LOS ANGELES--(BUSINESS WIRE)--
Kilroy Realty Corporation(NYSE: KRC) today reported
financial results for its second quarter ended June 30, 2016.
Second Quarter Highlights
Financial Results
-
Net income available to common stockholders of $0.31 per share
-
Funds from operations (FFO) of $0.86 per share which includes $0.01
per share of acquisition-related expenses
-
Revenues of $160.1 million
-
In May, increased our regular quarterly cash dividend to an annualized
rate of $1.50 per share, a 7.1% increase from the previous annualized
dividend level of $1.40 per share
Stabilized Portfolio
-
Stabilized portfolio was 95.5% occupied and 96.6% leased at June
30, 2016
-
Signed approximately 266,000 square feet of new or renewing leases
Development
-
In June, completed construction of the 200 unit, 21-story residential
building at the company’s mixed-used Columbia Square project in
Hollywood. As of June 30, 2016, 22% of the 200 units were leased
Acquisitions
-
In June, acquired a fully leased 114,000 square-foot office building
in Mountain View, CA for $55.4 million
Capital Recycling
-
In June, completed the sale of three land parcels aggregating 24.4
acres in Carlsbad, CA for total gross proceeds of $14.9 million
Recent Developments
-
In July, received final entitlement approval for the company’s 1.1
million square-foot mixed-used One Paseo project in the Del Mar
submarket of San Diego
-
In July, completed the sale of two office properties aggregating
137,000 rentable square feet and a 7.0 acre land site in the Sorrento
Mesa submarket of San Diego for gross proceeds of $49.0 million
Results for the Quarter Ended June 30, 2016
For the second quarter ended June 30, 2016, KRC reported net income
available to common stockholders of $29.5 million, or $0.31 per share,
compared to $54.2 million, or $0.61 per share, in the prior year period,
which included a $31.4 million, or $0.35 per share, gain from property
dispositions. FFO for the period was $82.7 million, or $0.86 per share,
compared to $74.8 million, or $0.82 per share, in the second quarter of
2015. FFO per share in 2Q16 includes approximately $0.01 per share of
acquisition-related expenses compared to $0.003 in 2Q15. Total revenues
in the second quarter of 2016 were $160.1 million, compared to $146.2
million in the second quarter of 2015.
All per share amounts in this report are presented on a diluted basis.
Operating and Leasing Activity
At June 30, 2016, KRC’s stabilized portfolio totaled approximately
13.7 million square feet of office space located in Los Angeles,
Orange County, San Diego, the San Francisco Bay Area and greater
Seattle. During the second quarter, the company signed new or renewing
leases in its stabilized portfolio totaling 266,112 square feet of
space. At quarter-end, the portfolio was 95.5% occupied, compared to
94.8% at December 31, 2015 and 96.7% at June 30, 2015, and was 96.6%
leased.
Real Estate Development Activity
KRC currently has one project under construction, The Exchange on 16th
in the Mission Bay submarket of San Francisco. It has a total estimated
investment of approximately $485.0 million. The company also has two
office properties currently in lease-up that represent a total estimated
investment of approximately $265.0 million and one recently completed
residential property with a total estimated investment of $160.0
million. As of June 30, 2016, the office properties were 73% committed
and the residential property was 22% leased.
Management Comments
“Six months into 2016, we’re on track for another strong financial and
operating year at KRC,” said John Kilroy, the company’s chairman,
president and chief executive officer. “Our stabilized portfolio is at
frictional occupancy levels and generating strong same-store NOI growth.
We’re making excellent progress moving our in-process development
projects forward, on both the construction and leasing fronts. And we
continue to advance our development pipeline, acquiring key entitlements
and ensuring broad access to capital, including continued success in our
capital recycling program.”
FFO per Share Guidance
The company has updated its guidance range of NAREIT defined FFO per
share (diluted) for the full year 2016 to $3.36 - $3.44 per share with a
midpoint of $3.40 per share. The updated guidance reflects an increase
in proceeds related to 2016 capital recycling to a new estimated 2016
target of approximately $800 million from the previous midpoint of $500
million.
These estimates reflect management’s view of current and future market
conditions, including assumptions with respect to rental rates,
occupancy levels and the earnings impact of the events referenced in
this release and otherwise referenced during the conference call
referred to below. These estimates do not include possible future gains
or losses or the impact on operating results from other possible future
property acquisitions or dispositions, other possible capital markets
activity or possible future impairment charges. There can be no
assurance that the company’s actual results will not differ materially
from these estimates.
Conference Call and Audio Webcast
KRC management will discuss earnings guidance for fiscal year 2016
during the company’s July 26, 2016 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) 680-0878 reservation #80256205. A replay of the conference
call will be available via phone through August 2, 2016 at (888)
286-8010, reservation #85935244, or via the Internet at the company’s
website.
About Kilroy Realty Corporation
With nearly 70 years’ experience owning, developing, acquiring and
managing real estate assets in West Coast real estate markets, Kilroy
Realty Corporation (KRC), a publicly traded real estate investment trust
and member of the S&P MidCap 400 Index, is one of the region’s premier
landlords. The company provides physical work environments that foster
creativity and productivity and serves a broad roster of dynamic,
innovation-driven tenants, including technology, entertainment, digital
media and health care companies.
At June 30, 2016, the company’s stabilized portfolio totaled
13.7 million square feet of office properties, all located in the
coastal regions of greater Seattle, the San Francisco Bay Area, Los
Angeles, Orange County and San Diego. The company is recognized by GRESB
as the North American leader in sustainability, ranking first among
155 North American participants across all asset types. At the end of
the second quarter, the company’s properties were 47% LEED certified and
69% of eligible properties were ENERGY STAR certified. In addition, KRC
had one office project totaling approximately 700,000 square feet under
construction, two office projects in lease-up totaling approximately
443,000 square feet and a 200-unit residential tower in lease-up. More
information is available at http://www.kilroyrealty.com.
Non-GAAP Financial Information
The Company does not provide a reconciliation for its guidance range of
FFO per common share/unit - diluted to net income available to common
stockholders per common share - diluted, the most directly comparable
forward-looking GAAP financial measure, because it is unable to provide
a meaningful or accurate estimation of reconciling items and the
information is not available without unreasonable effort. This is due to
the inherent difficulty of forecasting the timing and/or amount of
various items that would impact net income available to common
stockholders per share - diluted, including, for example, gains on sales
of depreciable real estate and other items that have not yet occurred
and are out of the Company’s control. For the same reasons, the Company
is unable to address the probable significance of the unavailable
information and believes that providing a reconciliation for its
guidance range of FFO per common share/unit - diluted would imply a
degree of precision as to its forward-looking net income available to
common stockholders per common share - diluted that would be confusing
or misleading to investors.
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, 2015 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 U.S. securities laws.
|
| |
| |
KILROY REALTY CORPORATION |
SUMMARY OF QUARTERLY RESULTS |
|
(unaudited, in thousands, except per share data)
|
| | | |
|
| | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| | 2016 |
| 2015 | | 2016 |
| 2015 |
|
Revenues
| |
$
|
160,133
| | |
$
|
146,227
| | |
$
|
305,579
| | |
$
|
292,309
| |
| | | | | | | |
|
|
Net income available to common stockholders (1) | |
$
|
29,535
| | |
$
|
54,188
| | |
$
|
200,530
| | |
$
|
94,062
| |
| | | | | | | |
|
|
Weighted average common shares outstanding – basic
| |
92,210
| | |
88,126
| | |
92,217
| | |
87,515
| |
|
Weighted average common shares outstanding – diluted
| |
92,825
| | |
88,646
| | |
92,784
| | |
88,044
| |
| | | | | | | |
|
|
Net income available to common stockholders per share – basic (1) | |
$
|
0.32
| | |
$
|
0.61
| | |
$
|
2.17
| | |
$
|
1.07
| |
|
Net income available to common stockholders per share – diluted (1) | |
$
|
0.31
| | |
$
|
0.61
| | |
$
|
2.15
| | |
$
|
1.06
| |
| | | | | | | |
|
|
Funds From Operations (1)(2)(3) | |
$
|
82,722
| | |
$
|
74,819
| | |
$
|
160,915
| | |
$
|
166,351
| |
| | | | | | | |
|
|
Weighted average common shares/units outstanding – basic (4) | |
95,966
| | |
91,109
| | |
95,642
| | |
90,498
| |
|
Weighted average common shares/units outstanding – diluted (4) | |
96,581
| | |
91,629
| | |
96,209
| | |
91,028
| |
| | | | | | | |
|
|
Funds From Operations per common share/unit – basic (4) | |
$
|
0.86
| | |
$
|
0.82
| | |
$
|
1.68
| | |
$
|
1.84
| |
|
Funds From Operations per common share/unit – diluted (4) | |
$
|
0.86
| | |
$
|
0.82
| | |
$
|
1.67
| | |
$
|
1.83
| |
| | | | | | | |
|
|
Common shares outstanding at end of period
| | | | | |
92,255
| | |
88,406
| |
|
Common partnership units outstanding at end of period
| | | | | |
2,631
|
| |
1,793
|
|
|
Total common shares and units outstanding at end of period
| | | | | |
94,886
| | |
90,199
| |
| | | | | | | |
|
| | | | | | June 30, 2016 | | June 30, 2015 |
|
Stabilized office portfolio occupancy rates: (5) | | | | | | | | |
| Los Angeles and Ventura Counties
| | | | | |
94.2
|
%
| |
95.4
|
%
|
| Orange County | | | | | |
97.8
|
%
| |
98.1
|
%
|
| San Diego County | | | | | |
89.0
|
%
| |
95.5
|
%
|
| San Francisco Bay Area | | | | | |
98.7
|
%
| |
98.5
|
%
|
| Greater Seattle | | | | | |
98.1
|
%
| |
97.0
|
%
|
|
Weighted average total
| | | | | |
95.5
|
%
| |
96.7
|
%
|
| | | | | | | |
|
|
Total square feet of stabilized office properties owned at end of
period: (5) | | | | | | | | |
| Los Angeles and Ventura Counties
| | | | | |
3,619
| | |
3,505
| |
| Orange County | | | | | |
272
| | |
272
| |
| San Diego County | | | | | |
2,711
| | |
3,318
| |
| San Francisco Bay Area | | | | | |
4,992
| | |
3,890
| |
| Greater Seattle | | | | | |
2,066
|
| |
2,066
|
|
|
Total
| | | | | |
13,660
| | |
13,051
| |
|
________________________
|
|
(1)
|
|
Net income available to common stockholders for the six months ended
June 30, 2016 includes a gain on sale of depreciable operating
properties of $146.0 million. Net income available to common
stockholders and Funds From Operations for the three and six months
ended June 30, 2016 includes a loss on sale of land of $0.3 million.
Net income available to common stockholders for the three and six
months ended June 30, 2015 includes gains on sales of depreciable
operating properties of $31.4 million. Net income available to
common stockholders and Funds From Operations for the six months
ended June 30, 2015 includes a gain on sale of land of $17.3 million.
|
|
(2)
| |
Reconciliation of Net income available to common stockholders to
Funds From Operations and management statement on Funds From
Operations are included after the Consolidated Statements of
Operations.
|
|
(3)
| |
Reported amounts are attributable to common stockholders and common
unitholders.
|
|
(4)
| |
Calculated based on weighted average shares outstanding including
participating share-based awards and assuming the exchange of all
common limited partnership units outstanding.
|
|
(5)
| |
Occupancy percentages and total square feet reported are based on
the company’s stabilized office portfolio for the periods presented.
Occupancy percentages and total square feet shown for June 30, 2015
include the office properties that were sold subsequent to June 30,
2015 and held for sale at June 30, 2016.
|
| |
|
|
| |
| |
KILROY REALTY CORPORATION |
CONSOLIDATED BALANCE SHEETS |
|
(in thousands)
|
| | | |
|
| | June 30, 2016 | | December 31, 2015 |
| | (unaudited) | | |
ASSETS | | | | |
|
REAL ESTATE ASSETS:
| | | | |
|
Land and improvements
| |
$
|
1,020,287
| | |
$
|
875,794
| |
|
Buildings and improvements
| |
4,639,003
| | |
4,091,012
| |
|
Undeveloped land and construction in progress
| |
894,057
|
| |
1,361,340
|
|
|
Total real estate assets held for investment
| |
6,553,347
| | |
6,328,146
| |
|
Accumulated depreciation and amortization
| |
(1,054,828
|
)
| |
(994,241
|
)
|
|
Total real estate assets held for investment, net
| |
5,498,519
| | |
5,333,905
| |
| | | |
|
|
Real estate assets and other assets held for sale, net
| |
30,257
| | |
117,666
| |
|
Cash and cash equivalents
| |
26,332
| | |
56,508
| |
|
Restricted cash
| |
266,158
| | |
696
| |
|
Marketable securities
| |
13,388
| | |
12,882
| |
|
Current receivables, net
| |
10,112
| | |
11,153
| |
|
Deferred rent receivables, net
| |
207,851
| | |
189,704
| |
|
Deferred leasing costs and acquisition-related intangible assets, net
| |
186,903
| | |
176,683
| |
|
Prepaid expenses and other assets, net (1) | |
58,913
|
| |
27,233
|
|
|
TOTAL ASSETS
| |
$
|
6,298,433
|
| |
$
|
5,926,430
|
|
| | | |
|
LIABILITIES AND EQUITY | | | | |
|
LIABILITIES:
| | | | |
|
Secured debt, net (1) | |
$
|
373,500
| | |
$
|
380,835
| |
|
Unsecured debt, net (1) | |
1,845,992
| | |
1,844,634
| |
|
Unsecured line of credit
| |
220,000
| | |
—
| |
|
Accounts payable, accrued expenses and other liabilities
| |
211,196
| | |
246,323
| |
|
Accrued dividends and distributions
| |
37,733
| | |
34,992
| |
|
Deferred revenue and acquisition-related intangible liabilities, net
| |
138,394
| | |
128,156
| |
|
Rents received in advance and tenant security deposits
| |
44,663
| | |
49,361
| |
|
Liabilities of real estate assets held for sale
| |
321
|
| |
7,543
|
|
|
Total liabilities
| |
2,871,799
|
| |
2,691,844
|
|
| | | |
|
|
EQUITY:
| | | | |
|
Stockholders’ Equity
| | | | |
|
6.875% Series G Cumulative Redeemable Preferred stock
| |
96,155
| | |
96,155
| |
|
6.375% Series H Cumulative Redeemable Preferred stock
| |
96,256
| | |
96,256
| |
|
Common stock
| |
923
| | |
923
| |
|
Additional paid-in capital
| |
3,074,508
| | |
3,047,894
| |
|
Retained earnings/(distributions in excess of earnings)
| |
62,647
|
| |
(70,262
|
)
|
|
Total stockholders’ equity
| |
3,330,489
| | |
3,170,966
| |
|
Noncontrolling Interests
| | | | |
|
Common units of the Operating Partnership | |
89,495
| | |
57,100
| |
|
Noncontrolling interest in consolidated subsidiary
| |
6,650
|
| |
6,520
|
|
|
Total noncontrolling interests
| |
96,145
|
| |
63,620
|
|
|
Total equity
| |
3,426,634
|
| |
3,234,586
|
|
|
TOTAL LIABILITIES AND EQUITY
| |
$
|
6,298,433
|
| |
$
|
5,926,430
|
|
|
________________________
|
|
(1)
|
|
Effective January 1, 2016, the Company adopted Financial Accounting
Standards Board Accounting Standards Update No. 2015-03 and 2015-15,
which changed the presentation of deferred financing costs on the
balance sheet. As a result, for all periods presented, deferred
financing costs, with the exception of deferred financing costs
related to the unsecured line of credit, have been reclassified as a
reduction to the related secured debt, net and unsecured debt, net
line items. Deferred financing costs related to the unsecured line
of credit are included in prepaid expenses and other assets, net.
|
| |
|
|
| |
| |
KILROY REALTY CORPORATION |
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
(unaudited, in thousands, except per share data)
|
| | | |
|
| | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| | 2016 |
| 2015 | | 2016 |
| 2015 |
|
REVENUES
| | | | | | | | |
|
Rental income
| |
$
|
143,653
| | |
$
|
131,450
| | |
$
|
277,408
| | |
$
|
262,382
| |
|
Tenant reimbursements
| |
16,138
| | |
14,174
| | |
27,542
| | |
28,599
| |
|
Other property income
| |
342
|
| |
603
|
| |
629
|
| |
1,328
|
|
|
Total revenues
| |
160,133
|
| |
146,227
|
| |
305,579
|
| |
292,309
|
|
| | | | | | | |
|
|
EXPENSES
| | | | | | | | |
|
Property expenses
| |
29,221
| | |
26,866
| | |
55,186
| | |
51,580
| |
|
Real estate taxes
| |
13,845
| | |
12,430
| | |
24,877
| | |
25,145
| |
|
Provision for bad debts
| |
—
| | |
47
| | |
—
| | |
289
| |
|
Ground leases
| |
768
| | |
813
| | |
1,597
| | |
1,589
| |
|
General and administrative expenses
| |
13,979
| | |
12,633
| | |
27,416
| | |
25,401
| |
|
Acquisition-related expenses
| |
714
| | |
265
| | |
776
| | |
393
| |
|
Depreciation and amortization
| |
53,346
|
| |
51,658
|
| |
103,786
|
| |
103,145
|
|
|
Total expenses
| |
111,873
|
| |
104,712
|
| |
213,638
|
| |
207,542
|
|
| | | | | | | |
|
|
OTHER (EXPENSES) INCOME
| | | | | | | | |
|
Interest income and other net investment gains
| |
311
| | |
511
| | |
582
| | |
871
| |
|
Interest expense
| |
(14,384
|
)
| |
(14,864
|
)
| |
(26,213
|
)
| |
(31,742
|
)
|
|
Total other (expenses) income
| |
(14,073
|
)
| |
(14,353
|
)
| |
(25,631
|
)
| |
(30,871
|
)
|
| | | | | | | |
|
|
INCOME FROM OPERATIONS BEFORE GAINS (LOSSES) ON SALES OF REAL ESTATE
| |
34,187
| | |
27,162
| | |
66,310
| | |
53,896
| |
|
Net (loss) gain on sales of land
| |
(295
|
)
| |
—
| | |
(295
|
)
| |
17,268
| |
|
Gains on sale of depreciable operating properties
| |
—
|
| |
31,428
|
| |
145,990
|
| |
31,428
|
|
|
NET INCOME
| |
33,892
|
| |
58,590
|
| |
212,005
|
| |
102,592
|
|
| | | | | | | |
|
|
Net income attributable to noncontrolling common units of the
Operating Partnership | |
(829
|
)
| |
(1,090
|
)
| |
(4,439
|
)
| |
(1,905
|
)
|
|
Net income attributable to noncontrolling interest in consolidated
subsidiary
| |
(216
|
)
| |
—
|
| |
(411
|
)
| |
—
|
|
|
Total income attributable to noncontrolling interests
| |
(1,045
|
)
| |
(1,090
|
)
| |
(4,850
|
)
| |
(1,905
|
)
|
| | | | | | | |
|
|
NET INCOME ATTRIBUTABLE TO KILROY REALTY CORPORATION
| |
32,847
| | |
57,500
| | |
207,155
| | |
100,687
| |
| | | | | | | |
|
|
PREFERRED DIVIDENDS
| |
(3,312
|
)
| |
(3,312
|
)
| |
(6,625
|
)
| |
(6,625
|
)
|
|
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS
| |
$
|
29,535
|
| |
$
|
54,188
|
| |
$
|
200,530
|
| |
$
|
94,062
|
|
| | | | | | | |
|
|
Weighted average common shares outstanding – basic
| |
92,210
| | |
88,126
| | |
92,217
| | |
87,515
| |
|
Weighted average common shares outstanding – diluted
| |
92,825
| | |
88,646
| | |
92,784
| | |
88,044
| |
| | | | | | | |
|
|
Net income available to common stockholders per share – basic
| |
$
|
0.32
|
| |
$
|
0.61
|
| |
$
|
2.17
|
| |
$
|
1.07
|
|
|
Net income available to common stockholders per share – diluted
| |
$
|
0.31
|
| |
$
|
0.61
|
| |
$
|
2.15
|
| |
$
|
1.06
|
|
| | | | | | | | | | | | | | | |
|
|
| |
| |
KILROY REALTY CORPORATION |
FUNDS FROM OPERATIONS |
|
(unaudited, in thousands, except per share data)
|
| | | |
|
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2016 |
| 2015 | | 2016 |
| 2015 |
|
Net income available to common stockholders
| |
$
|
29,535
| | |
$
|
54,188
| | |
$
|
200,530
| | |
$
|
94,062
| |
|
Adjustments:
| | | | | | | | |
|
Net income attributable to noncontrolling common units of the
Operating Partnership | |
829
| | |
1,090
| | |
4,439
| | |
1,905
| |
|
Depreciation and amortization of real estate assets
| |
52,358
| | |
50,969
| | |
101,936
| | |
101,812
| |
|
Gains on sales of depreciable real estate
| |
—
|
| |
(31,428
|
)
| |
(145,990
|
)
| |
(31,428
|
)
|
|
Funds From Operations (1)(2)(3) | |
$
|
82,722
|
| |
$
|
74,819
|
| |
$
|
160,915
|
| |
$
|
166,351
|
|
| | | | | | | |
|
|
Weighted average common shares/units outstanding – basic
| |
95,966
| | |
91,109
| | |
95,642
| | |
90,498
| |
|
Weighted average common shares/units outstanding – diluted
| |
96,581
| | |
91,629
| | |
96,209
| | |
91,028
| |
| | | | | | | |
|
|
Funds From Operations per common share/unit – basic (3) | |
$
|
0.86
|
| |
$
|
0.82
|
| |
$
|
1.68
|
| |
$
|
1.84
|
|
|
Funds From Operations per common share/unit – diluted (3) | |
$
|
0.86
|
| |
$
|
0.82
|
| |
$
|
1.67
|
| |
$
|
1.83
|
|
|
________________________
|
|
(1)
|
|
We calculate 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, gains and losses from sales
of depreciable real estate and impairment write-downs associated
with depreciable real estate, 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. Our calculation of
FFO includes the amortization of deferred revenue related to
tenant-funded tenant improvements and excludes the depreciation of
the related tenant improvement assets. We also add back net income
attributable to noncontrolling common units of the Operating
Partnership because we report FFO attributable to common
stockholders and common unitholders.
|
| |
|
| |
We believe that FFO is a useful supplemental measure of our
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 our 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 operating performance to other
REITs. However, other REITs may use different methodologies to
calculate FFO, and accordingly, our 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, we believe that
FFO along with the required GAAP presentations provides a more
complete measurement of our performance relative to our 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 our
operating performance because 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 our properties, which are significant economic costs
and could materially impact our results from operations.
|
| |
|
|
(2)
| |
FFO includes amortization of deferred revenue related to
tenant-funded tenant improvements of $3.2 million and $3.3 million
for the three months ended June 30, 2016 and 2015, respectively, and
$6.1 million and $6.3 million for the six months ended June 30, 2016
and 2015, respectively.
|
| |
|
|
(3)
| |
Reported amounts are attributable to common stockholders and common
unitholders.
|
| |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160725006381/en/
Kilroy Realty Corporation
Tyler H. Rose
Executive Vice
President
and Chief Financial Officer
(310) 481-8484
or
Michelle
Ngo
Senior Vice President
and Treasurer
(310) 481-8581
Source: Kilroy Realty Corporation