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