Document

Exhibit 99.2


Contact:			FOR RELEASE:
Tyler H. Rose			October 25, 2022
President
(310) 481-8484 Or
Eliott Trencher
Executive Vice President,
Chief Investment Officer,
Interim Chief Financial Officer
(310) 481-8587

KILROY REALTY CORPORATION REPORTS

THIRD QUARTER FINANCIAL RESULTS

---------------

LOS ANGELES, October 25, 2022 - Kilroy Realty Corporation (NYSE: KRC) today reported financial results for its third quarter ended September 30, 2022.

Third Quarter Highlights

Financial Results

•Revenues grew approximately 19% to $276.0 million for the quarter ended September 30, 2022, as compared to $232.3 million for the quarter ended September 30, 2021

•Net income available to common stockholders of $79.8 million, or $0.68 per diluted share, including a $0.15 per share gain on sale of an operating property, as compared to $47.0 million, or $0.40 per diluted share for the quarter ended September 30, 2021

•Funds from operations available to common stockholders and unitholders (“FFO”) of $139.7 million, or $1.17 per diluted share, an increase of approximately 20% as compared to $116.0 million, or $0.98 per diluted share for the quarter ended September 30, 2021

Leasing and Occupancy

•Stabilized portfolio was 90.8% occupied and 92.6% leased at September 30, 2022

◦In August, added 2100 Kettner, 12400 High Bluff Drive and 12340 El Camino Real. The three buildings total approximately 500,000 square feet and are 59% occupied and 64% leased as of the date of this report

•Signed approximately 132,000 square feet of new and renewing leases, including approximately 5,500 square feet of leases signed in the development portfolio

◦GAAP and cash rents increased approximately 16.8% and 1.2%, respectively, from prior levels in the stabilized portfolio

•In October, signed approximately 223,000 square feet of new and renewing leases in the development and stabilized portfolios, including approximately 28,000 square feet at 2100 Kettner and approximately 51,000 square feet at Indeed Tower

◦GAAP and cash rents increased approximately 45.5% and 18.5%, respectively, from prior levels in the stabilized portfolio

Dispositions

•In August, completed the sale of 3130 Wilshire, an approximately 96,000 square foot operating property in the Greater Los Angeles region for gross proceeds of $48.0 million

Balance Sheet / Liquidity Highlights

•As of the date of this release, the company had approximately $1.6 billion of total liquidity comprised of approximately $330.0 million of cash and cash equivalents, $200.0 million available under the new unsecured term loan facility (described herein under Recent Developments) and full availability under the $1.1 billion unsecured revolving credit facility

•Investment grade credit rated with approximately 95% unsecured debt and no significant debt maturities until December 2024

Dividend

•Increased the regular quarterly cash dividend to common stockholders by 3.8% to $0.54 per share; an annualized rate of $2.16 per share

Recent Developments

•In October, entered into a $400.0 million unsecured term loan facility and made an initial draw of $200.0 million. The facility bears variable interest subject to a ratings-based grid, currently calculated as one-month Adjusted Secured Overnight Financing Rate (SOFR) plus 95-basis points, has a delayed draw feature and is scheduled to mature in October 2026 (inclusive of two twelve-month extensions at the Company's option). The facility also includes a $100.0 million accordion feature

Net Income Available to Common Stockholders / FFO Guidance and Outlook

The company is providing an updated guidance range of NAREIT-defined FFO per diluted share for the full year 2022 of $4.62 to $4.68 per share, with a midpoint of $4.65 per share.



	Full Year 2022 Range
	Low End		High End
Net income available to common stockholders per share - diluted	$	1.89	$	1.95

Weighted average common shares outstanding - diluted (1)	117,200		117,200

Net income available to common stockholders	$	222,000	$	229,000
Adjustments:
Net income attributable to noncontrolling common units of the Operating Partnership	2,400		2,800
Net income attributable to noncontrolling interests in consolidated property partnerships	23,500		24,000
Depreciation and amortization of real estate assets	355,000		355,000
Gains on sales of depreciable real estate	(17,500)		(17,500)
Funds From Operations attributable to noncontrolling interests in consolidated property partnerships	(35,250)		(36,250)
Funds From Operations (2)	$	550,150	$	557,050

Weighted average common shares/units outstanding – diluted (3)	119,000		119,000

Funds From Operations per common share/unit – diluted (3)	$	4.62	$	4.68

Updated 2022 assumptions:

•Same Store Cash NOI growth of 6.0% to 6.5% (4)

•Total remaining development spending of approximately $100.0 million to $150.0 million

•Dispositions of $48.0 million

________________________

(1)Calculated based on estimated weighted average shares outstanding including non-participating share-based awards.

(2)See management statement for Funds From Operations at end of release.

(3)Calculated based on weighted average shares outstanding including participating and non-participating share-based awards, dilutive impact of contingently issuable shares, and assuming the exchange of all common limited partnership units outstanding. Reported amounts are attributable to common stockholders and common unitholders.

(4)See management statement for Same Store Cash Net Operating Income on page 35 of our Supplemental Financial Report furnished on Form 8-K with this press release.

The company’s guidance estimates for the full year 2022, and the reconciliation of net income available to common stockholders per share - diluted and FFO per share and unit - diluted included within this press release, reflect management’s views on current and future market conditions, including assumptions with respect to rental rates, occupancy levels, and the earnings impact of the events referenced in this press release. Although these guidance estimates reflect the impact on the company’s operating results of an assumed range of future disposition activity, these guidance estimates do not include any estimates of possible future gains or losses from possible future dispositions because the magnitude of gains or losses on sales of depreciable operating properties, if any, will depend on the sales price and depreciated cost basis of the disposed assets at the time of disposition, information that is not known at the time the company provides guidance, and the timing of any gain recognition will depend on the closing of the dispositions, information that is also not known at the time the company provides guidance and may occur after the relevant guidance period. We caution you not to place undue reliance on our assumed range of future disposition activity because any potential future disposition transactions will ultimately depend on the market conditions and other factors, including but not limited to the company’s capital needs, the particular assets being sold and the company’s ability to defer some or all of the taxable gain on the sales. These guidance estimates also do not include the impact on operating results from potential future acquisitions, possible capital markets activity, possible future impairment charges or any events outside of the company’s control. There can be no assurance that the company’s actual results will not differ materially from these estimates.

Conference Call and Audio Webcast

The company’s management will discuss third quarter results and the current business environment during the company’s October 26, 2022 earnings conference call. The call will begin at 10:00 a.m. Pacific Time and last approximately one hour. Those interested in listening via the Internet can access the conference call at https://events.q4inc.com/attendee/503608981. It may be necessary to download audio software to hear the conference call. Those interested in listening via telephone can access the conference call at (844) 200-6205 and enter access code 398297 five to 10 minutes prior to the start time to allow time for registration. International callers should dial (929) 526-1599 and enter the same passcode. In order to bypass speaking to the operator on the day of the call, please pre-register anytime at https://www.netroadshow.com/events/login?show=7c82e7bf&confId=40135. A replay of the conference call will be available via telephone on October 26, 2022 through November 2, 2022 by dialing (866) 813-9403 and entering passcode 763892. International callers should dial (929) 458-6194 and enter the same passcode. The replay will also be available on our website at https://investors.kilroyrealty.com/shareholders/investor-events/default.aspx.

About Kilroy Realty Corporation

Kilroy Realty Corporation (NYSE: KRC, the “company”, “Kilroy”) is a leading U.S. landlord and developer, with operations in San Diego, Greater Los Angeles, the San Francisco Bay Area, the Pacific Northwest and Austin, Texas. The company has earned global recognition for sustainability, building operations, innovation and design. As pioneers and innovators in the creation of a more sustainable real

estate industry, the company’s approach to modern business environments helps drive creativity and productivity for some of the world’s leading technology, entertainment, life science and business services companies.

The company is a publicly traded real estate investment trust (“REIT”) and member of the S&P MidCap 400 Index with more than seven decades of experience developing, acquiring and managing office, life science and mixed-use projects.

As of September 30, 2022, Kilroy’s stabilized portfolio totaled approximately 16.2 million square feet of primarily office and life science space that was 90.8% occupied and 92.6% leased. The company also had more than 1,000 residential units in Hollywood and San Diego, which had a quarterly average occupancy of 93.5%. In addition, the company had one in-process life science redevelopment project with a total estimated redevelopment cost of $25.0 million, totaling approximately 52,000 square feet, and three in-process development projects with an estimated total investment of $1.7 billion, totaling approximately 1.7 million square feet of office and life science space. The in-process development and redevelopment office and life science space is 36% leased.

A Leader in Sustainability and Commitment to Corporate Social Responsibility

The company is listed on the Dow Jones Sustainability World Index and has been recognized by industry organizations around the world. GRESB has named Kilroy the listed sustainability leader for Office in the Americas for eight of the last ten years. Other honors have included the National Association of Real Estate Investment Trusts' (NAREIT) Leader in the Light award for eight consecutive years and ENERGY STAR Partner of the Year for nine years as well as ENERGY STAR’s highest honor of Sustained Excellence, for the past seven years.

Kilroy is proud to have achieved carbon neutral operations across our portfolio since 2020. The company’s office portfolio was 71% LEED certified and 40% Fitwel certified, and 76% of eligible properties were ENERGY STAR certified as of September 30, 2022.

A big part of the company’s foundation is its commitment to enhancing employee growth, satisfaction and wellness while maintaining a diverse and thriving culture. For the third year in a row, the company has been named to Bloomberg’s Gender Equality Index—recognizing companies committed to supporting gender equality through policy development, representation, and transparency.

More information is available at http://www.kilroyrealty.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on our current expectations, beliefs and assumptions, and are not guarantees of future performance. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends and factors that are difficult to predict, many of which are outside of our control. Accordingly, actual performance, results and events may vary materially from those indicated or implied in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future performance, results or events. Numerous factors could cause actual future performance, results and events to differ materially from those indicated in the forward-looking statements, including, among others: global market and general economic conditions, including periods of heightened inflation, and their effect on our liquidity and financial conditions and those of our tenants; adverse economic or real estate conditions generally, and specifically, in the States of California, Texas and Washington; risks associated with our

investment in real estate assets, which are illiquid, and with trends in the real estate industry; defaults on or non-renewal of leases by tenants; any significant downturn in tenants’ businesses; our ability to re-lease property at or above current market rates; costs to comply with government regulations, including environmental remediation; the availability of cash for distribution and debt service and exposure to risk of default under debt obligations; increases in interest rates and our ability to manage interest rate exposure; the availability of financing on attractive terms or at all, which may adversely impact our future interest expense and our ability to pursue development, redevelopment and acquisition opportunities and refinance existing debt; a decline in real estate asset valuations, which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt financing, and which may result in write-offs or impairment charges; significant competition, which may decrease the occupancy and rental rates of properties; potential losses that may not be covered by insurance; the ability to successfully complete acquisitions and dispositions on announced terms; the ability to successfully operate acquired, developed and redeveloped properties; the ability to successfully complete development and redevelopment projects on schedule and within budgeted amounts; delays or refusals in obtaining all necessary zoning, land use and other required entitlements, governmental permits and authorizations for our development and redevelopment properties; increases in anticipated capital expenditures, tenant improvement and/or leasing costs; defaults on leases for land on which some of our properties are located; adverse changes to, or enactment or implementations of, tax laws or other applicable laws, regulations or legislation, as well as business and consumer reactions to such changes; risks associated with joint venture investments, including our lack of sole decision-making authority, our reliance on co-venturers’ financial condition and disputes between us and our co-venturers; environmental uncertainties and risks related to natural disasters; our ability to maintain our status as a REIT; and uncertainties regarding the impact of the COVID-19 pandemic, and restrictions intended to prevent its spread, on our business and the economy generally. These factors are not exhaustive and additional factors could adversely affect our business and financial performance. For a discussion of additional factors that could materially adversely affect our business and financial performance, see the factors included under the caption “Risk Factors” in our quarterly report on Form 10-Q for the period ending September 30, 2022 to be filed on October 26, 2022 and in our annual report on Form 10-K for the year ended December 31, 2021 and our other filings with the Securities and Exchange Commission. All forward-looking statements are based on currently available information and speak only as of the dates on which they are made. We assume no obligation to update any forward-looking statement made in this press release that becomes untrue because of subsequent events, new information or otherwise, except to the extent we are required to do so in connection with our ongoing requirements under federal securities laws.

KILROY REALTY CORPORATION

SUMMARY OF QUARTERLY RESULTS

(unaudited; in thousands, except per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022			2021
Revenues	$	275,958	$	232,326	$	812,643		$	693,955

Net income available to common stockholders	$	79,757	$	47,028	$	179,990		$	580,498

Weighted average common shares outstanding – basic	116,873		116,457		116,783			116,418
Weighted average common shares outstanding – diluted	117,242		116,963		117,163			116,894

Net income available to common stockholders per share – basic	$	0.68	$	0.40	$	1.53		$	4.98
Net income available to common stockholders per share – diluted	$	0.68	$	0.40	$	1.53		$	4.96

Funds From Operations (1)(2)	$	139,657	$	115,998	$	416,776		$	336,837

Weighted average common shares/units outstanding – basic (3)	118,563		118,357		118,591			118,343
Weighted average common shares/units outstanding – diluted (4)	118,933		118,862		118,972			118,820

Funds From Operations per common share/unit – basic (2)	$	1.18	$	0.98	$	3.51		$	2.85
Funds From Operations per common share/unit – diluted (2)	$	1.17	$	0.98	$	3.50		$	2.83

Common shares outstanding at end of period					116,877			116,462
Common partnership units outstanding at end of period					1,151			1,151
Total common shares and units outstanding at end of period					118,028			117,613

					September 30, 2022			September 30, 2021
Stabilized office portfolio occupancy rates: (5)
Greater Los Angeles					84.5		%	86.4		%
San Diego County					86.3		%	91.8		%
San Francisco Bay Area					93.8		%	93.0		%
Greater Seattle					97.7		%	97.2		%
Weighted average total					90.8		%	91.5		%

Total square feet of stabilized office properties owned at end of period: (5)
Greater Los Angeles					4,328			4,436
San Diego County					2,709			2,619
San Francisco Bay Area					6,212			5,763
Greater Seattle					3,000			2,381
Total					16,249			15,199

________________________

(1)Reconciliation of Net income available to common stockholders to Funds From Operations available to common stockholders and unitholders and management statement on Funds From Operations are included after the Consolidated Statements of Operations.

(2)Reported amounts are attributable to common stockholders, common unitholders and restricted stock unitholders.

(3)Calculated based on weighted average shares outstanding including participating share-based awards (i.e. nonvested stock and certain time based restricted stock units) and assuming the exchange of all common limited partnership units outstanding.

(4)Calculated based on weighted average shares outstanding including participating and non-participating share-based awards, dilutive impact of stock options and contingently issuable shares, and assuming the exchange of all common limited partnership units outstanding.

(5)Occupancy percentages and total square feet reported are based on the company’s stabilized office portfolio for the periods presented. Occupancy percentages and total square feet shown for September 30, 2021 include the office properties that were sold subsequent to September 30, 2021.

KILROY REALTY CORPORATION

CONSOLIDATED BALANCE SHEETS

(unaudited; in thousands)


	September 30, 2022		December 31, 2021
ASSETS
REAL ESTATE ASSETS:
Land and improvements	$	1,743,194	$	1,731,982
Buildings and improvements	7,693,247		7,543,585
Undeveloped land and construction in progress	2,183,071		2,017,126
Total real estate assets held for investment	11,619,512		11,292,693
Accumulated depreciation and amortization	(2,150,060)		(2,003,656)
Total real estate assets held for investment, net	9,469,452		9,289,037


Cash and cash equivalents	249,981		414,077
Restricted cash	13,009		13,006
Marketable securities	22,390		27,475
Current receivables, net	15,885		14,386
Deferred rent receivables, net	442,987		405,665
Deferred leasing costs and acquisition-related intangible assets, net	214,484		234,458
Right of use ground lease assets	126,708		127,302
Prepaid expenses and other assets, net	65,096		57,991
TOTAL ASSETS	$	10,619,992	$	10,583,397

LIABILITIES AND EQUITY
LIABILITIES:
Secured debt, net	$	244,316	$	248,367
Unsecured debt, net	3,823,532		3,820,383

Accounts payable, accrued expenses and other liabilities	424,087		391,264
Ground lease liabilities	125,065		125,550
Accrued dividends and distributions	64,271		61,850
Deferred revenue and acquisition-related intangible liabilities, net	176,105		171,151
Rents received in advance and tenant security deposits	82,839		74,962

Total liabilities	4,940,215		4,893,527

EQUITY:
Stockholders’ Equity
Common stock	1,169		1,165
Additional paid-in capital	5,162,088		5,155,232
Retained earnings	276,138		283,663
Total stockholders’ equity	5,439,395		5,440,060
Noncontrolling Interests
Common units of the Operating Partnership	53,475		53,746
Noncontrolling interests in consolidated property partnerships	186,907		196,064
Total noncontrolling interests	240,382		249,810
Total equity	5,679,777		5,689,870
TOTAL LIABILITIES AND EQUITY	$	10,619,992	$	10,583,397

KILROY REALTY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited; in thousands, except per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
REVENUES
Rental income	$	272,546	$	230,720	$	804,330	$	689,849

Other property income	3,412		1,606		8,313		4,106
Total revenues	275,958		232,326		812,643		693,955

EXPENSES
Property expenses	52,075		40,842		147,421		120,183
Real estate taxes	27,415		24,153		78,718		71,528

Ground leases	1,771		1,708		5,473		5,559
General and administrative expenses	23,524		22,990		68,425		69,482

Leasing costs	1,015		798		3,475		2,373
Depreciation and amortization	81,140		73,213		266,215		222,734
Total expenses	186,940		163,704		569,727		491,859

OTHER INCOME (EXPENSES)
Interest and other income, net	295		976		501		3,686
Interest expense	(19,982)		(16,105)		(60,728)		(59,829)


Gains on sales of depreciable operating properties	17,329		—		17,329		457,831
Total other (expenses) income	(2,358)		(15,129)		(42,898)		401,688

NET INCOME	86,660		53,493		200,018		603,784

Net income attributable to noncontrolling common units of the Operating Partnership	(664)		(460)		(1,695)		(5,700)
Net income attributable to noncontrolling interests in consolidated property partnerships	(6,239)		(6,005)		(18,333)		(17,586)
Total income attributable to noncontrolling interests	(6,903)		(6,465)		(20,028)		(23,286)






NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	79,757	$	47,028	$	179,990	$	580,498

Weighted average common shares outstanding – basic	116,873		116,457		116,783		116,418
Weighted average common shares outstanding – diluted	117,242		116,963		117,163		116,894

Net income available to common stockholders per share – basic	$	0.68	$	0.40	$	1.53	$	4.98
Net income available to common stockholders per share – diluted	$	0.68	$	0.40	$	1.53	$	4.96

KILROY REALTY CORPORATION

FUNDS FROM OPERATIONS

(unaudited; in thousands, except per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income available to common stockholders	$	79,757	$	47,028	$	179,990	$	580,498
Adjustments:
Net income attributable to noncontrolling common units of the Operating Partnership	664		460		1,695		5,700
Net income attributable to noncontrolling interests in consolidated property partnerships	6,239		6,005		18,333		17,586
Depreciation and amortization of real estate assets	79,410		71,703		261,129		218,171
Gains on sales of depreciable real estate	(17,329)		—		(17,329)		(457,831)
Funds From Operations attributable to noncontrolling interests in consolidated property partnerships	(9,084)		(9,198)		(27,042)		(27,287)
Funds From Operations(1)(2)(3)	$	139,657	$	115,998	$	416,776	$	336,837

Weighted average common shares/units outstanding – basic (4)	118,563		118,357		118,591		118,343
Weighted average common shares/units outstanding – diluted (5)	118,933		118,862		118,972		118,820

Funds From Operations per common share/unit – basic (2)	$	1.18	$	0.98	$	3.51	$	2.85
Funds From Operations per common share/unit – diluted (2)	$	1.17	$	0.98	$	3.50	$	2.83

________________________

(1)We calculate Funds From Operations available to common stockholders and common unitholders (“FFO”) in accordance with the 2018 Restated White Paper on FFO approved by the Board of Governors of NAREIT. The White Paper defines FFO as net income or loss calculated in accordance with GAAP, excluding extraordinary items, as defined by GAAP, gains and losses from sales of depreciable real estate and impairment write-downs associated with depreciable real estate, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets) and after adjustment for unconsolidated partnerships and joint ventures. Our calculation of FFO includes the amortization of deferred revenue related to tenant-funded tenant improvements and excludes the depreciation of the related tenant improvement assets. We also add back net income attributable to noncontrolling common units of the Operating Partnership because we report FFO attributable to common stockholders and common unitholders.

We believe that FFO is a useful supplemental measure of our operating performance. The exclusion from FFO of gains and losses from the sale of operating real estate assets allows investors and analysts to readily identify the operating results of the assets that form the core of our activity and assists in comparing those operating results between periods. Also, because FFO is generally recognized as the industry standard for reporting the operations of REITs, it facilitates comparisons of operating performance to other REITs. However, other REITs may use different methodologies to calculate FFO, and accordingly, our FFO may not be comparable to all other REITs.

Implicit in historical cost accounting for real estate assets in accordance with GAAP is the assumption that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies using historical cost accounting alone to be insufficient. Because FFO excludes depreciation and amortization of real estate assets, we believe that FFO along with the required GAAP presentations provides a more complete measurement of our performance relative to our competitors and a more appropriate basis on which to make decisions involving operating, financing and investing activities than the required GAAP presentations alone would provide.

However, FFO should not be viewed as an alternative measure of our operating performance because it does not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, which are significant economic costs and could materially impact our results from operations.

(2)Reported amounts are attributable to common stockholders and common unitholders.

(3)FFO available to common stockholders and unitholders includes amortization of deferred revenue related to tenant-funded tenant improvements of $5.0 million and $4.1 million for the three months ended September 30, 2022 and 2021, respectively, and $14.2 million and $13.0 million for the nine months ended September 30, 2022 and 2021, respectively..

(4)Calculated based on weighted average shares outstanding including participating share-based awards (i.e. certain time based restricted stock units) and assuming the exchange of all common limited partnership units outstanding.

(5)Calculated based on weighted average shares outstanding including participating and non-participating share-based awards, dilutive impact of stock options and contingently issuable shares, and assuming the exchange of all common limited partnership units outstanding.