<PAGE>
Exhibit 99.1
-----------
KILROY
-----------
REALTY
-----------
CORPORATION
Third Quarter 2000 Supplemental Financial Report
<TABLE>
<CAPTION>
Page
----
<S> <C>
Financial Highlights 1
Consolidated Balance Sheets 2
Consolidated Statements of Operations 3
Funds From Operations and Funds Available for Distribution 4
Net Operating Income Breakdown 5
Same Store Analysis 6
Stabilized Portfolio and Occupancy Overview 7
Leasing Activity 8
Lease Expiration Schedule 9
Dispositions 10
Stabilized Development 11
In-Process and Committed Development Projects 12
Future Development Pipeline 13
Capital Structure 14
Share Repurchase Program Summary 15
Debt Analysis 16
</TABLE>
Some of the enclosed information presented is forward-looking in nature,
including information concerning development timing and investment amounts.
Although the information is based on Kilroy Realty Corporation's current
expectations, actual results could vary from expectations stated here. Numerous
factors will affect Kilroy Realty Corporation's actual results, some of which
are beyond its control. These include the timing and strength of regional
economic growth, the strength of commercial and industrial real estate markets,
competitive market conditions, future interest rate levels and capital market
conditions. You are cautioned not to place undue reliance on this information,
which speaks only as of the date of this report. Kilroy Realty Corporation
assumes no obligation to update publicly any forward-looking information,
whether as a result of new information, future events or otherwise. For a
discussion of important risks related to Kilroy Realty Corporation's business,
and an investment in its securities, including risks that could cause actual
results and events to differ materially from results and events referred to in
the forward-looking information, see the discussion under the caption "business
risks" in Kilroy Realty Corporation's annual report on Form 10-K for the year
ended December 31, 1999. In light of these risks, uncertainties and
assumptions, the forward-looking events contained in this supplement information
might not occur.
<PAGE>
Kilroy Realty Corporation
Third Quarter 2000 Supplemental Financial Report
--------------------------------------------------------------------------------
Financial Highlights
(unaudited, $ in thousands, except per share amounts)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------------------- -------------------------------------------
2000 1999 % Change 2000 1999 % Change
--------------- -------------- ------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INCOME ITEMS:
Revenues $47,221 $40,202 17.5% $136,344 $117,053 16.5%
Net Operating Income 35,352 31,470 12.3% 104,417 90,705 15.1%
Net Income 15,679 10,911 43.7% 38,060 31,617 20.4%
Funds From Operations 21,067 20,693 1.8% 61,899 59,686 3.7%
Funds Available for Distribution 16,420 17,669 (7.1%) 52,157 52,666 (1.0%)
Funds From Operations per share - diluted $0.69 $0.64 7.8% $2.02 $1.85 9.2%
Funds Available for Distribution per share -
diluted 0.54 0.55 (1.8%) 1.71 1.64 4.3%
Dividend per share $0.45 $0.42 7.1% $1.35 $1.26 7.1%
RATIOS:
Interest Coverage Ratio (1) 3.4x 4.5x 3.6x 4.6x
Fixed Charge Coverage Ratio (2) 2.5x 3.3x 2.6x 3.3x
FFO Payout Ratio (3) 64.5% 65.6% (1.1%) 65.7% 68.2% (2.5%)
FAD Payout Ratio (4) 82.8% 76.8% 6.0% 78.0% 77.3% 0.7%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Sept. 30, 2000 Dec. 31, 1999 % Change
--------------- -------------- -------------
<S> <C> <C> <C>
ASSETS:
Investments in Real Estate before Depreciation $1,449,457 $1,410,238 2.8%
Total Assets 1,414,052 1,320,501 7.1%
CAPITALIZATION:
Total Debt $673,556 $553,516 21.7%
Total Preferred Stock (5) 155,000 155,000 --
Total Market Equity Value (5) 806,037 716,831 12.4%
Total Market Capitalization (5) 1,634,593 1,425,347 14.7%
Total Debt / Total Market Capitalization 41.2% 38.8% 2.4%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Calculated as earnings before interest expense and depreciation and
amortization divided by interest expense plus loan cost amortization.
(2) Calculated as earnings before interest expense and depreciation and
amortization divided by interest expense plus loan cost amortization and
current year paid and accrued preferred dividends.
(3) Calculated as current year dividends paid and accrued to common
shareholders divided by funds from operations.
(4) Calculated as current year dividends paid and accrued to common
shareholders divided by funds available for distribution.
(5) See "Capital Structure" on page 14.
1
<PAGE>
Kilroy Realty Corporation
Third Quarter 2000 Supplemental Financial Report
--------------------------------------------------------------------------------
Consolidated Balance Sheets
(unaudited, $ in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
--------------- ---------------
<S> <C> <C>
ASSETS:
Land and improvements $ 263,923 $ 274,463
Buildings and improvements 1,034,081 946,130
Undeveloped land and construction in progress, net 151,453 189,645
------- -------
Total investment in real estate 1,449,457 1,410,238
Accumulated depreciation and amortization (194,563) (174,427)
--------- ---------
Investment in real estate, net 1,254,894 1,235,811
Cash and cash equivalents 12,801 26,116
Restricted cash 35,506 6,636
Tenant receivables, net 25,181 22,078
Note receivable from related party 45,278
Deferred financing and leasing costs, net 34,657 27,840
Prepaid expenses and other assets 5,735 2,020
----- -----
TOTAL ASSETS $1,414,052 $1,320,501
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Secured debt $ 387,556 $ 325,516
Unsecured line of credit 186,000 228,000
Unsecured term facility 100,000
Accounts payable and accrued expenses 39,177 26,260
Accrued distributions 13,591 13,456
Rents received in advance and tenant security deposits 16,773 20,287
------ ------
Total liabilities 743,097 613,519
------- -------
Minority Interests:
8.075% Series A Cumulative Redeemable Preferred unitholders 73,716 73,716
9.375% Series C Cumulative Redeemable Preferred unitholders 34,464 34,464
9.250% Series D Cumulative Redeemable Preferred unitholders 44,321 44,022
Common unitholders of the Operating Partnership 62,900 71,920
Minority interest in Development LLCs 11,606 9,931
------ -----
Total minority interests 227,007 234,053
------- -------
Stockholders' Equity:
Common stock 265 278
Additional paid-in capital 459,785 491,204
Distributions in excess of earnings (16,102) (18,553)
-------- --------
Total stockholders' equity 443,948 472,929
------- -------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $1,414,052 $1,320,501
========== ==========
</TABLE>
2
<PAGE>
Kilroy Realty Corporation
Third Quarter 2000 Supplemental Financial Report
--------------------------------------------------------------------------------
Consolidated Statements of Operations
(unaudited, $ in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
---------------------------------- ------------------------------------
2000 1999 % Change 2000 1999 % Change
---------- ------- ---------- ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Rental income $40,555 $34,959 16.0% $117,627 $101,941 15.4%
Tenant reimbursements 4,748 4,214 12.7% 14,036 12,530 12.0%
Interest income 1,706 239 613.8% 3,008 860 249.8%
Other income 212 790 (73.2%) 1,673 1,722 (2.8%)
------- ------- -------- --------
Total revenues 47,221 40,202 17.5% 136,344 117,053 16.5%
------- ------- -------- --------
EXPENSES:
Property expenses 6,217 5,054 23.0% 17,749 15,517 14.4%
Real estate taxes 3,523 3,108 13.4% 9,959 8,969 11.0%
General and administrative expenses 2,890 2,266 27.5% 8,077 6,781 19.1%
Ground leases 423 331 27.8% 1,211 1,002 20.9%
Interest expense 10,024 6,501 54.2% 27,800 18,420 50.9%
Depreciation and amortization 9,941 7,900 25.8% 28,909 22,577 28.0%
------- ------- -------- --------
Total expenses 33,018 25,160 31.2% 93,705 73,266 27.9%
------- ------- -------- --------
INCOME BEFORE NET GAINS ON DISPOSITIONS
OF OPERATING PROPERTIES, EQUITY IN INCOME
(LOSS) OF UNCONSOLIDATED SUBSIDIARY
AND MINORITY INTERESTS 14,203 15,042 (5.6%) 42,639 43,787 (2.6%)
Net gains on dispositions of operating properties 7,288 75 9617.3% 11,256 75 14908.0%
Equity in income (loss) of unconsolidated subsidiary 28 (8) (450.0%) 11 (22) (150.0%)
------- ------- -------- --------
INCOME BEFORE MINORITY INTERESTS 21,519 15,109 42.4% 53,906 43,840 23.0%
------- ------- -------- --------
MINORITY INTERESTS:
Distributions on Cumulative Redeemable
Preferred units (3,375) (2,334) 44.6% (10,125) (7,003) 44.6%
Minority interest in earnings of Operating Partnership (2,227) (1,830) 21.7% (5,442) (5,186) 4.9%
Minority interest in earnings of Development LLCs (238) (34) 600.0% (279) (34) 720.6%
------- ------- -------- --------
Total minority interests (5,840) (4,198) 39.1% (15,846) (12,223) 29.6%
------- ------- -------- --------
NET INCOME $15,679 $10,911 43.7% $38,060 $31,617 20.4%
======= ======= ======= =======
Weighted average shares outstanding - basic 26,455 27,658 26,647 27,640
Weighted average shares outstanding - diluted 26,697 27,677 26,758 27,675
NET INCOME PER COMMON SHARE:
Income per common share - basic $0.59 $0.39 51.3% $1.43 $1.14 25.4%
======= ======= ======= =======
Income per common share - diluted $0.59 $0.39 51.3% $1.42 $1.14 24.6%
======= ======= ======= =======
</TABLE>
3
<PAGE>
Kilroy Realty Corporation
Third Quarter 2000 Supplemental Financial Report
--------------------------------------------------------------------------------
Funds From Operations and Funds Available for Distribution
(unaudited, $ in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
---------------------------------- ---------------------------------
2000 1999 % Change 2000 1999 % Change
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
FUNDS FROM OPERATIONS:
Net income $15,679 $10,911 43.7% $38,060 $31,617 20.4%
Add:
Minority interest in earnings of Operating Partnership 2,227 1,830 21.7% 5,442 5,186 4.9%
Depreciation and amortization 9,941 7,900 25.8% 28,909 22,577 28.0%
Net gains on dispositions of operating properties (7,288) (75) 9617.3% (11,256) (75) 14908.0%
Non-cash amortization of restricted stock grants (1) 508 127 300.0% 744 381 95.3%
------- ------- ------- -------
Funds From Operations $21,067 $20,693 1.8% $61,899 $59,686 3.7%
======= ======= ======= =======
Weighted average common shares/units outstanding - basic 30,203 32,302 30,457 32,174
Weighted average common shares/units outstanding - diluted 30,444 32,321 30,568 32,208
Funds From Operations per common share/unit - basic $ 0.70 $ 0.64 9.4% $ 2.03 $ 1.86 9.1%
======= ======= ======= =======
Funds From Operations per common share/unit - diluted $ 0.69 $ 0.64 7.8% $ 2.02 $ 1.85 9.2%
======= ======= ======= =======
FUNDS AVAILABLE FOR DISTRIBUTION:
Funds From Operations $21,067 $20,693 1.8% $61,899 $59,686 3.7%
Adjustments:
Amortization of deferred financing costs 426 257 65.8% 1,119 820 36.5%
Tenant improvements, leasing commissions and
recurring capital expenditures (2,462) (1,324) 86.0% (5,193) (3,274) 58.6%
Net effect of straight-line rents (2,611) (1,957) 33.4% (5,668) (4,566) 24.1%
------- ------- ------- -------
Funds Available for Distribution $16,420 $17,669 (7.1%) $52,157 $52,666 (1.0%)
======= ======= ======= =======
Funds Available for Distribution per common share/unit-basic $ 0.54 $ 0.55 (1.8%) $ 1.71 $ 1.64 4.3%
======= ======= ======= =======
Funds Available for Distribution per common share/unit - $ 0.54 $ 0.55 (1.8%) $ 1.71 $ 1.64 4.3%
diluted ======= ======= ======= =======
</TABLE>
(1) On June 23, 2000, the Company granted 175,000 shares of restricted stock to
certain key employees, the grantees. The shares of restricted stock contain
cliff-vesting provisions such that the shares vest 100% on March 1, 2003.
Compensation expense for the restricted shares is calculated based upon the
Company's closing per share price of $24.94 on the June 23, 2000 grant date
and is amortized on a straight-line basis over the vesting period and
included in general and administrative expenses. In the event all of the
grantees remain with the Company until the March 1, 2003 cliff-vesting date,
non-cash compensation expense related to this grant will be recorded by the
Company at a rate of approximately $1.6 million per year. The restricted
shares are included in the Company's outstanding shares at September 30,
2000.
4
<PAGE>
Kilroy Realty Corporation
Third Quarter 2000 Supplemental Financial Report
----------------------------------------------------------------
Net Operating Income Breakdown
--------------------------------------------------------------------------------
As of
September 30, 2000 (1)
----------------------
% OF TOTAL NOI BY SEGMENT TYPE:
Office:
Los Angeles 37.5%
Orange County 4.3%
San Diego 25.9%
Other 5.9%
----
Subtotal 73.6%
-----
Industrial:
Los Angeles 3.5%
Orange County 19.0%
San Diego 0.6%
Other 3.3%
----
Subtotal 26.4%
-----
% OF TOTAL NOI BY REGION:
Los Angeles 41.0%
Orange County 23.3%
San Diego 26.5%
Other 9.2%
----
Total Portfolio 100.0%
======
--------------------------------------------------------------------------------
(1) Based on Net Operating Income for the quarter ended September 30, 2000.
5
<PAGE>
Kilroy Realty Corporation
Third Quarter 2000 Supplemental Financial Report
--------------------------------------------------------------------------------
Same Store Analysis (1)
($ in thousands)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
----------------------------------------------- ----------------------------------------------
2000 1999 $ Change % Change 2000 1999 $ Change % Change
----------------------------------------------- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL SAME STORE PORTFOLIO
Operating Revenues:
Rental income $30,882 $29,319 $1,563 5.3% $ 96,634 $ 91,498 $ 5,136 5.6%
Tenant reimbursements 4,209 3,505 704 20.1% 12,428 11,437 991 8.7%
Other income 146 734 (588) (80.1%) 1,361 1,107 254 22.9%
--- --- ----- ----- ----- ---
Total operating revenues $35,237 $33,558 $1,679 5.0% $110,423 $104,042 $6,381 6.1%
------- ------- ------ -------- -------- ------
Operating Expenses:
Property expenses $4,851 $4,634 $217 4.7% $15,284 $14,550 $734 5.0%
Real estate taxes 2,591 2,638 (47) (1.8%) 7,974 8,127 (153) (1.9%)
Ground leases 333 327 6 1.8% 1,045 972 73 7.5%
--- --- - ----- --- --
Total operating expenses $7,775 $7,599 $176 2.3% $24,303 $23,649 $654 2.8%
------ ------ ---- ------- ------- ----
Net Operating Income $27,462 $25,959 $1,503 5.8% $86,120 $80,393 $5,727 7.1%
======= ======= ====== ======= ======= ======
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
Average Occupancy - Same Store Portfolio
--------------------------------------------------------------------------------
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2000 1999 % Change 2000 1999 % Change
-------------------------------- -------------------------------
Office 94.4% 91.8% 2.6% 95.5% 93.0% 2.5%
Industrial 99.7% 98.8% 0.9% 98.6% 97.5% 1.1%
----- ----- ---- ----- ----- ----
Total 97.0% 95.3% 1.7% 97.1% 95.3% 1.8%
===== ===== ==== ===== ===== ====
(1) Same store defined as all stabilized properties owned at January 1, 1999 and
still owned at September 30, 2000.
6
<PAGE>
Kilroy Realty Corporation
Third Quarter 2000 Supplemental Financial Report
--------------------------------------------------------------------------------
Stabilized Portfolio Occupancy Overview
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
# of Square Feet Occupancy at:
----------------------------------------- -----------------------------------
Buildings Total Leased Available 9/30/00 6/30/00 12/31/99
------------- ---------- ---------------- ------------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
OCCUPANCY BY SEGMENT TYPE:
Office:
Los Angeles 27 2,506,098 2,404,492 101,606 95.9% 97.8% 97.4%
Orange County 13 625,893 505,245 120,648 80.7% 86.6% 85.9%
San Diego 34 2,452,429 2,397,962 54,467 97.8% 97.5% 99.1%
Other 6 709,575 688,133 21,442 97.0% 96.7% 98.7%
- ------- ------- ------
Subtotal 80 6,293,995 5,995,832 298,163 95.3% 96.2% 96.4%
-- --------- --------- -------
Industrial:
Los Angeles 7 554,225 551,055 3,170 99.4% 97.3% 99.2%
Orange County 62 4,393,470 4,320,579 72,891 98.3% 98.0% 96.4%
San Diego 1 39,669 39,669 - 100.0% 100.0% 100.0%
Other 8 820,124 820,124 - 100.0% 100.0% 97.2%
- ------- ------- ------
Subtotal 78 5,807,488 5,731,427 76,061 98.7% 98.4% 96.9%
-- --------- --------- ------
OCCUPANCY BY REGION:
Los Angeles 34 3,060,323 2,955,547 104,776 96.6% 97.7% 97.7%
Orange County 75 5,019,363 4,825,824 193,539 96.1% 96.3% 94.7%
San Diego 35 2,492,098 2,437,631 54,467 97.8% 97.6% 99.2%
Other 14 1,529,699 1,508,257 21,442 98.6% 98.8% 97.8%
-- --------- --------- ------
TOTAL PORTFOLIO 158 12,101,483 11,727,259 374,224 96.9% 97.3% 96.7%
=== ========== ========== =======
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------
AVERAGE OCCUPANCY - STABILIZED PORTFOLIO
----------------------------------------
Office Industrial Total
------- ---------- ------
<S> <C> <C> <C>
3rd Quarter 95.7% 98.5% 97.1%
Year-to-date 96.0% 98.0% 97.0%
</TABLE>
7
<PAGE>
Kilroy Realty Corporation
Third Quarter 2000 Supplemental Financial Report
--------------------------------------------------------------------------------
Leasing Activity
Quarter to Date
<TABLE>
<CAPTION>
2nd Generation
--------------------------------------------------- Weighted
Maintenance Average
# of Leases(1) Square Feet(1) TI/LC Capex Changes in Changes in Retention Lease
--------------- ----------------
New Renewal New Renewal Per Sq.Ft. Per Sq.Ft.(2) Rents(3) Cash Rents(4) Rates(5) Term (Mo.)
----- ------- ---- ------- ---------- ------------- -------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Office 22 14 174,542 75,723 $8.39 $0.01 21.3% 16.0% 54.2% 51
Industrial 12 8 81,671 27,105 $1.73 $0.00 13.9% 10.9% 58.8% 59
-- -- ------- ------- ----- ----- ---- ---- ---- --
Total 34 22 256,213 102,828 $6.19 $0.01 20.5% 15.4% 55.5% 53
== == ======= ======= ==== ==== ==== ==== ==== ==
</TABLE>
Year to Date
<TABLE>
<CAPTION>
2nd Generation
--------------------------------------------------- Weighted
Maintenance Average
# of Leases(1) Square Feet(1) TI/LC Capex Changes in Changes in Retention Lease
-------------- -----------------
New Renewal New Renewal Per Sq.Ft. Per Sq.Ft.(2) Rents(3) Cash Rents(4) Rates(5) Term (Mo.)
----- ------- ---- ------- ---------- ------------- --------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Office 43 36 260,165 193,487 $6.94 $0.08 22.4% 18.1% 55.0% 42
Industrial 32 27 402,957 380,358 $1.71 $0.05 24.2% 19.3% 61.4% 62
-- -- ------- ------ ---- ---- ----- ---- ---- --
Total 75 63 663,122 573,845 $3.84 $0.06 23.0% 18.5% 58.8% 54
== == ======= ======= ==== ==== ===== ==== ==== ==
</TABLE>
(1) Includes first and second generation space, net of month-to-month leases.
Excludes leasing on new construction. First generation space is defined as
the space first leased by the Company.
(2) Calculated over entire stabilized portfolio.
(3) Calculated as the change between GAAP rents for new/renewed leases and the
expiring GAAP rents for the same space.
(4) Calculated as the change between stated rents for new/renewed leases and
the expiring stated rents for the same space.
(5) Calculated as the percentage of space either renewed or expanded into by
existing tenants at lease expiration.
8
<PAGE>
Kilroy Realty Corporation
Third Quarter 2000 Supplemental Financial Report
--------------------------------------------------------------------------------
Lease Expiration Schedule
($ in thousands)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
# of Expiring Total % of Total Annual Annual Rent
Year of Expiration Leases Square Feet Leased Sq. Ft. Base Rent per Sq. Ft.
-------------------- --------------- ------------- ---------------- ----------- -------------
OFFICE:
Remaining 2000 16 61,057 1.1% $1,407 $23.04
2001 71 900,381 15.5% 15,361 17.06
2002 57 403,440 7.0% 7,231 17.92
2003 46 258,500 4.5% 5,048 19.53
2004 49 788,505 13.6% 17,999 22.83
2005 47 923,201 15.9% 15,363 16.64
2006 19 480,445 8.3% 10,516 21.89
2007 13 563,914 9.7% 10,917 19.36
2008 6 313,092 5.4% 6,225 19.88
2009 and Beyond 16 1,099,049 19.0% 29,187 26.56
---- ---------- --------- ----------
Subtotal 340 5,791,584 100.0% $119,254 $20.59
---- ---------- --------- ----------
INDUSTRIAL:
Remaining 2000 18 376,817 6.6% $3,141 $8.34
2001 73 800,345 14.1% 5,670 7.08
2002 48 331,473 5.8% 3,031 9.14
2003 34 713,293 12.6% 4,958 6.95
2004 14 529,130 9.3% 3,769 7.12
2005 14 681,255 12.0% 5,115 7.51
2006 6 457,336 8.0% 3,250 7.11
2007 3 164,595 2.9% 1,396 8.48
2008 5 839,712 14.8% 6,268 7.46
2009 and Beyond 13 789,214 13.9% 7,405 9.38
---- ---------- --------- ----------
Subtotal 228 5,683,170 100.0% $44,003 $7.74
---- ---------- --------- ----------
TOTAL PORTFOLIO:
Remaining 2000 34 437,874 3.8% $4,548 $10.36
2001 144 1,700,726 14.8% 21,031 12.37
2002 105 734,913 6.4% 10,262 13.96
2003 80 971,793 8.5% 10,006 10.30
2004 63 1,317,635 11.5% 21,768 16.52
2005 61 1,604,456 14.0% 20,478 12.76
2006 25 937,781 8.2% 13,766 14.68
2007 16 728,509 6.3% 12,313 16.90
2008 11 1,152,804 10.0% 12,493 10.84
2009 and Beyond 29 1,888,263 16.5% 36,592 19.38
---- ---------- --------- ----------
Total Portfolio 568 11,474,754 100.0% $163,257 $14.23
==== ========== ========= ==========
</TABLE>
9
<PAGE>
Kilroy Realty Corporation
Third Quarter 2000 Supplemental Financial Report
--------------------------------------------------------------------------------
2000 Dispositions
($ in thousands)
<TABLE>
<CAPTION>
Rentable
Month Of Square Sales
Property Location Type Disposition Feet Price
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1st QUARTER:
26212 - 26242 Dimension Drive Lake Forest, CA Industrial January 45,300 $3,350
-------- --------
2nd QUARTER:
12691 Monarch & 12700 Pala Dr. Garden Grove, CA Industrial April 110,200 $6,300
5759 Fleet Street Carlsbad, CA Industrial June 82,900 12,550
Pacific Park Plaza Aliso Viejo, CA Office June 134,700 18,000
-------- --------
327,800 $36,850
-------- --------
3rd QUARTER:
1961 Concourse, 1710 Fortune Dr.
and Fortune Business Park San Jose, CA Industrial July 431,400 $62,400
1501 - 1561 Orangethorpe Ave. Fullerton, CA Office August 152,000 11,000
-------- --------
583,400 $73,400
-------- --------
TOTAL YEAR-TO-DATE DISPOSITIONS 956,500 $113,600
======== =========
</TABLE>
10
<PAGE>
Kilroy Realty Corporation
Third Quarter 2000 Supplemental Financial Report
--------------------------------------------------------------------------------
Stabilized Development
($ in thousands)
<TABLE>
<CAPTION>
Completion Rentable Total Est.
Project Location Type Start Date Date Square Feet Investment Occupancy
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1st QUARTER:
Brobeck, Phleger & Harrison Del Mar, CA Office 1Q 1999 1Q 2000 72,332 $15,519 100%
--------- ---------
2nd QUARTER:
Peregrine Systems - Bldg 2(1) Del Mar, CA Office 2Q 1999 2Q 2000 129,680 $25,436 100%
Peregrine Systems - Bldg 5(1) Del Mar, CA Office 3Q 1999 2Q 2000 112,067 21,902 100%
--------- ---------
241,747 $47,338 100%
--------- ---------
3rd QUARTER:
Innovation Corporate Center - Lot 1 & Lot A San Diego, CA Office 4Q 1999 3Q 2000 103,000 $17,739 100%
Sorrento Rim Parcel C San Diego, CA Office 1Q 2000 3Q 2000 62,415 8,100 100%
Westside Media Center - Phase II West LA, CA Office 3Q 1999 3Q 2000 151,000 43,826 100%
--------- ---------
316,415 $69,665 100%
--------- ---------
TOTAL YEAR-TO-DATE DEVELOPMENTS STABILIZED 630,494 $132,522 100%
========= =========
</TABLE>
(1) Project was developed by a Development LLC in which the Company holds a 50%
managing interest. The total estimated investment figure includes the
capital required to purchase the remaining 50% interest in the project.
Some of the enclosed information presented is forward-looking in nature,
including information concerning development timing and investment amounts.
Although the information is based on Kilroy Realty Corporation's current
expectations, actual results could vary from expectations stated here. Numerous
factors will affect Kilroy Realty Corporation's actual results, some of which
are beyond its control. These include the timing and strength of regional
economic growth, the strength of commercial and industrial real estate markets,
competitive market conditions, future interest rate levels and capital market
conditions. You are cautioned not to place undue reliance on this information,
which speaks only as of the date of this report. Kilroy Realty Corporation
assumes no obligation to update publicly any forward-looking information,
whether as a result of new information, future events or otherwise. For a
discussion of important risks related to Kilroy Realty Corporation's business,
and an investment in its securities, including risks that could cause actual
results and events to differ materially from results and events referred to in
the forward-looking information, see the discussion under the caption "business
risks" in Kilroy Realty Corporation's annual report on Form 10-K for the year
ended December 31, 1999. In light of these risks, uncertainties and
assumptions, the forward-looking events contained in this supplement information
might not occur.
11
<PAGE>
Kilroy Realty Corporation
Third Quarter 2000 Supplemental Financial Report
--------------------------------------------------------------------------------
In-Process and Committed Development Projects
($ in thousands)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Est. Construction Period
-----------------------------------
Project Location Type Start Date Completion Date
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PROJECTS IN LEASE-UP:
Kilroy Airport Center, Long Beach - 7 Story(4) Long Beach, CA Office 2Q 1999 2Q 2000
Calabasas Park Centre - Phase I(5) Calabasas, CA Office 3Q 1999 2Q 2000
Subtotal
PROJECTS UNDER CONSTRUCTION:
Calabasas Park Centre - Phase II Calabasas, CA Office 2Q 2000 1Q 2001
Calabasas Park Centre - Phase III Calabasas, CA Office 3Q 2000 1Q 2001
Innovation Corporate Center - Lot 8 San Diego, CA Office 2Q 2000 1Q 2001
Innovation Corporate Center - Lot 12 San Diego, CA Office 2Q 2000 2Q 2001
Pacific Technology Center San Diego, CA Office 1Q 2000 1Q 2001
Peregrine Systems Corporate Center - Bldg. 3(1) Del Mar, CA Office 2Q 2000 2Q 2001
Sorrento Gateway - Lot 5(1) San Diego, CA Office 1Q 2000 4Q 2000
Sorrento Business Park II San Diego, CA Office 2Q 2000 2Q 2001
Subtotal
TOTAL PROJECTS IN LEASE-UP AND UNDER CONSTRUCTION
COMMITTED DEVELOPMENT:
Brobeck, Phleger & Harrison Expansion Del Mar, CA Office 2Q 2001 2Q 2002
Sorrento Gateway - Lot 4(1) San Diego, CA Office 1Q 2001 4Q 2001
Subtotal
TOTAL IN-PROCESS AND COMMITTED DEVELOPMENT PROJECTS
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
% Committed(3)
---------------------------------
Est. Stabilization Rentable Total Est. % %
Project Date(2) Square Feet Investment Leased LOI Total
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PROJECTS IN LEASE-UP:
Kilroy Airport Center, Long Beach - 7 Story(4) 4Q 2000 192,476 $ 32,364 87% 12% 99%
Calabasas Park Centre - Phase I(5) 4Q 2000 102,264 18,060 97% 3% 100%
------- --------
Subtotal 294,740 $ 50,424 90% 9% 99%
------- --------
PROJECTS UNDER CONSTRUCTION:
Calabasas Park Centre - Phase II 1Q 2002 98,706 $ 18,964 0% 19% 19%
Calabasas Park Centre - Phase III 1Q 2002 11,744 2,295 0% 0% 0%
Innovation Corporate Center - Lot 8 1Q 2002 48,833 7,726 0% 100% 100%
Innovation Corporate Center - Lot 12 2Q 2002 70,617 10,690 0% 100% 100%
Pacific Technology Center 1Q 2002 67,995 11,501 0% 100% 100%
Peregrine Systems Corporate Center - Bldg. 3(1) 2Q 2002 129,752 27,230 100% 0% 100%
Sorrento Gateway - Lot 5(1) 4Q 2000 75,520 18,738 100% 0% 100%
Sorrento Business Park II 2Q 2001 102,875 25,241 100% 0% 100%
------- --------
Subtotal 606,042 $122,385 51% 34% 85%
------- --------
TOTAL PROJECTS IN LEASE-UP AND UNDER CONSTRUCTION 900,782 $172,809 64% 26% 90%
------- --------
COMMITTED DEVELOPMENT:
Brobeck, Phleger & Harrison Expansion 2Q 2002 89,168 $ 22,283 0% 100% 100%
Sorrento Gateway - Lot 4(1) 4Q 2001 60,060 15,450 100% 0% 100%
------ --------
Subtotal 149,228 $ 37,733 40% 60% 100%
------- --------
TOTAL IN-PROCESS AND COMMITTED DEVELOPMENT PROJECTS 1,050,010 $210,542 60% 31% 91%
========= ========
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Project is being developed by a Development LLC in which the Company holds
a 50% managing interest. The estimated investment figure includes the
capital required to purchase the remaining 50% interest in the project.
(2) Based on management's estimation of the earlier of stabilized occupancy
(95%) or one year from the date of substantial completion.
(3) Includes executed leases and signed letters of intent, calculated on a
square footage basis.
(4) This project was 87% occupied at September 30, 2000.
(5) This project was 81% occupied at September 30, 2000.
Some of the enclosed information presented is forward-looking in nature,
including information concerning development timing and investment amounts.
Although the information is based on Kilroy Realty Corporation's current
expectations, actual results could vary from expectations stated here. Numerous
factors will affect Kilroy Realty Corporation's actual results, some of which
are beyond its control. These include the timing and strength of regional
economic growth, the strength of commercial and industrial real estate markets,
competitive market conditions, future interest rate levels and capital market
conditions. You are cautioned not to place undue reliance on this information,
which speaks only as of the date of this report. Kilroy Realty Corporation
assumes no obligation to update publicly any forward-looking information,
whether as a result of new information, future events or otherwise. For a
discussion of important risks related to Kilroy Realty Corporation's business,
and an investment in its securities, including risks that could cause actual
results and events to differ materially from results and events referred to in
the forward-looking information, see the discussion under the caption "business
risks" in Kilroy Realty Corporation's annual report on Form 10-K for the year
ended December 31, 1999. In light of these risks, uncertainties and
assumptions, the forward-looking events contained in this supplement information
might not occur.
12
<PAGE>
Kilroy Realty Corporation
Third Quarter 2000 Supplemental Financial Report
--------------------------------------------------------------------------------
Future Development Pipeline
($ in thousands)
<TABLE>
<CAPTION> Rentable Total Estimated
Project Location Type Square Feet Investment
--------------------------- ----------------- ----- ----------- ---------------
<S> <C> <C> <C> <C>
LOS ANGELES COUNTY:
Westside Media Center - Phase III West LA, CA Office 151,000 $53,457
------- -------
SAN DIEGO COUNTY:
Innovation Corporate Center - Lot 2 San Diego, CA Office 52,000 $8,389
Innovation Corporate Center - Lot 4 San Diego, CA Office 75,000 11,122
Innovation Corporate Center - Lot 9 San Diego, CA Office 65,400 9,946
Innovation Corporate Center - Lot 10 San Diego, CA Office 37,300 6,091
Pacific Corporate Center - Lots 3, 4 & 6 San Diego, CA Office 218,250 39,250
Pacific Corporate Center - Lot 8 San Diego, CA Office 116,379 21,830
Pacific Corporate Center - Lots 25 & 27 San Diego, CA Office 68,400 10,920
Peregrine Systems Corporate Center - Bldg. 4(1) San Diego, CA Office 118,061 26,558
Santa Fe Summit - Phase 1 San Diego, CA Office 150,000 29,759
Santa Fe Summit - Phase 2 San Diego, CA Office 150,000 30,594
Sorrento Gateway - Lot 1 San Diego, CA Office 54,878 10,598
Sorrento Gateway - Lot 2(1) San Diego, CA Office 125,000 23,004
Sorrento Gateway - Lot 3(1) San Diego, CA Office 56,800 10,221
Sorrento Gateway - Lot 7(1) San Diego, CA Office 57,000 10,657
------ ------
1,344,468 $248,939
--------- --------
TOTAL FUTURE DEVELOPMENT PIPELINE 1,495,468 $302,396
========= ========
</TABLE>
(1) Project is being developed by a Development LLC in which the Company holds
a 50% interest. The estimated investment figure includes the capital
required to purchase the remaining 50% interest in the project.
Some of the enclosed information presented is forward-looking in nature,
including information concerning development timing and investment amounts.
Although the information is based on Kilroy Realty Corporation's current
expectations, actual results could vary from expectations stated here. Numerous
factors will affect Kilroy Realty Corporation's actual results, some of which
are beyond its control. These include the timing and strength of regional
economic growth, the strength of commercial and industrial real estate markets,
competitive market conditions, future interest rate levels and capital market
conditions. You are cautioned not to place undue reliance on this information,
which speaks only as of the date of this report. Kilroy Realty Corporation
assumes no obligation to update publicly any forward-looking information,
whether as a result of new information, future events or otherwise. For a
discussion of important risks related to Kilroy Realty Corporation's business,
and an investment in its securities, including risks that could cause actual
results and events to differ materially from results and events referred to in
the forward-looking information, see the discussion under the caption "business
risks" in Kilroy Realty Corporation's annual report on Form 10-K for the year
ended December 31, 1999. In light of these risks, uncertainties and
assumptions, the forward-looking events contained in this supplement information
might not occur.
13
<PAGE>
Kilroy Realty Corporation
Third Quarter 2000 Supplemental Financial Report
--------------------------------------------------------------------------------
Capital Structure
At September 30, 2000
($ in thousands)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Aggregate
Principal
Amount or % of Total
Shares/Units $ Value Market
at Sept. 30, 2000 Equivalent Capitalization
----------------- ---------- --------------
<S> <C> <C> <C>
DEBT:
Secured Debt $ 387,556 23.7%
Unsecured Line of Credit 186,000 11.4%
Unsecured Term Facility 100,000 6.1%
------- ------
Total Debt $ 673,556 41.2%
-------- ------
EQUITY:
8.075% Series A Cumulative Redeemable Preferred units(1) 1,500,000 $ 75,000 4.6%
9.375% Series C Cumulative Redeemable Preferred units(1) 700,000 35,000 2.1%
9.250% Series D Cumulative Redeemable Preferred units(1) 900,000 45,000 2.8%
Common Units outstanding(2) 3,747,412 100,009 6.1%
Common Shares outstanding(2) 26,455,400 706,028 43.2%
------- ------
Total Equity $ 961,037 58.8%
-------- ------
TOTAL MARKET CAPITALIZATION $1,634,593 100.0%
========== ======
------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Value based on $50,00 per share liquidation preference,
(2) Valued based on closing share price of $26 11/16 at September 30, 2000,
14
<PAGE>
Kilroy Realty Corporation
Third Quarter 2000 Supplemental Financial Report
--------------------------------------------------------------------------------
Share Repurchase Program Summary
($ in thousands, except per share information )
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Average Total
Number Price per Aggregate
of Shares Share Repurchases
------------------------------------------- --------- ---------- -----------
<S> <C> <C> <C>
4th QUARTER 1999: 265,000 $20.19 $ 5,350
--------- ------ -------
1st QUARTER 2000: 1,999,300 $20.58 $41,151
--------- ------ -------
2nd QUARTER 2000: NONE
3rd QUARTER 2000: NONE
TOTAL PROGRAM-TO-DATE SHARE REPURCHASES 2,264,300 $20.54 $46,501
========= ====== =======
-------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
Kilroy Realty Corporation
Third Quarter 2000 Supplemental Financial Report
--------------------------------------------------------------------------------
Debt Analysis
At September 30, 2000
($ in thousands)
<TABLE>
<CAPTION>
UNSECURED DEBT AND SECURED TERM FACILITY PRINCIPAL REPAYMENT SCHEDULE
---------------------------------------------------------------------------------------------------------------------------------
2000 2001 2002 2003 2004 Thereafter Total
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$1,308 $5,525 $47,932 $98,167 $127,511 $207,113 $487,556
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
TOTAL DEBT COMPOSITION
--------------------------------------------------------------------------------------------------------------------------------
Weighted Average
% of ----------------
Total Debt Interest Rate Maturity
---------- ------------- --------
<S> <C> <C> <C>
Secured vs. Unsecured Debt:
Secured Debt 57.5% 8.1% 6.1
Unsecured Debt 42.5% 8.3% 6.2
Floating vs. Fixed Rate Debt:
Fixed Rate Debt (1) (4) 58.0% 8.1% 5.8
Floating Rate Debt (2) (3) 42.0% 8.3% 1.7
Total Debt 8.2% 4.2
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
UNSECURED LINE OF CREDIT
---------------------------------------------------------------------------------
Total Line Outstanding Balance Expiration Date
---------- ------------------- ---------------
<S> <C> <C>
$400,000 $186,000 November 2002
---------------------------------------------------------------------------------
</TABLE>
(1) The Company currently has an interest-rate swap agreement to fix LIBOR on
$150 million of its floating rate debt at 6.95% which expires in February
2002.
(2) The Company currently has an interest-rate cap agreement to cap LIBOR on
$150 million of its floating rate debt at 6.5% which expires in January
2002.
(3) The Company, through one of its Development LLCs, currently has an
interest-rate cap agreement to cap LIBOR on its floating rate construction
debt at 8.5% which expires in April 2002. The notional amount of the cap
increases over the life of the agreement as the balance of the related
construction loan increases. At September 30, 2000, the notional amount of
the cap agreement was approximately $38.9 million.
(4) The percentage of fixed rate debt to total debt does not take into
consideration the portion of floating rate debt capped by the Company's
interest-rate cap agreements. Including the effects of the interest-rate
cap agreements, the Company had fixed or capped approximately 86.0% of its
total outstanding debt at September 30, 2000.
16
