Alexandria Real Estate Equities, Inc. · NYSE:ARE
Alexandria Real Estate Equities — Investor Day (December 2012)
86 slides from Alexandria Real Estate Equities's investor day presentation, Dec 5, 2012
Slide 1: Alexandria Real Estate Equities 2012 Investor Day
1 Alexandria Real Estate Equities, Inc. Landlord of Choice to the Life Science Industry® 2012 Investor Day December 5, 2012 PROPRIETARY MATERIALS – DO NOT COPY OR DISTRIBUTE © 2012 Alexandria Real Estate Equities, Inc.
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation 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. You can identify the forward-looking statements by their use of forward-looki
Slide 3: Alexandria's Top 10 Catalysts/Value Drivers for 2013
Alexandria’s Top 10 Catalysts/Value Drivers for 2013 Embedded equity from land and asset sales eliminates need for large equity offering overhang Accelerated asset sales will continue to improve overall asset base quality and enterprise value 499 Illinois Street lease-up will provide significant NOI
Slide 4: Investors Should Shift Focus to the Asset Side of the Balance Sheet
For the past several years, investor attention has been focused on the right side of the balance sheet. Focus should now shift to the asset side of the balance sheet. Given Alexandria’s unique ability to create Class-A assets (not just buy someone else’s value creation) in AAA locations (urban/CBD s
Slide 5: Largest Tenants Are High-Credit and Diverse
How Has Alexandria’s Core Business Performed? Alexandria’s 20 Largest Tenants Are High-Credit and Diverse Company Remaining Lease Terms in Years(1) Percentage of Aggregate Annualized Base Rent Investment Grade(2) 1. Novartis AG 4.3 7.3 Y 2. Bristol-Myers Squibb Company 5.4 3.8 Y 3. Eli Lilly and Com
Slide 6: Record Total Square Footage Leased
How Has Alexandria’s Core Business Performed? Record Total Square Footage Leased Alexandria has successfully leased significant square feet year after year, a clear indication of the consistent demand for Alexandria’s Class-A assets in AAA cluster locations Alexandria Total Rentable Square Feet Leas
Slide 7: Stable Occupancy Percentage
Stable Occupancy Percentage How Has Alexandria’s Core Business Performed? Stable Occupancy Percentage(1) Occupancy of operating properties and operating and redevelopment properties at end of period. (2) Occupancy statistics for North America properties only for comparability across periods. Consoli
Slide 8: Greater Boston: Alexandria Consistently Outperformed Market
How Has Alexandria’s Core Business Performed? Greater Boston: Alexandria Consistently Outperformed Market Percentage Occupancy Occupancy Percentage in Greater Boston (Alexandria vs. Market) Alexandria’s Greater Boston asset base has consistently outperformed the market in occupancy percentage Source
Slide 9: San Francisco Bay: Alexandria Consistently Outperformed Market
How Has Alexandria’s Core Business Performed? San Francisco Bay: Alexandria Consistently Outperformed Market Occupancy Percentage in San Francisco Bay (Alexandria vs. Market) Alexandria’s San Francisco Bay asset base has consistently outperformed the market in occupancy percentage Source of Market O
Slide 10: San Diego: Alexandria Consistently Outperformed Market
How Has Alexandria’s Core Business Performed? San Diego: Alexandria Consistently Outperformed Market Occupancy Percentage in San Diego (Alexandria vs. Market) Alexandria’s San Diego asset base has consistently outperformed the market in occupancy percentage Source of Market Occupancy: Cassidy Turley
Slide 11: Seattle: Alexandria Consistently Outperformed Market
How Has Alexandria’s Core Business Performed? Seattle: Alexandria Consistently Outperformed Market Occupancy Percentage in Seattle (Alexandria vs. Market) Alexandria’s Seattle asset base has consistently outperformed the market in occupancy percentage Source of Market Occupancy: Kidder Matthews Perc
Slide 12: Solid Rental Rate Increases
ARE has reported positive GAAP rental rate increases on renewed/re-leased space for 13 consecutive years and has a manageable lease expiration schedule How Has Alexandria’s Core Business Performed? Solid Rental Rate Increases Alexandria Rental Rate Percentage Increases (GAAP) Alexandria Rental Rate
Slide 13: Increase in Annualized Base Rent from Class-A Assets
How Has Alexandria’s Core Business Performed? Increase in Annualized Base Rent from Class-A Assets Alexandria’s Class-A asset concentration has grown considerably in key cluster submarkets Increase in Annualized Base Rent from Class-A Assets
Slide 14: Unique, Positive Same Property NOI Growth
How Has Alexandria’s Core Business Performed? Unique, Positive Same Property Net Operating Income Growth (1) Office REIT figures based on UBS Investment Bank – Equity Research data (1) Same Property NOI (Cash Basis) Alexandria’s asset base has consistently outperformed the office peer group -2% 0% 2
Slide 15: Proven Track Record Compared with REIT Universe
Alexandria achieved greater risk-adjusted same property NOI growth than other peer group REITs How Has Alexandria’s Core Business Performed? Proven Track Record Compared with REIT Universe Same Property NOI Growth and Standard Deviation 4Q05 – 3Q12 Average Same Property NOI Growth/Standard Deviation
Slide 16: Solid Increase in Revenue
Revenue (in millions) How Has Alexandria’s Core Business Performed? Solid Increase in Revenue Alexandria’s total revenue has grown through the Great Recession
Slide 17: Solid Increase in Net Operating Income
Net Operating Income (in millions) How Has Alexandria’s Core Business Performed? Solid Increase in Net Operating Income Alexandria’s total net operating income has grown through the Great Recession
Slide 18: Solid Increase in Adjusted EBITDA
Adjusted EBITDA (in millions) How Has Alexandria’s Core Business Performed? Solid Increase in Adjusted EBITDA Alexandria’s adjusted EBITDA has grown through the Great Recession
Slide 19: Solid Increase in FFO
(1) Represents funds from operations, before gains/losses on early extinguishment of debt, realized gain on equity investment primarily related to one non-tenant life science entity, and preferred stock redemption charges. How Has Alexandria’s Core Business Performed? Solid Increase in FFO FFO(1) (i
Slide 20: Common Macro Misperceptions of Laboratory Space Demand
A Recent Analyst Report Incorrectly Characterized Drivers of Laboratory Space Common Macro Misperceptions Reality: The focus of healthcare on personalized medicine and the critical need to reduce the economic cost of diseases to society set the backdrop for solid and continuing laboratory space dema
Slide 21: Life Science R&D Funding Remains Steady and Predictable
(1) Source: National Institutes of Health; National Science Foundation; National Venture Capital Association; Thomson Reuters; and Battelle (2) Source: PharmaExec & Evaluate Pharma 2011 Life Science R&D Investments: $113.4B+(1) R&D Funding Remains Steady, Solid, and Predictable as Pharma and Biotech
Slide 22: Capital Allocation Strategy: Class-A Assets in AAA Locations
Alexandria’s Capital Allocation Strategy Has Focused on Increasing Class-A Assets in AAA Locations for High-Quality Tenants As the pioneer of the labspace® niche in 1994, Alexandria has a first-mover advantage in the top magnet ‘brain trust’ clusters Since 1994, Alexandria has accumulated and create
Slide 23: Alexandria Center for Life Science | New York City
“New York City is home to a wealth of world-class biotechnology resources, including academic medical centers that have been on the leading edge of translational research – making it an ideal place to establish partnerships for our Centers for Therapeutic Innovation. Success and advancements occur w
Slide 24: Biopharma Migration to Mission Bay
455 Mission Bay Boulevard South | Mission Bay, San Francisco Biopharma Migration to Mission Bay: Creating Value Through Development of Class-A Asset in AAA Location Alexandria created value through the development of a Class-A asset in the heart of the Mission Bay science and technology cluster, imm
Slide 25: Biopharma Migration to UTC
Biopharma Migration to UTC: Creating Value Through Redevelopment of Acquired Asset in AAA Location Alexandria created value by acquiring and redeveloping a manufacturing facility into UTC’s leading life science campus 450,000 RSF life science facility, 96% leased Initial stabilized yield on 279,000
Slide 26: Cluster Around MIT: Redevelopment in AAA Location
Alexandria created value by converting a dated office facility into a Class-A laboratory asset in a AAA location across the street from MIT’s science campus 212,000 RSF laboratory/office facility, 80% pre-leased Redevelopment from office to laboratory/office space including 9% increase in rentable s
Slide 27: Ag-Tech Hub: Development in Research Triangle Park
“Medicago and ARE teamed to design and construct a 97,000 square foot plant-based vaccine production facility in Durham, NC. From Medicago’s perspective, we could not have successfully undertaken this project without a partner such as ARE. Their expertise and focus in the biotech arena insured a rap
Slide 28: Biopharma Acquisition and Focus on Lake Union
“Cystic fibrosis represents an important area of unmet medical need. We intend to retain Corus’s Seattle-based operations, and we look forward to welcoming the Corus employees to Gilead and to working together to advance the development of aztreonam lysine.” – JOHN F. MILLIGAN, PHD, FORMER EXECUTIVE
Slide 29: Timeline of Significant Improvements to the Balance Sheet
Timeline of Alexandria’s Significant Improvements to the Balance Sheet 2008: Significant U.S. and worldwide financial crisis/Great Recession 2008/2009: Alexandria is an unrated REIT 2010: Sales of Mission Bay land parcels for approximately $278 million 2010: Common stock offering for 5,175,000 share
Slide 30: Alexandria's Financial Strategy
Alexandria’s Financial Strategy Maintain diverse sources of capital Continue to improve capital structure Execute capital recycling program for investment into higher value, Class-A urban assets Reduction of non-income-producing assets as a percentage of GAV through monetization Leverage Net Debt to
Slide 31: 2012 Balance Sheet Achievements and 2013/2014 Strategy
2012 Balance Sheet Achievements and 2013/2014 Strategy 2012 Achievements(1) 2013 Forecast 2014 Forecast Construction spending forecast $596 million $545 to $595 million $250 to $350 million Cash flows from operations after dividends $138 million $130 to $150 million $130 to $150 million Asset recycl
Slide 32: Debt Capital Markets Update
Debt Capital Markets Update Source: Bank of America Merrill Lynch Internal Database as of November 16, 2012 Alexandria Bonds Have Performed Inline With the REIT Index In addition to comfort from regular dialogue with the rating agencies, the solid performance of Alexandria’s bonds demonstrates the m
Slide 33: 2012 Capital Transactions/Liquidity
2012 Capital Transactions/Liquidity Total Capital Raised of $2.5 Billion Asset Sales: $151-$156 million(1) 6.45% Series E Preferred Stock Offering: $125 million 4.60% Unsecured Senior Notes Offering: $545 million Secured Construction Loan: $55 million Common Stock Offering: $98 million Availability
Slide 34: Fixed Rate and Variable Rate Debt
Fixed Rate/Hedged Variable Rate and Unhedged Variable Rate Debt We expect to manage the amount of unhedged variable rate debt as a percentage of total debt through periodic issuance of unsecured bonds as well as additional interest rate hedge and/or interest rate cap agreements 15% 25% 85% 75% 0% 10
Slide 35: Strong Access to Capital
Strong Access to Capital $3.3 billion $2.3 billion Perpetual preferred stock Unsecured bank term loans Equity Unsecured bonds Unsecured line of credit Secured construction loan
Slide 36: Real Estate Asset Sales as of 3Q12
Real Estate Asset Sales as of 3Q12 (1) Annualized using actual year-to-date results as of the quarter end prior to date of sale or September 30, 2012. (2) Represents contractual sales price for assets sold or contractual/estimated sale price for sales in process. (3) Properties sold to residential d
Slide 37: Manageable Debt Maturities
Manageable Debt Maturities Alexandria has manageable debt maturities Assumes we exercise our sole right to extend the maturities of our unsecured senior line of credit and unsecured senior bank term loans. Amounts represent principal amounts due and do not reflect unamortized discounts as reflected
Slide 38: Improvement in Capital Structure
Improvement in Capital Structure Improvement in Capital Structure A REAL ESTATE EQUITIES, INC. ALL RIGHTS RESERVED © 2012 PROPRIETARY MATERIALS DO NOT COPY OR DISTRIBUTE 4Q07 3Q12 4Q13 Beyond 2013 Net Debt to Adjusted EBITDA(1) 9.0x 7.6x 6.5x <6.5x Net Debt to Gross Assets 55% 38% 34 to 36% 33 to 35
Slide 39: Consistent Performance
Revenue Consistent Performance (in millions) (1) Represents funds from operations, before gains/losses on early extinguishment of debt, realized gain on equity investment primarily related to one non-tenant life science entity, and preferred stock redemption charges. NOI Adjusted EBITDA FFO(1)
Slide 40: Credit Metrics
Net Debt to Adjusted EBITDA Credit Metrics Net Debt to Gross Assets (Excluding Cash and Restricted Cash) Interest Coverage Ratio (1) Periods represent quarter annualized metrics. (1) (1) (1) Fixed Charge Coverage Ratio
Slide 41: Unsecured Senior Line of Credit: Key Financial Covenants
Secured Debt Ratio Interest Coverage Ratio Leverage Ratio Fixed Charge Coverage Ratio Unsecured Senior Line of Credit: Key Financial Covenants LTM Adjusted EBITDA > 1.50x Fixed Charges Secured Debt < 40% of Adjusted Tangible Assets Total Debt < 60% of Adjusted Tangible Assets LTM Adjusted NOI from U
Slide 42: Post-2013 Balance Sheet Framework
Post-2013 Balance Sheet Framework As we come out of 2013, Alexandria’s balance sheet objective is to manage to Net Debt to Adjusted EBITDA of 6.5x Significant investment activity (acquisitions, development, and redevelopment) would be match-funded to be leverage neutral
Slide 43: Increasing Development/Redevelopment Demand and Acquisition Opportunities
Increasing Development/Redevelopment Demand from Life Science Industry and Acquisition Opportunities Alexandria is fortunate to have more demand (developments and redevelopments) and acquisition opportunities than capital to fund them with.
Slide 44: Roadmap for Future Growth and Restoration of Premium Multiple
Alexandria’s Roadmap for Future Growth and Restoration of Premium Multiple in 2013 Recycling assets for future value Transforming CIP assets into future value and growth in key ‘brain trust’ clusters Creating value by monetizing land bank in key ‘brain trust’ clusters
Slide 45: Recycling Assets in Non-Core Markets
Recycling Assets in Non-Core Markets for Capital Deployment in Key ‘Brain Trust’ Clusters for Future Value 5110 Campus Drive, Pennsylvania 1201 Mercer Street, Seattle 1209 Mercer Street, Seattle 801 Dexter Avenue North, Seattle 210 Welsh Pool Road, Pennsylvania 200 Lawrence Drive, Pennsylvania In 20
Slide 46: Misperception of Development/Redevelopment Risk and Return
Misperception of Alexandria’s Development/Redevelopment Risk and Return Alexandria has: Focused on significantly increasing its market presence in high barrier-to-entry clusters with very low existing cap rates Significantly mitigated risk due to high pre-leasing percentage Achieved solid initial st
Slide 47: Misperception of Development/Redevelopment Risk and Return
Misperception of Alexandria’s Development/Redevelopment Risk and Return As of September 30, 2012, 96% of our overall leases contained annual rent escalations that were either fixed or based on a consumer price index or another index. Our Initial Stabilized Yield on a cash basis reflects cash rents u
Slide 48: AAA Locations in High Barrier-to-Entry Markets
AAA locations in high barrier-to-entry markets with very low existing cap rates Misperception of Alexandria’s Development/Redevelopment Risk and Return As of September 30, 2012, 96% of our overall leases contained annual rent escalations that were either fixed or based on a consumer price index or a
Slide 49: Risk Mitigation Due to High Pre-Leasing
Significant risk mitigation due to high pre-leasing percentage Misperception of Alexandria’s Development/Redevelopment Risk and Return As of September 30, 2012, 96% of our overall leases contained annual rent escalations that were either fixed or based on a consumer price index or another index. Our
Slide 50: Solid Initial Stabilized Yields
Solid initial stabilized yields Misperception of Alexandria’s Development/Redevelopment Risk and Return As of September 30, 2012, 96% of our overall leases contained annual rent escalations that were either fixed or based on a consumer price index or another index. Our Initial Stabilized Yield on a
Slide 51: Development | 499 Illinois Street, Mission Bay
AAA location in Mission Bay’s vibrant life science and technology cluster Immediately adjacent to UCSF’s research campus and future state-of-the-art hospital 223,000 RSF under development and being marketed for laboratory/office UCSF research campus and future state-of-the-art hospital San Francisco
Slide 52: Development | 225 Binney Street, Cambridge
AAA location in the heart of the Kendall Square innovation district Adjacent to Cambridge’s leading academic medical research centers 303,000 RSF life science headquarters facility 100% leased to Biogen Idec Inc. 15-year term “Kendall Square is one of the world’s preeminent biotechnology clusters. T
Slide 53: Development | Alexandria Center for Life Science, West Tower
AAA location in the heart of Manhattan’s East Side Medical Corridor New York City’s first and only world-class life science campus 420,000 RSF laboratory/office facility (Anticipated delivery: 4Q13) Big pharma migration to ‘brain trust’ clusters to access academic innovation Due to significant storm
Slide 54: Stacking Diagram: West Tower Leasing Activity
Stacking Diagram: Current Leasing Activity for West Tower
Slide 55: Redevelopment | ARE Esplanade, University Town Center
AAA location in University Town Center Ideal proximity to San Diego’s industrial biotechnology community 72,000 RSF laboratory/office facility Burgeoning industrial biotechnology sector in San Diego Alexandria proactively approached Genomatica, Inc. about relocating from its existing Wateridge Summi
Slide 56: Redevelopment | 9800 Medical Center Drive, Rockville
AAA location in the Shady Grove Life Sciences Center Proximity to NIH and other government research agencies 75,000 RSF lease (expansion of existing space, totaling 135,000 RSF) 15-year lease Proximity to NIH NCATS, new NIH initiative established in December 2011 to catalyze the generation of innova
Slide 57: Non-Income-Producing Real Estate Assets as Percentage of Gross Investments
Non-Income-Producing Real Estate Assets as a Percentage of Gross Investments in Real Estate In 2013, Alexandria’s non-income-producing real estate assets as a percentage of gross investments in real estate will significantly decrease to 15-17%. 25% 15-17% 24% 25% 30% 29% Preconstruction Land held fo
Slide 58: Future Value-Added Projects in North America
Future Value-Added Projects in North America Market Land Undergoing Preconstruction Activities (additional CIP) Land Held for Future Development Total Land(1) Future Redevelopment(2) Greater Boston 1,589,000 (3) 155,000 1,744,000 119,000 San Francisco Bay - Mission Bay - 290,000 290,000 - San Franci
Slide 59: Summary of 2013 Lease Expirations
Summary of 2013 Lease Expirations as of 3Q12 (1) Based upon rental rates achieved in recently executed leases over the trailing 12 months. (2) The largest two tenant leases expiring in 2013 are approximately 54,000 rentable square feet in the Gaithersburg submarket and approximately 51,000 rentable
Slide 60: 2012 FFO Per Share Guidance Events
2012 Funds From Operations Per Share (Diluted), as Adjusted Guidance Events 2012 December 7, 2011 Investor Day $4.50 to $4.54 4.60% unsecured senior notes issued in February 2012 ($0.13) 3Q12 earnings release $4.37 to $4.41
Slide 61: Investor Day 2011 to Investor Day 2012
Investor Day 2011 —> Investor Day 2012 December 7, 2011 December 5, 2012 Operating results in line with guidance Net operating income – 4Q12 $111 to $113 million $110.5 to $112.5 million(1) Funds from operations per share in line with guidance FFO per share diluted – 4Q12 $1.16 to $1.20 $1.15 to $1.
Slide 62: 2012 Guidance
2012 Guidance December 7, 2011 December 5, 2012(1) 2012 Guidance FFO per share diluted, as adjusted $4.50 to $4.54 $4.37 to $4.41(2) Earnings per share diluted $1.85 $1.16 to $1.26(3) Key assumptions Same property net operating income performance Up 3% to 5% cash Up 0% to 2% GAAP Up 3% to 4% cash Sl
Slide 63: 2012 Guidance Footnotes
(1) Represents guidance disclosed on October 26, 2012, in our financial and operating results for the third quarter ended September 30, 2012. (2) Reflects reclassification related to presentation of capitalization of interest disclosed for uses of capital for development, redevelopment, and capitali
Slide 64: Roll Forward of 4Q12 FFO Per Share to 2013
High Level Roll Forward of Projected 4Q12 FFO Per Share Diluted to Projected 2013 FFO Per Share Diluted 2013 Funds from Operation Per Share Diluted Guidance FFO Per Share Diluted 2013 Amount of Asset Sales 2012 2013 4Q12 FFO per share diluted guidance disclosed on 3Q12 earnings call $1.15 to $1.17 M
Slide 65: 2013 Guidance
2013 Guidance December 5, 2012 2013 Guidance(1) FFO per share diluted $4.40 to $4.60 Earnings per share diluted $1.39 to $1.59 Key assumptions(1) Same property net operating income performance – cash basis Up 4% to 7% Same property net operating income performance – GAAP basis Up 0% to 3% Rental rat
Slide 66: Net Operating Income Trend
Net Operating Income Trend $100 $80 $60 $40 so $116t0$120million $110,5t0$112.5million $101.8milion 4 lion '$116t0$120 milion $107.5t0$109.5 milion 4on1 4012Projection 4013 Projection ‘Continuing OperationsNO! = Discontinued Operations NOI QAcexanoeia
Slide 67: 2013 Sources & Uses of Capital
2013 Sources & Uses of Capital December 5, 2012 Sources of capital Net cash provided by operating activities less dividends $130 to $150 million Non-income-producing asset sales $175 to $225 million Income-producing asset sales $75 to $125 million Secured construction borrowings $20 to $30 million U
Slide 68: Asset Recycling Strategy
Asset Recycling Strategy Assets To Be Sold* Older buildings: Eliminate potential capital expenditures and leasing risk Non-strategic: Not proximate to academic medical research centers in core life science clusters Alternate use for buyer: Not lab (Example: MOB, hospital, residential) Suburban locat
Slide 69: Historical and Projected Asset Sales
Historical and Projected Asset Sales 2010 2011 2012 2013 Total Income-producing $11 million $3 million $71 to $76 million $75 to $125 million $160 to $215 million Non-income-producing $283 million $17 million $80 million $175 to $225 million $555 to $605 million Total asset sales $294 million $20 mi
Slide 70: Monetization of Non-Income-Producing Assets
Land/Future Value-Added Projects: Monetization of Non-Income- Producing Assets $1.0 billion in land/future value-added property as of 3Q12 (see next slide) $200 million cost basis related to West Tower of the Alexandria Center for Life Science – New York City will transfer into active development (g
Slide 71: Monetization of Non-Income-Producing Assets: Investments in Real Estate
Land/Future Value-Added Projects: Monetization of Non-Income-Producing Assets Land/future value-added projects: Land held for future development in North America 326,932 Land undergoing preconstruction activities (additional CIP) in North America 597,631 Land held for future development/land undergo
Slide 72: Future Value-Added Projects in North America
Future Value-Added Projects in North America Market Land Undergoing Preconstruction Activities (additional CIP) Land Held for Future Development Total Land (1) Future Redevelopment (2) Greater Boston 1,589,000 (3) 155,000 1,744,000 119,000 San Francisco Bay - Mission Bay - 290,000 290,000 - San Fran
Slide 73: Non-Income-Producing Real Estate Assets as Percentage of Gross Investments
Non-Income-Producing Real Estate Assets as a Percentage of Gross Investments in Real Estate In 2013, Alexandria’s non-income-producing real estate assets as a percentage of gross investments in real estate will significantly decrease to 15-17%. 25% 15-17% 24% 25% 30% 29% Preconstruction Land held fo
Slide 74: 2013 Construction Spending
2013 Construction Spending 2013 Construction Spending (Projection) 2013 Active development projects in North America $120 million Active redevelopment projects in North America $60 million Preconstruction $45 million Generic infrastructure/building improvement projects in North America $65 million F
Slide 75: Roll Forward of Debt to EBITDA
High Level Roll Forward of Debt to EBITDA (in millions) (1) Represents annualized Adjusted EBITDA for the three months ended. Adjustments from EBITDA to Adjusted EBITDA include, among others, adjustments to exclude stock compensation expense which approximates approximately $12 to $16 million on an
Slide 76: Growth in 4Q13 Adjusted EBITDA over 4Q12
ALEXANDRIA REAL ESTATE EQUITIES, INC. ALL RIGHTS RESERVED © 2012 PROPRIETARY MATERIALS DO NOT COPY OR DISTRIBUTE Growth in 4Q13 Adjusted EBITDA over 4Q12 Adjusted EBITDA (in millions) (1) Project is 100% pre-leased. (2) Project is 80% pre-leased. (3) Represents only the pre-leased portion. (4) Repre
Slide 77: Record Total Square Footage Leased
How Has Alexandria’s Core Business Performed? Record Total Square Footage Leased Alexandria has successfully leased significant square feet year after year, a clear indication of the consistent demand for Alexandria’s Class-A assets in AAA cluster locations Alexandria Total Rentable Square Feet Leas
Slide 78: Strategic Goals for 2014
Strategic Goals for 2014 Earnings growth/FFO per share diluted growth over 2013 guidance 6-8% Capital recycling Non-income-producing assets Selective sales Income-producing assets Limited to none Manageable construction spending Approximately $250 to $350 million Growth through selective development
Slide 79: Projected Leverage and Coverage Ratios
Net Debt to Gross Assets (Excluding Cash and Restricted Cash) Projected Leverage and Coverage Ratios Interest Coverage Ratio Fixed Charge Coverage Ratio Net Debt to Adjusted EBITDA 3.6x - 3.8x 3.3x - 3.5x 2.9x - 3.0x 2.7x - 2.9x 34% - 36% 38% - 40% (1) Periods represent quarter annualized metrics. (
Slide 80: Common Stock Dividend Policy
Common Stock Dividend Policy Board Philosophy: Share increase in cash flows from operations with common shareholders while also retaining cash flows from operations for reinvestment Increase in dividend per common share Low payout ratio as of 3Q12: 50% Future potential regular increases in dividend
Slide 81: Appendix
Appendix 81 ALEXANDRIA REAL ESTATE EQUITIES, INC. ALL RIGHTS RESERVED © 2012 PROPRIETARY MATERIALS DO NOT COPY OR DISTRIBUTE
Slide 82: Appendix A: Non-GAAP Measures
Appendix A: Non-GAAP Measures Net operating income is a non-GAAP financial measure equal to income from continuing operations, the most directly comparable GAAP financial measure, plus loss on early extinguishment of debt, depreciation and amortization, interest expense, and general and administrati
Slide 83: Appendix A: Non-GAAP Measures
Appendix A: Non-GAAP Measures Interest coverage and fixed charge coverage ratios Net debt to Adjusted EBITDA Net debt to gross assets EBITDA represents earnings before interest, taxes, depreciation, and amortization (“EBITDA”), a non-GAAP financial measure, and is used by us and others as a suppleme
Slide 84: Appendix A: Non-GAAP Measures (NOI)
Appendix A: Non-GAAP Measures (Dollars in thousands) NOI 3Q12 2Q12 1Q12 4Q11 3Q11 2011 2010 2009 2008 Net operating income 100,841 $ 105,657 $ 97,521 $ 97,696 $ 97,195 $ 388,658 $ 337,312 $ 343,185 $ 325,074 $ Operating margins 69% 71% 70% 70% 70% 71% 73% 75% 76% General and administrative 12,485 12
Slide 85: Appendix A: Non-GAAP Measures (Adjusted EBITDA)
Appendix A: Non-GAAP Measures (Dollars in thousands) Adjusted EBITDA 3Q12 2Q12 1Q12 4Q11 3Q11 4Q07 2011 2010 2009 2008 Net income 18,305 $ 25,641 $ 32,775 $ 35,462 $ 32,995 $ 24,992 $ 135,393 $ 139,022 $ 141,648 $ 120,097 $ Interest expense 17,094 17,922 16,227 14,757 14,273 24,013 63,443 69,642 82,
Slide 86: Appendix A: Non-GAAP Measures (Adjusted EBITDA 4Q13)
Appendix A: Non-GAAP Measures (Dollars in millions, except per share amounts) Adjusted EBITDA 4Q13 4Q12 Net income $34 - $38 $33 - $36 Interest expense $19 - $23 $18 - $20 Depreciation and amortization $46 - $51 $42.6 - $47.7 EBITDA $104 - $108 $93.6 - $103.7 Stock compensation $3 - $5 $3 - $5 Other
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