-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OUySBY7tR7WYloUlhNUr52Eavc5nsvdQRBxTp1VTOdebztU+yXOaByG/8oMKkBvl h2q2BbPhnxASHbt2K06RAQ== 0000898430-01-000385.txt : 20010205 0000898430-01-000385.hdr.sgml : 20010205 ACCESSION NUMBER: 0000898430-01-000385 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010131 ITEM INFORMATION: FILED AS OF DATE: 20010201 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KILROY REALTY CORP CENTRAL INDEX KEY: 0001025996 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 954598246 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-12675 FILM NUMBER: 1521005 BUSINESS ADDRESS: STREET 1: 2250 E IMPERIAL HWY STREET 2: C/O KILROY INDUSTRIES CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3105635500 MAIL ADDRESS: STREET 1: C/O KILROY INDUSTRIES STREET 2: 2250 E IMPERIAL HIGHWAY #1200 CITY: EL SEGUNDO STATE: CA ZIP: 90245 8-K 1 0001.txt FORM 8-K - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 31, 2001 KILROY REALTY CORPORATION (Exact name of registrant as specified in its charter) Maryland Commission File Number: 95-4598246 (State or other jurisdiction 1-12675 (I.R.S. Employer of incorporation or organization) Identification No.) 2250 East Imperial Highway, Suite 1200, El Segundo, California 90245 (Address of principal executive offices) Registrant's telephone number, including area code: (310) 563-5500 - ------------------------------------------------------------------------------- ITEM 9. REGULATION FD DISCLOSURE On January 31, 2001, the Company issued a press release announcing its earnings for the quarter ended December 31, 2000 and made publicly available certain supplemental information. The supplemental information is attached to this current report as exhibit 99.1, and the press release is attached to this current report Exhibit 99.2, and each are incorporated by reference to this report. Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. KILROY REALTY CORPORATION Date: January 31, 2001 By: /s/ ANN MARIE WHITNEY --------------------- Ann Marie Whitney Senior Vice-President and Controller EXHIBIT INDEX Exhibit ------- Number Description ------ ----------- 99.1* Fourth Quarter 2000 Supplemental Financial Report for the Quarter Ended December, 2000 99.2* Press Release dated January 31, 2001. * Filed herewith. EX-99.1 2 0002.txt FOURTH QUARTER SUPPLEMENTAL 2000 FINANCIAL REPORT EXHIBIT 99.1 KILROY REALTY ------------- CORPORATION Fourth Quarter 2000 Supplemental Financial Report
Page -------- Financial Highlights 1 Consolidated Balance Sheets 2 Consolidated Statements of Operations 3 Funds from Operations and Funds Available for Distribution 4 Net Operating Income Breakdown 5 Same Store Analysis 6 Stabilized Portfolio and Occupancy Overview 7 Leasing Activity 8 Lease Expiration Schedule 9 Dispositions 10 Stabilized Development 11 In-Process and Committed Development Projects 12 Future Development Pipeline 13 Capital Structure 14 Share Repurchase Program Summary 15 Debt Analysis 16
Some of the enclosed information presented is forward-looking in nature, including information concerning development timing and investment amounts. Although the information is based on Kilroy Realty Corporation's current expectations, actual results could vary from expectations stated here. Numerous factors will affect Kilroy Realty Corporation's actual results, some of which are beyond its 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 and capital market conditions. You are cautioned not to place undue reliance on this information, which speaks only as of the date of this report. Kilroy Realty Corporation assumes no obligation to update publicly any forward-looking information, whether as a result of new information, future events or otherwise. For a discussion of important risks related to Kilroy Realty Corporation's business, and an investment in its securities, including risks that could cause actual results and events to differ materially from results and events referred to in the forward-looking information, see the discussion under the caption "business risks" in Kilroy Realty Corporation's annual report on Form 10-K for the year ended December 31, 1999. In light of these risks, uncertainties and assumptions, the forward-looking events contained in this supplement information might not occur. Kilroy Realty Corporation Fourth Quarter 2000 Supplemental Financial Report - -------------------------------------------------------------------------------- Financial Highlights (unaudited, $ in thousands, except per share amounts)
- ---------------------------------------------------------------------------------------------------------------------------------- Three Months Ended December 31, Year Ended December 31, --------------------------------- ---------------------------------- 2000 1999 % Change 2000 1999 % Change -------- -------- ------------ --------- --------- ----------- INCOME ITEMS: Revenues $50,769 $42,647 19.0% $187,113 $159,700 17.2% Net Operating Income 38,513 33,385 15.4% 142,930 124,090 15.2% Net Income 8,786 8,278 6.1% 46,846 39,895 17.4% Funds From Operations 21,572 20,945 3.0% 83,471 80,631 3.5% Funds Available for Distribution 16,704 16,968 (1.6%) 68,861 69,634 (1.1%) Funds From Operations per share - diluted $ 0.71 $ 0.65 9.2% $ 2.73 $ 2.50 9.2% Funds Available for Distribution per share - diluted 0.55 0.53 3.8% 2.25 2.16 4.2% Dividend per share $ 0.45 $ 0.42 7.1% $1.80 $1.68 7.1% RATIOS: Interest Coverage Ratio(1) 3.3x 4.0x 3.5x 4.4x Fixed Charge Coverage Ratio(2) 2.5x 3.0x 2.6x 3.2x FFO Payout Ratio(3) 63.0% 64.2% (1.2%) 65.0% 67.2% (2.2%) FAD Payout Ratio(4) 81.4% 79.3% 2.1% 78.8% 77.8% 1.0% - ----------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------ Dec. 31, 2000 Dec. 31, 1999 % Change ------------- ------------- ------------ ASSETS: Investments in Real Estate before Depreciation $1,496,477 $1,410,238 6.1% Total Assets 1,457,169 1,320,501 10.3% CAPITALIZATION: Total Debt $723,688 $553,516 30.7% Total Preferred Stock (5) 155,000 155,000 -- Total Market Equity Value (5) 848,162 716,831 18.3% Total Market Capitalization (5) 1,726,850 1,425,347 21.2% Total Debt / Total Market Capitalization 41.9% 38.8% 3.1% - ------------------------------------------------------------------------------------------------------
(1) Calculated as earnings before interest expense and depreciation and amortization divided by interest expense plus loan cost amortization. (2) Calculated as earnings before interest expense and depreciation and amortization divided by interest expense plus loan cost amortization and current year paid and accrued preferred dividends. (3) Calculated as current year dividends paid and accrued to common shareholders divided by funds from operations. (4) Calculated as current year dividends paid and accrued to common shareholders divided by funds available for distribution. (5) See "Capital Structure" on page 14. 1 Kilroy Realty Corporation Fourth Quarter 2000 Supplemental Financial Report - -------------------------------------------------------------------------------- Consolidated Balance Sheets (unaudited, $ in thousands)
- --------------------------------------------------------------------------------------------- December 31, December 31, 2000 1999 ------------ ------------ ASSETS: 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 AND 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 ========== ========== - --------------------------------------------------------------------------------------------
2 Kilroy Realty Corporation Fourth Quarter 2000 Supplemental Financial Report - -------------------------------------------------------------------------------- Consolidated Statements of Operations (unaudited, $ in thousands, except per share amounts)
- -------------------------------------------------------------------------------------------------------------------------------- Three Months Ended Year Ended December 31, December 31, ----------------------------- -------------------------------- 2000 1999 % Change 2000 1999 % Change ------- ------- ---------- -------- -------- ---------- REVENUES: Rental income $43,609 $38,241 14.0% $161,236 $140,182 15.0% Tenant reimbursements 5,405 3,786 42.8% 19,441 16,316 19.2% Interest income 1,594 315 406.0% 4,602 1,175 291.7% Other income 161 305 (47.2%) 1,834 2,027 (9.5%) ------- ------- -------- -------- Total revenues 50,769 42,647 19.0% 187,113 159,700 17.2% ------- ------- -------- -------- EXPENSES: Property expenses 5,598 5,152 8.7% 23,347 20,669 13.0% Real estate taxes 4,632 3,400 36.2% 14,591 12,369 18.0% General and administrative expenses 3,037 2,310 31.5% 11,114 9,091 22.3% Ground leases 432 395 9.4% 1,643 1,397 17.6% Interest expense 11,309 7,889 43.4% 39,109 26,309 48.7% Depreciation and amortization 12,216 11,217 8.9% 41,125 33,794 21.7% ------- ------- -------- -------- Total expenses 37,224 30,363 22.6% 130,929 103,629 26.3% ------- ------- -------- -------- 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 10.3% 56,184 56,071 0.2% Net (losses) gains on dispositions of operating properties (29) (100.0%) 11,256 46 24369.6% Equity in (loss) income of unconsolidated subsidiary (1) 39 (102.6%) 10 17 (41.2%) ------- ------- -------- -------- INCOME BEFORE MINORITY INTERESTS 13,544 12,294 10.2% 67,450 56,134 20.2% ------- ------- -------- -------- MINORITY INTERESTS: Distributions on Cumulative Redeemable Preferred units (3,375) (2,557) 32.0% (13,500) (9,560) 41.2% Minority interest in earnings of Operating Partnership (1,241) (1,294) (4.1%) (6,683) (6,480) 3.1% Minority interest in earnings of Development LLCs (142) (165) (13.9%) (421) (199) 111.6% ------- ------- -------- -------- Total minority interests (4,758) (4,016) 18.5% (20,604) (16,239) 26.9% ------- ------- -------- -------- NET INCOME $ 8,786 $ 8,278 6.1% $ 46,846 $ 39,895 17.4% ======= ======= ======== ======== 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 NET INCOME PER COMMON SHARE: Income per common share - basic $ 0.33 $ 0.30 10.0% $ 1.76 $ 1.44 22.2% ======= ======= ======== ======== Income per common share - diluted $ 0.33 $ 0.30 10.0% $ 1.75 $ 1.44 21.5% ======= ======= ======== ======== - ------------------------------------------------------------------------------------------------------------------------------------
3 Kilroy Realty Corporation Fourth Quarter 2000 Supplemental Financial Report - -------------------------------------------------------------------------------- Funds From Operations and Funds Available for Distribution (unaudited, $ in thousands, except per share amounts)
- ------------------------------------------------------------------------------------------------------------------------------------ Three Months Ended Year Ended December 31, December 31, ------------------------------ ------------------------------- 2000 1999 % Change 2000 1999 % Change -------- -------- --------- -------- ------- --------- FUNDS FROM OPERATIONS: Net income $ 8,786 $ 8,278 6.1% $ 46,846 $39,895 17.4% Adjustments: Minority interest in earnings of Operating Partnership 1,241 1,294 (4.1%) 6,683 6,480 3.1% Depreciation and amortization 11,037 11,217 (1.6%) 39,946 33,794 18.2% Net losses (gains) on dispositions of operating properties 29 (100.0%) (11,256) (46) 24369.6% Non-cash amortization of restricted stock grants/(1)/ 508 127 300.0% 1,252 508 146.5% ------- ------- -------- ------- Funds From Operations $21,572 $20,945 3.0% $ 83,471 $80,631 3.5% ======= ======= ======== ======= 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 9.2% $ 2.75 $ 2.50 10.0% ======= ======= ======== ======= Funds From Operations per common share/unit - diluted $ 0.71 $ 0.65 9.2% $ 2.73 $ 2.50 9.2% ======= ======= ======== ======= FUNDS AVAILABLE FOR DISTRIBUTION: Funds From Operations $21,572 $20,945 3.0% $ 83,471 $80,631 3.5% Adjustments: Amortization of deferred financing costs 369 645 (42.8%) 1,488 1,465 1.6% Tenant improvements, leasing commissions and recurring capital expenditures (3,237) (2,322) 39.4% (8,430) (5,596) 50.6% Net effect of straight-line rents (2,000) (2,300) (13.0%) (7,668) (6,866) 11.7% ------- ------- -------- ------- Funds Available for Distribution $16,704 $16,968 (1.6%) $ 68,861 $69,634 (1.1%) ======= ======= ======== ======= Funds Available for Distribution per common share/unit - basic $ 0.55 $ 0.53 3.8% $ 2.27 $ 2.16 5.1% ======= ======= ======== ======= Funds Available for Distribution per common share/unit - diluted $ 0.55 $ 0.53 3.8% $ 2.25 $ 2.16 4.2% ======= ======= ======== ======= - ------------------------------------------------------------------------------------------------------------------------------------
(1) On June 23, 2000, the Company granted 175,000 shares of restricted stock to certain key employees, the grantees. The shares of restricted stock contain stock-vesting provisions such that the shares vest 100% on March 1, 2003. Compensation expense for the restricted shares is calculated based upon the Company's closing per share price of $24.94 on the June 23, 2000 grant date and is amortized on a straight-line basis over the vesting period and included in general and administrative expenses. In the event all of the grantees remain with the Company until the March 1, 2003 stock-vesting date, non-cash compensation expense related to this grant will be recorded by the Company at a rate of approximately $1.6 million per year. The restricted shares are included in the Company's outstanding shares at December 31, 2000. 4 Kilroy Realty Corporation Fourth Quarter 2000 Supplemental Financial Report - -------------------------------------------------------------------------------- Net Operating Income Breakdown ------------------------------------------------------------------------------- As of December 31, 2000 (1) -------------------- % OF TOTAL NOI BY PRODUCT TYPE: Office: Los Angeles 38.8% Orange County 3.5% San Diego 26.8% Other 5.7% ------ Subtotal 74.8% ------ Industrial: Los Angeles 3.4% Orange County 18.0% San Diego 0.6% Other 3.2% ------ Subtotal 25.2% ------ % OF TOTAL NOI BY REGION: Los Angeles 42.2% Orange County 21.5% San Diego 27.4% Other 8.9% ------ Total 100.0% ====== ------------------------------------------------------------------------------- (1) Based on Net Operating Income for the quarter ended December 31, 2000. 5 Kilroy Realty Corporation Fourth Quarter 2000 Supplemental Financial Report - -------------------------------------------------------------------------------- Same Store Analysis/(1)/ ($ in thousands)
- ------------------------------------------------------------------------------------------------------------------------------------ Three Months Ended Year Ended December 31, December 31, --------------------------------------------------- --------------------------------------------------- 2000 1999 $ Change % Change 2000 1999 $ Change % Change --------- -------------- -------------- --------- -------------- ------------- ----------- ---------- TOTAL SAME STORE PORTFOLIO Operating Revenues: Rental income $ 31,869 $ 30,287 $ 1,582 5.2% $ 128,503 $ 121,785 $ 6,718 5.5% Tenant reimbursements 4,317 3,020 1,297 42.9% 16,577 14,458 2,119 14.7% Other income 44 222 (178) (80.2%) 1,573 1,329 244 18.4% -- --- ---- ----- ----- --- Total operating revenues 36,230 33,529 2,701 8.1% 146,653 137,572 9,081 6.6% -------- --------- ------- --------- --------- ------- Operating Expenses: Property expenses 4,355 4,544 (189) (4.2%) 19,638 19,094 544 2.8% Real estate taxes(2) 3,595 2,499 1,096 43.9% 11,569 10,627 942 8.9% Ground leases 345 364 (19) (5.2%) 1,390 1,336 54 5.9% --- --- --- ----- ----- -- Total operating expenses 8,295 7,407 888 12.0% 32,597 31,057 1,540 5.0% -------- --------- ------- --------- --------- ------- Net Operating Income $ 27,935 $ 26,122 $ 1,813 6.9% $ 114,056 $ 106,515 $ 7,541 7.1% ======== ========= ======= ========= ========= ======= - ------------------------------------------------------------------------------------------------------------------------------------
(1) Same store defined as all stabilized properties owned at January 1, 1999 and still owned at December 31, 2000. (2) The results for the three and twelve months ended December 31, 2000 include a one-time $1.1 million adjustment for potential supplemental real estate taxes. The Company also recorded Tenant Reimbursements of $0.8 million which represents an estimate of the amount of supplemental real estate taxes collectible from tenants. Net of these adjustments the increase in total operating revenues, operating expenses and net operating income for the three and twelve months ended would have been as follows:
Three Months Ended Twelve Months Ended ------------------ ------------------- Total Operating Revenues 5.5% 6.0% Total Operating Expenses (2.1%) 1.6% Net Operating Income 7.8% 7.3%
- ---------------------------------------------------------------------------------------------------------- Average Occupancy - Same Store Portfolio - ---------------------------------------------------------------------------------------------------------- Three Months Ended December 31, Year Ended December 31, ------------------------------------------ --------------------------------------- 2000 1999 % Change 2000 1999 % Change -------------- -------------- ------------ ------------- ------------- ----------- Office 94.7% 94.9% (0.2%) 95.4% 93.8% 1.6% Industrial 96.6% 96.6% 0.0% 97.9% 97.2% 0.7% ---- ---- ---- ---- ---- --- Total 95.6% 95.8% (0.2%) 96.7% 95.5% 1.2% ==== ==== ==== ==== ==== === - ----------------------------------------------------------------------------------------------------------
6 Kilroy Realty Corporation Fourth Quarter 2000 Supplemental Financial Report - ------------------------------------------------------------------------------- Stabilized Portfolio and Occupancy Overview
- ---------------------------------------------------------------------------------------------------------------------------------- # of Square Feet Occupancy at: --------------------------------------- ----------------------------------- Buildings Total Leased Available 12/31/00 9/30/00 12/31/99 --------- ---------- ---------- --------- -------- ------- -------- OCCUPANCY BY PRODUCT TYPE: Office: Los Angeles 29 2,759,362 2,685,349 74,013 97.3% 95.9% 97.4% Orange County 13 625,893 460,590 165,303 73.6% 80.7% 85.9% San Diego 35 2,529,613 2,529,613 - 100.0% 97.8% 99.1% Other 6 709,575 696,550 13,025 98.2% 97.0% 98.7% -- --------- --------- ------- Subtotal 83 6,624,443 6,372,102 252,341 96.2% 95.3% 96.4% -- --------- --------- ------- Industrial: Los Angeles 7 554,225 553,370 855 99.8% 99.4% 99.2% Orange County 62 4,393,537 4,268,033 125,504 97.1% 98.3% 96.4% San Diego 1 39,669 39,669 - 100.0% 100.0% 100.0% Other 8 820,124 820,124 - 100.0% 100.0% 97.2% -- --------- --------- ------- Subtotal 78 5,807,555 5,681,196 126,359 97.8% 98.7% 96.9% -- --------- --------- ------- OCCUPANCY BY REGION: Los Angeles 36 3,313,587 3,238,719 74,868 97.7% 96.6% 97.7% Orange County 75 5,019,430 4,728,623 290,807 94.2% 96.1% 94.7% San Diego 36 2,569,282 2,569,282 - 100.0% 97.8% 99.2% Other 14 1,529,699 1,516,674 13,025 99.1% 98.6% 97.8% -- --------- --------- ------- TOTAL PORTFOLIO 161 12,431,998 12,053,298 378,700 97.0% 96.9% 96.7% === ========== ========== ======= - ----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------- AVERAGE OCCUPANCY - STABILIZED PORTFOLIO ----------------------------------------------------------------- Office Industrial Total -------------- ------------ ------------ Quarter-to-Date 95.7% 98.3% 96.9% Year-to-Date 96.1% 97.8% 96.9% ----------------------------------------------------------------- 7 Kilroy Realty Corporation Fourth Quarter 2000 Supplemental Financial Report - -------------------------------------------------------------------------------- Leasing Activity
Quarter to Date - ------------------------------------------------------------------------------------------------------------------------------------ 2nd Generation ------------------------------------------------------- Weighted Maintenance Average # of Leases/(1)/ Square Feet/(1)/ TI/LC Capex Changes in Changes in Retention Lease ------------------ -------------------- New Renewal New Renewal Per Sq.Ft. Per Sq.Ft./(2)/ Rents/(3)/ Cash Rents/(4)/ Rates/(5)/ Term (Mo.) --- ------- --- ------- ---------- --------------- ---------- --------------- ---------- ---------- Office 11 13 133,296 50,734 $8.43 $0.06 19.8% 14.2% 39.1% 60 Industrial 10 8 326,576 224,134 $0.73 $0.00 31.7% 3.9% 50.9% 56 -- --- ------- ------- ----- ----- ---- ---- ----- ---- Total 21 21 459,872 274,868 $3.21 $0.03 24.3% 9.8% 47.6% 57 == === ======= ======= ===== ===== ==== ==== ===== ==== - ------------------------------------------------------------------------------------------------------------------------------------ Year to Date - ------------------------------------------------------------------------------------------------------------------------------------ 2nd Generation ------------------------------------------------------- Weighted Maintenance Average # of Leases/(1)/ Square Feet/(1)/ TI/LC Capex Changes in Changes in Retention Lease ------------------ -------------------- New Renewal New Renewal Per Sq.Ft. Per Sq.Ft./(2)/ Rents/(3)/ Cash Rents/(4)/ Rates/(5)/ Term (Mo.) --- ------- --- ------- ---------- --------------- ---------- --------------- ---------- ---------- Office 54 49 393,461 244,221 $7.34 $0.14 21.6% 15.9% 52.0% 47 Industrial 42 35 729,533 604,492 $1.37 $0.05 27.4% 13.1% 50.4% 60 -- --- --------- ------- ----- ----- ---- ---- ----- ---- Total 96 84 1,122,994 848,713 $3.64 $0.09 23.7% 14.9% 50.9% 55 == === ========= ======= ===== ===== ==== ==== ===== ==== - ------------------------------------------------------------------------------------------------------------------------------------
(1) Includes first and second generation space, net of month-to-month leases. Excludes leasing on new construction. First generation space is defined as the space first leased by the Company. (2) Calculated over entire stabilized portfolio. (3) Calculated as the change between GAAP rents for new/renewed leases and the expiring GAAP rents for the same space. (4) Calculated as the change between stated rents for new/renewed leases and the expiring stated rents for the same space. (5) Calculated as the percentage of space either renewed or expanded into by existing tenants at lease expiration. 8 Kilroy Realty Corporation Fourth Quarter 2000 Supplemental Financial Report - -------------------------------------------------------------------------------- Lease Expiration Schedule ($ in thousands)
-------------------------------------------------------------------------------------------------------------------------- # of Expiring Total % of Total Annual Annual Rent Year of Expiration Leases Square Feet Leased Sq. Ft. Base Rent per Sq. Ft. ------------------ ---------------- ----------------- ----------------- ----------------- ----------------- OFFICE: 2001 68 879,677 14.1% $14,734 $16.75 2002 57 407,110 6.5% 6,974 17.13 2003 51 271,549 4.4% 5,323 19.60 2004 50 772,479 12.4% 17,364 22.48 2005 50 915,230 14.7% 16,722 18.27 2006 24 530,948 8.5% 12,112 22.81 2007 15 630,304 10.1% 12,097 19.19 2008 6 313,092 5.0% 6,225 19.88 2009 10 772,982 12.4% 18,260 23.62 2010 and beyond 12 745,127 11.9% 26,255 35.24 --- --------- ------ -------- Subtotal 343 6,238,498 100.0% $136,066 $21.81 --- --------- ------ -------- INDUSTRIAL: 2001 74 799,932 14.2% $ 5,674 $7.09 2002 50 316,658 5.6% 2,929 9.25 2003 40 735,605 13.1% 5,158 7.01 2004 15 535,472 9.5% 3,825 7.14 2005 15 746,635 13.3% 5,586 7.48 2006 6 457,336 8.1% 3,249 7.10 2007 3 164,595 2.9% 1,397 8.49 2008 5 839,712 14.9% 6,268 7.46 2009 9 530,066 9.4% 3,996 7.54 2010 and beyond 5 503,978 9.0% 6,489 12.88 --- --------- ------ -------- Subtotal 222 5,629,989 100.0% $ 44,571 $7.92 --- --------- ------ -------- TOTAL PORTFOLIO: 2001 142 1,679,609 14.2% $ 20,408 $12.15 2002 107 723,768 6.1% 9,903 13.68 2003 91 1,007,154 8.5% 10,481 10.41 2004 65 1,307,951 11.0% 21,189 16.20 2005 65 1,661,865 14.0% 22,308 13.42 2006 30 988,284 8.3% 15,361 15.54 2007 18 794,899 6.7% 13,494 16.98 2008 11 1,152,804 9.7% 12,493 10.84 2009 19 1,303,048 11.0% 22,256 17.08 2010 and beyond 17 1,249,105 10.5% 32,744 26.21 --- ---------- ------ -------- Total 565 11,868,487 100.0% $180,637 $15.22 === ========== ====== ======== --------------------------------------------------------------------------------------------------------------------------
9 Kilroy Realty Corporation Fourth Quarter 2000 Supplemental Financial Report - -------------------------------------------------------------------------------- 2000 Dispositions ($ in thousands)
---------------------------------------------------------------------------------------------------------------------------------- Month of Square Sales Project Location Type Disposition Feet Price - -------------------------------------- ------------------------ ---------------- ---------------- --------------- -------------- 1st QUARTER: 26212 - 26242 Dimension Drive Lake Forest, CA Industrial January 45,300 $3,350 ------- ------- 2nd QUARTER: 12691 Monarch St/12700 Pala Dr. Garden Grove, CA Industrial April 110,200 $6,300 5759 Fleet Street Carlsbad, CA Industrial June 82,900 12,550 Pacific Park Plaza Aliso Viejo, CA Office June 134,700 18,000 ------- ------- 327,800 $36,850 ------- ------- 3rd QUARTER: 1961 Concourse, 1710 Fortune Dr. and Fortune Business Park San Jose, CA Industrial July 431,400 $62,400 1501 - 1561 Orangethorpe Ave. Fullerton, CA Office August 152,000 11,000 ------- ------- 583,400 $73,400 ------- ------- 4th QUARTER: NONE TOTAL YEAR-TO-DATE DISPOSITIONS 956,500 $113,600 ======= ======== ----------------------------------------------------------------------------------------------------------------------------------
10 Kilroy Realty Corporation Fourth Quarter 2000 Supplemental Financial Report - -------------------------------------------------------------------------------- Stabilized Development ($ in thousands)
- ------------------------------------------------------------------------------------------------------------------------------------ Completion Rentable Total Est. Project Location Type Start Date Date Square Feet Investment Occupancy - -------------------------------------------- ------------- ------ ---------- ---------- ----------- ---------- ----------- 1st QUARTER: Brobeck, Phleger & Harrison Del Mar, CA Office 1Q 1999 1Q 2000 72,332 $ 15,525 100% --------- -------- 2nd QUARTER: Peregrine Systems - Bld 2/(1)/ Del Mar, CA Office 2Q 1999 2Q 2000 129,680 $ 25,740 100% Peregrine Systems - Bld 5/(1)/ Del Mar, CA Office 3Q 1999 2Q 2000 112,067 21,568 100% --------- -------- 241,747 $ 47,308 100% --------- -------- 3rd QUARTER: Innovation Corporate Center - Lot 1 & Lot A San Diego, CA Office 4Q 1999 3Q 2000 103,000 $ 17,841 100% Sorrento Rim Parcel C San Diego, CA Office 1Q 2000 3Q 2000 62,415 8,086 100% Westside Media Center - Phase II West LA, CA Office 3Q 1999 3Q 2000 151,000 43,807 100% --------- -------- 316,415 $ 69,734 100% --------- -------- 4th QUARTER Calabasas Park Centre - Phase I Calabasas, CA Office 3Q 1999 2Q 2000 102,264 $ 18,666 97% Kilroy Airport Center, Long Beach - 7 Story Long Beach, CA Office 2Q 1999 2Q 2000 197,334 32,407 99%/(2)/ Sorrento Gateway Lot 5/(1)/ San Diego, CA Office 1Q 2000 4Q 2000 76,246 18,869 100% --------- -------- 375,844 $ 69,942 99% --------- -------- TOTAL YEAR-TO-DATE STABILIZED DEVELOPMENT 1,006,338 $202,509 99% ========= ======== - ------------------------------------------------------------------------------------------------------------------------------------
(1) Project was developed by a Development LLC in which the Company holds a 50% managing interest. The total estimated investment figure includes the capital required to purchase the remaining 50% interest in the project. (2) This project reached 99% occupancy at January 15, 2000 and was 89% occupied at December 31, 2000. Some of the enclosed information presented is forward-looking in nature, including information concerning development timing and investment amounts. Although the information is based on Kilroy Realty Corporation's current expectations, actual results could vary from expectations stated here. Numerous factors will affect Kilroy Realty Corporation's actual results, some of which are beyond its 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 and capital market conditions. You are cautioned not to place undue reliance on this information, which speaks only as of the date of this report. Kilroy Realty Corporation assumes no obligation to update publicly any forward-looking information, whether as a result of new information, future events or otherwise. For a discussion of important risks related to Kilroy Realty Corporation's business, and an investment in its securities, including risks that could cause actual results and events to differ materially from results and events referred to in the forward-looking information, see the discussion under the caption "business risks" in Kilroy Realty Corporation's annual report on Form 10-K for the year ended December 31, 1999. In light of these risks, uncertainties and assumptions the forward-looking events contained in this supplemental information might not occur. 11 Kilroy Realty Corporation Fourth Quarter 2000 Supplemental Financial Report - -------------------------------------------------------------------------------- In-Process and Committed Development Projects ($ in thousands)
- --------------------------------------------------------------------------------------------------------------------------------- Estimated Est Rentable Construction Period Stabilization Square --------------------------- Project Location Type Start Date Compl. Date Date/(2)/ Feet - ---------------------------------------------- ------------- ------ ------------ ------------- ------------- ---------- PROJECTS IN LEASE-UP: None PROJECTS UNDER CONSTRUCTION: Calabasas Park Centre - Phase II Calabasas, CA Office 2Q 2000 1Q 2001 1Q 2002 98,706 Calabasas Park Centre - Phase III Calabasas, CA Office 3Q 2000 1Q 2001 1Q 2002 11,744 Innovation Corporate Center - Lot 8 San Diego, CA Office 2Q 2000 2Q 2001 2Q 2002 48,833 Innovation Corporate Center - Lot 12 San Diego, CA Office 2Q 2000 2Q 2001 2Q 2002 70,617 Pacific Technology Center San Diego, CA Office 1Q 2000 2Q 2001 2Q 2001 67,995 Peregrine Systems Corporate Ctr - Bld. 3/(1)/ Del Mar, CA Office 2Q 2000 2Q 2001 2Q 2002 129,752 Sorrento Rim Business Park II San Diego, CA Office 2Q 2000 2Q 2001 2Q 2001 102,875 Westside Media Center - Phase III West LA, CA Office 4Q 2000 1Q 2002 1Q 2003 151,000 ------- Subtotal 681,522 ------- TOTAL PROJECTS IN LEASE UP AND UNDER CONSTRUCTION 681,522 ------- COMMITTED DEVELOPMENT: Brobeck, Phleger & Harrison Expansion Del Mar, CA Office 2Q 2001 2Q 2002 2Q 2002 89,168 Imperial & Sepulveda/(4)/ El Segundo, CA Office 1Q 2001 4Q 2001 4Q 2002 133,678 Sorrento Gateway - Lot 4/(1)/ San Diego, CA Office 2Q 2001 1Q 2002 1Q 2002 60,060 ------- Subtotal 282,906 ------- TOTAL IN-PROCESS AND COMMITTED DEVELOPMENT PROJECTS: 964,428 ======= - -------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- Total % Committed/(3)/ ------------------------------------ Estimated % % Project Investment Leased LOI Total - ------------------------------------------------- ------------ ---------- ----------- --------- PROJECTS IN LEASE-UP: None PROJECTS UNDER CONSTRUCTION: Calabasas Park Centre - Phase II $ 19,656 10% 57% 67% Calabasas Park Centre - Phase III 2,381 0% 0% 0% Innovation Corporate Center - Lot 8 8,358 0% 50% 50% Innovation Corporate Center - Lot 12 11,510 0% 0% 0% Pacific Technology Center 12,001 100% 0% 100% Peregrine Systems Corporate Ctr - Bld. 3/(1)/ 27,209 100% 0% 100% Sorrento Rim Business Park II 25,055 100% 0% 100% Westside Media Center - Phase III 53,457 0% 0% 0% -------- Subtotal $159,627 46% 12% 57% -------- TOTAL PROJECTS IN LEASE UP AND UNDER CONSTRUCTION $159,627 46% 12% 57% -------- COMMITTED DEVELOPMENT: Brobeck, Phleger & Harrison Expansion $ 22,880 100% 0% 100% Imperial & Sepulveda/(4)/ 34,397 0% 0% 0% Sorrento Gateway - Lot 4/(1)/ 15,485 100% 0% 100% -------- Subtotal $ 72,762 53% 0% 53% -------- TOTAL IN-PROCESS AND COMMITTED DEVELOPMENT PROJECTS: $232,389 48% 8% 56% ======== - ----------------------------------------------------------------------------------------------------------
(1) Project is being developed by a Development LLC in which the Company holds a 50% managing interest. The estimated investment figure includes the capital required to purchase the remaining 50% interest in the project. (2) Based on management's estimation of the earlier of stabilized occupancy (95%) or one year from the date of substantial completion. (3) Includes executed leases and signed letters of intent, calculated on a square footage basis. (4) The company owned a 25% tenancy-in-common interest in this project as of December 31, 2000 and acquired the remaining 75% tenancy-in-common interest on January 9, 2000. Some of the enclosed information presented is forward-looking in nature, including information concerning development timing and investment amounts. Although the information is based on Kilroy Realty Corporation's current expectations, actual results could vary from expectations stated here. Numerous factors will affect Kilroy Realty Corporation's actual results, some of which are beyond its 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 and capital market conditions. You are cautioned not to place undue reliance on this information, which speaks only as of the date of this report. Kilroy Realty Corporation assumes no obligation to update publicly any forward-looking information, whether as a result of new information, future events or otherwise. For a discussion of important risks related to Kilroy Realty Corporation's business, and an investment in its securities, including risks that could cause actual results and events to differ materially from results and events referred to in the forward-looking information, see the discussion under the caption "business risks" in Kilroy Realty Corporation's annual report on Form 10-K for the year ended December 31, 1999. In light of these risks, uncertainties and assumptions the forward-looking events contained in this supplemental information might not occur. 12 Kilroy Realty Corporation Fourth Quarter 2000 Supplemental Financial Report - -------------------------------------------------------------------------------- Future Development Pipeline ($ in thousands)
- ------------------------------------------------------------------------------------------------------------------------------ Total Rentable Estimated Project Location Type Square Feet Investment - ------------------------------------------------------ -------------------- --------------- ---------------- ---------------- SAN DIEGO COUNTY: Innovation Corporate Center - Lot 2 San Diego, CA Office 51,187 $ 9,298 Innovation Corporate Center - Lot 4 San Diego, CA Office 75,000 12,490 Innovation Corporate Center - Lot 9 San Diego, CA Office 65,867 11,142 Innovation Corporate Center - Lot 10 San Diego, CA Office 37,405 7,136 Pacific Corporate Center - Lots 3, 4 & 6 San Diego, CA Office 225,000 40,144 Pacific Corporate Center - Lot 8 San Diego, CA Office 116,157 23,734 Pacific Corporate Center - Lots 25 & 27 San Diego, CA Office 68,400 13,349 Peregrine Systems Corporate Ctr - Bld. 4/(1)/ Del Mar, CA Office 118,061 26,546 Santa Fe Summit - Phase I San Diego, CA Office 150,000 31,848 Santa Fe Summit - Phase II San Diego, CA Office 150,000 32,670 Sorrento Gateway - Lot 1 San Diego, CA Office 54,878 11,201 Sorrento Gateway - Lot 2/(1)/ San Diego, CA Office 70,000 13,024 Sorrento Gateway - Lot 3/(1)/ San Diego, CA Office 56,800 10,514 Sorrento Gateway - Lot 7/(1)/ San Diego, CA Office 57,000 10,671 --------- --------- Subtotal 1,295,755 $ 253,767 --------- --------- TOTAL FUTURE DEVELOPMENT PIPELINE 1,295,755 $ 253,767 ========= ========= - -------------------------------------------------------------------------------------------------------------------------------
(1) Project is being developed by a Development LLC in which the Company holds a 50% interest. The estimated investment figure includes the capital required to purchase the remaining 50% interest in the project. Some of the enclosed information presented is forward-looking in nature, including information concerning development timing and investment amounts. Although the information is based on Kilroy Realty Corporation's current expectations, actual results could vary from expectations stated here. Numerous factors will affect Kilroy Realty Corporation's actual results, some of which are beyond its 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 and capital market conditions. You are cautioned not to place undue reliance on this information, which speaks only as of the date of this report. Kilroy Realty Corporation assumes no obligation to update publicly any forward-looking information, whether as a result of new information, future events or otherwise. For a discussion of important risks related to Kilroy Realty Corporation's business and an investment in its securities, including risks that could cause actual results and events to differ materially from results and events referred to in the forward-looking information, see the discussion under the caption "business risks" in Kilroy Realty Corporation's annual report on Form 10-K for the year ended December 31, 1999. In light of these risks, uncertainties and assumptions, the forward-looking events contained in this supplement information might not occur. 13 Kilroy Realty Corporation Fourth Quarter 2000 Supplemental Financial Report - -------------------------------------------------------------------------------- Capital Structure At December 31, 2000 ($ in thousands)
- --------------------------------------------------------------------------------------------------------------------------------- Aggregate Principal Amount or % of Total Shares/Units $ Value Market at December 31, 2000 Equivalent Capitalization ----------------------- ------------------ ---------------------- DEBT: Secured Debt $ 432,688 25.0% Unsecured Line of Credit 191,000 11.1% Unsecured Term Facility 100,000 5.8% ----------- ------ Total Debt $ 723,688 41.9% ----------- ------ EQUITY: 8.075% Series A Cumulative Redeemable Preferred Units/(1)/ 1,500,000 $ 75,000 4.4% 9.375% Series C Cumulative Redeemable Preferred Units/(1)/ 700,000 35,000 2.0% 9.250% Series D Cumulative Redeemable Preferred Units/(1)/ 900,000 45,000 2.6% Common Units Outstanding/(2)/ 3,748,545 105,194 6.1% Common Shares Outstanding/(2)/ 26,475,470 742,968 43.0% ----------- ------ Total Equity $ 1,003,162 58.1% ----------- ------ TOTAL MARKET CAPITALIZATION $ 1,726,850 100.0% =========== ====== - ---------------------------------------------------------------------------------------------------------------------------------
(1) Value based on $50.00 per share liquidation preference. (2) Valued based on closing share price of $28 1/16 at December 31, 2000. 14 Kilroy Realty Corporation Fourth Quarter 2000 Supplemental Financial Report - -------------------------------------------------------------------------------- Share Repurchase Program Summary ($ in thousands except per share information ) - -------------------------------------------------------------------------------- Average Total Number Price per Value of of Shares Share Purchases - -------------------------------------------------------------------------------- 4th QUARTER 1999: 265,000 $20.19 $ 5,350 --------- ------ ------- 1st QUARTER 2000: 1,999,300 $20.58 $41,151 --------- ------ ------- 2nd QUARTER 2000: NONE 3rd QUARTER 2000: NONE 4TH QUARTER 2000: NONE TOTAL PROGRAM-TO-DATE SHARE REPURCHASES 2,264,300 $20.54 $46,501 ========= ====== ======= - -------------------------------------------------------------------------------- 15 Kilroy Realty Corporation Fourth Quarter 2000 Supplemental Financial Report - -------------------------------------------------------------------------------- Debt Analysis At December 31, 2000 ($ in thousands) - -------------------------------------------------------------------------------- SECURED DEBT AND UNSECURED TERM FACILITY PRINCIPAL REPAYMENT SCHEDULE - -------------------------------------------------------------------------------- 2001 2002 2003 2004 2005 Thereafter Total - -------------------------------------------------------------------------------- $5,695 $81,709 $98,358 $127,719 $16,965 $202,262 $532,688 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TOTAL DEBT COMPOSITION - -------------------------------------------------------------------------------- % of Weighted Average ---------------- Total Debt Interest Rate Maturity ---------- ------------- -------- Secured vs. Unsecured Debt: Secured Debt 59.8% 8.2% 5.7 Unsecured Debt 40.2% 8.3% 5.4 Floating vs. Fixed Rate Debt: Fixed Rate Debt/(1)/,/(5)/ 55.6% 8.1% 5.8 Floating Rate Debt/(2)/,/(3)/,/(4)/ 44.4% 8.4% 2.1 --- --- Total Debt 8.2% 4.2 === === - -------------------------------------------------------------------------------- ----------------------------------------------------------------- UNSECURED LINE OF CREDIT ----------------------------------------------------------------- Total Line Outstanding Balance Expiration Date ----------------------------------------------------------------- $400,000 $191,000 November 2002 ----------------------------------------------------------------- (1) The Company currently has an interest-rate swap agreement to fix LIBOR on $150 million of its floating rate debt at 6.95% which expires in February 2002. (2) At December 31, 2000, the Company had an interest-rate cap agreement to cap LIBOR on $150 million of its floating rate debt at 6.5%. The Company terminated this interest-rate cap agreement in January 2001. (3) In January 2001, the Company entered into an interest-rate swap agreement to fix LIBOR on $150 million of its floating rate debt at 5.48% starting in January 2001 and expiring in November 2002. (4) The Company, through one of its Development LLCs, currently has an interest-rate cap agreement to cap LIBOR on its floating rate construction debt at 8.5% which expires in April 2002. The notional amount of the cap increases over the life of the agreement as the balance of the related construction loan increases. At December 31, 2000, the notional amount of the cap agreement was approximately $42.0 million. (5) The percentage of fixed rate debt to total debt does not take into consideration the portion of floating rate debt capped by the Company's interest-rate cap agreements. Including the effects of the interest-rate cap agreements, the Company had fixed or capped approximately 82.1% of its total outstanding debt at December 31, 2000. 16 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 ================= ================= ================= =================
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