LOS ANGELES, Feb. 2, 2000 (PRIMEZONE) -- Kilroy Realty Corporation (NYSE:KRC) today reported financial results for its fourth quarter ended December 31, 1999, with funds from operations (FFO) of $20.9 million, or $0.65 per share, up 10.2% on a per-share basis from $18.9 million, or $0.59 per share, in the fourth quarter of 1998. Net income in the fourth quarter declined to $8.3 million, or $0.30 per share, down from $10.2 million, or $0.37 per share, in the year-earlier quarter. Revenues in the period totaled $42.6 million, compared to $39.3 million a year ago.
In its 1999 fiscal year, the company reported FFO of $80.6 million, or $2.50 per share, an 8.7% increase on a per-share basis from $71.2 million, or $2.30 per share, in 1998. Net income in 1999 rose to $39.9 million, or $1.44 per share, compared to $38.8 million, or $1.43 per share, in the prior year. Revenues in the year totaled $159.7 million, up from $137.1 million in 1998. All per-share amounts are presented on a diluted basis.
"Kilroy Realty capitalized on the robust commercial real estate market in Southern California in 1999 and continued the successful development and lease-up of the company's over $500 million property pipeline," said John B. Kilroy, Jr., KRC's president and chief executive officer.
Kilroy Realty completed and stabilized eight properties in 1999 totaling $125 million in new development. These new developments added 1.2 million square feet of space to the company's office and industrial real estate portfolio and were 100% leased at the end of the year. Year-end occupancy for the company's operating portfolio, including the newly stabilized properties, was 97%, up from 96% at the end of 1998.
Through December 1999, the company had also committed to build or initiated construction on another 1.4 million square feet of office space, representing a total projected investment of $274 million. Approximately 86% of this new space has been preleased or committed to tenants, including major, multi-year leases signed during 1999 with Peregrine Systems in San Diego, SCAN Health in Long Beach, and eToys in West Los Angeles.
Some of the information presented in this release is forward-looking in nature. Although the information is based on the company's current best judgment, actual results 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 and capital market conditions. For further information, please see KRC's Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q.
Kilroy Realty Corporation is a Southern California-based real estate investment trust active in the commercial office and industrial property sectors. The company has a 50-year history of owning, developing, acquiring and managing real estate assets in the coastal regions of California and Washington. Principal submarkets for the company's current development projects include Los Angeles, San Diego, and Long Beach, where the company's total development program is over $500 million. At December 31, 1999, the company owned 6.1 million square feet of commercial office space and 6.5 million square feet of industrial space. More information on Kilroy Realty can be found at www.kilroyrealty.com.
KILROY REALTY CORPORATION
SUMMARY QUARTERLY RESULTS
(unaudited, in thousands, except per share data)
3 Mos. 3 Mos. Year Year
Ended Ended Ended Ended
12/31/99 12/31/98 12/31/99 12/31/98
Revenues $ 42,647 $ 39,294 $ 159,700 $ 137,088
Net income available to
common stockholders (1) $ 8,278 $ 10,173 $ 39,895 $ 38,822
Weighted average common
shares outstanding
- basic 27,884 27,639 27,701 26,989
Weighted average common
shares outstanding
- diluted 27,884 27,640 27,727 27,060
Net income per share
of common stock
- basic $ 0.30 $ 0.37 $ 1.44 $ 1.44
Net income per share
of common stock
- diluted $ 0.30 $ 0.37 $ 1.44 $ 1.43
Funds From Operations $ 20,945 $ 18,868 $ 80,631 $ 71,174
Weighted average common
shares/units outstanding
- basic (2) 32,284 31,840 32,201 30,897
Weighted average common
shares/units outstanding
- diluted (2) 32,284 31,840 32,227 30,967
Funds From Operations per
common share/unit -
basic (2) $ 0.65 $ 0.59 $ 2.50 $ 2.30
Funds From Operations per
common share/unit -
diluted (2) $ 0.65 $ 0.59 $ 2.50 $ 2.30
Common shares outstanding
at end of period 27,808 27,639
Common partnership units
outstanding at end of period 4,229 4,201
Total common shares and units
outstanding at end of period 32,037 31,840
12/31/99 12/31/98
Occupancy rates:
California 96.4% 95.9%
Washington 99.6% 90.8%
Arizona 100.0% 100.0%
Nevada 100.0% 100.0%
Weighted average total 96.7% 95.9%
Total square feet of stabilized
properties owned at end of period:
Office 6,148 5,600
Industrial 6,477 6,157
Total 12,625 11,757
(1) Net income after minority interests.
(2) Calculated based on weighted average shares outstanding
assuming conversion of all common limited partnership units
outstanding.
KILROY REALTY CORPORATION CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
December 31, December 31,
1999 1998
ASSETS
INVESTMENT IN REAL ESTATE:
Land and improvements $ 274,463 $ 253,500
Buildings and improvements 946,130 828,425
Undeveloped land and construction
in progress, net 189,645 112,359
Total investment in real estate 1,410,238 1,194,284
Accumulated depreciation and amortization (174,427) (145,437)
Investment in real estate, net 1,235,811 1,048,847
Cash and cash equivalents 26,116 6,443
Restricted cash 6,636 6,896
Tenant receivables, net 22,078 18,919
Notes receivable from related parties 8,798
Deferred financing and leasing costs, net 27,840 16,168
Prepaid expenses and other assets 2,020 3,146
TOTAL ASSETS $1,320,501 $1,109,217
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES:
Mortgage debt $ 325,516 $ 133,383
Unsecured line of credit 228,000 272,000
Accounts payable and accrued expenses 26,260 16,791
Accrued distributions 13,456 12,895
Rents received in advance and
tenant security deposits 20,287 17,749
Total liabilities 613,519 452,818
MINORITY INTERESTS:
8.075% Series A Cumulative
Redeemable Preferred unitholders 73,716 73,718
9.375% Series C Cumulative
Redeemable Preferred unitholders 34,464 34,410
9.250% Series D Cumulative
Redeemable Preferred unitholders 44,022
Common unitholders 71,920 72,372
Minority interest in Development LLCs 9,931
Total minority interests 234,053 180,500
STOCKHOLDERS' EQUITY:
Common stock 278 276
Additional paid-in capital 491,204 487,467
Distributions in excess of earnings (18,553) (11,844)
Total stockholders' equity 472,929 475,899
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $1,320,501 $1,109,217
KILROY REALTY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)
3 Mos. 3 Mos. Year Year
Ended Ended Ended Ended
12/31/99 12/31/98 12/31/99 12/31/98
REVENUES:
Rental income $ 38,241 $ 32,521 $ 140,182 $ 117,338
Tenant reimbursements 3,786 4,111 16,316 14,956
Interest income 315 507 1,175 1,698
Other income 305 2,155 2,027 3,096
Total revenues 42,647 39,294 159,700 137,088
EXPENSES:
Property expenses 5,152 5,512 20,669 19,281
Real estate taxes 3,400 3,025 12,369 10,383
General and administrative
expenses 2,310 2,240 9,091 7,739
Ground leases 395 326 1,397 1,223
Provision for potentially
unrecoverable pre-
development costs 1,700 1,700
Interest expense 7,889 5,926 26,309 20,568
Depreciation and
amortization 11,217 7,041 33,794 26,200
Total expenses 30,363 25,770 103,629 87,094
Income from operations
before gain (loss) on
dispositions of operating
properties, equity in
income of unconsolidated
subsidiary and minority
interests 12,284 13,524 56,071 49,994
Gain (loss) on dispositions
of operating properties (29) 46
Equity in income of
unconsolidated subsidiary 39 29 17 5
Income before minority
interests 12,294 13,553 56,134 49,999
Minority interests:
Distributions on
Cumulative Redeemable
Preferred units (2,557) (1,852) (9,560) (5,556)
Minority interest in
earnings of Operating
Partnership (1,294) (1,528) (6,480) (5,621)
Minority interest in
earnings of
Development LLCs (165) (199)
Total minority
interests (4,016) (3,380) (16,239) (11,177)
Net income $ 8,278 $ 10,173 $ 39,895 $ 38,822
Weighted average shares
outstanding - basic 27,884 27,639 27,701 26,989
Weighted average shares
outstanding - diluted 27,884 27,640 27,727 27,060
Income per common
share - basic $ 0.30 $ 0.37 $ 1.44 $ 1.44
Income per common
share - diluted $ 0.30 $ 0.37 $ 1.44 $ 1.43
KILROY REALTY CORPORATION
FUNDS FROM OPERATIONS
(unaudited, in thousands, except per share data)
3 Mos. 3 Mos. Year Year
Ended Ended Ended Ended
12/31/99 12/31/98 12/31/99 12/31/98
Net income $ 8,278 $ 10,173 $ 39,895 $ 38,822
Adjustments:
Minority interest
in earnings
of Operating
Partnership 1,294 1,528 6,480 5,621
Depreciation and
amortization 11,217 7,041 33,794 26,200
(Gain) loss on
dispositions of
operating properties 29 (46)
Other 127 126 508 531
Funds From Operations $ 20,945 $ 18,868 $ 80,631 $ 71,174
Weighted average common
shares/units
outstanding - basic 32,284 31,840 32,201 30,897
Weighted average common
shares/units
outstanding - diluted 32,284 31,840 32,227 30,967
Funds From Operations
per common share/unit
- basic $ 0.65 $ 0.59 $ 2.50 $ 2.30
Funds From Operations
per common share/unit
- diluted $ 0.65 $ 0.59 $ 2.50 $ 2.30
KILROY REALTY CORPORATION
FUNDS AVAILABLE FOR DISTRIBUTION
(unaudited, in thousands, except per share data)
3 Mos. 3 Mos. Year Year
Ended Ended Ended Ended
12/31/99 12/31/98 12/31/99 12/31/98
Funds From Operations $ 20,945 $ 18,868 $ 80,631 $ 71,174
Adjustments:
Amortization of
deferred financing
costs 645 287 1,465 995
Tenant improvements,
leasing commissions
and recurring
capital expenditures (2,322) (942) (5,596) (3,190)
Net effect of
straight-line
rents (2,300) (1,526) (6,866) (4,509)
Funds Available for
Distribution $ 16,968 $ 16,687 $ 69,634 $ 64,470
Funds Available for
Distribution per
common share/unit
- basic $ 0.53 $ 0.52 $ 2.16 $ 2.09
Funds Available for
Distribution per
common share/unit
- diluted $ 0.53 $ 0.52 $ 2.16 $ 2.08
Contact: Kilroy Realty Corporation
Richard E. Moran Jr.
Executive Vice President and Chief Financial Officer
(310) 563-5533
or
Tyler H. Rose
Senior Vice President and Treasurer
(310) 563-5531