LOS ANGELES, Jan. 31, 2001 (PRIMEZONE) -- Kilroy Realty Corporation (NYSE:KRC) today reported financial results for its fourth quarter ended December 31, 2000, with funds from operations (FFO) of $21.6 million, or $0.71 per share, up 9.2% on a per-share basis from $20.9 million, or $0.65 per share, in the fourth quarter of 1999. Net income in the fourth quarter rose to $8.8 million, or $0.33 per share, compared to $8.3 million, or $0.30 per share, in the year-earlier quarter. Revenues totaled $50.8 million, up from $42.6 million a year ago.
For the year, the company reported FFO of $83.5 million, or $2.73 per share, up 9.2% on a per-share basis from $80.6 million, or $2.50 per share in 1999. Net income in the twelve-month period increased to $46.8 million, or $1.75 per share, up from $39.9 million, or $1.44 per share, in the year-earlier period. Revenues totaled $187.1 million, up from $159.7 million in 1999. All per-share amounts are presented on a diluted basis.
"California delivered one of the strongest economic performances in the state's modern history last year, and we took full advantage of the commercial real estate opportunities this created," said John B. Kilroy, Jr., Kilroy Realty's president and chief executive officer. "We significantly enhanced the overall quality of our portfolio with new development, while selling older, mature properties into a strong market. And we achieved this while maintaining an average occupancy rate of 97%."
KRC completed and stabilized $203 million of new development in 2000, adding an aggregate 1.0 million square feet of space to its portfolio. At year-end, the portfolio was 97% occupied. The company also disposed of $114 million of non-strategic real estate assets totaling 957,000 square feet last year, using the proceeds to help fund its development program.
Through year-end, the company had committed to build or initiated construction on an additional 964,000 square feet of space, representing a total estimated investment of $232 million. This committed pipeline includes individual properties scheduled for stabilization at various dates through 2003. The properties are located in select coastal submarkets of Southern California, including San Diego County, El Segundo, West Los Angeles, and the city of Calabasas along the northwestern Los Angeles Interstate 101 Corridor.
The company also reported that eToys, a tenant at the company's Westside Media Center in West Los Angeles, has defaulted on its space lease and related obligations to Kilroy Realty. Under the terms of the lease and related obligations, the company has fully drawn on two letters of credit totaling $15 million that support the lease and other obligations.
Kilroy Realty will conduct a conference call to discuss its 2000 fourth quarter results on Thursday, February 1, 2001 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 Fourth 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, El Segundo and coastal San Diego, where the company's total development pipeline exceeds $480 million. At December 31, 2000, the company owned 6.6 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 Year Year
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
2000 1999 2000 1999
------------- ------------ ----------- ------------
Revenues $ 50,769 $ 42,647 $187,113 $159,700
Net income
available to
common
stockholders (1) $ 8,786 $ 8,278 $ 46,846 $ 39,895
Weighted average
common shares
outstanding
- basic 26,456 27,884 26,599 27,701
Weighted average
common shares
outstanding
- diluted 26,747 27,884 26,755 27,727
Net income per
share of common
stock - basic $ 0.33 $ 0.30 $ 1.76 $ 1.44
Net income per
share of common
stock - diluted $ 0.33 $ 0.30 $ 1.75 $ 1.44
Funds From
Operations $ 21,572 $ 20,945 $ 83,471 $ 80,631
Weighted average
common shares/units
outstanding
- basic (2) 30,205 32,284 30,394 32,201
Weighted average
common shares/units
outstanding
- diluted (2) 30,495 32,284 30,550 32,227
Funds From
Operations per
common share/unit
- basic (2) $ 0.71 $ 0.65 $ 2.75 $ 2.50
Funds From
Operations per
common share/unit
- diluted (2) $ 0.71 $ 0.65 $ 2.73 $ 2.50
Common shares
outstanding at
end of period 26,475 27,808
Common partnership
units outstanding
at end of period 3,749 4,229
Total common ----------- -----------
shares and units
outstanding at
end of period 30,224 32,037
December 31, December 31,
Occupancy rates: 2000 1999
----------- -----------
California 96.7% 96.4%
Washington 100.0% 99.6%
Arizona 100.0% 100.0%
Nevada 100.0% 100.0%
----------- -----------
Weighted average total 97.0% 96.7%
Total square feet
of stabilized
properties owned at
end of period:
Office 6,624 6,148
Industrial 5,808 6,477
---------- -----------
Total 12,432 12,625
(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,
2000 1999
-------------- ---------------
ASSETS
------
INVESTMENT IN REAL ESTATE:
Land and improvements $ 266,444 $ 274,463
Buildings and improvements 1,054,995 946,130
Undeveloped land and
construction in progress, net 162,633 189,645
Investment in unconsolidated
real estate 12,405
-------------- ---------------
Total investment in real estate 1,496,477 1,410,238
Accumulated depreciation
and amortization (205,332) (174,427)
-------------- ---------------
Investment in real estate, net 1,291,145 1,235,811
Cash and cash equivalents 17,600 26,116
Restricted cash 35,014 6,636
Tenant receivables, net 32,521 22,078
Note receivable from
related party 33,274
Deferred financing and
leasing costs, net 39,674 27,840
Prepaid expenses and
other assets 7,941 2,020
-------------- ---------------
TOTAL ASSETS $ 1,457,169 $ 1,320,501
============== ===============
LIABILITIES & STOCKHOLDERS' EQUITY LIABILITIES:
----------------------------------------------
Secured debt $ 432,688 $ 325,516
Unsecured line of credit 191,000 228,000
Unsecured term facility 100,000
Accounts payable and
accrued expenses 33,911 26,260
Accrued distributions 13,601 13,456
Rents received in
advance and tenant
security deposits 17,810 20,287
-------------- ---------------
Total liabilities 789,010 613,519
-------------- ---------------
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 62,485 71,920
Minority interest in
Development LLCs 11,748 9,931
-------------- ---------------
Total minority interests 226,734 234,053
-------------- ---------------
STOCKHOLDERS' EQUITY:
Common stock 265 278
Additional paid-in
capital 460,390 491,204
Distributions in
excess of earnings (19,230) (18,553)
-------------- ---------------
Total stockholders' equity 441,425 472,929
-------------- ---------------
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $ 1,457,169 $ 1,320,501
============== ===============
KILROY REALTY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)
Three Months Three Months Year Year
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
2000 1999 2000 1999
-------- -------- -------- --------
REVENUES:
Rental income $ 43,609 $ 38,241 $ 161,236 $ 140,182
Tenant
reimbursements 5,405 3,786 19,441 16,316
Interest income 1,594 315 4,602 1,175
Other income 161 305 1,834 2,027
-------- -------- -------- --------
Total revenues 50,769 42,647 187,113 159,700
-------- -------- -------- --------
EXPENSES:
Property expenses 5,598 5,152 23,347 20,669
Real estate taxes 4,632 3,400 14,591 12,369
General and
administrative
expenses 3,037 2,310 11,114 9,091
Ground leases 432 395 1,643 1,397
Interest expense 11,309 7,889 39,109 26,309
Depreciation and
amortization 12,216 11,217 41,125 33,794
-------- -------- -------- --------
Total expenses 37,224 30,363 130,929 103,629
-------- -------- -------- --------
Income from
operations before
net (losses) gains
on dispositions of
operating properties,
equity in (loss)
income of
unconsolidated
subsidiary and
minority interests 13,545 12,284 56,184 56,071
Net (losses) gains
on dispositions
of operating
properties (29) 11,256 46
Equity in (loss)
income of
unconsolidated
subsidiary (1) 39 10 17
-------- -------- -------- --------
Income before
minority interests 13,544 12,294 67,450 56,134
-------- -------- -------- --------
Minority interests:
Distributions on
Cumulative
Redeemable
Preferred units (3,375) (2,557) (13,500) (9,560)
Minority interest
in earnings of
Operating
Partnership (1,241) (1,294) (6,683) (6,480)
Minority interest
in earnings of
Development LLCs (142) (165) (421) (199)
-------- -------- -------- --------
Total minority
interests (4,758) (4,016) (20,604) (16,239)
-------- -------- -------- --------
Net income $ 8,786 $ 8,278 $ 46,846 $ 39,895
======== ======== ======== ========
Weighted average
shares outstanding
- basic 26,456 27,884 26,599 27,701
Weighted average
shares outstanding
- diluted 26,747 27,884 26,755 27,727
Income per common
share - basic $ 0.33 $ 0.30 $ 1.76 $ 1.44
======== ======== ======== ========
Income per common
share - diluted $ 0.33 $ 0.30 $ 1.75 $ 1.44
======== ======== ======== ========
KILROY REALTY CORPORATION
FUNDS FROM OPERATIONS
(unaudited, in thousands, except per share data)
Three Months Three Months Year Year
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
2000 1999 2000 1999
-------- -------- -------- --------
Net income $ 8,786 $ 8,278 $ 46,846 $ 39,895
Adjustments:
Minority interest
in earnings of
Operating
Partnership 1,241 1,294 6,683 6,480
Depreciation and
amortization 11,037 11,217 39,946 33,794
Net losses (gains)
on dispositions
of operating
properties 29 (11,256) (46)
Non-cash
amortization of
restricted
stock grants 508 127 1,252 508
-------- -------- -------- --------
Funds From
Operations $ 21,572 $ 20,945 $ 83,471 $ 80,631
======== ======== ======== ========
Weighted average
common shares/units
outstanding
- basic 30,205 32,284 30,394 32,201
Weighted average
common shares/units
outstanding
- diluted 30,495 32,284 30,550 32,227
Funds From
Operations per
common share/unit
- basic $ 0.71 $ 0.65 $ 2.75 $ 2.50
======== ======== ======== ========
Funds From
Operations per
common share/unit
- diluted $ 0.71 $ 0.65 $ 2.73 $ 2.50
======== ======== ======== ========
KILROY REALTY CORPORATION
FUNDS AVAILABLE FOR DISTRIBUTION
(unaudited, in thousands, except per share data)
Three Months Three Months Year Year
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
2000 1999 2000 1999
-------- -------- -------- --------
Funds From
Operations $ 21,572 $ 20,945 $ 83,471 $ 80,631
Adjustments:
Amortization of
deferred
financing costs 369 645 1,488 1,465
Tenant
improvements,
leasing
commissions
and recurring
capital
expenditures (3,237) (2,322) (8,430) (5,596)
Net effect of
straight-line
rents (2,000) (2,300) (7,668) (6,866)
-------- -------- -------- --------
Funds Available
for Distribution $ 16,704 $ 16,968 $ 68,861 $ 69,634
======== ======== ======== ========
Funds Available
for Distribution
per common
share/unit
- basic $ 0.55 $ 0.53 $ 2.27 $ 2.16
======== ======== ======== ========
Funds Available
for Distribution
per common
share/unit
- diluted $ 0.55 $ 0.53 $ 2.25 $ 2.16
======== ======== ======== ========