Exhibit 99.1

Third Quarter 2012 Supplemental Financial Report

This Supplemental Financial Report 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. These statements include, among other things, information concerning lease expirations, debt maturity, potential investments, development and redevelopment activity, projected construction costs, dispositions and other forward-looking financial data. In some instances, forward-looking statements can be identified by the use of forward-looking terminology such as “expect,” “future,” “will,” “would,” “pursue,” or “project” and variations of such words and similar expressions that do not relate to historical matters. Forward-looking statements are based on Kilroy Realty Corporation’s current expectations, beliefs and assumptions, and are not guarantees of future performance, results or events. 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 Kilroy Realty Corporation’s control. Accordingly, actual performance, results and events may vary materially from those indicated in forward-looking statements, and you should not rely on 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 forward-looking statements, including, among others: risks associated with investment in real estate assets, which are illiquid, and with trends in the real estate industry; competitive market conditions; the ability to complete potential acquisitions and dispositions on announced terms; the ability to successfully operate acquired properties; the availability of cash for debt service and exposure of risk of default under debt obligations; and the ability to successfully complete development and redevelopment projects on schedule and within budgeted amounts. These factors are not exhaustive. For a discussion of additional factors that could materially adversely affect Kilroy Realty Corporation’s business and financial performance, see the factors included under the caption “Risk Factors” in Kilroy Realty Corporation’s annual report on Form 10-K for the year ended December 31, 2011, and it’s other filings with the Securities and Exchange Commission. All forward-looking statements are based on currently available information and speak only as of the date on which they are made. Kilroy Realty Corporation assumes no obligation to update any forward-looking statement made in this Supplemental Financial Report that becomes untrue because of subsequent events, new information or otherwise, except to the extent required in connection with ongoing requirements under Federal securities laws.

Kilroy Realty Corporation

Third Quarter 2012 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	8-12
Submarket Statistics	13
Information on Leases Commenced & Leases Executed	14
Capital Expenditures	15
Lease Expiration Summary and Lease Expirations by Region	16-19
Top Fifteen Tenants	20
2012 Operating Property Acquisitions	21
2012 Development & Redevelopment Acquisitions	22
2012 Dispositions & Properties Held for Sale	23
Development
In-Process Development and Redevelopment Projects	24
Future Development & Redevelopment Pipeline and Other Land Holdings	25
Debt and Capitalization Data
Capital Structure	26
Debt Analysis	27-28
Non-GAAP Supplemental Measures	29-33

Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Company Background

Kilroy Realty Corporation (NYSE: KRC), a member of the S&P Small Cap 600 Index, is a real estate investment trust active in the premier office and industrial submarkets along the West Coast. The Company owns, develops, acquires and manages real estate assets primarily in the coastal regions of Los Angeles, Orange County, San Diego County, greater Seattle, and the San Francisco Bay Area. As of September 30, 2012, the Company’s stabilized portfolio consisted of 111 office buildings, which encompassed an aggregate of 12.7 million rentable square feet and was 91.1% 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 Los Angeles, CA 90064 (310) 481-8400 Web: www.kilroyrealty.com E-mail: investorrelations@kilroyrealty.com
Edward F. Brennan, Ph.D.		Jeffrey C. Hawken	Executive VP and COO
William P. Dickey		Eli Khouri	Executive VP and CIO
Scott S. Ingraham		Tyler H. Rose	Executive VP and CFO
John B. Kilroy, Jr.		David Simon	Executive VP
Dale F. Kinsella		John T. Fucci	Sr. VP, Asset Management
		Heidi R. Roth	Sr. VP, CAO and Controller
		Steve Scott	Sr. VP, San Diego
		Justin W. Smart	Sr. VP, Development

Equity Research Coverage
Bank of America Merrill Lynch		JMP Securities
James Feldman	(646) 855-5808	Mitch Germain	(212) 906-3546
Cantor Fitzgerald & Company		J.P. Morgan
Evan Smith	(212) 915-1220	Anthony Paolone	(212) 622-6682
Citigroup Investment Research		KeyBanc Capital Markets
Michael Bilerman	(212) 816-1383	Craig Mailman	(917) 368-2316
Cowen and Company		Morgan Stanley
James Sullivan	(646) 562-1380	Chris Caton	(415) 576-2637
Deutsche Bank Securities, Inc.		RBC Capital Markets
John N. Perry	(212) 250-4912	Richard Moore	(440) 715-2646
Green Street Advisors		Stifel, Nicolaus & Company
Michael Knott	(949) 640-8780	John W. Guinee III	(443) 224-1307
ISI Group		UBS Investment Research
Steve Sakwa	(212) 446-9462	Ross T. Nussbaum	(212) 713-2484

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 2012 Supplemental Financial Report

Financial Highlights

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

	Three Months Ended
	9/30/2012 (1)			6/30/2012			3/31/2012  (2)(3)			12/31/2011  (2)(4)			9/30/2011 (2)
INCOME ITEMS (Including Discontinued Operations):
Revenues	$	111,375		$	103,922		$	100,413		$	105,138		$	97,806
Lease Termination Fees		261			401			106			596			280
Net Operating Income		77,603			73,230			73,588			76,590			69,525
Acquisition-related Costs		556			1,813			1,528			1,224			1,163
Capitalized Interest and Debt Costs		4,989			4,334			3,831			2,688			2,398
Net (Loss) Income Available to Common Stockholders		(2,753	)		(800	)		67,540			39,910			10,195
EBITDA (5)		68,650			62,056			63,777			67,872			62,037
Funds From Operations (6)(7)		43,142			39,508			32,990			40,528			33,878
Funds Available for Distribution (6)(7)		32,366			21,099			26,818			22,578			18,854
Net (Loss) Income Available to Common Stockholders per common share - diluted	$	(0.04	)	$	(0.02	)	$	1.06		$	0.68		$	0.17
Funds From Operations per common share - diluted	$	0.57		$	0.55		$	0.49		$	0.66		$	0.56
Dividends per common share	$	0.35		$	0.35		$	0.35		$	0.35		$	0.35
RATIOS (Including Discontinued Operations):
Operating Margins		69.7	%		70.5	%		73.3	%		72.8	%		71.1	%
Interest Coverage Ratio (8)		3.0	x		3.0	x		3.0	x		3.1	x		2.7	x
Fixed Charge Coverage Ratio (9)		2.6	x		2.6	x		2.5	x		2.6	x		2.3	x
FFO Payout Ratio (10)		62.1	%		62.6	%		74.3	%		52.3	%		62.2	%
FAD Payout Ratio (11)		82.7	%		117.2	%		91.4	%		93.8	%		111.7	%
	9/30/2012			6/30/2012			3/31/2012			12/31/2011			9/30/2011
ASSETS:
Real Estate Held for Investment before Depreciation	$	4,399,353		$	4,271,755		$	3,993,637		$	3,798,690		$	3,748,262
Total Assets (12)		4,215,841			3,847,522			3,959,341			3,446,795			3,367,684
CAPITALIZATION:
Total Debt	$	1,847,439		$	1,786,276		$	1,654,983		$	1,836,529		$	1,776,900
Total Preferred Equity and Noncontrolling Interests		200,000			175,000			175,000			201,500			201,500
Total Common Equity and Noncontrolling Interests		3,426,541			3,419,966			3,265,635			2,304,676			1,883,714
Total Market Capitalization		5,473,980			5,381,242			5,095,618			4,342,705			3,862,114
Total Debt / Total Market Capitalization		33.7	%		33.0	%		32.5	%		42.4	%		46.0	%
Total Debt and Preferred / Total Market Capitalization		37.3	%		36.3	%		36.0	%		47.0	%		51.1	%

(1) Results for the three months ended September 30, 2012 include a non-cash charge of $2.1 million related to the original issuance costs of the Series A Preferred Units that were redeemed on August 15, 2012.

(2) Net (Loss) Income Available to Common Stockholders includes a net gain on dispositions of discontinued operations of $72.8 million, $39.0 million and $12.6 million for the three months ended March 31, 2012, December 31, 2011 and September 30, 2011, respectively.

(3) Results for the three months ended March 31, 2012 include a non-cash charge of $4.9 million related to the original issuance costs of the Series E and Series F Preferred Stock that were redeemed on April 16, 2012.

(4) Results for the three months ended December 31, 2011 include the receipt of a $3.7 million cash payment under a bankruptcy claim related to a 2009 tenant default.

(5) EBITDA for all periods presented includes the impact of acquisition-related expenses.

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

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

(8) Calculated as EBITDA divided by interest expense (excluding amortization of deferred debt costs and debt discounts).

(9) Calculated as EBITDA divided by interest expense (excluding amortization of deferred debt costs and debt discounts), current year accrued preferred dividends and distributions on Cumulative Redeemable Preferred units.

(10) Calculated as current-quarter dividends accrued to common stockholders and common unitholders (excluding dividend equivalents accrued to restricted stock unitholders) divided by Funds From Operations.

(11) Calculated as current-quarter dividends accrued to common stockholders and common unitholders (excluding dividend equivalents accrued to restricted stock unitholders) divided by Funds Available for Distribution.

(12) Total assets at September 30, 2012 and December 31, 2011 includes Real estate assets and other assets held for sale.

2

Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Common Stock Data (NYSE: KRC)

	Three Months Ended
	9/30/2012		6/30/2012		3/31/2012		12/31/2011		9/30/2011
High Price	$	49.88	$	48.58	$	46.61	$	38.57	$	41.58
Low Price	$	44.78	$	44.84	$	37.92	$	29.25	$	30.01
Closing Price	$	44.78	$	48.41	$	46.61	$	38.07	$	31.30
Dividends per share - annualized	$	1.40	$	1.40	$	1.40	$	1.40	$	1.40
Closing common shares (in 000’s) (1)(2)		74,693		68,928		68,350		58,820		58,464
Closing common partnership units (in 000’s) (1)(3)		1,827		1,718		1,718		1,718		1,718
		76,520		70,646		70,068		60,538		60,182

(1) As of the end of the period.

(2) In August 2012, the Company completed an underwritten public offering of 5,750,000 shares of common stock at $46.10 per share.

(3) In July 2012, the Company issued 118,372 common units of the operating partnership in connection with an operating property acquisition.

3

Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Consolidated Balance Sheets

(unaudited, $ in thousands)

	9/30/2012			6/30/2012			3/31/2012			12/31/2011			9/30/2011
ASSETS:
Land and improvements	$	562,071		$	576,433		$	576,433		$	537,574		$	537,973
Buildings and improvements		3,169,224			3,137,665			2,970,967			2,830,310			2,881,504
Undeveloped land and construction in progress		668,058			557,657			446,237			430,806			328,785
Total real estate held for investment		4,399,353			4,271,755			3,993,637			3,798,690			3,748,262
Accumulated depreciation and amortization		(725,728	)		(801,083	)		(770,688	)		(742,503	)		(732,162	)
Total real estate held for investment, net		3,673,625			3,470,672			3,222,949			3,056,187			3,016,100
Real estate assets and other assets held for sale, net		166,019			—			—			84,156			—
Cash and cash equivalents		16,113			18,111			374,368			4,777			15,481
Restricted cash		5,884			97			43,140			358			25,436
Marketable securities		6,812			6,546			6,459			5,691			5,213
Current receivables, net		7,113			7,643			6,990			8,395			6,860
Deferred rent receivables, net		110,128			110,689			106,309			101,142			103,668
Deferred leasing costs and acquisition-related intangible assets, net		187,307			168,488			158,132			155,522			155,757
Deferred financing costs, net		18,442			18,919			19,060			18,368			19,638
Prepaid expenses and other assets, net		24,398			46,357			21,934			12,199			19,531
TOTAL ASSETS	$	4,215,841		$	3,847,522		$	3,959,341		$	3,446,795		$	3,367,684
LIABILITIES, NONCONTROLLING INTEREST AND EQUITY:
Liabilities:
Secured debt	$	520,867		$	381,097		$	350,219		$	351,825		$	473,997
Exchangeable senior notes, net		162,885			161,844			308,689			306,892			305,115
Unsecured debt, net		1,130,814			1,130,732			1,130,651			980,569			980,487
Unsecured line of credit		27,000			102,000			—			182,000			—
Accounts payable, accrued expenses and other liabilities		127,472			98,940			92,574			81,713			93,050
Accrued distributions		28,845			25,975			26,622			22,692			22,565
Deferred revenue and acquisition-related intangible liabilities, net		120,407			108,462			90,206			79,781			95,120
Rents received in advance and tenant security deposits		31,728			31,768			30,392			26,917			29,369
Liabilities and deferred revenue of real estate assets held for sale		4,455			—			—			13,286			—
7.80% Series E and 7.50% Series F Cumulative Redeemable Preferred stock, called for redemption		—			—			126,500			—			—
Total liabilities		2,154,473			2,040,818			2,155,853			2,045,675			1,999,703
Noncontrolling Interest:
7.45% Series A Cumulative Redeemable Preferred units of the Operating Partnership		—			73,638			73,638			73,638			73,638
Equity:
Stockholders’ Equity
7.80% Series E Cumulative Redeemable Preferred stock		—			—			—			38,425			38,425
7.50% Series F Cumulative Redeemable Preferred stock		—			—			—			83,157			83,157
6.875% Series G Cumulative Redeemable Preferred stock		96,155			96,155			96,155			—			—
6.375% Series H Cumulative Redeemable Preferred stock		96,256			—			—			—			—
Common stock		747			689			683			588			585
Additional paid-in capital		2,114,774			1,856,431			1,827,676			1,448,997			1,435,580
Distributions in excess of earnings		(288,765	)		(259,495	)		(234,199	)		(277,450	)		(296,476	)
Total stockholders’ equity		2,019,167			1,693,780			1,690,315			1,293,717			1,261,271
Noncontrolling Interest
Common units of the Operating Partnership		42,201			39,286			39,535			33,765			33,072
Total equity		2,061,368			1,733,066			1,729,850			1,327,482			1,294,343
TOTAL LIABILITIES, NONCONTROLLING INTEREST AND EQUITY	$	4,215,841		$	3,847,522		$	3,959,341		$	3,446,795		$	3,367,684

4

Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Consolidated Statements of Operations

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

	Three Months  Ended September 30,						Nine Months  Ended September 30,
	2012			2011			2012			2011
REVENUES:
Rental income	$	95,405		$	79,673		$	268,228		$	223,853
Tenant reimbursements		8,665			6,387			23,947			17,382
Other property income		223			339			1,625			2,136
Total revenues		104,293			86,399			293,800			243,371
EXPENSES:
Property expenses		21,871			18,132			57,906			49,091
Real estate taxes		9,312			7,352			25,138			21,941
Provision for bad debts		—			144			2			265
Ground leases		859			503			2,276			1,266
General and administrative expenses		8,727			6,355			26,745			20,355
Acquisition-related expenses		556			1,163			3,897			2,829
Depreciation and amortization		44,109			33,275			116,832			88,969
Total expenses		85,434			66,924			232,796			184,716
OTHER (EXPENSES) INCOME:
Interest income and other net investment gains		330			30			703			272
Interest expense		(19,854	)		(22,896	)		(60,172	)		(62,671	)
Total other (expenses) income		(19,524	)		(22,866	)		(59,469	)		(62,399	)
(LOSS) INCOME FROM CONTINUING OPERATIONS		(665	)		(3,391	)		1,535			(3,744	)
DISCONTINUED OPERATIONS:
Income from discontinued operations		3,187			5,126			9,127			13,818
Net gain on dispositions of discontinued operations		—			12,555			72,809			12,555
Total income from discontinued operations		3,187			17,681			81,936			26,373
NET INCOME		2,522			14,290			83,471			22,629
Net loss (income) attributable to noncontrolling common units of the Operating Partnership		67			(296	)		(1,708	)		(320	)
NET INCOME ATTRIBUTABLE TO KILROY REALTY CORPORATION		2,589			13,994			81,763			22,309
PREFERRED DISTRIBUTIONS AND DIVIDENDS:
Distributions on noncontrolling cumulative redeemable preferred units of the Operating Partnership		(747	)		(1,397	)		(3,541	)		(4,191	)
Preferred dividends		(2,533	)		(2,402	)		(7,254	)		(7,206	)
Original issuance costs of redeemed preferred stock and preferred units		(2,062	)		—			(6,980	)		—
Total preferred distributions and dividends		(5,342	)		(3,799	)		(17,775	)		(11,397	)
NET (LOSS) INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	(2,753	)	$	10,195		$	63,988		$	10,912
Weighted average common shares outstanding - basic		71,889			58,355			67,975			56,136
Weighted average common shares outstanding - diluted		71,889			58,355			67,975			56,136
NET (LOSS) INCOME AVAILABLE TO COMMON STOCKHOLDERS PER SHARE
Net (loss) income available to common stockholders per share - basic	$	(0.04	)	$	0.17		$	0.92		$	0.18
Net (loss) income available to common stockholders per share - diluted	$	(0.04	)	$	0.17		$	0.92		$	0.18

5

Kilroy Realty Corporation

Third Quarter 2012 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,
	2012			2011			2012			2011
FUNDS FROM OPERATIONS: (1) (2)
Net (loss) income available to common stockholders	$	(2,753	)	$	10,195		$	63,988		$	10,912
Adjustments:
Net (loss) income attributable to noncontrolling common units of the Operating Partnership		(67	)		296			1,708			320
Depreciation and amortization of real estate assets		45,962			35,942			122,754			96,971
Net gain on dispositions of discontinued operations		—			(12,555	)		(72,809	)		(12,555	)
Funds From Operations (3)	$	43,142		$	33,878		$	115,641		$	95,647
Weighted average common shares/units outstanding - basic (4)		74,850			61,015			70,830			58,774
Weighted average common shares/units outstanding - diluted (4)		76,185			61,017			71,953			58,961
FFO per common share/unit - basic (3)	$	0.58		$	0.56		$	1.63		$	1.63
FFO per common share/unit - diluted (3)	$	0.57		$	0.56		$	1.61		$	1.62
FUNDS AVAILABLE FOR DISTRIBUTION: (1) (2)
Funds From Operations (3)	$	43,142		$	33,878		$	115,641		$	95,648
Adjustments:
Tenant improvements, leasing commissions and recurring capital expenditures		(6,394	)		(9,755	)		(26,581	)		(28,888	)
Amortization of deferred revenue related to tenant improvements (5)		(2,386	)		(2,337	)		(6,851	)		(7,005	)
Net effect of straight-line rents (6)		(6,052	)		(6,919	)		(16,627	)		(15,825	)
Amortization of other deferred revenue, net (7)		602			(74	)		1,146			(311	)
Amortization of net (below) above market rents (8)		(2,027	)		121			(4,616	)		1,519
Noncash amortization of exchangeable debt discount, net (9)		781			1,470			3,069			4,364
Amortization of deferred financing costs and debt discounts/premiums		513			1,344			2,579			3,878
Noncash amortization of share-based compensation awards		2,125			1,126			5,544			3,365
Original issuance costs of redeemed preferred stock and preferred units		2,062			—			6,980			—
Funds Available for Distribution (1)	$	32,366		$	18,854		$	80,284		$	56,745

(1) See page 30 for Management Statements on Funds From Operation and Funds Available for Distribution.

(2) Includes amounts reported in discontinued operations.

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

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

(5) Represents revenue recognized during the period as a result of the amortization of deferred revenue recorded for tenant-funded tenant improvements.

(6) 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 and the provision for bad debts recorded for deferred rent receivable balances.

(7) Represents amortization of deferred revenue related to cash received prior to or during the revenue recognition period in connection with tenants’ contractual lease obligations, net of such amounts received.

(8) Represents the adjustment related to the acquisition of buildings with above and/or below market rents.

(9) Represents the amortization of the noncash debt discounts on the Company’s exchangeable senior notes, net of amounts capitalized.

6

Kilroy Realty Corporation

Third Quarter 2012 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,
	2012			2011			% Change			2012			2011			% Change
Total Same Store Portfolio
Number of properties		89			89						89			89
Square Feet		9,550,566			9,550,566						9,550,566			9,550,566
Percent of Stabilized Portfolio		75.5	%		88.3	%					75.5	%		88.3	%
Average Occupancy		90.8	%		93.0	%					91.5	%		90.2	%
Operating Revenues:
Rental income	$	70,876		$	70,971			(0.1	)%	$	213,621		$	209,971			1.7	%
Tenant reimbursements		5,034			4,580			9.9	%		15,231			14,547			4.7	%
Other property income		197			337			(41.5	)%		1,347			2,104			(36.0	)%
Total operating revenues		76,107			75,888			0.3	%		230,199			226,622			1.6	%
Operating Expenses:
Property expenses		16,224			15,726			3.2	%		45,577			44,942			1.4	%
Real estate taxes		6,634			6,263			5.9	%		19,013			19,570			(2.8	)%
Provision for bad debts		—			144			(100.0	)%		2			265			(99.2	)%
Ground leases		224			274			(18.2	)%		673			906			(25.7	)%
Total operating expenses		23,082			22,407			3.0	%		65,265			65,683			(0.6	)%
GAAP Net Operating Income	$	53,025		$	53,481			(0.9	)%	$	164,934		$	160,939			2.5	%
Same Store Analysis (Cash Basis) (2)
	Three Months Ended September 30,									Nine Months Ended September 30,
	2012			2011			% Change			2012			2011			% Change
Total operating revenues	$	71,887		$	70,018			2.7	%	$	214,952		$	210,026			2.3	%
Total operating expenses		23,082			22,263			3.7	%		65,263			65,418			(0.2	)%
Cash Net Operating Income	$	48,805		$	47,755			2.2	%	$	149,689		$	144,608			3.5	%

(1) Same store defined as all of the properties owned and included in our stabilized portfolio as of January 1, 2011 and still owned and included in the stabilized portfolio as of September 30, 2012. Same store excludes the properties held for sale at September 30, 2012.

(2) Please refer to page 31 for a reconciliation of the Same Store measures on this page to Net (Loss) Income Available to Common Stockholders.

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Third Quarter 2012 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview by Region ⁽¹⁾

	# of Buildings		Portfolio Breakdown								Occupancy at: (2)
			Year-to-Date NOI (3)			Sq. Ft.			Total Square Feet		9/30/2012			6/30/2012			12/31/2011
STABILIZED PORTFOLIO:
Office:
Los Angeles and Ventura Counties		25		22.1	%		24.0	%		3,037,984		94.3	%		88.0	%		83.5	%
San Diego County		59		43.2	%		41.0	%		5,182,742		87.8	%		87.5	%		92.5	%
Orange County		4		3.5	%		3.9	%		497,393		95.6	%		92.7	%		99.1	%
San Francisco Bay Area		13		20.0	%		17.5	%		2,211,184		92.0	%		91.4	%		93.3	%
Greater Seattle		10		11.2	%		13.6	%		1,727,239		93.2	%		93.8	%		89.9	%
TOTAL STABILIZED PORTFOLIO		111		100.0	%		100.0	%		12,656,542		91.1	%		90.0	%		92.4	%

Average Occupancy

	Stabilized Portfolio			Same Store Portfolio
Quarter-to-Date		90.7	%		90.8	%
Year-to-Date		91.2	%		91.5	%

(1) Excludes properties held for sale at September 30, 2012. See page 23, ‘2012 Dispositions and Properties Held for Sale’.

(2) Occupancy percentages reported are based on the Company’s stabilized portfolio for the period presented. Occupancy percentages shown for March 31 and June 30, 2012 include Properties Held for Sale at September 30, 2012.

(3) Percentage of year-to-date Net Operating Income excluding Other Property Income and net operating income from discontinued operations and held for sale properties.

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview by Region

	City/ Submarket	Square Feet		Occupancy
Los Angeles and Ventura, California
23925 Park Sorrento	Calabasas		11,789		100.0	%
23975 Park Sorrento	Calabasas		100,592		93.1	%
24025 Park Sorrento	Calabasas		102,264		71.7	%
26541 Agoura Road	Calabasas		90,156		100.0	%
2240 E. Imperial Highway	El Segundo		122,870		100.0	%
2250 E. Imperial Highway	El Segundo		298,728		100.0	%
909 N. Sepulveda Boulevard	El Segundo		241,607		86.9	%
999 N. Sepulveda Boulevard	El Segundo		128,504		93.3	%
3750 Kilroy Airport Way	Long Beach		10,457		86.1	%
3760 Kilroy Airport Way	Long Beach		165,278		93.2	%
3780 Kilroy Airport Way	Long Beach		219,745		93.4	%
3800 Kilroy Airport Way	Long Beach		192,476		100.0	%
3840 Kilroy Airport Way	Long Beach		136,026		100.0	%
3900 Kilroy Airport Way	Long Beach		126,840		95.0	%
12100 W. Olympic Boulevard	Los Angeles		150,167		97.9	%
12200 W. Olympic Boulevard	Los Angeles		150,302		99.7	%
12312 W. Olympic Boulevard	Los Angeles		78,000		100.0	%
6255 W. Sunset Blvd.	Los Angeles		321,883		87.3	%
1633 26th Street	Santa Monica		44,915		100.0	%
2100/2110 Colorado Avenue	Santa Monica		102,864		100.0	%
3130 Wilshire Boulevard	Santa Monica		88,339		93.8	%
501 Santa Monica Boulevard	Santa Monica		73,115		91.1	%
2829 Townsgate Road	Thousand Oaks		81,067		90.6	%
Total Los Angeles and Ventura Counties			3,037,984		94.3	%

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview by Region

	City/ Submarket	Square Feet		Occupancy
San Diego, California
12225 El Camino Real	Del Mar		60,148		97.8	%
12235 El Camino Real	Del Mar		54,673		100.0	%
12340 El Camino Real	Del Mar		87,405		86.9	%
12390 El Camino Real	Del Mar		72,332		100.0	%
12348 High Bluff Drive	Del Mar		38,710		82.0	%
12400 High Bluff Drive	Del Mar		208,464		100.0	%
3579 Valley Center Drive	Del Mar		52,375		79.0	%
3611 Valley Center Drive	Del Mar		130,178		5.0	%
3661 Valley Center Drive	Del Mar		129,752		99.4	%
3721 Valley Centre Drive	Del Mar		114,780		100.0	%
3811 Valley Centre Drive	Del Mar		112,067		100.0	%
6200 Greenwich Drive	Governor Park		71,000		100.0	%
6220 Greenwich Drive	Governor Park		141,214		100.0	%
15051 Avenue of Science	I-15 Corridor		70,617		0.0	%
15073 Avenue of Science	I-15 Corridor		46,759		0.0	%
15231 Avenue of Science	I-15 Corridor		65,638		100.0	%
15253 Avenue of Science	I-15 Corridor		37,437		100.0	%
15333 Avenue of Science	I-15 Corridor		78,880		46.4	%
15378 Avenue of Science	I-15 Corridor		68,910		61.8	%
15435 Innovation Drive	I-15 Corridor		51,500		63.5	%
15445 Innovation Drive	I-15 Corridor		51,500		100.0	%
13280 Evening Creek Drive South	I-15 Corridor		41,665		67.0	%
13290 Evening Creek Drive South	I-15 Corridor		61,176		0.0	%
13480 Evening Creek Drive North	I-15 Corridor		149,817		100.0	%
13500 Evening Creek Drive North	I-15 Corridor		147,533		100.0	%
13520 Evening Creek Drive North	I-15 Corridor		141,129		92.4	%
7525 Torrey Santa Fe	56 Corridor		103,979		100.0	%
7535 Torrey Santa Fe	56 Corridor		130,243		100.0	%
7545 Torrey Santa Fe	56 Corridor		130,354		100.0	%
7555 Torrey Santa Fe	56 Corridor		101,236		100.0	%

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview by Region

	City/ Submarket	Square Feet		Occupancy
San Diego, California (Continued)
2355 Northside Drive	Mission Valley		50,425		74.4	%
2365 Northside Drive	Mission Valley		91,260		86.8	%
2375 Northside Drive	Mission Valley		51,516		100.0	%
2385 Northside Drive	Mission Valley		88,795		76.5	%
2305 Historic Decatur Road	Point Loma		103,900		95.3	%
10020 Pacific Mesa Boulevard	Sorrento Mesa		318,000		100.0	%
4910 Directors Place	Sorrento Mesa		50,925		49.9	%
4921 Directors Place	Sorrento Mesa		56,136		100.0	%
4939 Directors Place	Sorrento Mesa		60,662		100.0	%
4955 Directors Place	Sorrento Mesa		76,246		100.0	%
5005 Wateridge Vista Drive	Sorrento Mesa		61,460		0.0	%
10770 Wateridge Circle	Sorrento Mesa		174,310		97.5	%
6055 Lusk Avenue	Sorrento Mesa		93,000		100.0	%
6260 Sequence Drive	Sorrento Mesa		130,536		100.0	%
6290 Sequence Drive	Sorrento Mesa		90,000		100.0	%
6310 Sequence Drive	Sorrento Mesa		62,415		100.0	%
6340 Sequence Drive	Sorrento Mesa		66,400		100.0	%
6350 Sequence Drive	Sorrento Mesa		132,600		100.0	%
10390 Pacific Center Court	Sorrento Mesa		68,400		100.0	%
10394 Pacific Center Court	Sorrento Mesa		59,630		100.0	%
10398 Pacific Center Court	Sorrento Mesa		43,645		100.0	%
10421 Pacific Center Court	Sorrento Mesa		75,899		100.0	%
10445 Pacific Center Court	Sorrento Mesa		48,709		100.0	%
10455 Pacific Center Court	Sorrento Mesa		90,000		100.0	%
5717 Pacific Center Boulevard	Sorrento Mesa		67,995		100.0	%
4690 Executive Drive	University Towne Center		47,212		100.0	%
9455 Towne Center Drive	University Towne Center		45,195		0.0	%
9785 Towne Center Drive	University Towne Center		75,534		100.0	%
9791 Towne Center Drive	University Towne Center		50,466		100.0	%
Total San Diego County			5,182,742		87.8	%

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview by Region

	City/ Submarket	Square Feet		Occupancy
Orange County, California
8101 Kaiser Boulevard	Anaheim		59,790		91.0	%
2211 Michelson Drive	Irvine		271,556		94.0	%
111 Pacifica	Irvine Spectrum		67,496		100.0	%
999 Town & Country	Orange		98,551		100.0	%
Total Orange County			497,393		95.6	%
San Francisco Bay Area, California
4100 Bohannon Drive	Menlo Park		46,614		100.0	%
4200 Bohannon Drive	Menlo Park		46,255		86.7	%
4300 Bohannon Drive	Menlo Park		62,920		33.2	%
4400 Bohannon Drive	Menlo Park		46,255		84.2	%
4500 Bohannon Drive	Menlo Park		62,920		100.0	%
4600 Bohannon Drive	Menlo Park		46,255		45.6	%
4700 Bohannon Drive	Menlo Park		62,920		100.0	%
303 Second Street	San Francisco		740,047		94.2	%
100 First Street	San Francisco		466,490		98.1	%
250 Brannan Street	San Francisco		92,948		100.0	%
201 Third Street	San Francisco		332,893		90.5	%
301 Brannan Street	San Francisco		74,430		100.0	%
4040 Civic Center	San Rafael		130,237		90.4	%
Total San Francisco Bay Area			2,211,184		92.0	%
Greater Seattle, Washington
601 108th Avenue NE	Bellevue		488,470		90.4	%
10900 NE 4th Street	Bellevue		416,755		90.5	%
10220 NE Points Drive	Kirkland		49,851		89.5	%
10230 NE Points Drive	Kirkland		98,982		100.0	%
10210 NE Points Drive	Kirkland		84,641		71.8	%
3933 Lake Washington Blvd NE	Kirkland		46,450		100.0	%
15050 NE 36th Street	Redmond		122,103		100.0	%
837 N. 34th Street	Lake Union		111,580		100.0	%
701 N. 34th Street	Lake Union		138,995		98.7	%
801 N. 34th Street	Lake Union		169,412		100.0	%
Total Greater Seattle, Washington			1,727,239		93.2	%
TOTAL			12,656,542		91.1	%

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Submarket Statistics as of September 30, 2012

Submarket	Market Direct Vacancy  (1)			Market Total Vacancy  (1)			KRC Percentage Occupied			KRC Percentage Leased
SAN DIEGO
Del Mar		13.6	%		16.7	%		89.8	%		93.2	%
Sorrento Mesa
Two- Three Story Corporate		9.5	%		9.7	%		95.0	%		95.0	%
University Towne Center / Governor Park
Two- Three Story Corporate		10.7	%		18.0	%		89.5	%		89.5	%
I-15 Corridor
Class A Office Market		13.2	%		13.4	%		97.6	%		97.6	%
Two- Three Story Corporate		12.5	%		13.7	%		51.3	%		59.7	%
Mission Valley		15.8	%		16.7	%		83.7	%		85.7	%
Point Loma		12.2	%		12.6	%		95.3	%		100.0	%
ORANGE COUNTY
Office		14.2	%		18.6	%		95.6	%		96.1	%
LOS ANGELES
Westside		13.6	%		15.3	%		97.7	%		97.7	%
El Segundo (Class A)		15.6	%		15.9	%		94.9	%		94.9	%
Long Beach Airport (Class A)		9.8	%		10.3	%		96.1	%		96.4	%
101 Corridor (Class A)		13.6	%		15.6	%		88.7	%		88.7	%
Hollywood (Class A)		6.6	%		10.5	%		87.3	%		87.3	%
SAN FRANCISCO BAY AREA
South Financial District		9.4	%		9.9	%		95.1	%		95.5	%
Marin County		11.3	%		15.5	%		90.4	%		95.3	%
Menlo Park		10.3	%		12.0	%		78.4	%		79.6	%
GREATER SEATTLE
Eastside		13.0	%		13.8	%		91.1	%		92.3	%
Lake Union		5.6	%		5.8	%		99.6	%		99.6	%
TOTAL								91.1	%		92.3	%

(1) Market direct and market total vacancy data was obtained from market research data from third parties. Kilroy Realty Corporation uses market research data from third parties to analyze the current and projected real estate fundamentals in each of its existing submarkets as well as potential acquisition submarkets. Recent market research data from third parties suggests improvement in real estate fundamentals in each of Kilroy Realty’s primary submarkets over the next few years. Please note that Kilroy Realty Corporation does not verify the market research data from third parties and further that such data does not represent views or forecasts of Kilroy Realty Corporation or its management.

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Information on Leases Commenced (1)
	1st & 2nd Generation								2nd Generation
	# of Leases (2)				Square Feet (2)				TI/LC Per  Sq.Ft.		Changes in Rents (3)			Changes  in Cash Rents (4)			Retention Rates (5)			Weighted Average  Lease Term (Mo.)
	New		Renewal		New		Renewal
Quarter to Date		18		13		178,357		95,674	$	30.62		12.0	%		4.6	%		62.8	%		60
Year to Date		60		43		560,442		413,042		30.06		9.9	%		4.4	%		44.1	%		64
Information on Leases Executed (1)
	1st & 2nd Generation								2nd Generation
	# of Leases (6)				Square Feet (6)				TI/LC Per  Sq.Ft.		Changes in Rents (7)			Changes  in Cash Rents (8)						Weighted Average  Lease Term (Mo.)
	New		Renewal		New		Renewal
Quarter to Date (9)		19		17		184,641		155,312	$	36.04		28.6	%		17.6	%					79
Year to Date (10)		56		45		651,126		408,624		35.95		20.2	%		11.5	%					72

(1) Excludes leasing statistics for properties held for sale at September 30, 2012. Amounts for TI/LC per square foot exclude tenant-funded tenant improvements.

(2) Represents leasing activity for leases that commenced during the period shown, including first and second generation space, net of month-to-month leases.

(3) Calculated as the change between GAAP rents for new/renewed leases and the expiring GAAP rents for the same space. Excludes leases for which the space was vacant longer than one year, or vacant when the property was acquired by the Company.

(4) Calculated as the change between stated rents for new/renewed leases and the expiring stated rents for the same space. Excludes leases for which the space was vacant longer than one year, or vacant when the property was acquired by the Company.

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

(6) Represents leasing activity for leases signed at properties in the stabilized portfolio during the period shown, including first and second generation space, net of month-to-month leases.

(7) Calculated as the change between GAAP rents for signed leases and the expiring GAAP rents for the same space. Excludes leases for which the space was vacant longer than one year, or vacant when the property was acquired by the Company.

(8) Calculated as the change between stated rents for signed leases and the expiring stated rents for the same space. Excludes leases for which the space was vacant longer than one year, or vacant when the property was acquired by the Company.

(9) During the three months ended September 30, 2012, 8 new leases totaling 136,000 square feet were signed but not commenced as of September 30, 2012.

(10) During the nine months ended September 30, 2012, 14 new leases totaling 148,000 square feet were signed but not commenced as of September 30, 2012.

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Stabilized Portfolio Capital Expenditures ⁽¹⁾

($ in thousands)

1st Generation (Nonrecurring) Capital Expenditures ⁽²⁾:

	Q1 2012		Q2 2012		Q3 2012		YTD 2012
Capital Improvements	$	5,143	$	9,016	$	7,575	$	21,734
Tenant Improvements & Leasing Commissions		2,609		2,783		1,220		6,612
Total	$	7,752	$	11,799	$	8,795	$	28,346

2nd Generation (Recurring) Capital Expenditures:

	Q1 2012		Q2 2012		Q3 2012		YTD 2012
Capital Improvements
Office	$	3,353	$	1,073	$	1,977	$	6,403
Industrial		99		166		169		434
		3,452		1,239		2,146		6,837
Tenant Improvements & Leasing Commissions (3)
Office		3,551		11,631		4,220		19,402
Industrial		5		309		28		342
		3,556		11,940		4,248		19,744
Total
Office		6,904		12,704		6,197		25,805
Industrial		104		475		197		776
	$	7,008	$	13,179	$	6,394	$	26,581

(1) Reported amounts include expenditures for the properties held for sale at September 30, 2012.

(2) We generally categorize capital expenditures for newly acquired space, newly developed or redeveloped space, or change in use as 1st Generation. These costs are not subtracted in our calculation of Funds Available for Distribution.

(3) Represents costs incurred for leasing activity during the period shown. Amounts exclude tenant-funded tenant improvements.

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Stabilized Portfolio Lease Expiration Summary Schedule ⁽¹⁾

($ in thousands)

Year of Expiration	# of  Expiring Leases		Total Square Feet		% of Total Leased Sq. Ft.			Annualized Base Rent (2)		% of Total  Annualized Base Rent (2)			Annualized Rent per Sq. Ft. (2)
Remainder of 2012		20		110,844		1.0	%	$	3,380		1.0	%	$	30.49
2013		116		1,342,152		11.8	%		38,648		11.0	%		28.80
2014		110		1,201,666		10.6	%		33,904		9.7	%		28.21
2015		150		2,123,402		18.7	%		65,386		18.6	%		30.79
2016		70		798,302		7.0	%		20,454		5.8	%		25.62
2017		89		1,895,729		16.6	%		55,813		15.9	%		29.44
2018		39		1,166,473		10.2	%		46,234		13.2	%		39.64
2019		26		677,420		6.0	%		23,113		6.6	%		34.12
2020		24		1,029,855		9.1	%		29,972		8.5	%		29.10
2021		11		337,006		3.0	%		12,013		3.4	%		35.65
2022 and beyond		16		678,263		6.0	%		22,076		6.3	%		32.55
Total (3)		671		11,361,112		100.0	%	$	350,993		100.0	%	$	30.89

(1) Excludes lease expirations for properties held for sale at September 30, 2012.

(2) Annualized base rent includes the impact of straight-lining rent escalations and the amortization of free rent periods and excludes the impact of the following: amortization of deferred revenue related tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases, and expense reimbursement revenue. Additionally, the underlying leases contain various expense structures including full service gross, modified gross and triple net. Amounts represent percentage of total portfolio annualized contractual base rental revenue.

(3) The information presented for all lease expiration activity reflects leasing activity through September 30, 2012 for our stabilized portfolio. For leases that have been renewed early or space that has been re-leased to a new tenant, the expiration date and annualized base rent information presented takes into consideration the renewed or re-leased lease terms. Excludes space leased under month-to-month leases and vacant space as of September 30, 2012.

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Lease Expiration Schedule Detail by Region ⁽¹⁾

($ in thousands)

Year of Expiration	Los Angeles/Ventura Counties														Orange County
	#  of Expiring Leases		Total Square Feet		% of Total Leased Sq.  Ft.			Annualized Base Rent (2)		% of Total Annualized Base Rent (2)			Annualized Rent per Sq. Ft. (2)		#  of Expiring Leases		Total Square Feet		% of Total Leased Sq.  Ft.			Annualized Base Rent (2)		% of Total Annualized Base Rent (2)			Annualized Rent per Sq. Ft. (2)
Remainder of 2012		14		52,777		0.5	%	$	1,866		0.5	%	$	35.36		2		22,863		0.2	%	$	379		0.1	%	$	16.58
2013		44		387,495		3.4	%		10,727		3.1	%		27.68		17		61,850		0.5	%		1,706		0.5	%		27.58
2014		54		329,854		2.9	%		9,617		2.7	%		29.16		9		50,681		0.4	%		1,371		0.4	%		27.05
2015		48		411,668		3.6	%		12,973		3.7	%		31.51		6		36,846		0.3	%		1,006		0.3	%		27.30
2016		31		218,976		1.9	%		7,296		2.1	%		33.32		6		32,495		0.3	%		1,021		0.3	%		31.42
2017		40		373,116		3.3	%		11,973		3.4	%		32.09		8		72,502		0.6	%		2,801		0.8	%		38.63
2018		6		47,616		0.4	%		1,557		0.4	%		32.70		3		115,724		1.0	%		3,632		1.0	%		31.39
2019		7		285,081		2.5	%		9,523		2.7	%		33.40		1		61,885		0.5	%		2,775		0.8	%		44.84
2020		5		100,079		0.9	%		2,365		0.7	%		23.63		1		13,397		0.1	%		438		0.1	%		32.69
2021		4		154,821		1.4	%		4,397		1.3	%		28.40		—		—		—			—		—			—
2022 and beyond		4		401,553		3.5	%		13,337		3.8	%		33.21		—		—		—			—		—			—
Total(3)		257		2,763,036		24.3	%	$	85,631		24.4	%	$	30.99		53		468,243		3.9	%	$	15,129		4.3	%	$	32.31

	San Diego														San Francisco Bay Area
Year of Expiration	#  of Expiring Leases		Total Square Feet		% of Total Leased Sq. Ft.			Annualized Base Rent (2)		% of Total Annualized Base Rent (2)			Annualized Rent per Sq. Ft. (2)		# of Expiring Leases		Total Square Feet		% of Total Leased Sq. Ft.			Annualized Base Rent (2)		% of Total Annualized Base Rent (2)			Annualized Rent per Sq. Ft. (2)
Remainder of 2012		2		28,400		0.2	%	$	909		0.3	%	$	32.01		1		4,649		0.0	%	$	174		0.0	%	$	37.43
2013		14		389,880		3.4	%		8,803		2.5	%		22.58		23		308,393		2.7	%		11,967		3.4	%		38.80
2014		13		480,026		4.2	%		10,874		3.1	%		22.65		18		231,951		2.0	%		8,451		2.4	%		36.43
2015		24		648,806		5.7	%		15,959		4.5	%		24.60		39		582,324		5.1	%		23,525		6.7	%		40.40
2016		18		356,341		3.1	%		6,870		2.0	%		19.28		3		33,029		0.3	%		1,563		0.4	%		47.32
2017		21		1,192,422		10.5	%		33,022		9.4	%		27.69		12		134,789		1.2	%		5,606		1.6	%		41.59
2018		11		684,030		6.0	%		30,004		8.5	%		43.86		3		42,948		0.4	%		2,133		0.6	%		49.66
2019		6		126,019		1.1	%		4,025		1.1	%		31.94		7		136,439		1.2	%		4,966		1.4	%		36.40
2020		7		350,284		3.1	%		10,680		3.0	%		30.49		9		376,964		3.3	%		11,500		3.3	%		30.51
2021		4		131,080		1.2	%		5,940		1.7	%		45.32		1		36,280		0.3	%		1,315		0.4	%		36.25
2022 and beyond		1		141,214		1.2	%		4,286		1.2	%		30.35		8		113,398		1.0	%		3,880		1.1	%		34.22
Total(3)		121		4,528,502		39.7	%	$	131,372		37.3	%	$	29.01		124		2,001,164		17.5	%	$	75,080		21.3	%	$	37.52

(1) Excludes lease expirations for properties held for sale at September 30, 2012.

(2) Annualized base rent includes the impact of straight-lining rent escalations and the amortization of free rent periods and excludes the impact of the following: amortization of deferred revenue related tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases, and expense reimbursement revenue. Additionally, the underlying leases contain various expense structures including full service gross, modified gross and triple net. Amounts represent percentage of total portfolio annualized contractual base rental revenue.

(3) The information presented for all lease expiration activity reflects leasing activity through September 30, 2012 for our stabilized portfolio. For leases that have been renewed early or space that has been re-leased to a new tenant, the expiration date and annualized base rent information presented takes into consideration the renewed or re-leased lease terms. Excludes space leased under month-to-month leases and vacant space as of September 30, 2012.

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Third Quarter 2012 Supplemental Financial Report

Lease Expiration Schedule Detail by Region ⁽¹⁾

($ in thousands)

	Greater Seattle
Year of Expiration	# of  Expiring Leases		Total Square Feet		% of Total Leased Sq. Ft.			Annualized Base Rent (2)		% of Total Annualized Base Rent (2)			Annualized Rent per Sq. Ft. (2)
Remainder of 2012		1		2,155		0.0	%	$	52		0.0	%	$	24.13
2013		18		194,534		1.7	%		5,445		1.6	%		27.99
2014		16		109,154		1.0	%		3,591		1.0	%		32.90
2015		33		443,758		3.9	%		11,923		3.4	%		26.87
2016		12		157,461		1.4	%		3,704		1.1	%		23.52
2017		8		122,900		1.1	%		2,411		0.7	%		19.62
2018		16		276,155		2.4	%		8,908		2.5	%		32.26
2019		5		67,996		0.6	%		1,824		0.5	%		26.83
2020		2		189,131		1.7	%		4,989		1.4	%		27.45
2021		2		14,825		0.1	%		361		0.1	%		24.35
2022 and beyond		3		22,098		0.2	%		573		0.2	%		25.93
Total (3)		116		1,600,167		14.2	%	$	43,781		12.6	%	$	27.36

(1) Excludes lease expirations for properties held for sale at September 30, 2012.

(2) Annualized base rent includes the impact of straight-lining rent escalations and the amortization of free rent periods and excludes the impact of the following: amortization of deferred revenue related tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases, and expense reimbursement revenue. Additionally, the underlying leases contain various expense structures including full service gross, modified gross and triple net. Amounts represent percentage of total portfolio annualized contractual base rental revenue.

(3) The information presented for all lease expiration activity reflects leasing activity through September 30, 2012 for our stabilized portfolio. For leases that have been renewed early or space that has been re-leased to a new tenant, the expiration date and annualized base rent information presented takes into consideration the renewed or re-leased lease terms. Excludes space leased under month-to-month leases and vacant space as of September 30, 2012.

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Quarterly Lease Expirations for 2012 and 2013⁽¹⁾

($ in thousands)

	# of  Expiring Leases		Total Square Feet		% of Total Leased Sq. Ft.			Annualized Base Rent (2)		% of  Total Annualized Base Rent  (2)			Annualized Rent per Sq.  Ft. (2)
Remaining 2012:
Q4 2012		20		110,844		1.0	%	$	3,380		1.0	%	$	30.49
Total 2012(3)		20		110,844		1.0	%	$	3,380		1.0	%	$	30.49
2013:
Q1 2013		39		460,218		4.1	%	$	13,693		3.8	%	$	29.75
Q2 2013		31		264,820		2.3	%		8,008		2.3	%		30.24
Q3 2013		20		238,396		2.1	%		4,804		1.4	%		20.15
Q4 2013		26		378,718		3.3	%		12,143		3.5	%		32.06
Total 2013(3)		116		1,342,152		11.8	%	$	38,648		11.0	%	$	28.80

(1) Excludes lease expirations for properties held for sale at September 30, 2012.

(2) Annualized base rent includes the impact of straight-lining rent escalations and the amortization of free rent periods and excludes the impact of the following: amortization of deferred revenue related tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases, and expense reimbursement revenue. Additionally, the underlying leases contain various expense structures including full service gross, modified gross and triple net. Amounts represent percentage of total portfolio annualized contractual base rental revenue.

(3) The information presented for all lease expiration activity reflects leasing activity through September 30, 2012 for our stabilized portfolio. For leases that have been renewed early or space that has been re-leased to a new tenant, the expiration date and annualized base rent information presented takes into consideration the renewed or re-leased lease terms. Excludes space leased under month-to-month leases and vacant space as of September 30, 2012.

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Top Fifteen Tenants ⁽¹⁾

($ in thousands)

Tenant Name	Annualized Base Rental Revenue (2)		Rentable Square  Feet		Percentage of Total Annualized Base Rental Revenue (2)			Percentage of Total Rentable Square Feet
Intuit, Inc.	$	15,193		536,812		4.3	%		4.2	%
Bridgepoint Education, Inc		15,105		322,994		4.3	%		2.6	%
DIRECTV, LLC (3)		11,966		332,595		3.4	%		2.6	%
Delta Dental of California		10,275		230,389		2.9	%		1.8	%
CareFusion Corporation (4)		9,256		411,000		2.6	%		3.2	%
AMN Healthcare, Inc.		8,192		175,672		2.3	%		1.4	%
Adobe Systems, Inc. (4)		6,557		224,550		1.9	%		1.8	%
Wells Fargo (4)		6,144		173,306		1.8	%		1.4	%
Fish & Richardson P.C.		6,071		139,538		1.7	%		1.1	%
Scripps Health		5,199		112,067		1.5	%		0.9	%
BP Biofuels		5,128		136,908		1.5	%		1.1	%
Epson America, Inc.		4,915		136,026		1.4	%		1.1	%
Scan Health Plan (4)		4,505		158,366		1.3	%		1.3	%
Lucile Salter Packard Children’s Hospital at Stanford		4,382		119,790		1.3	%		0.9	%
Avnet, Inc.		4,163		132,929		1.2	%		1.1	%
Total Top Fifteen Tenants	$	117,051		3,342,942		33.4	%		26.5	%

(1) The information presented is as of the date of this filing. Reported amounts exclude the properties held for sale at September 30, 2012.

(2) Based upon annualized base rental revenue for leases for which rental revenue is being recognized by the Company as of September 30, 2012 for the Company’s stabilized portfolio. Annualized base rental revenue includes the impact of straight-lining rent escalations and the amortization of free rent periods and excludes the impact of the following: amortization of deferred revenue related tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases, and expense reimbursement revenue.

(3) In November 2011, the Company executed a new lease with DIRECTV, LLC (“DIRECTV”) for approximately 299,000 rentable square feet at 2260 E. Imperial Highway in Los Angeles, CA. This lease will increase the Company’s annualized base rental revenue and percentage of total annualized base rental revenue from DIRECTV to approximately $22.3 million and 6.2%, respectively, and the lease is expected to commence in phases beginning December 2012. DIRECTV will become the Company’s largest tenant upon commencement of this lease.

(4) The Company has entered into leases with various affiliates of the tenant name listed above.

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

2012 Operating Property Acquisitions

($ in millions)

COMPLETED ACQUISITIONS

Property	City/Submarket	Month of Acquisition	No. of Buildings		Rentable Square  Feet		Purchase Price
1st Quarter:
4100-4700 Bohannon Drive Menlo Park, CA	Menlo Park	February		7		374,139	$	162.5
2nd Quarter:
701-801 N. 34th Street Seattle, WA	Lake Union	June		2		308,407		105.4
837 N. 34th Street Seattle, WA	Lake Union	June		1		111,580		39.2
3rd Quarter:
10900 NE 4th Street Bellevue, WA	Bellevue	July		1		416,755		186.1
6255 W. Sunset Boulevard Los Angeles, CA	Hollywood	July		1		321,883		78.8	(1)
TOTAL				12		1,532,764	$	572.0

ACQUISITIONS CLOSED SUBSEQUENT TO THE THIRD QUARTER

Property	City/Submarket	Month of Acquisition	No. of Buildings		Rentable Square  Feet		Purchase Price
4th Quarter:
12233 Olympic Blvd Los Angeles, CA	Los Angeles	October		1		151,029	$	72.9	(1)

(1) Excludes other accrued liabilities assumed in connection with the acquisitions.

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

2012 Development and Redevelopment Acquisitions⁽¹⁾

($ in millions)

COMPLETED ACQUISITIONS
Property	City/Submarket	Project Type	Month of Acquisition	Purchase Price (2)
2nd Quarter
690 E. Middlefield Road Mountain View, CA	Mountain View	Development	May	$	74.5
3rd Quarter
333 Brannan Street San Francisco, CA	San Francisco	Development	July		18.5
Columbia Square Los Angeles, CA	Hollywood	Development and Redevelopment	September		65.0
TOTAL				$	158.0

ACQUISITIONS CLOSED SUBSEQUENT TO THE THIRD QUARTER

Property	City/Submarket	Project Type	Month of Acquisition	Purchase Price (2)
4th Quarter
350 Mission Street San Francisco, CA	San Francisco	Development	October	$	52.0
TOTAL				$	52.0

(1) For additional information, see pages 24 and 25 ‘In Process Redevelopment and Other Land Holdings’ and ‘In Process and Future Development Pipeline’.

(2) Excludes leasing costs and/or other accrued liabilities assumed in connection with the acquisitions.

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

2012 Dispositions and Properties Held for Sale

($ in millions)

COMPLETED DISPOSITIONS

Property	City / Submarket	Type	Month of Disposition	No. of Buildings		Rentable Square  Feet		Sales Price
1st Quarter
15004 Innovation Drive and 10243 Genetic Center (1) San Diego, CA	I-15 Corridor and Sorrento Mesa	Office	January		2		253,676	$	146.1
2nd Quarter
NONE
3rd Quarter
NONE
TOTAL DISPOSITIONS					2		253,676	$	146.1

PROPERTIES HELD FOR SALE AT SEPTEMBER 30, 2012

Property	City / Submarket	Type	No. of Buildings		Rentable Square  Feet
3rd Quarter
Industrial Portfolio	Various	Industrial		39		3,413,354
5151, 5153 & 5155 Camino Ruiz	Camarillo	Office		4		265,372
4175 E. La Palma Avenue	Anaheim	Office		1		43,263
TOTAL PROPERTIES HELD FOR SALE				44		3,721,989

(1) These properties were classified as held for sale at December 31, 2011.

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

In-Process Redevelopment Projects and Other Land Holdings

($ in millions)

		Estimated Construction Period
Redevelopment Project	Location	Start Date	Compl. Date	Estimated Stabilization Date  (1)	Estimated Rentable Square Feet		Existing Investment  (2)		Estimated Redevelopment Costs		Total Estimated Investment		Total Costs as of 9/30/2012 (3)		% Leased
UNDER CONSTRUCTION:
2260 E. Imperial Highway (4)	El Segundo	3Q 2010	4Q 2012	4Q 2012		299,000	$	9.1	$	51.7	$	60.8	$	43.1		100	%
3880 Kilroy Airport Way (5)	Long Beach	3Q 2011	4Q 2012	4Q 2013		98,000		6.3		13.3		19.6		15.4		50	%
5010 Wateridge Vista Drive (6)	Sorrento Mesa	3Q 2011	4Q 2012	4Q 2012		111,000		22.2		15.2		37.4		35.3		100	%
360 Third Street (7)	San Francisco	4Q 2011	1Q 2013	1Q 2014		410,000		88.5		64.5		153.0		108.9		37	%
						918,000	$	126.1	$	144.7	$	270.8	$	202.7		67	%

Other Land Holdings	Gross Site		Estimated Rentable		Total Costs as of
Project	Acreage		Square Feet		9/30/2012 (3)
IRVINE, CALIFORNIA
17150 Von Karman (8)		8.5		N/A	$	7.6

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

(2) Represents the depreciated carrying value at the commencement of redevelopment for the space being redeveloped.

(3) Represents cash paid and costs incurred as of September 30, 2012. Includes existing investment at the commencement of redevelopment.

(4) The tenant is obligated to begin paying cash rent in December 2012, however, completion of tenant improvements and physical occupancy may occur in phases.

(5) This property was 50% leased prior to any redevelopment activity, which is occurring in two phases. Redevelopment on the first half was completed during the second quarter of 2012 and the tenant has taken occupancy of this space. Redevelopment on the second half commenced in the second quarter of 2012. Redevelopment costs are capitalized only on the portion of the building that is currently under redevelopment.

(6) Cash rent for this property commenced September 1, 2012 but was deferred for financial reporting purposes. The project was substantially complete mid-October and the tenant has taken occupancy.

(7) Approximately 91% of this project is being redeveloped since approximately 9% of the project was leased and occupied by an existing tenant upon acquisition in December 2011. In July 2012, approximately 17% of the building was completed and the tenant took occupancy. The remaining 74% of the building remains under redevelopment. Redevelopment costs are capitalized only on the portion of the building that is under redevelopment and not occupied by tenants.

(8) During the fourth quarter of 2011, the Company completed demolition of the industrial building at this site to prepare for the possible sale of the land since the Company successfully obtained entitlements to reposition this site for residential use. The Company’s ultimate decision to sell this site and the timing of any potential future sale will depend upon market conditions and other factors.

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

In-Process and Future Development Pipeline

($ in millions)

		Estimated Construction Period
	Location	Start Date	Compl. Date	Estimated Stabilization Date (1)	Estimated Rentable Square Feet		Total Estimated Investment		Total Costs as of 9/30/2012 (2)		% Leased
UNDER CONSTRUCTION:
San Francisco Bay Area
690 Middlefield	Mountain View	2Q 2012	1Q 2015	1Q 2015		341,000	$	196.3	$	87.6		100	%
FUTURE DEVELOPMENT PIPELINE:
San Francisco Bay Area
333 Brannan Street (3)	San Francisco	4Q 2013	1Q 2015	1Q 2016		175,000	$	85.0	$	18.8		—	%
350 Mission Street (4)	San Francisco	TBD	TBD	TBD		400,000		250.0		52.0		—	%
SUBTOTAL:						575,000	$	335.0	$	70.8		—	%
Los Angeles
Columbia Square (3,5)	Hollywood	1Q 2013	TBD	TBD		600,000	$	315.0	$	66.4		—	%
San Diego
Carlsbad Oaks - Lots 4, 5, 7 & 8	Carlsbad	TBD	TBD	TBD		288,000		TBD	$	18.3		—	%
Pacific Corporate Center - Lot 8	Sorrento Mesa	TBD	TBD	TBD		170,000		TBD		11.3		—	%
Rancho Bernardo Corporate Center	I-15 Corridor	TBD	TBD	TBD		320,000 - 1,000,000		TBD		27.2		—	%
One Paseo (6)	Del Mar	TBD	TBD	TBD		500,000		TBD		131.2		—	%
Santa Fe Summit - Phase II and III	56 Corridor	TBD	TBD	TBD		600,000		TBD		77.4		—	%
Sorento Gateway - Lot 2	Sorrento Mesa	TBD	TBD	TBD		80,000		TBD		12.0		—	%
SUBTOTAL:						1,958,000 - 2,638,000	$	—	$	277.4		—	%
POTENTIAL FUTURE DEVELOPMENT PIPELINE (7):
San Francisco Bay Area
Silicon Valley Project	Silicon Valley	4Q 2012	4Q 2013	4Q2013		88,000	$	45.0		N/A		100	%
Redwood Towers	Redwood City	TBD	TBD	TBD		300,000		150.0		N/A		—	%
SUBTOTAL:						388,000	$	195.0		N/A		70	%

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

(2) Represents cash paid and costs incurred as of September 30, 2012.

(3) This project was acquired by the Company during the third quarter of 2012 and added to the Company’s future development and redevelopment pipeline upon acquisition.

(4) Total costs represent the purchase price at the close of this acquisition in October 2012.

(5) The Company is planning to redevelop an existing building encompassing approximately 100,000 rentable square feet and develop a mixed-use plan encompassing approximately 500,000 rentable square feet, which will include office, multi-family and retail components.

(6) Estimated rentable square feet reflects existing office entitlements. The Company is currently pursuing mixed-use entitlements for this project which, if successfully obtained, would increase the estimated rentable square feet.

(7) Represents potential future development pipeline acquisitions which the Company had not yet closed as of the date of this report.

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Capital Structure

As of September 30, 2012

($ in thousands)

	Shares/Units As of September 30, 2012		Aggregate Principal Amount or $ Value Equivalent		% of Total Market Capitalization
DEBT:
Unsecured Line of Credit			$	27,000		0.5	%
Unsecured Term Loan Facility				150,000		2.7	%
Unsecured Exchangeable Senior Notes due 2014 (1)				172,500		3.2	%
Unsecured Senior Notes due 2014				83,000		1.5	%
Unsecured Senior Notes due 2015 (1)				325,000		5.9	%
Unsecured Senior Notes due 2018 (1)				325,000		5.9	%
Unsecured Senior Notes due 2020 (1)				250,000		4.6	%
Secured Debt (1)				514,939		9.4	%
Total Debt				1,847,439		33.7	%
EQUITY AND NONCONTROLLING INTERESTS:
6.875% Series G Cumulative Redeemable Preferred stock (2)		4,000,000		100,000		1.8	%
6.375% Series H Cumulative Redeemable Preferred stock (2)		4,000,000		100,000		1.8	%
Common limited partnership units outstanding (3)		1,826,503		81,791		1.5	%
Common shares outstanding (3)		74,692,939		3,344,750		61.2	%
Total Equity and Noncontrolling Interests			$	3,626,541		66.3	%
TOTAL MARKET CAPITALIZATION			$	5,473,980		100.0	%

(1) Represents gross aggregate principal amount due at maturity before the effect of the unamortized discounts and premiums as of September 30, 2012.

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

(3) Value based on closing share price of $44.78 as of September 30, 2012.

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Debt Analysis

As of September 30, 2012

($ in millions)

TOTAL DEBT COMPOSITION

	% of Total Debt			Weighted Average
				Interest Rate			Maturity
Secured vs. Unsecured Debt:
Unsecured Debt (1)		72.1	%		4.8	%		4.4
Secured Debt		27.9	%		5.2	%		5.7
Floating vs. Fixed-Rate Debt:
Floating-Rate Debt		9.6	%		1.7	%		3.4
Fixed-Rate Debt (1)		90.4	%		5.3	%		4.9
Stated Rate (1)					4.9	%		4.8
GAAP Effective Rate (2)					5.0	%
GAAP Effective Rate Including Debt Issuance Costs					5.4	%

CAPITALIZED INTEREST, LOAN FEES, AND DEBT DISCOUNTS
Quarter-to-Date	Year-to-Date
$5.0	$13.2

(1) Excludes the impact of the amortization of any debt discounts/premiums.

(2) Includes the impact of the amortization of any debt discounts/premiums, excluding debt issuance costs.

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Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Debt Analysis

As of September 30, 2012

($ in thousands)

DEBT MATURITY SCHEDULE
Floating/ Fixed Rate	Stated Rate	GAAP Effective Rate (1)	Maturity Date		Remaining 2012		2013		2014		2015		2016		After 2016		Total (2)
Floating (3)	1.97%	1.97%		8/10/2015							$	27,000					$	27,000
Floating (3)	1.97%	1.97%		3/29/2016										150,000				150,000
Fixed	4.25%	7.13%		11/15/2014						172,500								172,500
Fixed	6.45%	6.45%		8/4/2014						83,000								83,000
Fixed	5.00%	5.01%		11/3/2015								325,000						325,000
Fixed	4.80%	4.83%		7/15/2018												325,000		325,000
Fixed	6.63%	6.74%		6/1/2020												250,000		250,000
						—		—		255,500		352,000		150,000		575,000		1,332,500
Secured Debt:
Fixed (4)	6.37%	3.55%		4/1/2013		402		83,014										83,416
Fixed (4)	4.94%	4.00%		4/15/2015		258		1,062		1,116		26,205						28,641
Fixed (4)	5.09%	3.50%		8/7/2015								34,000						34,000
Fixed (4)	5.23%	3.50%		1/1/2016		199		816		861		908		50,969				53,753
Fixed	6.51%	6.51%		2/1/2017		229		952		1,016		1,084		1,157		64,406		68,844
Fixed	7.15%	7.15%		5/1/2017		535		2,238		2,404		2,581		2,772		1,215		11,745
Fixed	4.27%	4.27%		2/1/2018				2,075		2,358		2,461		2,568		125,538		135,000
Fixed	4.48%	4.48%		7/1/2027				—		—		646		1,600		94,754		97,000
Fixed (5)	Various	Various		Various		23		46		49		51		54		2,317		2,540
						1,646		90,203		7,804		67,936		59,120		288,230		514,939
Total	4.95%	4.97%			$	1,646	$	90,203	$	263,304	$	419,936	$	209,120	$	863,230	$	1,847,439

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

(2) Amounts presented reflect the gross principal balances before the effect of any unamortized discounts/premiums.

(3) Floating rate debt is calculated at an annual rate of LIBOR plus 1.75% at September 30, 2012.

(4) Represents secured debt assumed in connection with an operating property acquisition.

(5) Represents balance outstanding related to public facility bonds (the “Bonds”) issued in February 2008 by the City of Carlsbad. The Bonds have annual maturities beginning on September 1, 2013 through September 1, 2038, with interest rates ranging from 4.74% to 6.20%.

28

Kilroy Realty Corporation

Third Quarter 2012 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 29, 2012 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, acquisition-related expenses, other nonproperty income and losses, and gains and losses from property dispositions, 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, acquisition-related expenses, interest expense, depreciation and amortization costs, other nonproperty income and losses, 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 all of the properties that were owned and included in our stabilized portfolio for two comparable reporting periods. Because Same Store NOI excludes the change in NOI from developed, redeveloped, acquired and disposed of and held for sale properties that were operational for two comparable periods, it highlights operating trends such as occupancy levels, rental rates and operating costs on properties. 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, acquisition-related expenses, interest expense, depreciation and amortization costs, other nonproperty income and losses, 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.

29

Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Management Statements on Non-GAAP Supplemental Measures

EBITDA:

Management believes that earnings before interest expense, depreciation and amortization, gain/loss on early extinguishment of debt, net gains and losses on disposition of discontinued operations, net income attributable to noncontrolling interests, preferred dividends and distributions, original issuance costs of preferred stock called for redemption, and impairment losses (“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, including the impact of general and administrative expenses and acquisition-related expenses, 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:

The Company calculates FFO in accordance with the 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.

Management believes that FFO is a useful supplemental measure of the Company’s 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 the Company’s 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, the Company’s 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, management believes that FFO along with the required GAAP presentations provides a more complete measurement of the Company’s performance relative to its 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 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 and could materially impact the Company’s results from 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, debt discounts and premiums, share-based compensation awards and original issuance costs on preferred stock called for redemption, amortization of above (below) market rents for acquisition properties and contractual cash rents received in advance of revenue recognition, then subtracting recurring tenant improvements, leasing commissions and capital expenditures, and eliminating the net effect of straight-line rents, amortization of deferred revenue related to tenant improvements and cash received prior to revenue recognition. FAD provides an additional perspective on the Company’s ability to fund cash needs and make distributions to stockholders by adjusting FFO for the impact of certain cash and noncash items, as well as adjusting FFO for 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.

30

Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Reconciliation of Same Store Net Operating Income to Net (Loss) Income Available to Common Stockholders

(unaudited, $ in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Same Store Cash Net Operating Income	$	48,805		$	47,755		$	149,689		$	144,608
Adjustments:
GAAP Operating Revenues Adjustments, net		4,220			5,870			15,247			16,596
GAAP Operating Expenses Adjustments, net		—			(144	)		(2	)		(265	)
Same Store GAAP Net Operating Income		53,025			53,481			164,934			160,939
Non-Same Store GAAP Net Operating Income		19,226			6,787			43,544			9,868
Net Operating Income excluding discontinued operations		72,251			60,268			208,478			170,807
Net Operating Income from discontinued operations		5,352			9,257			15,945			26,144
Net Operating Income, as defined (1)		77,603			69,525			224,423			196,951
Adjustments:
General and administrative expenses		(8,727	)		(6,355	)		(26,745	)		(20,355	)
Acquisition-related expenses		(556	)		(1,163	)		(3,897	)		(2,829	)
Depreciation and amortization (including discontinued operations)		(46,274	)		(36,251	)		(123,650	)		(97,810	)
Interest income and other net investment gains		330			30			703			272
Interest expense (including discontinued operations)		(19,854	)		(24,051	)		(60,172	)		(66,155	)
Net gain on dispositions of discontinued operations		—			12,555			72,809			12,555
Net Income		2,522			15,445			83,471			22,629
Net loss (income) attributable to noncontrolling common units of the Operating Partnership		67			(296	)		(1,708	)		(320	)
Preferred distributions and dividends		(5,342	)		(3,799	)		(17,775	)		(11,397	)
Net (Loss) Income Available to Common Stockholders	$	(2,753	)	$	10,195		$	63,988		$	10,912

(1) Please refer to page 29 for Management Statements on Net Operating Income and Same Store Net Operating Income.

31

Kilroy Realty Corporation

Third Quarter 2012 Supplemental Financial Report

Reconciliation of EBITDA to Net (Loss) Available to Common Stockholders

(unaudited, $ in thousands)

	Three Months  Ended September 30,
	2012			2011
Net (Loss) Income Available to Common Stockholders	$	(2,753	)	$	10,195
Interest expense (including discontinued operations)		19,854			24,051
Depreciation and amortization (including discontinued operations)		46,274			36,251
Net (loss) income attributable to noncontrolling common units of the Operating Partnership		(67	)		296
Net gain on dispositions of discontinued operations		—			(12,555	)
Preferred distributions and dividends		5,342			3,799
EBITDA (1)	$	68,650		$	62,037

(1) Please refer to page 30 for a Management Statement on EBITDA.

32

Kilroy Realty Corporation

Third Quarter 2012 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,
	2012			2011		2012			2011
Funds Available for Distribution (1)	$	32,366		$	18,854	$	80,284		$	56,745
Adjustments:
Tenant improvements, leasing commissions and recurring capital expenditures		6,394			9,755		26,581			28,888
Depreciation for furniture, fixtures and equipment		312			309		896			839
Preferred distributions and dividends		3,280			3,799		10,795			11,397
Provision for uncollectible tenant receivables		(194	)		274		(192	)		420
Changes in operating assets and liabilities and other adjustments, net (2)		26,536			24,609		28,963			15,776
GAAP Net Cash Provided by Operating Activities		68,694		$	57,600		147,327		$	114,065

(1) Please refer to page 30 for a Management Statement on Funds Available for Distribution.

(2) Primarily includes changes in the following assets and liabilities: marketable securities; current receivables; other deferred leasing costs; prepaid expenses and other assets; accounts payable, accrued expenses and other liabilities; rents received in advance and tenant security deposits and other.

33