PASADENA, Calif., Jan. 30, 2017 /PRNewswire/ -- Alexandria Real Estate Equities, Inc. (NYSE: ARE) announced financial and operating results for the fourth quarter and year ended December 31, 2016.

Key highlights:

Solid internal growth

• Total revenues of $249.2 million, up 11.3%, for 4Q16, compared to $224.0 million for 4Q15 and total revenues of $921.7 million, up 9.3%, for 2016, compared to $843.5 million for 2015;
• Solid leasing activity in light of minimal contractual lease expirations at the beginning of 2016 and a highly leased value-creation pipeline:

• Same property net operating income growth:
  • 3.2% and 4.9% (cash basis) for 4Q16, compared to 4Q15
  • 4.7% and 6.0% (cash basis) for 2016, compared to 2015

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

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

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

• 4Q16 key development, redevelopment, and other projects placed into service:
  • 422,980 RSF, 100% leased to Uber Technologies, Inc. at 1455 and 1515 Third Street;
  • 305,006 RSF, 100% leased to Eli Lilly and Company at 10290 Campus Point Drive;
  • 61,755 RSF, 100% leased to Otonomy, Inc. at 4796 Executive Drive; and
• Executed a 293,855 RSF 15-year build-to-suit lease with Merck & Co., Inc. at 213 East Grand Avenue in our South San Francisco submarket; we anticipate commencing development 2Q17.

Increased common stock dividend

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

Operating results	4Q16				4Q15				Change			2016				2015				Change
Net (loss) income attributable to Alexandria's common stockholders – diluted:
In Millions	$	(25.1)			$	35.1			N/A			$	(151.1)			$	116.9			N/A
Per Share	$	(0.31)			$	0.49			N/A			$	(1.99)			$	1.63			N/A
Funds from operations attributable to Alexandria's common stockholders – diluted, as adjusted:
In Millions	$	115.5			$	95.8			20.6%			$	421.3			$	375.8			12.1%
Per Share	$	1.42			$	1.33			6.8%			$	5.51			$	5.25			5.0%

Items included in net (loss) income attributable to Alexandria's common stockholders: (amounts are shown after deducting any amounts attributable to noncontrolling interests)
(In millions, except per share amounts)	Amount								Per Share – Diluted								Amount								Per Share – Diluted
	4Q16				4Q15				4Q16				4Q15				2016				2015				2016				2015
Gain on sales of real estate – rental properties and land parcels	$	3.7			$	12.4			$	0.05			$	0.17			$	3.8			$	12.4			$	0.05			$	0.17
Impairment of:
Real estate – rental properties	(3.5)				(8.7)				(0.04)				(0.12)				(98.2)				(23.3)				(1.29)				(0.33)
Real estate – land parcels and non- real estate investments	(12.5)				—				(0.16)				—				(113.5)				—				(1.49)				—
Loss on early extinguishment of debt	—				—				—				—				(3.2)				(0.2)				(0.04)				—
Preferred stock redemption charge	(35.7)				—				(0.44)				—				(61.3)				—				(0.81)				—
Total	$	(48.0)			$	3.7			$	(0.59)			$	0.05			$	(272.4)			$	(11.1)			$	(3.58)			$	(0.16)
Weighted-average shares of common stock outstanding – diluted	80.8				71.8												76.1				71.5

Core operating metrics and internal growth

• Percentage of annual rental revenue from investment-grade tenants as of 4Q16: 49%
• Percentage of annual rental revenue from Class A properties in AAA locations as of 4Q16: 79%
• Occupancy for operating properties in North America at 96.6% as of 4Q16
• Operating margin at 71% for 4Q16
• Adjusted EBITDA margin at 67% for 4Q16
• See "Solid internal growth" in the Key Highlights section (left side of page) of this Earnings Press Release for information on our leasing activity and same property net operating income growth.

External growth

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

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

Strategic acquisitions

• In November 2016, we acquired the remaining 49% interest in our real estate joint venture with Uber Technologies, Inc. for $90.1 million. The real estate joint venture owned land parcels located at 1455 and 1515 Third Street and a parking garage structure in our Mission Bay/SoMa submarket of San Francisco.
  • The former real estate joint venture was expected to complete the development of two new Class A properties in 2018, pursuant to leases with Uber.
  • As a result of the acquisition of the remaining 49% ownership interest, we own a 100% fee simple interest in both land parcels and the parking garage and are no longer obligated to fund the development of the two Class A properties.
  • In connection with the acquisition of the remaining interest in the land and parking garage, we leased these assets to Uber for 75 years, beginning in November 2016. Uber will develop and own 100% of the two Class A properties on the land parcels.
  • The $90.1 million purchase price includes $56.8 million payable in 2017.
  • Initial stabilized yields on our total project investment of $155.0 million (including our investment in our initial 51% interest) are 14.4% and 7.0% (cash basis). Cash rents commence in February 2017.
• In November 2016, we acquired One Kendall Square, a 644,771 RSF, nine-building collaborative life science and technology campus located in the east side of our Cambridge submarket of Greater Boston, for a purchase price of $725.0 million, including the assumption of a $203.0 million secured note payable. The campus is 97.3% occupied, and we expect to achieve an initial stabilized yield (cash basis) of 6.2% upon completion of near-term renewals and re-leasing of space (see below). This acquisition provides us with a significant opportunity to increase cash flows through the following:
  • $47/RSF average in-place annual rents (mix of office gross rents and lab triple net rents), significantly below-market;
  • 55% contractual lease expirations through 2019;
  • Conversion of campus office space into office/laboratory space through redevelopment; and
  • Entitled land parcel for near-term ground-up development of an additional building aggregating 172,500 square feet.
• In October 2016, we acquired Torrey Ridge Science Center, a 294,993 RSF, three-building collaborative life science campus located in the heart of our Torrey Pines submarket of San Diego, for a purchase price of $182.5 million. The campus is 87.1% occupied, and we expect to achieve an initial stabilized yield (cash basis) of 6.8% at stabilization in 1H18 upon completion of near-term renewals/re-leasing of acquired below-market leases and the conversion of 75,953 RSF of existing shell and office space into office/laboratory space.

Strategic dispositions

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

Balance sheet management

Improvement in balance sheet leverage and liquidity

• $14.2 billion total market capitalization as of 4Q16;
• $2.2 billion of liquidity as of 4Q16;
• Net debt to Adjusted EBITDA:
  • 4Q16 annualized: 6.1x; 4Q16 trailing 12 months: 6.6x;
  • 4Q17 annualized target range: 5.5x to 6.0x;
• Fixed-charge coverage ratio:
  • 4Q16 annualized: 3.8x; 4Q16 trailing 12 months: 3.6x;
  • 4Q17 annualized target: greater than 4.0x;
• Repurchased 3.0 million shares of our 7.00% Series D cumulative convertible preferred stock at an aggregate price of $108.2 million, or $36.12 per share, and recognized a preferred stock redemption charge of $35.7 million in 4Q16;
• In October 2016, we filed an "at the market" common stock offering program, which allows us to sell up to an aggregate of $600.0 million of our common stock. During 4Q16, we sold an aggregate of 3.4 million shares of common stock for gross proceeds of $354.2 million, or $105.73 per share, and net proceeds of approximately $348.4 million;
• In December 2016, we sold an aggregate of 7.5 million shares of our common stock to settle our forward equity sales agreements executed in July 2016. Net proceeds, after issuance costs and underwriters' discount, of $715.9 million were used to fund the acquisition of One Kendall Square, located in East Cambridge, to lower net debt to Adjusted EBITDA by 0.3x, and fund construction;
• Raised $380.9 million in 2016 from (i) completed dispositions aggregating $274.6 million and (ii) funding from our joint venture partner aggregating $106.3 million, primarily in 2016, related to the sale of a partial interest in 10290 Campus Point Drive. See page 4 of this earnings press release for additional information;
• Current and future value-creation pipeline was 10% of gross investments in real estate in North America as of 4Q16, with a 4Q17 target of less than 10%; and
• 4% unhedged variable-rate debt as a percentage of total debt as of 4Q16.

Sustainability and health and wellness

• 51% of annual rental revenue expected from Leadership in Energy and Environmental Design ("LEED") certified projects upon completion of in-process projects.
• In November 2016, we became the first REIT to be named a first-in-class Fitwel Champion to promote health and wellness in the workplace and to earn Fitwel building certifications.

Subsequent events in January 2017

• Acquired land parcels aggregating 2.6 acres at 88 Bluxome Street in our Mission Bay/SoMa submarket of San Francisco for a purchase price of $130.0 million. We are currently obtaining entitlements for the development of this site and anticipate an aggregate of 1,070,925 RSF to be available for construction of two buildings in separate phases. We have leased the property back to the seller until we obtain entitlements.
• Executed lease extensions with Novartis AG aggregating 302,626 RSF at 100 and 200 Technology Square in our Cambridge submarket of Greater Boston.

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

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

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

							Net Operating Income					Net Operating Income (Cash)					Classification
Property/Market/Submarket		Date of Sale		RSF/Acres						(1)					(1)		Construction Funding				AssetSales
Dispositions completed 1Q16 to 3Q16:
16020 Industrial Drive/Maryland/Gaithersburg		4/21/2016		71,000 RSF			$	1,022				$	896				$	—			$	6,400
Land parcels in North America (Gaithersburg/Non-cluster)		Various		5.9 acres			N/A					N/A					—					8,700
Land parcels in India		Various		28 acres			N/A					N/A					—					12,767		(2)
																	—					27,867
Two joint ventures – 45% partial interest sales:
10290 Campus Point Drive/San Diego/University Town Center		6/29/16		305,006 RSF			$	15,832	(3)			$	14,665	(3)			106,263		(4)			—
10300 Campus Point Drive/San Diego/University Town Center		12/15/16		449,759 RSF													—					150,008		(4)
Dispositions completed in 4Q16:
306 Belmont Street and 350 Plantation Street/Greater Boston/ Route 495/Worcester		12/9/16		90,690 RSF			$	1,558				$	1,348				—					17,550
560 Eccles Avenue/San Francisco/South San Francisco		12/21/16		3.3 acres			N/A					N/A					—					12,000
7990 Enterprise Street/Canada		12/15/16		66,000 RSF			965					957					—					13,836
Operating properties and land parcels in India		4Q16		566,355 RSF / 168 acres			363					391					—					53,364		(2)
																	—					96,750
																	$	106,263			$	274,625

(1)	Represents annualized amounts for the quarter ended prior to the date of sale. Cash net operating income excludes straight-line rent and amortization of acquired below-market leases.
(2)	Represents the completion of the sale of all of our investments in real estate in India. During 2016, we recognized impairments of real estate related to the dispositions of assets in Asia aggregating $194.3 million. Refer to page 43 of our Supplemental Information for additional information.
(3)	Represents a 45% partial interest share of net operating income and cash net operating income: (i) anticipated upon stabilization of the redevelopment of 10290 Campus Point Drive and (ii) realized for 10300 Campus Point Drive during 3Q16.
(4)	Aggregate proceeds of $256.3 million, including gross proceeds of $68.6 million received as of 3Q16, $153.0 million received during 4Q16, and additional future proceeds of $34.7 million to be received primarily in 1Q17.

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

				Date of Purchase				Square Footage											Occupancy			Unlevered Yields
Property/Market/Submarket		Type				Number of Properties		Operating				Future Value-Creation			Purchase Price							Initial Stabilized Cash Basis			Initial Stabilized
Torrey Ridge Science Center/San Diego/Torrey Pines		Operating		10/3/16		3		294,993				—			$	182,500			87.1%			6.8%	(1)		7.1%	(1)
One Kendall Square/Greater Boston/Cambridge (2)		Operating/Development		11/7/16		9		644,771				172,500			725,000				97.3%			6.2%	(3)		6.4%	(3)
1455 and 1515 Third Street/San Francisco/Mission Bay/SoMa (acquisition of remaining 49% interest)		Operating		11/10/16		2		422,980				—			90,100			(4)	100.0%			N/A	(5)		N/A	(5)
						14		1,362,744				172,500			$	997,600

(1)	At stabilization in 1H18, upon completion of near-term renewals/re-leasing of acquired below-market leases and the conversion of 75,953 RSF of existing shell and office space into office/laboratory space.
(2)	Refer to pages 5-7 of our Earnings Press Release and Supplemental Information for the Second Quarter Ended June 30, 2016, for additional discussion on our acquisition of One Kendall Square.
(3)	Upon stabilization at completion of the ground-up development of our entitled land parcel.
(4)	The purchase price includes $56.8 million payable in 2017.
(5)	See page 2 of our Earnings Press Release for discussion of our overall project investment and yields after our acquisition of the 49% noncontrolling interest.

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

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

Earnings per Share and Funds From Operations per Share Attributable to Alexandria's Common Stockholders – Diluted
Earnings per share		$1.49 to $1.69
Depreciation and amortization (1)			4.45
Allocation to unvested restricted stock awards			(0.04)
Funds from operations per share		$5.90 to $6.10

Key Assumptions		Low				High
Occupancy percentage in North America as of December 31, 2017		96.6%				97.2%
Lease renewals and re-leasing of space:
Rental rate increases		18.5%				21.5%
Rental rate increases (cash basis)		6.5%				9.5%
Same property performance:
Net operating income increase		1.5%				3.5%
Net operating income increase (cash basis)		5.5%				7.5%
Straight-line rent revenue (4)		$	107			$	112
General and administrative expenses (5)		$	68			$	73
Capitalization of interest		$	42			$	52
Interest expense		$	131			$	141

Key Credit Metrics		2017 Guidance
Net debt to Adjusted EBITDA – 4Q17 annualized		5.5x to 6.0x
Net debt and preferred stock to Adjusted EBITDA – 4Q17 annualized		5.5x to 6.0x
Fixed-charge coverage ratio – 4Q17 annualized		Greater than 4.0x
Value-creation pipeline percentage of gross real estate as of December 31, 2017		Less than 10%

Key Sources and Uses of Capital		Range								Midpoint
Sources of capital:
Net cash provided by operating activities after dividends		$	115			$	135			$	125
Incremental debt		460				440				450
Real estate dispositions and common equity (2)		450				720				585
Total sources of capital		$	1,025			$	1,295			$	1,160
Uses of capital:
Construction		$	815			$	915			$	865
Acquisitions (3)		150				250				200
7.00% Series D preferred stock repurchases		60				130				95
Total uses of capital		$	1,025			$	1,295			$	1,160
Incremental debt (included above):
Issuance of unsecured senior notes payable		$	375			$	475			$	425
Borrowings – secured construction loans		200				250				225
Repayments of secured notes payable		(5)				(10)				(8)
Repayment of unsecured senior term loan		(200)				(200)				(200)
$1.65 billion unsecured senior line of credit/other		90				(75)				8
Incremental debt		$	460			$	440			$	450

(1)	Includes depreciation related to the final purchase price allocations for the acquisitions of Torrey Ridge Science Center and One Kendall Square that closed in 4Q16.
(2)	Includes our share of the proceeds from the anticipated sale of a condo interest in 203,090 RSF of our unconsolidated real estate joint venture development project at 360 Longwood Avenue, aggregating approximately $65.7 million, pursuant to the exercise of a purchase option by the anchor tenant. The sale is expected to close in mid-2017.
(3)	Includes the acquisition of 88 Bluxome Street in our Mission Bay/SoMa submarket of San Francisco for $130.0 million, which closed in January 2017, and $56.8 million related to 1455 and 1515 Third Street in our Mission Bay/SoMa submarket (see page 5).
(4)	Straight-line rent revenue includes free rent and rent escalations. For competitive reasons, we do not provide disclosure of free rent included in straight-line rent revenue on expected deliveries in anticipation of future negotiations with potential tenants. During 4Q16, approximately 84% of straight-line rent revenue related to initial free rent concessions granted on value-creation projects recently placed into service. Initial free rent concessions granted on value-creation projects recently placed into service as a percentage of straight-line rent revenue for the year ending December 31, 2017 is expected to be consistent with 4Q16.
(5)	General and administrative expenses as a percentage of total assets and total revenues for the year ending December 31, 2017, are expected to be consistent with 2016.

Earnings Call Information and About the Company December 31, 2016

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

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

About the Company

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

***********

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

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

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

Consolidated Balance SheetsDecember 31, 2016(In thousands)

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

(1)	See page 2 of our Earnings Press Release for additional information on our acquisition of the remaining 49% interest in our real estate joint venture with Uber.

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

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

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

(1)	Includes impairment of real estate aggregating $209.3 million and impairment of non-real estate investment aggregating approximately $3.1 million, net of amounts attributable to noncontrolling interests.
(2)	Calculated in accordance with standards established by the Advisory Board of Governors of the National Association of Real Estate Investment Trusts (the "NAREIT Board of Governors") in its April 2002 White Paper and related implementation guidance.

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

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

		Three Months Ended																				Year Ended
		12/31/16				9/30/16				6/30/16				3/31/16				12/31/15				12/31/16				12/31/15
Net (loss) income per share attributable to Alexandria's common stockholders		$	(0.31)			$	0.07			$	(1.72)			$	(0.05)			$	0.49			$	(1.99)			$	1.63
Depreciation and amortization		1.15				0.97				0.92				0.95				1.00				4.02				3.64
Gain on sales of real estate – rental properties		(0.05)				—				—				—				(0.17)				(0.05)				(0.17)
Impairment of real estate – rental properties		0.05				0.08				1.19				—				0.12				1.29				0.33
Funds from operations per share attributable to Alexandria's common stockholders – basic and diluted (1)		0.84				1.12				0.39				0.90				1.44				3.27				5.43
Non-real estate investment income		—				—				(0.06)				—				(0.11)				(0.06)				(0.18)
Impairments of land parcels and non-real estate investments		0.15				0.06				0.90				0.40				—				1.47				—
Loss on early extinguishment of debt		—				0.04				—				—				—				0.04				—
Preferred stock redemption charge		0.43				0.17				0.13				0.04				—				0.79				—
Funds from operations per share attributable to Alexandria's common stockholders – diluted, as adjusted		$	1.42			$	1.39			$	1.36			$	1.34			$	1.33			$	5.51			$	5.25
Weighted-average shares of common stock outstanding for calculating funds from operations per share and funds from operations, as adjusted, per share – diluted		81,280		(2)		77,402		(2)		74,319				72,584				71,833				76,412		(2)		71,529

(1)	Calculated in accordance with standards established by the NAREIT Board of Governors in its April 2002 White Paper and related implementation guidance.
(2)	Includes weighted average shares related to our forward equity sales agreements. See page 2 of our Earnings Press Release for additional information on our forward equity sales agreements and page 54 of our Supplemental Information for the definition of weighted-average shares of common stock outstanding – diluted.

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

SOURCE Alexandria Real Estate Equities, Inc.