8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 1, 2021

KILROY REALTY CORPORATION

(Exact name of registrant as specified in its charter)

Maryland	001-12675	95-4598246
(State or other jurisdiction of<br>incorporation or organization)	(Commission File No.)	(I.R.S. Employer<br>Identification No.)

12200 W. Olympic Boulevard, Suite 200, Los Angeles, California, 90064

(Address of principal executive offices) (Zip Code)

(310) 481-8400

(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
---	---	---	---
Registrant	Title of each class	Name of each exchange on which registered	Ticker Symbol
Kilroy Realty Corporation	Common Stock, $.01 par value	New York Stock Exchange	KRC

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2.):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02    Results of Operations and Financial Condition.

On February 1, 2021, Kilroy Realty Corporation issued a press release announcing its earnings for the quarter and full year ended December 31, 2020 and distributed certain supplemental financial information. On February 1, 2021, Kilroy Realty Corporation also posted the supplemental information on its website located at www.kilroyrealty.com. The text of the supplemental information and the related press release are furnished herewith as Exhibits 99.1 and 99.2, respectively, and are incorporated by reference herein.

Exhibits 99.1 and 99.2 are being furnished pursuant to Item 2.02 and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act regardless of any general incorporation language in such filing.

Item 7.01    Regulation FD Disclosure.

As discussed in Item 2.02 above, Kilroy Realty Corporation issued a press release announcing its earnings for the quarter and full year ended December 31, 2020 and distributed certain supplemental information. On February 1, 2021, Kilroy Realty Corporation also posted the supplemental information on its website located at www.kilroyrealty.com.

The information being furnished pursuant to Item 7.01 shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act regardless of any general incorporation language in such filing.

Item 9.01    Financial Statements and Exhibits.

(a)	Financial statements of businesses acquired: None.
(b)	Pro forma financial information: None.
(c)	Shell company transactions: None.
(d)	Exhibits:

The following exhibits are furnished with this Current Report on Form 8-K:

Exhibit No.	Description
99.1**	Supplemental Operating and Financial Data for the quarter endedDecember 31, 2020
99.2**	Press Release datedFebruary 1, 2021regardingfourthquarter 2020 earnings
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

_______________

**    Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Kilroy Realty Corporation
Date: February 1, 2021
	By:	/s/ Merryl E. Werber
		Merryl E. Werber<br>Senior Vice President, <br>Chief Accounting Officer and Controller

Document

Exhibit 99.1

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Table of Contents

	Page
Corporate Data and Financial Highlights
Company Background	1
Executive Summary	2
Financial Highlights	3
COVID-19 Cash Collection Summary	4
Common Stock Data	5
Consolidated Balance Sheets	6
Consolidated Statements of Operations	7
Funds From Operations and Funds Available for Distribution	8-9
Net Operating Income	10
Portfolio Data
Same Store Analysis	11
Stabilized Portfolio Occupancy Overview by Region	12-16
Information on Leases Commenced & Leases Executed	17
Stabilized Portfolio Capital Expenditures	18
Stabilized Portfolio Lease Expirations	19-21
Top Fifteen Tenants	22
2020 Dispositions	23
Consolidated Ventures (Noncontrolling Property Partnerships)	24
Development
Stabilized Office Development Projects & Completed Residential Development Projects	25
In-Process Development	26
Future Development Pipeline	27
Debt and Capitalization Data
Capital Structure	28
Debt Analysis	29-30
Non-GAAP Supplemental Measures	31-33
Definitions & Reconciliations	34-37

This Supplemental Financial Report 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. These statements include, among other things, information concerning lease expirations, debt maturities, potential investments, development and redevelopment activity, projected construction costs, dispositions and other forward-looking financial data. In some instances, forward-looking statements can be identified by the use of forward-looking terminology such as “expect,” “future,” “will,” “would,” “pursue,” or “project” and variations of such words and similar expressions that do not relate to historical matters. Forward-looking statements are based on Kilroy Realty Corporation’s 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 Kilroy Realty Corporation’s control. Accordingly, actual performance, results and events may vary materially from those indicated or implied in the forward-looking statements, and you should not rely on the 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 the forward-looking statements, including, among others: global market and general economic conditions and their effect on our liquidity and financial conditions and those of our tenants; adverse economic or real estate conditions generally, and specifically, in the States of California and Washington; risks associated with our investment in real estate assets, which are illiquid, and with trends in the real estate industry; defaults on or non-renewal of leases by tenants; any significant downturn in tenants’ businesses; our ability to re-lease property at or above current market rates; costs to comply with government regulations, including environmental remediation; the availability of cash for distribution and debt service and exposure to risk of default under debt obligations; increases in interest rates and our ability to manage interest rate exposure; the availability of financing on attractive terms or at all, which may adversely impact our future interest expense and our ability to pursue development, redevelopment and acquisition opportunities and refinance existing debt; a decline in real estate asset valuations, which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt financing, and which may result in write-offs or impairment charges; significant competition, which may decrease the occupancy and rental rates of properties; potential losses that may not be covered by insurance; the ability to successfully complete acquisitions and dispositions on announced terms; the ability to successfully operate acquired, developed and redeveloped properties; the ability to successfully complete development and redevelopment projects on schedule and within budgeted amounts; delays or refusals in obtaining all necessary zoning, land use and other required entitlements, governmental permits and authorizations for our development and redevelopment properties; increases in anticipated capital expenditures, tenant improvement and/or leasing costs; defaults on leases for land on which some of our properties are located; adverse changes to, or enactment or implementations of, tax laws or other applicable laws, regulations or legislation, as well as business and consumer reactions to such changes; risks associated with joint venture investments, including our lack of sole decision-making authority, our reliance on co-venturers' financial condition and disputes between us and our co-venturers; environmental uncertainties and risks related to natural disasters; our ability to maintain our status as a REIT; and uncertainties regarding the impact of the COVID-19 pandemic, and restrictions intended to prevent its spread, on our business and the economy generally. These factors are not exhaustive and additional factors could adversely affect our business and financial performance. For a discussion of additional factors that could materially adversely affect Kilroy Realty Corporation’s business and financial performance, see the factors included under the caption “Risk Factors” in Kilroy Realty Corporation’s quarterly report on Form 10-Q for the period ending September 30, 2020 and in its annual report on Form 10-K for the year ended December 31, 2019, and its other filings with the Securities and Exchange Commission. All forward-looking statements are based on currently available information and speak only as of the dates on which they are made. Kilroy Realty Corporation assumes no obligation to update any forward-looking statement made in this Supplemental Financial Report that becomes untrue because of subsequent events, new information or otherwise, except to the extent we are required to do so in connection with our ongoing requirements under federal securities laws.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Company Background

Kilroy Realty Corporation (NYSE: KRC), a publicly traded real estate investment trust and member of the S&P MidCap 400 Index, is one of the West Coast’s premier landlords. The Company has over seven decades of experience developing, acquiring and managing office, life science and mixed-use real estate assets. At December 31, 2020, the Company’s stabilized portfolio totaled approximately 14.6 million square feet of primarily office and life science space that was 91.2% occupied and 94.3% leased located in the coastal regions of Los Angeles, San Diego, the San Francisco Bay Area and Greater Seattle and 808 residential units in the Los Angeles and San Diego regions.

Board of Directors		Executive and Senior Management Team		Investor Relations
John Kilroy	Chairman	John Kilroy	Chief Executive Officer	12200 W. Olympic Blvd., Suite 200<br>Los Angeles, CA 90064<br>(310) 481-8400<br>Web: www.kilroyrealty.com<br>E-mail: investorrelations@kilroyrealty.com
Edward F. Brennan, PhD	Lead Independent	Tyler H. Rose	President
Jolie Hunt		Robert Paratte	Executive VP, Leasing and Business Development
Scott S. Ingraham		Heidi R. Roth	Executive VP, Chief Administrative Officer
Louisa Ritter		Justin W. Smart	Executive VP, Development and Construction Services
Gary R. Stevenson		Michelle Ngo	Senior VP, Chief Financial Officer and Treasurer
Peter B. Stoneberg		John Osmond	Senior VP, Head of Asset Management
		Eliott Trencher	Senior VP, Chief Investment Officer
		Merryl Werber	Senior VP, Chief Accounting Officer and Controller			Equity Research Coverage
---	---	---	---
BofA Securities		Jefferies LLC
James Feldman	(646) 855-5808	Peter Abramowitz	(212) 336-7241
BMO Capital Markets Corp.		J.P. Morgan
John P. Kim	(212) 885-4115	Anthony Paolone	(212) 622-6682
BTIG		KeyBanc Capital Markets
Thomas Catherwood	(212) 738-6140	Craig Mailman	(917) 368-2316
Citigroup Investment Research		Mizuho Securities USA LLC
Emmanuel Korchman	(212) 816-1382	Omotayo Okusanya	(646) 949-9672
Deutsche Bank Securities, Inc.		RBC Capital Markets
Derek Johnston	(210) 250-5683	Mike Carroll	(440) 715-2649
Evercore ISI		Robert W. Baird & Co.
Steve Sakwa	(212) 446-9462	David B. Rodgers	(216) 737-7341
Goldman Sachs & Co. LLC		Scotiabank
Richard Skidmore	(801) 741-5459	Nicholas Yulico	(212) 225-6904
Green Street Advisors		Wells Fargo
Daniel Ismail	(949) 640-8780	Blaine Heck	(443) 263-6529

Kilroy Realty Corporation is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding Kilroy Realty Corporation’s performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of Kilroy Realty Corporation or its management. Kilroy Realty Corporation does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Executive Summary

Quarterly Financial Highlights
• Net income available to common stockholders per share of 0.67, including 0.03 per
share net charge primarily due to co-working, advertising and residential tenant
creditworthiness as a result of the COVID-19 pandemic
• FFO per share of 0.95, including 0.03 per share net charge as noted above
• Revenues of 229.3 million, net of the charge noted above
• Same Store GAAP NOI decreased 2.3% compared to the prior year
• Same Store Cash NOI increased 3.9% compared to the prior year
Capital Markets Highlights
• As of the date of this report, approximately 1.5 billion of total liquidity comprised of
700.0 million of cash and cash equivalents on hand and full availability under the 750.0
million unsecured revolving credit facility

All values are in US Dollars.

________________________

Note: Definitions for commonly used terms in this Supplemental Financial Report are on pages 34-35 “Definitions Included in Supplemental.”

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Financial Highlights

(unaudited, $ in thousands, except per share amounts)

		Three Months Ended
		12/31/2020 (1)			9/30/2020 (1)			6/30/2020 (1)			3/31/2020 (1)			12/31/2019 (1)
INCOME ITEMS:
	Revenues	$	229,332		$	228,314		$	219,423		$	221,328		$	220,235
	Lease Termination Fees, net	732			424			867			60			—
	Net Operating Income (2)	163,843			163,091			157,410			157,826			154,679
	Capitalized Interest and Debt Costs	18,280			19,339			20,516			21,418			20,339
	Net Income Available to Common Stockholders	78,642			49,028			19,618			39,817			72,500
	EBITDA, as adjusted (2)	141,882			145,402			120,321			134,232			131,734
	Funds From Operations (3)	112,703			117,391			93,089			110,173			109,518
	Net Income Available to Common Stockholders per common share – diluted (4)	$	0.67		$	0.42		$	0.17		$	0.37		$	0.67
	Funds From Operations per common share – diluted (3)	$	0.95		$	0.99		$	0.78		$	1.00		$	1.00
LIQUIDITY ITEMS:
	Funds Available for Distribution (3)	$	73,953		$	88,396		$	68,459		$	84,899		$	65,443
	Dividends per common share (4)	$	0.500		$	0.500		$	0.485		$	0.485		$	0.485
RATIOS:
	Net Operating Income Margins	71.4		%	71.4		%	71.7		%	71.3		%	70.2		%
	Fixed Charge Coverage Ratio	3.8x			4.0x			3.5x			3.9x			4.0x
	FFO Payout Ratio	52.0		%	49.9		%	61.0		%	51.5		%	47.8		%
	FAD Payout Ratio	79.2		%	66.3		%	83.0		%	66.9		%	80.1		%
ASSETS:
	Real Estate Held for Investment before Depreciation	$	10,190,046		$	10,086,784		$	9,945,221		$	9,822,116		$	9,628,773
	Total Assets	10,000,708			9,984,608			9,658,665			9,735,147			8,900,094
CAPITALIZATION: (5)
	Total Debt	$	3,954,365		$	3,955,668		$	3,681,958		$	3,713,236		$	3,579,502
	Total Common Equity and Noncontrolling Interests in the Operating Partnership	6,726,499			6,088,611			6,874,423			7,458,583			9,064,520
	Total Market Capitalization	10,680,864			10,044,279			10,556,381			11,171,819			12,644,022
	Total Debt / Total Market Capitalization	37.0		%	39.4		%	34.9		%	33.2		%	28.3		%

______________________________________________________

Note: Definitions for commonly used terms in this Supplemental Financial Report are on pages 34-35 “Definitions Included in Supplemental.”

(1)Net Income Available to Common Stockholders, EBITDA, as adjusted, and Fund From Operations include $19.7 million of severance costs for the three months ended June 30, 2020, net charges of $3.6 million, $1.8 million, $5.9 million and $6.5 million related to the creditworthiness of tenants as a result of the COVID-19 pandemic for the three months ended December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020, respectively. Net Income Available to Common Stockholder also includes $35.5 million and $29.6 million of gains on sale of depreciable operating properties for the three months ended December 31, 2020 and 2019, respectively.

(2)Please refer to pages 36-37 for reconciliations of GAAP Net Income Available to Common Stockholders to Net Operating Income and EBITDA, as adjusted. The Company’s calculation of EBITDA, as adjusted, is the same as EBITDAre, as defined by NAREIT, as the Company does not have any unconsolidated joint ventures.

(3)Please refer to page 8 for reconciliations of GAAP Net Income Available to Common Stockholders to Funds From Operations available to common stockholders and unitholders and Funds Available for Distribution to common stockholders and unitholders and page 9 for a reconciliation of GAAP Net Cash Provided by Operating Activities to Funds Available for Distribution to common stockholders and unitholders.

(4)Reported amounts are attributable to common stockholders, common unitholders and restricted stock unit holders.

(5)Please refer to page 28 for additional information regarding our capital structure.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

COVID-19 Cash Collection Summary

    

Notes:

•January 2021 collections are presented as of the date of this report.

•To date, rent relief has primarily been provided to retail tenants in the form of deferrals in exchange for lease extensions for an equivalent number of months.

•For all periods presented, the Company collected 100% of rent from Top 15 tenants.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Common Stock Data (NYSE: KRC)

	Three Months Ended
	12/31/2020		9/30/2020		6/30/2020		3/31/2020		12/31/2019
High Price	$	64.31	$	60.98	$	68.88	$	88.28	$	84.50
Low Price	$	46.46	$	51.74	$	51.49	$	49.01	$	76.35
Closing Price	$	57.40	$	51.96	$	58.70	$	63.70	$	83.90
Dividends per share – annualized	$	2.00	$	2.00	$	1.94	$	1.94	$	1.94
Closing common shares (in 000s) (1)(2)	116,036		115,247		115,177		115,068		106,016
Closing common partnership units (in 000s) (1)(2)	1,151		1,932		1,935		2,021		2,023
	117,187		117,179		117,112		117,089		108,039

________________________

(1)As of the end of the period.

(2)During the three months ended December 31, 2020, 781,000 common partnership units were redeemed for an equal number of common shares.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Consolidated Balance Sheets

(unaudited, $ in thousands)

	12/31/2020		9/30/2020		6/30/2020		3/31/2020		12/31/2019
ASSETS:
Land and improvements	$	1,628,848	$	1,612,224	$	1,546,209	$	1,506,357	$	1,466,166
Buildings and improvements	6,783,092		6,535,637		6,289,816		5,997,523		5,866,477
Undeveloped land and construction in progress	1,778,106		1,938,923		2,109,196		2,318,236		2,296,130
Total real estate assets held for investment	10,190,046		10,086,784		9,945,221		9,822,116		9,628,773
Accumulated depreciation and amortization	(1,798,646)		(1,744,325)		(1,684,837)		(1,622,369)		(1,561,361)
Total real estate assets held for investment, net	8,391,400		8,342,459		8,260,384		8,199,747		8,067,412
Cash and cash equivalents	731,991		849,009		605,012		762,134		60,044
Restricted cash	91,139		16,300		16,300		16,300		16,300
Marketable securities	27,481		25,073		23,175		19,984		27,098
Current receivables, net	12,007		16,083		20,925		16,534		26,489
Deferred rent receivables, net	386,658		375,939		358,914		352,352		337,937
Deferred leasing costs and acquisition-related intangible assets, net	210,949		208,306		209,637		204,392		212,805
Right of use ground lease assets	95,523		95,733		95,940		96,145		96,348
Prepaid expenses and other assets, net	53,560		55,706		68,378		67,559		55,661
TOTAL ASSETS	$	10,000,708	$	9,984,608	$	9,658,665	$	9,735,147	$	8,900,094
LIABILITIES AND EQUITY:
Liabilities:
Secured debt, net	$	253,582	$	254,854	$	256,113	$	257,359	$	258,593
Unsecured debt, net	3,670,099		3,668,976		3,399,105		3,050,103		3,049,185
Unsecured line of credit	—		—		—		380,000		245,000
Accounts payable, accrued expenses and other liabilities	445,100		458,421		401,378		417,547		418,848
Ground lease liabilities	97,778		97,936		98,093		98,247		98,400
Accrued dividends and distributions	59,431		59,416		57,600		57,620		53,219
Deferred revenue and acquisition-related intangible liabilities, net	128,523		131,558		129,264		130,843		139,488
Rents received in advance and tenant security deposits	68,874		61,483		63,523		65,913		66,503
Total liabilities	4,723,387		4,732,644		4,405,076		4,457,632		4,329,236
Equity:
Stockholders’ Equity
Common stock	1,160		1,152		1,152		1,151		1,060
Additional paid-in capital	5,131,916		5,089,926		5,084,362		5,067,181		4,350,917
Distributions in excess of earnings	(103,133)		(122,936)		(113,223)		(76,182)		(58,467)
Total stockholders’ equity	5,029,943		4,968,142		4,972,291		4,992,150		4,293,510
Noncontrolling Interests
Common units of the Operating Partnership	49,875		83,226		83,502		87,655		81,917
Noncontrolling interests in consolidated property partnerships	197,503		200,596		197,796		197,710		195,431
Total noncontrolling interests	247,378		283,822		281,298		285,365		277,348
Total equity	5,277,321		5,251,964		5,253,589		5,277,515		4,570,858
TOTAL LIABILITIES AND EQUITY	$	10,000,708	$	9,984,608	$	9,658,665	$	9,735,147	$	8,900,094

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Consolidated Statements of Operations

(unaudited, $ and shares in thousands, except per share amounts)

	Three Months Ended December 31,				Year Ended December 31,
	2020		2019		2020		2019
REVENUES
Rental income	$	228,195	$	217,140	$	892,306	$	826,472
Other property income	1,137		3,095		6,091		10,982
Total revenues	229,332		220,235		898,397		837,454
EXPENSES
Property expenses	39,070		42,044		155,118		160,037
Real estate taxes	24,294		21,534		92,218		78,097
Ground leases	2,125		1,978		8,891		8,113
General and administrative expenses (1)	23,085		22,365		99,264		88,139
Leasing costs	721		2,016		4,493		7,615
Depreciation and amortization	72,990		69,513		299,308		273,130
Total expenses	162,285		159,450		659,292		615,131
OTHER INCOME (EXPENSES)
Interest income and other net investment gain	1,845		1,436		3,424		4,641
Interest expense	(20,976)		(13,932)		(70,772)		(48,537)
Gains on sales of depreciable operating properties	35,536		29,633		35,536		36,802
Total other income (expenses)	16,405		17,137		(31,812)		(7,094)
NET INCOME	83,452		77,922		207,293		215,229
Net income attributable to noncontrolling common units of the Operating Partnership	(1,012)		(1,343)		(2,869)		(3,766)
Net income attributable to noncontrolling interests in consolidated property partnerships	(3,798)		(4,079)		(17,319)		(16,020)
Total income attributable to noncontrolling interests	(4,810)		(5,422)		(20,188)		(19,786)
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS (2)	$	78,642	$	72,500	$	187,105	$	195,443
Weighted average common shares outstanding – basic	115,730		106,013		113,241		103,201
Weighted average common shares outstanding – diluted	116,243		106,748		113,720		103,849
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS PER SHARE
Net income available to common stockholders per share – basic	$	0.67	$	0.68	$	1.63	$	1.87
Net income available to common stockholders per share – diluted	$	0.67	$	0.67	$	1.63	$	1.86

________________________

(1)Includes $20.5 million of severance costs for the year ended December 31, 2020.

(2)Net income available to common stockholders is presented net of charges related to the creditworthiness of tenants offset by charges attributable to noncontrolling interests in consolidated property partnerships. For the three months ended December 31, 2020, rental income includes $0.6 million of reversals of allowances for doubtful accounts due to transitioning certain tenants to a cash basis of reporting and $4.2 million of write-offs related to the cumulative impact of transitioning certain tenants to a cash basis of reporting as a result of the COVID-19 pandemic. For the year ended December 31, 2020, rental income includes $0.6 million of allowances for doubtful accounts and $17.2 million of write-offs related to the cumulative impact of transitioning certain tenants to a cash basis of reporting as a result of the COVID-19 pandemic.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Funds From Operations and Funds Available for Distribution

(unaudited, $ in thousands, except per share amounts)

	Three Months Ended December 31,				Year Ended December 31,
	2020		2019		2020		2019
FUNDS FROM OPERATIONS: (1)
Net income available to common stockholders	$	78,642	$	72,500	$	187,105	$	195,443
Adjustments:
Net income attributable to noncontrolling common units of the Operating Partnership	1,012		1,343		2,869		3,766
Net income attributable to noncontrolling interests in consolidated property partnerships	3,798		4,079		17,319		16,020
Depreciation and amortization of real estate assets	71,512		68,078		290,353		268,045
Gains on sales of depreciable real estate	(35,536)		(29,633)		(35,536)		(36,802)
Funds From Operations attributable to noncontrolling interests in consolidated property partnerships	(6,725)		(6,849)		(28,754)		(27,994)
Funds From Operations (1)(2)	$	112,703	$	109,518	$	433,356	$	418,478
Weighted average common shares/units outstanding – basic (3)	118,330		109,138		116,233		106,342
Weighted average common shares/units outstanding – diluted (4)	118,843		109,872		116,711		106,991
FFO per common share/unit – basic (1)	$	0.95	$	1.00	$	3.73	$	3.94
FFO per common share/unit – diluted (1)	$	0.95	$	1.00	$	3.71	$	3.91
FUNDS AVAILABLE FOR DISTRIBUTION: (1)
Funds From Operations (1)(2)	$	112,703	$	109,518	$	433,356	$	418,478
Adjustments:
Recurring tenant improvements, leasing commissions and capital expenditures	(29,242)		(36,941)		(90,440)		(123,395)
Amortization of deferred revenue related to tenant-funded tenant improvements (2)(5)	(5,076)		(4,243)		(22,500)		(19,190)
Net effect of straight-line rents	(12,087)		(23,122)		(50,487)		(75,323)
Amortization of net below market rents (6)	(3,984)		(2,965)		(10,253)		(9,206)
Amortization of deferred financing costs and net debt discount/premium	706		516		2,958		1,427
Non-cash executive compensation expense (7)	6,331		7,180		31,749		28,503
Lease related adjustments, leasing costs and other (8)	3,781		9,300		15,241		11,448
Adjustments attributable to noncontrolling interests in consolidated property partnerships	821		6,200		6,083		16,082
Funds Available for Distribution (1)	$	73,953	$	65,443	$	315,707	$	248,824

________________________

(1)See page 33 for Management Statements on Funds From Operations and Funds Available for Distribution. Reported per common share/unit amounts are attributable to common stockholders, common unitholders and restricted stock unit holders.

(2)FFO available to common stockholders and unitholders includes amortization of deferred revenue related to tenant-funded tenant improvements of $5.1 million and $4.2 million for the three months ended December 31, 2020 and 2019, respectively, and $22.5 million and $19.2 million for the year ended December 31, 2020 and 2019, respectively. These amounts are adjusted out of FFO in our calculation of FAD.

(3)Calculated based on weighted average shares outstanding including participating share-based awards and assuming the exchange of all common limited partnership units outstanding.

(4)Calculated based on weighted average shares outstanding including participating and non-participating share-based awards, dilutive impact of stock options and contingently issuable shares, and assuming the exchange of all common limited partnership units outstanding.

(5)Represents revenue recognized during the period as a result of the amortization of deferred revenue recorded for tenant-funded tenant improvements.

(6)Represents the non-cash adjustment related to the acquisition of buildings with above and/or below market rents.

(7)Includes non-cash amortization of share-based compensation and accrued potential future executive retirement benefits. Includes $4.3 million of accelerated non-cash amortization of share-based compensation related to severance costs for the year ended December 31, 2020.

(8)Includes other cash and non-cash adjustments attributable to lease-related matters including GAAP revenue recognition timing differences, leasing costs and other.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Reconciliation of GAAP Net Cash Provided by Operating Activities to Funds Available for Distribution

(unaudited, $ in thousands)

	Three Months Ended December 31,				Year Ended December 31,
	2020		2019		2020		2019
GAAP Net Cash Provided by Operating Activities	$	91,610	$	85,131	$	455,590	$	386,521
Adjustments:
Recurring tenant improvements, leasing commissions and capital expenditures	(29,242)		(36,941)		(90,440)		(123,395)
Depreciation of non-real estate furniture, fixtures and equipment	(1,478)		(1,435)		(8,955)		(5,085)
Net changes in operating assets and liabilities (1)	20,086		19,678		(13,863)		4,427
Noncontrolling interests in consolidated property partnerships’ share of FFO and FAD	(5,904)		(649)		(22,671)		(11,912)
Cash adjustments related to investing and financing activities	(1,119)		(341)		(3,954)		(1,732)
Funds Available for Distribution(2)	$	73,953	$	65,443	$	315,707	$	248,824

_______________________

(1)Primarily includes changes in the following assets and liabilities: marketable securities; current receivables; prepaid expenses and other assets; accounts payable, accrued expenses and other liabilities; and rents received in advance and tenant security deposits.

(2)Please refer to page 33 for a Management Statement on Funds Available for Distribution.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Net Operating Income (1)

(unaudited, $ in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2020		2019		% Change		2020		2019		% Change
Operating Revenues:
Rental income (2)(3)	$	196,847	$	184,011	7.0	%	$	767,950	$	710,917	8.0	%
Tenant reimbursements (3)	31,348		33,129		(5.4)	%	124,356		115,555		7.6	%
Other property income	1,137		3,095		(63.3)	%	6,091		10,982		(44.5)	%
Total operating revenues	229,332		220,235		4.1	%	898,397		837,454		7.3	%
Operating Expenses:
Property expenses	39,070		42,044		(7.1)	%	155,118		160,037		(3.1)	%
Real estate taxes	24,294		21,534		12.8	%	92,218		78,097		18.1	%
Ground leases	2,125		1,978		7.4	%	8,891		8,113		9.6	%
Total operating expenses	65,489		65,556		(0.1)	%	256,227		246,247		4.1	%
Net Operating Income	$	163,843	$	154,679	5.9	%	$	642,170	$	591,207	8.6	%

________________________

(1)Please refer to page 31 for Management Statements on Net Operating Income and page 36 for a reconciliation of GAAP Net Income Available to Common Stockholders to Net Operating Income.

(2)Rental income is presented net of charges related to the creditworthiness of tenants. For the three months ended December 31, 2020, rental income includes $0.6 million of reversals of allowances for doubtful accounts due to transitioning certain tenants to a cash basis of reporting and $5.4 million of write-offs related to the cumulative impact of transitioning certain tenants to a cash basis of reporting as a result of the COVID-19 pandemic. For the year ended December 31, 2020, rental income includes $0.6 million of allowances for doubtful accounts and $18.4 million of write-offs related to the cumulative impact of transitioning certain tenants to a cash basis of reporting as a result of the COVID-19 pandemic. For the three months and year ended December 31, 2020, includes $1.2 million of write-offs attributable to noncontrolling interests in consolidated property partnerships that are related to the cumulative impact of transitioning certain tenants to a cash basis of reporting as a result of the COVID-19 pandemic.

(3)Revenue from tenant reimbursements is included in rental income on our consolidated statements of operations.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Same Store Analysis (1)

(unaudited, $ in thousands)

		Three Months Ended December 31,								Year Ended December 31,
		2020			2019			% Change		2020			2019			% Change
	Total Same Store Portfolio
	Office Portfolio
	Number of properties	91			91					91			91
	Square Feet	12,866,289			12,866,289					12,866,289			12,866,289
	Percent of Stabilized Portfolio	88.0		%	95.5		%			88.0		%	95.5		%
	Average Occupancy	90.8		%	93.3		%			92.2		%	93.5		%
	Operating Revenues:
	Rental income (2)(3)	$	158,690		$	162,002		(2.0)	%	$	642,036		$	649,867		(1.2)	%
	Tenant reimbursements (2)	21,941			23,771			(7.7)	%	89,219			96,956			(8.0)	%
	Other property income	947			2,345			(59.6)	%	5,088			9,050			(43.8)	%
	Total operating revenues	181,578			188,118			(3.5)	%	736,343			755,873			(2.6)	%
	Operating Expenses:
	Property expenses	32,304			37,025			(12.8)	%	132,950			146,602			(9.3)	%
	Real estate taxes	17,304			16,076			7.6	%	68,687			66,866			2.7	%
	Ground leases	1,824			1,818			0.3	%	7,959			7,953			0.1	%
	Total operating expenses	51,432			54,919			(6.3)	%	209,596			221,421			(5.3)	%
	GAAP Net Operating Income	$	130,146		$	133,199		(2.3)	%	$	526,747		$	534,452		(1.4)	%
Same Store Analysis (Cash Basis) (4)
		Three Months Ended December 31,								Year Ended December 31,
		2020			2019			% Change		2020			2019			% Change
	Total operating revenues	$	176,368		$	175,165		0.7	%	$	707,837		$	681,602		3.8	%
	Total operating expenses	51,451			54,937			(6.3)	%	209,667			221,469			(5.3)	%
	Cash Net Operating Income	$	124,917		$	120,228		3.9	%	$	498,170		$	460,133		8.3	%

________________________

(1)Same Store is defined as all properties owned and included in our stabilized portfolio as of January 1, 2019 and still owned and included in the stabilized portfolio as of December 31, 2020. Same Store includes 100% of consolidated property partnerships as well as the residential tower at Columbia Square.

(2)Revenue from tenant reimbursements is included in rental income on our consolidated statements of operations.

(3)Rental income is presented net of charges related to the creditworthiness of tenants. For the three months ended December 31, 2020, rental income includes $0.8 million of reversals of allowances for doubtful accounts due to transitioning certain tenants to a cash basis of reporting and $4.6 million of write-offs related to the cumulative impact of transitioning certain tenants to a cash basis of reporting, primarily as a result of the COVID-19 pandemic. For the year ended December 31, 2020, rental income includes $0.2 million of allowances for doubtful accounts and $15.2 million of write-offs related to the cumulative impact of transitioning certain tenants to a cash basis of reporting, primarily as a result of the COVID-19 pandemic. For the three months and year ended December 31, 2020, includes $1.2 million of write-offs attributable to noncontrolling interests in consolidated property partnerships that are related to the cumulative impact of transitioning certain tenants to a cash basis of reporting as a result of the COVID-19 pandemic. For the three months and year ended December 31, 2019, rental income includes recoveries of provision for bad debts of $0.2 million and $3.1 million, respectively.

(4)Please refer to page 36 for a reconciliation of GAAP Net Income Available to Common Stockholders to Same Store GAAP Net Operating Income and Same Store Cash Net Operating Income.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview by Region

		Portfolio Breakdown					Occupied at				Leased at
STABILIZED OFFICE PORTFOLIO (1)	Buildings	YTD NOI %		SF %		Total SF	12/31/2020		9/30/2020 (2)		12/31/2020
Greater Los Angeles
Culver City	19	1.3	%	1.0	%	151,908	91.9	%	98.5	%	91.9	%
El Segundo	5	4.8	%	7.5	%	1,093,050	96.9	%	97.4	%	96.9	%
Hollywood	10	4.6	%	8.0	%	1,167,945	91.0	%	87.2	%	91.0	%
Long Beach	7	3.1	%	6.5	%	955,291	79.7	%	94.2	%	79.8	%
West Hollywood	4	1.4	%	1.3	%	183,211	88.6	%	89.2	%	92.2	%
West Los Angeles	10	5.2	%	5.8	%	844,151	81.6	%	80.7	%	81.6	%
Total Greater Los Angeles	55	20.4	%	30.1	%	4,395,556	88.1	%	90.8	%	88.3	%
San Diego County
Del Mar	15	7.7	%	9.9	%	1,450,512	81.3	%	82.0	%	94.7	%
I-15 Corridor	5	1.6	%	3.7	%	540,892	94.8	%	96.4	%	94.8	%
Point Loma	1	0.1	%	0.7	%	107,456	93.9	%	100.0	%	100.0	%
University Towne Center	1	0.1	%	0.3	%	47,846	76.4	%	91.4	%	76.4	%
Total San Diego County	22	9.5	%	14.6	%	2,146,706	85.2	%	86.7	%	94.6	%
San Francisco Bay Area
Menlo Park	7	2.7	%	2.6	%	378,358	74.1	%	76.5	%	74.1	%
Mountain View	3	3.5	%	3.1	%	455,088	100.0	%	100.0	%	100.0	%
Palo Alto	2	1.6	%	1.1	%	165,574	100.0	%	100.0	%	100.0	%
Redwood City	2	3.5	%	2.4	%	347,269	100.0	%	100.0	%	100.0	%
San Francisco	11	40.8	%	28.2	%	4,120,835	94.0	%	93.3	%	98.2	%
South San Francisco	3	1.3	%	1.0	%	145,530	100.0	%	100.0	%	100.0	%
Sunnyvale	4	5.0	%	4.5	%	663,460	100.0	%	100.0	%	100.0	%
Total San Francisco Bay Area	32	58.4	%	42.9	%	6,276,114	94.5	%	94.2	%	97.3	%
Greater Seattle
Bellevue	2	5.3	%	6.3	%	917,027	89.5	%	89.5	%	96.2	%
Lake Union	6	6.4	%	6.1	%	884,763	100.0	%	100.0	%	100.0	%
Total Greater Seattle	8	11.7	%	12.4	%	1,801,790	94.7	%	94.7	%	98.1	%
TOTAL STABILIZED OFFICE PORTFOLIO	117	100.0	%	100.0	%	14,620,166	91.2	%	92.2	%	94.3	%
Average Office Occupancy
---	---
Quarter-to-Date	Year-to-Date
91.5%	92.6%

________________________

(1)Includes stabilized retail space, which contributed approximately 1.3% of YTD NOI.

(2)Represents occupancy for properties in the stabilized portfolio as of the date presented, including properties sold subsequent to the date presented.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview by Region, continued

		Submarket	Square Feet	Occupied		Leased
Greater Los Angeles, California
	3101-3243 La Cienega Boulevard	Culver City	151,908	91.9	%	91.9	%
	2240 E. Imperial Highway	El Segundo	122,870	100.0	%	100.0	%
	2250 E. Imperial Highway	El Segundo	298,728	100.0	%	100.0	%
	2260 E. Imperial Highway	El Segundo	298,728	100.0	%	100.0	%
	909 N. Pacific Coast Highway	El Segundo	244,136	89.4	%	89.4	%
	999 N. Pacific Coast Highway	El Segundo	128,588	93.6	%	93.6	%
	1350 Ivar Avenue	Hollywood	16,448	100.0	%	100.0	%
	1355 Vine Street	Hollywood	183,129	100.0	%	100.0	%
	1375 Vine Street	Hollywood	159,236	100.0	%	100.0	%
	1395 Vine Street	Hollywood	2,575	100.0	%	100.0	%
	1500 N. El Centro Avenue (1)	Hollywood	104,504	27.9	%	27.9	%
	1525 N. Gower Street	Hollywood	9,610	100.0	%	100.0	%
	1575 N. Gower Street	Hollywood	251,245	100.0	%	100.0	%
	6115 W. Sunset Boulevard	Hollywood	26,105	73.1	%	73.1	%
	6121 W. Sunset Boulevard	Hollywood	91,173	100.0	%	100.0	%
	6255 W. Sunset Boulevard	Hollywood	323,920	93.0	%	93.0	%
	3750 Kilroy Airport Way (1)	Long Beach	10,718	62.9	%	69.9	%
	3760 Kilroy Airport Way	Long Beach	166,761	94.7	%	94.7	%
	3780 Kilroy Airport Way	Long Beach	221,452	94.4	%	94.4	%
	3800 Kilroy Airport Way	Long Beach	192,476	88.9	%	88.9	%
	3840 Kilroy Airport Way	Long Beach	136,026	0.0	%	0.0	%
	3880 Kilroy Airport Way	Long Beach	96,923	100.0	%	100.0	%
	3900 Kilroy Airport Way	Long Beach	130,935	91.3	%	91.3	%
	8560 W. Sunset Boulevard	West Hollywood	74,842	94.1	%	94.1	%
	8570 W. Sunset Boulevard	West Hollywood	45,941	97.1	%	97.1	%
	8580 W. Sunset Boulevard (1)	West Hollywood	7,126	0.0	%	0.0	%
	8590 W. Sunset Boulevard	West Hollywood	55,302	85.6	%	97.6	%
	12100 W. Olympic Boulevard	West Los Angeles	152,048	66.0	%	66.0	%
	12200 W. Olympic Boulevard	West Los Angeles	150,832	90.2	%	90.2	%
	12233 W. Olympic Boulevard	West Los Angeles	151,029	55.6	%	55.6	%
	12312 W. Olympic Boulevard	West Los Angeles	76,644	100.0	%	100.0	%
	1633 26th Street	West Los Angeles	43,857	69.9	%	69.9	%
	2100/2110 Colorado Avenue	West Los Angeles	102,864	100.0	%	100.0	%
	3130 Wilshire Boulevard	West Los Angeles	90,074	97.6	%	97.6	%
	501 Santa Monica Boulevard	West Los Angeles	76,803	91.7	%	91.7	%
	Total Greater Los Angeles		4,395,556	88.1	%	88.3	%

________________________

(1)This property is part of a complex of properties and is analyzed at the complex level.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview by Region, continued

		Submarket	Square Feet	Occupied		Leased
San Diego County, California
	12225 El Camino Real	Del Mar	58,401	100.0	%	100.0	%
	12235 El Camino Real	Del Mar	53,751	100.0	%	100.0	%
	12340 El Camino Real	Del Mar	89,272	50.1	%	50.1	%
	12390 El Camino Real	Del Mar	70,140	55.1	%	100.0	%
	12348 High Bluff Drive	Del Mar	39,193	85.3	%	85.3	%
	12400 High Bluff Drive	Del Mar	210,732	100.0	%	100.0	%
	12770 El Camino Real (1)	Del Mar	73,032	66.1	%	66.1	%
	12780 El Camino Real	Del Mar	140,591	100.0	%	100.0	%
	12790 El Camino Real	Del Mar	78,836	59.2	%	100.0	%
	3579 Valley Centre Drive (1)	Del Mar	54,960	13.0	%	100.0	%
	3611 Valley Centre Drive (1)	Del Mar	130,109	40.6	%	100.0	%
	3661 Valley Centre Drive	Del Mar	128,364	100.0	%	100.0	%
	3721 Valley Centre Drive	Del Mar	115,193	100.0	%	100.0	%
	3811 Valley Centre Drive	Del Mar	112,067	100.0	%	100.0	%
	3745 Paseo Place	Del Mar	95,871	92.3	%	97.7	%
	13280 Evening Creek Drive South	I-15 Corridor	41,196	100.0	%	100.0	%
	13290 Evening Creek Drive South	I-15 Corridor	61,180	100.0	%	100.0	%
	13480 Evening Creek Drive North	I-15 Corridor	154,157	94.4	%	94.4	%
	13500 Evening Creek Drive North	I-15 Corridor	137,658	97.5	%	97.5	%
	13520 Evening Creek Drive North	I-15 Corridor	146,701	89.0	%	89.0	%
	2305 Historic Decatur Road	Point Loma	107,456	93.9	%	100.0	%
	4690 Executive Drive	University Towne Center	47,846	76.4	%	76.4	%
	Total San Diego County		2,146,706	85.2	%	94.6	%

________________________

(1)This property is part of a complex of properties and is analyzed at the complex level.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview by Region, continued

		Submarket	Square Feet	Occupied		Leased
San Francisco Bay Area, California
	4100 Bohannon Drive	Menlo Park	47,379	100.0	%	100.0	%
	4200 Bohannon Drive	Menlo Park	45,451	70.8	%	70.8	%
	4300 Bohannon Drive (1)	Menlo Park	63,079	34.1	%	34.1	%
	4400 Bohannon Drive (1)	Menlo Park	48,146	39.4	%	39.4	%
	4500 Bohannon Drive	Menlo Park	63,078	100.0	%	100.0	%
	4600 Bohannon Drive	Menlo Park	48,147	70.7	%	70.7	%
	4700 Bohannon Drive	Menlo Park	63,078	100.0	%	100.0	%
	1290-1300 Terra Bella Avenue	Mountain View	114,175	100.0	%	100.0	%
	680 E. Middlefield Road	Mountain View	170,090	100.0	%	100.0	%
	690 E. Middlefield Road	Mountain View	170,823	100.0	%	100.0	%
	1701 Page Mill Road	Palo Alto	128,688	100.0	%	100.0	%
	3150 Porter Drive	Palo Alto	36,886	100.0	%	100.0	%
	900 Jefferson Avenue	Redwood City	228,505	100.0	%	100.0	%
	900 Middlefield Road	Redwood City	118,764	100.0	%	100.0	%
	100 Hooper Street	San Francisco	394,340	94.0	%	94.0	%
	100 First Street	San Francisco	480,457	99.2	%	99.2	%
	1800 Owens Street	San Francisco	750,370	99.6	%	99.6	%
	303 Second Street	San Francisco	784,658	82.9	%	99.2	%
	201 Third Street	San Francisco	346,538	90.3	%	90.3	%
	360 Third Street	San Francisco	429,796	88.8	%	99.6	%
	250 Brannan Street	San Francisco	100,850	100.0	%	100.0	%
	301 Brannan Street	San Francisco	82,834	100.0	%	100.0	%
	333 Brannan Street	San Francisco	185,602	100.0	%	100.0	%
	345 Brannan Street	San Francisco	110,050	99.7	%	99.7	%
	350 Mission Street	San Francisco	455,340	99.7	%	99.7	%
	345 Oyster Point Boulevard	South San Francisco	40,410	100.0	%	100.0	%
	347 Oyster Point Boulevard	South San Francisco	39,780	100.0	%	100.0	%
	349 Oyster Point Boulevard	South San Francisco	65,340	100.0	%	100.0	%
	505 Mathilda Avenue	Sunnyvale	212,322	100.0	%	100.0	%
	555 Mathilda Avenue	Sunnyvale	212,322	100.0	%	100.0	%
	605 Mathilda Avenue	Sunnyvale	162,785	100.0	%	100.0	%
	599 Mathilda Avenue	Sunnyvale	76,031	100.0	%	100.0	%
	Total San Francisco Bay Area		6,276,114	94.5	%	97.3	%

________________________

(1)This property is part of a complex of properties and is analyzed at the complex level.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview by Region, continued

		Submarket	Square Feet	Occupied		Leased
Greater Seattle, Washington
	601 108th Avenue NE	Bellevue	488,470	93.7	%	93.7	%
	10900 NE 4th Street	Bellevue	428,557	84.7	%	99.0	%
	837 N. 34th Street	Lake Union	112,487	100.0	%	100.0	%
	701 N. 34th Street	Lake Union	141,860	100.0	%	100.0	%
	801 N. 34th Street	Lake Union	169,412	100.0	%	100.0	%
	320 Westlake Avenue North	Lake Union	184,644	100.0	%	100.0	%
	321 Terry Avenue North	Lake Union	135,755	100.0	%	100.0	%
	401 Terry Avenue North	Lake Union	140,605	100.0	%	100.0	%
	Total Greater Seattle		1,801,790	94.7	%	98.1	%
	TOTAL STABILIZED OFFICE PORTFOLIO		14,620,166	91.2	%	94.3	%
		Total No. of Units		Average Residential Occupancy
---	---	---	---	---	---	---
COMPLETED RESIDENTIAL PROPERTIES	Submarket		Quarter-to-Date		Year-to-Date
Greater Los Angeles
1550 N. El Centro Avenue	Hollywood	200		89.5%		88.3%
San Diego County
3200 Paseo Village Way	Del Mar	608		50.4%		44.1%
TOTAL COMPLETED RESIDENTIAL PROPERTIES		808		60.1%		72.0%

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Information on Leases Commenced (1)

	1st & 2nd Generation						2nd Generation
	# of Leases  (2)		Square Feet (2)		Retention<br>Rates		TI/LC<br><br>Per Sq.Ft. (3)		TI/LC<br><br>Per Sq.Ft. /Year (3)		Changes in<br>GAAP Rents		Changes in <br>Cash Rents		Weighted<br>Average Lease<br>Term (Mo.)
	New	Renewal	New	Renewal
Quarter to Date	13	6	491,393	46,628	11.0	%	$	76.16	$	11.72	57.3	%	28.7	%	78
Year to Date	46	34	816,300	484,771	31.6	%	53.94		9.52		41.6	%	20.0	%	68

Information on Leases Executed (1)

	1st & 2nd Generation				2nd Generation
	# of Leases (4)		Square Feet (4)		TI/LC<br><br>Per Sq.Ft. (3)		TI/LC<br><br>Per Sq.Ft. /Year (3)		Changes in<br>GAAP Rents		Changes in <br>Cash Rents		Weighted<br>Average Lease<br>Term (Mo.)
	New	Renewal	New	Renewal
Quarter to Date (5)	2	6	14,317	46,628	$	6.24	$	2.50	28.4	%	13.9	%	30
Year to Date (6)	17	34	207,442	484,771	43.85		8.35		36.5	%	18.4	%	63

________________________

(1)Includes 100% of consolidated property partnerships.

(2)Represents leasing activity for leases that commenced at properties in the stabilized portfolio during the three months and year ended December 31, 2020, including first and second generation space, net of month-to-month leases.

(3)Includes tenant improvement costs and third-party leasing commissions. Amounts exclude tenant-funded tenant improvements and indirect leasing costs.

(4)Represents leasing activity for leases signed at properties in the stabilized portfolio during the three months and year ended December 31, 2020, including first and second generation space, net of month-to-month leases. Excludes leasing on new construction.

(5)During the three months ended December 31, 2020, 1 new lease totaling 6,505 square feet was signed but not commenced as of December 31, 2020.

(6)During the year ended December 31, 2020, 4 new leases totaling 105,103 square feet were signed but not commenced as of December 31, 2020.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Stabilized Portfolio Capital Expenditures

($ in thousands)

	Total 2020		Q4 2020		Q3 2020		Q2 2020		Q1 2020
1st Generation (Nonrecurring) Capital Expenditures: (1)
Capital Improvements	$	8,244	$	5,870	$	1,162	$	591	$	621
Tenant Improvements & Leasing Commissions (2)	7,066		(171)		1,932		998		4,307
Total	$	15,310	$	5,699	$	3,094	$	1,589	$	4,928
	Total 2020		Q4 2020		Q3 2020		Q2 2020		Q1 2020
2nd Generation (Recurring) Capital Expenditures: (1)
Capital Improvements	$	31,148	$	14,274	$	6,212	$	7,686	$	2,976
Tenant Improvements & Leasing Commissions (2)	59,292		14,968		15,557		14,680		14,087
Total	$	90,440	$	29,242	$	21,769	$	22,366	$	17,063

________________________

(1)Includes 100% of capital expenditures of consolidated property partnerships.

(2)Includes tenant improvement costs and third-party leasing commissions. Amounts exclude tenant-funded tenant improvements.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Stabilized Portfolio Lease Expiration Summary Schedule

($ in thousands, except for annualized rent per sq. ft.)

Year of Expiration	# of Expiring<br>Leases	Total Square<br>Feet	% of Total<br>Leased Sq. Ft.		Annualized<br><br>Base Rent (1)		% of Total <br>Annualized<br>Base Rent		Annualized Rent<br>per Sq. Ft.
2021 (2)	70	582,179	4.4	%	$	25,788	3.6	%	$	44.30
2022 (2)	72	865,679	6.6	%	37,112		5.2	%	42.87
2023	77	1,198,043	9.1	%	63,426		8.9	%	52.94
2024	58	978,481	7.5	%	48,005		6.8	%	49.06
2025	53	672,538	5.1	%	32,050		4.5	%	47.66
2026	39	1,635,749	12.5	%	74,225		10.4	%	45.38
2027 (3)	36	1,269,396	9.7	%	51,539		7.2	%	40.60
2028	22	928,925	7.1	%	58,150		8.2	%	62.60
2029	20	813,854	6.2	%	46,728		6.6	%	57.42
2030	32	1,241,437	9.5	%	66,648		9.4	%	53.69
2031 and beyond	30	2,944,267	22.3	%	207,953		29.2	%	70.63
Total (4)	509	13,130,548	100.0	%	$	711,624	100.0	%	$	54.20

________________________

(1)Includes 100% of annualized base rent of consolidated property partnerships.

(2)Adjusting for leasing transactions executed as of December 31, 2020 but not yet commenced, the 2021 and 2022 expirations would be reduced by 121,554 and 38,806 square feet, respectively.

(3)The Company is currently in discussions with a tenant regarding its termination option as of December 31, 2020 on up to approximately 150,000 square feet of space. The Company believes the tenant did not validly exercise its termination option.

(4)For leases that have been renewed early with existing tenants, the expiration date and annualized base rent information presented takes into consideration the renewed lease terms. Excludes leases not commenced as of December 31, 2020, space leased under month-to-month leases, storage leases, vacant space and future lease renewal options not executed as of December 31, 2020.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Stabilized Portfolio Lease Expiration Schedule by Region

($ in thousands, except for annualized rent per sq. ft.)

Year		Region		# of<br>Expiring Leases		Total<br>Square Feet		% of Total<br>Leased Sq. Ft.				Annualized<br><br>Base Rent (1)			% of Total<br>Annualized<br>Base Rent				Annualized Rent<br>per Sq. Ft.
2021		Greater Los Angeles		45		236,882		1.8	%			$	9,647		1.4	%			$	40.72
	San Diego		14		101,979		0.8	%		3,788				0.5	%		37.14
	San Francisco Bay Area		9		239,351		1.8	%		12,202				1.7	%		50.98
	Greater Seattle		2		3,967		—	%		151				—	%		38.06
	Total		70		582,179		4.4	%		$	25,788			3.6	%		$	44.30
2022		Greater Los Angeles		49		480,088		3.7	%			$	21,084		3.0	%			$	43.92
	San Diego		8		204,237		1.5	%		6,991				1.0	%		34.23
	San Francisco Bay Area		6		115,448		0.9	%		6,559				0.9	%		56.81
	Greater Seattle		9		65,906		0.5	%		2,478				0.3	%		37.60
	Total		72		865,679		6.6	%		$	37,112			5.2	%		$	42.87
2023		Greater Los Angeles		38		387,276		2.9	%			$	20,709		2.9	%			$	53.47
	San Diego		13		196,477		1.5	%		7,940				1.1	%		40.41
	San Francisco Bay Area		18		498,952		3.8	%		30,982				4.4	%		62.09
	Greater Seattle		8		115,338		0.9	%		3,795				0.5	%		32.90
	Total		77		1,198,043		9.1	%		$	63,426			8.9	%		$	52.94
2024		Greater Los Angeles		32		465,380		3.6	%			$	21,131		3.0	%			$	45.41
	San Diego		6		61,313		0.5	%		2,944				0.4	%		48.02
	San Francisco Bay Area		14		249,494		1.9	%		16,337				2.3	%		65.48
	Greater Seattle		6		202,294		1.5	%		7,593				1.1	%		37.53
	Total		58		978,481		7.5	%		$	48,005			6.8	%		$	49.06
2025		Greater Los Angeles		18		172,227		1.3	%			$	7,600		1.1	%			$	44.13
	San Diego		20		192,625		1.4	%		8,386				1.1	%		43.54
	San Francisco Bay Area		5		169,225		1.3	%		10,525				1.5	%		62.20
	Greater Seattle		10		138,461		1.1	%		5,539				0.8	%		40.00
	Total		53		672,538		5.1	%		$	32,050			4.5	%		$	47.66
2026<br>and<br>Beyond		Greater Los Angeles		45		2,005,899		15.3	%			$	91,412		12.8	%			$	45.57
	San Diego		54		1,044,358		8.0	%		53,713				7.6	%		51.43
	San Francisco Bay Area		50		4,614,375		35.1	%		312,475				43.9	%		67.72
	Greater Seattle		30		1,168,996		8.9	%		47,643				6.7	%		40.76
	Total		179		8,833,628		67.3	%		$	505,243			71.0	%		$	57.20

________________________

(1)Includes 100% of annualized base rent of consolidated property partnerships.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Stabilized Portfolio Quarterly Lease Expirations for 2021 and 2022

($ in thousands, except for annualized rent per sq. ft.)

	# of Expiring<br>Leases	Total Square<br>Feet	% of Total<br>Leased Sq. Ft.		Annualized<br><br>Base Rent (1)		% of Total<br>Annualized<br>Base Rent		Annualized Rent<br>per Sq. Ft.
2021:
Q1 2021	17	122,524	0.9	%	$	5,052	0.7	%	$	41.23
Q2 2021	15	63,553	0.5	%	2,519		0.4	%	39.64
Q3 2021	21	302,565	2.3	%	14,721		2.0	%	48.65
Q4 2021	17	93,537	0.7	%	3,496		0.5	%	37.38
Total 2021 (2)	70	582,179	4.4	%	$	25,788	3.6	%	$	44.30
2022:
Q1 2022	24	397,598	3.0	%	$	16,775	2.3	%	$	42.19
Q2 2022	15	104,083	0.8	%	4,156		0.6	%	39.93
Q3 2022	15	161,625	1.2	%	6,332		0.9	%	39.18
Q4 2022	18	202,373	1.6	%	9,849		1.4	%	48.67
Total 2022 (2)	72	865,679	6.6	%	$	37,112	5.2	%	$	42.87

________________________

(1)Includes 100% of annualized base rent of consolidated property partnerships.

(2)Adjusting for leasing transactions executed as of December 31, 2020 but not yet commenced, the 2021 and 2022 expirations would be reduced by 121,554 and 38,806 square feet, respectively.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Top Fifteen Tenants (1)

($ in thousands)

Tenant Name	Region	Annualized Base Rental Revenue (2)		Rentable<br>Square Feet	Percentage of<br>Total Annualized Base Rental Revenue		Percentage of<br>Total Rentable<br>Square Feet		Year(s) of Lease Expiration
Dropbox, Inc.	San Francisco Bay Area	$	55,998	738,081	7.7	%	4.9	%	2033
GM Cruise, LLC	San Francisco Bay Area	36,337		374,618	5.0	%	2.5	%	2031
LinkedIn Corporation / Microsoft Corporation	San Francisco Bay Area	29,752		663,460	4.1	%	4.4	%	2024 / 2026
Adobe Systems, Inc.	San Francisco Bay Area / Greater Seattle	27,897		513,111	3.8	%	3.4	%	2027 / 2031
salesforce.com, inc.	San Francisco Bay Area	24,076		451,763	3.3	%	3.0	%	2031 / 2032
DIRECTV, LLC (3)	Greater Los Angeles	23,152		684,411	3.2	%	4.6	%	2027
Box, Inc.	San Francisco Bay Area	22,441		372,673	3.1	%	2.5	%	2021 / 2028
Okta, Inc.	San Francisco Bay Area	22,387		273,371	3.1	%	1.8	%	2028
Netflix, Inc.	Greater Los Angeles	21,959		362,868	3.0	%	2.4	%	2021 / 2032
DoorDash, Inc.	San Francisco Bay Area	18,650		184,968	2.6	%	1.2	%	2032
Synopsys, Inc.	San Francisco Bay Area	15,492		340,913	2.1	%	2.3	%	2030
Fortune 50 Publicly-Traded Company	Greater Seattle	15,355		311,983	2.1	%	2.1	%	2033
Riot Games, Inc.	Greater Los Angeles	15,152		243,051	2.1	%	1.6	%	2023 / 2024
Amazon.com	Greater Seattle	14,760		348,880	2.0	%	2.3	%	2023 / 2030
Viacom International, Inc.	Greater Los Angeles	13,718		211,343	1.9	%	1.4	%	2028
Total Top Fifteen Tenants		$	357,126	6,075,494	49.1	%	40.4	%

________________________

(1)The information presented is as of December 31, 2020.

(2)Includes 100% of annualized base rental revenues of consolidated property partnerships.

(3)The Company is currently in discussions with tenant regarding tenant's termination option as of December 31, 2020 on up to approximately 150,000 square feet of space. The Company believes tenant did not validly exercise its termination option.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

2020 Dispositions

($ in millions)

COMPLETED OPERATING PROPERTY DISPOSITIONS	Submarket	Month of<br>Disposition	No. of Buildings	Rentable<br>Square Feet	Sales<br>Price (1)
1st Quarter
None
2nd Quarter
None
3rd Quarter
None
4th Quarter
331 Fairchild Drive	Mountain View	December	1	87,147	$	75.9
TOTAL DISPOSITIONS			1	87,147	$	75.9

____________________

(1)Represents gross sales price before the impact of commissions and closing costs.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Consolidated Ventures (Noncontrolling Property Partnerships)

Property (1)	Venture Partner	Submarket	Rentable Square Feet	KRC Ownership %
100 First Street, San Francisco, CA	Norges Bank Real Estate Management	San Francisco	480,457	56%
303 Second Street, San Francisco, CA	Norges Bank Real Estate Management	San Francisco	784,658	56%
900 Jefferson Avenue and 900 Middlefield Road, Redwood City, CA (2)	Local developer	Redwood City	347,269	93%

____________________

(1)For breakout of Net Operating Income by partnership, refer to page 36, Reconciliation of Net Income Available to Common Stockholders to Same Store Net Operating Income.

(2)Reflects the KRC ownership percentage at time of agreement. Actual percentage may vary depending on cash flows or promote structure.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Stabilized Office and Residential Development Projects

($ in millions)

STABILIZED OFFICE AND RETAIL DEVELOPMENT PROJECTS (1)	Location	Start Date	Stabilization Date (2)	Total Estimated Investment		Rentable <br>Square Feet	Total Project % Occupied
1st Quarter
The Exchange on 16th	San Francisco	2Q 2015	1Q 2020	$	585.0	750,370	100%
One Paseo - Retail	Del Mar	4Q 2016	1Q 2020	100.0		95,871	92%
2nd Quarter
None
3rd Quarter
None
4th Quarter
Netflix // On Vine	Hollywood	1Q 2018	4Q 2020	300.0		361,388	100%
TOTAL:				$	985.0	1,207,629	99%
COMPLETED RESIDENTIAL DEVELOPMENT PROJECT	Location	Start Date	Completion <br>Date	Total Estimated Investment		Number of Units	% Leased
---	---	---	---	---	---	---	---
One Paseo - Residential Phase I	Del Mar	4Q 2016	3Q 2019	$	145.0	237	78%
One Paseo - Residential Phase II	Del Mar	4Q 2016	1Q 2020	145.0		225	52%
One Paseo - Residential Phase III	Del Mar	4Q 2016	3Q 2020	100.0		146	50%
TOTAL:				$	390.0	608	62%

____________________

(1)Our stabilized office portfolio includes stabilized retail space.

(2)For office and retail, represents the earlier of 95% occupancy date or one year from substantial completion of base building components.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

In-Process Development

($ in millions)

	Location	Construction Start Date	Estimated Stabilization Date (2)	Estimated Rentable Square Feet	Total Estimated Investment		Total Cash Costs Incurred as of<br><br>12/31/2020 (3)		% Leased	Total Project % Occupied
TENANT IMPROVEMENT (1)
Office
San Diego County
One Paseo - Office	Del Mar	4Q 2018	3Q 2021	285,000	$	205.0	$	188.7	93%	66%
9455 Towne Centre Drive	University Towne Center	1Q 2019	1Q 2021	160,000	105.0		75.3		100%	—%
Greater Seattle
333 Dexter	South Lake Union	2Q 2017	3Q 2022	635,000	410.0		296.0		100%	49%
TOTAL:				1,080,000	$	720.0	$	560.0	98%	46%		UNDER CONSTRUCTION	Location	Construction Start Date	Estimated Stabilization Date (2)	Estimated Rentable Square Feet	Total Estimated Investment		Total Cash Costs Incurred as of<br><br>12/31/2020 (3)		Office % Leased
---	---	---	---	---	---	---	---	---	---
Office / Life Science
San Francisco Bay Area
Kilroy Oyster Point - Phase I	South San Francisco	1Q 2019	4Q 2021	656,000	$	570.0	$	285.8	100%
San Diego County
2100 Kettner	Little Italy	3Q 2019	2Q 2022	200,000	140.0		93.7		—%
Residential
Greater Los Angeles
Jardine (Living // On Vine)	Hollywood	4Q 2018	1Q 2021	193 Resi Units	200.0		173.8		N/A
TOTAL:					$	910.0	$	553.3	77%

________________________

(1)Represents projects that have reached cold shell condition and are ready for tenant improvements, which may require additional major base building construction before being placed in service.

(2)For office and retail, represents the earlier of anticipated 95% occupancy date or one year from substantial completion of base building components. For multi-phase projects, interest and carry cost capitalization may cease and recommence driven by various factors, including tenant improvement construction and other tenant related timing or project scope. The timing of completion of our projects may be impacted by factors outside of our control, including government restrictions and/or social distancing requirements on construction projects due to the COVID-19 pandemic. As of the date of this report, all of our in-process development projects were under active construction.

(3)Represents costs incurred as of December 31, 2020, excluding GAAP accrued liabilities and leasing overhead.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Future Development Pipeline

($ in millions)

FUTURE DEVELOPMENT PIPELINE	Location	Approx. Developable<br><br>Square Feet (1)	Total Cash Costs Incurred as of 12/31/2020 (2)
San Diego County
Santa Fe Summit – Phases II and III	56 Corridor	600,000 - 650,000	$	79.8
Kilroy East Village	East Village	TBD	48.1
San Francisco Bay Area
Kilroy Oyster Point - Phases II - IV	South San Francisco	1,750,000 - 1,900,000	331.3
Flower Mart	SOMA	2,300,000	398.7
Greater Seattle
SIX0 - Office & Residential	Seattle CBD	TBD	138.9
TOTAL:			$	996.8

________________________

(1)The developable square feet and scope of projects could change materially from estimated data provided due to one or more of the following: any significant changes in the economy, market conditions, our markets, tenant requirements and demands, construction costs, new supply, regulatory and entitlement processes or project design.

(2)Represents costs incurred as of December 31, 2020, excluding accrued liabilities recorded in accordance with GAAP.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Capital Structure

As of December 31, 2020

($ in thousands)

	Shares/Units<br>December 31, 2020	Aggregate PrincipalAmount or Value Equivalent	% of Total<br>Market<br>Capitalization
DEBT: (1)(2)
Unsecured Senior Notes due 2023			2.8	%
Unsecured Senior Notes due 2024		425,000	4.0	%
Unsecured Senior Notes due 2025		400,000	3.8	%
Unsecured Senior Notes Series A & B due 2026		250,000	2.3	%
Unsecured Senior Notes due 2028		400,000	3.8	%
Unsecured Senior Notes due 2029		400,000	3.8	%
Unsecured Senior Notes Series A & B due 2027 & 2029		250,000	2.3	%
Unsecured Senior Notes due 2030		500,000	4.6	%
Unsecured Senior Notes due 2031		350,000	3.3	%
Unsecured Senior Notes due 2032		425,000	4.0	%
Secured Debt		254,365	2.3	%
Total Debt			37.0	%
EQUITY AND NONCONTROLLING INTEREST IN THE OPERATING PARTNERSHIP: (3)
Common limited partnership units outstanding (4)	1,150,574		0.6	%
Shares of common stock outstanding	116,035,827	6,660,456	62.4	%
Total Equity and Noncontrolling Interests in the Operating Partnership			63.0	%
TOTAL MARKET CAPITALIZATION			100.0	%

All values are in US Dollars.

________________________

(1)Represents the gross aggregate principal amount due at maturity before the effect of unamortized deferred financing costs and premiums and discounts.

(2)As of December 31, 2020, there was no outstanding balance on the unsecured revolving credit facility.

(3)Value based on closing share price of $57.40 as of December 31, 2020.

(4)Includes common units of the Operating Partnership not owned by the Company; does not include noncontrolling interests in consolidated property partnerships.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Debt Analysis

As of December 31, 2020

TOTAL DEBT COMPOSITION (1)
	Percent of<br>Total Debt		Weighted Average
		Interest Rate		Years to Maturity
Secured vs. Unsecured Debt
Unsecured Debt	93.6%		3.8%		7.3
Secured Debt	6.4%		3.9%		6.1
Floating vs. Fixed-Rate Debt
Floating-Rate Debt	—%		—%		—
Fixed-Rate Debt	100.0%		3.8%		7.2
Stated Interest Rate			3.8%		7.2
GAAP Effective Rate			3.8%
GAAP Effective Rate Including Debt Issuance Costs			4.0%
KEY DEBT COVENANTS
---	---	---
	Covenant	Actual Performance<br>as of December 31, 2020
Unsecured Credit Facility and Private Placement Notes (as defined in the Credit Agreements):
Total debt to total asset value	less than 60%	30%
Fixed charge coverage ratio	greater than 1.5x	3.2x
Unsecured debt ratio	greater than 1.67x	3.09x
Unencumbered asset pool debt service coverage	greater than 1.75x	3.98x
Unsecured Senior Notes due 2023, 2024, 2025, 2028, 2029, 2030 and 2032 (as defined in the Indentures):
Total debt to total asset value	less than 60%	35%
Interest coverage	greater than 1.5x	8.1x
Secured debt to total asset value	less than 40%	2%
Unencumbered asset pool value to unsecured debt	greater than 150%	297%

________________________

(1)As of December 31, 2020, there was no outstanding balance on the unsecured revolving credit facility.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Debt Analysis

($ in thousands)

DEBT MATURITY SCHEDULE
Floating/<br>Fixed Rate	Stated <br>Rate	Maturity<br>Date	2021		2022		2023		2024		2025		After 2025		Total (1)
Unsecured Debt(2):
Fixed	3.80%	1/15/2023					$	300,000							$	300,000
Fixed	3.45%	12/15/2024							$	425,000					425,000
Fixed	4.38%	10/1/2025									$	400,000			400,000
Fixed	4.30%	7/18/2026											$	50,000	50,000
Fixed	4.35%	10/18/2026											200,000		200,000
Fixed	3.35%	2/17/2027											175,000		175,000
Fixed	4.75%	12/15/2028											400,000		400,000
Fixed	3.45%	2/17/2029											75,000		75,000
Fixed	4.25%	8/15/2029											400,000		400,000
Fixed	3.05%	2/15/2030											500,000		500,000
Fixed	4.27%	1/31/2031											350,000		350,000
Fixed	2.50%	11/15/2032											425,000		425,000
Total unsecured debt	3.78%		—		—		300,000		425,000		400,000		2,575,000		3,700,000
Secured Debt:
Fixed	3.57%	12/1/2026	3,341		3,462		3,587		3,718		3,853		148,815		166,776
Fixed	4.48%	7/1/2027	2,001		2,092		2,188		2,288		2,393		76,627		87,589
Total secured debt	3.88%		5,342		5,554		5,775		6,006		6,246		225,442		254,365
Total	3.78%		$	5,342	$	5,554	$	305,775	$	431,006	$	406,246	$	2,800,442	$	3,954,365

________________________

(1)Represents the gross aggregate principal amount due at maturity before the effect of unamortized deferred financing costs and premiums and discounts.

(2)As of December 31, 2020, there was no outstanding balance on the unsecured revolving credit facility.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Management Statements on Non-GAAP Supplemental Measures

Included in this section are management’s statements regarding certain non-GAAP financial measures provided in this supplemental financial report and, with respect to Funds From Operations available to common stockholders and common unitholders (“FFO”), in the Company’s earnings release on February 1, 2021 and the reasons why management believes that these measures provide useful information to investors about the Company’s financial condition and results of operations.

Net Operating Income:

Management believes that Net Operating Income (“NOI”) is a useful supplemental measure of the Company’s operating performance. The Company defines NOI as follows: consolidated operating revenues (rental income and other property income) less consolidated property and related expenses (property expenses, real estate taxes and ground leases). Other real estate investment trusts (“REITs”) may use different methodologies for calculating NOI, and accordingly, the Company’s NOI may not be comparable to other REITs.

Because NOI excludes leasing costs, general and administrative expenses, interest expense, depreciation and amortization, other nonproperty income and losses, and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, reflects the consolidated revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. The Company uses NOI to evaluate its operating performance on a portfolio basis since NOI allows the Company to evaluate the impact that factors such as occupancy levels, lease structure, rental rates, and tenant base have on the Company’s results, margins and returns. In addition, management believes that NOI provides useful information to the investment community about the Company’s financial and operating performance when compared to other REITs since NOI is generally recognized as a standard measure of performance in the real estate industry.

However, NOI should not be viewed as an alternative measure of the Company’s financial performance since it does not reflect general and administrative expenses, leasing costs, interest expense, depreciation and amortization costs, other nonproperty income and losses and the level of capital expenditures necessary to maintain the operating performance of the Company’s properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact the Company’s results from operations.

Same Store Net Operating Income:

Management believes that Same Store NOI is a useful supplemental measure of the Company’s operating performance. Same Store NOI represents the consolidated NOI for all of the properties that were owned and included in the Company's stabilized portfolio for two comparable reporting periods. Because Same Store NOI excludes the change in NOI from developed, redeveloped, acquired and disposed of and held for sale properties, it highlights operating trends such as occupancy levels, rental rates and operating costs on properties. Other REITs may use different methodologies for calculating Same Store NOI, and accordingly, the Company’s Same Store NOI may not be comparable to other REITs.

However, Same Store NOI should not be viewed as an alternative measure of the Company’s financial performance since it does not reflect the operations of the Company’s entire portfolio, nor does it reflect the impact of general and administrative expenses, leasing costs, interest expense, depreciation and amortization costs, other nonproperty income and losses and the level of capital expenditures necessary to maintain the operating performance of the Company’s properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact the Company’s results from operations.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Management Statements on Non-GAAP Supplemental Measures, continued

Same Store Cash Net Operating Income:

Management believes that Same Store Cash NOI is a useful supplemental measure of the Company’s operating performance. Same Store Cash NOI represents the consolidated NOI for all of the properties that were owned and included in the Company’s stabilized portfolio for two comparable reporting periods, adjusted for the net effect of straight-line rents, amortization of deferred revenue related to tenant-funded tenant improvements, amortization of above and below market lease intangibles, and the provision for bad debts. Because Same Store Cash NOI excludes the change in NOI from developed, redeveloped, acquired and disposed of and held for sale properties, it highlights operating trends on a cash basis such as occupancy levels, rental rates and operating costs on properties. Other REITs may use different methodologies for calculating Same Store Cash NOI, and accordingly, our Same Store Cash NOI may not be comparable to other REITs.

However, Same Store Cash NOI should not be viewed as an alternative measure of the Company’s financial performance since it does not reflect the operations of the Company's entire portfolio, nor does it reflect the impact of general and administrative expenses, acquisition-related expenses, interest expense, depreciation and amortization costs, other nonproperty income and losses, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact the Company's results from operations.

EBITDA, as adjusted:

Management believes that consolidated earnings before interest expense, depreciation and amortization, gain/loss on early extinguishment of debt, gains and losses on depreciable real estate, net income attributable to noncontrolling interests, preferred dividends and distributions, original issuance costs of redeemed preferred stock and preferred units, and impairment losses (“EBITDA, as adjusted”) is a useful supplemental measure of the Company’s operating performance. When considered with other GAAP measures and FFO, management believes EBITDA, as adjusted, gives the investment community a more complete understanding of the Company’s consolidated operating results, including the impact of general and administrative expenses and acquisition-related expenses, before the impact of investing and financing transactions and facilitates comparisons with competitors. Management also believes it is appropriate to present EBITDA, as adjusted, as it is used in several of the Company’s financial covenants for both its secured and unsecured debt. However, EBITDA, as adjusted, should not be viewed as an alternative measure of the Company’s operating performance since it excludes financing costs as well as depreciation and amortization costs which are significant economic costs that could materially impact the Company’s results of operations and liquidity. Other REITs may use different methodologies for calculating EBITDA, as adjusted, and, accordingly, the Company’s EBITDA, as adjusted, may not be comparable to other REITs. The Company’s calculation of EBITDA, as adjusted, is the same as EBITDAre, as defined by NAREIT, as the Company does not have any unconsolidated joint ventures.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Management Statements on Non-GAAP Supplemental Measures, continued

Funds From Operations:

The Company calculates Funds From Operations available to common stockholders and common unitholders (“FFO”) in accordance with the 2018 Restated 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.

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 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.

Funds Available for Distribution:

Management believes that Funds Available for Distribution available to common stockholders and common unitholders (“FAD”) is a useful supplemental measure of the Company’s liquidity. The Company computes FAD by adding to FFO the non-cash amortization of deferred financing costs, debt discounts and premiums and share-based compensation awards, amortization of above (below) market rents for acquisition properties and non-cash executive compensation expense then subtracting recurring tenant improvements, leasing commissions and capital expenditures and eliminating the net effect of straight-line rents, amortization of deferred revenue related to tenant improvements, adjusting for other lease related items and amounts of gain or loss on marketable securities related to the Company’s executive deferred compensation plan that are capitalized as development costs, and after adjustment for amounts attributable to noncontrolling interests in consolidated property partnerships. FAD provides an additional perspective on the Company’s ability to fund cash needs and make distributions to stockholders by adjusting FFO for the impact of certain cash and non-cash items, as well as adjusting FFO for recurring capital expenditures and leasing costs. Management also believes that FAD provides useful information to the investment community about the Company’s financial position as compared to other REITs since FAD is a liquidity measure used by other REITs. However, other REITs may use different methodologies for calculating FAD and, accordingly, the Company’s FAD may not be comparable to other REITs.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Definitions Included in Supplemental

Annualized Base Rent:

Includes the impact of straight-lining rent escalations and the amortization of free rent periods and excludes the impact of the following: amortization of deferred revenue related to tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases, and expense reimbursement revenue. Additionally, the underlying leases contain various expense structures including full service gross, modified gross and triple net. Amounts represent percentage of total portfolio annualized contractual base rental revenue.

Change in GAAP/Cash Rents (Leases Commenced):

Calculated as the change between GAAP/cash rents for new/renewed leases and the expiring GAAP/cash rents for the same space. Excludes leases for which the space was vacant longer than one year, or vacant when the property was acquired by the Company.

Change in GAAP/Cash Rents (Leases Executed):

Calculated as the change between GAAP/cash rents for signed leases and the expiring GAAP/cash rents for the same space. Excludes leases for which the space was vacant longer than one year, or vacant when the property was acquired by the Company.

Estimated Stabilization Date (Development):

Management’s estimation of the earlier of stabilized occupancy (95%) or one year from the date of the cessation of major base building construction activities for office and retail properties and upon substantial completion for residential properties.

FAD Payout Ratio:

Calculated as current-quarter dividends accrued to common stockholders and common unitholders (excluding dividend equivalents accrued to restricted stock unitholders) divided by FAD.

First Generation Capital Expenditures:

Capital expenditures for newly acquired space, newly developed, redeveloped, or repositioned space. These costs are not subtracted in our calculation of FAD.

Fixed Charge Coverage Ratio:

Calculated as EBITDA, as adjusted, divided by gross interest expense (excluding amortization of deferred debt costs and debt discounts/premiums) and current year accrued preferred dividends.

FFO Payout Ratio:

Calculated as current-quarter dividends accrued to common stockholders and common unitholders (excluding dividend equivalents accrued to restricted stock unitholders) divided by FFO attributable to common stockholders and unitholders.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Definitions Included in Supplemental, continued

GAAP Effective Rate:

The rate at which interest expense is recorded for financial reporting purposes, which reflects the amortization of any discounts/premiums, excluding debt issuance costs.

Interest Coverage Ratio:

Calculated as EBITDA, as adjusted, divided by gross interest expense (excluding amortization of deferred debt costs and debt discounts/premiums).

Net Effect of Straight-Line Rents:

Represents the straight-line rent income recognized during the period offset by cash received during the period that was applied to deferred rents receivable balances for terminated leases and the provision for bad debts recorded for deferred rent receivable balances.

Net Operating Income Margins:

Calculated as Net Operating Income divided by total revenues.

Retention Rates (Leases Commenced):

Calculated as the percentage of space either renewed or expanded into by existing tenants or subtenants at lease expiration.

Same Store Portfolio:

Our Same Store portfolio includes all of our properties owned and included in our stabilized portfolio for two comparable reporting periods, i.e., owned and included in our stabilized portfolio as of January 1, 2019 and still owned and included in the stabilized portfolio as of December 31, 2020. It does not include undeveloped land, development and redevelopment properties currently committed for construction, under construction, or in the tenant improvement phase, completed residential developments not yet stabilized and properties held-for-sale. We define redevelopment properties as those projects for which we expect to spend significant development and construction costs on existing or acquired buildings pursuant to a formal plan, the intended result of which is a higher economic return on the property.

Stated Interest Rate:

The rate at which interest expense is recorded per the respective loan documents, excluding the impact of the amortization of any debt discounts/premiums.

Tenant Improvement Phase:

Represents projects that have reached cold shell condition and are ready for tenant improvements, which may require additional major base building construction before being placed in service.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Reconciliation of Net Income Available to Common Stockholders to Same Store Net Operating Income

(unaudited, $ in thousands)

	Three Months Ended December 31,				Year Ended December 31,
	2020		2019		2020		2019
Net Income Available to Common Stockholders	$	78,642	$	72,500	$	187,105	$	195,443
Net income attributable to noncontrolling common units of the Operating Partnership	1,012		1,343		2,869		3,766
Net income attributable to noncontrolling interests in consolidated property partnerships	3,798		4,079		17,319		16,020
Net Income	83,452		77,922		207,293		215,229
Adjustments:
General and administrative expenses	23,085		22,365		99,264		88,139
Leasing costs	721		2,016		4,493		7,615
Depreciation and amortization	72,990		69,513		299,308		273,130
Interest income and other net investment gain	(1,845)		(1,436)		(3,424)		(4,641)
Interest expense	20,976		13,932		70,772		48,537
Gains on sales of depreciable operating properties	(35,536)		(29,633)		(35,536)		(36,802)
Net Operating Income, as defined (1)	163,843		154,679		642,170		591,207
Wholly-Owned Properties	144,569		135,460		560,575		512,281
Consolidated property partnerships: (2)
100 First Street (3)	6,413		5,914		22,272		23,890
303 Second Street (3)	7,121		7,568		36,341		31,787
Crossing/900 (4)	5,740		5,737		22,982		23,249
Net Operating Income, as defined (1)	163,843		154,679		642,170		591,207
Non-Same Store GAAP Net Operating Income (5)	(33,697)		(21,480)		(115,423)		(56,755)
Same Store GAAP Net Operating Income	130,146		133,199		526,747		534,452
GAAP to Cash Adjustments:
GAAP Operating Revenues Adjustments, net (6)	(5,210)		(12,953)		(28,506)		(74,271)
GAAP Operating Expenses Adjustments, net (7)	(19)		(18)		(71)		(48)
Same Store Cash Net Operating Income	$	124,917	$	120,228	$	498,170	$	460,133

________________________

(1)Please refer to pages 31-32 for Management Statements on Net Operating Income, Same Store Net Operating Income and Same Store Cash Net Operating Income.

(2)Reflects GAAP Net Operating Income for all periods presented.

(3)For all periods presented, an unrelated third party entity owned approximately 44% common equity interests in two properties located at 100 First Street and 303 Second Street in San Francisco, CA.

(4)For all periods presented, an unrelated third party entity owned an approximate 7% common equity interest in two properties located at 900 Jefferson Avenue and 900 Middlefield Road in Redwood City, CA.

(5)Includes the results of one office property disposed of during the second quarter of 2019, one property disposed of during the fourth quarter of 2019, one office property disposed of during the fourth quarter 2020, one office property we acquired in the third quarter of 2019, our completed residential development, one office development project added to the stabilized portfolio in the second quarter of 2019, one office development project added to the stabilized portfolio in the first quarter of 2020, on retail development project added to the stabilized portfolio in the first quarter of 2020, one office development project added to the stabilized portfolio in the fourth quarter of 2020 and our in-process and future development projects.

(6)Includes the net effect of straight-line rents, amortization of deferred revenue related to tenant-funded tenant improvements, amortization of above and below market lease intangibles and revenue reversals (recoveries) related to tenant creditworthiness.

(7)Includes the amortization of above and below market lease intangibles for ground leases.

Kilroy Realty Corporation

Fourth Quarter 2020 Supplemental Financial Report

Reconciliation of Net Income Available to Common Stockholders to EBITDA, as Adjusted

(unaudited, $ in thousands)

	Three Months Ended December 31,
	2020		2019
Net Income Available to Common Stockholders	$	78,642	$	72,500
Interest expense	20,976		13,932
Depreciation and amortization	72,990		69,513
Net income attributable to noncontrolling common units of the Operating Partnership	1,012		1,343
Net income attributable to noncontrolling interests in consolidated property partnerships	3,798		4,079
Gains on sales of depreciable operating properties	(35,536)		(29,633)
EBITDA, as adjusted (1)	$	141,882	$	131,734

________________________

(1)Please refer to page 32 for a Management Statement on EBITDA, as adjusted. The Company’s calculation of EBITDA, as adjusted, is the same as EBITDAre, as defined by NAREIT, as the Company does not have any unconsolidated joint ventures.

37

Document

Exhibit 99.2

Contact:	FOR RELEASE:
Tyler H. Rose	February 1, 2021
President
(310) 481-8484<br>Or
Michelle Ngo
Senior Vice President,
Chief Financial Officer and Treasurer
(310) 481-8581

KILROY REALTY CORPORATION REPORTS

FOURTH QUARTER FINANCIAL RESULTS

---

LOS ANGELES, February 1, 2021 - Kilroy Realty Corporation (NYSE: KRC) today reported financial results for its fourth quarter ended December 31, 2020.

COVID-19 Pandemic Key Business Update

Operations

•Collected 96% of contractual fourth quarter rent billings across all property types, including 98% from office and life science tenants. Excluding rent relief provided to certain tenants, collected 97% across all property types, including 98% from office and life science tenants

◦The collection rate for January across all property types was 95%, including 97% from office and life science tenants, as of the date of this release. Excluding rent relief provided to certain tenants, collected 96% across all property types, including 97% from office and life science tenants

•Limited lease expiration exposure with an average of approximately 6.3% of total rentable square feet expiring per year through 2025

Balance Sheet / Liquidity Highlights

•As of the date of this release, the company had approximately $1.5 billion of total liquidity comprised of approximately $700.0 million of cash and cash equivalents on hand and full availability under the $750.0 million revolving credit facility

•No significant debt maturities until 2023, excluding the company’s revolving credit facility, which matures in the third quarter of 2022

•Weighted average debt maturity of approximately 7.2 years

Development

•$1.6 billion of projects under development

◦89% leased across office and life science space

◦As of the date of this release, all in-process projects were under active construction

◦Remaining spending to complete the projects of approximately $500.0 million, fully funded with cash on hand

Fourth Quarter Highlights

Financial Results

•Net income available to common stockholders per share of $0.67

•Funds from operations available to common stockholders and unitholders (“FFO”) per share of $0.95

◦Both net income available to common stockholders per share and FFO per share included a $0.03 per share net charge primarily due to co-working, advertising and residential tenant creditworthiness as a result of the COVID-19 pandemic

•Revenues increased to $229.3 million, including the charge noted above

Stabilized Portfolio

•Stabilized portfolio was 91.2% occupied and 94.3% leased at December 31, 2020

•Signed approximately 60,945 square feet of new or renewing leases

◦GAAP and cash rents increased approximately 28.4% and 13.9%, respectively, from prior levels

Dispositions

•In December, completed the sale of an approximately 87,000 square foot operating property in the Mountain View submarket of the San Francisco Bay Area for gross proceeds of $75.9 million, or $871 per square foot, and a GAAP gain on sale of operating properties of $35.5 million

Development

•In November, completed construction on and added Netflix // On Vine, an approximately 361,000 square foot office development project located in Hollywood, CA to the stabilized portfolio. The project is 100% leased to Netflix, Inc.

Full Year 2020 Highlights

•Fully stabilized The Exchange on 16th, a $585.0 million, approximately 750,000 square foot office development project, located in the Mission Bay district of San Francisco. The office component is 100% leased to Dropbox

•Completed construction on $1.0 billion of office projects that were delivered or turned over to tenants for tenant improvements, a record year

▪Netflix // On Vine, a $300.0 million office project, located in the Hollywood submarket of Los Angeles; the project is 100% leased to Netflix, Inc.

▪333 Dexter, a $410.0 million office project in Seattle; the project is 100% leased to a Fortune 50 publicly traded company

▪One Paseo Office, a $205.0 million component of our One Paseo mixed-use project in the Del Mar submarket of San Diego, which is 93% leased

▪9455 Towne Centre Drive, a $105.0 million office project located in the University Towne Center submarket of San Diego; the project is 100% leased to a Fortune 50 publicly traded company

•Completed construction on $245.0 million, or 371 units, at the residential development of our One Paseo mixed-use project in the Del Mar submarket of San Diego, which are 51% leased

•Increased the annual dividend on the company’s common stock by 3.1% to $2.00 per share

•Fully physically settled equity forward sale agreements in connection with the February 2020 common stock public offering of 5,750,000 shares priced at $86.00 per share and 3,147,110 shares of common stock in connection with a forward transaction under the ATM program

▪Generated aggregate net proceeds of $722.2 million

•Issued $775.0 million of debt across two transactions

▪Private placement of $350.0 million, 10-year, 4.270% senior unsecured notes

▪Public offering of $425.0 million, 12-year, 2.500% senior unsecured green bonds

•Completed the sale of an approximately 87,000 square foot operating property in the Mountain View submarket of the San Francisco Bay Area for gross proceeds of $75.9 million, or $871 per square foot

•Executed 731,000 square feet of leases, including development properties, with strong increases in rental rates compared to prior rates

▪GAAP and cash rents increased approximately 36.5% and 18.4%, respectively, from prior levels

•Maintained industry leadership position in sustainability, including repeat awards from GRESB, NAREIT, the EPA and Green Lease Leaders

▪Achieved Carbon Neutral Operations in 2020; KRC was the first North American REIT to make this commitment

▪Largest Fitwel portfolio among all non-government organizations in the world

▪Listed in the Dow Jones Sustainability World Index for the fourth year and included in the Bloomberg Gender Equality Index

Results for the Quarter Ended December 31, 2020

For the fourth quarter ended December 31, 2020, KRC reported net income available to common stockholders of $78.6 million, or $0.67 per share, including a $0.31 per share gain on sale of operating properties, compared to $72.5 million, or $0.67 per share, in the fourth quarter of 2019, including a $0.28 per share gain on sale of operating properties. FFO in the fourth quarter of 2020 was $112.7 million, or $0.95 per share, compared to $109.5 million, or $1.00 per share, in the fourth quarter of 2019. Current period net income available to common stockholders and FFO per share included a $0.03 per share net charge primarily due to co-working, advertising and residential tenant creditworthiness related to the COVID-19 pandemic.

All per share amounts in this report are presented on a diluted basis.

Conference Call and Audio Webcast

KRC management will discuss fourth quarter results and the current business environment during the company’s February 2, 2021 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 https://services.choruscall.com/links/krc210202.html. 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 (866) 312-7299. International callers should dial (412) 317-1070. In order to bypass speaking to the operator on the day of the call, please pre-register anytime at https://dpregister.com/sreg/10148263/d9a945fc41. A replay of the conference call will be available via telephone on February 2, 2021 through February 9, 2021 by dialing (877) 344-7529 and entering passcode 10148263. International callers should dial (412) 317-0088 and enter the same passcode. The replay will also be available on our website at http://investors.kilroyrealty.com/shareholders/conference-calls/default.aspx.

About Kilroy Realty Corporation

Kilroy Realty Corporation (NYSE: KRC, the “company”, “KRC”) is a leading West Coast landlord and developer, with a major presence in San Diego, Greater Los Angeles, the San Francisco Bay Area, and the Pacific Northwest. The company has earned global recognition for sustainability, building operations, innovation and design. As pioneers and innovators in the creation of a more sustainable real estate industry,

the company’s approach to modern business environments helps drive creativity, productivity and employee retention for some of the world’s leading technology, entertainment, life science and business services companies.

KRC is a publicly traded real estate investment trust (“REIT”) and member of the S&P MidCap 400 Index with more than seven decades of experience developing, acquiring and managing office and mixed-use projects.

As of December 31, 2020, KRC’s stabilized portfolio totaled approximately 14.6 million square feet of primarily office and life science space that was 91.2% occupied and 94.3% leased. The company also had 808 residential units in Hollywood and San Diego, which had a quarterly average occupancy of 89.5% and 50.4%, respectively. In addition, KRC had six in-process development projects with an estimated total investment of $1.6 billion, totaling approximately 1.9 million square feet of office and life science space. The office and life science space was 89% leased.

A Leader in Sustainability and Commitment to Corporate Social Responsibility

KRC is listed on the Dow Jones Sustainability World Index and has been recognized by industry organizations around the world. KRC’s stabilized portfolio was 68% LEED certified and 39% Fitwel certified, the highest of any non-government organization, as of December 31, 2020.

The company has been recognized by GRESB, the Global Real Estate Sustainability Benchmark, as the listed sustainability leader in the Americas for six of the last seven years. Other honors have included the National Association of Real Estate Investment Trust’s (NAREIT) Leader in the Light award for six consecutive years and ENERGY STAR Partner of the Year for seven years as well as ENERGY STAR’s highest honor of Sustained Excellence, for the past five years.

A big part of the company’s foundation is its commitment to enhancing employee growth, satisfaction and wellness while maintaining a diverse and thriving culture. For the second year in a row, the company has been named to Bloomberg’s Gender Equality Index—recognizing companies committed to supporting gender equality through policy development, representation, and transparency.

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 or implied in the forward-looking statements, and you should not rely on the 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 the forward-looking statements, including, among others: global market and general economic conditions and their effect on our liquidity and financial conditions and those of our tenants; adverse economic or real estate conditions generally, and specifically, in the States of California and Washington; risks associated with our investment in real estate assets, which are illiquid, and with trends in the real estate industry; defaults on or non-renewal of leases by tenants; any significant downturn in tenants’ businesses; our ability to re-lease property at or above current market rates; costs to comply with government regulations, including environmental remediation; the availability of cash for

distribution and debt service and exposure to risk of default under debt obligations; increases in interest rates and our ability to manage interest rate exposure; the availability of financing on attractive terms or at all, which may adversely impact our future interest expense and our ability to pursue development, redevelopment and acquisition opportunities and refinance existing debt; a decline in real estate asset valuations, which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt financing, and which may result in write-offs or impairment charges; significant competition, which may decrease the occupancy and rental rates of properties; potential losses that may not be covered by insurance; the ability to successfully complete acquisitions and dispositions on announced terms; the ability to successfully operate acquired, developed and redeveloped properties; the ability to successfully complete development and redevelopment projects on schedule and within budgeted amounts; delays or refusals in obtaining all necessary zoning, land use and other required entitlements, governmental permits and authorizations for our development and redevelopment properties; increases in anticipated capital expenditures, tenant improvement and/or leasing costs; defaults on leases for land on which some of our properties are located; adverse changes to, or enactment or implementations of, tax laws or other applicable laws, regulations or legislation, as well as business and consumer reactions to such changes; risks associated with joint venture investments, including our lack of sole decision-making authority, our reliance on co-venturers’ financial condition and disputes between us and our co-venturers; environmental uncertainties and risks related to natural disasters; our ability to maintain our status as a REIT; and uncertainties regarding the impact of the COVID-19 pandemic, and restrictions intended to prevent its spread, on our business and the economy generally. These factors are not exhaustive and additional factors could adversely affect our business and financial performance. 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 quarterly report on Form 10-Q for the period ending September 30, 2020 and in our annual report on Form 10-K for the year ended December 31, 2019 and our other filings with the Securities and Exchange Commission. All forward-looking statements are based on currently available information and speak only as of the dates 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 we are required to do so in connection with our ongoing requirements under federal securities laws.

KILROY REALTY CORPORATION

SUMMARY OF QUARTERLY RESULTS

(unaudited; in thousands, except per share data)

	Three Months Ended December 31,				Year Ended December 31,
	2020		2019		2020			2019
Revenues	$	229,332	$	220,235	$	898,397		$	837,454
Net income available to common stockholders	$	78,642	$	72,500	$	187,105		$	195,443
Weighted average common shares outstanding – basic	115,730		106,013		113,241			103,201
Weighted average common shares outstanding – diluted	116,243		106,748		113,720			103,849
Net income available to common stockholders per share – basic	$	0.67	$	0.68	$	1.63		$	1.87
Net income available to common stockholders per share – diluted	$	0.67	$	0.67	$	1.63		$	1.86
Funds From Operations (1)(2)	$	112,703	$	109,518	$	433,356		$	418,478
Weighted average common shares/units outstanding – basic (3)	118,330		109,138		116,233			106,342
Weighted average common shares/units outstanding – diluted (4)	118,843		109,872		116,711			106,991
Funds From Operations per common share/unit – basic (2)	$	0.95	$	1.00	$	3.73		$	3.94
Funds From Operations per common share/unit – diluted (2)	$	0.95	$	1.00	$	3.71		$	3.91
Common shares outstanding at end of period					116,036			106,016
Common partnership units outstanding at end of period					1,151			2,023
Total common shares and units outstanding at end of period					117,187			108,039
					December 31, 2020			December 31, 2019
Stabilized office portfolio occupancy rates: (5)
Greater Los Angeles					88.1		%	95.2		%
San Diego County					85.2		%	89.7		%
San Francisco Bay Area					94.5		%	95.0		%
Greater Seattle					94.7		%	97.7		%
Weighted average total					91.2		%	94.6		%
Total square feet of stabilized office properties owned at end of period: (5)
Greater Los Angeles					4,395			4,026
San Diego County					2,147			2,048
San Francisco Bay Area					6,276			5,600
Greater Seattle					1,802			1,802
Total					14,620			13,476

________________________

(1)Reconciliation of Net income available to common stockholders to Funds From Operations available to common stockholders and unitholders and management statement on Funds From Operations are included after the Consolidated Statements of Operations.

(2)Reported amounts are attributable to common stockholders, common unitholders, and restricted stock unitholders.

(3)Calculated based on weighted average shares outstanding including participating share-based awards (i.e. nonvested stock and certain time based restricted stock units) and assuming the exchange of all common limited partnership units outstanding.

(4)Calculated based on weighted average shares outstanding including participating and non-participating share-based awards, dilutive impact of stock options and contingently issuable shares, 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 December 31, 2019 include the office properties that were sold subsequent to December 31, 2019.

KILROY REALTY CORPORATION

CONSOLIDATED BALANCE SHEETS

(unaudited; in thousands)

	December 31, 2020		December 31, 2019
ASSETS
REAL ESTATE ASSETS:
Land and improvements	$	1,628,848	$	1,466,166
Buildings and improvements	6,783,092		5,866,477
Undeveloped land and construction in progress	1,778,106		2,296,130
Total real estate assets held for investment	10,190,046		9,628,773
Accumulated depreciation and amortization	(1,798,646)		(1,561,361)
Total real estate assets held for investment, net	8,391,400		8,067,412
Cash and cash equivalents	731,991		60,044
Restricted cash	91,139		16,300
Marketable securities	27,481		27,098
Current receivables, net	12,007		26,489
Deferred rent receivables, net	386,658		337,937
Deferred leasing costs and acquisition-related intangible assets, net	210,949		212,805
Right of use ground lease assets	95,523		96,348
Prepaid expenses and other assets, net	53,560		55,661
TOTAL ASSETS	$	10,000,708	$	8,900,094
LIABILITIES AND EQUITY
LIABILITIES:
Secured debt, net	$	253,582	$	258,593
Unsecured debt, net	3,670,099		3,049,185
Unsecured line of credit	—		245,000
Accounts payable, accrued expenses and other liabilities	445,100		418,848
Ground lease liabilities	97,778		98,400
Accrued dividends and distributions	59,431		53,219
Deferred revenue and acquisition-related intangible liabilities, net	128,523		139,488
Rents received in advance and tenant security deposits	68,874		66,503
Total liabilities	4,723,387		4,329,236
EQUITY:
Stockholders’ Equity
Common stock	1,160		1,060
Additional paid-in capital	5,131,916		4,350,917
Distributions in excess of earnings	(103,133)		(58,467)
Total stockholders’ equity	5,029,943		4,293,510
Noncontrolling Interests
Common units of the Operating Partnership	49,875		81,917
Noncontrolling interests in consolidated property partnerships	197,503		195,431
Total noncontrolling interests	247,378		277,348
Total equity	5,277,321		4,570,858
TOTAL LIABILITIES AND EQUITY	$	10,000,708	$	8,900,094

KILROY REALTY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited; in thousands, except per share data)

	Three Months Ended December 31,				Year Ended December 31,
	2020		2019		2020		2019
REVENUES
Rental income	$	228,195	$	217,140	$	892,306	$	826,472
Other property income	1,137		3,095		6,091		10,982
Total revenues	229,332		220,235		898,397		837,454
EXPENSES
Property expenses	39,070		42,044		155,118		160,037
Real estate taxes	24,294		21,534		92,218		78,097
Ground leases	2,125		1,978		8,891		8,113
General and administrative expenses	23,085		22,365		99,264		88,139
Leasing costs	721		2,016		4,493		7,615
Depreciation and amortization	72,990		69,513		299,308		273,130
Total expenses	162,285		159,450		659,292		615,131
OTHER INCOME (EXPENSES)
Interest income and other net investment gain	1,845		1,436		3,424		4,641
Interest expense	(20,976)		(13,932)		(70,772)		(48,537)
Gains on sales of depreciable operating properties	35,536		29,633		35,536		36,802
Total other income (expenses)	16,405		17,137		(31,812)		(7,094)
NET INCOME	83,452		77,922		207,293		215,229
Net income attributable to noncontrolling common units of the Operating Partnership	(1,012)		(1,343)		(2,869)		(3,766)
Net income attributable to noncontrolling interests in consolidated property partnerships	(3,798)		(4,079)		(17,319)		(16,020)
Total income attributable to noncontrolling interests	(4,810)		(5,422)		(20,188)		(19,786)
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	78,642	$	72,500	$	187,105	$	195,443
Weighted average common shares outstanding – basic	115,730		106,013		113,241		103,201
Weighted average common shares outstanding – diluted	116,243		106,748		113,720		103,849
Net income available to common stockholders per share – basic	$	0.67	$	0.68	$	1.63	$	1.87
Net income available to common stockholders per share – diluted	$	0.67	$	0.67	$	1.63	$	1.86

KILROY REALTY CORPORATION

FUNDS FROM OPERATIONS

(unaudited; in thousands, except per share data)

	Three Months Ended December 31,				Year Ended December 31,
	2020		2019		2020		2019
Net income available to common stockholders	$	78,642	$	72,500	$	187,105	$	195,443
Adjustments:
Net income attributable to noncontrolling common units of the Operating Partnership	1,012		1,343		2,869		3,766
Net income attributable to noncontrolling interests in consolidated property partnerships	3,798		4,079		17,319		16,020
Depreciation and amortization of real estate assets	71,512		68,078		290,353		268,045
Gains on sales of depreciable real estate	(35,536)		(29,633)		(35,536)		(36,802)
Funds From Operations attributable to noncontrolling interests in consolidated property partnerships	(6,725)		(6,849)		(28,754)		(27,994)
Funds From Operations(1)(2)(3)	$	112,703	$	109,518	$	433,356	$	418,478
Weighted average common shares/units outstanding – basic (4)	118,330		109,138		116,233		106,342
Weighted average common shares/units outstanding – diluted (5)	118,843		109,872		116,711		106,991
Funds From Operations per common share/unit – basic (2)	$	0.95	$	1.00	$	3.73	$	3.94
Funds From Operations per common share/unit – diluted (2)	$	0.95	$	1.00	$	3.71	$	3.91

________________________

(1)We calculate Funds From Operations available to common stockholders and common unitholders (“FFO”) in accordance with the 2018 Restated 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)Reported amounts are attributable to common stockholders, common unitholders, and restricted stock unitholders.

(3)FFO available to common stockholders and unitholders includes amortization of deferred revenue related to tenant-funded tenant improvements of $5.1 million and $4.2 million for the three months ended December 31, 2020 and 2019, respectively, and $22.5 million and $19.2 million for the year ended December 31, 2020 and 2019, respectively.

(4)Calculated based on weighted average shares outstanding including participating share-based awards (i.e. nonvested stock and certain time based restricted stock units) and assuming the exchange of all common limited partnership units outstanding.

(5)Calculated based on weighted average shares outstanding including participating and non-participating share-based awards, dilutive impact of stock options and contingently issuable shares, and assuming the exchange of all common limited partnership units outstanding.

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