Condensed consolidating financial information

9 Months Ended

Sep. 30, 2017

Condensed Consolidated Financial Information [Abstract]

Condensed consolidating financial information

Condensed consolidating financial information

Alexandria Real Estate Equities, Inc. (the “Issuer”) has sold certain debt securities registered under the Securities Act of 1933, as amended, that are fully and unconditionally guaranteed by Alexandria Real Estate Equities, L.P. (the “LP” or the “Guarantor Subsidiary”), an indirectly 100% owned subsidiary of the Issuer. The Issuer’s other subsidiaries, including, but not limited to, the subsidiaries that own substantially all of its real estate (collectively, the “Combined Non-Guarantor Subsidiaries”), will not provide a guarantee of such securities, including the subsidiaries that are partially or 100% owned by the LP. The following condensed consolidating financial information presents the condensed consolidating balance sheets as of September 30, 2017, and December 31, 2016, the condensed consolidating statements of income and comprehensive income for the three and nine months ended September 30, 2017 and 2016, and the condensed consolidating statements of cash flows for the nine months ended September 30, 2017 and 2016, for the Issuer, the Guarantor Subsidiary, and the Combined Non-Guarantor Subsidiaries, as well as the eliminations necessary to arrive at the information on a consolidated basis. In presenting the condensed consolidating financial statements, the equity method of accounting has been applied to (i) the Issuer’s interests in the Guarantor Subsidiary and the Combined Non-Guarantor Subsidiaries, (ii) the Guarantor Subsidiary’s interests in the Combined Non-Guarantor Subsidiaries, and (iii) the Combined Non-Guarantor Subsidiaries’ interests in the Guarantor Subsidiary, where applicable, even though all such subsidiaries meet the requirements to be consolidated under GAAP. All intercompany balances and transactions between the Issuer, the Guarantor Subsidiary, and the Combined Non-Guarantor Subsidiaries have been eliminated, as shown in the column “Eliminations.” All assets and liabilities have been allocated to the Issuer, the Guarantor Subsidiary, and the Combined Non-Guarantor Subsidiaries generally based on legal entity ownership.

Condensed Consolidating Balance Sheet

as of September 30, 2017

(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)		Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)		Combined Non- Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Investments in real estate	$	—	$	—	$	10,046,521	$	—		$	10,046,521
Investments in unconsolidated real estate JVs	—		—		33,692		—			33,692
Cash and cash equivalents	37,916		—		80,646		—			118,562
Restricted cash	138		—		27,575		—			27,713
Tenant receivables	—		—		9,899		—			9,899
Deferred rent	—		—		402,353		—			402,353
Deferred leasing costs	—		—		208,265		—			208,265
Investments	—		1,689		483,573		—			485,262
Investments in and advances to affiliates	9,158,536		8,276,072		168,449		(17,603,057		)	—
Other assets	48,095		—		164,961		—			213,056
Total assets	$	9,244,685	$	8,277,761	$	11,625,934	$	(17,603,057	)	$	11,545,323
Liabilities, Noncontrolling Interests, and Equity
Secured notes payable	$	—	$	—	$	1,153,890	$	—		$	1,153,890
Unsecured senior notes payable	2,801,290		—		—		—			2,801,290
Unsecured senior line of credit	314,000		—		—		—			314,000
Unsecured senior bank term loans	547,860		—		—		—			547,860
Accounts payable, accrued expenses, and tenant security deposits	91,163		—		648,907		—			740,070
Dividends payable	83,402		—		—		—			83,402
Total liabilities	3,837,715		—		1,802,797		—			5,640,512
Redeemable noncontrolling interests	—		—		11,418		—			11,418
Alexandria Real Estate Equities, Inc.’s stockholders’ equity	5,406,970		8,277,761		9,325,296		(17,603,057		)	5,406,970
Noncontrolling interests	—		—		486,423		—			486,423
Total equity	5,406,970		8,277,761		9,811,719		(17,603,057		)	5,893,393
Total liabilities, noncontrolling interests, and equity	$	9,244,685	$	8,277,761	$	11,625,934	$	(17,603,057	)	$	11,545,323

Condensed Consolidating Balance Sheet

as of December 31, 2016

(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)		Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)		Combined Non- Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Investments in real estate	$	—	$	—	$	9,077,972	$	—		$	9,077,972
Investments in unconsolidated real estate JVs	—		—		50,221		—			50,221
Cash and cash equivalents	30,603		—		94,429		—			125,032
Restricted cash	102		—		16,232		—			16,334
Tenant receivables	—		—		9,744		—			9,744
Deferred rent	—		—		335,974		—			335,974
Deferred leasing costs	—		—		195,937		—			195,937
Investments	—		4,440		338,037		—			342,477
Investments in and advances to affiliates	8,152,965		7,444,919		151,594		(15,749,478		)	—
Other assets	45,646		—		155,551		—			201,197
Total assets	$	8,229,316	$	7,449,359	$	10,425,691	$	(15,749,478	)	$	10,354,888
Liabilities, Noncontrolling Interests, and Equity
Secured notes payable	$	—	$	—	$	1,011,292	$	—		$	1,011,292
Unsecured senior notes payable	2,378,262		—		—		—			2,378,262
Unsecured senior line of credit	28,000		—		—		—			28,000
Unsecured senior bank term loans	746,471		—		—		—			746,471
Accounts payable, accrued expenses, and tenant security deposits	104,044		—		627,627		—			731,671
Dividends payable	76,743		—		171		—			76,914
Total liabilities	3,333,520		—		1,639,090		—			4,972,610
Redeemable noncontrolling interests	—		—		11,307		—			11,307
Alexandria Real Estate Equities, Inc.’s stockholders’ equity	4,895,796		7,449,359		8,300,119		(15,749,478		)	4,895,796
Noncontrolling interests	—		—		475,175		—			475,175
Total equity	4,895,796		7,449,359		8,775,294		(15,749,478		)	5,370,971
Total liabilities, noncontrolling interests, and equity	$	8,229,316	$	7,449,359	$	10,425,691	$	(15,749,478	)	$	10,354,888

Condensed Consolidating Statement of Income

for the Three Months Ended September 30, 2017

(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)			Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Rental	$	—		$	—		$	216,021		$	—		$	216,021
Tenant recoveries	—			—			67,058			—			67,058
Other income	3,230			(2,589		)	5,736			(4,086		)	2,291
Total revenues	3,230			(2,589		)	288,815			(4,086		)	285,370
Expenses:
Rental operations	—			—			83,469			—			83,469
General and administrative	16,598			—			5,124			(4,086		)	17,636
Interest	23,958			—			7,073			—			31,031
Depreciation and amortization	1,787			—			106,001			—			107,788
Total expenses	42,343			—			201,667			(4,086		)	239,924
Equity in earnings of unconsolidated real estate JVs	—			—			14,100			—			14,100
Equity in earnings of affiliates	92,886			88,900			1,702			(183,488		)	—
Net income	53,773			86,311			102,950			(183,488		)	59,546
Net income attributable to noncontrolling interests	—			—			(5,773		)	—			(5,773		)
Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders	53,773			86,311			97,177			(183,488		)	53,773
Dividends on preferred stock	(1,302		)	—			—			—			(1,302		)
Net income attributable to unvested restricted stock awards	(1,198		)	—			—			—			(1,198		)
Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$	51,273		$	86,311		$	97,177		$	(183,488	)	$	51,273

Condensed Consolidating Statement of Income

for the Three Months Ended September 30, 2016

(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)			Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)		Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Rental	$	—		$	—	$	166,591		$	—		$	166,591
Tenant recoveries	—			—		58,681			—			58,681
Other income	1,077			91		7,852			(3,913		)	5,107
Total revenues	1,077			91		233,124			(3,913		)	230,379
Expenses:
Rental operations	—			—		72,002			—			72,002
General and administrative	15,568			—		4,199			(3,913		)	15,854
Interest	21,318			—		4,532			—			25,850
Depreciation and amortization	1,722			—		75,411			—			77,133
Impairment of real estate	—			—		8,114			—			8,114
Loss on early extinguishment of debt	3,230			—		—			—			3,230
Total expenses	41,838			—		164,258			(3,913		)	202,183
Equity in earnings of unconsolidated real estate JVs	—			—		273			—			273
Equity in earnings of affiliates	65,236			55,532		1,100			(121,868		)	—
Gain on sale of real estate – land parcels	—			—		90			—			90
Net income	24,475			55,623		70,329			(121,868		)	28,559
Net income attributable to noncontrolling interests	—			—		(4,084		)	—			(4,084		)
Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders	24,475			55,623		66,245			(121,868		)	24,475
Dividends on preferred stock	(5,007		)	—		—			—			(5,007		)
Preferred stock redemption charge	(13,095		)	—		—			—			(13,095		)
Net income attributable to unvested restricted stock awards	(921		)	—		—			—			(921		)
Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$	5,452		$	55,623	$	66,245		$	(121,868	)	$	5,452

Condensed Consolidating Statement of Income

for the Nine Months Ended September 30, 2017

(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)			Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Rental	$	—		$	—		$	635,156		$	—		$	635,156
Tenant recoveries	—			—			188,874			—			188,874
Other income	11,337			(2,577		)	10,199			(13,683		)	5,276
Total revenues	11,337			(2,577		)	834,229			(13,683		)	829,306
Expenses:
Rental operations	—			—			237,536			—			237,536
General and administrative	55,272			—			14,510			(13,683		)	56,099
Interest	72,907			—			19,656			—			92,563
Depreciation and amortization	5,217			—			303,852			—			309,069
Impairment of real estate	—			—			203			—			203
Loss on early extinguishment of debt	670			—			—			—			670
Total expenses	134,066			—			575,757			(13,683		)	696,140
Equity in earnings of unconsolidated real estate JVs	—			—			15,050			—			15,050
Equity in earnings of affiliates	252,434			242,345			4,694			(499,473		)	—
Gain on sales of real estate – rental properties	—			—			270			—			270
Gain on sales of real estate – land parcels	—			—			111			—			111
Net income	129,705			239,768			278,597			(499,473		)	148,597
Net income attributable to noncontrolling interests	—			—			(18,892		)	—			(18,892		)
Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders	129,705			239,768			259,705			(499,473		)	129,705
Dividends on preferred stock	(6,364		)	—			—			—			(6,364		)
Preferred stock redemption charge	(11,279		)	—			—			—			(11,279		)
Net income attributable to unvested restricted stock awards	(3,498		)	—			—			—			(3,498		)
Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$	108,564		$	239,768		$	259,705		$	(499,473	)	$	108,564

Condensed Consolidating Statement of Income

for the Nine Months Ended September 30, 2016

(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)			Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Rental	$	—		$	—		$	486,505		$	—		$	486,505
Tenant recoveries	—			—			165,385			—			165,385
Other income	7,086			115			24,091			(10,638		)	20,654
Total revenues	7,086			115			675,981			(10,638		)	672,544
Expenses:
Rental operations	—			—			205,164			—			205,164
General and administrative	45,224			—			11,840			(10,638		)	46,426
Interest	60,729			—			15,001			—			75,730
Depreciation and amortization	4,997			—			213,171			—			218,168
Impairment of real estate	—			—			193,237			—			193,237
Loss of early extinguishment of debt	3,230			—			—			—			3,230
Total expenses	114,180			—			638,413			(10,638		)	741,955
Equity in losses of unconsolidated real estate JVs	—			—			(270		)	—			(270		)
Equity in earnings (losses) of affiliates	25,889			(6,282		)	(98		)	(19,509		)	—
Gain on sale of real estate – land parcels	—			—			90			—			90
Net (loss) income	(81,205		)	(6,167		)	37,290			(19,509		)	(69,591		)
Net income attributable to noncontrolling interests	—			—			(11,614		)	—			(11,614		)
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s stockholders	(81,205		)	(6,167		)	25,676			(19,509		)	(81,205		)
Dividends on preferred stock	(16,388		)	—			—			—			(16,388		)
Preferred stock redemption charge	(25,614		)	—			—			—			(25,614		)
Net income attributable to unvested restricted stock awards	(2,807		)	—			—			—			(2,807		)
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$	(126,014	)	$	(6,167	)	$	25,676		$	(19,509	)	$	(126,014	)

Condensed Consolidating Statement of Comprehensive Income

for the Three Months Ended September 30, 2017

(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)		Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)		Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	53,773	$	86,311	$	102,950		$	(183,488	)	$	59,546
Other comprehensive income
Unrealized gains on available-for-sale equity securities:
Unrealized holding gains arising during the period	—		65		16,953			—			17,018
Reclassification adjustment for losses included in net income	—		—		—			—			—
Unrealized gains on available-for-sale equity securities, net	—		65		16,953			—			17,018
Unrealized gains (losses) on interest rate hedge agreements:
Unrealized interest rate hedge gains (losses) arising during the period	174		—		(29		)	—			145
Reclassification adjustment for amortization of interest expense included in net income	195		—		3			—			198
Unrealized gains (losses) on interest rate hedge agreements, net	369		—		(26		)	—			343
Unrealized gains on foreign currency translation:
Unrealized foreign currency translation gains arising during the period	—		—		3,836			—			3,836
Reclassification adjustment for cumulative foreign currency translation losses included in net income upon sale or liquidation	—		—		—			—			—
Unrealized gains on foreign currency translation, net	—		—		3,836			—			3,836
Total other comprehensive income	369		65		20,763			—			21,197
Comprehensive income	54,142		86,376		123,713			(183,488		)	80,743
Less: comprehensive income attributable to noncontrolling interests	—		—		(5,783		)	—			(5,783		)
Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$	54,142	$	86,376	$	117,930		$	(183,488	)	$	74,960

Condensed Consolidating Statement of Comprehensive Income

for the Three Months Ended September 30, 2016

(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)		Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	24,475	$	55,623		$	70,329		$	(121,868	)	$	28,559
Other comprehensive income (loss)
Unrealized losses on available-for-sale equity securities:
Unrealized holding gains (losses) arising during the period	—		58			(38,679		)	—			(38,621		)
Reclassification adjustment for gains included in net income	—		(159		)	(8,381		)	—			(8,540		)
Unrealized losses on available-for-sale equity securities, net	—		(101		)	(47,060		)	—			(47,161		)
Unrealized gains (losses) on interest rate hedge agreements:
Unrealized interest rate hedge gains arising during the period	2,979		—			3			—			2,982
Reclassification adjustment for amortization of interest expense (income) included in net income	1,714		—			(12		)	—			1,702
Unrealized gains (losses) on interest rate hedge agreements, net	4,693		—			(9		)	—			4,684
Unrealized gains on foreign currency translation:
Unrealized foreign currency translation losses arising during the period	—		—			(1,322		)	—			(1,322		)
Reclassification adjustment for cumulative foreign currency translation losses included in net income upon sale or liquidation	—		—			3,779			—			3,779
Unrealized gains on foreign currency translation, net	—		—			2,457			—			2,457
Total other comprehensive income (loss)	4,693		(101		)	(44,612		)	—			(40,020		)
Comprehensive income (loss)	29,168		55,522			25,717			(121,868		)	(11,461		)
Less: comprehensive income attributable to noncontrolling interests	—		—			(4,081		)	—			(4,081		)
Comprehensive income (loss) attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$	29,168	$	55,522		$	21,636		$	(121,868	)	$	(15,542	)

Condensed Consolidating Statement of Comprehensive Income

for the Nine Months Ended September 30, 2017

(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)		Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)		Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	129,705	$	239,768	$	278,597		$	(499,473	)	$	148,597
Other comprehensive income
Unrealized gains on available-for-sale equity securities:
Unrealized holding gains arising during the period	—		20		23,394			—			23,414
Reclassification adjustment for losses included in net income	—		4		2,478			—			2,482
Unrealized gains on available-for-sale equity securities, net	—		24		25,872			—			25,896
Unrealized gains (losses) on interest rate hedge agreements:
Unrealized interest rate hedge gains (losses) arising during the period	1,062		—		(250		)	—			812
Reclassification adjustment for amortization of interest expense included in net income	1,804		—		6			—			1,810
Unrealized gains (losses) on interest rate hedge agreements, net	2,866		—		(244		)	—			2,622
Unrealized gains on foreign currency translation:
Unrealized foreign currency translation gains arising during the period	—		—		7,592			—			7,592
Reclassification adjustment for cumulative foreign currency translation losses included in net income upon sale or liquidation	—		—		2,421			—			2,421
Unrealized gains on foreign currency translation, net	—		—		10,013			—			10,013
Total other comprehensive income	2,866		24		35,641			—			38,531
Comprehensive income	132,571		239,792		314,238			(499,473		)	187,128
Less: comprehensive income attributable to noncontrolling interests	—		—		(18,914		)	—			(18,914		)
Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$	132,571	$	239,792	$	295,324		$	(499,473	)	$	168,214

Condensed Consolidating Statement of Comprehensive Income

for the Nine Months Ended September 30, 2016

(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)			Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net (loss) income	$	(81,205	)	$	(6,167	)	$	37,290		$	(19,509	)	$	(69,591	)
Other comprehensive loss
Unrealized losses on available-for-sale equity securities:
Unrealized holding gains (losses) arising during the period	—			136			(70,191		)	—			(70,055		)
Reclassification adjustment for losses (gains) included in net income	—			(148		)	(18,479		)	—			(18,627		)
Unrealized losses on available-for-sale equity securities, net	—			(12		)	(88,670		)	—			(88,682		)
Unrealized losses on interest rate hedge agreements:
Unrealized interest rate hedge (losses) gains arising during the period	(7,658		)	—			3			—			(7,655		)
Reclassification adjustment for amortization of interest expense (income) included in net income	3,737			—			(12		)	—			3,725
Unrealized losses on interest rate hedge agreements, net	(3,921		)	—			(9		)	—			(3,930		)
Unrealized gains on foreign currency translation:
Unrealized foreign currency translation gains arising during the period	—			—			842			—			842
Reclassification adjustment for cumulative foreign currency translation losses included in net (loss) income upon sale or liquidation	—			—			10,807			—			10,807
Unrealized gains on foreign currency translation, net	—			—			11,649			—			11,649
Total other comprehensive loss	(3,921		)	(12		)	(77,030		)	—			(80,963		)
Comprehensive loss	(85,126		)	(6,179		)	(39,740		)	(19,509		)	(150,554		)
Less: comprehensive income attributable to noncontrolling interests	—			—			(11,587		)	—			(11,587		)
Comprehensive loss attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$	(85,126	)	$	(6,179	)	$	(51,327	)	$	(19,509	)	$	(162,141	)

Condensed Consolidating Statement of Cash Flows

for the Nine Months Ended September 30, 2017

(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)			Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating Activities
Net income	$	129,705		$	239,768		$	278,597		$	(499,473	)	$	148,597
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	5,217			—			303,852			—			309,069
Loss on early extinguishment of debt	670			—			—			—			670
Gain on sales of real estate – rental properties	—			—			(270		)	—			(270		)
Impairment of real estate	—			—			203			—			203
Gain on sales of real estate – land parcels	—			—			(111		)	—			(111		)
Equity in earnings of unconsolidated real estate JVs	—			—			(15,050		)	—			(15,050		)
Distributions of earnings from unconsolidated real estate JVs	—			—			249			—			249
Amortization of loan fees	5,665			—			2,913			—			8,578
Amortization of debt discounts (premiums)	441			—			(2,314		)	—			(1,873		)
Amortization of acquired below-market leases	—			—			(14,908		)	—			(14,908		)
Deferred rent	—			—			(74,362		)	—			(74,362		)
Stock compensation expense	18,649			—			—			—			18,649
Equity in earnings of affiliates	(252,434		)	(242,345		)	(4,694		)	499,473			—
Investment gains	—			(17		)	(8,408		)	—			(8,425		)
Investment losses	—			2,599			3,819			—			6,418
Changes in operating assets and liabilities:
Restricted cash	(36		)	—			(876		)	—			(912		)
Tenant receivables	—			—			(224		)	—			(224		)
Deferred leasing costs	—			—			(39,925		)	—			(39,925		)
Other assets	(10,576		)	—			(86		)	—			(10,662		)
Accounts payable, accrued expenses, and tenant security deposits	(9,813		)	(9		)	40,441			—			30,619
Net cash (used in) provided by operating activities	(112,512		)	(4		)	468,846			—			356,330
Investing Activities
Proceeds from sales of real estate	—			—			4,263			—			4,263
Additions to real estate	—			—			(660,877		)	—			(660,877		)
Purchases of real estate	—			—			(590,884		)	—			(590,884		)
Deposits for investing activities	—			—			4,700			—			4,700
Investments in subsidiaries	(753,137		)	(588,808		)	(12,160		)	1,354,105			—
Investments in unconsolidated real estate JVs	—			—			(248		)	—			(248		)
Return of capital from unconsolidated real estate JVs	—			—			38,576			—			38,576
Additions to investments	—			—			(128,190		)	—			(128,190		)
Sales of investments	—			204			18,692			—			18,896
Net cash used in investing activities	$	(753,137	)	$	(588,604	)	$	(1,326,128	)	$	1,354,105		$	(1,313,764	)

Condensed Consolidating Statement of Cash Flows (continued)

for the Nine Months Ended September 30, 2017

(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)			Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Financing Activities
Borrowings from secured notes payable	$	—		$	—	$	145,272		$	—		$	145,272
Repayments of borrowings from secured notes payable	—			—		(2,882		)	—			(2,882		)
Proceeds from issuance of unsecured senior notes payable	424,384			—		—			—			424,384
Borrowings from unsecured senior line of credit	2,634,000			—		—			—			2,634,000
Repayments of borrowings from unsecured senior line of credit	(2,348,000		)	—		—			—			(2,348,000		)
Repayments of borrowings from unsecured senior bank term loans	(200,000		)	—		—			—			(200,000		)
Transfer to/from parent company	47,558			588,608		717,939			(1,354,105		)	—
Change in restricted cash related to financing activities	—			—		(10,467		)	—			(10,467		)
Payment of loan fees	(3,956		)	—		(387		)	—			(4,343		)
Repurchase of 7.00% Series D cumulative convertible preferred stock	(17,934		)	—		—			—			(17,934		)
Redemption of 6.45% Series E cumulative redeemable preferred stock	(130,350		)	—		—			—			(130,350		)
Proceeds from the issuance of common stock	705,391			—		—			—			705,391
Dividends on common stock	(229,814		)	—		—			—			(229,814		)
Dividends on preferred stock	(8,317		)	—		—			—			(8,317		)
Contributions from noncontrolling interests	—			—		9,877			—			9,877
Distributions to noncontrolling interests	—			—		(17,432		)	—			(17,432		)
Net cash provided by financing activities	872,962			588,608		841,920			(1,354,105		)	949,385
Effect of foreign exchange rate changes on cash and cash equivalents	—			—		1,579			—			1,579
Net increase (decrease) in cash and cash equivalents	7,313			—		(13,783		)	—			(6,470		)
Cash and cash equivalents as of the beginning of period	30,603			—		94,429			—			125,032
Cash and cash equivalents as of the end of period	$	37,916		$	—	$	80,646		$	—		$	118,562
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest, net of interest capitalized	$	67,091		$	—	$	19,141		$	—		$	86,232
Non-Cash Investing Activities:
Change in accrued construction	$	—		$	—	$	(38,767	)	$	—		$	(38,767	)
Contribution of real estate to an unconsolidated real estate JV	$	—		$	—	$	6,998		$	—		$	6,998

Condensed Consolidating Statement of Cash Flows

for the Nine Months Ended September 30, 2016

(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)			Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating Activities
Net (loss) income	$	(81,205	)	$	(6,167	)	$	37,290		$	(19,509	)	$	(69,591	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	4,997			—			213,171			—			218,168
Loss on early extinguishment of debt	3,230			—			—			—			3,230
Impairment of real estate	—			—			193,237			—			193,237
Gain on sale of real estate – land parcels	—			—			(90		)	—			(90		)
Equity in losses of unconsolidated real estate JVs	—			—			270			—			270
Distributions of earnings from unconsolidated real estate JVs	—			—			286			—			286
Amortization of loan fees	5,826			—			2,966			—			8,792
Amortization of debt discounts (premiums)	353			—			(470		)	—			(117		)
Amortization of acquired below-market leases	—			—			(2,905		)	—			(2,905		)
Deferred rent	—			—			(30,679		)	—			(30,679		)
Stock compensation expense	19,007			—			—			—			19,007
Equity in earnings of affiliates	(25,889		)	6,282			98			19,509			—
Investment gains	—			(566		)	(28,155		)	—			(28,721		)
Investment losses	—			188			10,482			—			10,670
Changes in operating assets and liabilities:
Restricted cash	(16		)	—			(262		)	—			(278		)
Tenant receivables	—			—			843			—			843
Deferred leasing costs	—			—			(21,621		)	—			(21,621		)
Other assets	(8,332		)	—			(6,481		)	—			(14,813		)
Accounts payable, accrued expenses, and tenant security deposits	(35,351		)	(592		)	42,106			—			6,163
Net cash (used in) provided by operating activities	(117,380		)	(855		)	410,086			—			291,851
Investing Activities
Proceeds from sales of real estate	—			—			27,332			—			27,332
Additions to real estate	—			—			(638,568		)	—			(638,568		)
Purchase of real estate	—			—			(18,108		)	—			(18,108		)
Deposits for investing activities	—			—			(54,998		)	—			(54,998		)
Investments in subsidiaries	(301,852		)	(365,132		)	(7,405		)	674,389			—
Investments in unconsolidated real estate JVs	—			—			(6,924		)	—			(6,924		)
Additions to investments	—			—			(68,384		)	—			(68,384		)
Sales of investments	—			1,174			34,121			—			35,295
Repayment of notes receivable	—			—			9,054			—			9,054
Net cash used in investing activities	$	(301,852	)	$	(363,958	)	$	(723,880	)	$	674,389		$	(715,301	)

Condensed Consolidating Statement of Cash Flows (continued)

for the Nine Months Ended September 30, 2016

(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)			Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Financing Activities
Borrowings from secured notes payable	$	—		$	—	$	215,330		$	—		$	215,330
Repayments of borrowings from secured notes payable	—			—		(234,096		)	—			(234,096		)
Proceeds from issuance of unsecured senior notes payable	348,604			—		—			—			348,604
Borrowings from unsecured senior line of credit	2,349,000			—		—			—			2,349,000
Repayments of borrowings from unsecured senior line of credit	(2,084,000		)	—		—			—			(2,084,000		)
Repayment of borrowings from unsecured bank term loans	(200,000		)	—		—			—			(200,000		)
Transfer to/from parent company	(69,139		)	364,813		378,715			(674,389		)	—
Change in restricted cash related to financing activities	—			—		7,742			—			7,742
Payment of loan fees	(12,401		)	—		(4,098		)	—			(16,499		)
Repurchase of 7.00% Series D cumulative convertible preferred stock	(98,633		)	—		—			—			(98,633		)
Proceeds from the issuance of common stock	367,802			—		—			—			367,802
Dividends on common stock	(177,966		)	—		—			—			(177,966		)
Dividends on preferred stock	(17,487		)	—		—			—			(17,487		)
Financing costs paid for sale of noncontrolling interests	—			—		(8,093		)	—			(8,093		)
Contributions from and sale of noncontrolling interests	—			—		68,621			—			68,621
Distributions to and purchase of noncontrolling interests	—			—		(62,605		)	—			(62,605		)
Net cash provided by financing activities	405,780			364,813		361,516			(674,389		)	457,720
Effect of foreign exchange rate changes on cash and cash equivalents	—			—		(1,440		)	—			(1,440		)
Net (decrease) increase in cash and cash equivalents	(13,452		)	—		46,282			—			32,830
Cash and cash equivalents as of the beginning of period	31,982			—		93,116			—			125,098
Cash and cash equivalents as of the end of period	$	18,530		$	—	$	139,398		$	—		$	157,928
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest, net of interest capitalized	$	58,062		$	—	$	758		$	—		$	58,820
Non-Cash Investing Activities:
Change in accrued construction	$	—		$	—	$	23,023		$	—		$	23,023
Non-Cash Financing Activities:
Redemption of redeemable noncontrolling interests	$	—		$	—	$	(5,000	)	$	—		$	(5,000	)