LOS ANGELES, Aug. 1, 2001 (PRIMEZONE) -- Kilroy Realty Corporation (NYSE:KRC) today reported financial results for its second quarter ended June 30, 2001, with net income of $15.1 million, or $0.55 per share, compared to $12.8 million, or $0.49 per share in the second quarter of 2000. Revenues for the period totaled $58.2 million, up from $45.3 million a year ago.
For the first six months of 2001, the company reported net income of $21.5 million, or $0.79 per share, down from $22.4 million, or $0.84 per share, in the year-earlier period. Revenues for the six months totaled $108.6 million, up from $89.1 million in 2000.
Funds from operations (FFO) for the second quarter were $28.2 million, or $0.93 per share, compared to $20.2 million, or $0.67 per share in the second quarter of 2000. For the first six months of 2001, FFO totaled $50.1 million, or $1.64 per share, up from $40.8 million, or $1.33 per share for the first six months of 2000. All per-share amounts in this report are presented on a diluted basis.
The company's second quarter results include a non-recurring lease termination fee of $5.4 million (or $0.18 per share) related to a lease default by a tenant at the company's Westside Media Center project.
KRC completed and stabilized two new office buildings during the second quarter aggregating 170,870 square feet of space for a total investment of approximately $37.5 million. The two buildings, both located in San Diego County, were 100% leased on completion. The company is currently developing or is committed to develop an additional 975,311 square feet of space in Southern California, with completion dates scheduled through 2002. This committed development pipeline, representing a total estimated investment of approximately $240 million, is currently 50% preleased.
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, and the timely leasing or re-leasing of space at current or anticipated rents, 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 program include Calabasas, West Los Angeles, El Segundo and coastal San Diego, where the company's total development pipeline is over $500 million. At June 30, 2001, the company owned 7.2 million square feet of commercial office space and 5.6 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,
2001 2000 2001 2000
------- ------- -------- -------
Revenues $58,234 $45,336 $108,601 $89,106
Net income available to
common stockholders (1) $15,097 $12,804 $ 21,523 $22,381
Weighted average
common shares
outstanding - basic 27,160 26,259 26,938 26,744
Weighted average
common shares
outstanding - diluted 27,380 26,348 27,177 26,788
Net income per share
of common stock - basic $ 0.56 $ 0.49 $ 0.80 $ 0.84
Net income per share
of common stock - diluted $ 0.55 $ 0.49 $ 0.79 $ 0.84
Funds From Operations $28,237 $20,153 $ 50,113 $40,832
Weighted average common
shares/units outstanding
- basic (2) 30,260 30,041 30,243 30,586
Weighted average common
shares/units outstanding
- diluted (2) 30,481 30,131 30,482 30,630
Funds From Operations
per common share/unit
- basic (2) $ 0.93 $ 0.67 $ 1.66 $ 1.33
Funds From Operations
per common share/unit
- diluted (2) $ 0.93 $ 0.67 $ 1.64 $ 1.33
Common shares outstanding
at end of period 27,266 26,455
Common partnership units
outstanding at end of period 3,063 3,748
------ ------
Total common shares and
units outstanding at
end of period 30,329 30,203
June 30, 2001 June 30, 2000
------------- -------------
Occupancy rates:
California 94.5% 97.1%
Washington 99.8% 99.7%
Arizona 100.0% 100.0%
Nevada 100.0% 100.0%
------ ------
Weighted average total 94.9% 97.3%
Total square feet of stabilized
properties owned at end of period:
Office 7,235 6,333
Industrial 5,606 6,238
------ ------
Total 12,841 12,571
(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,
2001 2000
----------- -----------
ASSETS
INVESTMENT IN REAL ESTATE:
Land and improvements $ 285,733 $ 266,444
Buildings and improvements 1,154,660 1,054,995
Undeveloped land and
construction in progress, net 143,564 162,633
Investment in unconsolidated
real estate -- 12,405
----------- -----------
Total investment in real estate 1,583,957 1,496,477
Accumulated depreciation
and amortization (224,157) (205,332)
----------- -----------
Investment in real estate, net 1,359,800 1,291,145
Cash and cash equivalents 13,898 17,600
Restricted cash 7,222 35,014
Tenant receivables, net 30,095 32,521
Note receivable from related party -- 33,274
Deferred financing and leasing
costs, net 37,455 39,674
Prepaid expenses and other assets 5,371 7,941
----------- -----------
TOTAL ASSETS $ 1,453,841 $ 1,457,169
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES:
Secured debt $ 438,947 $ 432,688
Unsecured line of credit 185,000 191,000
Unsecured term facility 100,000 100,000
Accounts payable and
accrued expenses 38,554 33,911
Accrued distributions 14,558 13,601
Rents received in advance
and tenant security deposits 16,302 17,810
----------- -----------
Total liabilities 793,361 789,010
----------- -----------
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 44,321
Common unitholders of the
Operating Partnership 50,076 62,485
Minority interest in
Development LLCs 12,177 11,748
----------- -----------
Total minority interests 214,754 226,734
----------- -----------
STOCKHOLDERS' EQUITY:
Common stock 273 265
Additional paid-in capital 474,864 460,390
Distributions in excess
of earnings (23,742) (19,230)
Accumulated other
comprehensive loss (5,669) --
----------- -----------
Total stockholders' equity 445,726 441,425
----------- -----------
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $ 1,453,841 $ 1,457,169
=========== ===========
KILROY REALTY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
---------------------------------------------------------------
(unaudited, in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
------- ------- -------- --------
REVENUES:
Rental income $46,029 $39,370 $ 90,408 $ 77,072
Tenant reimbursements 6,170 4,594 11,690 9,288
Interest income 277 1,016 713 1,302
Other income 5,758 356 5,790 1,444
------- ------- -------- --------
Total revenues 58,234 45,336 108,601 89,106
------- ------- -------- --------
EXPENSES:
Property expenses 7,443 6,074 14,338 11,532
Real estate taxes 4,744 3,049 8,379 6,436
General and
administrative expenses 3,034 2,555 6,388 5,187
Ground leases 375 399 767 788
Interest expense 10,612 9,948 21,403 17,776
Depreciation and
amortization 12,521 9,645 25,954 18,968
------- ------- -------- --------
Total expenses 38,729 31,670 77,229 60,687
------- ------- -------- --------
Income from operations 19,505 13,666 31,372 28,419
Net gains on dispositions
of operating properties 1,234 4,273 1,539 3,968
------- ------- -------- --------
Income before minority
interests and cumulative
effect of change in
accounting principle 20,739 17,939 32,911 32,387
------- ------- -------- --------
Minority interests:
Distributions on
Cumulative Redeemable
Preferred units (3,375) (3,375) (6,750) (6,750)
Minority interest in
earnings of Operating
Partnership (1,796) (1,843) (2,641) (3,215)
Minority interest in
earnings of
Development LLCs (471) 83 (605) (41)
------- ------- -------- --------
Total minority
interests (5,642) (5,135) (9,996) (10,006)
------- ------- -------- --------
Net income before
cumulative effect of
change in accounting
principle 15,097 12,804 22,915 22,381
Cumulative effect of
change in accounting
principle -- -- (1,392) --
------- ------- -------- --------
Net income $15,097 $12,804 $ 21,523 $ 22,381
======= ======= ======== ========
Weighted average shares
outstanding - basic 27,160 26,259 26,938 26,744
Weighted average shares
outstanding - diluted 27,380 26,348 27,177 26,788
Income per common share
- basic $ 0.56 $ 0.49 $ 0.80 $ 0.84
======= ======= ======== ========
Income per common share
- diluted $ 0.55 $ 0.49 $ 0.79 $ 0.84
======= ======= ======== ========
KILROY REALTY CORPORATION
FUNDS FROM OPERATIONS
---------------------
(unaudited, in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
------- ------- ------- -------
Net income $15,097 $12,804 $21,523 $22,381
Adjustments:
Minority interest in
earnings of Operating
Partnership 1,796 1,843 2,641 3,215
Depreciation and
amortization 12,030 9,645 25,000 18,968
Net gains on dispositions
of operating properties (1,234) (4,273) (1,539) (3,968)
Cumulative effect of change
in accounting principle -- -- 1,392 --
Non-cash amortization of
restricted stock grants 548 134 1,096 236
------- ------- ------- -------
Funds From Operations $28,237 $20,153 $50,113 $40,832
======= ======= ======= =======
Weighted average common
shares/units outstanding
- basic 30,260 30,041 30,243 30,586
Weighted average common
shares/units outstanding
- diluted 30,481 30,131 30,482 30,630
Funds From Operations per
common share/unit - basic $ 0.93 $ 0.67 $ 1.66 $ 1.33
======= ======= ======= =======
Funds From Operations per
common share/unit - diluted $ 0.93 $ 0.67 $ 1.64 $ 1.33
======= ======= ======= =======
KILROY REALTY CORPORATION
FUNDS AVAILABLE FOR DISTRIBUTION
--------------------------------
(unaudited, in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
------- ------- ------- -------
Funds From Operations $28,237 $20,153 $50,113 $40,832
Adjustments:
Amortization of deferred
financing costs 399 487 780 693
Tenant improvements,
leasing commissions and
recurring capital
expenditures (3,668) (1,827) (4,679) (2,731)
Net effect of straight-line
rents (873) (1,549) (2,587) (3,057)
------- ------- ------- -------
Funds Available for
Distribution $24,095 $17,264 $43,627 $35,737
======= ======= ======= =======
Funds Available for
Distribution per common
share/unit - basic $ 0.80 $ 0.57 $ 1.44 $ 1.17
======= ======= ======= =======
Funds Available for
Distribution per common
share/unit - diluted $ 0.79 $ 0.57 $ 1.43 $ 1.17
======= ======= ======= =======