LOS ANGELES, Nov. 1, 2000 (PRIMEZONE) -- 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 approximately 316,400 square feet of space for a total investment of approximately $69.7 million. All three projects, 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 through the Investors 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.
KILROY REALTY CORPORATION
SUMMARY QUARTERLY RESULTS
-------------------------
(unaudited, in thousands, except per share data)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 1999 2000 1999
------------ ------------ ----------- -----------
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
Sept. 30, Sept. 30,
2000 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.
KILROY REALTY CORPORATION CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
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
=========== ===========
KILROY REALTY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 1999 2000 1999
-------- -------- -------- --------
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
======== ======== ======== ========
KILROY REALTY CORPORATION
FUNDS FROM OPERATIONS
---------------------
(unaudited, in thousands, except per share data)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 1999 2000 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
============ ============ =========== ===========
KILROY REALTY CORPORATION
FUNDS AVAILABLE FOR DISTRIBUTION
--------------------------------
(unaudited, in thousands, except per share data)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 1999 2000 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
=========== =========== ========== ===========