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Kilroy Realty Corporation Reports Third Quarter Financial Results

Wed, 31 Oct 2012 07:51:26 +0000

Kilroy Realty Corporation Reports Third Quarter Financial Results

LOS ANGELES–(BUSINESS WIRE)– Kilroy Realty Corporation today reported financial results for its third quarter ended September 30, 2012, with a net loss available to common stockholders of $2.8 million, or $0.04 per share, compared to net income available to common stockholders of $10.2 million, or $0.17 per share, in the third quarter of 2011. Revenues from continuing operations in the third quarter totaled $104.3 million, up from $86.4 million in the prior year’s third quarter. Funds from operations (FFO) for the period totaled $43.1 million, or $0.57 per share, compared to $33.9 million, or $0.56 per share, in the year-earlier period. Net loss available to common stockholders and FFO for the third quarter of 2012 included a one-time, non-cash charge of approximately $2.1 million, or $0.03 per share, in conjunction with the redemption of all of the company’s Series A Cumulative Redeemable Preferred Units.

Results for the third quarter of 2012 include $0.01 per share of acquisition-related expenses and also reflect the company’s public offering of 5.75 million shares of common stock sold at a price of $46.10 per share, which closed on August 13, 2012. Net loss available to common stockholders in the third quarter of 2012 also included an increase in depreciation and amortization expense of approximately $10.8 million attributable to depreciation and amortization for the company’s recent acquisition properties.

For the first nine months of 2012, KRC reported net income available to common stockholders of $64.0 million, or $0.92 per share, compared to $10.9 million, or $0.18 per share, in the first nine months of 2011. Revenues from continuing operations in the nine-month period totaled $293.8 million, up from $243.4 million in the same period of 2011. FFO for the first nine months of 2012 totaled $115.6 million, or $1.61 per share, compared to $95.6 million, or $1.62 per share, in the same period of 2011. Net income in the first nine months of 2012 included approximately $72.8 million of net gains from property dispositions. All per share amounts in this report are presented on a diluted basis.

KRC also announced that it has entered into agreements to sell its entire Orange County industrial portfolio and five additional Southern California office buildings. The transactions are expected to close by year-end 2012, subject to customary closing conditions. Accordingly, these assets have been reclassified as properties held for sale and their financial results are accounted for as discontinued operations in the 2012 third-quarter and nine-month financial statements.

At September 30, 2012, the company’s stabilized portfolio, encompassing approximately 12.7 million square feet of office space located in greater Seattle, the San Francisco Bay Area, Los Angeles, Orange County and San Diego, was 91.1% occupied.

As previously announced, KRC completed three operating property acquisitions since the end of the second quarter: Skyline Tower, a 24-story Class A office building in Bellevue, Washington; Sunset Media Center, a 22-story Class A office building in Hollywood; and Tribeca West, a three-story entertainment-oriented office building in West Los Angeles.

In addition, the company completed the acquisition of three development opportunities: 333 Brannan Street, a development site in San Francisco’s SOMA district; Columbia Square, an historic 4.7 acre media campus in Hollywood; and 350 Mission Street, a development site in San Francisco’s South of Market financial district.

Details of all these transactions are available in the News section on the company’s website.

Since the beginning of 2012, KRC has completed the purchase of 13 office buildings in six transactions aggregating approximately 1.7 million square feet of space for an aggregate purchase price of approximately $645 million. The company also has added four individual projects to its development and redevelopment pipeline, acquiring the four projects for an aggregate purchase price of approximately $210 million. The company estimates that its total investment, including land, in these four development and redevelopment projects will aggregate approximately $846 million.

“KRC continues to build the breadth, diversity, value and financial strength of its West Coast real estate operations,” said John Kilroy, Jr., the company’s president and chief executive officer. “We’re leveraging the expertise and local knowledge of our talented management team to acquire top quality properties and development opportunities in the West Coast’s most economically vibrant markets. We’re also pursuing an active disposition program to generate capital from the sale of non-strategic assets and maintain a conservatively leveraged balance sheet in what remains a highly volatile business environment.”

KRC management will discuss updated earnings guidance for fiscal 2012 during the company’s October 31, 2012 earnings conference call. The call will begin at 10:00 a.m. Pacific Time and last approximately one hour. Those interested in listening via the Internet can access the conference call at http://www.kilroyrealty.com. Please go to the website 15 minutes before the call and register. It may be necessary to download audio software to hear the conference call. Those interested in listening via telephone can access the conference call at (888) 680-0879 reservation # 76348175. A replay of the conference call will be available via phone through November 7, 2012 at (888) 286-8010, reservation # 10454808, or via the Internet at the company’s website.

About Kilroy Realty Corporation. Kilroy Realty Corporation, a member of the SP Small Cap 600 Index, is a real estate investment trust active in the office and industrial property sectors along the West Coast. For over 60 years, the company has owned, developed, acquired and managed real estate assets primarily in the coastal regions of Los Angeles, Orange County, San Diego, greater Seattle and the San Francisco Bay Area. At September 30, 2012, the company’s stabilized office portfolio encompassed 12.7 million rentable square feet and its held for sale portfolio encompassed 3.7 million rentable square feet of office and industrial space. More information is available at http://www.kilroyrealty.com.

Forward-Looking Statements. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on our current expectations, beliefs and assumptions, and are not guarantees of future performance. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends and factors that are difficult to predict, many of which are outside of our control. Accordingly, actual performance, results and events may vary materially from those indicated in forward-looking statements, and you should not rely on forward-looking statements as predictions of future performance, results or events. Numerous factors could cause actual future performance, results and events to differ materially from those indicated in forward-looking statements, including, among others, risks associated with: investment in real estate assets, which are illiquid; trends in the real estate industry; significant competition, which may decrease the occupancy and rental rates of properties; the ability to successfully complete acquisitions and dispositions on announced terms; the ability to successfully operate acquired properties; the availability of cash for distribution and debt service and exposure of risk of default under debt obligations; adverse changes to, or implementations of, applicable laws, regulations or legislation; and the ability to successfully complete development and redevelopment projects on schedule and within budgeted amounts. These factors are not exhaustive. For a discussion of additional factors that could materially adversely affect our business and financial performance, see the factors included under the caption “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2011 and our other filings with the Securities and Exchange Commission. All forward-looking statements are based on information that was available, and speak only, as of the date on which they are made. We assume no obligation to update any forward-looking statement made in this press release that becomes untrue because of subsequent events, new information or otherwise, except to the extent required in connection with ongoing requirements under Federal securities laws.

KILROY REALTY CORPORATION

SUMMARY QUARTERLY RESULTS

(unaudited, in thousands, except per share data)

Three Months
Ended

September 30, 2012

Three Months
Ended

September 30, 2011

Nine Months
Ended

September 30, 2012

Nine Months
Ended

September 30, 2011

Revenues from continuing operations

$
104,293

$
86,399

$
293,800

$
243,371

Revenues including discontinued operations

$
111,375

$
97,806

$
315,712

$
277,995

Net (loss) income available to common stockholders⁽¹⁾

$
(2,753
)

$
10,195

$
63,988

$
10,912

Weighted average common shares outstanding – basic

71,889

58,355

67,975

56,136

Weighted average common shares outstanding – diluted

71,889

58,355

67,975

56,136

Net (loss) income available to common stockholders per share – basic ⁽¹⁾

$
(0.04
)

$
0.17

$
0.92

$
0.18

Net (loss) income available to common stockholders per share – diluted ⁽¹⁾

$
(0.04
)

$
0.17

$
0.92

$
0.18

Funds From Operations ^{(1), (2), (3)}

$
43,142

$
33,878

$
115,641

$
95,648

Weighted average common shares/units outstanding – basic ⁽⁴⁾

74,850

61,015

70,830

58,774

Weighted average common shares/units outstanding – diluted ⁽⁴⁾

76,185

61,017

71,953

58,961

Funds From Operations per common share/unit – basic ^{(1), (4)}

$
0.58

$
0.56

$
1.63

$
1.63

Funds From Operations per common share/unit – diluted ^{(1), (4)}

$
0.57

$
0.56

$
1.61

$
1.62

Common shares outstanding at end of period:

74,693

58,464

Common partnership units outstanding at end of period

1,827

1,718

Total common shares and units outstanding at end of period

76,520

60,182

September 30, 2012

September 30, 2011
Stabilized office portfolio occupancy rates:⁽⁵⁾

Los Angeles and Ventura Counties

94.3
%

84.1
%
San Diego County

87.8
%

92.6
%
Orange County

95.6
%

91.4
%
San Francisco Bay Area

92.0
%

95.4
%
Greater Seattle

93.2
%

90.2
%
Weighted average total

91.1
%

90.6
%

Total square feet of stabilized office properties owned at end of period:⁽⁵⁾

Los Angeles and Ventura Counties

3,038

2,976

San Diego County

5,183

5,435

Orange County

497

541

San Francisco Bay Area

2,211

1,732

Greater Seattle

1,727

890

Total

12,656

11,574

KILROY REALTY CORPORATION CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)

September 30, 2012

December 31, 2011

ASSETS

REAL ESTATE ASSETS:

Land and improvements

$
562,071

$
537,574

Buildings and improvements

3,169,224

2,830,310

Undeveloped land and construction in progress

668,058

430,806

Total real estate held for investment

4,399,353

3,798,690

Accumulated depreciation and amortization

(725,728
)

(742,503
)
Total real estate held for investment, net

3,673,625

3,056,187

Real estate assets and other assets held for sale, net

166,019

84,156

Cash and cash equivalents

16,113

4,777

Restricted cash

5,884

358

Marketable securities

6,812

5,691

Current receivables, net

7,113

8,395

Deferred rent receivables, net

110,128

101,142

Deferred leasing costs and acquisition-related intangible assets, net

187,307

155,522

Deferred financing costs, net

18,442

18,368

Prepaid expenses and other assets, net

24,398

12,199

TOTAL ASSETS

$
4,215,841

$
3,446,795

LIABILITIES, NONCONTROLLING INTEREST AND EQUITY

LIABILITIES:

Secured debt

$
520,867

$
351,825

Exchangeable senior notes, net

162,885

306,892

Unsecured debt, net

1,130,814

980,569

Unsecured line of credit

27,000

182,000

Accounts payable, accrued expenses and other liabilities

127,472

81,713

Accrued distributions

28,845

22,692

Deferred revenue and acquisition-related intangible liabilities, net

120,407

79,781

Rents received in advance and tenant security deposits

31,728

26,917

Liabilities and deferred revenue of real estate assets held for sale

4,455

13,286

Total liabilities

2,154,473

2,045,675

NONCONTROLLING INTEREST:

7.45% Series A Cumulative Redeemable Preferred units of the Operating Partnership

—

73,638

EQUITY:

Stockholders’ Equity

7.80% Series E Cumulative Redeemable Preferred stock

—

38,425

7.50% Series F Cumulative Redeemable Preferred stock

—

83,157

6.875% Series G Cumulative Redeemable Preferred stock

96,155

—

6.375% Series H Cumulative Redeemable Preferred stock

96,256

—

Common stock

747

588

Additional paid-in capital

2,114,774

1,448,997

Distributions in excess of earnings

(288,765
)

(277,450
)
Total stockholders’ equity

2,019,167

1,293,717

Noncontrolling Interest

Common units of the Operating Partnership

42,201

33,765

Total equity

2,061,368

1,327,482

TOTAL LIABILITIES, NONCONTROLLING INTEREST AND EQUITY

$
4,215,841

$
3,446,795

KILROY REALTY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share data)

Three Months
Ended

September 30, 2012

Three Months
Ended

September 30, 2011

Nine Months
Ended

September 30, 2012

Nine Months
Ended
September 30, 2011
REVENUES:

Rental income

$
95,405

$
79,673

$
268,228

$
223,853

Tenant reimbursements

8,665

6,387

23,947

17,382

Other property income

223

339

1,625

2,136

Total revenues

104,293

86,399

293,800

243,371

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Article source: http://www.dailyfinance.com/2012/10/29/kilroy-realty-corporation-reports-third-quarter-fi/

Kilroy Realty Corporation Reports Third Quarter Financial Results

Wed, 02 Nov 2011 16:54:13 +0000

LOS ANGELES, Nov 01, 2011 (BUSINESS WIRE) –
Kilroy Realty Corporation

/quotes/zigman/171049/quotes/nls/krc KRC
+2.28%

today reported
financial results for its third quarter ended September 30, 2011, with
net income available to common stockholders of $10.2 million, or $0.17
per share, compared to a net loss available to common stockholders of
$126,000, or $0.01 per share, in the third quarter of 2010. Revenues
from continuing operations in the third quarter totaled $97.3 million,
up from $79.3 million in the prior year’s third quarter. Funds from
operations (FFO) for the period totaled $33.9 million, or $0.56 per
share, compared to $29.7 million, or $0.54 per share, in the
year-earlier period.

For the first nine months of 2011, KRC reported net income available to
common stockholders of $10.9 million, or $0.18 per share, compared to
$3.0 million, or $0.04 per share, in the first nine months of 2010.
Revenues from continuing operations in the nine-month period totaled
$276.4 million, up from $217.5 million in the same period of 2010. FFO
in the first nine months of 2011 totaled $95.6 million, or $1.62 per
share, compared to $77.2 million, or $1.51 per share, in the first nine
months of 2010. Net income available to common stockholders for the
three and nine months ended September 30, 2011 included a net gain from
property dispositions of $12.6 million, or $0.22 per share. Results for
the nine months ended September 30, 2010 included a one-time charge of
$4.6 million, or $0.09 per share, from the early extinguishment of debt.
All per share amounts in this report are presented on a diluted basis.

KRC signed new and renewing leases on approximately 530,000 square feet
of office and industrial space during the third quarter, bringing the
year to date leasing total to 1.2 million square feet. At
September 30, 2011, the company’s stabilized portfolio totaled 15.2
million square feet and was 92.8% occupied.

During the third quarter, KRC acquired a 311,545 square foot, 12-story
office building located at 201 Third Street in the South of Market
district of San Francisco for approximately $103.3 million. The property
is currently 90% occupied. The company also sold a two-building
RD/office facility located in the Sorrento Mesa submarket of San Diego.
The 90,558 square foot complex was sold for approximately $24 million,
resulting in a net gain of $12.6 million.

Through the first nine months of 2011, KRC has completed the acquisition
of six office projects, consisting of 9 buildings, adding just under 1.5
million square feet to its stabilized portfolio. The aggregate purchase
price of these transactions is approximately $516 million.

KRC remains in various stages of negotiations on three additional office
acquisitions that would have an aggregate estimated purchase price of
approximately $199 million, including the assumption of approximately
$55 million of secured debt. Two of these projects are in Northern
California and one is in Southern California. The company is also in
various stages of negotiations on the disposition of four Southern
California properties that would generate aggregate estimated proceeds
of approximately $205 million. No assurances can be made that the
company will complete the pending acquisitions and dispositions.

“We’re making strong progress on all fronts,” said John B. Kilroy, Jr.,
KRC’s president and chief executive officer. “We are on track to lease
more square footage in 2011 than in all of 2010. We continue to find
opportunities to acquire well-located, high quality assets at
economically advantageous prices, building the long-term value of our
portfolio. And there is good momentum with our capital recycling plans,
as we see good demand for our disposition properties.”

KRC management will discuss updated earnings guidance for fiscal 2011
during the company’s November 2, 2011 earnings conference call. The call
will begin at 10:00 a.m. Pacific time and last approximately one hour.
Those interested in listening via the Internet can access the conference
call at
http://www.kilroyrealty.com .
Please go to the website 15 minutes before the call and register. It may
be necessary to download audio software to hear the conference call.
Those interested in listening via telephone can access the conference
call at (888) 679-8034, reservation #58493051. A replay of the
conference call will be available via phone through November 9, 2011 at
(888) 286-8010, reservation #95754685, or via the Internet at the
company’s website.

Some of the information presented in this release is forward looking in
nature within the meaning of the Private Securities Litigation Reform
Act of 1995. Although KRC believes the expectations reflected in such
forward-looking statements are based on reasonable assumptions, there
can be no assurance that its expectations will be achieved. Certain
factors that could cause actual results to differ materially from KRC’s
expectations are set forth as risk factors in the company’s Securities
and Exchange Commission reports and filings. Included among these
factors are changes in general economic conditions, including changes in
the economic conditions affecting industries in which its principal
tenants compete; its ability to timely lease or re-lease space at
current or anticipated rents; changes in interest rates; changes in
operating costs, including utility costs; future demand for its debt and
equity securities; its ability to refinance its debt on reasonable terms
at maturity; its ability to complete potential acquisitions and
potential dispositions on the terms or by the dates currently
contemplated; its ability to complete current and future development
projects on schedule and on budget; its ability to successfully operate
properties; the demand for office space in markets in which KRC has a
presence; and risks detailed from time to time in the company’s
Securities and Exchange Commission reports and filings, including
quarterly reports on Form 10-Q, current reports on Form 8-K and annual
reports on Form 10-K. Many of these factors are beyond KRC’s ability to
control or predict. Forward-looking statements are not guarantees of
performance. For forward-looking statements herein, KRC claims the
protection of the safe harbor for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995. The company
assumes no obligation to update or supplement forward-looking statements
that become untrue because of subsequent events.

Kilroy Realty Corporation, a member of the SP Small Cap 600 Index, is a
Southern California-based real estate investment trust active in the
office and industrial property sectors. For over 60 years, the company
has owned, developed, acquired and managed real estate assets primarily
in the coastal regions of Los Angeles, Orange County, San Diego, greater
Seattle and the San Francisco Bay Area. At September 30, 2011, the
company owned 11.6 million rentable square feet of commercial office
space and 3.6 million rentable square feet of industrial space. More
information is available 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 September 30, 2011 September 30, 2010 September 30, 2011 September 30, 2010 ---------------- ---------------- ---------------- ---------------- Revenues from continuing operations $ 97,337 $ 79,276 $ 276,434 $ 217,469 Revenues including discontinued operations $ 97,806 $ 79,804 $ 277,995 $ 219,039 Net income (loss) available to common stockholders $ 10,195 $ (126) $ 10,912 $ 2,977 Weighted average common shares outstanding - basic 58,355 52,274 56,136 48,562 Weighted average common shares outstanding - diluted 58,355 52,274 56,136 48,565 Net income (loss) available to common stockholders per share - basic $ 0.17 $ (0.01) $ 0.18 $ 0.04 Net income (loss) available to common stockholders per share - $ 0.17 $ (0.01) $ 0.18 $ 0.04 diluted Funds From Operations (1), (2) $ 33,878 $ 29,690 $ 95,648 $ 77,154 Weighted average common shares/units outstanding - basic (3) 61,015 54,778 58,774 51,106 Weighted average common shares/units outstanding - diluted (3) 61,017 54,782 58,961 51,109 Funds From Operations per common share/unit - basic (3) $ 0.56 $ 0.54 $ 1.63 $ 1.51 Funds From Operations per common share/unit - diluted (3) $ 0.56 $ 0.54 $ 1.62 $ 1.51 Common shares outstanding at end of period 58,464 52,350 Common partnership units outstanding at end of period 1,718 1,723 --------------- --------------- Total common shares and units outstanding at end of period 60,182 54,073 September 30, 2011 September 30, 2010 ---------------- ---------------- Stabilized portfolio occupancy rates: Office 90.6 % 84.8 % Industrial 100.0 % 90.6 % ------------------ ------------------ Weighted average total 92.8 % 86.4 % Los Angeles and Ventura Counties 85.1 % 90.2 % San Diego County 92.6 % 82.2 % Orange County 98.8 % 88.3 % San Francisco Bay Area 95.4 % 89.4 % Greater Seattle 90.2 % -- ------------------ --------------- Weighted average total 92.8 % 86.4 % Total square feet of stabilized properties owned at end of period: Office 11,574 9,810 Industrial 3,605 3,654 --------------- --------------- Total 15,179 13,464

(1) Reconciliation of Net Income (Loss) Available to Common Stockholders to Funds From Operations and management statement on Funds From Operations are included after the Consolidated Statements of Operations. (2) Reported amounts are attributable to common stockholders and common unitholders. (3) Calculated based on weighted average shares outstanding including participating share-based awards and assuming the exchange of all common limited partnership units outstanding.

KILROY REALTY CORPORATION CONSOLIDATED BALANCE SHEETS (unaudited, in thousands) ------------------------------------------------------------------------------------------------------ September 30, 2011 December 31, 2010 ------------------- ------------------ ASSETS ----------------------------------------------------------------------- REAL ESTATE ASSETS: Land and improvements $ 537,973 $ 491,333 Buildings and improvements 2,881,504 2,435,173 Undeveloped land and construction in progress 328,785 290,365 ----------------- ---------------- Total real estate held for investment 3,748,262 3,216,871 Accumulated depreciation and amortization (732,162) (672,429) ------------------ ----------------- Total real estate assets, net 3,016,100 2,544,442 Cash and cash equivalents 15,481 14,840 Restricted cash 25,436 1,461 Marketable securities 5,213 4,902 Current receivables, net 6,860 6,258 Deferred rent receivables, net 103,668 89,052 Deferred leasing costs and acquisition-related intangible assets, net 155,757 131,066 Deferred financing costs, net 19,638 16,447 Prepaid expenses and other assets, net 19,531 8,097 ----------------- ---------------- TOTAL ASSETS $ 3,367,684 $ 2,816,565 ====== ========= ===== ========= LIABILITIES, NONCONTROLLING INTEREST AND EQUITY ----------------------------------------------------------------------- LIABILITIES: Secured debt, net $ 473,997 $ 313,009 Exchangeable senior notes, net 305,115 299,964 Unsecured senior notes, net 980,487 655,803 Unsecured line of credit -- 159,000 Accounts payable, accrued expenses and other liabilities 93,050 68,525 Accrued distributions 22,565 20,385 Deferred revenue and acquisition-related intangible liabilities, net 95,120 79,322 Rents received in advance and tenant security deposits 29,369 29,189 ----------------- ---------------- Total liabilities 1,999,703 1,625,197 ----------------- ---------------- NONCONTROLLING INTEREST: 7.45% Series A cumulative redeemable preferred units of the 73,638 73,638 Operating Partnership EQUITY: Stockholders' Equity 7.80% Series E Cumulative Redeemable Preferred stock 38,425 38,425 7.50% Series F Cumulative Redeemable Preferred stock 83,157 83,157 Common stock 585 523 Additional paid-in capital 1,435,580 1,211,498 Distributions in excess of earnings (296,476) (247,252) ------------------ ----------------- Total stockholders' equity 1,261,271 1,086,351 ----------------- ---------------- Noncontrolling Interest Common units of the Operating Partnership 33,072 31,379 ----------------- ---------------- Total equity 1,294,343 1,117,730 ----------------- ---------------- TOTAL LIABILITIES, NONCONTROLLING INTEREST AND EQUITY $ 3,367,684 $ 2,816,565 ====== ========= ===== =========

KILROY REALTY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except per share data) --------------------------------------------------------------------------------------------------------------------------------------- Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, 2011 September 30, 2010 September 30, 2011 September 30, 2010 ---------------- ---------------- ---------------- ---------------- REVENUES: Rental income $ 89,306 $ 72,135 $ 252,102 $ 196,883 Tenant reimbursements 7,683 6,156 21,469 18,261 Other property income 348 985 2,863 2,325 -------------- -------------- --------------- --------------- Total revenues 97,337 79,276 276,434 217,469 -------------- -------------- --------------- --------------- EXPENSES: Property expenses 19,361 15,802 54,548 42,255 Real estate taxes 8,360 7,582 24,878 20,035 Provision for bad debts (5) (857) 141 (843) Ground leases 503 336 1,266 648 General and administrative expenses (1) 6,355 7,273 20,355 21,096 Acquisition-related expenses 1,163 354 2,829 1,624 Depreciation and amortization 36,152 29,951 97,513 74,405 -------------- -------------- --------------- --------------- Total expenses 71,889 60,441 201,530 159,220 -------------- -------------- --------------- --------------- OTHER (EXPENSES) INCOME: Interest income and other net investment gains 30 337 272 703 Interest expense (24,051) (15,853) (66,155) (40,897) Loss on early extinguishment of debt -- -- -- (4,564) -------------- -------------- --------------- ------------------ Total other (expenses) income (24,021) (15,516) (65,883) (44,758) INCOME FROM CONTINUING OPERATIONS 1,427 3,319 9,021 13,491 DISCONTINUED OPERATIONS: Net income from discontinued operations 308 350 1,053 1,011 Net gain on dispositions of discontinued operations 12,555 -- 12,555 -- -------------- -------------- --------------- --------------- Total income from discontinued operations 12,863 350 13,608 1,011 -------------- -------------- --------------- --------------- NET INCOME 14,290 3,669 22,629 14,502 Net (income) loss attributable to noncontrolling common units of the (296) 4 (320) (128) Operating Partnership ------------ ---- ------------ ------------- --- ------------- --- NET INCOME ATTRIBUTABLE TO KILROY REALTY CORPORATION 13,994 3,673 22,309 14,374 PREFERRED DISTRIBUTIONS AND DIVIDENDS: Distributions on noncontrolling cumulative redeemable preferred (1,397) (1,397) (4,191) (4,191) units of the Operating Partnership Preferred dividends (2,402) (2,402) (7,206) (7,206) ------------------ ------------------ ------------------ ------------------ (3,799) (3,799) (11,397) (11,397) Total preferred distributions and dividends NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ 10,195 $ (126) $ 10,912 $ 2,977 ====== ====== ====== ====== ==== ====== ======= ====== ======= Weighted average common shares outstanding - basic 58,355 52,274 56,136 48,562 Weighted average common shares outstanding - diluted 58,355 52,274 56,136 48,565 Net income (loss) available to common stockholders per share - basic $ 0.17 $ (0.01) $ 0.18 $ 0.04 ====== ====== ====== ====== ==== ====== ======= ====== ======= Net income (loss) available to common stockholders per share - $ 0.17 $ (0.01) $ 0.18 $ 0.04 diluted ====== ====== ==== ====== ====== ==== ====== ======= === ====== ======= ===

(1) For the three months ended September 30, 2011, general and administrative expenses was reduced by a $0.5 million mark to market adjustment related to our deferred compensation plan liability. This reduction was offset by a related reduction in interest income and other net investment gains resulting from the mark to market of the marketable securities held for our deferred compensation plan.

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 September 30, 2011 September 30, 2010 September 30, 2011 September 30, 2010 ---------------- ---------------- ---------------- ------------------ Net income (loss) available to common stockholders $ 10,195 $ (126) $ 10,912 $ 2,977 Adjustments: Net income (loss) attributable to noncontrolling common units of the 296 (4) 320 128 Operating Partnership Depreciation and amortization of real estate assets 35,942 29,820 96,971 74,049 Net gain on dispositions of discontinued operations (12,555) -- (12,555) -- ------------------ -------------- ------------------ -------------------- Funds From Operations (1) $ 33,878 $ 29,690 $ 95,648 $ 77,154 ====== ====== ====== ====== ====== ====== ========= ========= Weighted average common shares/units outstanding - basic 61,015 54,778 58,774 51,106 Weighted average common shares/units outstanding - diluted 61,017 54,782 58,961 51,109 Funds From Operations per common share/unit - basic (2) $ 0.56 $ 0.54 $ 1.63 $ 1.51 ====== ====== ====== ====== ====== ====== ========= ========= Funds From Operations per common share/unit - diluted (2) $ 0.56 $ 0.54 $ 1.62 $ 1.51 ====== ====== ====== ====== ====== ====== ========= =========

(1) The company calculates FFO in accordance with the White Paper on FFO approved by the Board of Governors of NAREIT. The White Paper defines FFO as net income or loss calculated in accordance with GAAP, excluding extraordinary items, as defined by GAAP, and gains and losses from sales of depreciable operating property, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), and after adjustment for unconsolidated partnerships and joint ventures. Management believes that FFO is a useful supplemental measure of the company's operating performance. The exclusion from FFO of gains and losses from the sale of operating real estate assets allows investors and analysts to readily identify the operating results of the assets that form the core of the company's activity and assists in comparing those operating results between periods. Also, because FFO is generally recognized as the industry standard for reporting the operations of REITs, it facilitates comparisons of the company's operating performance to other REITs. However, other REITs may use different methodologies to calculate FFO, and accordingly, the company's FFO may not be comparable to all other REITs. Implicit in historical cost accounting for real estate assets in accordance with GAAP is the assumption that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies using historical cost accounting alone to be insufficient. Because FFO excludes depreciation and amortization of real estate assets, management believes that FFO along with the required GAAP presentations provides a more complete measurement of the company's performance relative to its competitors and a more appropriate basis on which to make decisions involving operating, financing and investing activities than the required GAAP presentations alone would provide. However, FFO should not be viewed as an alternative measure of the company's operating performance since it does not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of the company's properties, which are significant economic costs and could materially impact the company's results from operations. (2) Reported amounts are attributable to common stockholders and common unitholders.

SOURCE: Kilroy Realty Corporation

Kilroy Realty Corporation Tyler H. Rose Executive Vice President and Chief Financial Officer (310) 481-8484 or Michelle Ngo Vice President and Treasurer (310) 481-8581

Copyright Business Wire 2011

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Article source: http://www.marketwatch.com/story/kilroy-realty-corporation-reports-third-quarter-financial-results-2011-11-01

Bay Area Economy Could Fizzle if Recovery Fails to Broaden Beyond High Tech …

Tue, 01 Nov 2011 22:42:45 +0000

Oct. 31 (Source: By George Avalos, Contra Costa Times, Walnut Creek, Calif.) - High-tech job growth has sparked the Bay Area’s rebound from the recession, but experts warn that the region’s economy could stall unless other industries start to hire.Over the first nine months of 2011, the technology industry added 26,200 workers, 65 percent of all the jobs created in the Bay Area, this newspaper’s analysis of data compiled by state officials and Beacon Economics shows. High-tech jobs account for 18 percent of the Bay Area’s workforce.

“If the Bay Area jobs recovery doesn’t broaden, it is in danger of fizzling out completely,” said Scott Anderson, senior economist with Wells Fargo Bank.

The key, according to a number of economists, would be a recovery in the long-troubled housing industry.

“We need a normal housing market,” said Jeffrey Michael, director of the Business Forecasting Center at University of the Pacific in Stockton. “We have to have a construction industry that has a pulse.”

Much in the way the financial industry bolsters New York City’s economy, real estate is an economic bulwark for the Bay Area. Real estate and high-tech produce strong ripple effects throughout the economy, creating many jobs in many industries.

“Technology workers are more likely to buy a home, make home improvements or go to the spa,” said Jon Haveman, chief economist with the Bay Area Council’s Economic Institute. “They will dine out more often. They spend more at the mall.”

Much the same is true with the

housing industry. Rising demand spurs construction of new homes and apartments. Newly purchased houses are filled with furniture, often new. Backyards receive upgrades, with the help of frequent trips to the hardware store or garden supply shop. Mortgage providers hire loan agents. Commissions for real estate agents swell. Those virtuous cycles vanished when the housing bubble popped.

The employment gains in the Bay Area housing sector during the peak year of 2005, compared with now, illustrate the problem. In the first nine months of 2011, Bay Area construction companies added 3,200 jobs. Over the first nine months of 2005, construction gained 4,700 jobs. The difference is akin to a Solyndra solar plant. The contrast is even starker in the finance, insurance and real estate sectors, which have numerous jobs linked to housing. In the first nine months of 2011, Bay Area financial businesses shed 1,500 jobs. During the same nine months of 2005, financial companies added 3,100 jobs. That 4,600-job swing equates to a NUMMI factory.

“We don’t need construction to go all the way back to the 2005 levels,” Michael said. “But it has to get off the floor, to improve from these abnormally low levels.”

For now, the thousands of new jobs in construction are a welcome sign.

“Things are looking a little better,” Brent Judd, a project supervisor for Tilton Pacific, said of local construction activity. “It’s not dramatic. But things have stabilized.”

Tilton Pacific is the general contractor for a new shopping center in Pleasanton that will be anchored by a big Safeway store. Joining construction in the upswing are transportation and warehousing, which gained 9,500 jobs, and retail, which added 2,300 jobs. Even the battered manufacturing sector rose by 3,900 jobs.

“We are hiring people all the time,” said Nathan Tyson, an engineer at Chevron’s refinery in Richmond.

He started a few years ago as a tank turnaround engineer for the Richmond refinery. He now works as a design engineer at the plant.

The improvement in retail is significant because it reflects a stronger job market in other sectors. If residents are working, they are more likely to shop. New entrants into the supermarket sector, coupled with Safeway’s store expansions and revamps, also may have spurred some hiring.

Fresh Easy and Sprouts Farmers Markets have been opening new stores. REI opened a new store in Dublin. Auto dealers have been growing. Whole Foods and Sunflower Farmers Markets have announced, or recently opened, new stores in the Bay Area.

Safeway held a jobs fair recently for its new Pleasanton store. The supermarket estimated that 600 people showed up in person and 1,000 applied online.

“We ended up hiring 240 employees,” said Susan Houghton, a spokeswoman for Safeway.

Despite the hopeful signs, weaknesses persist in the Bay Area — meaning it will take years to fully recover. Arts and entertainment, hotels and dining and beverage establishments, along with government, have shed jobs lately.

“It’s going to take a certain amount of time to bleed off the excess debt in the economy because of the credit and housing bubbles,” said Michael Yoshikami, chief investment officer with Walnut Creek-based YCMNet. “We won’t see a meaningful jobs rebound for a few years.”

Contact George Avalos at 925-977-8477. Follow him at twitter.com/george_avalos.

___

(c)2011 the Contra Costa Times (Walnut Creek, Calif.)

Visit the Contra Costa Times (Walnut Creek, Calif.) at www.contracostatimes.com

Distributed by MCT Information Services

A service of YellowBrix, Inc. Publication date: 2011-10-31

Source: By George Avalos, Contra Costa Times, Walnut Creek, Calif.

Article source: http://www.loansafe.org/bay-area-economy-could-fizzle-if-recovery-fails-to-broaden-beyond-high-tech-industry

Bay Area economy could fizzle if recovery fails to broaden beyond high tech …

Mon, 31 Oct 2011 10:01:16 +0000

High-tech job growth has sparked the Bay Area’s rebound from the recession, but experts warn that the region’s economy could stall unless other industries start to hire.

Over the first nine months of 2011, the technology industry added 26,200 workers, 65 percent of all the jobs created in the Bay Area, this newspaper’s analysis of data compiled by state officials and Beacon Economics shows. High-tech jobs account for 18 percent of the Bay Area’s workforce.

“If the Bay Area jobs recovery doesn’t broaden, it is in danger of fizzling out completely,” said Scott Anderson, senior economist with Wells Fargo Bank.

The key, according to a number of economists, would be a recovery in the long-troubled housing industry.

“We need a normal housing market,” said Jeffrey Michael, director of the Business Forecasting Center at University of the Pacific in Stockton. “We have to have a construction industry that has a pulse.”

Much in the way the financial industry bolsters New York City’s economy, real estate is an economic bulwark for the Bay Area. Real estate and high-tech produce strong ripple effects throughout the economy, creating many jobs in many industries.

“Technology workers are more likely to buy a home, make home improvements or go to the spa,” said Jon Haveman, chief economist with the Bay Area Council’s Economic Institute. “They will dine out more often. They spend more at the mall.”

Much the same is true with the

housing industry. Rising demand spurs construction of new homes and apartments. Newly purchased houses are filled with furniture, often new. Backyards receive upgrades, with the help of frequent trips to the hardware store or garden supply shop. Mortgage providers hire loan agents. Commissions for real estate agents swell. Those virtuous cycles vanished when the housing bubble popped.
The employment gains in the Bay Area housing sector during the peak year of 2005, compared with now, illustrate the problem. In the first nine months of 2011, Bay Area construction companies added 3,200 jobs. Over the first nine months of 2005, construction gained 4,700 jobs. The difference is akin to a Solyndra solar plant. The contrast is even starker in the finance, insurance and real estate sectors, which have numerous jobs linked to housing. In the first nine months of 2011, Bay Area financial businesses shed 1,500 jobs. During the same nine months of 2005, financial companies added 3,100 jobs. That 4,600-job swing equates to a NUMMI factory.

“We don’t need construction to go all the way back to the 2005 levels,” Michael said. “But it has to get off the floor, to improve from these abnormally low levels.”

For now, the thousands of new jobs in construction are a welcome sign.

“Things are looking a little better,” Brent Judd, a project supervisor for Tilton Pacific, said of local construction activity. “It’s not dramatic. But things have stabilized.”

Tilton Pacific is the general contractor for a new shopping center in Pleasanton that will be anchored by a big Safeway store. Joining construction in the upswing are transportation and warehousing, which gained 9,500 jobs, and retail, which added 2,300 jobs. Even the battered manufacturing sector rose by 3,900 jobs.

“We are hiring people all the time,” said Nathan Tyson, an engineer at Chevron’s refinery in Richmond.

He started a few years ago as a tank turnaround engineer for the Richmond refinery. He now works as a design engineer at the plant.

The improvement in retail is significant because it reflects a stronger job market in other sectors. If residents are working, they are more likely to shop. New entrants into the supermarket sector, coupled with Safeway’s store expansions and revamps, also may have spurred some hiring.

Fresh Easy and Sprouts Farmers Markets have been opening new stores. REI opened a new store in Dublin. Auto dealers have been growing. Whole Foods and Sunflower Farmers Markets have announced, or recently opened, new stores in the Bay Area.

Safeway held a jobs fair recently for its new Pleasanton store. The supermarket estimated that 600 people showed up in person and 1,000 applied online.

“We ended up hiring 240 employees,” said Susan Houghton, a spokeswoman for Safeway.

Despite the hopeful signs, weaknesses persist in the Bay Area — meaning it will take years to fully recover. Arts and entertainment, hotels and dining and beverage establishments, along with government, have shed jobs lately.

“It’s going to take a certain amount of time to bleed off the excess debt in the economy because of the credit and housing bubbles,” said Michael Yoshikami, chief investment officer with Walnut Creek-based YCMNet. “We won’t see a meaningful jobs rebound for a few years.”

Contact George Avalos at 925-977-8477. Follow him at twitter.com/george_avalos.

Article source: http://www.mercurynews.com/business/ci_19229328