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, 2019, and December 31, 2018, the condensed consolidating statements of operations and comprehensive income for the three and nine months ended September 30, 2019 and 2018, and the condensed consolidating statements of cash flows for the nine months ended September 30, 2019 and 2018, 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, 2019 (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 | $ | — |
| | $ | — |
| | $ | 13,618,280 |
| | $ | — |
| | $ | 13,618,280 |
| Investments in unconsolidated real estate JVs | — |
| | — |
| | 340,190 |
| | — |
| | 340,190 |
| Cash and cash equivalents | 275,498 |
| | — |
| | 135,177 |
| | — |
| | 410,675 |
| Restricted cash | 223 |
| | — |
| | 42,072 |
| | — |
| | 42,295 |
| Tenant receivables | — |
| | — |
| | 10,668 |
| | — |
| | 10,668 |
| Deferred rent | — |
| | — |
| | 615,817 |
| | — |
| | 615,817 |
| Deferred leasing costs | — |
| | — |
| | 252,772 |
| | — |
| | 252,772 |
| Investments | — |
| | 1,123 |
| | 989,331 |
| | — |
| | 990,454 |
| Investments in and advances to affiliates | 14,076,652 |
| | 12,685,103 |
| | 258,380 |
| | (27,020,135 | ) | | — |
| Other assets | 69,236 |
| | — |
| | 707,767 |
| | — |
| | 777,003 |
| Total assets | $ | 14,421,609 |
| | $ | 12,686,226 |
| | $ | 16,970,454 |
| | $ | (27,020,135 | ) | | $ | 17,058,154 |
| Liabilities, Noncontrolling Interests, and Equity | | | | | | | | | | Secured notes payable | $ | — |
| | $ | — |
| | $ | 351,852 |
| | $ | — |
| | $ | 351,852 |
| Unsecured senior notes payable | 6,042,831 |
| | — |
| | — |
| | — |
| | 6,042,831 |
| Unsecured senior line of credit | 343,000 |
| | — |
| | — |
| | — |
| | 343,000 |
| Accounts payable, accrued expenses, and other liabilities | 129,971 |
| | — |
| | 1,111,305 |
| | — |
| | 1,241,276 |
| Dividends payable | 115,575 |
| | — |
| | — |
| | — |
| | 115,575 |
| Total liabilities | 6,631,377 |
| | — |
| | 1,463,157 |
| | — |
| | 8,094,534 |
| Redeemable noncontrolling interests | — |
| | — |
| | 12,099 |
| | — |
| | 12,099 |
| Alexandria Real Estate Equities, Inc.’s stockholders’ equity | 7,790,232 |
| | 12,686,226 |
| | 14,333,909 |
| | (27,020,135 | ) | | 7,790,232 |
| Noncontrolling interests | — |
| | — |
| | 1,161,289 |
| | — |
| | 1,161,289 |
| Total equity | 7,790,232 |
| | 12,686,226 |
| | 15,495,198 |
| | (27,020,135 | ) | | 8,951,521 |
| Total liabilities, noncontrolling interests, and equity | $ | 14,421,609 |
| | $ | 12,686,226 |
| | $ | 16,970,454 |
| | $ | (27,020,135 | ) | | $ | 17,058,154 |
|
Condensed Consolidating Balance Sheet as of December 31, 2018 (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 | $ | — |
| | $ | — |
| | $ | 11,913,693 |
| | $ | — |
| | $ | 11,913,693 |
| Investments in unconsolidated real estate JVs | — |
| | — |
| | 237,507 |
| | — |
| | 237,507 |
| Cash and cash equivalents | 119,112 |
| | — |
| | 115,069 |
| | — |
| | 234,181 |
| Restricted cash | 193 |
| | — |
| | 37,756 |
| | — |
| | 37,949 |
| Tenant receivables | — |
| | — |
| | 9,798 |
| | — |
| | 9,798 |
| Deferred rent | — |
| | — |
| | 530,237 |
| | — |
| | 530,237 |
| Deferred leasing costs | — |
| | — |
| | 239,070 |
| | — |
| | 239,070 |
| Investments | — |
| | 1,262 |
| | 891,002 |
| | — |
| | 892,264 |
| Investments in and advances to affiliates | 12,235,577 |
| | 10,949,631 |
| | 222,983 |
| | (23,408,191 | ) | | — |
| Other assets | 56,353 |
| | — |
| | 313,904 |
| | — |
| | 370,257 |
| Total assets | $ | 12,411,235 |
| | $ | 10,950,893 |
| | $ | 14,511,019 |
| | $ | (23,408,191 | ) | | $ | 14,464,956 |
| Liabilities, Noncontrolling Interests, and Equity | | | | | | | | | | Secured notes payable | $ | — |
| | $ | — |
| | $ | 630,547 |
| | $ | — |
| | $ | 630,547 |
| Unsecured senior notes payable | 4,292,293 |
| | — |
| | — |
| | — |
| | 4,292,293 |
| Unsecured senior line of credit | 208,000 |
| | — |
| | — |
| | — |
| | 208,000 |
| Unsecured senior bank term loan | 347,415 |
| | — |
| | — |
| | — |
| | 347,415 |
| Accounts payable, accrued expenses, and other liabilities | 111,282 |
| | — |
| | 870,425 |
| | — |
| | 981,707 |
| Dividends payable | 110,280 |
| | — |
| | — |
| | — |
| | 110,280 |
| Total liabilities | 5,069,270 |
| | — |
| | 1,500,972 |
| | — |
| | 6,570,242 |
| Redeemable noncontrolling interests | — |
| | — |
| | 10,786 |
| | — |
| | 10,786 |
| Alexandria Real Estate Equities, Inc.’s stockholders’ equity | 7,341,965 |
| | 10,950,893 |
| | 12,457,298 |
| | (23,408,191 | ) | | 7,341,965 |
| Noncontrolling interests | — |
| | — |
| | 541,963 |
| | — |
| | 541,963 |
| Total equity | 7,341,965 |
| | 10,950,893 |
| | 12,999,261 |
| | (23,408,191 | ) | | 7,883,928 |
| Total liabilities, noncontrolling interests, and equity | $ | 12,411,235 |
| | $ | 10,950,893 |
| | $ | 14,511,019 |
| | $ | (23,408,191 | ) | | $ | 14,464,956 |
|
Condensed Consolidating Statement of Operations for the Three Months Ended September 30, 2019 (In thousands) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | Alexandria Real Estate Equities, Inc. (Issuer) | | Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary) | | Combined Non- Guarantor Subsidiaries | | Eliminations | | Consolidated | Revenues: | | | | | | | | | | Income from rentals | $ | — |
| | $ | — |
| | $ | 385,776 |
| | $ | — |
| | $ | 385,776 |
| Other income | 6,523 |
| | — |
| | 4,468 |
| | (6,283 | ) | | 4,708 |
| Total revenues | 6,523 |
| | — |
| | 390,244 |
| | (6,283 | ) | | 390,484 |
| | | | | | | | | | | Expenses: | | | | | | | | | | Rental operations | — |
| | — |
| | 116,450 |
| | — |
| | 116,450 |
| General and administrative | 27,488 |
| | — |
| | 6,725 |
| | (6,283 | ) | | 27,930 |
| Interest | 44,120 |
| | — |
| | 2,083 |
| | — |
| | 46,203 |
| Depreciation and amortization | 1,929 |
| | — |
| | 133,641 |
| | — |
| | 135,570 |
| Loss on early extinguishment of debt | 40,209 |
| | — |
| | — |
| | — |
| | 40,209 |
| Total expenses | 113,746 |
| | — |
| | 258,899 |
| | (6,283 | ) | | 366,362 |
| |
|
| | | | | | | | | Equity in earnings of unconsolidated real estate JVs | — |
| | — |
| | 2,951 |
| | — |
| | 2,951 |
| Equity in earnings of affiliates | 60,021 |
| | 129,029 |
| | 2,544 |
| | (191,594 | ) | | — |
| Investment loss | — |
| | (80 | ) | | (62,996 | ) | | — |
| | (63,076 | ) | Net (loss) income | (47,202 | ) | | 128,949 |
| | 73,844 |
| | (191,594 | ) | | (36,003 | ) | Net income attributable to noncontrolling interests | — |
| | — |
| | (11,199 | ) | | — |
| | (11,199 | ) | Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s stockholders | (47,202 | ) | | 128,949 |
| | 62,645 |
| | (191,594 | ) | | (47,202 | ) | Dividends on preferred stock | (1,173 | ) | | — |
| | — |
| | — |
| | (1,173 | ) | Net income attributable to unvested restricted stock awards | (1,398 | ) | | — |
| | — |
| | — |
| | (1,398 | ) | Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | $ | (49,773 | ) | | $ | 128,949 |
| | $ | 62,645 |
| | $ | (191,594 | ) | | $ | (49,773 | ) |
Condensed Consolidating Statement of Operations for the Three Months Ended September 30, 2018 (In thousands) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | Alexandria Real Estate Equities, Inc. (Issuer) | | Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary) | | Combined Non- Guarantor Subsidiaries | | Eliminations | | Consolidated | Revenues: | | | | | | | | | | Income from rentals | $ | — |
| | $ | — |
| | $ | 336,547 |
| | $ | — |
| | $ | 336,547 |
| Other income | 5,017 |
| | — |
| | 5,723 |
| | (5,464 | ) | | 5,276 |
| Total revenues | 5,017 |
| | — |
| | 342,270 |
| | (5,464 | ) | | 341,823 |
| | | | | | | | | | | Expenses: | | | | | | | | | | Rental operations | — |
| | — |
| | 99,759 |
| | — |
| | 99,759 |
| General and administrative | 21,803 |
| | — |
| | 6,321 |
| | (5,464 | ) | | 22,660 |
| Interest | 37,236 |
| | — |
| | 5,008 |
| | — |
| | 42,244 |
| Depreciation and amortization | 1,506 |
| | — |
| | 118,094 |
| | — |
| | 119,600 |
| Loss on early extinguishment of debt | 823 |
| | — |
| | 299 |
| | — |
| | 1,122 |
| Total expenses | 61,368 |
| | — |
| | 229,481 |
| | (5,464 | ) | | 285,385 |
| | | | | | | | | | | Equity in earnings of unconsolidated real estate JVs | — |
| | — |
| | 40,718 |
| | — |
| | 40,718 |
| Equity in earnings of affiliates | 269,987 |
| | 147,999 |
| | 2,912 |
| | (420,898 | ) | | — |
| Investment income | — |
| | 111 |
| | 122,092 |
| | — |
| | 122,203 |
| Net income | 213,636 |
| | 148,110 |
| | 278,511 |
| | (420,898 | ) | | 219,359 |
| Net income attributable to noncontrolling interests | — |
| | — |
| | (5,723 | ) | | — |
| | (5,723 | ) | Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders | 213,636 |
| | 148,110 |
| | 272,788 |
| | (420,898 | ) | | 213,636 |
| Dividends on preferred stock | (1,301 | ) | | — |
| | — |
| | — |
| | (1,301 | ) | Net income attributable to unvested restricted stock awards | (3,395 | ) | | — |
| | — |
| | — |
| | (3,395 | ) | Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | $ | 208,940 |
| | $ | 148,110 |
| | $ | 272,788 |
| | $ | (420,898 | ) | | $ | 208,940 |
|
Condensed Consolidating Statement of Operations for the Nine Months Ended September 30, 2019 (In thousands) (Unaudited) | | | | | | | | | | | | | | | | | | | | | | Alexandria Real Estate Equities, Inc. (Issuer) | | Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary) | | Combined Non- Guarantor Subsidiaries | | Eliminations | | Consolidated | Revenues: | | | | | | | | | | Income from rentals | $ | — |
| | $ | — |
| | $ | 1,112,143 |
| | $ | — |
| | $ | 1,112,143 |
| Other income | 16,755 |
| | — |
| | 11,414 |
| | (17,130 | ) | | 11,039 |
| Total revenues | 16,755 |
| | — |
| | 1,123,557 |
| | (17,130 | ) | | 1,123,182 |
| | | | | | | | | | | Expenses: | | | | | | | | | | Rental operations | — |
| | — |
| | 323,640 |
| | — |
| | 323,640 |
| General and administrative | 78,291 |
| | — |
| | 17,880 |
| | (17,130 | ) | | 79,041 |
| Interest | 120,826 |
| | — |
| | 7,356 |
| | — |
| | 128,182 |
| Depreciation and amortization | 5,344 |
| | — |
| | 398,750 |
| | — |
| | 404,094 |
| Loss on early extinguishment of debt | 40,209 |
| | — |
| | 7,361 |
| | — |
| | 47,570 |
| Total expenses | 244,670 |
| | — |
| | 754,987 |
| | (17,130 | ) | | 982,527 |
| | | | | | | | | | | Equity in earnings of unconsolidated real estate JVs | — |
| | — |
| | 5,359 |
| | — |
| | 5,359 |
| Equity in earnings of affiliates | 388,639 |
| | 348,947 |
| | 6,867 |
| | (744,453 | ) | | — |
| Investment income | — |
| | 33 |
| | 41,947 |
| | — |
| | 41,980 |
| Net income | 160,724 |
| | 348,980 |
| | 422,743 |
| | (744,453 | ) | | 187,994 |
| Net income attributable to noncontrolling interests | — |
| | — |
| | (27,270 | ) | | — |
| | (27,270 | ) | Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders | 160,724 |
| | 348,980 |
| | 395,473 |
| | (744,453 | ) | | 160,724 |
| Dividends on preferred stock | (3,204 | ) | | — |
| | — |
| | — |
| | (3,204 | ) | Preferred stock redemption charge | (2,580 | ) | | — |
| | — |
| | — |
| | (2,580 | ) | Net income attributable to unvested restricted stock awards | (4,532 | ) | | — |
| | — |
| | — |
| | (4,532 | ) | Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | $ | 150,408 |
| | $ | 348,980 |
| | $ | 395,473 |
| | $ | (744,453 | ) | | $ | 150,408 |
|
Condensed Consolidating Statement of Operations for the Nine Months Ended September 30, 2018 (In thousands) (Unaudited) | | | | | | | | | | | | | | | | | | | | | | Alexandria Real Estate Equities, Inc. (Issuer) | | Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary) | | Combined Non- Guarantor Subsidiaries | | Eliminations | | Consolidated | Revenues: | | | | | | | | | | Income from rentals | $ | — |
| | $ | — |
| | $ | 976,996 |
| | $ | — |
| | $ | 976,996 |
| Other income | 14,106 |
| | — |
| | 11,760 |
| | (15,866 | ) | | 10,000 |
| Total revenues | 14,106 |
| | — |
| | 988,756 |
| | (15,866 | ) | | 986,996 |
| | | | | | | | | | | Expenses: | | | | | | | | | | Rental operations | — |
| | — |
| | 283,438 |
| | — |
| | 283,438 |
| General and administrative | 66,694 |
| | — |
| | 17,192 |
| | (15,866 | ) | | 68,020 |
| Interest | 100,470 |
| | — |
| | 16,786 |
| | — |
| | 117,256 |
| Depreciation and amortization | 4,830 |
| | — |
| | 347,841 |
| | — |
| | 352,671 |
| Impairment of real estate | — |
| | — |
| | 6,311 |
| | — |
| | 6,311 |
| Loss on early extinguishment of debt | 823 |
| | — |
| | 299 |
| | — |
| | 1,122 |
| Total expenses | 172,817 |
| | — |
| | 671,867 |
| | (15,866 | ) | | 828,818 |
| | | | | | | | | | | Equity in earnings of unconsolidated real estate JVs | — |
| | — |
| | 42,952 |
| | — |
| | 42,952 |
| Equity in earnings of affiliates | 562,707 |
| | 345,676 |
| | 6,809 |
| | (915,192 | ) | | — |
| Investment income | — |
| | 487 |
| | 219,807 |
| | — |
| | 220,294 |
| Net income | 403,996 |
| | 346,163 |
| | 586,457 |
| | (915,192 | ) | | 421,424 |
| Net income attributable to noncontrolling interests | — |
| | — |
| | (17,428 | ) | | — |
| | (17,428 | ) | Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders | 403,996 |
| | 346,163 |
| | 569,029 |
| | (915,192 | ) | | 403,996 |
| Dividends on preferred stock | (3,905 | ) | | — |
| | — |
| | — |
| | (3,905 | ) | Net income attributable to unvested restricted stock awards | (6,010 | ) | | — |
| | — |
| | — |
| | (6,010 | ) | Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | $ | 394,081 |
| | $ | 346,163 |
| | $ | 569,029 |
| | $ | (915,192 | ) | | $ | 394,081 |
|
Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended September 30, 2019 (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 | $ | (47,202 | ) | | $ | 128,949 |
| | $ | 73,844 |
| | $ | (191,594 | ) | | $ | (36,003 | ) | Other comprehensive income (loss): | | | | | | | | | | Unrealized gains on interest rate hedge agreements: | | | | | | | | | | Unrealized interest rate hedge losses arising during the period | (79 | ) | | — |
| | — |
| | — |
| | (79 | ) | Reclassification adjustment for amortization expense to interest expense included in net (loss) income | 38 |
| | — |
| | — |
| | — |
| | 38 |
| Reclassification of swap termination losses to interest expense included in net income | 1,702 |
| | — |
| | — |
| | — |
| | 1,702 |
| Unrealized gains on interest rate hedge agreements, net | 1,661 |
| | — |
| | — |
| | — |
| | 1,661 |
| | | | | | | | | | | Unrealized losses on foreign currency translation: | | | | | | | | | | Unrealized foreign currency translation losses arising during the period | — |
| | — |
| | (2,076 | ) | | — |
| | (2,076 | ) | Unrealized losses on foreign currency translation, net | — |
| | — |
| | (2,076 | ) | | — |
| | (2,076 | ) | | | | | | | | | | | Total other comprehensive income (loss) | 1,661 |
| | — |
| | (2,076 | ) | | — |
| | (415 | ) | Comprehensive (loss) income | (45,541 | ) | | 128,949 |
| | 71,768 |
| | (191,594 | ) | | (36,418 | ) | Less: comprehensive income attributable to noncontrolling interests | — |
| | — |
| | (11,199 | ) | | — |
| | (11,199 | ) | Comprehensive (loss) income attributable to Alexandria Real Estate Equities, Inc.’s stockholders | $ | (45,541 | ) | | $ | 128,949 |
| | $ | 60,569 |
| | $ | (191,594 | ) | | $ | (47,617 | ) |
Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended September 30, 2018 (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 | $ | 213,636 |
| | $ | 148,110 |
| | $ | 278,511 |
| | $ | (420,898 | ) | | $ | 219,359 |
| Other comprehensive loss: | | | | | | | | | | Unrealized losses on interest rate hedge agreements: | | | | | | | | | | Unrealized interest rate hedge gains arising during the period | 165 |
| | — |
| | — |
| | — |
| | 165 |
| Reclassification of gains to interest expense included in net income | (1,432 | ) | | — |
| | — |
| | — |
| | (1,432 | ) | Unrealized losses on interest rate hedge agreements, net | (1,267 | ) | | — |
| | — |
| | — |
| | (1,267 | ) | | | | | | | | | | | Unrealized losses on foreign currency translation: | | | | | | | | | | Unrealized foreign currency translation losses arising during the period | — |
| | — |
| | (59 | ) | | — |
| | (59 | ) | Unrealized losses on foreign currency translation, net | — |
| | — |
| | (59 | ) | | — |
| | (59 | ) | | | | | | | | | | | Total other comprehensive loss | (1,267 | ) | | — |
| | (59 | ) | | — |
| | (1,326 | ) | Comprehensive income | 212,369 |
| | 148,110 |
| | 278,452 |
| | (420,898 | ) | | 218,033 |
| Less: comprehensive income attributable to noncontrolling interests | — |
| | — |
| | (5,723 | ) | | — |
| | (5,723 | ) | Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s stockholders | $ | 212,369 |
| | $ | 148,110 |
| | $ | 272,729 |
| | $ | (420,898 | ) | | $ | 212,310 |
|
Condensed Consolidating Statement of Comprehensive Income for the Nine Months Ended September 30, 2019 (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 | $ | 160,724 |
| | $ | 348,980 |
| | $ | 422,743 |
| | $ | (744,453 | ) | | $ | 187,994 |
| Other comprehensive (loss) income: | | | | | | | | | | Unrealized losses on interest rate hedge agreements: | | | | | | | | | | Unrealized interest rate hedge losses arising during the period | (1,763 | ) | | — |
| | — |
| | — |
| | (1,763 | ) | Reclassification adjustment for amortization income to interest expense included in net income | (1,777 | ) | | — |
| | — |
| | — |
| | (1,777 | ) | Reclassification of losses related to terminated interest rate hedge instruments to interest expense included in net income | 1,702 |
| | — |
| | — |
| | — |
| | 1,702 |
| Unrealized losses on interest rate hedge agreements, net | (1,838 | ) | | — |
| | — |
| | — |
| | (1,838 | ) | | | | | | | | | | | Unrealized gains on foreign currency translation: | | | | | | | | | | Unrealized foreign currency translation gains arising during the period | — |
| | — |
| | 724 |
| | — |
| | 724 |
| Unrealized gains on foreign currency translation, net | — |
| | — |
| | 724 |
| | — |
| | 724 |
| | | | | | | | | | | Total other comprehensive (loss) income | (1,838 | ) | | — |
| | 724 |
| | — |
| | (1,114 | ) | Comprehensive income | 158,886 |
| | 348,980 |
| | 423,467 |
| | (744,453 | ) | | 186,880 |
| Less: comprehensive income attributable to noncontrolling interests | — |
| | — |
| | (27,270 | ) | | — |
| | (27,270 | ) | Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s stockholders | $ | 158,886 |
| | $ | 348,980 |
| | $ | 396,197 |
| | $ | (744,453 | ) | | $ | 159,610 |
|
Condensed Consolidating Statement of Comprehensive Income for the Nine Months Ended September 30, 2018 (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 | $ | 403,996 |
| | $ | 346,163 |
| | $ | 586,457 |
| | $ | (915,192 | ) | | $ | 421,424 |
| Other comprehensive loss: | | | | | | | | | | Unrealized losses on interest rate hedge agreements: | | | | | | | | | | Unrealized interest rate hedge gains arising during the period | 2,808 |
| | — |
| | — |
| | — |
| | 2,808 |
| Reclassification of gains to interest expense included in net income | (3,241 | ) | | — |
| | — |
| | — |
| | (3,241 | ) | Unrealized losses on interest rate hedge agreements, net | (433 | ) | | — |
| | — |
| | — |
| | (433 | ) | | | | | | | | | | | Unrealized losses on foreign currency translation: | | | | | | | | | | Unrealized foreign currency translation losses arising during the period | — |
| | — |
| | (3,631 | ) | | — |
| | (3,631 | ) | Unrealized losses on foreign currency translation, net | — |
| | — |
| | (3,631 | ) | | — |
| | (3,631 | ) | | | | | | | | | | | Total other comprehensive loss | (433 | ) | | — |
| | (3,631 | ) | | — |
| | (4,064 | ) | Comprehensive income | 403,563 |
| | 346,163 |
| | 582,826 |
| | (915,192 | ) | | 417,360 |
| Less: comprehensive income attributable to noncontrolling interests | — |
| | — |
| | (17,428 | ) | | — |
| | (17,428 | ) | Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s stockholders | $ | 403,563 |
| | $ | 346,163 |
| | $ | 565,398 |
| | $ | (915,192 | ) | | $ | 399,932 |
|
Condensed Consolidating Statement of Cash Flows for the Nine Months Ended September 30, 2019 (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 | $ | 160,724 |
| | $ | 348,980 |
| | $ | 422,743 |
| | $ | (744,453 | ) | | $ | 187,994 |
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: | | | | | | | | | | Depreciation and amortization | 5,344 |
| | — |
| | 398,750 |
| | — |
| | 404,094 |
| Loss on early extinguishment of debt | 40,209 |
| | — |
| | 7,361 |
| | — |
| | 47,570 |
| Equity in earnings of unconsolidated real estate JVs | — |
| | — |
| | (5,359 | ) | | — |
| | (5,359 | ) | Distributions of earnings from unconsolidated real estate JVs | — |
| | — |
| | 2,607 |
| | — |
| | 2,607 |
| Amortization of loan fees | 6,601 |
| | — |
| | 263 |
| | — |
| | 6,864 |
| Amortization of debt premiums | (484 | ) | | — |
| | (2,386 | ) | | — |
| | (2,870 | ) | Amortization of acquired below-market leases | — |
| | — |
| | (20,976 | ) | | — |
| | (20,976 | ) | Deferred rent | — |
| | — |
| | (79,835 | ) | | — |
| | (79,835 | ) | Stock compensation expense | 33,401 |
| | — |
| | — |
| | — |
| | 33,401 |
| Equity in earnings of affiliates | (388,639 | ) | | (348,947 | ) | | (6,867 | ) | | 744,453 |
| | — |
| Investment income | — |
| | (33 | ) | | (41,947 | ) | | — |
| | (41,980 | ) | Changes in operating assets and liabilities: | | | | | | | | |
|
| Tenant receivables | — |
| | — |
| | (886 | ) | | — |
| | (886 | ) | Deferred leasing costs | — |
| | — |
| | (34,374 | ) | | — |
| | (34,374 | ) | Other assets | (3,989 | ) | | — |
| | (997 | ) | | — |
| | (4,986 | ) | Accounts payable, accrued expenses, and other liabilities | (537 | ) | | — |
| | 14,839 |
| | — |
| | 14,302 |
| Net cash (used in) provided by operating activities | (147,370 | ) | | — |
| | 652,936 |
| | — |
| | 505,566 |
| | | | | | | | | | | Investing Activities | | | | | | | | | | Additions to real estate | — |
| | — |
| | (914,722 | ) | | — |
| | (914,722 | ) | Purchases of real estate | — |
| | — |
| | (1,289,319 | ) | | — |
| | (1,289,319 | ) | Deposits returned for investing activities
| — |
| | — |
| | 1,899 |
| | — |
| | 1,899 |
| Investments in subsidiaries | (1,452,436 | ) | | (1,386,525 | ) | | (28,530 | ) | | 2,867,491 |
| | — |
| Investments in unconsolidated real estate JVs | — |
| | — |
| | (99,955 | ) | | — |
| | (99,955 | ) | Additions to investments | — |
| | — |
| | (133,866 | ) | | — |
| | (133,866 | ) | Sales of investments | — |
| | 172 |
| | 84,921 |
| | — |
| | 85,093 |
| Net cash used in investing activities | $ | (1,452,436 | ) | | $ | (1,386,353 | ) | | $ | (2,379,572 | ) | | $ | 2,867,491 |
| | $ | (2,350,870 | ) |
Condensed Consolidating Statement of Cash Flows (continued) for the Nine Months Ended September 30, 2019 (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 | | | | | | | | | | Repayments of borrowings from secured notes payable | $ | — |
| | $ | — |
| | $ | (304,455 | ) | | $ | — |
| | $ | (304,455 | ) | Proceeds from issuance of unsecured senior notes payable | 2,721,169 |
| | — |
| | — |
| | — |
| | 2,721,169 |
| Repayments of unsecured senior notes payable | (950,000 | ) | | — |
| | — |
| | — |
| | (950,000 | ) | Borrowings from unsecured senior line of credit | 4,068,000 |
| | — |
| | — |
| | — |
| | 4,068,000 |
| Repayments of borrowings from unsecured senior line of credit | (3,933,000 | ) | | — |
| | — |
| | — |
| | (3,933,000 | ) | Repayments of borrowings from unsecured senior bank term loan | (350,000 | ) | | — |
| | — |
| | — |
| | (350,000 | ) | Premium paid for early extinguishment of debt | (34,677 | ) | | — |
| | — |
| | — |
| | (34,677 | ) | Transfers to/from parent company | 396,001 |
| | 1,386,353 |
| | 1,085,137 |
| | (2,867,491 | ) | | — |
| Payment of loan fees | (26,772 | ) | | — |
| | (7,082 | ) | | — |
| | (33,854 | ) | Taxes paid related to net settlement of equity awards | (25,150 | ) | | — |
| | — |
| | — |
| | (25,150 | ) | Repurchase of 7.00% Series D cumulative convertible preferred stock | (9,240 | ) | | — |
| | — |
| | — |
| | (9,240 | ) | Proceeds from issuance of common stock | 235,487 |
| | — |
| | — |
| | — |
| | 235,487 |
| Dividends on common stock | (332,458 | ) | | — |
| | — |
| | — |
| | (332,458 | ) | Dividends on preferred stock | (3,138 | ) | | — |
| | — |
| | — |
| | (3,138 | ) | Contributions from and sales of noncontrolling interests | — |
| | — |
| | 1,015,874 |
| | — |
| | 1,015,874 |
| Distributions to and purchases of noncontrolling interests | — |
| | — |
| | (38,882 | ) | | — |
| | (38,882 | ) | Net cash provided by financing activities | 1,756,222 |
| | 1,386,353 |
| | 1,750,592 |
| | (2,867,491 | ) | | 2,025,676 |
| | | | | | | | | | | Effect of foreign exchange rate changes on cash and cash equivalents | — |
| | — |
| | 468 |
| | — |
| | 468 |
| | | | | | | | | | | Net increase in cash, cash equivalents, and restricted cash | 156,416 |
| | — |
| | 24,424 |
| | — |
| | 180,840 |
| Cash, cash equivalents, and restricted cash as of the beginning of period | 119,305 |
| | — |
| | 152,825 |
| | — |
| | 272,130 |
| Cash, cash equivalents, and restricted cash as of the end of period | $ | 275,721 |
| | $ | — |
| | $ | 177,249 |
| | $ | — |
| | $ | 452,970 |
| | | | | | | | | | | Supplemental Disclosures and Non-Cash Investing and Financing Activities: | | | | | | | | | | Cash paid during the period for interest, net of interest capitalized | $ | 114,951 |
| | $ | — |
| | $ | 10,213 |
| | $ | — |
| | $ | 125,164 |
| Change in accrued construction | $ | — |
| | $ | — |
| | $ | 12,128 |
| | $ | — |
| | $ | 12,128 |
| Accrued construction for current-period additions to real estate | $ | — |
| | $ | — |
| | $ | 211,691 |
| | $ | — |
| | $ | 211,691 |
| Assumption of secured notes payable in connection with purchase of properties | $ | — |
| | $ | — |
| | $ | (28,200 | ) | | $ | — |
| | $ | (28,200 | ) | Right-of-use asset | $ | — |
| | $ | — |
| | $ | 267,559 |
| | $ | — |
| | $ | 267,559 |
| Lease liability | $ | — |
| | $ | — |
| | $ | (273,545 | ) | | $ | — |
| | $ | (273,545 | ) |
Condensed Consolidating Statement of Cash Flows for the Nine Months Ended September 30, 2018 (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 | $ | 403,996 |
| | $ | 346,163 |
| | $ | 586,457 |
| | $ | (915,192 | ) | | $ | 421,424 |
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: | | | | | | | | | | Depreciation and amortization | 4,830 |
| | — |
| | 347,841 |
| | — |
| | 352,671 |
| Loss on early extinguishment of debt | 823 |
| | — |
| | 299 |
| | — |
| | 1,122 |
| Impairment of real estate | — |
| | — |
| | 6,311 |
| | — |
| | 6,311 |
| Equity in earnings of unconsolidated real estate JVs | — |
| | — |
| | (42,952 | ) | | — |
| | (42,952 | ) | Distributions of earnings from unconsolidated real estate JVs | — |
| | — |
| | 430 |
| | — |
| | 430 |
| Amortization of loan fees | 6,685 |
| | — |
| | 1,185 |
| | — |
| | 7,870 |
| Amortization of debt discounts (premiums) | 587 |
| | — |
| | (2,382 | ) | | — |
| | (1,795 | ) | Amortization of acquired below-market leases | — |
| | — |
| | (16,588 | ) | | — |
| | (16,588 | ) | Deferred rent | — |
| | — |
| | (75,960 | ) | | — |
| | (75,960 | ) | Stock compensation expense | 25,209 |
| | — |
| | — |
| | — |
| | 25,209 |
| Equity in earnings of affiliates | (562,707 | ) | | (345,676 | ) | | (6,809 | ) | | 915,192 |
| | — |
| Investment income | — |
| | (487 | ) | | (219,807 | ) | | — |
| | (220,294 | ) | Changes in operating assets and liabilities: | | | | | | |
|
| |
|
| Tenant receivables | — |
| | — |
| | (807 | ) | | — |
| | (807 | ) | Deferred leasing costs | — |
| | — |
| | (42,821 | ) | | — |
| | (42,821 | ) | Other assets | (14,955 | ) | | — |
| | (6,674 | ) | | — |
| | (21,629 | ) | Accounts payable, accrued expenses, and other liabilities | (4,371 | ) | | — |
| | 26,268 |
| | — |
| | 21,897 |
| Net cash (used in) provided by operating activities | (139,903 | ) | | — |
| | 553,991 |
| | — |
| | 414,088 |
| | | | | | | | | | | Investing Activities | | | | | | | | | | Proceeds from sales of real estate | — |
| | — |
| | 5,748 |
| | — |
| | 5,748 |
| Additions to real estate | — |
| | — |
| | (663,688 | ) | | — |
| | (663,688 | ) | Purchases of real estate | — |
| | — |
| | (947,013 | ) | | — |
| | (947,013 | ) | Deposits returned for investing activities | — |
| | — |
| | 2,500 |
| | — |
| | 2,500 |
| Investments in subsidiaries | (1,453,711 | ) | | (1,234,186 | ) | | (25,477 | ) | | 2,713,374 |
| | — |
| Acquisitions of interests in unconsolidated real estate JVs | — |
| | — |
| | (35,922 | ) | | — |
| | (35,922 | ) | Investments in unconsolidated real estate JVs | — |
| | — |
| | (77,501 | ) | | — |
| | (77,501 | ) | Return of capital from unconsolidated real estate joint ventures | — |
| | — |
| | 68,592 |
| | — |
| | 68,592 |
| Additions to investments | — |
| | — |
| | (174,195 | ) | | — |
| | (174,195 | ) | Sales of investments | — |
| | 420 |
| | 56,910 |
| | — |
| | 57,330 |
| Net cash used in investing activities | $ | (1,453,711 | ) | | $ | (1,233,766 | ) | | $ | (1,790,046 | ) | | $ | 2,713,374 |
| | $ | (1,764,149 | ) |
Condensed Consolidating Statement of Cash Flows (continued) for the Nine Months Ended September 30, 2018 (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 | $ | — |
| | $ | — |
| | $ | 17,784 |
| | $ | — |
| | $ | 17,784 |
| Repayments of borrowings from secured notes payable | — |
| | — |
| | (155,155 | ) | | — |
| | (155,155 | ) | Proceeds from issuance of unsecured senior notes payable | 899,321 |
| | — |
| | — |
| | — |
| | 899,321 |
| Borrowings from unsecured senior line of credit | 3,894,000 |
| | — |
| | — |
| | — |
| | 3,894,000 |
| Repayments of borrowings from unsecured senior line of credit | (3,531,000 | ) | | — |
| | — |
| | — |
| | (3,531,000 | ) | Repayments of borrowings from unsecured senior bank term loan | (200,000 | ) | | — |
| | — |
| | — |
| | (200,000 | ) | Transfers to/from parent company | 102,582 |
| | 1,233,757 |
| | 1,377,035 |
| | (2,713,374 | ) | | — |
| Payment of loan fees | (19,066 | ) | | — |
| | — |
| | — |
| | (19,066 | ) | Proceeds from issuance of common stock | 696,532 |
| | — |
| | — |
| | — |
| | 696,532 |
| Dividends on common stock | (280,632 | ) | | — |
| | — |
| | — |
| | (280,632 | ) | Dividends on preferred stock | (3,905 | ) | | — |
| | — |
| | — |
| | (3,905 | ) | Contributions from noncontrolling interests | — |
| | — |
| | 15,837 |
| | — |
| | 15,837 |
| Distributions to noncontrolling interests | — |
| | — |
| | (25,910 | ) | | — |
| | (25,910 | ) | Net cash provided by financing activities | 1,557,832 |
| | 1,233,757 |
| | 1,229,591 |
| | (2,713,374 | ) | | 1,307,806 |
| | | | | | | | | | | Effect of foreign exchange rate changes on cash and cash equivalents | — |
| | — |
| | (1,051 | ) | | — |
| | (1,051 | ) | | | | | | | | | | | Net decrease in cash, cash equivalents, and restricted cash | (35,782 | ) | | (9 | ) | | (7,515 | ) | | — |
| | (43,306 | ) | Cash, cash equivalents, and restricted cash as of the beginning of period | 130,516 |
| | 9 |
| | 146,661 |
| | — |
| | 277,186 |
| Cash, cash equivalents, and restricted cash as of the end of period | $ | 94,734 |
| | $ | — |
| | $ | 139,146 |
| | $ | — |
| | $ | 233,880 |
| | | | | | | | | | | Supplemental Disclosures and Non-Cash Investing and Financing Activities: | | | | | | | | | | Cash paid during the period for interest, net of interest capitalized | $ | 81,888 |
| | $ | — |
| | $ | 17,750 |
| | $ | — |
| | $ | 99,638 |
| Change in accrued construction | $ | — |
| | $ | — |
| | $ | 69,654 |
| | $ | — |
| | $ | 69,654 |
| Accrued construction for current-period additions to real estate | $ | — |
| | $ | — |
| | $ | 225,435 |
| | $ | — |
| | $ | 225,435 |
|
|