Secured and Unsecured Debt of the Operating Partnership (Tables) (Kilroy Realty, L.P. [Member])

9 Months Ended

Sep. 30, 2013

Per Share Average Trading Price Of Companys Common Stock On Stock Exchange [Tables Text Block]

For the three and nine months ended September 30, 2013 and 2012, the per share average trading price of the Company’s common stock on the NYSE was higher than the $35.93 exchange price for the 4.25% Exchangeable Notes, as presented below:



	Three Months Ended September 30,		Nine Months Ended September 30,
	2013	2012	2013	2012
Per share average trading price of the Company’s common stock	$51.57	$47.56	$52.42	$45.74

Schedule of Debt Conversions, Fair Value Upon Conversion [Table Text Block]

The 4.25% Exchangeable Notes were exchangeable as of September 30, 2013, and were not exchangeable as of September 30, 2012. If the Exchangeable Notes were exchangeable for all periods presented, the approximate fair value of the shares upon exchangeable at September 30, 2013 and 2012, using the per share average trading price presented in the table above, would have been as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
	(in thousands)
Approximate fair value of shares upon conversion	$	245,200	$	225,100	$	248,000	$	218,600
Principal amount of the 4.25% Exchangeable Notes	172,500		172,500		172,500		172,500
Approximate fair value in excess amount of principal amount	$	72,700	$	52,600	$	75,500	$	46,100

Interest expense for the exchangeable notes

The following table summarizes the total interest expense attributable to the 4.25% Exchangeable Notes and attributable to the 3.25% Exchangeable Notes (which were repaid upon maturity in April 2012), in each case based on the respective effective interest rates, before the effect of capitalized interest, for the three and nine months ended September 30, 2013 and 2012:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
	(in thousands)
Contractual interest payments⁽¹⁾	$	1,833	$	1,833	$	5,498	$	6,888
Amortization of discount⁽¹⁾	1,116		1,041		3,291		3,993
Interest expense attributable to the Exchangeable Notes⁽¹⁾	$	2,949	$	2,874	$	8,789	$	10,881

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(1)	The Company repaid the 3.25% Exchangeable Notes in April 2012. Interest payments and discount amortization for the three and nine months ended September 30, 2013 and three months ended September 30, 2012 are solely attributable to the 4.25% Exchangeable Notes.

Capped call Transactions

The table below summarizes our capped call option positions for the 4.25% Exchangeable Notes as of September 30, 2013 and December 31, 2012.



	4.25% Exchangeable Notes
Referenced shares of common stock	4,800,796
Exchange price including effect of capped calls	$	42.81

Unsecured Revolving Credit Facility

The following table summarizes the balance and terms of our revolving credit facility as of September 30, 2013 and December 31, 2012, respectively:



	September 30, 2013		December 31, 2012
	(in thousands)
Outstanding borrowings	$	—	$	185,000
Remaining borrowing capacity	500,000		315,000
Total borrowing capacity ⁽¹⁾	$	500,000	$	500,000
Interest rate ⁽²⁾			1.66		%
Facility fee-annual rate ⁽³⁾	0.300%
Maturity date ⁽⁴⁾	April 2017

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(1)	We may elect to borrow, subject to bank approval, up to an additional $200.0 million under an accordion feature under the terms of the revolving credit facility.


(2)	The revolving credit facility interest rate was calculated based on an annual rate of LIBOR plus 1.450% as of both September 30, 2013 and December 31, 2012. No interest rate is shown as of September 30, 2013 because no borrowings were outstanding.


(3)	The facility fee is paid on a quarterly basis and is calculated based on the total borrowing capacity. In addition to the facility fee, from 2010 to 2012 we incurred debt origination and legal costs totaling approximately $10.2 million that are currently being amortized through the maturity date of the revolving credit facility.


(4)	Under the terms of the revolving credit facility, we may exercise an option to extend the maturity date by one year.

Stated debt maturities and scheduled amortization payments, excluding debt discounts

The following table summarizes the stated debt maturities and scheduled amortization payments, excluding debt discounts and premiums, as of September 30, 2013:



Year	(in thousands)
Remaining 2013	$	2,387
2014	265,346
2015	395,104
2016	249,431
2017	71,748
Thereafter	1,169,742
Total ⁽¹⁾	$	2,153,758

________________________


(1)	Includes gross principal balance of outstanding debt before impact of net unamortized premiums totaling approximately $8.4 million.

Capitalized interest and loan fees

The following table sets forth gross interest expense reported in continuing operations, including debt discount/premium and loan cost amortization, net of capitalized interest, for the three and nine months ended September 30, 2013 and 2012. The interest expense capitalized was recorded as a cost of development and redevelopment, and increased the carrying value of undeveloped land and construction in progress.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Gross interest expense	$	27,942		$	24,843		$	83,322		$	73,326
Capitalized interest	(9,089		)	(4,989		)	(25,301		)	(13,154		)
Interest expense	$	18,853		$	19,854		$	58,021		$	60,172

Secured Debt [Member]

Debt Instrument [Line Items]

Balance and significant terms of debt

The following table sets forth the composition of our secured debt as of September 30, 2013 and December 31, 2012:



Type of Debt	Annual Stated Interest Rate ⁽¹⁾	GAAP Effective Rate ⁽¹⁾⁽²⁾	Maturity Date	September 30, 2013 ⁽³⁾		December 31, 2012 ⁽³⁾
				(in thousands)
Mortgage note payable	4.27%	4.27%	February 2018	$	133,689	$	135,000
Mortgage note payable ⁽⁴⁾	4.48%	4.48%	July 2027	97,000		97,000
Mortgage note payable ⁽⁴⁾⁽⁵⁾	6.05%	3.50%	June 2019	93,306		—
Mortgage note payable⁽⁶⁾	6.37%	3.55%	April 2013	—		83,116
Mortgage note payable	6.51%	6.51%	February 2017	67,907		68,615
Mortgage note payable ⁽⁴⁾	5.23%	3.50%	January 2016	55,007		56,302
Mortgage note payable ⁽⁴⁾	5.57%	3.25%	February 2016	41,999		43,016
Mortgage note payable⁽⁴⁾	5.09%	3.50%	August 2015	34,979		35,379
Mortgage note payable ⁽⁴⁾	4.94%	4.00%	April 2015	27,970		28,941
Mortgage note payable	7.15%	7.15%	May 2017	9,546		11,210
Other	Various	Various	Various	2,495		2,517
Total				$	563,898	$	561,096

______________


(1)	All interest rates presented are fixed-rate interest rates.


(2)	This represents the rate at which interest expense is recorded for financial reporting purposes, which reflects the amortization of discounts/premiums, excluding debt issuance costs.


(3)	Amounts reported include the amounts of unamortized debt premiums and discounts for the periods presented.


(4)	The secured debt and the related properties that secure the debt are held in a special purpose entity and the properties are not available to satisfy the debts and other obligations of the Company or the Operating Partnership.

(5)

In January 2013, in connection with the acquisition of two office buildings in Seattle, Washington, we assumed a mortgage loan that is secured by the project. The assumed mortgage had a principal balance of $83.9 million at the acquisition date and was recorded at fair value on the date of the acquisition resulting in a premium of approximately $11.6 million. The loan requires monthly principal and interest payments based on a 6.4 year amortization period.


(6)	In January 2013, we repaid this loan prior to the stated maturity date.

Convertible Debt [Member]

Debt Instrument [Line Items]

Balance and significant terms of debt

The table below summarizes the balance and significant terms of the Company’s 4.25% Exchangeable Notes due November 2014 (the “4.25% Exchangeable Notes”) outstanding as of September 30, 2013 and December 31, 2012.



	4.25% Exchangeable Notes
	September 30, 2013			December 31, 2012
	(in thousands)
Principal amount	$	172,500		$	172,500
Unamortized discount	(5,264		)	(8,556		)
Net carrying amount of liability component	$	167,236		$	163,944
Carrying amount of equity component	$19,835
Issuance date	November 2009
Maturity date	November 2014
Stated coupon rate ⁽¹⁾	4.25%
Effective interest rate ⁽²⁾	7.13%
Exchange rate per $1,000 principal value of the 4.25% Exchangeable Notes, as adjusted ⁽³⁾	27.8307
Exchange price, as adjusted ⁽³⁾	$35.93
Number of shares on which the aggregate consideration to be delivered on conversion is determined ⁽³⁾	4,800,796

_______________


(1)	Interest on the 4.25% Exchangeable Notes is payable semi-annually in arrears on May 15^th and November 15^th of each year.


(2)	The rate at which we record interest expense for financial reporting purposes, which reflects the amortization of the discounts on the 4.25% Exchangeable Notes. This rate represents our conventional debt borrowing rate at the date of issuance.


(3)	The exchange rate, exchange price, and the number of shares to be delivered upon conversion are subject to adjustment under certain circumstances including increases in our common dividends.