Kilroy Realty Corporation (NYSE: KRC) today reported
financial results for its second quarter ended June 30, 2022.
Second Quarter
Highlights
Financial Results
- Revenues grew approximately 20% to $271.2 million for the
quarter ended June 30, 2022, as compared to $226.0 million for the
quarter ended June 30, 2021
- Net income available to common stockholders of $47.1 million,
or $0.40 per diluted share, an increase of approximately 32% as
compared to $35.8 million, or $0.30 per diluted share for the
quarter ended June 30, 2021
- Funds from operations available to common stockholders and
unitholders (“FFO”) of $139.4 million, or $1.17 per diluted share,
an increase of approximately 33% as compared to $104.6 million, or
$0.88 per diluted share for the quarter ended June 30, 2021
Stabilized Portfolio
- Stabilized portfolio was 91.4% occupied and 93.7% leased at
June 30, 2022
- Signed approximately 249,000 square feet of new and renewing
leases, including approximately 26,000 square feet in the
development portfolio
- GAAP and cash rents increased approximately 35.3% and 20.7%,
respectively, from prior levels
- In April, commenced GAAP revenue recognition on the remaining
phases of the approximately 619,000 square foot 333 Dexter office
development project located in Seattle’s Lake Union submarket and
added the building to the stabilized portfolio
- In July, signed approximately 73,000 square feet of new and
renewing leases
Balance Sheet / Liquidity Highlights
- As of the date of this release, the company had approximately
$1.2 billion of total liquidity comprised of approximately $120.0
million of cash and cash equivalents and full availability under
the $1.1 billion unsecured revolving credit facility
- Investment grade credit rated with approximately 95% unsecured
debt and no significant debt maturities until December 2024
Dividend
- Company’s Board of Directors declared and paid a regular
quarterly cash dividend on its common stock of $0.52 per share,
equivalent to an annual rate of $2.08 per share
Net Income Available to Common Stockholders / FFO Guidance
and Outlook
The company is providing an updated guidance range of
NAREIT-defined FFO per diluted share for the full year 2022 of
$4.53 to $4.63 per share, with a midpoint of $4.58 per share.
Full Year 2022 Range
Low End
High End
Net income available to common
stockholders per share - diluted
$
1.68
$
1.78
Weighted average common shares outstanding
- diluted (1)
117,150
117,150
Net income available to common
stockholders
$
197,000
$
209,000
Adjustments:
Net income attributable to noncontrolling
common units of the Operating Partnership
2,850
3,250
Net income attributable to noncontrolling
interests in consolidated property partnerships
24,000
25,000
Depreciation and amortization of real
estate assets
350,000
350,000
Funds From Operations attributable to
noncontrolling interests in consolidated property partnerships
(35,250
)
(36,250
)
Funds From Operations (2)
$
538,600
$
551,000
Weighted average common shares/units
outstanding – diluted (3)
119,000
119,000
Funds From Operations per common
share/unit – diluted (3)
$
4.53
$
4.63
Key 2022 assumptions:
- Dispositions of $200.0 million to $500.0 million
- Same Store Cash NOI growth of 5.0% to 6.0% (4)
- Year-end occupancy of approximately 91.0% to 92.0%
- Total remaining development spending of approximately $300.0
million to $350.0 million
________________________
(1)
Calculated based on estimated weighted
average shares outstanding including non-participating share-based
awards.
(2)
See management statement for Funds From
Operations at end of release.
(3)
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. Reported amounts are attributable to common
stockholders and common unitholders.
(4)
See management statement for Same Store
Cash Net Operating Income on page 33 of our Supplemental Financial
Report furnished on Form 8-K with this press release.
The company’s guidance estimates for the full year 2022, 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. Although these guidance
estimates reflect the impact on the company’s operating results of
an assumed range of future disposition activity, these guidance
estimates do not include any estimates of possible future gains or
losses from possible future dispositions because the magnitude of
gains or losses on sales of depreciable operating properties, if
any, will depend on the sales price and depreciated cost basis of
the disposed assets at the time of disposition, information that is
not known at the time the company provides guidance, and the timing
of any gain recognition will depend on the closing of the
dispositions, information that is also not known at the time the
company provides guidance and may occur after the relevant guidance
period. We caution you not to place undue reliance on our assumed
range of future disposition activity because any potential future
disposition transactions will ultimately depend on the market
conditions and other factors, including but not limited to the
company’s capital needs, the particular assets being sold and the
company’s ability to defer some or all of the taxable gain on the
sales. These guidance estimates also do not include the impact on
operating results from potential future acquisitions, possible
capital markets activity, possible future impairment charges or any
events outside of the company’s control. 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 second quarter results and
the current business environment during the company’s July 28, 2022
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://events.q4inc.com/attendee/405051510. 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 (844) 200-6205 and enter access code 296795 five to 10
minutes prior to the start time to allow time for registration.
International callers should dial (929) 526-1599 and enter the same
passcode. In order to bypass speaking to the operator on the day of
the call, please pre-register anytime at
https://ige.netroadshow.com/registration/q4inc/9127/q2-2022-kilroy-realty-corporation-earnings-conference-call/.
A replay of the conference call will be available via telephone on
July 28, 2022 through August 4, 2022 by dialing (866) 813-9403 and
entering passcode 873673. International callers should dial (929)
458-6194 and enter the same passcode. The replay will also be
available on our website at
http://investors.kilroyrealty.com/shareholders/investor-events/default.aspx.
About Kilroy Realty Corporation
Kilroy Realty Corporation (NYSE: KRC, the “company”, “Kilroy”)
is a leading U.S. landlord and developer, with operations in San
Diego, Greater Los Angeles, the San Francisco Bay Area, the Pacific
Northwest and Austin, Texas. 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 and productivity for
some of the world’s leading technology, entertainment, life science
and business 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 developing, acquiring and managing
office, life science and mixed-use projects.
As of June 30, 2022, Kilroy’s stabilized portfolio totaled
approximately 15.8 million square feet of primarily office and life
science space that was 91.4% occupied and 93.7% leased. The company
also had more than 1,000 residential units in Hollywood and San
Diego, which had a quarterly average occupancy of 93.7%. In
addition, the company had three in-process life science
redevelopment projects with total estimated redevelopment costs of
$115.0 million, totaling approximately 344,000 square feet, and
four in-process development projects with an estimated total
investment of $1.8 billion, totaling approximately 1.9 million
square feet of office and life science space. The in-process
development and redevelopment office and life science space was 38%
leased.
A Leader in Sustainability and Commitment to Corporate Social
Responsibility
The company is listed on the Dow Jones Sustainability World
Index and has been recognized by industry organizations around the
world. The company’s office portfolio was 72% LEED certified and
42% Fitwel certified, and 77% of eligible properties were ENERGY
STAR certified as of June 30, 2022.
The company has been recognized by GRESB as the listed
sustainability leader in the Americas for eight of the last nine
years. Other honors have included the National Association of Real
Estate Investment Trust’s (NAREIT) Leader in the Light award for
eight consecutive years and ENERGY STAR Partner of the Year for
nine years as well as ENERGY STAR’s highest honor of Sustained
Excellence, for the past seven 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 third 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, including
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;
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
June 30, 2022 to be filed on July 28, 2022 and in our annual report
on Form 10-K for the year ended December 31, 2021 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 June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Revenues
$
271,184
$
225,983
$
536,685
$
461,629
Net income available to common
stockholders
$
47,105
$
35,839
$
100,233
$
533,470
Weighted average common shares outstanding
– basic
116,822
116,452
116,737
116,398
Weighted average common shares outstanding
– diluted
117,185
116,917
117,123
116,860
Net income available to common
stockholders per share – basic
$
0.40
$
0.30
$
0.85
$
4.58
Net income available to common
stockholders per share – diluted
$
0.40
$
0.30
$
0.85
$
4.56
Funds From Operations (1)(2)
$
139,353
$
104,595
$
277,119
$
220,839
Weighted average common shares/units
outstanding – basic (3)
118,584
118,340
118,606
118,337
Weighted average common shares/units
outstanding – diluted (4)
118,946
118,806
118,992
118,798
Funds From Operations per common
share/unit – basic (2)
$
1.18
$
0.88
$
2.34
$
1.87
Funds From Operations per common
share/unit – diluted (2)
$
1.17
$
0.88
$
2.33
$
1.86
Common shares outstanding at end of
period
116,871
116,454
Common partnership units outstanding at
end of period
1,151
1,151
Total common shares and units outstanding
at end of period
118,022
117,605
June 30, 2022
June 30, 2021
Stabilized office portfolio occupancy
rates: (5)
Greater Los Angeles
84.9
%
86.7
%
San Diego County
90.9
%
91.0
%
San Francisco Bay Area
93.1
%
94.7
%
Greater Seattle
97.8
%
96.5
%
Weighted average total
91.4
%
91.8
%
Total square feet of stabilized office
properties owned at end of period: (5)
Greater Los Angeles
4,422
4,410
San Diego County
2,174
2,410
San Francisco Bay Area
6,212
5,528
Greater Seattle
3,000
1,804
Total
15,808
14,152
________________________
(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 June 30, 2021 include the office
properties that were sold subsequent to June 30, 2021.
KILROY
REALTY CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited; in thousands)
June 30, 2022
December 31, 2021
ASSETS
REAL ESTATE ASSETS:
Land and improvements
$
1,713,152
$
1,731,982
Buildings and improvements
7,530,547
7,543,585
Undeveloped land and construction in
progress
2,272,508
2,017,126
Total real estate assets held for
investment
11,516,207
11,292,693
Accumulated depreciation and
amortization
(2,104,990
)
(2,003,656
)
Total real estate assets held for
investment, net
9,411,217
9,289,037
Cash and cash equivalents
210,044
414,077
Restricted cash
13,008
13,006
Marketable securities
22,988
27,475
Current receivables, net
13,268
14,386
Deferred rent receivables, net
435,549
405,665
Deferred leasing costs and
acquisition-related intangible assets, net
217,026
234,458
Right of use ground lease assets
126,587
127,302
Prepaid expenses and other assets, net
65,554
57,991
TOTAL ASSETS
$
10,515,241
$
10,583,397
LIABILITIES AND
EQUITY
LIABILITIES:
Secured debt, net
$
245,680
$
248,367
Unsecured debt, net
3,822,482
3,820,383
Accounts payable, accrued expenses and
other liabilities
357,253
391,264
Ground lease liabilities
125,277
125,550
Accrued dividends and distributions
61,880
61,850
Deferred revenue and acquisition-related
intangible liabilities, net
176,845
171,151
Rents received in advance and tenant
security deposits
73,273
74,962
Total liabilities
4,862,690
4,893,527
EQUITY:
Stockholders’ Equity
Common stock
1,169
1,165
Additional paid-in capital
5,151,705
5,155,232
Retained earnings
260,020
283,663
Total stockholders’ equity
5,412,894
5,440,060
Noncontrolling Interests
Common units of the Operating
Partnership
53,289
53,746
Noncontrolling interests in consolidated
property partnerships
186,368
196,064
Total noncontrolling interests
239,657
249,810
Total equity
5,652,551
5,689,870
TOTAL LIABILITIES AND EQUITY
$
10,515,241
$
10,583,397
KILROY
REALTY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; in thousands, except
per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
REVENUES
Rental income
$
268,576
$
224,473
$
531,784
$
459,129
Other property income
2,608
1,510
4,901
2,500
Total revenues
271,184
225,983
536,685
461,629
EXPENSES
Property expenses
49,922
40,482
95,346
79,341
Real estate taxes
25,433
22,109
51,303
47,375
Ground leases
1,876
2,023
3,702
3,851
General and administrative expenses
22,120
24,507
44,901
46,492
Leasing costs
1,447
883
2,460
1,575
Depreciation and amortization
96,415
73,589
185,075
149,521
Total expenses
197,213
163,593
382,787
328,155
OTHER INCOME (EXPENSES)
Interest and other income, net
125
1,337
206
2,710
Interest expense
(20,121
)
(21,390
)
(40,746
)
(43,724
)
Gains on sales of depreciable operating
properties
—
543
—
457,831
Total other (expenses) income
(19,996
)
(19,510
)
(40,540
)
416,817
NET INCOME
53,975
42,880
113,358
550,291
Net income attributable to noncontrolling
common units of the Operating Partnership
(515
)
(354
)
(1,031
)
(5,240
)
Net income attributable to noncontrolling
interests in consolidated property partnerships
(6,355
)
(6,687
)
(12,094
)
(11,581
)
Total income attributable to
noncontrolling interests
(6,870
)
(7,041
)
(13,125
)
(16,821
)
NET INCOME AVAILABLE TO COMMON
STOCKHOLDERS
$
47,105
$
35,839
$
100,233
$
533,470
Weighted average common shares outstanding
– basic
116,822
116,452
116,737
116,398
Weighted average common shares outstanding
– diluted
117,185
116,917
117,123
116,860
Net income available to common
stockholders per share – basic
$
0.40
$
0.30
$
0.85
$
4.58
Net income available to common
stockholders per share – diluted
$
0.40
$
0.30
$
0.85
$
4.56
KILROY
REALTY CORPORATION
FUNDS FROM
OPERATIONS
(unaudited; in thousands, except
per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Net income available to common
stockholders
$
47,105
$
35,839
$
100,233
$
533,470
Adjustments:
Net income attributable to noncontrolling
common units of the Operating Partnership
515
354
1,031
5,240
Net income attributable to noncontrolling
interests in consolidated property partnerships
6,355
6,687
12,094
11,581
Depreciation and amortization of real
estate assets
94,718
72,037
181,719
146,468
Gains on sales of depreciable real
estate
—
(543
)
—
(457,831
)
Funds From Operations attributable to
noncontrolling interests in consolidated property partnerships
(9,340
)
(9,779
)
(17,958
)
(18,089
)
Funds From Operations(1)(2)(3)
$
139,353
$
104,595
$
277,119
$
220,839
Weighted average common shares/units
outstanding – basic (4)
118,584
118,340
118,606
118,337
Weighted average common shares/units
outstanding – diluted (5)
118,946
118,806
118,992
118,798
Funds From Operations per common
share/unit – basic (2)
$
1.18
$
0.88
$
2.34
$
1.87
Funds From Operations per common
share/unit – diluted (2)
$
1.17
$
0.88
$
2.33
$
1.86
________________________
(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 and common unitholders.
(3)
FFO available to common stockholders and
unitholders includes amortization of deferred revenue related to
tenant-funded tenant improvements of $4.9 million and $4.7 million
for the three months ended June 30, 2022 and 2021, respectively,
and $9.2 million and $8.9 million for the six months ended June 30,
2022 and 2021, 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 stock options and
contingently issuable shares, and assuming the exchange of all
common limited partnership units outstanding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220727005852/en/
Tyler H. Rose President (310) 481-8484 or Eliott Trencher
Executive Vice President, Chief Investment Officer, Interim Chief
Financial Officer (310) 481-8587
Kilroy Realty (NYSE:KRC)
過去 株価チャート
から 9 2024 まで 10 2024
Kilroy Realty (NYSE:KRC)
過去 株価チャート
から 10 2023 まで 10 2024