Exhibit 99.1

Third Quarter 2006 Supplemental Financial Report

Some of the enclosed information presented in this supplemental and on the Company’s October 31, 2006 conference call is forward-looking in nature, including information concerning project 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, except to the extent it is required to do so in connection with its ongoing requirements under Federal securities laws to disclose material information. 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 “Risk Factors” in Kilroy Realty Corporation’s annual report on Form 10-K for the year ended December 31, 2005. In light of these risks, uncertainties and assumptions, the forward-looking events contained in this supplemental information and on the Company’s October 31, 2006 conference call might not occur.

Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Table of Contents

	Page
Corporate Data and Financial Highlights
Company Background	1
Financial Highlights	2
Common Stock Data	3
Consolidated Balance Sheets	4
Consolidated Statements of Operations	5
Funds From Operations and Funds Available for Distribution	6
Portfolio Data
Same Store Analysis	7
Stabilized Portfolio Occupancy Overview	8-11
Leasing Activity	12
Stabilized Portfolio Capital Expenditures	13
Lease Expiration Summary and Lease Expirations by Region	14-17
Top Ten Office and Top Ten Industrial Tenants	18
Boeing Lease Summary	19
Acquisitions and Dispositions	20
Development
In-Process and Committed Development and Redevelopment Projects	21
Future Development Pipeline	22
Debt and Capitalization Data
Capital Structure	23
Debt Analysis	24-25
Non-GAAP Supplemental Measures	26-30

Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Company Background

Kilroy Realty Corporation (NYSE: KRC) owns, develops, and operates office and industrial real estate, primarily in Southern California. The Company operates as a self-administered real estate investment trust. As of September 30, 2006, the Company’s stabilized portfolio consisted of 84 office buildings and 45 industrial buildings, which encompassed an aggregate of 7.8 million and 4.2 million square feet, respectively, and was 96.2% occupied.

Board of Directors	Senior Management		Investor Relations
John B. Kilroy, Sr. Chairman	John B. Kilroy, Jr.	President and CEO	12200 W. Olympic Blvd., Suite 200
Edward F. Brennan, Ph.D.	Jeffrey C. Hawken	Executive VP and COO	Los Angeles, CA 90064
John R. D’Eathe	Richard E. Moran Jr.	Executive VP and CFO	(310) 481-8400
William P. Dickey	Conan Cotrell	Sr. VP Marketing and Leasing	Web: www.kilroyrealty.com
Matthew J. Hart	John T. Fucci	Sr. VP Asset Management	E-mail: investorrelations@kilroyrealty.com
John B. Kilroy, Jr.	Tyler H. Rose	Sr. VP and Treasurer
Dale F. Kinsella	Heidi R. Roth	Sr. VP and Controller
	Steve Scott	Sr. VP San Diego
	Justin W. Smart	Sr. VP Development

Equity Research Coverage
A.G. Edwards & Sons, Inc.	Green Street Advisors
David AuBuchon                        (314) 955-5452	Michael Knott                        (949) 640-8780
Bank of America Securities	Merrill Lynch & Co., Inc.
Ross Nussbaum                          (212) 847-5668	Steve Sakwa                            (212) 449-0335
Deutsche Bank Securities, Inc.	RBC Capital Markets
Lou Taylor                                   (212) 250-4912	Sri Nagarajan                          (212) 428-2360
Friedman, Billings, Ramsey & Co., Inc.	Robert W. Baird & Company
Wilkes Graham                            (703) 312-9737	David Loeb                            (414) 765-7063

Kilroy Realty Corporation is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding Kilroy Realty Corporation’s performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of Kilroy Realty Corporation or its management. Kilroy Realty Corporation does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations.

1

Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Financial Highlights

(unaudited, $ in thousands, except per share amounts)

	Three Months Ended
	9/30/2006			6/30/2006			3/31/2006			12/31/2005			9/30/2005
INCOME ITEMS (Including Discontinued Operations):
Revenues	$	63,058		$	73,450		$	63,479		$	61,109		$	60,338
Net Straight Line Rent(1)		1,967			899			2,750			1,870			1,599
Lease Termination Fees(2)		475			9,938			837			44			149
Net Operating Income(3), (4)		46,156			57,241			47,410			47,814			45,592
Capitalized Interest and Loan Fees		2,984			2,398			2,061			2,069			2,583
Net Income (Loss) Available for Common Stockholders		31,574			17,975			13,529			(1,648	)		14,071
EBITDA(4), (5)		40,817			52,833			42,846			22,962			27,713
Funds From Operations(4), (6), (7)		26,462			37,630			26,787			8,506			14,150
Funds Available for Distribution(4), (6), (7), (8)		21,002			29,765			22,010			(629	)		9,788
Net Income (Loss) per common share – diluted	$	0.98		$	0.58		$	0.46		$	(0.06	)	$	0.49
Funds From Operations per common share – diluted	$	0.76		$	1.11		$	0.82		$	0.26		$	0.43
Dividends per share	$	0.530		$	0.530		$	0.530		$	0.510		$	0.510
RATIOS (Including Discontinued Operations):
Operating Margins		73.2	% .		77.9	%		74.7	%		78.2	%		75.6	%
Interest Coverage Ratio(9)		4.0x			4.7x			3.6x			2.2x			2.9x
Fixed Charge Coverage Ratio(10)		2.9x			3.5x			2.7x			1.6x			2.1x
FFO Payout Ratio(11)		69.5	%		48.9	%		64.7	%		195.7	%		117.6	%
FAD Payout Ratio(12)		87.6	%		61.8	%		78.7	%		N/A			170.1	%
	9/30/2006			6/30/2006			3/31/2006			12/31/2005			9/30/2005
ASSETS:
Real Estate Held for Investment before Depreciation	$	2,005,713		$	1,991,551		$	1,964,418		$	1,953,971		$	1,910,834
Total Assets		1,759,799			1,713,762			1,684,309			1,674,474			1,644,664
CAPITALIZATION:
Total Debt	$	837,005		$	811,562		$	929,578		$	842,282		$	830,727
Total Preferred Equity(13)		201,500			201,500			201,500			201,500			201,500
Total Market Equity Value(13)		2,615,609			2,508,333			2,525,219			2,020,429			1,828,831
Total Market Capitalization(13)		3,654,114			3,521,395			3,656,297			3,064,211			2,861,059
Total Debt / Total Market Capitalization		22.9	%		23.0	%		25.4	%		27.4	%		29.1	%
Total Debt and Preferred / Total Market Capitalization		28.4	%		28.7	%		31.0	%		34.0	%		36.1	%

(1) Represents the straight-line rent recognized during the period offset by cash received during the period that was applied to deferred rents receivable balances for terminated leases.

(2) For the three months ended June 30, 2006, lease terminations fees include approximately $9.8 million from an early lease termination with Qwest Communications, Inc. See footnote (1) on page 5 for additional information.

(3) Net Operating Income is defined as operating revenues (rental income, tenant reimbursements and other property income) less property and related expenses (property expenses, real estate taxes, provision for bad debts and ground leases) and excludes other non-property income and expenses, depreciation and amortization, and corporate general and administrative expenses.

(4) Please refer to pages 26 and 27 for Management Statements on Net Operating Income, EBITDA before minority interests, Funds From Operations and Funds Available for Distribution.

(5) EBITDA is reported before minority interests and net gain (loss) on dispositions. Please refer to page 29 for a reconciliation of GAAP Net Income Available for Common Stockholders to EBITDA before minority interests.

(6) Please refer to page 6 for a reconciliation of GAAP Net Income Available for Common Stockholders to Funds From Operations and Funds Available for Distribution.

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

(8) Please refer to page 30 for Reconciliation of Funds Available for Distribution to GAAP Net Cash Provided by Operating Activities.

(9) Calculated as EBITDA before minority interests divided by total interest expense, including discontinued operations.

(10) Calculated as EBITDA before minority interests divided by total interest expense, including discontinued operations, current year accrued preferred dividends and distributions on Cumulative Redeemable Preferred units.

(11) Calculated as current-quarter dividends accrued to common stockholders and common unitholders divided by Funds From Operations.

(12) Calculated as current-quarter dividends accrued to common stockholders and common unitholders divided by Funds Available for Distribution.

(13) See “Capital Structure” on page 23.

2

Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Common Stock Data (NYSE: KRC)

	Three Months Ended
	9/30/2006		6/30/2006		3/31/2006		12/31/2005		9/30/2005
High Price	$	79.44	$	76.00	$	77.74	$	63.71	$	56.03
Low Price	$	70.72	$	65.33	$	63.45	$	51.74	$	47.29
Closing Price	$	75.34	$	72.25	$	77.26	$	61.90	$	56.03
Dividends per share - annualized	$	2.12	$	2.12	$	2.12	$	2.04	$	2.04
Closing common shares (in 000’s) (1)		32,389		32,092		29,792		28,971		28,923
Closing partnership units (in 000’s) (1)		2,329		2,626		2,892		3,670		3,717
		34,718		34,718		32,684		32,641		32,640

(1) As of the end of the period.

3

Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Consolidated Balance Sheets

(unaudited, $ in thousands)

	9/30/2006			6/30/2006			3/31/2006			12/31/2005			9/30/2005
ASSETS:
Land and improvements	$	315,113		$	320,778		$	321,235		$	321,988		$	319,784
Buildings and improvements		1,472,438			1,481,215			1,490,006			1,494,958			1,456,253
Undeveloped land and construction in progress		218,162			189,558			153,177			137,025			134,797
Total real estate held for investment		2,005,713			1,991,551			1,964,418			1,953,971			1,910,834
Accumulated depreciation and amortization		(436,940	)		(425,708	)		(428,624	)		(416,597	)		(403,871	)
Total real estate assets, net		1,568,773			1,565,843			1,535,794			1,537,374			1,506,963
Cash and cash equivalents		7,750			8,583			11,395			3,881			8,705
Restricted cash		1,302			614			649			703			1,565
Funds held at qualified intermediary for Section 1031 exchange		43,794			—			—			—			—
Current receivables, net		3,168			3,951			6,396			5,759			3,694
Deferred rent receivables, net		60,535			58,579			57,692			55,048			53,168
Note receivable		11,126			11,155			11,184			11,213			11,241
Deferred leasing costs and other related intangibles, net		48,790			49,108			48,853			50,074			48,103
Deferred financing costs, net		5,754			6,396			4,828			5,256			5,552
Prepaid expenses and other assets		8,807			9,533			7,518			5,166			5,673
TOTAL ASSETS		1,759,799			1,713,762			1,684,309			1,674,474			1,644,664
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Liabilities:
Secured debt	$	463,005		$	465,562		$	468,078		$	473,282		$	487,727
Unsecured senior notes		144,000			144,000			144,000			144,000			144,000
Unsecured line of credit		230,000			202,000			317,500			225,000			199,000
Accounts payable, accrued expenses and other liabilities		66,230			60,203			55,596			134,558			96,547
Accrued distributions		19,610			19,610			18,533			17,856			17,856
Rents received in advance, tenant security deposits and deferred revenue		41,462			43,297			40,270			36,410			38,070
Total liabilities		964,307			934,672			1,043,977			1,031,106			983,200
Minority Interests:
7.45% Series A Cumulative Redeemable Preferred unitholders		73,638			73,638			73,638			73,638			73,638
Common unitholders of the Operating Partnership		40,338			44,199			39,437			50,462			53,152
Total minority interests		113,976			117,837			113,075			124,100			126,790
Stockholders’ Equity:
7.80% Series E Cumulative Redeemable Preferred stock		38,425			38,425			38,425			38,425			38,425
7.50% Series F Cumulative Redeemable Preferred stock		83,157			83,157			83,157			83,157			83,157
Common stock		324			321			298			289			289
Additional paid-in capital		670,715			664,860			531,852			523,609			523,027
Deferred compensation (1)		—			—			—			(1,998	)		(2,430	)
Distributions in excess of earnings		(111,105	)		(125,510	)		(126,475	)		(124,214	)		(107,794	)
Total stockholders’ equity		681,516			661,253			527,257			519,268			534,674
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,759,799		$	1,713,762		$	1,684,309		$	1,674,474		$	1,644,664

(1) On January 1, 2006, in connection with the adoption of SFAS 123(R), “Share-Based Payment,” the Company recorded a $2.0 million change in accounting principle to net the deferred compensation line item within equity against additional paid in capital. Under SFAS 123(R), an equity instrument is not recorded to stockholders’ equity until the related compensation expense is recorded over the requisite service period of the award. Prior to the adoption of SFAS 123(R) and in accordance with the previous accounting guidance, the Company recorded the full fair value of all issued but nonvested equity instruments in additional paid in capital and recorded an offsetting deferred compensation balance on a separate line item within equity for the amount of compensation costs not yet recognized for these nonvested instruments.

4

Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Consolidated Statements of Operations

(unaudited, $ in thousands, except per share amounts)

	Three Months Ended September 30,								Nine Months Ended September 30,
	2006			2005			% Change		2006			2005			% Change
REVENUES:
Rental income	$	56,641		$	53,387		6.1	%	$	169,142		$	159,215		6.2	%
Tenant reimbursements		5,890			5,721		3.0	%		17,657			17,318		2.0	%
Other property income		521			187		178.6	%		1,656			810		104.4	%
Total revenues		63,052			59,295		6.3	%		188,455			177,343		6.3	%
EXPENSES:
Property expenses		11,457			10,720		6.9	%		32,460			29,977		8.3	%
Real estate taxes		4,746			4,020		18.1	%		14,210			12,673		12.1	%
Provision for bad debts		56			(617	)	(109.1	%)		637			783		(18.6	%)
Ground leases		514			410		25.4	%		1,507			1,258		19.8	%
General and administrative expenses		5,673			18,400		(69.2	%)		15,322			41,214		(62.8	%)
Interest expense		10,312			9,570		7.8	%		33,491			28,535		17.4	%
Depreciation and amortization		17,908			16,040		11.6	%		53,263			49,035		8.6	%
Total expenses		50,666			58,543		(13.5	%)		150,890			163,475		(7.7	%)
OTHER INCOME AND EXPENSE:
Interest and other income		359			223		61.0	%		841			334		151.8	%
Net settlement receipts on interest rate swaps		299			183		63.4	%		747			143		422.4	%
(Loss) gain on derivative instruments		(324	)		115		(381.7	%)		(580	)		479		(221.1	%)
Total other income and expense		334			521		(35.9	%)		1,008			956		5.4	%
INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTERESTS		12,720			1,273		899.2	%		38,573			14,824		160.2	%
MINORITY INTERESTS:
Distributions on Cumulative Redeemable Preferred units		(1,397	)		(1,397	)	0.0	%		(4,191	)		(4,191	)	0.0	%
Minority interest in (earnings) loss of Operating Partnership attributable to continuing operations		(601	)		296		(303.0	%)		(2,171	)		(397	)	446.9	%
Total minority interests		(1,998	)		(1,101	)	81.5	%		(6,362	)		(4,588	)	38.7	%
INCOME FROM CONTINUING OPERATIONS		10,722			172		6133.7	%		32,211			10,236		214.7	%
DISCONTINUED OPERATIONS:
Revenues from discontinued operations (1)		6			1,043		(99.4	%)		11,534			4,390		162.7	%
Expenses from discontinued operations		(444	)		(448	)	(0.9	%)		(1,421	)		(2,185	)	(35.0	%)
Net gain on disposition of discontinued operations		25,603			17,831		43.6	%		31,259			23,610		32.4	%
Minority interest attributable to discontinued operations		(1,911	)		(2,125	)	(10.1	%)		(3,304	)		(2,987	)	10.6	%
Total income from discontinued operations		23,254			16,301		42.7	%		38,068			22,828		66.8	%
NET INCOME		33,976			16,473		106.3	%		70,279			33,064		112.6	%
PREFERRED DIVIDENDS		(2,402	)		(2,402	)	0.0	%		(7,206	)		(7,206	)	0.0	%
NET INCOME AVAILABLE FOR COMMON STOCKHOLDERS	$	31,574		$	14,071		124.4	%	$	63,073		$	25,858		143.9	%
Weighted average shares outstanding - basic		32,200			28,760		12.0	%		30,906			28,686		7.7	%
Weighted average shares outstanding - diluted		32,324			28,760		12.4	%		31,044			28,841		7.6	%
NET INCOME PER COMMON SHARE:
Net income per common share - basic	$	0.98		$	0.49		100.0	%	$	2.04		$	0.90		126.7	%
Net income per common share - diluted	$	0.98		$	0.49		100.0	%	$	2.03		$	0.90		125.6	%

(1) For the nine months ended September 30, 2006, revenues from discontinued operations includes approximately $9.8 million of other property income resulting from the early lease termination of a lease at an industrial property that was sold in September 2006. The $9.8 million is comprised of an approximate $9.0 million cash lease termination fee, an approximate $2.3 million non-cash gain related to the tenant’s obligation to replace the property’s roof in accordance with the original lease and the lease termination agreement, partially offset by the write-off of a $1.5 million deferred rent receivable associated with the lease. See footnote (5) on page 6 for additional information on the non-cash gain component of the lease termination fee.

5

Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Funds From Operations and Funds Available for Distribution

(unaudited, $ in thousands, except per share amounts)

	Three Months Ended September 30,								Nine Months Ended September 30,
	2006			2005			% Change		2006			2005			% Change
FUNDS FROM OPERATIONS: (1)
Net income available for common stockholders	$	31,574		$	14,071		124.4	%	$	63,073		$	25,858		143.9	%
Adjustments:
Minority interest in earnings of Operating Partnership		2,512			1,829		37.3	%		5,475			3,384		61.8	%
Depreciation and amortization of real estate assets		17,979			16,081		11.8	%		53,585			49,464		8.3	%
Net gain on dispositions of discontinued operations		(25,603	)		(17,831	)	43.6	%		(31,259	)		(23,610	)	32.4	%
Funds From Operations (2)	$	26,462		$	14,150		87.0	%	$	90,874		$	55,096		64.9	%
Weighted average common shares/units outstanding - basic		34,570			32,477		6.4	%		33,597			32,452		3.5	%
Weighted average common shares/units outstanding - diluted		34,694			32,635		6.3	%		33,735			32,607		3.5	%
FFO per common share/unit - basic	$	0.77		$	0.44		75.7	%	$	2.70		$	1.70		59.3	%
FFO per common share/unit - diluted	$	0.76		$	0.43		75.9	%	$	2.69		$	1.69		59.4	%
FUNDS AVAILABLE FOR DISTRIBUTION: (1)
Funds From Operations	$	26,462		$	14,150		87.0	%	$	90,874		$	55,096		64.9	%
Adjustments:
Amortization of deferred financing costs		305			334		(8.7	%)		909			1,034		(12.1	%)
Contractual cash rents received in advance of revenue recognition (3)		51			—		100.0	%		378			—		100.0	%
Non-cash amortization of restricted stock grants		1,069			795		34.5	%		2,657			2,622		1.3	%
Loss (gain) on derivative instruments (4)		325			(115	)	(382.6	%)		580			(479	)	(221.1	%)
Non-cash gain on lease termination(5)		—			—		0.0	%		(2,334	)		—		100.0	%
Revenue recorded for reimbursement of tenant improvements (6)		(585	)		(524	)	11.6	%		(1,717	)		(1,602	)	7.2	%
Amortization of below market rents (7)		(458	)		(309	)	48.2	%		(1,113	)		(915	)	21.6	%
Tenant improvements, leasing commissions and recurring capital expenditures (8)		(4,200	)		(2,944	)	42.7	%		(11,844	)		(12,184	)	(2.8	%)
Net effect of straight-line rents (9)		(1,967	)		(1,599	)	23.0	%		(5,616	)		(7,920	)	(29.1	%)
Funds Available for Distribution (2)	$	21,002		$	9,788		114.6	%	$	72,774		$	35,652		104.1	%

(1) See page 27 for Management Statements on Funds From Operations and Funds Available for Distribution.

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

(3) Represents cash rents received for leases that have contractually commenced but for which tenant improvements are not substantially complete.

(4) Represents the non-cash gain / loss on derivatives as a result of marking such instruments to market at the end of each period.

(5) Represents the amount funded by a tenant for a new roof on one of the Company’s industrial properties in connection with the tenant’s early lease termination. The roof was recorded as a building improvement on the Company’s balance sheet with an offsetting gain recorded in other income.

(6) Represents the revenue recognized during the period for tenant improvements reimbursed by the tenant.

(7) Represents the SFAS 141 adjustment related to the acquisition of buildings with above/below market rents.

(8) For 2006, represents costs incurred during the period. For 2005, represents costs incurred during the period and remaining unpaid costs for leases commencing during the period.

(9) Represents the straight-line rent income recognized during the period offset by cash received during the period that was applied to deferred rents receivable balances for terminated leases.

6

Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Same Store Analysis ⁽¹⁾

(unaudited, $ in thousands)

Same Store Analysis (GAAP Basis)⁽²⁾

	Three Months Ended September 30,								Nine Months Ended September 30,
	2006			2005			% Change		2006			2005			% Change
Total Same Store Portfolio
Number of properties		123			123					123			123
Square Feet		11,240,918			11,240,918					11,240,918			11,240,918
Percent of Stabilized Portfolio		93.7	%		89.8	%				93.7	%		89.8	%
Average Occupancy		95.2	%		95.3	%				96.1	%		95.9	%
Operating Revenues:
Rental income	$	54,021		$	52,243		3.4	%	$	161,791		$	156,273		3.5	%
Tenant reimbursements		5,626			5,434		3.5	%		16,405			16,180		1.4	%
Other property income		521			187		178.6	%		1,650			808		104.2	%
Total operating revenues		60,168			57,864		4.0	%		179,846			173,261		3.8	%
Operating Expenses:
Property expenses		10,638			10,178		4.5	%		30,059			28,762		4.5	%
Real estate taxes		4,444			3,892		14.2	%		13,193			12,338		6.9	%
Provision for bad debts		58			(611	)	(109.5	%)		628			740		(15.1	%)
Ground leases		513			409		25.4	%		1,503			1,255		19.8	%
Total operating expenses		15,653			13,868		12.9	%		45,383			43,095		5.3	%
GAAP Net Operating Income	$	44,515		$	43,996		1.2	%	$	134,463		$	130,166		3.3	%
Same Store Analysis (Cash Basis)(2)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2006			2005			% Change		2006			2005			% Change
Total operating revenues		59,250			55,607		6.6	%		173,281			163,765		5.8	%
Total operating expenses		15,653			13,868		12.9	%		45,383			43,095		5.3	%
Cash Net Operating Income	$	43,597		$	41,739		4.5	%	$	127,898		$	120,670		6.0	%

(1) Same store defined as all stabilized properties owned at January 1, 2005 and still owned and in the stabilized portfolio at September 30, 2006.

(2) Please refer to page 28 for a reconciliation of Cash and GAAP Net Operating Income to Net Income Available to Common Stockholders.

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Stabilized Portfolio Occupancy Overview

	# of Buildings	Portfolio Breakdown				Total Square Feet	Occupancy at: (1)
		NOI (2)		Sq. Ft.			9/30/2006		6/30/2006		12/31/2005
STABILIZED PORTFOLIO:
OCCUPANCY BY PRODUCT TYPE:
Office:
Los Angeles	25	27.9	%	24.7	%	2,963,024	92.9	%	93.3	%	90.6	%
Orange County	5	2.1	%	2.3	%	277,727	96.1	%	88.0	%	86.3	%
San Diego	46	49.6	%	30.9	%	3,703,650	99.7	%	99.5	%	94.4	%
Other	8	5.2	%	7.3	%	878,960	92.6	%	92.7	%	92.9	%
Subtotal	84	84.8	%	65.2	%	7,823,361	96.2	%	95.9	%	92.5	%
Industrial:
Los Angeles	2	1.2	%	1.7	%	198,415	100.0	%	100.0	%	100.0	%
Orange County	42	13.2	%	30.6	%	3,677,916	95.6	%	99.8	%	99.1	%
San Diego	1	0.8	%	2.5	%	303,000	100.0	%	100.0	%	100.0	%
Subtotal	45	15.2	%	34.8	%	4,179,331	96.1	%	99.9	%	99.3	%
OCCUPANCY BY REGION:
Los Angeles	27	29.1	%	26.4	%	3,161,439	93.4	%	93.7	%	91.2	%
Orange County	47	15.3	%	32.9	%	3,955,643	95.6	%	99.0	%	98.2	%
San Diego	47	50.4	%	33.4	%	4,006,650	99.7	%	99.5	%	94.9	%
Other	8	5.2	%	7.3	%	878,960	92.6	%	92.7	%	94.0	%
TOTAL STABILIZED PORTFOLIO	129	100.0	%	100.0	%	12,002,692	96.2	%	97.4	%	95.0	%

AVERAGE OCCUPANCY - STABILIZED PORTFOLIO

	Office		Industrial		Total
Quarter-to-Date	96.0	%	92.6	%	94.8	%
Year-to-Date	94.0	%	97.3	%	95.2	%

(1) Occupancy percentages reported are based on the Company’s stabilized portfolio for the period presented.

(2) Percentage of year-to-date Net Operating Income excluding Other Property Income.

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Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview

	City/ Submarket	# of Buildings	Square Feet	Occupancy
Office:
Los Angeles, California
23925 Park Sorrento	Calabasas	1	11,789	100.0	%
23975 Park Sorrento	Calabasas	1	100,592	100.0	%
24025 Park Sorrento	Calabasas	1	102,264	100.0	%
26541 Agoura Road	Calabasas	1	90,366	100.0	%
181/185 S. Douglas Street	El Segundo	1	61,545	97.2	%
Kilroy Airport Center, El Segundo	El Segundo	2	598,214	100.0	%
909 Sepulveda Blvd.	El Segundo	1	241,607	61.9	%
999 Sepulveda Blvd.	El Segundo	1	127,901	95.0	%
Kilroy Airport Center, Long Beach	Long Beach	7	949,065	90.0	%
12200 W. Olympic Blvd.	Los Angeles	1	150,302	99.0	%
12100 W. Olympic Blvd.	Los Angeles	1	150,167	100.0	%
12312 W. Olympic Blvd.	Los Angeles	1	78,000	100.0	%
1633 26th Street	Santa Monica	1	44,915	100.0	%
2100 Colorado Avenue	Santa Monica	3	94,844	100.0	%
3130 Wilshire Blvd.	Santa Monica	1	88,338	100.0	%
501 Santa Monica Blvd.	Santa Monica	1	73,115	81.8	%
Total Los Angeles Office		25	2,963,024	92.9	%
Orange County, California
4175 E. La Palma Avenue	Anaheim	1	43,263	80.2	%
8101 Kaiser Blvd.	Anaheim	1	60,177	100.0	%
Kilroy Center-Brea	Brea	2	106,791	100.0	%
111 Pacifica	Irvine Spectrum	1	67,496	96.7	%
Total Orange County Office		5	277,727	96.1	%

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Third Quarter 2006 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview

	City/ Submarket	# of Buildings	Square Feet	Occupancy
Office:
San Diego, California
12340 El Camino Real	Del Mar	1	87,405	100.0	%
12348 High Bluff Drive	Del Mar	1	38,710	100.0	%
12390 El Camino Real	Del Mar	1	72,332	100.0	%
3579 Valley Center Drive	Del Mar	1	52,375	100.0	%
3611 Valley Center Drive	Del Mar	1	130,178	100.0	%
3661 Valley Center Drive	Del Mar	1	129,752	100.0	%
3721 Valley Center Drive	Del Mar	1	114,780	100.0	%
3811 Valley Center Drive	Del Mar	1	112,067	100.0	%
12225 / 12235 El Camino Real	Del Mar	2	115,513	100.0	%
12400 High Bluff Drive	Del Mar	1	208,464	100.0	%
6215 / 6220 Greenwich Drive	Governor Park	2	212,214	100.0	%
15051 Ave of Science	I-15 Corridor	1	70,617	100.0	%
15073 Ave of Science	I-15 Corridor	1	46,759	100.0	%
15378 Ave of Science	I-15 Corridor	1	68,910	100.0	%
15435 / 15445 Innovation Drive	I-15 Corridor	2	103,000	100.0	%
15231 Ave of Science	I-15 Corridor	1	65,867	100.0	%
15253 Ave of Science	I-15 Corridor	1	37,405	100.0	%
13500/13520 Evening Creek Drive North	I-15 Corridor	2	281,830	98.3	%
4939 / 4955 Directors Place	Sorrento Mesa	2	136,908	100.0	%
5005 / 5010 Wateridge Vista Drive	Sorrento Mesa	2	172,778	100.0	%
10421 Pacific Center Court	Sorrento Mesa	1	79,871	100.0	%
10243 Genetic Center	Sorrento Mesa	1	102,875	100.0	%
10390 Pacific Center Court	Sorrento Mesa	1	68,400	100.0	%
6055 Lusk Avenue	Sorrento Mesa	1	93,000	100.0	%
6260 Sequence Drive	Sorrento Mesa	1	130,536	100.0	%
6290 / 6310 Sequence Drive	Sorrento Mesa	2	152,415	100.0	%
6340 / 6350 Sequence Drive	Sorrento Mesa	2	199,000	100.0	%
Pacific Corporate Center	Sorrento Mesa	6	332,542	100.0	%
5717 Pacific Center	Sorrento Mesa	1	67,995	100.0	%
4690 Executive Drive	University Towne Center	1	47,957	86.8	%
9455 Towne Center Drive	University Towne Center	1	45,195	100.0	%
9785 / 9791 Towne Center Drive	University Towne Center	2	126,000	100.0	%
Total San Diego Office		46	3,703,650	99.7	%
Other
Kilroy Airport Center, Sea-Tac	Seattle, WA	3	532,430	89.3	%
5151/5155 Camino Ruiz	Carmarillo, CA	4	265,372	100.0	%
2829 Townsgate Road	Thousand Oaks, CA	1	81,158	89.7	%
Total Other Office		8	878,960	92.6	%
Total Office		84	7,823,361	96.2	%

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Third Quarter 2006 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview

	City/ Submarket	# of Buildings	Square Feet	Occupancy
Industrial:
Los Angeles, California
2031 E. Mariposa Avenue	El Segundo	1	192,053	100.0	%
2270 E. El Segundo Blvd.	El Segundo	1	6,362	100.0	%
Total Los Angeles Industrial		2	198,415	100.0	%
Orange County, California
1000 E. Ball Road	Anaheim	1	100,000	100.0	%
1230 S. Lewis Road	Anaheim	1	57,730	100.0	%
1250 N. Tustin Avenue	Anaheim	1	84,185	100.0	%
3125 E. Coronado Street	Anaheim	1	144,000	100.0	%
3130 - 3150 Miraloma	Anaheim	1	144,000	100.0	%
3250 E. Carpenter	Anaheim	1	41,225	100.0	%
3340 E. La Palma Avenue	Anaheim	1	153,320	100.0	%
5115 E. La Palma Avenue	Anaheim	1	286,139	100.0	%
5325 E. Hunter Avenue	Anaheim	1	110,487	100.0	%
Anaheim Tech Center	Anaheim	5	597,147	100.0	%
La Palma Business Center	Anaheim	2	145,481	100.0	%
Brea Industrial Complex	Brea	7	277,456	97.8	%
Brea Industrial-Lambert Road	Brea	2	178,811	100.0	%
1675 MacArthur	Costa Mesa	1	50,842	100.0	%
25202 Towne Center Drive	Foothill Ranch	1	303,533	100.0	%
12400 Industry Street	Garden Grove	1	64,200	100.0	%
12681 / 12691 Pala Drive	Garden Grove	1	84,700	100.0	%
7421 Orangewood Avenue	Garden Grove	1	82,602	100.0	%
Garden Grove Industrial Complex	Garden Grove	6	275,971	100.0	%
17150 Von Karman	Irvine	1	157,458	0.0	%
2055 S.E. Main Street	Irvine	1	47,583	100.0	%
1951 E. Carnegie Avenue	Santa Ana	1	100,000	100.0	%
2525 Pullman	Santa Ana	1	103,380	100.0	%
14831 Franklin Avenue	Tustin	1	36,256	100.0	%
2911 Dow Avenue	Tustin	1	51,410	100.0	%
Total Orange County Industrial		42	3,677,916	95.6	%
San Diego, California
10850 Via Frontera	I-15 Corridor	1	303,000	100.0	%
Total San Diego Industrial		1	303,000	100.0	%
Total Industrial		45	4,179,331	96.1	%

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Third Quarter 2006 Supplemental Financial Report

Leasing Activity

Quarter-to-Date

	1st & 2nd Generation				2nd Generation										Weighted Average Lease Term (Mo.)
	# of Leases (1)		Square Feet (1)		TI/LC Per Sq.Ft. (2)		Maintenance Capex Per Sq.Ft. (3)		Changes in Rents (4)		Changes in Cash Rents (5)		Retention Rates (6)
	New	Renewal	New	Renewal
Office	9	8	35,585	27,098	$	15.45	$	0.07	8.8	%	5.0	%	39.6	%	50
Industrial	1	1	4,000	17,931		6.64		0.10	31.5	%	8.1	%	81.8	%	56
Total	10	9	39,585	45,029	$	12.36	$	0.09	12.3	%	5.5	%	49.9	%	51
Year-to-Date
	1st & 2nd Generation				2nd Generation										Weighted Average Lease Term (Mo.)
	# of Leases (1)		Square Feet (1)		TI/LC Per Sq.Ft. (2)		Maintenance Capex Per Sq.Ft. (3)		Changes in Rents (4)		Changes in Cash Rents (5)		Retention Rates (6)
	New	Renewal	New	Renewal
Office	41	28	389,093	223,191	$	13.25	$	0.22	12.2	%	1.4	%	51.8	%	78
Industrial	6	7	57,864	430,303		4.18		0.15	9.5	%	0.8	%	93.5	%	64
Total	47	35	446,957	653,494	$	8.79	$	0.20	11.4	%	1.2	%	73.3	%	72

(1) Represents leasing activity for leases commencing during the period shown, net of month-to-month leases. Excludes leasing on new construction.

(2) Excludes tenant improvements constructed by the Company and reimbursed by the tenant upon completion of the improvements.

(3) Calculated over entire stabilized portfolio.

(4) Calculated as the change between GAAP rents for new/renewed leases and the expired GAAP rents for the same space. Excludes leases for which the space was vacant longer than one year.

(5) Calculated as the change between stated rents for new/renewed leases and the expired stated rents for the same space. Excludes leases for which the space was vacant longer than one year.

(6) Calculated as the percentage of space either renewed or expanded into by existing tenants at lease expiration.

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Third Quarter 2006 Supplemental Financial Report

Stabilized Portfolio Capital Expenditures

($ in thousands)

Non-Recurring Capital Expenditures:

	Q1 2006		Q2 2006		Q3 2006		YTD 2006
Capital Improvements	$	—	$	—	$	—	$	—
Tenant Improvements & Leasing Commissions (1)		345		672		864		1,881
Total	$	345	$	672	$	864	$	1,881
Recurring Capital Expenditures:
	Q1 2006		Q2 2006		Q3 2006		YTD 2006
Capital Improvements
Office	$	782	$	410	$	606	$	1,798
Industrial		72		123		484		679
		854		533		1,090		2,477
Tenant Improvements & Leasing Commissions (1)
Office		843		3,955		2,822		7,620
Industrial		998		461		288		1,747
		1,841		4,416		3,110		9,367
Total
Office		1,625		4,365		3,428		9,418
Industrial		1,070		584		772		2,426
	$	2,695	$	4,949	$	4,200	$	11,844

(1) Represents costs incurred for leasing activity during the period shown. Excludes tenant improvements constructed by the Company and reimbursed by the tenant upon completion of the improvements.

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Third Quarter 2006 Supplemental Financial Report

Lease Expiration Summary Schedule

($ in thousands)

Year of Expiration	# of Expiring Leases	Total Square Feet(1)	% of Total Leased Sq. Ft.		Annual Base Rent (2)		Annual Rent per Sq. Ft.(2)
OFFICE:
Remaining 2006 (3)	10	92,658	1.3	%	$	1,552	$	16.75
2007	67	833,675	11.3	%		16,378		19.65
2008	56	795,843	10.8	%		14,839		18.65
2009	75	1,295,510	17.5	%		30,136		23.26
2010	64	1,106,486	15.0	%		28,029		25.33
2011	56	565,453	7.6	%		11,580		20.48
2012	14	554,194	7.5	%		16,313		29.44
2013	11	379,939	5.1	%		8,608		22.66
2014	10	365,518	4.9	%		9,195		25.16
2015 and beyond	29	1,406,406	19.0	%		50,799		36.12
Subtotal	392	7,395,682	100.0	%	$	187,429	$	25.34
INDUSTRIAL:
Remaining 2006 (3)	3	328,000	8.2	%	$	1,624	$	4.95
2007	15	573,377	14.3	%		4,133		7.21
2008	12	921,713	23.0	%		6,525		7.08
2009	15	773,307	19.3	%		4,937		6.38
2010	7	418,941	10.5	%		3,967		9.47
2011	9	353,607	8.8	%		2,756		7.79
2012	5	357,369	8.9	%		2,168		6.07
2013	—	—	—			—		—
2014	—	—	—			—		—
2015 and beyond	4	281,557	7.0	%		2,102		7.47
Subtotal	70	4,007,871	100.0	%	$	28,212	$	7.04
TOTAL PORTFOLIO:
Remaining 2006 (3)	13	420,658	3.7	%	$	3,176	$	7.55
2007	82	1,407,052	12.3	%		20,511		14.58
2008	68	1,717,556	15.1	%		21,364		12.44
2009	90	2,068,817	18.1	%		35,073		16.95
2010	71	1,525,427	13.4	%		31,996		20.98
2011	65	919,060	8.1	%		14,336		15.60
2012	19	911,563	8.0	%		18,481		20.27
2013	11	379,939	3.3	%		8,608		22.66
2014	10	365,518	3.2	%		9,195		25.16
2015 and beyond	33	1,687,963	14.8	%		52,901		31.34
Total	462	11,403,553	100.0	%	$	215,641	$	18.91

(1) Excludes space leased under month-to-month leases and vacant space at September 30, 2006.

(2) Reflects annualized contractual base rent calculated on a straight-line basis.

(3) Represents leases expiring during the remainder of 2006 for which renewals have not been executed.

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Third Quarter 2006 Supplemental Financial Report

Lease Expiration Schedule Detail by Region

($ in thousands)

	Los Angeles County								Orange County
Year of Expiration	# of Expiring Leases	Total Square Feet(1)	% of Total Regional Sq. Ft.		Annual Base Rent (2)		Annual Rent per Sq. Ft.(2)		# of Expiring Leases	Total Square Feet(1)	% of Total Regional Sq. Ft.		Annual Base Rent (2)		Annual Rent per Sq. Ft.(2)
OFFICE:
Remaining 2006 (3)	5	21,779	0.8	%	$	592	$	27.18	1	1,485	0.6	%	$	28	$	18.86
2007	32	115,995	4.4	%		3,091		26.65	8	19,101	8.0	%		412		21.57
2008	27	217,056	8.1	%		5,258		24.22	11	79,108	33.2	%		1,217		15.38
2009	38	618,043	23.2	%		15,482		25.05	13	96,167	40.3	%		2,298		23.90
2010	41	662,970	24.9	%		16,181		24.41	3	7,762	3.3	%		187		24.09
2011	35	239,886	9.0	%		6,735		28.08	4	14,767	6.2	%		351		23.77
2012	8	340,331	12.8	%		9,258		27.20	1	19,982	8.4	%		480		24.02
2013	7	131,119	4.9	%		3,033		23.13	—	—	—			—		—
2014	6	118,037	4.4	%		3,158		26.75	—	—	—			—		—
2015 and beyond	6	198,997	7.5	%		6,678		33.56	—	—	—			—		—
Subtotal	205	2,664,213	100.0	%	$	69,466	$	26.07	41	238,372	100.0	%	$	4,973	$	20.86
INDUSTRIAL:
Remaining 2006 (3)	—	—	—			—		—	2	25,000	0.7	%	$	184	$	7.36
2007	—	—	—			—		—	15	573,377	16.4	%		4,133		7.21
2008	—	—	—			—		—	12	921,713	26.3	%		6,525		7.08
2009	1	6,362	3.2	%	$	101	$	15.88	14	766,945	21.9	%		4,836		6.31
2010	1	192,053	96.8	%		2,374		12.36	6	226,888	6.5	%		1,593		7.02
2011	—	—	—			—		—	9	353,607	10.1	%		2,756		7.79
2012	—	—	—			—		—	5	357,369	10.2	%		2,168		6.07
2013	—	—	—			—		—	—	—	—			—		—
2014	—	—	—			—		—	—	—	—			—		—
2015 and beyond	—	—	—			—		—	4	281,557	7.9	%		2,102		7.47
Subtotal	2	198,415	100.0	%	$	2,475	$	12.47	67	3,506,456	100.0	%	$	24,297	$	6.93
TOTAL PORTFOLIO:
Remaining 2006 (3)	5	21,779	0.8	%	$	592	$	27.18	3	26,485	0.7	%	$	212	$	8.00
2007	32	115,995	4.1	%		3,091		26.65	23	592,478	15.8	%		4,545		7.67
2008	27	217,056	7.6	%		5,258		24.22	23	1,000,821	26.7	%		7,742		7.74
2009	39	624,405	21.8	%		15,583		24.96	27	863,112	23.0	%		7,134		8.27
2010	42	855,023	29.9	%		18,555		21.70	9	234,650	6.3	%		1,780		7.59
2011	35	239,886	8.4	%		6,735		28.08	13	368,374	9.8	%		3,107		8.43
2012	8	340,331	11.9	%		9,258		27.20	6	377,351	10.1	%		2,648		7.02
2013	7	131,119	4.6	%		3,033		23.13	—	—	—			—		—
2014	6	118,037	4.1	%		3,158		26.75	—	—	—			—		—
2015 and beyond	6	198,997	6.8	%		6,678		33.56	4	281,557	7.6	%		2,102		7.47
Total	207	2,862,628	100.0	%	$	71,941	$	25.13	108	3,744,828	100.0	%	$	29,270	$	7.82

(1) Excludes space leased under month-to-month leases and vacant space at September 30, 2006.

(2) Reflects annualized contractual base rent calculated on a straight-line basis.

(3) Represents leases expiring during the remainder of 2006 for which renewals have not been executed.

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Third Quarter 2006 Supplemental Financial Report

Lease Expiration Schedule Detail by Region

($ in thousands)

	San Diego County								Other
Year of Expiration	# of Expiring Leases	Total Square Feet(1)	% of Total Regional Sq. Ft.		Annual Base Rent (2)		Annual Rent per Sq. Ft.(2)		# of Expiring Leases	Total Square Feet(1)	% of Total Regional Sq. Ft.		Annual Base Rent (2)		Annual Rent per Sq. Ft.(2)
OFFICE:
Remaining 2006 (3)	2	50,470	1.4	%	$	610	$	12.09	2	18,924	2.3	%	$	322	$	17.02
2007	16	577,748	15.7	%		10,512		18.19	11	120,831	14.9	%		2,363		19.56
2008	9	254,722	6.9	%		5,648		22.17	9	244,957	30.3	%		2,716		11.09
2009	14	515,324	14.0	%		10,928		21.21	10	65,976	8.2	%		1,428		21.64
2010	11	352,968	9.6	%		9,731		27.57	9	82,786	10.2	%		1,930		23.31
2011	7	88,963	2.4	%		1,699		19.10	10	221,837	27.4	%		2,795		12.60
2012	5	193,881	5.3	%		6,575		33.91	—	—	—			—		—
2013	3	245,316	6.7	%		5,492		22.39	1	3,504	0.4	%		83		23.69
2014	4	247,481	6.7	%		6,037		24.39	—	—	—			—		—
2015 and beyond	19	1,157,469	31.3	%		43,177		37.30	4	49,940	6.3	%		944		18.90
Subtotal	90	3,684,342	100.0	%	$	100,409	$	27.25	56	808,755	100.0	%	$	12,581	$	15.56
INDUSTRIAL:
Remaining 2006 (3)	1	303,000	100.0	%	$	1,440	$	4.75	—	—	—			—		—
2007	—	—	—			—		—	—	—	—			—		—
2008	—	—	—			—		—	—	—	—			—		—
2009	—	—	—			—		—	—	—	—			—		—
2010	—	—	—			—		—	—	—	—			—		—
2011	—	—	—			—		—	—	—	—			—		—
2012	—	—	—			—		—	—	—	—			—		—
2013	—	—	—			—		—	—	—	—			—		—
2014	—	—	—			—		—	—	—	—			—		—
2015 and beyond	—	—	—			—		—	—	—	—			—		—
Subtotal	1	303,000	100.0	%	$	1,440	$	4.75	—	—	—		$	—	$	—
TOTAL PORTFOLIO:
Remaining 2006 (3)	3	353,470	8.9	%	$	2,050	$	5.80	2	18,924	2.3	%	$	322	$	17.02
2007	16	577,748	14.5	%		10,512		18.19	11	120,831	14.9	%		2,363		19.56
2008	9	254,722	6.4	%		5,648		22.17	9	244,957	30.3	%		2,716		11.09
2009	14	515,324	12.9	%		10,928		21.21	10	65,976	8.2	%		1,428		21.64
2010	11	352,968	8.9	%		9,731		27.57	9	82,786	10.2	%		1,930		23.31
2011	7	88,963	2.2	%		1,699		19.10	10	221,837	27.4	%		2,795		12.60
2012	5	193,881	4.9	%		6,575		33.91	—	—	—			—		—
2013	3	245,316	6.2	%		5,492		22.39	1	3,504	0.4	%		83		23.69
2014	4	247,481	6.2	%		6,037		24.39	—	—	—			—		—
2015 and beyond	19	1,157,469	28.9	%		43,177		37.30	4	49,940	6.3	%		944		18.90
Total	91	3,987,342	100.0	%	$	101,849	$	25.54	56	808,755	100.0	%	$	12,581	$	15.56

⁽¹⁾ Excludes space leased under month-to-month leases and vacant space at September 30, 2006.

⁽²⁾ Reflects annualized contractual base rent calculated on a straight-line basis.

⁽³⁾ Represents leases expiring during the remainder of 2006 for which renewals have not been executed.

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Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Quarterly Lease Expirations for 2006 and 2007

($ in thousands)

	# of Expiring Leases (1)	Total Square Feet (1), (2)	% of Total Leased Sq. Ft.		Annual Base Rent (3)		Annual Rent per Sq. Ft. (3)
OFFICE:
Q4 2006	10	92,658	1.3	%	$	1,552	$	16.75
Q1 2007	12	156,662	2.1	%		4,267		27.24
Q2 2007	26	318,678	4.3	%		6,046		18.97
Q3 2007	17	264,612	3.6	%		3,925		14.83
Q4 2007	12	93,723	1.3	%		2,140		22.83
Subtotal 2007	67	833,675	11.3	%		16,378		19.65
INDUSTRIAL:
Q4 2006	3	328,000	8.2	%		1,624		4.95
Q1 2007	7	325,961	8.1	%		2,261		6.94
Q2 2007	4	156,980	3.9	%		1,151		7.33
Q3 2007	—	—	—			—		—
Q4 2007	4	90,436	2.3	%		721		7.97
Subtotal 2007	15	573,377	14.3	%		4,133		7.21
TOTAL PORTFOLIO:
Q4 2006	13	420,658	3.7	%		3,176		7.55
Q1 2007	19	482,623	4.2	%		6,528		13.53
Q2 2007	30	475,658	4.2	%		7,197		15.13
Q3 2007	17	264,612	2.3	%		3,925		14.83
Q4 2007	16	184,159	1.6	%		2,861		15.54
Total 2007	82	1,407,052	12.3	%	$	20,511	$	14.58

⁽¹⁾ Represents leases expiring during the remainder of 2006 and in 2007 for which renewals have not been executed.

⁽²⁾ Excludes space leased under month-to-month leases and vacant space at September 30, 2006.

⁽³⁾ Reflects annualized contractual base rent calculated on a straight-line basis.

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Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Top Ten Office and Top Ten Industrial Tenants

($ in thousands)

Tenant Name	Annual Base Rental Revenues (1)		Rentable Square Feet	Percentage of Total Annual Base Rental Revenues		Percentage of Total Rentable Square Feet
Office Properties:
The Boeing Company	$	8,825	675,979	4.1	%	5.6	%
AMN Healthcare		8,341	175,672	3.8	%	1.5	%
Intuit, Inc.(2)		6,185	305,409	2.9	%	2.5	%
DIRECTV Group, Inc.		6,131	207,166	2.8	%	1.7	%
Fish & Richardson		6,071	139,538	2.8	%	1.2	%
Scripps Health		5,199	112,067	2.4	%	0.9	%
Diversa Corporation		5,158	136,908	2.4	%	1.1	%
Favrille, Inc.		4,490	79,871	2.1	%	0.7	%
Hewlett-Packard Company		4,348	117,948	2.0	%	1.0	%
Epson America, Inc.		4,161	162,852	1.9	%	1.4	%
Total Office Properties	$	58,909	2,113,410	27.2	%	17.6	%
Industrial Properties:
Celestica California, Inc.	$	2,501	303,533	1.2	%	2.5	%
Mattel, Inc.		2,374	192,053	1.1	%	1.6	%
NBTY Manufacturing, LLC		1,484	286,139	0.7	%	2.4	%
Extron Electronics		1,145	157,730	0.5	%	1.3	%
Targus, Inc.		1,053	200,646	0.5	%	1.7	%
United Plastics Group, Inc.		1,028	144,000	0.5	%	1.2	%
Progressive Marketing		838	144,000	0.4	%	1.2	%
Ricoh Electronics, Inc.		810	100,000	0.4	%	0.8	%
Arrow Industries		798	153,320	0.4	%	1.3	%
Printrak International Inc.		668	84,185	0.3	%	0.7	%
Total Industrial Properties	$	12,699	1,765,606	6.0	%	14.7	%

(1) Reflects annualized contractual base rent calculated on a straight-line basis.

(2) Upon commencement of a new ten-year lease agreement in San Diego County, which is anticipated to occur in late 2007, Intuit is projected to become our largest tenant based on its percentage of total annual base rental revenues.

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Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Boeing Lease Summary

($ in thousands)

The Boeing Company	Rentable Square Feet	Annual Base Rental Revenues (1)		Lease Expiration Date
Boeing Satellite Systems
2260 E. Imperial Highway, El Segundo(2)	286,151	$	5,409	July 31, 2010
1231 N. Miller Street, Anaheim	113,242		689	March 31, 2009
1145 N. Ocean Blvd., Anaheim	65,447		495	October 31, 2010
	464,840		6,593
Boeing Airplane-on-Ground Division
17930 Pacific Highway, Seattle	211,139		2,232	December 31, 2007
Total	675,979	$	8,825

(1) Reflects annualized contractual base rent calculated on a straight-line basis.

(2) In addition to annual base rental revenues, Boeing was previously obligated to pay approximately $1.2 million in parking revenue to the Company under a separate parking agreement related to this lease. In accordance with the terms of the recent lease extension, annual base rental revenue includes parking income.

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Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

2006 Acquisitions and Dispositions

($ in thousands)

ACQUISITIONS:
Property	Location	Type	Month of Acquisition	Square Feet		Purchase Price
1st QUARTER:
NONE
2nd QUARTER:
NONE
3rd QUARTER:
NONE
DISPOSITIONS:
Property	Location	Type	Month of Disposition	Square Feet		Sales Price
1st QUARTER:
3735 Imperial Highway	Stockton, CA	Industrial	March	164,540		$	16,950
2nd QUARTER:
NONE
3rd QUARTER:
9401 and 9451 Toledo Way	Irvine, CA	Industrial and Office	September	272,000	(1)		45,000	(2)
TOTAL YEAR-TO-DATE DISPOSITIONS				436,540		$	61,950

(1) This disposition included one office building, encompassing approximately 27,200 rentable square feet, one industrial building, encompassing approximately 244,800 rentable square feet and a parcel of undeveloped land adjacent to the buildings.

(2) The net cash proceeds of approximately $43.8 million are being held at a qualified intermediary for the purpose of a future Section 1031 tax-deferred exchange.

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Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

In-Process and Committed Development and Redevelopment Projects

($ in millions)

DEVELOPMENT PROJECTS:		Type	Estimated Construction Period		Est. Stabilization Date(1)	Rentable Square Feet	Total Estimated Investment		Total Costs as of 9/30/2006(4)		% Leased
Project	Location		Start Date	Compl. Date
PROJECTS UNDER CONSTRUCTION:
ICC - 15333 Avenue of Science	I-15 Corridor	Office	4Q 2005	4Q 2006	4Q 2006	77,015	$	20.5	$	15.4	100	%
Santa Fe Summit - Phase I(2)	56 Corridor	Office	4Q 2005 - 1Q 2006	3Q 2007 - 4Q 2007	3Q 2007 - 4Q 2007	465,600		147.3		87.6	100	%
Pacific Corporate Center - Lots 3, 4 & 6	Sorrento Mesa	Office	3Q 2006	3Q 2007	3Q 2007	318,000		78.1		26.4	100	%
Kilroy Sabre Springs - Phase III	I-15 Corridor	Office	3Q 2006	4Q 2007	4Q 2008	142,726		65.9		10.2	0	%
ICC - 15004 Innovation Drive	I-15 Corridor	Office	3Q 2006	3Q 2008	3Q 2008	146,156		52.1		5.6	100	%
TOTAL PROJECTS UNDER CONSTRUCTION						1,149,497	$	363.9	$	145.2	88	%

REDEVELOPMENT PROJECTS:	Location	Pre and Post Redevelopment Type	Estimated Construction Period		Est. Stabilization Date(1)	Rentable Square Feet	Existing Investment(3)		Estimated Redevelopment Costs		Total Estimated Investment		Total Costs as of 9/30/2006(4)		% Leased
Project			Start Date	Compl. Date
PROJECTS UNDER CONSTRUCTION:
2240 E. Imperial Highway - Kilroy Airport Center(5)	El Segundo	Lab to Office	2Q 2006	2Q 2007	2Q 2008	107,041	$	5.0	$	13.0	$	18.0	$	6.0	77	%
TOTAL PROJECTS UNDER CONSTRUCTION						107,041	$	5.0	$	13.0	$	18.0	$	6.0	77	%

(1) Based on management’s estimation of the earlier of stabilized occupancy (95%) or one year from the date of substantial completion.

(2) Construction on two of the four buildings commenced in the fourth quarter of 2005. Construction on the remaining two buildings commenced in the first quarter of 2006.

(3) Represents the depreciated carrying value at the commencement of redevelopment for the space being redeveloped. See footnote (5) below.

(4) Represents cash paid and costs incurred as of September 30, 2006.

(5) The Company will be redeveloping 107,041 square feet of this building given that The Boeing Company and its predecessor occupied the space for over 20 years. The ground floor, which encompasses approximately 18,800 rentable square feet, is still reflected in the stabilized portfolio numbers of the Kilroy Airport Center, El Segundo complex.

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Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Future Development Pipeline

($ in millions)

Project	Location	Type	Total Site Acreage	Estimated Rentable Square Feet	Total Estimated Investment		Total Costs as of 9/30/2006 (1)
SAN DIEGO, CALIFORNIA:
Kilroy Centre Rancho Bernardo(2)	I-15 Corridor	Office	20.0	800,000 - 1,500,000	$	250.0 - 563.0	$	23.5
Pacific Corporate Center - Lot 8	Sorrento Mesa	Office	5.0	95,000		30.0		9.1
Santa Fe Summit - Phase II	56 Corridor	Office	11.3	339,500		141.7		28.7
Sorrento Gateway - Lot 1	Sorrento Mesa	Office	3.4	54,000		19.0		5.2
Sorrento Gateway - Lot 2	Sorrento Mesa	Office	4.4	80,000		37.2		9.4
Sorrento Gateway - Lot 3	Sorrento Mesa	Office	3.4	57,000		21.8		6.7
Sorrento Gateway - Lot 7	Sorrento Mesa	Office	4.1	57,000		22.9		8.3
TOTAL FUTURE DEVELOPMENT PIPELINE			51.6	1,482,500 - 2,182,500	$	522.6 - 835.6	$	90.9

(1) Represents cash paid and costs incurred as of September 30, 2006.

(2) This site includes entitlements to build approximately 1.8 million square feet of office or light industrial space. The Company currently anticipates it may develop the site in phases depending on lease activity and market conditions.

22

Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Capital Structure

At September 30, 2006

($ in thousands)

	Shares/Units At September 30, 2006	Aggregate Principal Amount or $ Value Equivalent		% of Total Market Capitalization
DEBT:
Secured Debt		$	463,005	12.7	%
Unsecured Senior Notes			144,000	3.9	%
Unsecured Line of Credit			230,000	6.3	%
Total Debt		$	837,005	22.9	%
EQUITY:
7.450% Series A Cumulative Redeemable Preferred Units (1)	1,500,000	$	75,000	2.1	%
7.800% Series E Cumulative Redeemable Preferred Stock (2)	1,610,000		40,250	1.0	%
7.500% Series F Cumulative Redeemable Preferred Stock (2)	3,450,000		86,250	2.4	%
Common Units Outstanding (3)	2,328,529		175,431	4.8	%
Common Shares Outstanding (3)	32,388,881		2,440,178	66.8	%
Total Equity		$	2,817,109	77.1	%
TOTAL MARKET CAPITALIZATION		$	3,654,114	100.0	%

(1) Value based on $50.00 per share liquidation preference.

(2) Value based on $25.00 per share liquidation preference.

(3) Value based on closing share price of $75.34 at September 30, 2006.

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Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Debt Analysis

At September 30, 2006

($ in thousands)

TOTAL DEBT COMPOSITION

	% of Total Debt		Weighted Average
			Interest Rate		Maturity
Secured vs. Unsecured Debt:
Secured Debt	55.3	%	6.0	%	4.0
Unsecured Debt	44.7	%	5.9	%	4.6
Floating vs. Fixed Rate Debt:
Fixed Rate Debt (1)	70.5	%	5.8	%	4.7
Floating Rate Debt	29.5	%	6.2	%	3.1
Total Debt			5.9	%	4.2
Total Debt Including Loan Fees			6.2	%

UNSECURED LINE OF CREDIT

Total Line	Outstanding Balance	Expiration Date
$550,000	$230,000	April 2010

CAPITALIZED INTEREST & LOAN FEES

Quarter-to-Date	Year-to-Date
$3.0	$7.4

(1) Includes the impact of the interest-rate swap agreements listed on page 25.

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Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Debt Analysis

At September 30, 2006

($ in thousands)

DEBT MATURITY SCHEDULE

Floating/     Fixed Rate	Effective Rate		Maturity Date		2006		2007		2008		2009		2010		After 2010		Total
Unsecured Debt:
Floating	6.18	%	4/26/2010	(1)									$	230,000			$	230,000
Fixed	5.72	%	8/4/2010											61,000				61,000
Fixed	6.45	%	8/4/2014												$	83,000		83,000
														291,000		83,000		374,000
Secured Debt:
Floating	6.23	%	7/1/2008	(2)						35,500								35,500
Floating	6.43	%	1/1/2009									31,000						31,000
Fixed	6.51	%	8/12/2007			63		17,049										17,112
Fixed	7.21	%	8/12/2007			46		4,325										4,371
Fixed	3.80	%	8/1/2008			403		1,650		73,401								75,454
Fixed	7.20	%	4/1/2009			580		2,423		2,604		75,475						81,082
Fixed	6.70	%	12/27/2011			285		1,189		1,271		1,359		1,453		69,980		75,537
Fixed	5.57	%	8/1/2012			296		1,226		1,297		1,370		1,449		73,048		78,686
Fixed	4.95	%	8/1/2012			136		563		592		622		653		30,441		33,007
Fixed	8.43	%	4/1/2008			286		1,211		370								1,867
Fixed	8.13	%	11/1/2014			153		646		701		760		824		4,204		7,288
Fixed	7.15	%	5/1/2017			349		1,459		1,567		1,683		1,807		15,236		22,101
						2,597		31,741		117,303		112,269		6,186		192,909		463,005
Effect of SWAPS	(0.14	%)
Total	5.93	%			$	2,597	$	31,741	$	117,303	$	112,269	$	297,186	$	275,909	$	837,005

DERIVATIVE INSTRUMENTS

Notional Amount	Instrument	Rate		Expiration Date
$25,000	Swap	2.98	%	12/2006
25,000	Swap	2.98	%	12/2006
$50,000

(1) The maturity date does not reflect the one-year extension option.

(2) The maturity date does not reflect the two one-year extension options.

25

Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Management Statements on Non-GAAP Supplemental Measures

Included in this section are management’s statements regarding certain non-GAAP financial measures provided in this supplemental financial report and, with respect to Funds From Operations (“FFO”), in the Company’s earnings release on October 30, 2006, and the reasons why management believes that these measures provide useful information to investors about the Company’s financial condition and results of operations.

Net Operating Income:

Management believes that Net Operating Income (“NOI”) is a useful supplemental measure of the Company’s operating performance. The Company defines NOI as operating revenues (rental income, tenant reimbursements and other property income) less property and related expenses (property expenses, real estate taxes, provision for bad debts and ground leases). Other real estate investment trusts (“REITs”) may use different methodologies for calculating NOI, and accordingly, the Company’s NOI may not be comparable to other REITs.

Because NOI excludes general and administrative expenses, interest expense, depreciation and amortization, other non-property income and expenses, gains and losses from property dispositions, discontinued operations, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. The Company uses NOI to evaluate its operating performance on a segment basis since NOI allows the Company to evaluate the impact that factors such as occupancy levels, lease structure, rental rates, and tenant base, which vary by segment type, have on the Company’s results, margins and returns. In addition, management believes that NOI provides useful information to the investment community about the Company’s financial and operating performance when compared to other REITs since NOI is generally recognized as a standard measure of performance in the real estate industry.

However, NOI should not be viewed as an alternative measure of the Company’s financial performance since it does not reflect general and administrative expenses, interest expense, depreciation and amortization costs, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company’s properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact the Company’s results from operations.

Same Store Net Operating Income:

Management believes that Same Store NOI is a useful supplemental measure of the Company’s operating performance. Same Store NOI represents the NOI for the stabilized properties that were operational for two comparable reporting periods. Because Same Store NOI excludes the change in NOI from properties developed, redeveloped, acquired and disposed of, it highlights operating trends such as occupancy levels, rental rates and operating costs on properties that were operational for two comparable periods. Other REITs may use different methodologies for calculating Same Store NOI, and accordingly, the Company’s Same Store NOI may not be comparable to other REITs.

However, Same Store NOI should not be viewed as an alternative measure of the Company’s financial performance since it does not reflect the operations of the Company’s entire portfolio, nor does it reflect the impact of general and administrative expenses, interest expense, depreciation and amortization costs, other non-property income and expenses, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company’s properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact the Company’s results from operations.

26

Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Management Statements on Non-GAAP Supplemental Measures

EBITDA:

Management believes that earnings before interest expense, depreciation and amortization, preferred dividends, minority interests and impairment loss (“EBITDA”) is a useful supplemental measure of the Company’s operating performance. When considered with other GAAP measures and FFO, management believes EBITDA gives the investment community a more complete understanding of the Company’s operating results before the impact of investing and financing transactions and facilitates comparisons with competitors. Management also believes it is appropriate to present EBITDA as it is used in several of the Company’s financial covenants for both its secured and unsecured debt. However, EBITDA should not be viewed as an alternative measure of the Company’s operating performance since it excludes financing costs as well as depreciation and amortization costs which are significant economic costs that could materially impact the Company’s results of operations and liquidity. Other REITs may use different methodologies for calculating EBITDA and, accordingly, the Company’s EBITDA may not be comparable to other REITs.

Funds From Operations:

Management believes that FFO is a useful supplemental measure of the Company’s operating performance. The Company computes FFO in accordance with the White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding extraordinary items, as defined by GAAP, and gains and losses from sales of depreciable operating property, 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. Other REITs may use different methodologies for calculating FFO and, accordingly, the Company’s FFO may not be comparable to other REITs.

Because FFO excludes depreciation and amortization, gains and losses from property dispositions, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, providing perspective on operating performance not immediately apparent from net income. In addition, management believes that FFO provides useful information to the investment community about the Company’s operating performance when compared to other REITs since FFO is generally recognized as the industry standard for reporting the operations of REITs.

However, FFO should not be viewed as an alternative measure of the Company’s operating performance since 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 the Company’s properties, which are significant economic costs that could materially impact the Company’s results of operations.

Funds Available for Distribution:

Management believes that Funds Available for Distribution (“FAD”) is a useful supplemental measure of the Company’s liquidity. The Company computes FAD by adding to FFO the noncash amortization of deferred financing costs and restricted stock compensation, the loss on derivative instruments, contractual cash rents received in advance of revenue recognition, the original issuance costs of redeemed preferred units, and the impairment losses on properties held for sale, and then subtracting tenant improvements, leasing commissions and recurring capital expenditures, revenue recorded for reimbursement of tenant improvements, the gain on derivative instruments, significant noncash gains, and eliminating the net effect of straight-line rents, and above (below) market rents for acquisition properties. FAD provides an additional perspective on the Company’s ability to fund cash needs and make distributions to shareholders by adjusting for the effect of these non-cash items included in FFO, as well as recurring capital expenditures and leasing costs. Management also believes that FAD provides useful information to the investment community about the Company’s financial position as compared to other REITs since FAD is a liquidity measure used by other REITs. However, other REITs may use different methodologies for calculating FAD and, accordingly, the Company’s FAD may not be comparable to other REITs.

27

Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Reconciliation of Same Store Net Operating Income to Net Income Available to Common Stockholders

(unaudited, $ in thousands)

	Three Months Ended September 30,
	2006			2005
Same Store Cash Net Operating Income	$	43,597		$	41,739
Adjustment:
GAAP Straight Line Rental Income		1,524			1,948
Other Non-Cash GAAP Adjustments, net		(606	)		309
Same Store GAAP Net Operating Income (1)		44,515			43,996
Adjustment:
Non-Same Store GAAP Net Operating Income		1,641			1,596
Net Operating Income, as defined (1)		46,156			45,592
Adjustments:
Net Operating Loss (Income), as defined, from discontinued operations		123			(830	)
Other Expenses:
General and administrative expenses		(5,673	)		(18,400	)
Interest expense		(10,312	)		(9,570	)
Depreciation and amortization		(17,908	)		(16,040	)
Other Income and Expense:
Interest and other income		359			223
Net settlement receipts on interest rate swaps		299			183
(Loss) gain on derivative instruments		(324	)		115
Income from Continuing Operations		12,720			1,273
Minority interests		(1,998	)		(1,101	)
Income from discontinued operations		23,254			16,301
Preferred dividends		(2,402	)		(2,402	)
Net Income Available for Common Stockholders	$	31,574		$	14,071

(1) Please refer to page 26 for Management Statements on Net Operating Income and Same Store Net Operating Income.

28

Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Reconciliation of EBITDA to Net Income Available to Common Stockholders

(unaudited, $ in thousands)

	Three Months Ended September 30,
	2006			2005
Net Income Available for Common Stockholders	$	31,574		$	14,071
Preferred dividends		2,402			2,402
Adjustments for Continuing Operations:
Interest expense		10,312			9,570
Depreciation and amortization		17,908			16,040
Distributions on Cumulative Redeemable Preferred units		1,397			1,397
Minority interest in earnings (loss) of Operating Partnership		601			(296	)
Adjustments for Discontinued Operations:
Interest expense		—			51
Depreciation and amortization		315			184
Net gain on disposition of discontinued operations		(25,603	)		(17,831	)
Minority interest in loss of Operating Partnership		1,911			2,125
EBITDA Before Minority Interests (1)	$	40,817		$	27,713

(1) Please refer to page 27 for a Management Statement on EBITDA before minority interests.

29

Kilroy Realty Corporation

Third Quarter 2006 Supplemental Financial Report

Reconciliation of Funds Available for Distribution to GAAP Net Cash Provided by Operating Activities

(unaudited, $ in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2006			2005			2006			2005
Funds Available for Distribution (1)	$	21,002		$	9,788		$	72,774		$	35,652
Adjustments:
Tenant improvements, leasing commissions and recurring capital expenditures		4,200			2,944			11,844			12,184
Depreciation for furniture, fixtures and equipment		245			142			639			579
Accrued preferred dividends		2,402			2,402			7,206			7,206
Distributions on Cumulative Redeemable Preferred units		1,397			1,397			4,191			4,191
Provision for uncollectible tenant receivables		59			(963	)		402			(333	)
Net settlement receipts on interest rate swaps		(299	)		(183	)		(747	)		(143	)
Changes in assets and liabilities (2)(3)		4,721			21,247			(64,273	)		30,301
GAAP Net Cash Provided by Operating Activities	$	33,727		$	36,774		$	32,036		$	89,637

(1) Please refer to page 27 for a Management Statement on Funds Available for Distribution.

(2) Includes changes in the following assets and liabilities and miscellaneous other adjustments: current receivables; deferred leasing costs; prepaid expenses and other assets; accounts payable, accrued expenses and other liabilities; rents received in advance, security deposits, and other deferred revenue; and other. The three and nine months ended September 30, 2006 has been adjusted for approximately $51,000 and $378,000, respectively, of contractual cash rents received in advance of revenue recognition, which is included in other deferred revenue and is added back for the purposes of calculating FAD. This adjustment is offset by the corresponding amortization which is reflected in the net effect of straight-line rents for the three and nine months ended September 30, 2006 of approximately $11,000 and $23,000, respectively.

(3) Amount includes a $71.7 million cash award approved by the Executive Compensation Committee and paid to the Company’s executive officers in January 2006. The payment represents the amount earned by the Company’s executive officers under a special long-term compensation program for the approximate three-year period ended December 31, 2005. Amounts were previously reflected in FAD as compensation was expensed for financial reporting purposes.

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