
490 |
2,788 |
|||||||||||||||||||||
Amortization of acquired below-market leases |
(997) |
(3,182) |
(1,006) |
(933) |
(654) |
(6,118) |
(2,845) |
|||||||||||||||||||||
Amortization of loan fees |
2,689 |
2,657 |
2,921 |
2,835 |
2,822 |
11,102 |
10,912 |
|||||||||||||||||||||
Amortization of debt (premiums) discounts |
(90) |
(100) |
(100) |
(82) |
17 |
(372) |
117 |
|||||||||||||||||||||
Stock compensation expense |
4,590 |
5,178 |
4,054 |
3,690 |
4,624 |
17,512 |
13,996 |
|||||||||||||||||||||
Allocation to unvested restricted stock awards |
141 |
207 |
152 |
118 |
98 |
619 |
359 |
|||||||||||||||||||||
AFFO attributable to Alexandria's common stockholders – diluted |
$ |
83,022 |
$ |
78,654 |
$ |
76,820 |
$ |
78,573 |
$ |
77,958 |
$ |
317,039 |
$ |
298,755 |
(1) |
Represents an impairment charge related to 16020 Industrial Drive, a 71,000 RSF, R&D/warehouse building in Maryland. We expect to complete the sale of the asset in 2016. |
(2) |
Gain on sales of real estate – rental properties recognized during 4Q14 is classified in (loss) income from discontinued operations in the consolidated statements of income. |
(3) |
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. |
(4) |
Includes gross investment gains of $12.7 million and $8.7 million for 4Q15 and 3Q15, respectively, primarily from the sale of two public securities in each of 4Q15 and 3Q15. |
Funds From Operations Per Share and Adjusted Funds From Operations Per Share |
||||||||||||||||||||||||||||
December 31, 2015 |
||||||||||||||||||||||||||||
(In thousands, except per share amounts) |
||||||||||||||||||||||||||||
The following table presents a reconciliation of earnings per share attributable to Alexandria's common stockholders – basic, the most directly comparable financial measure presented in accordance with GAAP, to FFO per share attributable to Alexandria's common stockholders – diluted, FFO per share attributable to Alexandria's common stockholders – diluted, as adjusted, and AFFO per share 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 Reconciliations" section in our supplemental information. 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 |
|||||||||||||||||||||||||||
12/31/15 |
9/30/15 |
6/30/15 |
3/31/15 |
12/31/14 |
12/31/15 |
12/31/14 |
||||||||||||||||||||||
EPS attributable to Alexandria's common stockholders – basic and diluted |
$ |
0.49 |
$ |
0.46 |
$ |
0.44 |
$ |
0.25 |
$ |
(0.23) |
$ |
1.63 |
$ |
1.01 |
||||||||||||||
Depreciation and amortization |
1.00 |
0.95 |
0.87 |
0.83 |
0.82 |
3.64 |
3.15 |
|||||||||||||||||||||
Impairment of real estate – rental properties |
0.12 |
— |
— |
0.20 |
0.38 |
0.33 |
0.38 |
|||||||||||||||||||||
Gain on sales of real estate – rental properties |
(0.17) |
— |
— |
— |
(0.03) |
(0.17) |
(0.03) |
|||||||||||||||||||||
Gain on sales of real estate – land parcels |
— |
— |
— |
— |
(0.08) |
— |
(0.09) |
|||||||||||||||||||||
FFO per share attributable to Alexandria's common stockholders – basic and diluted (1) |
1.44 |
1.40 |
1.31 |
1.28 |
0.86 |
5.43 |
4.42 |
|||||||||||||||||||||
Investment income |
(0.11) |
(0.08) |
— |
— |
— |
(0.18) |
— |
|||||||||||||||||||||
Impairment of real estate – land parcels |
— |
— |
— |
— |
0.34 |
— |
0.34 |
|||||||||||||||||||||
Loss on early extinguishment of debt |
— |
— |
— |
— |
— |
— |
0.01 |
|||||||||||||||||||||
Preferred stock redemption charge |
— |
— |
— |
— |
0.03 |
— |
0.03 |
|||||||||||||||||||||
FFO per share attributable to Alexandria's common stockholders – diluted, as adjusted |
1.33 |
1.33 |
1.31 |
1.28 |
1.23 |
5.25 |
4.80 |
|||||||||||||||||||||
Non-revenue-enhancing capital expenditures: |
||||||||||||||||||||||||||||
Building improvements |
(0.03) |
(0.03) |
(0.04) |
(0.03) |
(0.03) |
(0.13) |
(0.10) |
|||||||||||||||||||||
Tenant improvements and leasing commissions |
(0.06) |
(0.08) |
(0.09) |
(0.08) |
(0.08) |
(0.31) |
(0.20) |
|||||||||||||||||||||
Straight-line rent revenue |
(0.19) |
(0.17) |
(0.20) |
(0.15) |
(0.14) |
(0.71) |
(0.64) |
|||||||||||||||||||||
Straight-line rent expense on ground leases |
0.01 |
(0.02) |
0.01 |
0.01 |
0.01 |
0.01 |
0.04 |
|||||||||||||||||||||
Amortization of acquired below-market leases |
(0.01) |
(0.04) |
(0.01) |
(0.01) |
(0.01) |
(0.09) |
(0.04) |
|||||||||||||||||||||
Amortization of loan fees |
0.04 |
0.04 |
0.04 |
0.03 |
0.05 |
0.16 |
0.14 |
|||||||||||||||||||||
Stock compensation expense |
0.07 |
0.07 |
0.06 |
0.05 |
0.06 |
0.25 |
0.20 |
|||||||||||||||||||||
AFFO per share attributable to Alexandria's common stockholders – diluted |
$ |
1.16 |
$ |
1.10 |
$ |
1.08 |
$ |
1.10 |
$ |
1.09 |
$ |
4.43 |
$ |
4.20 |
||||||||||||||
Weighted-average shares of common stock outstanding for calculating FFO, FFO, as adjusted, and AFFO per share attributable to Alexandria's common stockholders – basic and diluted |
71,833 |
71,500 |
71,412 |
71,366 |
71,314 |
71,529 |
71,170 |
|||||||||||||||||||||
(1) Calculated in accordance with standards established by the NAREIT Board of Governors in its April 2002 White Paper and related implementation guidance. |
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2016
SOURCE Alexandria Real Estate Equities, Inc.
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