Kilroy Realty Corporation Reports Third Quarter Financial and Operational Results

LOS ANGELES--(BUSINESS WIRE)-- Kilroy Realty Corporation (NYSE: KRC) (“Kilroy” or the “Company”) today reported financial and operational results for the third quarter ended September 30, 2026. “Momentum in our West Coast markets continued to accelerate in the third quarter, with over 800,000 square feet of long-term leases signed, representing one of the Company’s highest quarterly leasing volumes since 2019,” said Angela Aman, Chief Executive Officer. “The breadth of activity was particularly notable, as we recorded sequential leased occupancy gains across all five of our regions and strong re-leasing spreads, driven by activity from a wide variety of users and industries. Looking ahead, our high-quality portfolio, solid balance sheet, and nimble approach position us well to capitalize on the real-time fundamental improvements we are seeing across our regions.” Financial Results Revenues of $271.6 million for the quarter ended September 30, 2026, as compared to $279.7 million for the quarter ended September 30, 2025 Net income available to common stockholders of $15.5 million, or $0.13 per diluted share, for the quarter ended September 30, 2026, as compared to $156.2 million, or $1.31 per diluted share, for the quarter ended September 30, 2025 Funds from operations (“FFO”) of $104.6 million, or $0.88 per diluted share, for the quarter ended September 30, 2026, as compared to $130.6 million, or $1.08 per diluted share, for the quarter ended September 30, 2025 Leasing and Occupancy Stabilized Portfolio was 76.9% occupied and 83.0% leased at September 30, 2026, representing 610 basis points of leases signed but not yet commenced Excluding Kilroy Oyster Point Phase 2 (“KOP 2”), the Stabilized Portfolio was 80.7% occupied and 84.8% leased at September 30, 2026, representing 410 basis points of leases signed but not yet commenced During the quarter, signed approximately 815,000 square feet of leases Leasing activity was comprised of 345,000 square feet of new leasing on previously vacant space, 127,000 square feet of new leasing on currently occupied space, and 343,000 square feet of renewal leasing Renewal leasing included a 12-year, approximately 243,000 square-foot renewal at Crossing 900 with Box, Inc., a leading content management company Leasing activity during the quarter included approximately 12,000 square feet of short-term leasing GAAP and cash rents on leases signed during the quarter increased 30.6% and 9.7%, respectively, from prior levels on Second Generation leasing, excluding short-term leasing Excluding leases signed on space vacant for more than 12 months, GAAP and cash rents on leases signed during the quarter increased 37.9% and 13.9%, respectively Land Site Under Contract In August, entered into an agreement, subject to a non-refundable deposit, to sell the land at Kilroy East Village in San Diego for $19.5 million in gross sales proceeds. The transaction is anticipated to close during the fourth quarter Balance Sheet / Liquidity In July, repaid the outstanding $200.0 million of 4.350% Private Placement Senior Notes Series B due October 2026, at par Dividend The Board of Directors declared and paid a regular quarterly cash dividend on its common stock of $0.54 per share, equivalent to an annual rate of $2.16 per share. The dividend was paid on October 14, 2026 to stockholders of record on September 30, 2026 (the ex-dividend date) Net Income Available to Common Stockholders / FFO Guidance The Company is updating Nareit-defined FFO per share guidance for the full year 2026 to $3.55 to $3.59 per diluted share, from the previous range of $3.49 to $3.63. The table below reflects key assumptions for 2026 guidance. Key Assumptions July 2026 Assumptions Current Assumptions Average full year occupancy 76.50% to 78.00% 77.00% to 77.50% Average full year occupancy excluding KOP 2 80.50% to 81.50% 80.75% to 81.25% Same Property Cash Net Operating Income (“NOI”) growth (1) 0.25% to 1.25% 0.75% to 1.00% NOI from Development Properties (2) $(22.5) to $(24.0) million +/- $(21.0) million Non-Cash GAAP NOI adjustments (1) (3) $13.0 to $15.0 million $13.0 to $14.0 million GAAP lease termination fee income $3.0 to $4.5 million $1.1 to $1.5 million General and administrative and Leasing costs $(87.5) to $(89.5) million $(89.5) to $(90.5) million Interest income $2.0 to $3.0 million +/- $3.0 million Gross interest expense $(208.0) to $(209.5) million $(207.5) to $(208.5) million Capitalized interest (4) $48.5 to $49.5 million $49.0 to $49.5 million Total development spending (5) +/- $150.0 million +/- $150.0 million Operating property dispositions $347.5 to $500.0 million $347.5 to $500.0 million Full Year 2026 Range as of July 2026 Full Year 2026 Range as of October 2026 Low End High End Low End High End $ and shares/units in thousands, except per share/unit amounts Net income available to common stockholders per share - diluted $ 0.08 $ 0.22 $ 0.23 $ 0.27 Weighted average common shares outstanding - diluted (6) 118,100 118,100 117,500 117,500 Net income available to common stockholders $ 9,055 $ 25,743 $ 26,607 $ 31,375 Adjustments: Net income attributable to noncontrolling common units of the Operating Partnership 300 300 300 300 Net income attributable to noncontrolling interests in consolidated property partnerships 17,000 17,000 17,000 17,000 Depreciation and amortization of real estate assets 379,400 379,400 369,000 369,000 Gain on sale of depreciable operating property (23,525 ) (23,525 ) (23,525 ) (23,525 ) Impairment of real estate assets 61,778 61,778 61,778 61,778 Funds From Operations attributable to noncontrolling interests in consolidated property partnerships (28,000 ) (28,000 ) (28,000 ) (28,000 ) Funds From Operations (1) $ 416,008 $ 432,696 $ 423,160 $ 427,928 Weighted average common shares/units outstanding – diluted (7) 119,200 119,200 119,200 119,200 Nareit Funds From Operations per common share/unit – diluted (1) $ 3.49 $ 3.63 $ 3.55 $ 3.59 ________________________ (1) For additional information, please refer to pages 36-38 “Management Statements on Non-GAAP Supplemental Measures” of the Company’s Supplemental Financial Report furnished on Form 8-K. (2) NOI from Development Properties is primarily attributable to the Company’s KOP 2 project. 2026 guidance assumes the continued capitalization of the Company’s Flower Mart project through year end. (3) Non-Cash GAAP NOI adjustments include the following items: Deferred income and lease incentives, net, Amortization of deferred revenue related to tenant-funded tenant improvements, Straight-line rents, net, Amortization of net below market rents, Deferred settlement and restoration fee income, and Other. (4) 2026 capitalized interest guidance assumes the continued capitalization of the Company’s Flower Mart project through year end. (5) Total development spending includes recently stabilized, in-process, and future development projects. (6) Calculated based on estimated weighted average shares outstanding, including non-participating share-based awards and the dilutive impact of contingently issuable shares. (7) Calculated based on the weighted average shares outstanding, including participating and non-participating share-based awards, and the dilutive impact of contingently issuable shares, and assuming the exchange of all common limited partnership units outstanding. Reported amounts are attributable to common stockholders, common unitholders, and restricted stock unitholders. The Company’s guidance estimates for the full year 2026, and the reconciliation of Net income available to common stockholders per share - diluted and FFO per share and unit - diluted included within this press release, reflect management’s views on current and future market conditions, including assumptions with respect to rental rates, occupancy levels, and the earnings impact of the events referenced in this press release. These guidance estimates do not include the impact on the Company’s operating results from any events outside of the Company’s control, as the timing and magnitude of any such events are not known at the time the Company provides guidance. There can be no assurance that the Company’s actual results will not differ materially from these estimates. Conference Call and Audio Webcast The Company’s management will discuss third quarter results and the current business environment during the Company’s October 23, 2026 earnings conference call. The call will begin at 10:00 a.m. Pacific Time and last approximately one hour. To participate and obtain conference call dial-in details, register by using the following link, https://events.q4inc.com/analyst/810842787?pwd=5kxxJfrm. Those interested in listening via the Internet can access the conference call at https://events.q4inc.com/attendee/810842787. It may be necessary to download audio software to hear the conference call. About Kilroy Realty Corporation Kilroy is a leading U.S. landlord and developer, with operations in the San Francisco Bay Area, Los Angeles, Seattle, San Diego, and Austin. The Company has earned global recognition for sustainability, building operations, innovation, and design. As a pioneer and innovator in the creation of a more sustainable real estate industry, the Company’s approach to modern business environments helps drive creativity and productivity for some of the world’s leading technology, media, life science, and professional services companies. The Company 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 managing, developing, and acquiring office, life science, and mixed-use projects. As of September 30, 2026, Kilroy’s stabilized portfolio totaled approximately 17.1 million square feet of primarily office and life science space that was 76.9% occupied and 83.0% leased. The Company also has 608 residential units in San Diego with a quarterly average occupancy of 94.8%. A Leader in Sustainability and Commitment to Corporate Social Responsibility Kilroy has a longstanding commitment to sustainability and continues to be a recognized leader in our sector. For over a decade, the Company and its sustainability initiatives have been recognized with numerous honors, including earning the GRESB five star rating and being named a sector and regional leader in the Americas. Other honors have included the Nareit Leader in the Light Award, being listed on the Dow Jones Sustainability World Index, being named ENERGY STAR Partner of the Year, and receiving the ENERGY STAR highest honor of Sustained Excellence. Kilroy is proud to have achieved carbon neutral operations across our portfolio since 2020. The Company also has a longstanding commitment to maintain high levels of LEED, Fitwel, and ENERGY STAR certifications across the portfolio. Kilroy is committed to cultivating a company culture that makes a positive difference in our employees’ lives by focusing on development, celebrating our unique backgrounds, promoting employee health and wellness, and dedicating ourselves to being a responsible corporate citizen through our community service and philanthropic efforts. 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, including actual and potential tariffs and periods of heightened inflation, 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, Texas, 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, including bankruptcy, lack of liquidity or lack of funding, and the impact labor disruptions or strikes, such as episodic strikes in the media industry, may have on our tenants’ businesses; our ability to re-lease property at or above current market rates; reduced demand for office space, including as a result of remote working and flexible working arrangements that allow work from remote locations other than an employer's office premises; 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; changes in interest rates and 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; risks associated with climate change and our sustainability strategies, and our ability to achieve our sustainability goals; and our ability to maintain our status as a REIT. 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 annual report on Form 10-K for the year ended December 31, 2025, 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 September 30, Nine Months Ended September 30, 2026 2025 2026 2025 Revenues $ 271,604 $ 279,744 $ 814,028 $ 840,480 Net income available to common stockholders $ 15,506 $ 156,220 $ 16,144 $ 263,677 Weighted average common shares outstanding – basic 116,309 118,296 116,741 118,259 Weighted average common shares outstanding – diluted 117,240 118,822 117,544 118,724 Net income available to common stockholders per share – basic $ 0.13 $ 1.32 $ 0.14 $ 2.22 Net income available to common stockholders per share – diluted $ 0.13 $ 1.31 $ 0.14 $ 2.21 Funds From Operations (1)(2) $ 104,633 $ 130,561 $ 322,817 $ 388,762 Weighted average common shares/units outstanding – basic (3) 117,978 119,870 118,390 119,823 Weighted average common shares/units outstanding – diluted (4) 118,910 120,397 119,193 120,288 Funds From Operations per common share/unit – basic (2) $ 0.89 $ 1.09 $ 2.73 $ 3.24 Funds From Operations per common share/unit – diluted (2) $ 0.88 $ 1.08 $ 2.71 $ 3.23 Common shares outstanding at end of period 116,309 118,304 Common partnership units outstanding at end of period 1,134 1,151 Total common shares and units outstanding at end of period 117,443 119,455 September 30, 2026 September 30, 2025 Stabilized office portfolio occupancy rates: (5) San Francisco Bay Area 75.3 % 85.7 % Los Angeles 72.2 % 74.0 % Seattle 79.5 % 80.6 % San Diego 83.4 % 82.8 % Austin 84.0 % 82.2 % Weighted average total 76.9 % 81.0 % Total square feet of stabilized office properties owned at end of period: (5) San Francisco Bay Area 6,456 5,565 Los Angeles 4,246 4,568 Seattle 2,997 2,996 San Diego 2,689 2,923 Austin 759 759 Total 17,147 16,811 ________________________ (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., 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 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. KILROY REALTY CORPORATION CONSOLIDATED BALANCE SHEETS (unaudited; in thousands) September 30, 2026 December 31, 2025 ASSETS Real Estate Assets: Land $ 1,730,514 $ 1,641,913 Buildings and improvements 9,103,217 8,505,486 Undeveloped land and construction in progress 1,627,372 2,387,742 Total real estate assets held for investment 12,461,103 12,535,141 Accumulated depreciation and amortization (3,014,889 ) (2,843,811 ) Total real estate assets held for investment, net 9,446,214 9,691,330 Real estate and other assets held for sale, net — 115,155 Cash and cash equivalents 94,301 179,316 Restricted cash 250 — Marketable securities 34,025 30,807 Current receivables, net 16,818 12,765 Deferred rent receivables, net 420,433 424,794 Deferred leasing costs and acquisition-related intangible assets, net 272,405 278,232 Right of use ground lease assets, net 127,261 128,116 Prepaid expenses and other assets, net 64,065 54,561 TOTAL ASSETS $ 10,475,772 $ 10,915,076 LIABILITIES AND EQUITY Liabilities: Secured debt, net $ 588,777 $ 592,685 Unsecured debt, net 3,748,263 3,996,774 Unsecured line of credit 40,000 — Accounts payable, accrued expenses, and other liabilities 309,288 288,963 Ground lease liabilities 126,979 127,628 Accrued dividends and distributions 63,430 65,009 Deferred revenue and acquisition-related intangible liabilities, net 112,854 125,628 Rents received in advance and tenant security deposits 82,705 75,701 Liabilities related to real estate assets held for sale — 4,945 Total liabilities 5,072,296 5,277,333 Equity: Stockholders’ Equity Common stock 1,163 1,184 Additional paid-in capital 5,171,034 5,230,747 Retained earnings 10,558 188,876 Total stockholders’ equity 5,182,755 5,420,807 Noncontrolling Interests Common units of the Operating Partnership 50,512 51,911 Consolidated property partnerships 170,209 165,025 Total noncontrolling interests 220,721 216,936 Total equity 5,403,476 5,637,743 TOTAL LIABILITIES AND EQUITY $ 10,475,772 $ 10,915,076 KILROY REALTY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited; in thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 Revenues Rental income $ 266,750 $ 274,909 $ 800,401 $ 826,224 Other property income 4,854 4,835 13,627 14,256 Total revenues 271,604 279,744 814,028 840,480 Expenses Property expenses 64,639 61,764 184,056 179,053 Real estate taxes 30,253 25,878 87,337 81,008 Ground leases 3,217 3,018 9,682 9,057 General and administrative expenses 18,408 18,247 58,040 53,623 Leasing costs 2,980 2,610 8,804 7,760 Depreciation and amortization 93,165 87,487 281,069 262,231 Total expenses 212,662 199,004 628,988 592,732 Other Income (Expenses) Interest income 620 3,119 2,821 4,765 Interest expense (39,376 ) (32,152 ) (119,521 ) (94,144 ) Other income 83 91 224 124 Gains on sales of depreciable operating properties — 110,484 23,525 127,038 Impairment of real estate assets — — (61,778 ) — Total other (expenses) income (38,673 ) 81,542 (154,729 ) 37,783 Net income 20,269 162,282 30,311 285,531 Net income attributable to noncontrolling common units of the Operating Partnership (151 ) (1,524 ) (159 ) (2,562 ) Net income attributable to noncontrolling interests in consolidated property partnerships (4,612 ) (4,538 ) (14,008 ) (19,292 ) Total net income attributable to noncontrolling interests (4,763 ) (6,062 ) (14,167 ) (21,854 ) Net income available to common stockholders $ 15,506 $ 156,220 $ 16,144 $ 263,677 Weighted average shares of common stock outstanding – basic 116,309 118,296 116,741 118,259 Weighted average shares of common stock outstanding – diluted 117,240 118,822 117,544 118,724 Net income available to common stockholders per share – basic $ 0.13 $ 1.32 $ 0.14 $ 2.22 Net income available to common stockholders per share – diluted $ 0.13 $ 1.31 $ 0.14 $ 2.21 KILROY REALTY CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited; in thousands, except per share data) Nine Months Ended September 30, 2026 2025 Cash flows from operating activities: Net income $ 30,311 $ 285,531 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of real estate assets and leasing costs 276,753 258,058 Depreciation of non-real estate furniture, fixtures, and equipment 4,316 4,173 Revenues deemed uncollectible 825 990 Non-cash amortization of deferred revenue related to tenant-funded tenant improvements (9,886 ) (11,097 ) Straight-line rents, net 3,633 9,270 Non-cash amortization of net below-market rents (1,974 ) (2,455 ) Non-cash amortization of deferred financing costs and debt discounts 6,166 3,615 Non-cash amortization of share-based compensation awards 11,177 13,945 Amortization of right of use ground lease assets 855 826 Gains on sales of depreciable operating properties (23,525 ) (127,038 ) Impairment of real estate assets 61,778 — Net change in other operating assets (7,765 ) (17,660 ) Net change in other operating liabilities 32,386 39,077 Net cash provided by operating activities 385,050 457,235 Cash flows from investing activities: Expenditures for development and redevelopment properties and undeveloped land (164,822 ) (123,857 ) Expenditures for operating properties and other capital assets (114,951 ) (74,507 ) Net proceeds received from dispositions of real estate assets 330,341 392,453 Investment in unconsolidated investment fund (1,629 ) — Expenditures for acquisitions of operating properties — (205,008 ) Net cash provided by (used in) investing activities 48,939 (10,919 ) Cash flows from financing activities: Distributions to noncontrolling interests in consolidated property partnerships (17,832 ) (26,312 ) Dividends and distributions paid to common stockholders and common unitholders (191,355 ) (193,356 ) Taxes paid upon net share settlement of restricted share units (6,970 ) (6,419 ) Principal payments and repayments of secured debt (4,847 ) (4,662 ) Financing costs (15,079 ) (4,805 ) Repurchase of common stock (72,671 ) — Repayments of unsecured debt (250,000 ) (400,000 ) Borrowings on unsecured revolving credit facility 105,000 65,000 Repayments on unsecured revolving credit facility (65,000 ) (65,000 ) Proceeds from the issuance of unsecured debt — 395,964 Net cash used in financing activities (518,754 ) (239,590 ) Net (decrease) increase in cash and cash equivalents and restricted cash (84,765 ) 206,726 Cash and cash equivalents, beginning of period 179,316 165,690 Cash and cash equivalents and restricted cash, end of period $ 94,551 $ 372,416 KILROY REALTY CORPORATION FUNDS FROM OPERATIONS (unaudited; in thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 Net income available to common stockholders $ 15,506 $ 156,220 $ 16,144 $ 263,677 Adjustments: Net income attributable to noncontrolling common units of the Operating Partnership 151 1,524 159 2,562 Net income attributable to noncontrolling interests in consolidated property partnerships 4,612 4,538 14,008 19,292 Depreciation and amortization of real estate assets 91,737 86,080 276,753 258,058 Gains on sales of depreciable operating properties — (110,484 ) (23,525 ) (127,038 ) Impairment of real estate assets — — 61,778 — Funds From Operations attributable to noncontrolling interests in consolidated property partnerships (7,373 ) (7,317 ) (22,500 ) (27,789 ) Funds From Operations (1)(2)(3) $ 104,633 $ 130,561 $ 322,817 $ 388,762 Weighted average common shares/units outstanding – basic (4) 117,978 119,870 118,390 119,823 Weighted average common shares/units outstanding – diluted (5) 118,910 120,397 119,193 120,288 Funds From Operations per common share/unit – basic (2) $ 0.89 $ 1.09 $ 2.73 $ 3.24 Funds From Operations per common share/unit – diluted (2) $ 0.88 $ 1.08 $ 2.71 $ 3.23 ________________________ (1) 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 depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. The reconciling items include amounts to adjust earnings from consolidated partially-owned entities and equity in earnings of unconsolidated affiliates to FFO. 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. FFO should not be viewed as an alternative measure of the Company’s operating performance since it does not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company’s properties, which are significant economic costs and could materially impact the Company’s results from operations. (2) Reported amounts are attributable to common stockholders, 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 $3.4 million and $3.6 million for the three months ended September 30, 2026 and 2025, respectively, and $9.9 million and $11.1 million for the nine months ended September 30, 2026 and 2025, respectively. (4) Calculated based on weighted average shares outstanding, including participating share-based awards (i.e., 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 contingently issuable shares, and assuming the exchange of all common limited partnership units outstanding. John Perry Senior Vice President, Investor Relations and Capital Markets (310) 481-8586 Source: Kilroy Realty Corporation