i




 
 
ii


 
 
 
Table of Contents
December 31, 2015
 
 

 
Page
EARNINGS PRESS RELEASE
 
Fourth Quarter and Year Ended December 31, 2015, Financial and Operating Results
Guidance
Earnings Call Information and About the Company
Consolidated Statements of Income
Consolidated Balance Sheets
Funds From Operations and Adjusted Funds From Operations
SUPPLEMENTAL INFORMATION
 
Company Profile
NAV, FFO, and Common Stock Dividends Per Share
High-Quality, Diversified, and Innovative Tenants
Class A Assets in AAA Locations
Solid Occupancy
Investor Information
Financial and Asset Base Highlights
Operating Information
 
Key Operating Metrics
Same Property Performance
Leasing Activity
Contractual Lease Expirations
Top 20 Tenants
Summary of Properties and Occupancy
Property Listing
 
 
Page
SUPPLEMENTAL INFORMATION (continued)
 
Investments in Real Estate
 
Key Real Estate Metrics
LEED Certification
Investments in Real Estate
Development and Redevelopment Projects Placed into Service in 2015
Visible Growth Pipeline:
 
Highly Leased Projects to Be Placed into Service by 4Q16
Projects to Be Placed into Service in 2017 and 2018
Key Future Projects
Projected Capital Allocation and Construction Spending
Historical Construction Spending
Pro Rata Operating and Balance Sheet Information
Real Estate Joint Ventures:
 
Consolidated
Unconsolidated
Dispositions
Non-Real Estate Investments
Balance Sheet
 
Key Credit Metrics
Summary of Debt
Definitions and Reconciliations


This document includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Please see page 4 of the earnings press release for further information.

This document is not an offer to sell or a solicitation to buy securities of Alexandria Real Estate Equities, Inc. Any offers to sell or solicitations to buy our securities shall be made only by means of a prospectus approved for that purpose. Unless otherwise indicated, the “Company,” “Alexandria,” “ARE,” “we,” “us,” and “our” refer to Alexandria Real Estate Equities, Inc. and its consolidated subsidiaries.

 
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2016
iii


Alexandria Real Estate Equities, Inc.
Reports

Fourth Quarter and Year Ended December 31, 2015
Financial and Operating Results

FFO Per Share – Diluted, as Adjusted, of $5.25 for 2015, up 9.4% over 2014
EPS – Diluted of $1.63 for 2015, up 61.4% over 2014
Total Revenues of $843.5 million for 2015, up 16.0% over 2014
NOI of $585.6 million for 2015, up 15.1% over 2014

Completed Sales of Partial Interest in Three Core Class A Assets in 4Q15 for $453.1 Million at an Average Cap Rate of 4.6% to a High-Quality Institutional Investor

PASADENA, Calif. – February 1, 2016 – Alexandria Real Estate Equities, Inc. (NYSE:ARE) today announced financial and operating results for the fourth quarter and year ended December 31, 2015.

Joel S. Marcus, chairman, chief executive officer, and founder of Alexandria Real Estate Equities, Inc., stated, “We concluded another very successful year where our best-in-class team delivered strong results and continued growth,” including the following key highlights:
Funds from operations (“FFO”) per share – diluted, as adjusted, of $1.33, up 8.1% for 4Q15, compared to $1.23 for 4Q14; and $5.25, up 9.4%, for 2015, compared to $4.80 for 2014;
In December 2015, we completed $453.1 million in sales of partial interest in three Class A assets at an average capitalization rate of 4.6%;
$2.0 billion of liquidity as of 4Q15;
6.6x net debt to adjusted EBITDA – 4Q15 annualized; with goal of achieving less than 6.0x;
7.0x net debt to adjusted EBITDA – 4Q15 trailing 12 months;
Executed leases for 1.0 million rentable square feet (“RSF”) and 5.0 million RSF during 4Q15 and 2015, respectively; the highest annual leasing volume in the Company’s 20-year history;
Rental rate increases of 19.8% and 7.3% (cash basis) for 4Q15 lease renewals and re-leasing of space aggregating 0.5 million RSF (included in the 1.0 million RSF above);
Highly leased value-creation pipeline:
89% leased, 1.5 million RSF, targeted for completion in 2016 (weighted toward 4Q16), expected to generate $75 to $80 million of incremental annual net operating income (“NOI”) upon stabilization
67% leased, 1.9 million RSF, targeted for completion in 2017 and 2018, expected to generate $105 to $110 million of incremental annual NOI upon stabilization
Same properties NOI growth of 1.3% and 2.0% (cash basis) for 4Q15, compared to 4Q14;
Same properties NOI growth of 1.3% and 4.7% (cash basis) for 2015 compared to 2014;
In November 2015, we completed an offering of $300.0 million of unsecured senior notes payable at a stated interest rate of 4.30% with a maturity of January 15, 2026;
 
In 4Q15, proceeds from sales of equity investments and investment income from life science entities aggregated $27.5 million and $7.7 million, respectively;
During 4Q15, we sold an aggregate of 832,982 shares of common stock under our ATM program for gross proceeds of $75.0 million, or $90.04 per share, and net proceeds of approximately $73.9 million; and
Common stock dividend for 2015 of $3.05 per common share, up 17 cents, or 5.9%, over 2014; continuation of strategy to share growth in cash flows from operating activities with our stockholders while also importantly retaining capital for reinvestment.

Sales of partial interest in core Class A assets at 4.6% cash cap rate to TIAA-CREF
 
 
 
 
 
 
Partial Interest
 
Cash Cap Rate
Property
 
Submarket
 
RSF
 
Sold
 
Sales Price
(in thousands)
 
225 Binney Street
 
Cambridge
 
305,212
 
70%
 
$
190,110

 
4.5
%
409/499 Illinois Street
 
Mission Bay/SoMa
 
455,069
 
40%
 
189,600

 
4.5

1500 Owens Street
 
Mission Bay/SoMa
 
158,267
 
49.9%
 
73,353

 
4.8

 
 
 
 
918,548

 
 
 
$
453,063

 
4.6
%

Refer to our “Dispositions” section on page 48 of our Supplemental Information package for additional information on our asset sales.

Results

FFO attributable to Alexandria Real Estate Equities, Inc.’s (“Alexandria’s”) common stockholders – diluted, as adjusted:
    
 
2015
 
2014
 
Change
 
In Millions
 
 
 
 
 
 
 
 
Fourth Quarter
$
95.8

 
$
87.9

 
$
7.9

 
9.0
%
 
Year
$
375.8

 
$
341.6

 
$
34.2

 
10.0
%
 
Per Share
 
 
 
 
 
 
 
 
Fourth Quarter
$
1.33

 
$
1.23

 
$
0.10

 
8.1
%
 
Year
$
5.25

 
$
4.80


$
0.45

 
9.4
%
 
Net income (loss) attributable to Alexandria’s common stockholders – diluted:
    
 
2015
 
2014
 
Change
 
In Millions
 
 
 
 
 
 
 
 
Fourth Quarter
$
35.1

 
$
(16.2
)
 
$
51.3

 
N/A

 
Year
$
116.9

 
$
72.1

 
$
44.8

 
62.1
%
 
Per Share
 
 
 
 
 
 

 
Fourth Quarter
$
0.49

 
$
(0.23
)
 
$
0.72

 
N/A

 
Year
$
1.63

 
$
1.01

 
$
0.62

 
61.4
%
 


 
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2016
1

 
 
 
Fourth Quarter and Year Ended December 31, 2015, Financial and Operating Results
December 31, 2015
 
 

Core operating metrics

Total revenues:
 
2015
 
2014
 
Change
 
In Millions
 
 
 
 
 
 
 
 
Fourth Quarter
$
224.0

 
$
188.7

 
$
35.3

 
18.7
%
 
Year
$
843.5

 
$
726.9

 
$
116.6

 
16.0
%
 

NOI, including our pro rata share of consolidated and unconsolidated real estate joint ventures:
 
2015
 
2014
 
Change
 
In Millions
 
 
 
 
 
 
 
 
Fourth Quarter
$
155.2

 
$
132.7

 
$
22.5

 
16.9
%
 
Year
$
585.6

 
$
508.6

 
$
76.9

 
15.1
%
 

Total annualized base rent (“ABR”): 54% generated from investment-grade tenants
Top 20 tenants generate 49.4% of total ABR:
81% of ABR generated from investment-grade tenants
8.3 years weighted average remaining lease term
Executed leases for 1.0 million RSF during 4Q15, including:
170,523 RSF to Vertex Pharmaceuticals Incorporated at 3115/3215 Merryfield Row in our Torrey Pines submarket
71,010 RSF to Juno Therapeutics, Inc. at 400 Dexter Avenue North in our Lake Union submarket
19.8% and 7.3% (cash basis) rental rate increases on lease renewals and re-leasing of space aggregating 480,963 RSF
Executed leases for 5.0 million RSF during 2015, the highest annual leasing volume in the Company’s 20-year history:
19.6% and 9.9% (cash basis) rental rate increases on lease renewals and re-leasing of space aggregating 2,209,893 RSF
Same property NOI growth:
1.3% and 2.0% (cash basis) increase for 4Q15, compared to 4Q14
1.3% and 4.7% (cash basis) increase for 2015, compared to 2014
Occupancy for operating properties in North America of 97.2% as of 4Q15
Operating margin at 69% for 4Q15
Adjusted EBITDA margin at 65% for 4Q15

 
External growth: visible, multiyear, highly leased value creation pipeline

Highly leased development and redevelopment projects:
89% leased, 1.5 million RSF, targeted for completion in 2016 (weighted toward 4Q16), expected to generate $75 to $80 million of incremental annual NOI upon stabilization
67% leased, 1.9 million RSF, targeted for completion in 2017 and 2018, expected to generate $105 to $110 million of incremental annual NOI upon stabilization
4Q15 commencements of development and redevelopment projects, include:
61,755 RSF development project at 4796 Executive Drive in our University Town Center submarket; 100% leased to Otonomy, Inc.
48,880 RSF redevelopment project at 10151 Barnes Canyon in our Sorrento Mesa submarket

Balance sheet

$2.0 billion of liquidity as of 4Q15
6.6x net debt to adjusted EBITDA – 4Q15 annualized; with goal of achieving less than 6.0x
6.9x net debt to adjusted EBITDA – 4Q15 annualized, excluding $7.7 million of investment income for 4Q15
7.0x net debt to adjusted EBITDA – 4Q15 trailing 12 months
3.6x fixed charge coverage ratio – 4Q15 annualized
In November 2015, we completed an offering of $300.0 million of unsecured senior notes payable at a stated interest rate of 4.30% with a maturity of January 15, 2026
In 4Q15, proceeds from sales of equity investments and investment income from life science entities aggregated $27.5 million and $7.7 million, respectively
During 4Q15, we sold an aggregate of 832,982 shares of common stock under our ATM program for gross proceeds of $75.0 million, or $90.04 per share, and net proceeds of approximately $73.9 million
In October 2015, we closed a secured construction loan with commitments available for borrowing aggregating $350.0 million, bearing interest at a rate of LIBOR+1.50%, for our 98% leased development project at 50/60 Binney Street in our Cambridge submarket
$10.9 billion total market capitalization as of 4Q15
15% of gross investments in real estate in value-creation pipeline as of 4Q15, with a target range from 10% to 15% as of 4Q16
Limited debt maturities through 2018 and well-laddered maturity profile
12% unhedged variable-rate debt as a percentage of total debt as of 4Q15

LEED certifications

57% of our total ABR will be generated from LEED projects upon completion of our in-process projects
During 2015, we received Gold certifications at 360 Longwood Avenue in our Longwood Medical Area submarket and 3033 Science Park Road in our Torrey Pines submarket



 
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2016
2

 
 
Guidance
December 31, 2015
(Dollars in thousands, except per share amounts)
 
 

The following updated guidance is based on our current view of existing market conditions and other assumptions for the year ending December 31, 2016. There can be no assurance that actual amounts will be materially higher or lower than these expectations. See our discussion of “forward-looking statements” on page 4.

Key sources and uses for 2016 have been updated to reflect a $100 million decrease in construction spending primarily due to the timing of construction spending related to projects expected to be placed into service in 2017 and 2018, as well as updates in the scope of several projects. The mid-point of construction of $850 million is projected to be funded by $375 million of internally generated sources (net cash provided by operating activities after dividends and debt from growth in EBITDA), $350 million of asset sales (minimum target), and $125 million of other capital, including sales of “available-for-sale” equity securities.

EPS and FFO Per Share Attributable to Alexandria’s Common Stockholders – Diluted
Earnings per share
 
$1.44 to $1.64
Add: depreciation and amortization
 
4.00
Other
 
(0.03)
FFO per share
 
$5.41 to $5.61

 
 
2016 Guidance
Key Assumptions
 
Low
 
High
Occupancy percentage for operating
properties in North America as of December 31, 2016
 
96.5%

 
97.1%

 
 
 
 
 
Lease renewals and re-leasing of space:
 
 
 
 
Rental rate increases
 
14.0%

 
17.0%

Rental rate increases (cash basis)
 
6.0%

 
9.0%

 
 
 
 
 
Same Property performance:
 
 
 
 
NOI increase
 
2.0%

 
4.0%

NOI increase (cash basis)
 
3.5%

 
5.5%

 
 
 
 
 
Straight-line rent revenue
 
$
51,000

 
$
56,000

General and administrative expenses
 
$
59,000

 
$
64,000

Capitalization of interest
 
$
45,000

 
$
55,000

Interest expense
 
$
108,000

 
$
118,000

 





 
Key Credit Metrics
 
2016 Guidance
Net debt to Adjusted EBITDA – 4Q annualized
 
6.5x to 6.9x
Fixed charge coverage ratio – 4Q annualized
 
3.0x to 3.5x
Value-creation pipeline as a percentage of gross investments in real estate as of December 31, 2016
 
10% to 15%
 
 
2016 Guidance
Key Sources and Uses of Capital
 
Low
 
High
 
Mid-Point
Sources of capital for construction:
 
 
 
 
 
 
Net cash provided by operating activities after dividends
 
$
115,000

 
$
135,000

 
$
125,000

Debt funding from growth in EBITDA
 
260,000

 
240,000

 
250,000

Internally generated sources
 
375,000

 
375,000

 
375,000

Asset sales (minimum target)
 
300,000

 
400,000

 
350,000

Other capital/sales of “available-for-sale” equity securities
 
125,000

 
125,000

 
125,000

Total sources/projected construction uses
 
$
800,000

 
$
900,000

 
$
850,000

 
 
 
 
 
 
 
Sources of capital for acquisitions:
 
 
 
 
 
 
Debt funding from growth in EBITDA
 
$
45,000

 
$
45,000

 
$
45,000

Other capital
 
105,000

 
205,000

 
155,000

Total sources/projected acquisitions uses
 
$
150,000

 
$
250,000

 
$
200,000

 
 
 
 
 
 
 
Incremental debt:
 
 
 
 
 
 
Issuance of unsecured senior notes payable 
 
$
400,000

 
$
550,000

 
$
475,000

Borrowings under secured construction loans
 
175,000

 
225,000

 
200,000

Repayments of secured notes payable
 
(120,000
)
 
(220,000
)
 
(170,000
)
Activity on unsecured senior line of credit/other
 
(150,000
)
 
(270,000
)
 
(210,000
)
Incremental debt (1)
 
$
305,000

 
$
285,000

 
$
295,000






(1)
Included in sources of capital above.

 
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2016
3

 
 
 
Earnings Call Information and About the Company
December 31, 2015
 
 


We will host a conference call on Tuesday, February 2, 2016, at 3:00 p.m. Eastern Time (“ET”)/noon Pacific Time (“PT”) that is open to the general public to discuss our financial and operating results for the fourth quarter and year ended December 31, 2015. To participate in this conference call, dial (877) 719-9789 or (719) 325-4799 and confirmation code 3794612 shortly before 3:00 p.m. ET/noon PT. The audio webcast can be accessed at: www.are.com, in the “For Investors” section. A replay of the call will be available for a limited time from 6:00 p.m. ET/3:00 p.m. PT on Tuesday, February 2, 2016. The replay number is (888) 203-1112 or (719) 457-0820, and the confirmation code is 3794612.

Additionally, a copy of this Earnings Press Release and Supplemental Information for the fourth quarter and year ended December 31, 2015, is available in the “For Investors” section of our website at www.are.com or by following this link: http://www.are.com/fs/2015q4.pdf.

For any questions, please contact Joel S. Marcus, chairman, chief executive officer, and founder, at (626) 578-9693 or Dean A. Shigenaga, executive vice president and chief financial officer, at (626) 578-0777.

About the Company

Alexandria Real Estate Equities, Inc. (NYSE:ARE) is a fully integrated, self-administered and self-managed urban office real estate investment trust (“REIT”) uniquely focused on collaborative science and technology campuses in AAA innovation cluster locations with a total market capitalization of $10.9 billion as of December 31, 2015, and an asset base of 32.0 million square feet, including 20.1 million RSF of operating properties and development and redevelopment projects (under construction or pre-construction), as well as an additional 11.9 million square feet of future ground-up development projects. Alexandria pioneered this niche in 1994 and has since established a dominant market presence in key locations, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland, and Research Triangle Park.

***********

This document includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements regarding our 2016 earnings per share attributable to Alexandria’s common stockholders – diluted, 2016 FFO per share attributable to Alexandria’s common stockholders – diluted, NOI, and our projected sources and uses of capital. You can identify the forward-looking statements by their use of forward-looking words, such as “forecast,” “guidance,” “projects,” “estimates,” “anticipates,” “believes,” “expects,” “intends,” “may,” “plans,” “seeks,” “should,” or “will,” or the negative of those words or similar words. These forward-looking statements are based on our current expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts, as well as a number of assumptions concerning future events. There can be no assurance that actual results will not be materially higher or lower than these expectations. These statements are subject to risks, uncertainties, assumptions, and other important factors that could cause actual results to differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, without limitation, our failure to obtain capital (debt, construction financing, and/or equity) or refinance debt maturities, increased interest rates and operating costs, adverse economic or real estate developments in our markets, our failure to successfully place into service and lease our existing space held for redevelopment and new properties acquired for that purpose and any properties undergoing development, our failure to successfully operate or lease acquired properties, decreased rental rates, increased vacancy rates or failure to renew or replace expiring leases, defaults on or non-renewal of leases by tenants, general and local economic conditions, a favorable capital market environment, performance of our operations in areas such as current and future development and redevelopment projects being placed into service, leasing activity, lease renewals, and other risks and uncertainties detailed in our filings with the Securities and Exchange Commission (“SEC”). Accordingly, you are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements are made as of the date of this earnings press release, and unless otherwise stated, we assume no obligation to update this information and expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. For more discussion relating to risks and uncertainties that could cause actual results to differ materially from those anticipated in our forward-looking statements, and risks to our business in general, please refer to our SEC filings, including our most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.


 
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2016
4

 
 
Consolidated Statements of Income
December 31, 2015
(In thousands, except per share amounts)
 
 



 
 
Three Months Ended
 
Year Ended
 
 
12/31/15

9/30/15
 
6/30/15
 
3/31/15
 
12/31/14
 
12/31/15
 
12/31/14
Revenues:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Rental
 
$
158,100

 
$
155,311

 
$
151,805

 
$
143,608

 
$
140,873

 
$
608,824

 
$
544,153

Tenant recoveries
 
54,956

 
56,119

 
49,594

 
48,394

 
45,282

 
209,063

 
173,480

Other income
 
10,899

 
7,180

 
2,757

 
4,751

 
2,519

 
25,587

 
9,244

Total revenues
 
223,955

 
218,610

 
204,156

 
196,753

 
188,674

 
843,474


726,877

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental operations
 
68,913

 
68,846

 
62,250

 
61,223

 
56,881

 
261,232

 
219,164

General and administrative
 
15,102

 
15,143

 
14,989

 
14,387

 
13,861

 
59,621

 
53,530

Interest
 
28,230

 
27,679

 
26,668

 
23,236

 
22,188

 
105,813

 
79,299

Depreciation and amortization
 
72,245

 
67,953

 
62,171

 
58,920

 
57,973

 
261,289

 
224,096

Impairment of real estate
 
8,740

 

 

 
14,510

 
51,675

 
23,250

 
51,675

Loss on early extinguishment of debt
 

 

 
189

 

 

 
189

 
525

Total expenses
 
193,230

 
179,621

 
166,267

 
172,276

 
202,578

 
711,394

 
628,289

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity in (loss) earnings of unconsolidated real estate joint ventures
 
(174
)
 
710

 
541

 
574

 
554

 
1,651

 
554

Gain on sales of real estate – rental properties
 
12,426

 

 

 

 

 
12,426

 

Income (loss) from continuing operations
 
42,977

 
39,699

 
38,430

 
25,051

 
(13,350
)
 
146,157

 
99,142

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income from discontinued operations
 

 

 

 
(43
)
 
1,722

 
(43
)
 
1,233

Gain on sales of real estate – land parcels
 

 

 

 

 
5,598

 

 
6,403

Net income (loss)
 
42,977

 
39,699

 
38,430

 
25,008

 
(6,030
)
 
146,114

 
106,778

Net income attributable to noncontrolling interests
 
(972
)
 
(170
)
 
(263
)
 
(492
)
 
(1,362
)
 
(1,897
)
 
(5,204
)
Net income (loss) attributable to Alexandria Real Estate Equities, Inc.
 
42,005

 
39,529

 
38,167

 
24,516

 
(7,392
)
 
144,217

 
101,574

Dividends on preferred stock
 
(6,246
)
 
(6,247
)
 
(6,246
)
 
(6,247
)
 
(6,284
)
 
(24,986
)
 
(25,698
)
Preferred stock redemption charge
 

 

 

 

 
(1,989
)
 

 
(1,989
)
Net income attributable to unvested restricted stock awards
 
(628
)
 
(623
)
 
(630
)
 
(483
)
 
(489
)
 
(2,364
)
 
(1,774
)
Net income (loss) attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
 
$
35,131

 
$
32,659

 
$
31,291

 
$
17,786

 
$
(16,154
)
 
$
116,867

 
$
72,113

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share attributable to Alexandria’s common stockholders – basic and diluted:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Continuing operations
 
$
0.49

 
$
0.46

 
$
0.44

 
$
0.25

 
$
(0.25
)
 
$
1.63

 
$
0.99

Discontinued operations
 

 

 

 

 
0.02

 

 
0.02

Earnings per share – basic and diluted
 
$
0.49

 
$
0.46

 
$
0.44

 
$
0.25

 
$
(0.23
)
 
$
1.63

 
$
1.01

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average shares of common stock outstanding for calculating earnings per share attributable to Alexandria’s common stockholders – basic and diluted
 
71,833

 
71,500

 
71,412

 
71,366

 
71,314

 
71,529

 
71,170

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends declared per share of common stock
 
$
0.77

 
$
0.77

 
$
0.77

 
$
0.74

 
$
0.74

 
$
3.05

 
$
2.88



 
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2016
5

 
 
Consolidated Balance Sheets
December 31, 2015
(In thousands)
 
 


 
 
12/31/15
 
9/30/15
 
6/30/15
 
3/31/15
 
12/31/14
Assets
 
 
 
 

 
 

 
 

 
 

Investments in real estate
 
$
7,629,922

 
$
7,527,738

 
$
7,321,820

 
$
7,268,031

 
$
7,108,610

Investments in unconsolidated real estate joint ventures
 
127,212

 
126,471

 
121,055

 
120,028

 
117,406

Cash and cash equivalents
 
125,098

 
76,383

 
68,617

 
90,641

 
86,011

Restricted cash
 
28,872

 
36,993

 
44,191

 
56,704

 
26,884

Tenant receivables
 
10,485

 
10,124

 
9,279

 
10,627

 
10,548

Deferred rent
 
280,570

 
267,954

 
257,427

 
243,459

 
234,124

Deferred leasing and financing costs
 
234,093

 
222,343

 
210,709

 
199,576

 
201,798

Investments
 
353,465

 
330,570

 
360,614

 
283,062

 
236,389

Other assets
 
121,403

 
138,768

 
131,179

 
133,093

 
114,266

Total assets
 
$
8,911,120

 
$
8,737,344

 
$
8,524,891

 
$
8,405,221

 
$
8,136,036

 
 
 
 
 
 
 
 
 
 
 
Liabilities, Noncontrolling Interests, and Equity
 
 
 
 
 
 
 
 
 
 
Secured notes payable
 
$
818,217

 
$
773,619

 
$
771,435

 
$
760,476

 
$
652,209

Unsecured senior notes payable
 
2,046,578

 
1,747,613

 
1,747,531

 
1,747,450

 
1,747,370

Unsecured senior line of credit
 
151,000

 
843,000

 
624,000

 
421,000

 
304,000

Unsecured senior bank term loans
 
950,000

 
950,000

 
950,000

 
975,000

 
975,000

Accounts payable, accrued expenses, and tenant security deposits
 
589,356

 
586,594

 
531,612

 
645,619

 
489,085

Dividends payable
 
62,005

 
61,340

 
61,194

 
58,824

 
58,814

Total liabilities
 
4,617,156

 
4,962,166

 
4,685,772

 
4,608,369

 
4,226,478

 
 
 
 
 
 
 
 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Redeemable noncontrolling interests
 
14,218

 
14,218

 
14,248

 
14,282

 
14,315

 
 
 
 
 
 
 
 
 
 
 
Alexandria Real Estate Equities, Inc.’s stockholders’ equity:
 
 
 
 
 
 
 
 
 
 
Series D cumulative convertible preferred stock
 
237,163

 
237,163

 
237,163

 
237,163

 
237,163

Series E cumulative redeemable preferred stock
 
130,000

 
130,000

 
130,000

 
130,000

 
130,000

Common stock
 
725

 
718

 
717

 
716

 
715

Additional paid-in capital
 
3,558,008

 
3,356,043

 
3,371,016

 
3,383,456

 
3,461,189

Accumulated other comprehensive income (loss)
 
49,191

 
35,238

 
83,980

 
29,213

 
(628
)
Alexandria’s stockholders’ equity
 
3,975,087

 
3,759,162

 
3,822,876

 
3,780,548

 
3,828,439

Noncontrolling interests
 
304,659

 
1,798

 
1,995

 
2,022

 
66,804

Total equity
 
4,279,746

 
3,760,960

 
3,824,871

 
3,782,570

 
3,895,243

Total liabilities, noncontrolling interests, and equity
 
$
8,911,120

 
$
8,737,344

 
$
8,524,891

 
$
8,405,221

 
$
8,136,036




 
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2016
6

 
 
Funds From Operations and Adjusted Funds From Operations
December 31, 2015
(In thousands)
 
 

The following table presents a reconciliation of net income (loss) attributable to Alexandria’s common stockholders – basic, the most directly comparable financial measure presented in accordance with generally accepted accounting principles (“GAAP”), to FFO attributable to Alexandria’s common stockholders – basic and diluted, FFO attributable to Alexandria’s common stockholders – diluted, as adjusted, and adjusted funds from operations (“AFFO”) attributable to Alexandria’s common stockholders – diluted. Quarterly amounts allocated to unvested restricted stock awards may not sum to annual amounts due to differences in the weighted-average share calculation of each period.
 
 
Three Months Ended
 
Year Ended
 
 
12/31/15
 
9/30/15
 
6/30/15
 
3/31/15
 
12/31/14
 
12/31/15
 
12/31/14
Net income (loss) attributable to Alexandria’s common stockholders
 
$
35,131

 
$
32,659

 
$
31,291

 
$
17,786

 
$
(16,154
)
 
$
116,867

 
$
72,113

Depreciation and amortization
 
72,528

 
68,398

 
62,523

 
59,202

 
58,302

 
262,651

 
224,425

Impairment of real estate – rental properties
 
8,740

(1) 

 

 
14,510

 
26,975

 
23,250

 
26,975

Gain on sales of real estate – rental properties (2)
 
(12,426
)
 

 

 

 
(1,838
)
 
(12,426
)
 
(1,838
)
Gain on sales of real estate – land parcels
 

 

 

 

 
(5,598
)
 

 
(6,403
)
Allocation to unvested restricted stock awards
 
(522
)
 
(698
)
 
(381
)
 
(166
)
 
(212
)
 
(1,758
)
 
(690
)
FFO attributable to Alexandria’s common stockholders –
basic and diluted (3)
 
103,451

 
100,359

 
93,433

 
91,332

 
61,475

 
388,584

 
314,582

Investment income (4)
 
(7,731
)
 
(5,378
)
 

 

 

 
(13,109
)
 

Impairment of real estate – land parcels
 

 

 

 

 
24,700

 

 
24,700

Loss on early extinguishment of debt
 

 

 
189

 

 

 
189

 
525

Preferred stock redemption charge
 

 

 

 

 
1,989

 

 
1,989

Allocation to unvested restricted stock awards
 
85

 
67

 
(2
)
 

 
(259
)
 
110

 
(226
)
FFO attributable to Alexandria’s common stockholders –
diluted, as adjusted
 
95,805

 
95,048

 
93,620

 
91,332

 
87,905

 
375,774

 
341,570

Non-revenue-enhancing capital expenditures:
 
 

 
 

 
 

 
 

 
 

 
 
 
 
Building improvements
 
(2,025
)
 
(2,404
)
 
(2,743
)
 
(2,278
)
 
(1,989
)
 
(9,450
)
 
(7,429
)
Tenant improvements and leasing commissions
 
(4,436
)
 
(5,499
)
 
(6,429
)
 
(5,775
)
 
(5,499
)
 
(22,139
)
 
(15,179
)
Straight-line rent revenue
 
(13,517
)
 
(12,006
)
 
(14,159
)
 
(10,697
)
 
(10,023
)
 
(50,379
)
 
(45,534
)
Straight-line rent expense on ground leases
 
862

 
(1,245
)
 
510

 
363

 
657

 
490

 
2,788

Amortization of acquired below-market leases
 
(997
)
 
(3,182
)
 
(1,006
)
 
(933
)
 
(654
)
 
(6,118
)
 
(2,845
)
Amortization of loan fees
 
2,689

 
2,657

 
2,921

 
2,835

 
2,822

 
11,102

 
10,912

Amortization of debt (premiums) discounts
 
(90
)
 
(100
)
 
(100
)
 
(82
)
 
17

 
(372
)
 
117

Stock compensation expense
 
4,590

 
5,178

 
4,054

 
3,690

 
4,624

 
17,512

 
13,996

Allocation to unvested restricted stock awards
 
141

 
207

 
152

 
118

 
98

 
619

 
359

AFFO attributable to Alexandria’s common stockholders – diluted
 
$
83,022

 
$
78,654

 
$
76,820

 
$
78,573

 
$
77,958

 
$
317,039

 
$
298,755


(1)
Represents an impairment charge related to 16020 Industrial Drive, a 71,000 RSF, R&D/warehouse building in Maryland. We expect to complete the sale of the asset in 2016.
(2)
Gain on sales of real estate – rental properties recognized during 4Q14 is classified in (loss) income from discontinued operations in the consolidated statements of income.
(3)
Calculated in accordance with standards established by the Advisory Board of Governors of the National Association of Real Estate Investment Trusts (the “NAREIT Board of Governors”) in its April 2002 White Paper and related implementation guidance.
(4)
Includes gross investment gains of $12.7 million and $8.7 million for 4Q15 and 3Q15, respectively, primarily from the sale of two public securities in each of 4Q15 and 3Q15.
    

 
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2016
7

 
 
Funds From Operations Per Share and Adjusted Funds From Operations Per Share
December 31, 2015
(In thousands, except per share amounts)
 
 

The following table presents a reconciliation of earnings per share attributable to Alexandria’s common stockholders – basic, the most directly comparable financial measure presented in accordance with GAAP, to FFO per share attributable to Alexandria’s common stockholders – diluted, FFO per share attributable to Alexandria’s common stockholders – diluted, as adjusted, and AFFO per share attributable to Alexandria’s common stockholders – diluted. For the computation of the weighted-average shares used to compute the per share information, refer to the “Definitions and Reconciliations” section in our supplemental information. Amounts allocable to unvested restricted stock awards are not material and are not presented separately within the table below. Per share amounts may not add due to rounding.
 
 
Three Months Ended
 
Year Ended
 
 
12/31/15
 
9/30/15
 
6/30/15
 
3/31/15
 
12/31/14
 
12/31/15
 
12/31/14
EPS attributable to Alexandria’s common stockholders –
basic and diluted
 
$
0.49

 
$
0.46

 
$
0.44

 
$
0.25

 
$
(0.23
)
 
$
1.63

 
$
1.01

Depreciation and amortization 
 
1.00

 
0.95

 
0.87

 
0.83

 
0.82

 
3.64

 
3.15

Impairment of real estate – rental properties
 
0.12

 

 

 
0.20

 
0.38

 
0.33

 
0.38

Gain on sales of real estate – rental properties
 
(0.17
)
 

 

 

 
(0.03
)
 
(0.17
)
 
(0.03
)
Gain on sales of real estate – land parcels
 

 

 

 

 
(0.08
)
 

 
(0.09
)
FFO per share attributable to Alexandria’s common stockholders –
basic and diluted (1)
 
1.44

 
1.40

 
1.31

 
1.28

 
0.86

 
5.43


4.42

Investment income
 
(0.11
)
 
(0.08
)
 

 

 

 
(0.18
)
 

Impairment of real estate – land parcels
 

 

 

 

 
0.34

 

 
0.34

Loss on early extinguishment of debt
 

 

 

 

 

 

 
0.01

Preferred stock redemption charge
 

 

 

 

 
0.03

 

 
0.03

FFO per share attributable to Alexandria’s common stockholders –
diluted, as adjusted
 
1.33

 
1.33

 
1.31

 
1.28

 
1.23

 
5.25

 
4.80

Non-revenue-enhancing capital expenditures:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Building improvements
 
(0.03
)
 
(0.03
)
 
(0.04
)
 
(0.03
)
 
(0.03
)
 
(0.13
)
 
(0.10
)
Tenant improvements and leasing commissions
 
(0.06
)
 
(0.08
)
 
(0.09
)
 
(0.08
)
 
(0.08
)
 
(0.31
)
 
(0.20
)
Straight-line rent revenue 
 
(0.19
)
 
(0.17
)
 
(0.20
)
 
(0.15
)
 
(0.14
)
 
(0.71
)
 
(0.64
)
Straight-line rent expense on ground leases
 
0.01

 
(0.02
)
 
0.01

 
0.01

 
0.01

 
0.01

 
0.04

Amortization of acquired below-market leases
 
(0.01
)
 
(0.04
)
 
(0.01
)
 
(0.01
)
 
(0.01
)
 
(0.09
)
 
(0.04
)
Amortization of loan fees 
 
0.04

 
0.04

 
0.04

 
0.03

 
0.05

 
0.16

 
0.14

Stock compensation expense
 
0.07

 
0.07

 
0.06

 
0.05

 
0.06

 
0.25

 
0.20

AFFO per share attributable to Alexandria’s common stockholders – diluted
 
$
1.16

 
$
1.10

 
$
1.08

 
$
1.10

 
$
1.09

 
$
4.43

 
$
4.20

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average shares of common stock outstanding for calculating FFO, FFO, as adjusted, and AFFO per share attributable to Alexandria’s common stockholders – basic and diluted
 
71,833

 
71,500

 
71,412

 
71,366

 
71,314

 
71,529

 
71,170


(1)
Calculated in accordance with standards established by the NAREIT Board of Governors in its April 2002 White Paper and related implementation guidance.

 
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2016
8









SUPPLEMENTAL
INFORMATION








 
 
 
 
 
 
 

 
 
 
Company Profile
December 31, 2015
 
 

Alexandria Real Estate Equities, Inc. (NYSE:ARE) is the largest and leading urban office REIT uniquely focused on collaborative science and technology campuses in AAA innovation cluster locations with a total market capitalization of $10.9 billion as of December 31, 2015, and an asset base of 32.0 million square feet, including 20.1 million RSF of operating properties and development and redevelopment projects (under construction or pre-construction), as well as an additional 11.9 million square feet of future ground-up development projects. Alexandria pioneered this niche in 1994 and has since established a dominant market presence in key locations, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland, and Research Triangle Park. Alexandria has a longstanding and proven track record of developing Class A assets clustered in urban science and technology campuses that provide its innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. We believe these advantages result in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. For additional information on Alexandria, please visit www.are.com.


Tenant base

Alexandria is known for its high-quality and diverse tenant base, with approximately 54% of total annualized base rent as of December 31, 2015, generated from investment-grade tenants – a REIT industry-leading percentage. The impressive quality, diversity, breadth, and depth of our significant relationships with our tenants provide Alexandria with high-quality and stable cash flows. Alexandria’s underwriting skills and long-term industry relationships positively distinguish us from all other publicly traded REITs and real estate companies.


Executive/senior management team

Alexandria’s executive and senior management team has unique experience and expertise in creating highly dynamic and collaborative campuses in key urban science and technology cluster locations that inspire innovation. From the development of high-quality, sustainable real estate, to the ongoing cultivation of collaborative environments with unique amenities and events, the Alexandria team has a first-in-class reputation of excellence in its niche. Our sophisticated management team also includes regional market directors with leading reputations and longstanding relationships within the science and technology communities in their respective urban innovation clusters. We believe that our unparalleled expertise, experience, reputation, and key relationships with the real estate, science, and technology industries provide Alexandria significant competitive advantages in attracting new business opportunities.
 
Alexandria’s executive/senior management team, consisting of 22 individuals, averages more than 25 years of real estate experience, including more than 12 years with Alexandria.


EXECUTIVE MANAGEMENT TEAM
Joel S. Marcus
Chairman,
Chief Executive Officer & Founder
Dean A. Shigenaga
Executive Vice President,
Chief Financial Officer & Treasurer
Thomas J. Andrews
Executive Vice President –
Regional Market Director – Greater Boston
Jennifer J. Banks
Executive Vice President –
General Counsel & Corporate Secretary
Vincent R. Ciruzzi
Chief Development Officer
Peter M. Moglia
Chief Investment Officer
Stephen A. Richardson
Chief Operating Officer &
Regional Market Director – San Francisco
Daniel J. Ryan
Executive Vice President –
Regional Market Director – San Diego & Strategic Operations


 
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2016
10

 
 
 
NAV, FFO, and Common Stock Dividends Per Share
December 31, 2015
 
 


Growth in NAV Per Share (1)
 
Growth in FFO Per Share (2)
 
Growth in Common Stock
Dividends Per Share
 
 

(1)
Based upon Real Estate Securities Monthly by Green Street Advisors Inc.
(2)
2015 FFO per share, as adjusted, excludes gross investment gains of $12.7 million and $8.7 million for 4Q15 and 3Q15, respectively, primarily from the sale of two public securities in each of 4Q15 and 3Q15.

 
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2016
11

 
 
 
High-Quality, Diversified, and Innovative Tenants
December 31, 2015
 
 



Increasing Cash Flows from Innovative, Diversified, and
High-Quality Tenants

Total ABR from Investment-Grade Tenants
Diverse Tenant Base by ABR
 
 
54%
 
Top 20 ABR from Investment-Grade Tenants
 
81%
 
Solid Lease Duration (2)
 
 
8.3 Years

(1)
Office and tech space compose 2.5% and 0.7% of ABR, respectively.
(2)
For top 20 tenants, representing 49.4% of total ABR.

 
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2016
12

 
 
 
Class A Assets in AAA Locations
December 31, 2015
 
 


High-Quality Cash Flows from Class A Assets in AAA Locations

 
 
Focus in Key Locations
 
 
Class A Assets in
AAA Locations
 
 
 
75%
 
 
 
of ARE’s Total ABR
 
 
 
 
 
 
 
 
% of ARE’s Total ABR


 
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2016
13

 
 
 
Solid Occupancy
December 31, 2015
 
 



Consistent and Solid Demand for Class A Assets in AAA Locations
Drives Solid Occupancy

 
 
Occupancy of Operating Properties
Across Key Locations
 
 
Solid Occupancy (1)
 
 
 
95%
 
 
 
Over 10 Years
 
 
 
(1) Average occupancy of operating properties in North America as of December 31 for the last 10 years.


 
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2016
14

 
 
 
Investor Information
December 31, 2015
 
 

Corporate Headquarters
 
New York Stock Exchange Trading Symbols
 
Information Requests
385 East Colorado Boulevard, Suite 299
 
Common stock: ARE
 
Phone:
(626) 396-4828
Pasadena, California 91101
 
Series D preferred stock: ARE PRD
 
E-mail:
corporateinformation@are.com
 
 
Series E preferred stock: ARE PRE
 
Web:
www.are.com
 
 
 
 
 
 
Equity research coverage
Alexandria is currently covered by the following research analysts. This list may not be complete and is subject to change as firms initiate or discontinue coverage of our company. Please note that any opinions, estimates, or forecasts regarding our historical or predicted performance made by these analysts are theirs alone and do not represent opinions, estimates, or forecasts of Alexandria or its management. Alexandria does not by its reference or distribution of the information below imply its endorsement of or concurrence with any opinions, estimates, or forecasts of these analysts. Interested persons may obtain copies of analysts’ reports on their own as we do not distribute these reports. Several of these firms may from time-to-time own our stock and/or hold other long or short positions in our stock, and may provide compensated services to us.
Bank of America Merrill Lynch
 
Evercore ISI
 
Mitsubishi UFJ Securities (USA), Inc.
 
Robert W. Baird & Co., Incorporated
Jamie Feldman / Jeffrey Spector
 
Sheila McGrath / Nathan Crossett
 
Karin Ford
 
David Rodgers / Richard Schiller
(646) 855-5808 / (646) 855-1363
 
(212) 497-0882 / (212) 497-0870
 
(212) 405-7349
 
(216) 737-7341 / (312) 609-5485
 
 
 
 
 
 
 
Barclays Capital Inc.
 
Green Street Advisors, Inc.
 
Mizuho Securities USA Inc.
 
Standard & Poor’s
Ross Smotrich
 
Michael Knott / Kevin Tyler
 
Richard Anderson / Jieren Huang
 
Cathy Seifert
(212) 526-2306
 
(949) 640-8780 / (949) 640-8780
 
(212) 205-8445 / (201) 626-1085
 
(212) 438-9545
 
 
 
 
 
 
 
Citigroup Global Markets Inc.
 
JMP Securities – JMP Group, Inc.
 
RBC Capital Markets
 
UBS Securities LLC
Michael Bilerman / Emmanuel Korchman
 
Peter Martin / Aaron Hecht
 
Michael Carroll / Rich Moore
 
Ross Nussbaum / Nick Yulico
(212) 816-1383 / (212) 816-1382
 
(415) 835-8904 / (415) 835-3963
 
(440) 715-2649 / (440) 715-2646
 
(212) 713-2484 / (212) 713-3402
 
 
 
 
 
 
 
Cowen and Company, LLC
 
J.P. Morgan Securities LLC
 
 
 
 
James Sullivan / Tom Catherwood
 
Anthony Paolone / Gene Nusinzon
 
 
 
 
(646) 562-1380 / (646) 562-1382
 
(212) 622-6682 / (212) 622-1041
 
 
 
 



Rating agencies
 
 
 
 
 
 
 
 
Moody’s Investors Service
 
Rating
 
Standard & Poor’s
 
Rating
 
 
Philip Kibel / Merrie Frankel
 
Baa2
 
Fernanda Hernandez / Anita Ogbara
 
BBB-
 
 
(212) 553-4569 / (212) 553-3652
 
Stable Outlook
 
(212) 438-1347 / (212) 438-5077
 
Positive Outlook
 
 

 
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2016
15

 
 
Financial and Asset Base Highlights
December 31, 2015
(Dollars in thousands, except for per share amounts)
 
 

 
 
Three Months Ended (unless stated otherwise)
 
 
12/31/15
 
9/30/15
 
6/30/15
 
3/31/15
 
12/31/14
Selected financial data from consolidated financial statements and related information
Total revenues
 
$
223,955

 
$
218,610

 
$
204,156

 
$
196,753

 
$
188,674

General and administrative expense as a percentage of total assets – trailing 12 months
 
0.7%

 
0.7%

 
0.7%

 
0.7%

 
0.7%

General and administrative expense as a percentage of total revenues – trailing 12 months
 
7.1%

 
7.2%

 
7.2%

 
7.3%

 
7.4%

Operating margins
 
69%

 
69%

 
70%

 
69%

 
70%

Capitalized interest
 
$
8,696

 
$
8,436

 
$
8,437

 
$
10,971

 
$
11,665

Weighted-average interest rate for capitalization of interest during period
 
3.37%

 
3.34%

 
3.45%

 
3.54%

 
3.69%

 
 
 
 
 
 
 
 
 
 
 
Gross investments in real estate
 
$
8,945,261

 
$
8,787,478

 
$
8,526,845

 
$
8,421,861

 
$
8,228,855

Investments in unconsolidated real estate joint ventures
 
$
127,212

 
$
126,471

 
$
121,055

 
$
120,028

 
$
117,406

Total assets
 
$
8,911,120

 
$
8,737,344

 
$
8,524,891

 
$
8,405,221

 
$
8,136,036

Gross assets
 
$
10,226,459

 
$
9,997,084

 
$
9,729,916

 
$
9,559,051

 
$
9,256,281

Total unsecured debt
 
$
3,147,578

 
$
3,540,613

 
$
3,321,531

 
$
3,143,450

 
$
3,026,370

Total debt
 
$
3,965,795

 
$
4,314,232

 
$
4,092,966

 
$
3,903,926

 
$
3,678,579

Total liabilities
 
$
4,617,156

 
$
4,962,166

 
$
4,685,772

 
$
4,608,369

 
$
4,226,478

 
 
 
 
 
 
 
 
 
 
 
Closing stock price
 
$
90.36

 
$
84.67

 
$
87.46

 
$
98.04

 
$
88.74

Dividend per share – quarter/annualized
 
$0.77/$3.08

 
$0.77/$3.08

 
$0.77/$3.08

 
$0.74/$2.96

 
$0.74/$2.96

Dividend payout ratio for the quarter
 
58%

 
58%

 
59%

 
58%

 
60%

Dividend yield – annualized
 
3.4%

 
3.6%

 
3.5%

 
3.0%

 
3.3%

Total equity capitalization
 
$
6,949,924

 
$
6,446,634

 
$
6,640,810

 
$
7,386,128

 
$
6,713,547

Total market capitalization
 
$
10,915,719

 
$
10,760,866

 
$
10,733,776

 
$
11,290,054

 
$
10,392,126

Common shares outstanding (in