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Exhibit 99.2
Contact: FOR RELEASE:
Richard E. Moran Jr. November 1, 2000
Executive Vice President
and Chief Financial Officer
(310) 563-5533
or
Tyler H. Rose
Senior Vice President
and Treasurer
(310) 563-5531
KILROY REALTY CORPORATION REPORTS THIRD QUARTER RESULTS
LOS ANGELES, November 1, 2000 - Kilroy Realty Corporation (NYSE: KRC) today
reported financial results for its third quarter ended September 30, 2000, with
funds from operations (FFO) of $21.1 million, or $0.69 per share, up 7.8% on a
per-share basis from $20.7 million, or $0.64 per share, in the third quarter of
1999. Net income in the third quarter rose to $15.7 million, or $0.59 per share,
compared to $10.9 million, or $0.39 per share, in the year-earlier quarter.
Revenues totaled $47.2 million, up from $40.2 million a year ago.
For the first nine months of 2000, the company reported FFO of $61.9 million,
or $2.02 per share, up 9.2% on a per-share basis from $59.7 million, or $1.85
per share, in the first nine months of 1999. Net income for the nine-month
period increased to $38.1 million, or $1.42 per share, up from $31.6 million, or
$1.14 per share, in the year-earlier period. Revenues for the nine months
totaled $136.3 million, up from $117.1 million in 1999. All per-share amounts
are presented on a diluted basis.
"Market conditions for commercial real estate in Southern California's key
coastal submarkets remain robust,'' said John B. Kilroy, Jr., KRC's president
and chief executive officer, "and we continue to use this opportunity to improve
the quality of the KRC portfolio." "Our development pipeline will add over $500
million of high quality, well-located properties over the next three years, a
program financed in part by the disposition of $114 million in non-strategic
real estate assets year-to-date," added Kilroy.
During the third quarter, KRC completed three new office buildings
aggregating 316,400 square feet of space for a total investment of approximately
$69.7 million. All three projects,
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including two properties in San Diego County and the second phase of the
company's Westside Media Center in West Los Angeles, were 100% leased on
completion and have been added to the company's stabilized portfolio. Year-to-
date, the company has completed and stabilized approximately 630,500 square feet
in six new office properties for a total investment of approximately $132.5
million. Overall, the company's in-process and committed development pipeline -
with individual properties scheduled for stabilization at various dates through
2002 - now totals just over one million square feet and is 91% leased or
otherwise committed.
Kilroy Realty will conduct a conference call to discuss its 2000 third
quarter results on Thursday, November 2, 2000 at 11:00 am PST. A live webcast of
the call will be available in the Investor Relations Section of the company's
website at www.kilroyrealty.com under Conference Calls. Replay information is
--------------------
also available on the website. Additionally, a copy of the company's Third
Quarter 2000 Supplemental Financial Report will be available in the Investor
Relations section of the company's website under Financial Reports.
Some of the information presented in this release is forward-looking in
nature within the meaning of the federal securities law. Although the
information is based on the company's current best judgment, actual results,
including the timing and total investment of the company's development projects,
could vary from expectations stated here. Numerous factors will affect KRC's
actual results, some of which are beyond the company's 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, capital market conditions and risks detailed from time
to time in the company's SEC reports, including quarterly reports on Form 10-Q,
reports on Form 8-K and annual reports on Form 10-K.
Kilroy Realty Corporation is a southern California-based real estate
investment trust active in the office and industrial property sectors. For more
than 50 years, the company has owned, developed, acquired and managed real
estate assets in the coastal regions of California and Washington. Principal
submarkets for KRC's current development projects include Calabasas, West Los
Angeles, and coastal San Diego, where the company's total development pipeline
exceeds $500 million. Other key submarkets where the company owns stabilized
assets include El Segundo, and Orange County in California and the city of
SeaTac in Washington. At September 30, 2000, the company owned 6.3 million
square feet of commercial office space and 5.8 million square feet of industrial
space. More information on Kilroy Realty can be found at www.kilroyrealty.com.
--------------------
#################
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KILROY REALTY CORPORATION
SUMMARY QUARTERLY RESULTS
-------------------------
(unaudited, in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, 2000 September 30, 1999 September 30, 2000 September 30, 1999
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Revenues $ 47,221 $ 40,202 $ 136,344 $ 117,053
Net income available to common stockholders (1) $ 15,679 $ 10,911 $ 38,060 $ 31,617
Weighted average common shares outstanding - basic
26,455 27,658 26,647 27,640
Weighted average common shares outstanding - diluted 26,697 27,677 26,758 27,675
Net income per share of common stock - basic $ 0.59 $ 0.39 $ 1.43 $ 1.14
Net income per share of common stock - diluted $ 0.59 $ 0.39 $ 1.42 $ 1.14
Funds From Operations $ 21,067 $ 20,693 $ 61,899 $ 59,686
Weighted average common shares/units outstanding - basic (2) 30,203 32,302 30,457 $ 32,174
Weighted average common shares/units outstanding - diluted (2) 30,444 32,321 30,568 $ 32,208
Funds From Operations per common share/unit - basic (2) $ 0.70 $ 0.64 $ 2.03 $ 1.86
Funds From Operations per common share/unit - diluted (2) $ 0.69 $ 0.64 $ 2.02 $ 1.85
Common shares outstanding at end of period 26,455 27,894
Common partnership units outstanding at end of period 3,748 4,408
------------- ----------
Total common shares and units outstanding at end of period 30,203 32,302
September 30, 2000 September 30, 1999
------------------ ------------------
Occupancy rates:
California 96.6% 95.1%
Washington 100.0% 99.5%
Arizona 100.0% 100.0%
Nevada 100.0% 100.0%
------------- --------------
Weighted average total 96.9% 95.5%
Total square feet of stabilized properties owned at end of period:
Office 6,294 6,209
Industrial 5,807 6,351
------------- -------------
Total 12,101 12,560
(1) Net income after minority interests.
(2) Calculated based on weighted average shares outstanding assuming conversion of
all common limited partnership units outstanding.
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</TABLE>
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KILROY REALTY CORPORATION CONSOLIDATED BALANCE SHEETS
-----------------------------------------------------
(unaudited, in thousands)
<TABLE>
<CAPTION>
<S> <C> <C>
September 30, December 31,
2000 1999
-------------- -------------
ASSETS
------
INVESTMENT IN REAL ESTATE:
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 & 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>
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KILROY REALTY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, 2000 September 30, 1999 September 30, 2000 September 30, 1999
------------------ ------------------ ------------------ -------------------
<S> <C> <C> <C> <C>
REVENUES:
Rental income $ 40,555 $ 34,959 $ 117,627 $ 101,941
Tenant reimbursements 4,748 4,214 14,036 12,530
Interest income 1,706 239 3,008 860
Other income 212 790 1,673 1,722
------------------ ------------------ ------------------ --------------------
Total revenues 47,221 40,202 136,344 117,053
------------------ ------------------ ------------------ -------------------
EXPENSES:
Property expenses 6,217 5,054 17,749 15,517
Real estate taxes 3,523 3,108 9,959 8,969
General and administrative expenses 2,890 2,266 8,077 6,781
Ground leases 423 331 1,211 1,002
Interest expense 10,024 6,501 27,800 18,420
Depreciation and amortization 9,941 7,900 28,909 22,577
------------------ ------------------ ------------------ --------------------
Total expenses 33,018 25,160 93,705 73,266
------------------ ------------------ ------------------ --------------------
Income from operations before net gains on dispositions
of operating properties, equity in income (loss) of
unconsolidated subsidiary and minority interests 14,203 15,042 42,639 43,787
Net gains on dispositions of operating properties 7,288 75 11,256 75
Equity in income (loss) of unconsolidated subsidiary 28 (8) 11 (22)
------------------ ------------------ ------------------ --------------------
Income before minority interests 21,519 15,109 53,906 43,840
------------------ ------------------ ----------------- ---------------------
Minority interests:
Distributions on Cumulative Redeemable
Preferred units (3,375) (2,334) (10,125) (7,003)
Minority interest in earnings of Operating Partnership (2,227) (1,830) (5,442) (5,186)
Minority interest in earnings of Development LLCs (238) (34) (279) (34)
------------------ ------------------ ------------------ -------------------
Total minority interests (5,840) (4,198) (15,846) (12,223)
------------------ ------------------ ------------------ -------------------
Net income $ 15,679 $ 10,911 $ 38,060 $ 31,617
================== ================== ================== ===================
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
Income per common share - basic $ 0.59 $ 0.39 $ 1.43 $ 1.14
=================== =================== =================== ================
Income per common share - diluted $ 0.59 $ 0.39 $ 1.42 $ 1.14
=================== =================== =================== ================
</TABLE>
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KILROY REALTY CORPORATION
FUNDS FROM OPERATIONS
---------------------
(unaudited, in thousands, except per share data)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, 2000 September 30, 1999 September 30, 2000 September 30, 1999
------------------ ------------------ ------------------ ------------------
Net income $ 15,679 $ 10,911 $ 38,060 $ 31,617
Adjustments:
Minority interest in earnings of Operating Partnership 2,227 1,830 5,442 5,186
Depreciation and amortization 9,941 7,900 28,909 22,577
Net gains on dispositions of operating properties (7,288) (75) (11,256) (75)
Non-cash amortization of restricted stock grants 508 127 744 381
------------------ ------------------ ------------------ ----------------
Funds From Operations $ 21,067 $ 20,693 $ 61,899 $ 59,686
================== ================== ================== ================
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 $ 2.03 $ 1.86
================== ================== =================== ================
Funds From Operations per common share/unit - diluted $ 0.69 $ 0.64 $ 2.02 $ 1.85
================== ================== =================== ================
</TABLE>
KILROY REALTY CORPORATION
FUNDS AVAILABLE FOR DISTRIBUTION
--------------------------------
(unaudited, in thousands, except per share)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, 2000 September 30, 1999 September 30, 2000 September 30, 1999
------------------ ------------------ ------------------ -----------------
Funds From Operations $ 21,067 $ 20,693 $ 61,899 $ 59,686
Adjustments:
Amortization of deferred financing costs 426 257 1,119 820
Tenant improvements, leasing commissions
and recurring capital expenditures (2,462) (1,324) (5,193) (3,274)
Net effect of straight-line rents (2,611) (1,957) (5,668) (4,566)
------------------ ------------------ ------------------ ----------------
Funds Available for Distribution $ 16,420 $ 17,669 $ 52,157 $ 52,666
================== ================== ================== ================
Funds Available for Distribution per common
share/unit - basic 0.54 $ 0.55 $ 1.71 $ 1.64
================== =================== ================== ================
Funds Available for Distribution per common
share/unit - diluted 0.54 $ 0.55 $ 1.71 $ 1.64
================== =================== ================== ================
</TABLE>
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