EX-99.2 3 0003.txt PRESS RELEASE DATED JANUARY 31, 2001 EXHIBIT 99.2 [KILROY REALTY CORPORATION LOGO] Contact: FOR RELEASE: Richard E. Moran Jr. January 31, 2001 Executive Vice President and Chief Financial Officer (310) 563-5533 or Tyler H. Rose Senior Vice President and Treasurer (310) 563-5531 KILROY REALTY CORPORATION REPORTS 9.2% INCREASE IN FOURTH QUARTER FFO PER SHARE LOS ANGELES, January 31, 2001 - Kilroy Realty Corporation (NYSE: KRC) today reported financial results for its fourth quarter ended December 31, 2000, with funds from operations (FFO) of $21.6 million, or $0.71 per share, up 9.2% on a per-share basis from $20.9 million, or $0.65 per share, in the fourth quarter of 1999. Net income in the fourth quarter rose to $8.8 million, or $0.33 per share, compared to $8.3 million, or $0.30 per share, in the year-earlier quarter. Revenues totaled $50.8 million, up from $42.6 million a year ago. For the year, the company reported FFO of $83.5 million, or $2.73 per share, up 9.2% on a per-share basis from $80.6 million, or $2.50 per share in 1999. Net income in the twelve-month period increased to $46.8 million, or $1.75 per share, up from $39.9 million, or $1.44 per share, in the year-earlier period. Revenues totaled $187.1 million, up from $159.7 million in 1999. All per-share amounts are presented on a diluted basis. "California delivered one of the strongest economic performances in the state's modern history last year, and we took full advantage of the commercial real estate opportunities this created," said John B. Kilroy, Jr., Kilroy Realty's president and chief executive officer. "We significantly enhanced the overall quality of our portfolio with new development, while selling older, mature properties into a strong market. And we achieved this while maintaining an average occupancy rate of 97%." KRC completed and stabilized $203 million of new development in 2000, adding an aggregate 1.0 million square feet of space to its portfolio. At year-end, the portfolio was 97% 2 occupied. The company also disposed of $114 million of non-strategic real estate assets totaling 957,000 square feet last year, using the proceeds to help fund its development program. Through year-end, the company had committed to build or initiated construction on an additional 964,000 square feet of space, representing a total estimated investment of $232 million. This committed pipeline includes individual properties scheduled for stabilization at various dates through 2003. The properties are located in select coastal submarkets of Southern California, including San Diego County, El Segundo, West Los Angeles, and the city of Calabasas along the northwestern Los Angeles Interstate 101 Corridor. The company also reported that eToys, a tenant at the company's Westside Media Center in West Los Angeles, has defaulted on its space lease and related obligations to Kilroy Realty. Under the terms of the lease and related obligations, the company has fully drawn on two letters of credit totaling $15 million that support the lease and other obligations. Kilroy Realty will conduct a conference call to discuss its 2000 fourth quarter results on Thurdsay, February 1, 2001 at 11:00 am PST. A live webcast of the call will be available through the Investors Relations section of the company's website at www.kilroyrealty.com under Conference Calls. Replay -------------------- information is also available on the website. Additionally, a copy of the company's Fourth Quarter 2000 Supplemental Financial Report will be available in the Investor Relations section of the company's website under Financial Reports. Some of the information presented in this release is forward-looking in nature within the meaning of the federal securities law. Although the information is based on the company's current best judgment, actual results, including the timing and total investment of the company's development projects, could vary from expectations stated here. Numerous factors will affect KRC's actual results, some of which are beyond the company's control. These include the timing and strength of regional economic growth, the strength of commercial and industrial real estate markets, competitive market conditions, future interest rate levels, capital market conditions and risks detailed from time to time in the company's SEC reports, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K. Kilroy Realty Corporation is a southern California-based real estate investment trust active in the office and industrial property sectors. For more than 50 years, the company has owned, developed, acquired and managed real estate assets in the coastal regions of California and Washington. Principal submarkets for KRC's current development projects include Calabasas, 3 West Los Angeles, El Segundo and coastal San Diego, where the company's total development pipeline exceeds $480 million. At December 31, 2000, the company owned 6.6 million square feet of commercial office space and 5.8 million square feet of industrial space. More information on Kilroy Realty can be found at www.kilroyrealty.com. -------------------- ###### KILROY REALTY CORPORATION SUMMARY QUARTERLY RESULTS ------------------------- (unaudited, in thousands, except per share data)
Three Months Three Months Year Year Ended Ended Ended Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------ ------------ ------------ ------------ Revenues $ 50,769 $ 42,647 $187,113 $159,700 Net income available to common stockholders (1) $ 8,786 $ 8,278 $ 46,846 $ 39,895 Weighted average common shares outstanding - basic 26,456 27,884 26,599 27,701 Weighted average common shares outstanding - diluted 26,747 27,884 26,755 27,727 Net income per share of common stock - basic $ 0.33 $ 0.30 $ 1.76 $ 1.44 Net income per share of common stock - diluted $ 0.33 $ 0.30 $ 1.75 $ 1.44 Funds From Operations $ 21,572 $ 20,945 $ 83,471 $ 80,631 Weighted average common shares/units outstanding - basic (2) 30,205 32,284 30,394 32,201 Weighted average common shares/units outstanding - diluted (2) 30,495 32,284 30,550 32,227 Funds From Operations per common share/unit - basic (2) $ 0.71 $ 0.65 $ 2.75 $ 2.50 Funds From Operations per common share/unit - diluted (2) $ 0.71 $ 0.65 $ 2.73 $ 2.50 Common shares outstanding at end of period 26,475 27,808 Common partnership units outstanding at end of period 3,749 4,229 -------- -------- Total common shares and units outstanding at end of period 30,224 32,037 December 31, December 31, 2000 1999 ------------ ------------ Occupancy rates: California 96.7% 96.4% Washington 100.0% 99.6% Arizona 100.0% 100.0% Nevada 100.0% 100.0% ---------- ----------- Weighted average total 97.0% 96.7% Total square feet of stabilized properties owned at end of period: Office 6,624 6,148 Industrial 5,808 6,477 ---------- ----------- Total 12,432 12,625
(1) Net income after minority interests. (2) Calculated based on weighted average shares outstanding assuming conversion of all common limited partnership units outstanding. KILROY REALTY CORPORATION CONSOLIDATED BALANCE SHEETS ----------------------------------------------------- (unaudited, in thousands)
December 31, December 31, 2000 1999 ---------------- --------------- ASSETS ------ INVESTMENT IN REAL ESTATE: Land and improvements $ 266,444 $ 274,463 Buildings and improvements 1,054,995 946,130 Undeveloped land and construction in progress, net 162,633 189,645 Investment in unconsolidated real estate 12,405 ------------ ----------- Total investment in real estate 1,496,477 1,410,238 Accumulated depreciation and amortization (205,332) (174,427) ------------ ----------- Investment in real estate, net 1,291,145 1,235,811 Cash and cash equivalents 17,600 26,116 Restricted cash 35,014 6,636 Tenant receivables, net 32,521 22,078 Note receivable from related party 33,274 Deferred financing and leasing costs, net 39,674 27,840 Prepaid expenses and other assets 7,941 2,020 ------------ ----------- TOTAL ASSETS $ 1,457,169 $ 1,320,501 ============ =========== LIABILITIES & STOCKHOLDERS' EQUITY ---------------------------------- LIABILITIES: Secured debt $ 432,688 $ 325,516 Unsecured line of credit 191,000 228,000 Unsecured term facility 100,000 Accounts payable and accrued expenses 33,911 26,260 Accrued distributions 13,601 13,456 Rents received in advance and tenant security deposits 17,810 20,287 ------------ ----------- Total liabilities 789,010 613,519 ------------ ----------- MINORITY INTERESTS: 8.075% Series A Cumulative Redeemable Preferred unitholders 73,716 73,716 9.375% Series C Cumulative Redeemable Preferred unitholders 34,464 34,464 9.250% Series D Cumulative Redeemable Preferred unitholders 44,321 44,022 Common unitholders of the Operating Partnership 62,485 71,920 Minority interest in Development LLCs 11,748 9,931 ------------ ----------- Total minority interests 226,734 234,053 ------------ ----------- STOCKHOLDERS' EQUITY: Common stock 265 278 Additional paid-in capital 460,390 491,204 Distributions in excess of earnings (19,230) (18,553) ------------ ----------- Total stockholders' equity 441,425 472,929 ------------ ----------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,457,169 $ 1,320,501 ============ ===========
KILROY REALTY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS --------------------------------------------------------------- (unaudited, in thousands, except per share data)
Three Months Three Months Year Year Ended Ended Ended Ended December 31, 2000 December 31, 1999 December 31, 2000 December 31, 1999 ----------------- ----------------- ----------------- ----------------- REVENUES: Rental income $ 43,609 $ 38,241 $ 161,236 $ 140,182 Tenant reimbursements 5,405 3,786 19,441 16,316 Interest income 1,594 315 4,602 1,175 Other income 161 305 1,834 2,027 ----------------- ----------------- ----------------- ----------------- Total revenues 50,769 42,647 187,113 159,700 ----------------- ----------------- ----------------- ----------------- EXPENSES: Property expenses 5,598 5,152 23,347 20,669 Real estate taxes 4,632 3,400 14,591 12,369 General and administrative expenses 3,037 2,310 11,114 9,091 Ground leases 432 395 1,643 1,397 Interest expense 11,309 7,889 39,109 26,309 Depreciation and amortization 12,216 11,217 41,125 33,794 ----------------- ----------------- ----------------- ----------------- Total expenses 37,224 30,363 130,929 103,629 ----------------- ----------------- ----------------- ----------------- Income from operations before net (losses) gains on dispositions of operating properties, equity in (loss) income of unconsolidated subsidiary and minority interests 13,545 12,284 56,184 56,071 Net (losses) gains on dispositions of operating properties (29) 11,256 46 Equity in (loss) income of unconsolidated subsidiary (1) 39 10 17 ----------------- ----------------- ----------------- ----------------- Income before minority interests 13,544 12,294 67,450 56,134 ----------------- ----------------- ----------------- ----------------- Minority interests: Distributions on Cumulative Redeemable Preferred units (3,375) (2,557) (13,500) (9,560) Minority interest in earnings of Operating Partnership (1,241) (1,294) (6,683) (6,480) Minority interest in earnings of Development LLCs (142) (165) (421) (199) ----------------- ----------------- ----------------- ----------------- Total minority interests (4,758 (4,016) (20,604) (16,239) ----------------- ----------------- ----------------- ----------------- Net income $ 8,786 $ 8,278 $ 46,846 $ 39,895 ================= ================= ================= ================= Weighted average shares outstanding - basic 26,456 27,884 26,599 27,701 Weighted average shares outstanding - diluted 26,747 27,884 26,755 27,727 Income per common share - basic $ 0.33 $ 0.30 $ 1.76 $ 1.44 ================= ================= ================= ================= Income per common share - diluted $ 0.33 $ 0.30 $ 1.75 $ 1.44 ================= ================= ================= =================
KILROY REALTY CORPORATION FUNDS FROM OPERATIONS --------------------- (unaudited, in thousands, except per share data)
Three Months Three Months Year Year Ended Ended Ended Ended December 31, 2000 December 31, 1999 December 31, 2000 December 31, 1999 ----------------- ----------------- ----------------- ----------------- Net income $ 8,786 $ 8,278 $ 46,846 $ 39,895 Adjustments: Minority interest in earnings of Operating Partnership 1,241 1,294 6,683 6,480 Depreciation and amortization 11,037 11,217 39,946 33,794 Net losses (gains) on dispositions of operating properties 29 (11,256) (46) Non-cash amortization of restricted stock grants 508 127 1,252 508 ----------------- ----------------- ----------------- ----------------- Funds From Operations $ 21,572 $ 20,945 $ 83,471 $ 80,631 ================= ================= ================= ================= Weighted average common shares/units outstanding - basic 30,205 32,284 30,394 32,201 Weighted average common shares/units outstanding - diluted 30,495 32,284 30,550 32,227 Funds From Operations per common share/unit - basic $ 0.71 $ 0.65 $ 2.75 $ 2.50 ================= ================= ================= ================= Funds From Operations per common share/unit - diluted $ 0.71 $ 0.65 $ 2.73 $ 2.50 ================= ================= ================= =================
KILROY REALTY CORPORATION FUNDS AVAILABLE FOR DISTRIBUTION -------------------------------- (unaudited, in thousands, except per share data)
Three Months Three Months Year Year Ended Ended Ended Ended December 31, 2000 December 31, 1999 December 31, 2000 December 31, 1999 ----------------- ----------------- ----------------- ----------------- Funds From Operations $ 21,572 $ 20,945 $ 83,471 $ 80,631 Adjustments: Amortization of deferred financing costs 369 645 1,488 1,465 Tenant improvements, leasing commissions and recurring capital expenditures (3,237) (2,322) (8,430) (5,596) Net effect of straight-line rents (2,000) (2,300) (7,668) (6,866) ----------------- ----------------- ----------------- ----------------- Funds Available for Distribution $ 16,704 $ 16,968 $ 68,861 $ 69,634 ================= ================= ================= ================= Funds Available for Distribution per common share/unit - basic $ 0.55 $ 0.53 $ 2.27 $ 2.16 ================= ================= ================= ================= Funds Available for Distribution per common share/unit - diluted $ 0.55 $ 0.53 $ 2.25 $ 2.16 ================= ================= ================= =================