LOS ANGELES, July 25, 2000 (PRIMEZONE) -- Kilroy Realty Corporation (NYSE:KRC) today reported financial results for its second quarter ended June 30, 2000, with funds from operations (FFO) of $20.2 million, or $0.67 per share, up 8.1% on a per-share basis from $20.2 million, or $0.62 per share, in the second quarter of 1999. Net income in the second quarter rose to $12.8 million, or $0.49 per share, compared to $10.8 million, or $0.39 per share, in the year-earlier quarter. Revenues totaled $45.4 million, up from $39.3 million a year ago.
For the first six months of 2000, the company reported FFO of $40.8 million, or $1.33 per share, up 9.9% on a per-share basis from $39.0 million, or $1.21 per share in the first six months of 1999. Net income in the first half of 2000 increased to $22.4 million, or $0.84 per share, up from $20.7 million, or $0.75 per share, in the year-earlier period. Revenues for the six months totaled $89.1 million, up from $76.9 million in 1999. All per-share amounts are presented on a diluted basis.
"Southern California market conditions remain bullish for commercial real estate, with demand far outstripping supply in key coastal submarkets," said John B. Kilroy, Jr., KRC's president and chief executive officer. "Our current development pipeline will add $256 million of new properties located in these markets to the KRC portfolio over the next three years."
During the second quarter, KRC completed four new office buildings aggregating 536,000 square feet of space for a total investment of approximately $98.8 million. Two of the buildings, located in Peregrine Systems Corporate Center in Del Mar, were 100% leased on completion and have been added to the company's stabilized portfolio. The third and fourth buildings, located at Kilroy Airport Center, Long Beach and Calabasas Park Centre in northwest Los Angeles County, are currently in lease-up. Together, these two buildings are 92% leased or otherwise committed.
KRC also initiated construction on five new office buildings during the quarter, including four in San Diego County and the second phase of Calabasas Park Centre. Overall, the company's in-process and committed development pipeline now totals nearly 1.3 million square feet and is 75% leased or otherwise committed, with individual properties scheduled for stabilization at various dates through 2002.
As previously reported, KRC sold five Silicon Valley industrial buildings earlier this week to a private investment group for approximately $62 million in cash. Including this sale, the company has completed approximately $103 million of property dispositions year-to-date. The proceeds will be reinvested in KRC's development program in Southern California.
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 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 is over $545 million. At June 30, 2000, the company owned 6.3 million square feet of commercial office space and 6.2 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)
Three Months Six Months
Ended Ended
June 30, June 30,
2000 1999 2000 1999
---- ---- ---- ----
Revenues $45,360 $39,301 $89,123 $76,851
Net income available
to common stockholders (1) $12,804 $10,796 $22,381 $20,706
Weighted average
common shares
outstanding - basic 26,259 27,629 26,744 27,631
Weighted average
common shares
outstanding - diluted 26,348 27,713 26,788 27,674
Net income per share
of common stock - basic $ 0.49 $ 0.39 $ 0.84 $ 0.75
Net income per share
of common stock - diluted $ 0.49 $ 0.39 $ 0.84 $ 0.75
Funds From Operations $20,153 $20,203 $40,832 $38,993
Weighted average common
shares/units outstanding
- basic (2) 30,041 32,302 30,586 32,109
Weighted average common
shares/units outstanding
- diluted (2) 30,131 32,386 30,630 32,151
Funds From Operations
per common share/unit
- basic (2) $ 0.67 $ 0.63 $ 1.33 $ 1.21
Funds From Operations
per common share/unit
- diluted (2) $ 0.67 $ 0.62 $ 1.33 $ 1.21
Common shares outstanding
at end of period 26,455 27,629
Common partnership units
outstanding at end of period 3,748 4,673
----- -----
Total common shares
and units outstanding
at end of period 30,203 32,302
June 30, June 30,
2000 1999
-------- --------
Occupancy rates:
California 97.1% 95.3%
Washington 99.7% 98.4%
Arizona 100.0% 100.0%
Nevada 100.0% 100.0%
------- -------
Weighted average total 97.3% 95.6%
Total square feet of
stabilized properties owned
at end of period:
Office 6,333 5,810
Industrial 6,238 6,152
------- -------
Total 12,571 11,962
(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)
June 30, December 31,
2000 1999
---- ----
ASSETS
INVESTMENT IN REAL ESTATE:
Land and improvements $ 274,541 $ 274,463
Buildings and improvements 1,016,166 946,130
Undeveloped land and construction
in progress, net 176,858 189,645
----------- -----------
Total investment in real estate 1,467,565 1,410,238
Accumulated depreciation and
amortization (189,410) (174,427)
----------- -----------
Investment in real estate, net 1,278,155 1,235,811
Cash and cash equivalents 16,518 26,116
Restricted cash 6,322 6,636
Tenant receivables, net 25,621 22,078
Notes receivable from
related party 45,278 --
Deferred financing and leasing
costs, net 32,997 27,840
Prepaid expenses and other assets 18,172 2,020
----------- -----------
TOTAL ASSETS $ 1,423,063 $ 1,320,501
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES:
Mortgage debt $ 386,034 $ 325,516
Unsecured line of credit 305,000 228,000
Accounts payable and accrued
expenses 32,165 26,260
Accrued distributions 13,591 13,456
Rents received in advance and
tenant security deposits 20,664 20,287
----------- -----------
Total liabilities 757,454 613,519
----------- -----------
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 62,315 71,920
Minority interest in Development LLCs 10,969 9,931
----------- -----------
Total minority interests 225,785 234,053
----------- -----------
STOCKHOLDERS' EQUITY:
Common stock 265 278
Additional paid-in capital 459,436 491,204
Distributions in excess of earnings (19,877) (18,553)
----------- -----------
Total stockholders' equity 439,824 472,929
----------- -----------
TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY $ 1,423,063 $ 1,320,501
=========== ===========
KILROY REALTY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2000 1999 2000 1999
---- ---- ---- ----
REVENUES:
Rental income $39,370 $34,164 $ 77,072 $66,982
Tenant reimbursements 4,594 4,193 9,288 8,316
Interest income 1,016 221 1,302 621
Other income 380 723 1,461 932
------- ------- -------- -------
Total revenues 45,360 39,301 89,123 76,851
------- ------- -------- -------
EXPENSES:
Property expenses 6,074 5,329 11,532 10,463
Real estate taxes 3,049 2,852 6,436 5,861
General and administrative
expenses 2,555 2,201 5,187 4,515
Ground leases 399 334 788 671
Interest expense 9,948 6,160 17,776 11,919
Depreciation and
amortization 9,645 7,460 18,968 14,677
------- ------- -------- -------
Total expenses 31,670 24,336 60,687 48,106
------- ------- -------- -------
Income from operations
before gains on dispositions
of operating properties,
equity in loss of
unconsolidated subsidiary
and minority interests 13,690 14,965 28,436 28,745
Gains on dispositions of
operating properties 4,273 -- 3,968 --
Equity in loss of
unconsolidated subsidiary (24) (14) (17) (14)
------- ------- -------- -------
Income before minority
interests 17,939 14,951 32,387 28,731
------- ------- -------- -------
Minority interests:
Distributions on
Cumulative Redeemable
Preferred units (3,375) (2,335) (6,750) (4,669)
Minority interest in
earnings of Operating
Partnership (1,843) (1,820) (3,215) (3,356)
Minority interest in
earnings of
Development LLCs 83 -- (41) --
------- ------- -------- -------
Total minority interests (5,135) (4,155) (10,006) (8,025)
------- ------- -------- -------
Net income $12,804 $10,796 $ 22,381 $20,706
======= ======= ======== =======
Weighted average shares
outstanding - basic 26,259 27,629 26,744 27,631
Weighted average shares
outstanding - diluted 26,348 27,713 26,788 27,674
Income per common share
- basic $ 0.49 $ 0.39 $ 0.84 $ 0.75
======= ======= ======== =======
Income per common share
- diluted $ 0.49 $ 0.39 $ 0.84 $ 0.75
======= ======= ======== =======
KILROY REALTY CORPORATION
FUNDS FROM OPERATIONS
(unaudited, in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2000 1999 2000 1999
---- ---- ---- ----
Net income $12,804 $10,796 $22,381 $20,706
Adjustments:
Minority interest in
earnings of
Operating Partnership 1,843 1,820 3,215 3,356
Depreciation and
amortization 9,645 7,460 18,968 14,677
Gains on dispositions of
operating properties (4,273) -- (3,968) --
Non-cash amortization of
restricted stock grants 134 127 236 254
------- ------- ------- -------
Funds From Operations $20,153 $20,203 $40,832 $38,993
======= ======= ======= =======
Weighted average common
shares/units outstanding
- basic 30,041 32,302 30,586 32,109
Weighted average common
shares/units outstanding
- diluted 30,131 32,386 30,630 32,151
Funds From Operations per
common share/unit - basic $ 0.67 $ 0.63 $ 1.33 $ 1.21
======= ======= ======= =======
Funds From Operations per
common share/unit - diluted $ 0.67 $ 0.62 $ 1.33 $ 1.21
======= ======= ======= =======
KILROY REALTY CORPORATION
FUNDS AVAILABLE FOR DISTRIBUTION
(unaudited, in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2000 1999 2000 1999
---- ---- ---- ----
Funds From Operations $20,153 $20,203 $40,832 $38,993
Adjustments:
Amortization of deferred
financing costs 487 269 693 563
Tenant improvements,
leasing commissions and
recurring capital
expenditures (1,827) (849) (2,731) (1,950)
Net effect of
straight-line rents (1,549) (1,220) (3,057) (2,609)
------- ------- ------- -------
Funds Available for
Distribution $17,264 $18,403 $35,737 $34,997
======= ======= ======= =======
Funds Available for
Distribution per common
share/unit - basic $ 0.57 $ 0.57 $ 1.17 $ 1.09
======= ======= ======= =======
Funds Available for
Distribution per common
share/unit - diluted $ 0.57 $ 0.57 $ 1.17 $ 1.09
======= ======= ======= =======