Condensed consolidating financial information

9 Months Ended

Sep. 30, 2012

Condensed consolidating financial information

Condensed consolidating financial information

14.   Condensed consolidating financial information

Alexandria Real Estate Equities, Inc. (the “Issuer”) has sold certain debt securities registered under the Securities Act, as amended, that are fully and unconditionally guaranteed by Alexandria Real Estate Equities, L.P. (the “LP”), an indirectly 100% owned subsidiary of the Issuer.  The Company’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, 2012, and December 31, 2011, and the condensed consolidating statements of income, comprehensive income, and cash flows for three and nine months ended September 30, 2012 and 2011, for the Issuer, the guarantor subsidiary (the LP), the Combined Non-Guarantor Subsidiaries, consolidating adjustments, and consolidated amounts.  Each entity in the condensed consolidating financial information follows the same accounting policies described in our condensed consolidated financial statements, except for the use of the equity method of accounting to reflect ownership interest in subsidiaries that are eliminated upon consolidation.

Condensed Consolidating Balance Sheet

as of September 30, 2012
(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, net	$	40,085	$	–	$	6,259,942	$	–		$	6,300,027
Cash and cash equivalents	50,395		–		44,509		–			94,904
Restricted cash	48		–		44,815		–			44,863
Tenant receivables	1		–		10,123		–			10,124
Deferred rent	1,693		–		159,221		–			160,914
Deferred leasing and financing costs, net	33,038		–		118,983		–			152,021
Investments	–		12,671		95,137		–			107,808
Investments in and advances to affiliates	5,738,965		5,274,333		108,334		(11,121,632		)	–
Intercompany note receivable	2,244		–		–		(2,244		)	–
Other assets	19,336		–		75,020		–			94,356
Total assets	$	5,885,805	$	5,287,004	$	6,916,084	$	(11,123,876	)	$	6,965,017
Liabilities, Noncontrolling Interests, and Equity
Secured notes payable	$	–	$	–	$	719,350	$	–		$	719,350
Unsecured senior notes payable	549,794		–		–		–			549,794
Unsecured senior line of credit	413,000		–		–		–			413,000
Unsecured senior bank term loans	1,350,000		–		–		–			1,350,000
Accounts payable, accrued expenses, and tenant security deposits	77,951		–		298,834		–			376,785
Dividends payable	39,170		–		298		–			39,468
Intercompany note payable	–		–		2,244		(2,244		)	–
Total liabilities	2,429,915		–		1,020,726		(2,244		)	3,448,397
Redeemable noncontrolling interests	–		–		15,610		–			15,610
Alexandria Real Estate Equities, Inc.’s stockholders’ equity	3,455,890		5,287,004		5,834,628		(11,121,632		)	3,455,890
Noncontrolling interests	–		–		45,120		–			45,120
Total equity	3,455,890		5,287,004		5,879,748		(11,121,632		)	3,501,010
Total liabilities, noncontrolling interests, and equity	$	5,885,805	$	5,287,004	$	6,916,084	$	(11,123,876	)	$	6,965,017

Condensed Consolidating Balance Sheet

as of December 31, 2011
(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, net	$	46,795	$	–	$	5,961,645	$	–		$	6,008,440
Cash and cash equivalents	10,608		–		67,931		–			78,539
Restricted cash	40		–		23,292		–			23,332
Tenant receivables	12		–		7,468		–			7,480
Deferred rent	1,615		–		140,482		–			142,097
Deferred leasing and financing costs, net	25,364		–		110,186		–			135,550
Investments	–		13,385		82,392		–			95,777
Investments in and advances to affiliates	5,443,778		5,020,525		105,284		(10,569,587		)	–
Intercompany note receivable	2,195		–		–		(2,195		)	–
Other assets	18,643		–		64,271		–			82,914
Total assets	$	5,549,050	$	5,033,910	$	6,562,951	$	(10,571,782	)	$	6,574,129
Liabilities, Noncontrolling Interests, and Equity
Secured notes payable	$	–	$	–	$	724,305	$	–		$	724,305
Unsecured senior notes payable	84,959		–		–		–			84,959
Unsecured senior line of credit	370,000		–		–		–			370,000
Unsecured senior bank term loans	1,600,000		–		–		–			1,600,000
Accounts payable, accrued expenses, and tenant security deposits	83,488		–		241,905		–			325,393
Dividends payable	36,302		–		277		–			36,579
Intercompany note payable	–		–		2,195		(2,195		)	–
Total liabilities	2,174,749		–		968,682		(2,195		)	3,141,236
Redeemable noncontrolling interests	–		–		16,034		–			16,034
Alexandria Real Estate Equities, Inc.’s stockholders’ equity	3,374,301		5,033,910		5,535,677		(10,569,587		)	3,374,301
Noncontrolling interests	–		–		42,558		–			42,558
Total equity	3,374,301		5,033,910		5,578,235		(10,569,587		)	3,416,859
Total liabilities, noncontrolling interests, and equity	$	5,549,050	$	5,033,910	$	6,562,951	$	(10,571,782	)	$	6,574,129

Condensed Consolidating Statement of Income

for the Three Months Ended September 30, 2012
(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)			Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)		Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Rental	$	–		$	–	$	108,367		$	–		$	108,367
Tenant recoveries	–			–		34,448			–			34,448
Other income	2,091			51		3,915			(3,417		)	2,640
Total revenues	2,091			51		146,730			(3,417		)	145,455
Expenses:
Rental operations	–			–		44,614			–			44,614
General and administrative	9,585			–		6,317			(3,417		)	12,485
Interest	11,786			–		5,308			–			17,094
Depreciation and amortization	1,726			–		45,450			–			47,176
Total expenses	23,097			–		101,689			(3,417		)	121,369
(Loss) income from continuing operations before equity in earnings of affiliates and loss on early extinguishment of debt	(21,006		)	51		45,041			–			24,086
Equity in earnings of affiliates	42,074			41,874		781			(84,729		)	–
Income from continuing operations	21,068			41,925		45,822			(84,729		)	24,086
(Loss) income from discontinued operations:
Income from discontinued operations before impairment of real estate	1,208			–		2,810			–			4,018
Impairment of real estate	(4,799		)	–		(5,000		)	–			(9,799		)
(Loss) income from discontinued operations, net	(3,591		)	–		(2,190		)	–			(5,781		)
Net income	17,477			41,925		43,632			(84,729		)	18,305
Net income attributable to noncontrolling interests	–			–		828			–			828
Dividends on preferred stock	6,471			–		–			–			6,471
Net income attributable to unvested restricted stock awards	360			–		–			–			360
Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$	10,646		$	41,925	$	42,804		$	(84,729	)	$	10,646

Condensed Consolidating Statement of Income

for the Nine Months Ended September 30, 2012
(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)			Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)		Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Rental	$	–		$	–	$	318,247		$	–		$	318,247
Tenant recoveries	–			–		99,006			–			99,006
Other income	5,199			891		18,500			(9,940		)	14,650
Total revenues	5,199			891		435,753			(9,940		)	431,903
Expenses:
Rental operations	–			–		127,884			–			127,884
General and administrative	32,030			–		13,062			(9,940		)	35,152
Interest	34,460			–		16,783			–			51,243
Depreciation and amortization	3,781			–		136,997			–			140,778
Total expenses	70,271			–		294,726			(9,940		)	355,057
(Loss) income from continuing operations before equity in earnings of affiliates and loss on early extinguishment of debt	(65,072		)	891		141,027			–			76,846
Equity in earnings of affiliates	142,660			134,347		2,662			(279,669		)	–
Loss on early extinguishment of debt	(2,225		)	–		–			–			(2,225		)
Income from continuing operations	75,363			135,238		143,689			(279,669		)	74,621
(Loss) income from discontinued operations:
Income from discontinued operations before impairment of real estate	3,767			–		6,268			–			10,035
Impairment of real estate	(4,799		)	–		(5,000		)	–			(9,799		)
(Loss) income from discontinued operations, net	(1,032		)	–		1,268			–			236
Gain on sale of land parcel	–			–		1,864			–			1,864
Net income	74,331			135,238		146,821			(279,669		)	76,721
Net income attributable to noncontrolling interests	–			–		2,390			–			2,390
Dividends on preferred stock	20,857			–		–			–			20,857
Preferred stock redemption charge	5,978			–		–			–			5,978
Net income attributable to unvested restricted stock awards	866			–		–			–			866
Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$	46,630		$	135,238	$	144,431		$	(279,669	)	$	46,630

Condensed Consolidating Statement of Income

for the Three Months Ended September 30, 2011
(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)			Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Rental	$	–		$	–		$	102,353		$	–		$	102,353
Tenant recoveries	–			–			33,226			–			33,226
Other income (loss)	2,032			(200		)	3,982			(3,339		)	2,475
Total revenues	2,032			(200		)	139,561			(3,339		)	138,054
Expenses:
Rental operations	–			–			40,859			–			40,859
General and administrative	9,423			7			4,198			(3,339		)	10,289
Interest	11,967			–			2,306			–			14,273
Depreciation and amortization	937			–			37,810			–			38,747
Total expenses	22,327			7			85,173			(3,339		)	104,168
(Loss) income from continuing operations before equity in earnings of affiliates and loss on early extinguishment of debt	(20,295		)	(207		)	54,388			–			33,886
Equity in earnings of affiliates	53,876			50,873			973			(105,722		)	–
Loss on early extinguishment of debt	(2,742		)	–			–			–			(2,742		)
Income from continuing operations	30,839			50,666			55,361			(105,722		)	31,144
Income (loss) from discontinued operations:
Income (loss) from discontinued operations before impairment of real estate	1,190			–			1,609			–			2,799
Impairment of real estate	–			–			(994		)	–			(994		)
Income (loss) from discontinued operations, net	1,190			–			615			–			1,805
Gain on sale of land parcel	–			–			46			–			46
Net income	32,029			50,666			56,022			(105,722		)	32,995
Net income attributable to noncontrolling interests	–			–			966			–			966
Dividends on preferred stock	7,089			–			–			–			7,089
Net income attributable to unvested restricted stock awards	278			–			–			–			278
Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$	24,662		$	50,666		$	55,056		$	(105,722	)	$	24,662

Condensed Consolidating Statement of Income

for the Nine Months Ended September 30, 2011
(In thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc. (Issuer)			Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary)			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Rental	$	–		$	–		$	309,532		$	–		$	309,532
Tenant recoveries	–			–			95,270			–			95,270
Other income (loss)	6,542			(515		)	7,967			(9,816		)	4,178
Total revenues	6,542			(515		)	412,769			(9,816		)	408,980
Expenses:
Rental operations	–			–			118,014			–			118,014
General and administrative	26,977			7			13,360			(9,816		)	30,528
Interest	32,727			–			15,894			–			48,621
Depreciation and amortization	2,427			–			110,899			–			113,326
Total expenses	62,131			7			258,167			(9,816		)	310,489
(Loss) income from continuing operations before equity in earnings of affiliates and loss on early extinguishment of debt	(55,589		)	(522		)	154,602			–			98,491
Equity in earnings of affiliates	155,514			146,803			2,896			(305,213		)	–
Loss on early extinguishment of debt	(6,485		)	–			–			–			(6,485		)
Income from continuing operations	93,440			146,281			157,498			(305,213		)	92,006
Income from discontinued operations:
Income from discontinued operations before impairment of real estate	3,658			–			5,215			–			8,873
Impairment of real estate	–			–			(994		)	–			(994		)
Income from discontinued operations, net	3,658			–			4,221			–			7,879
Gain on sale of land parcel	–			–			46			–			46
Net income	97,098			146,281			161,765			(305,213		)	99,931
Net income attributable to noncontrolling interests	–			–			2,833			–			2,833
Dividends on preferred stock	21,267			–			–			–			21,267
Net income attributable to unvested restricted stock awards	818			–			–			–			818
Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$	75,013		$	146,281		$	158,932		$	(305,213	)	$	75,013

Condensed Consolidating Statement of Comprehensive Income

for the Three Months Ended September 30, 2012
(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	$	17,477		$	41,925		$	43,632		$	(84,729	)	$	18,305
Other comprehensive income:
Unrealized gains (losses) on marketable securities:
Unrealized holding gains arising during the period	–			23			773			–			796
Reclassification adjustment for gains included in net income	–			(11		)	(1,410		)	–			(1,421		)
Unrealized gains (losses) on marketable securities, net	–			12			(637		)	–			(625		)
Unrealized gains on interest rate swaps:
Unrealized interest rate swap losses arising during the period	(2,818		)	–			–			–			(2,818		)
Reclassification adjustment for amortization of interest expense included in net income	5,956			–			–			–			5,956
Unrealized gains on interest rate swaps, net	3,138			–			–			–			3,138
Foreign currency translation gains	–			–			15,104			–			15,104
Total other comprehensive income	3,138			12			14,467			–			17,617
Comprehensive income	20,615			41,937			58,099			(84,729		)	35,922
Less: comprehensive income attributable to noncontrolling interests	–			–			(805		)	–			(805		)
Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$	20,615		$	41,937		$	57,294		$	(84,729	)	$	35,117

Condensed Consolidating Statement of Comprehensive Income

for the Nine Months Ended September 30, 2012
(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	$	74,331		$	135,238	$	146,821		$	(279,669	)	$	76,721
Other comprehensive income:
Unrealized gains (losses) on marketable securities:
Unrealized holding gains arising during the period	–			10		1,353			–			1,363
Reclassification adjustment for losses (gains) included in net income	–			172		(2,279		)	–			(2,107		)
Unrealized gains (losses) on marketable securities, net	–			182		(926		)	–			(744		)
Unrealized gains on interest rate swaps:
Unrealized interest rate swap losses arising during the period	(9,982		)	–		–			–			(9,982		)
Reclassification adjustment for amortization of interest expense included in net income	17,626			–		–			–			17,626
Unrealized gains on interest rate swaps, net	7,644			–		–			–			7,644
Foreign currency translation gains	–			–		7,871			–			7,871
Total other comprehensive income	7,644			182		6,945			–			14,771
Comprehensive income	81,975			135,420		153,766			(279,669		)	91,492
Less: comprehensive income attributable to noncontrolling interests	–			–		(2,379		)	–			(2,379		)
Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$	81,975		$	135,420	$	151,387		$	(279,669	)	$	89,113

Condensed Consolidating Statement of Comprehensive Income

for the Three Months Ended September 30, 2011
(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	$	32,029		$	50,666		$	56,022		$	(105,722	)	$	32,995
Other comprehensive income:
Unrealized losses on marketablesecurities:
Unrealized holding losses arising during the period	–			(172		)	(497		)	–			(669		)
Reclassification adjustments for gains included in net income	–			(28		)	(1,919		)	–			(1,947		)
Unrealized losses on marketablesecurities, net	–			(200		)	(2,416		)	–			(2,616		)
Unrealized gains on interest rate swaps:
Unrealized interest rate swap losses arising during the period	(2,822		)	–			–			–			(2,822		)
Reclassification adjustment for amortization of interest expense included in net income	5,381			–			–			–			5,381
Unrealized losses on interest rate swaps, net	2,559			–			–			–			2,559
Foreign currency translation loss	–			–			(25,814		)	–			(25,814		)
Total other comprehensive income (loss)	2,559			(200		)	(28,230		)	–			(25,871		)
Comprehensive income	34,588			50,466			27,792			(105,722		)	7,124
Less: comprehensive income attributable to noncontrolling interests	–			–			(1,024		)	–			(1,024		)
Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$	34,588		$	50,466		$	26,768		$	(105,722	)	$	6,100

Condensed Consolidating Statement of Comprehensive Income

for the Nine Months Ended September 30, 2011
(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	$	97,098		$	146,281		$	161,765		$	(305,213	)	$	99,931
Other comprehensive income:
Unrealized gains on marketable securities:
Unrealized holding losses arising during the period	–			(160		)	(497		)	–			(657		)
Reclassification adjustments for gains included in net income	–			(28		)	(1,919		)	–			(1,947		)
Unrealized losses on marketablesecurities, net	–			(188		)	(2,416		)	–			(2,604		)
Unrealized gains on interest rate swaps:
Unrealized interest rate swap losses arising during the period	(8,077		)	–			–			–			(8,077		)
Reclassification adjustment for amortization of interest expense included in net income	16,121			–			–			–			16,121
Unrealized gains on interest rate swaps, net	8,044			–			–			–			8,044
Foreign currency translation loss	–			–			(19,255		)	–			(19,255		)
Total other comprehensive income (loss)	8,044			(188		)	(21,671		)	–			(13,815		)
Comprehensive income	105,142			146,093			140,094			(305,213		)	86,116
Less: comprehensive income attributable to noncontrolling interests	–			–			(2,885		)	–			(2,885		)
Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$	105,142		$	146,093		$	137,209		$	(305,213	)	$	83,231

Condensed Consolidating Statement of Cash Flows

for the Nine Months Ended September 30, 2012
(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	$	74,331		$	135,238		$	146,821		$	(279,669)	$	76,721
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,781			–			140,152			–		143,933
Loss on early extinguishment of debt	2,225			–			–			–		2,225
Gain on sale of land parcel	–			–			(1,864		)	–		(1,864		)
Gain on sale of real estate	–			–			(1,564		)	–		(1,564		)
Non-cash impairment of real estate	4,799			–			5,000			–		9,799
Amortization of loan fees and costs	5,307			–			2,020			–		7,327
Amortization of debt premiums/discounts	104			–			297			–		401
Amortization of acquired above and below market leases	–			–			(2,356		)	–		(2,356		)
Deferred rent	164			–			(19,380		)	–		(19,216		)
Stock compensation expense	10,412			–			–			–		10,412
Equity in income related to investments	–			26			–			–		26
Equity in income related to subsidiaries	(142,660		)	(134,347		)	(2,662		)	279,669		–
Gain on sales of investments	–			(1,109		)	(11,207		)	–		(12,316		)
Loss on sales of investments	–			195			1,412			–		1,607
Changes in operating assets and liabilities:
Restricted cash	(8		)	–			449			–		441
Tenant receivables	11			–			(2,648		)	–		(2,637		)
Deferred leasing costs	4,232			–			(27,829		)	–		(23,597		)
Other assets	2,603			–			(5,833		)	–		(3,230		)
Intercompany receivables and payables	(49		)	–			49			–		–
Accounts payable, accrued expenses, and tenant security deposits	3,592			–			37,786			–		41,378
Net cash (used in) provided by operating activities	(31,156		)	3			258,643			–		227,490
Investing Activities
Proceeds from sale of property	–			–			36,179			–		36,179
Distributions from unconsolidated real estate entity related to sale of land parcel	–			–			22,250			–		22,250
Additions to properties	(1,192		)	–			(404,874		)	–		(406,066		)
Purchase of properties	–			–			(42,171		)	–		(42,171		)
Change in restricted cash related to construction projects	–			–			(11,453		)	–		(11,453		)
Contributions to unconsolidated real estate entity	–			–			(5,042		)	–		(5,042		)
Investments in subsidiaries	(145,389		)	(112,504		)	(389		)	258,282		–
Additions to investments	–			(160		)	(21,837		)	–		(21,997		)
Proceeds from investments	–			1,944			17,961			–		19,905
Net cash used in investing activities	(146,581		)	(110,720		)	(409,376		)	258,282		(408,395		)

Condensed Consolidating Statement of Cash Flows (continued)

for the Nine Months Ended September 30, 2012
(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
Principal borrowings from secured notes payable	–			–		2,874			–			2,874
Repayments of borrowings from secured notes payable	–			–		(8,125		)	–			(8,125		)
Proceeds from issuance of unsecured senior notes payable	544,649			–		–			–			544,649
Repurchase of unsecured senior convertible notes	(84,801		)	–		–			–			(84,801		)
Principal borrowings from unsecured senior line of credit and unsecured senior bank term loan	623,147			–		–			–			623,147
Repayments of borrowings from unsecured senior line of credit	(580,147		)	–		–			–			(580,147		)
Repayment of unsecured senior bank term loan	(250,000		)	–		–			–			(250,000		)
Redemption of Series C Preferred Stock	(129,638		)	–		–			–			(129,638		)
Proceeds from issuance of Series E Preferred Stock	124,868			–		–			–			124,868
Proceeds from issuance of common stock	98,443			–		–			–			98,443
Transfer to/from parent company	–			110,717		147,565			(258,282		)	–
Change in restricted cash related to financings	–			–		(10,476		)	–			(10,476		)
Deferred financing costs paid	(15,065		)	–		(5,352		)	–			(20,417		)
Proceeds from exercise of stock options	155			–		–			–			155
Dividends paid on common stock	(92,743		)	–		–			–			(92,743		)
Dividends paid on preferred stock	(21,348		)	–		–			–			(21,348		)
Distributions to redeemable noncontrolling interests	–			–		(943		)	–			(943		)
Redemption of redeemable noncontrolling interests	4			–		(154		)				(150		)
Contributions by noncontrolling interests	–			–		1,626			–			1,626
Distributions to noncontrolling interests	–			–		(770		)	–			(770		)
Net cash provided by financing activities	217,524			110,717		126,245			(258,282		)	196,204
Effect of exchange rate changes on cash and cash equivalents	–			–		1,066			–			1,066
Net increase (decrease) in cash and cash equivalents	39,787			–		(23,422		)	–			16,365
Cash and cash equivalents at beginning of period	10,608			–		67,931			–			78,539
Cash and cash equivalents at end of period	$	50,395		$	–	$	44,509		$	–		$	94,904
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest, net of interest capitalized	$	23,693		$	–	$	7,259		$	–		$	30,952
Non-Cash Investing Activities
Note receivable from sale of real estate	$	–		$	–	$	(6,125	)	$	–		$	(6,125	)

Condensed Consolidating Statement of Cash Flows

for the Nine Months Ended September 30, 2011
(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	$	97,098		$	146,281		$	161,765		$	(305,213	)	$	99,931
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,427			–			114,633			–			117,060
Loss on early extinguishment of debt	6,485			–			–			–			6,485
Gain on sale of land parcel	–			–			(46		)	–			(46		)
Non-cash impairment of real estate	–			–			994			–			994
Amortization of loan fees and costs	5,134			–			1,615			–			6,749
Amortization of debt premiums/discounts	3,060			–			194			–			3,254
Amortization of acquired above and below market leases	–			–			(8,520		)	–			(8,520		)
Deferred rent	–			–			(17,239		)	–			(17,239		)
Stock compensation expense	8,449			–			–			–			8,449
Equity in loss related to investments	–			–			–			–			–
Equity in income related to subsidiaries	(155,514		)	(146,803		)	(2,896		)	305,213			–
Gain on sales of investments	–			(236		)	(3,319		)	–			(3,555		)
Loss on sales of investments	–			767			473			–			1,240
Changes in operating assets and liabilities:										–
Restricted cash	18			–			471			–			489
Tenant receivables	(2		)	–			(1,326		)	–			(1,328		)
Deferred leasing costs	1,387			–			(52,968		)	–			(51,581		)
Other assets	2,071			–			(10,806		)	–			(8,735		)
Intercompany receivables and payables	(1,418		)	–			1,418			–			–
Accounts payable, accrued expenses, and tenant security deposits	(13,361		)	–			39,686			–			26,325
Net cash (used in) provided by operating activities	(44,166		)	9			224,129			–			179,972
Investing Activities
Proceeds from sale of property	–			–			17,339			–			17,339
Distributions from unconsolidated real estate entity related to sale of land parcel	–			–			–			–			–
Additions to properties	(844		)	–			(292,844		)	–			(293,688		)
Purchase of properties	–			–			(307,839		)	–			(307,839		)
Change in restricted cash related to construction projects	–			–			(2,891		)	–			(2,891		)
Contributions to unconsolidated real estate entity	–			–			(3,256		)	–			(3,256		)
Investments in subsidiaries	(415,486		)	(396,720		)	(10,093		)	822,299			–
Additions to investments	–			(314		)	(19,349		)	–			(19,663		)
Proceeds from investments	–			2,059			12,437			–			14,496
Net cash used in investing activities	(416,330		)	(394,975		)	(606,496		)	822,299			(595,502		)

Condensed Consolidating Statement of Cash Flows (continued)

for the Nine Months Ended September 30, 2011
(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
Principal borrowings from secured notes payable	–			–			–			–			–
Repayments of borrowings from secured notes payable	–			–			(30,181		)	–			(30,181		)
Proceeds from issuance of unsecured senior notes payable	–			–			–			–			–
Repurchase of unsecured senior convertible notes	(221,439		)	–			–			–			(221,439		)
Principal borrowings from unsecured senior line of credit	1,990,317			–			–			–			1,990,317
Repayments of borrowings from unsecured senior line of credit	(1,674,317		)	–			–			–			(1,674,317		)
Repayment of unsecured senior bank term loan	–			–			–			–			–
Proceeds from issuance of Series E Preferred Stock	–			–			–			–			–
Proceeds from issuance of common stock	451,539			–			–			–			451,539
Change in restricted cash related to financings	–			–			2,591			–			2,591
Transfers due to/from parent company	–			394,474			427,825			(822,299		)	–
Deferred financing costs paid	(20,124		)	–			(144		)	–			(20,268		)
Proceeds from exercise of stock options	1,165			–			–			–			1,165
Dividends paid on common stock	(77,787		)	–			–			–			(77,787		)
Dividends paid on preferred stock	(21,268		)	–			–			–			(21,268		)
Distributions to redeemable noncontrolling interests	–			–			(939		)	–			(939		)
Contributions by noncontrolling interests	–			–			–			–			–
Distributions to noncontrolling interests	–			–			(2,084		)	–			(2,084		)
Net cash provided by financing activities	428,086			394,474			397,068			(822,299		)	397,329
Effect of exchange rate changes on cash and cash equivalents	–			–			25			–			25
Net (decrease) increase in cash and cash equivalents	(32,410		)	(492		)	14,726			–			(18,176		)
Cash and cash equivalents at beginning of period	48,623			602			42,007			–			91,232
Cash and cash equivalents at end of period	$	16,213		$	110		$	56,733		$	–		$	73,056
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest, net of interest capitalized	$	24,296		$	–		$	13,717		$	–		$	38,013