10-Q 1 krc-20210930.htm 10-Q krc-20210930
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                  to                 
Commission File Number: 1-12675 (Kilroy Realty Corporation)
Commission File Number: 000-54005 (Kilroy Realty, L.P.)
KILROY REALTY CORPORATION
KILROY REALTY, L.P.
(Exact name of registrant as specified in its charter)
Kilroy Realty CorporationMaryland95-4598246
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
Kilroy Realty, L.P.Delaware95-4612685
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
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:
RegistrantTitle of each className of each exchange on which registeredTicker Symbol
Kilroy Realty CorporationCommon Stock, $.01 par valueNew York Stock ExchangeKRC
Securities registered pursuant to Section 12(g) of the Act:
RegistrantTitle of each class
Kilroy Realty, L.P.Common Units Representing Limited Partnership Interests
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    
Kilroy Realty Corporation    Yes      No  
Kilroy Realty, L.P.         Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    
Kilroy Realty Corporation     Yes      No  
Kilroy Realty, L.P.         Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Kilroy Realty Corporation
Large accelerated filer ☑    Accelerated filer 
Non-accelerated filer ☐    Smaller reporting company
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.
Kilroy Realty, L.P.
Large accelerated filer ☐    Accelerated filer 
Non-accelerated filer ☑    Smaller reporting company
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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    
Kilroy Realty Corporation Yes       No  
Kilroy Realty, L.P. Yes       No  
As of October 22, 2021, 116,461,683 shares of Kilroy Realty Corporation common stock, par value $.01 per share, were outstanding.
 



EXPLANATORY NOTE
This report combines the quarterly reports on Form 10-Q for the period ended September 30, 2021 of Kilroy Realty Corporation and Kilroy Realty, L.P. Unless stated otherwise or the context otherwise requires, references to “Kilroy Realty Corporation” or the “Company,” “we,” “our,” and “us” mean Kilroy Realty Corporation, a Maryland corporation, and its controlled and consolidated subsidiaries, and references to “Kilroy Realty, L.P.” or the “Operating Partnership” mean Kilroy Realty, L.P., a Delaware limited partnership and its controlled and consolidated subsidiaries.
The Company is a real estate investment trust, or REIT, and the general partner of the Operating Partnership. As of September 30, 2021, the Company owned an approximate 99.0% common general partnership interest in the Operating Partnership. The remaining approximate 1.0% common limited partnership interests are owned by non-affiliated investors and certain directors and officers of the Company. As the sole general partner of the Operating Partnership, the Company exercises exclusive and complete discretion over the Operating Partnership’s day-to-day management and control and can cause it to enter into certain major transactions, including acquisitions, dispositions, and refinancings and cause changes in its line of business, capital structure and distribution policies.
There are a few differences between the Company and the Operating Partnership that are reflected in the disclosures in this Form 10-Q. We believe it is important to understand the differences between the Company and the Operating Partnership in the context of how the Company and the Operating Partnership operate as an interrelated, consolidated company. The Company is a REIT, the only material asset of which is the partnership interests it holds in the Operating Partnership. As a result, the Company generally does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing equity from time to time and guaranteeing certain debt of the Operating Partnership. The Company itself is not directly obligated under any indebtedness, but generally guarantees all of the debt of the Operating Partnership. The Operating Partnership owns substantially all of the assets of the Company either directly or through its subsidiaries, conducts the operations of the Company’s business and is structured as a limited partnership with no publicly traded equity. Except for net proceeds from equity issuances by the Company, which the Company generally contributes to the Operating Partnership in exchange for units of partnership interest, the Operating Partnership generates the capital required by the Company’s business through the Operating Partnership’s operations, by the Operating Partnership’s incurrence of indebtedness or through the issuance of units of partnership interest.
Noncontrolling interests, stockholders’ equity and partners’ capital are the main areas of difference between the consolidated financial statements of the Company and those of the Operating Partnership. The common limited partnership interests in the Operating Partnership are accounted for as partners’ capital in the Operating Partnership’s financial statements and, to the extent not held by the Company, as noncontrolling interests in the Company’s financial statements. The differences between stockholders’ equity, partners’ capital and noncontrolling interest result from the differences in the equity issued by the Company and the Operating Partnership.
We believe combining the quarterly reports on Form 10-Q of the Company and the Operating Partnership into this single report results in the following benefits:
Combined reports better reflect how management and the analyst community view the business as a single operating unit;
Combined reports enhance investors’ understanding of the Company and the Operating Partnership by enabling them to view the business as a whole and in the same manner as management;
Combined reports are more efficient for the Company and the Operating Partnership and result in savings in time, effort and expense; and
Combined reports are more efficient for investors by reducing duplicative disclosure and providing a single document for their review.
To help investors understand the significant differences between the Company and the Operating Partnership, this report presents the following separate sections for each of the Company and the Operating Partnership:
consolidated financial statements;
the following notes to the consolidated financial statements:
Note 6, Stockholders’ Equity of the Company;
Note 8, Partners’ Capital of the Operating Partnership;
Note 13, Net Income Available to Common Stockholders Per Share of the Company;
Note 14, Net Income Available to Common Unitholders Per Unit of the Operating Partnership;
i


Note 15, Supplemental Cash Flow Information of the Company; and
Note 16, Supplemental Cash Flow Information of the Operating Partnership;
“Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
—Liquidity and Capital Resources of the Company;” and
—Liquidity and Capital Resources of the Operating Partnership.”
This report also includes separate sections under “Part I – Financial Information, Item 4. Controls and Procedures” and separate Exhibit 31 and Exhibit 32 certifications for the Company and the Operating Partnership to establish that the Chief Executive Officer and the Chief Financial Officer of each entity have made the requisite certifications and that the Company and Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and 18 U.S.C. §1350.

ii


KILROY REALTY CORPORATION AND KILROY REALTY, L.P.
QUARTERLY REPORT FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021
TABLE OF CONTENTS
 
  Page
PART I – FINANCIAL INFORMATION
Item 1.
  
 
Item 1.
Item 2.  
Item 3.
Item 4.
PART II – OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.



PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) OF KILROY REALTY CORPORATION

KILROY REALTY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited; in thousands, except share data)
 September 30, 2021December 31, 2020
ASSETS
REAL ESTATE ASSETS (Notes 2 and 3):  
Land and improvements$1,702,423 $1,628,848 
Buildings and improvements7,282,341 6,783,092 
Undeveloped land and construction in progress2,237,742 1,778,106 
Total real estate assets held for investment11,222,506 10,190,046 
Accumulated depreciation and amortization(1,962,730)(1,798,646)
Total real estate assets held for investment, net9,259,776 8,391,400 
CASH AND CASH EQUIVALENTS348,417 731,991 
RESTRICTED CASH (Note 2)13,042 91,139 
MARKETABLE SECURITIES (Note 12)27,285 27,481 
CURRENT RECEIVABLES, NET11,646 12,007 
DEFERRED RENT RECEIVABLES, NET394,297 386,658 
DEFERRED LEASING COSTS AND ACQUISITION-RELATED INTANGIBLE ASSETS, NET (Note 2)229,334 210,949 
RIGHT OF USE GROUND LEASE ASSETS (Notes 2 and 11)127,657 95,523 
PREPAID EXPENSES AND OTHER ASSETS, NET (Note 4)60,063 53,560 
TOTAL ASSETS$10,471,517 $10,000,708 
LIABILITIES AND EQUITY
LIABILITIES:
Secured debt, net (Notes 5 and 12)$249,690 $253,582 
Unsecured debt, net (Notes 5, 12 and 17)3,673,183 3,670,099 
Accounts payable, accrued expenses and other liabilities441,357 445,100 
Ground lease liabilities (Notes 2 and 11)125,676 97,778 
Accrued dividends and distributions (Note 17)61,845 59,431 
Deferred revenue and acquisition-related intangible liabilities, net (Note 2)160,687 128,523 
Rents received in advance and tenant security deposits68,441 68,874 
Total liabilities4,780,879 4,723,387 
COMMITMENTS AND CONTINGENCIES (Note 11)
EQUITY:
Stockholders’ Equity (Note 6):
Common stock, $.01 par value, 280,000,000 shares authorized, 116,461,683 and 116,035,827 shares issued and outstanding, respectively
1,165 1,160 
Additional paid-in capital5,146,049 5,131,916 
Retained earnings (distributions in excess of earnings)297,250 (103,133)
Total stockholders’ equity5,444,464 5,029,943 
Noncontrolling Interests (Notes 1 and 7):
Common units of the Operating Partnership53,788 49,875 
Noncontrolling interests in consolidated property partnerships192,386 197,503 
Total noncontrolling interests246,174 247,378 
Total equity5,690,638 5,277,321 
TOTAL LIABILITIES AND EQUITY$10,471,517 $10,000,708 




See accompanying notes to consolidated financial statements.
1


KILROY REALTY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except share and per share data)
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
REVENUES    
Rental income (Note 10)$230,720 $227,122 $689,849 $664,111 
Other property income1,606 1,192 4,106 4,954 
Total revenues232,326 228,314 693,955 669,065 
EXPENSES    
Property expenses40,842 39,236 120,183 116,048 
Real estate taxes24,153 23,868 71,528 67,924 
Ground leases (Notes 2 and 11)1,708 2,119 5,559 6,766 
General and administrative expenses (Note 9)22,990 18,572 69,482 76,179 
Leasing costs798 986 2,373 3,772 
Depreciation and amortization73,213 71,863 222,734 226,318 
Total expenses163,704 156,644 491,859 497,007 
OTHER INCOME (EXPENSES)     
Interest income and other net investment gain (Note 12)976 1,869 3,686 1,579 
Interest expense (Note 5)(16,105)(19,468)(59,829)(49,796)
Gain on sale of depreciable operating property (Note 3)  457,831  
      Total other (expenses) income(15,129)(17,599)401,688 (48,217)
NET INCOME53,493 54,071 603,784 123,841 
Net income attributable to noncontrolling common units of the Operating Partnership(460)(785)(5,700)(1,857)
Net income attributable to noncontrolling interests in consolidated property partnerships(6,005)(4,258)(17,586)(13,521)
Total income attributable to noncontrolling interests(6,465)(5,043)(23,286)(15,378)
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS$47,028 $49,028 $580,498 $108,463 
Net income available to common stockholders per share – basic (Note 13)$0.40 $0.42 $4.98 $0.95 
Net income available to common stockholders per share – diluted (Note 13)$0.40 $0.42 $4.96 $0.95 
Weighted average common shares outstanding – basic (Note 13)116,456,796 115,226,324 116,418,113 112,405,817 
Weighted average common shares outstanding – diluted (Note 13)116,962,680 115,667,657 116,894,434 112,875,875 























See accompanying notes to consolidated financial statements.
2


KILROY REALTY CORPORATION
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited; in thousands, except share and per share/unit data)


Common StockTotal
Stock-
holders’
Equity
Noncontrolling InterestsTotal
Equity
Number of
Shares
Common
Stock
Additional
Paid-in
Capital
Retained Earnings (Distributions
in Excess of
Earnings)
BALANCE AS OF DECEMBER 31, 2020116,035,827 $1,160 $5,131,916 $(103,133)$5,029,943 $247,378 $5,277,321 
Net income497,631 497,631 9,780 507,411 
Issuance of share-based compensation awards1,950 1,950 1,950 
Non-cash amortization of share-based compensation (Note 9)9,604 9,604 9,604 
Settlement of restricted stock units for shares of common stock769,701 8 (8)—  
Repurchase of common stock, stock options and restricted stock units(355,158)(3)(21,134)(21,137)(21,137)
Distributions to noncontrolling interests in consolidated property partnerships— (11,680)(11,680)
Adjustment for noncontrolling interest256 256 (256) 
Dividends declared per common share and common unit ($0.50 per share/unit)
(60,002)(60,002)(575)(60,577)
BALANCE AS OF MARCH 31, 2021116,450,370 1,165 5,122,584 334,496 5,458,245 244,647 5,702,892 
Net income35,839 35,839 7,041 42,880 
Issuance of share-based compensation awards645 645 645 
Non-cash amortization of share-based compensation (Note 9)11,193 11,193 11,193 
Settlement of restricted stock units for shares of common stock3,840 — — — — 
Distributions to noncontrolling interests in consolidated property partnerships— (4,692)(4,692)
Adjustment for noncontrolling interest(102)(102)102  
Dividends declared per common share and common unit ($0.50 per share/unit)
(58,877)(58,877)(576)(59,453)
BALANCE AS OF JUNE 30, 2021116,454,210 1,165 5,134,320 311,458 5,446,943 246,522 5,693,465 
Net income47,028 47,028 6,465 53,493 
Issuance of share-based compensation awards650 650 650 
Non-cash amortization of share-based compensation (Note 9)11,477 11,477 11,477 
Settlement of restricted stock units for shares of common stock11,743 — — — — 
Repurchase of common stock, stock options and restricted stock units(4,270) (282)(282)(282)
Contributions from noncontrolling interests in consolidated property partnerships— 1,591 1,591 
Distributions to noncontrolling interests in consolidated property partnerships— (7,922)(7,922)
Adjustment for noncontrolling interest(116)(116)116  
Dividends declared per common share and common unit ($0.52 per share/unit) (Note 17)
(61,236)(61,236)(598)(61,834)
BALANCE AS OF SEPTEMBER 30, 2021116,461,683 $1,165 $5,146,049 $297,250 $5,444,464 $246,174 $5,690,638 






3


Common StockTotal
Stock-
holders’
Equity
Noncontrolling InterestsTotal
Equity
Number of
Shares
Common
Stock
Additional
Paid-in
Capital
Distributions
in Excess of
Earnings
BALANCE AS OF DECEMBER 31, 2019106,016,287 $1,060 $4,350,917 $(58,467)$4,293,510 $277,348 $4,570,858 
Net income 39,817 39,817 5,601 45,418 
Issuance of common stock8,897,110 89 721,705 721,794 721,794 
Issuance of share-based compensation awards1,720 1,720 1,720 
Non-cash amortization of share-based compensation8,653 8,653 8,653 
Settlement of restricted stock units for shares of common stock 269,972 3 (3)—  
Repurchase of common stock, stock options and restricted stock units(117,445)(1)(9,798)(9,799)(9,799)
Exchange of common units of the Operating Partnership2,000 — 81 81 (81) 
Distributions to noncontrolling interests in consolidated property partnerships— (2,617)(2,617)
Adjustment for noncontrolling interest(6,094)(6,094)6,094  
Dividends declared per common share and common unit ($0.485 per share/unit)
(57,532)(57,532)(980)(58,512)
BALANCE AS OF MARCH 31, 2020115,067,924 1,151 5,067,181 (76,182)4,992,150 285,365 5,277,515 
Net income 19,618 19,618 4,734 24,352 
Issuance of common stock— — (45)(45)(45)
Issuance of share-based compensation awards805 805 805 
Non-cash amortization of share-based compensation13,576 13,576 13,576 
Settlement of restricted stock units for shares of common stock 33,581 — — — — 
Repurchase of common stock, stock options, and restricted stock units(11,668)— (735)(735)(735)
Exchange of common units of the Operating Partnership86,701 1 3,761 3,762 (3,762) 
Distributions to noncontrolling interests in consolidated property partnerships— (4,281)(4,281)
Adjustment for noncontrolling interest(181)(181)181  
Dividends declared per common share and common unit ($0.485 per share/unit)
(56,659)(56,659)(939)(57,598)
BALANCE AS OF JUNE 30, 2020115,176,538 1,152 5,084,362 (113,223)4,972,291 281,298 5,253,589 
Net income 49,028 49,028 5,043 54,071 
Issuance of common stock— — (74)(74)(74)
Issuance of share-based compensation awards1,101 1,101 1,101 
Non-cash amortization of share-based compensation7,794 7,794 7,794 
Settlement of restricted stock units for shares of common stock 126,740 1 (1)—  
Repurchase and cancellation of common stock, stock options, and restricted stock units(59,069)(1)(3,352)(3,353)(3,353)
Exchange of common units of the Operating Partnership3,012 — 129 129 (129) 
Distributions to noncontrolling interests in consolidated property partnerships— (1,458)(1,458)
Adjustment for noncontrolling interest(33)(33)33  
Dividends declared per common share and common unit ($0.50 per share/unit)
(58,741)(58,741)(965)(59,706)
BALANCE AS OF SEPTEMBER 30, 2020115,247,221 $1,152 $5,089,926 $(122,936)$4,968,142 $283,822 $5,251,964 









See accompanying notes to consolidated financial statements.
4


KILROY REALTY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)
 
 Nine Months Ended September 30,
 20212020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$603,784 $123,841 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of real estate assets and leasing costs218,171 218,841 
Depreciation of non-real estate furniture, fixtures and equipment4,563 7,477 
Revenue reversals for doubtful accounts, net (Note 10)2,830 14,205 
Non-cash amortization of share-based compensation awards26,486 24,290 
Non-cash amortization of deferred financing costs and debt discounts2,232 2,252 
Non-cash amortization of net below market rents(3,704)(6,269)
Gain on sale of depreciable operating property (Note 3)(457,831) 
Non-cash amortization of deferred revenue related to tenant-funded tenant improvements(12,982)(13,114)
Straight-line rents(41,238)(51,890)
Amortization of right of use ground lease assets886 615 
Net change in other operating assets(5,767)(4,245)
Net change in other operating liabilities70,130 47,977 
Net cash provided by operating activities407,560 363,980 
CASH FLOWS FROM INVESTING ACTIVITIES:  
Expenditures for acquisitions of development properties and undeveloped land (Note 2)(586,927) 
Expenditures for development properties and undeveloped land(436,839)(386,237)
Expenditures for acquisitions of operating properties (Note 2)(537,429) 
Expenditures for operating properties and other capital assets(90,280)(89,464)
Net proceeds received from dispositions (Note 3)1,013,359  
Net decrease in acquisition-related deposits1,000  
Net cash used in investing activities(637,116)(475,701)
CASH FLOWS FROM FINANCING ACTIVITIES:  
Financing costs (Note 5)(7,801)(6,216)
Repurchase of common stock and restricted stock units(21,419)(13,887)
Distributions to noncontrolling interests in consolidated property partnerships(24,303)(8,363)
Dividends and distributions paid to common stockholders and common unitholders(176,196)(165,986)
Principal payments and repayments of secured debt (3,987)(3,834)
Contributions from noncontrolling interests in consolidated property partnerships1,591  
Repayments of unsecured debt (150,000)
Net proceeds from issuance of common stock  721,675 
Proceeds from the issuance of unsecured debt 772,297 
Borrowings on unsecured revolving credit facility 190,000 
Repayments on unsecured revolving credit facility (435,000)
Net cash (used in) provided by financing activities(232,115)900,686 
Net (decrease) increase in cash and cash equivalents and restricted cash(461,671)788,965 
Cash and cash equivalents and restricted cash, beginning of period823,130 76,344 
Cash and cash equivalents and restricted cash, end of period$361,459 $865,309 











See accompanying notes to consolidated financial statements.
5




ITEM 1: FINANCIAL STATEMENTS (UNAUDITED) OF KILROY REALTY, L.P.

KILROY REALTY, L.P.
CONSOLIDATED BALANCE SHEETS
(Unaudited; in thousands, except unit data)
 
 September 30, 2021December 31, 2020
ASSETS
REAL ESTATE ASSETS (Notes 2 and 3):
Land and improvements$1,702,423 $1,628,848 
Buildings and improvements7,282,341 6,783,092 
Undeveloped land and construction in progress2,237,742 1,778,106 
Total real estate assets held for investment11,222,506 10,190,046 
Accumulated depreciation and amortization(1,962,730)(1,798,646)
Total real estate assets held for investment, net9,259,776 8,391,400 
CASH AND CASH EQUIVALENTS348,417 731,991 
RESTRICTED CASH (Note 2)13,042 91,139 
MARKETABLE SECURITIES (Note 12)27,285 27,481 
CURRENT RECEIVABLES, NET11,646 12,007 
DEFERRED RENT RECEIVABLES, NET394,297 386,658 
DEFERRED LEASING COSTS AND ACQUISITION-RELATED INTANGIBLE ASSETS, NET (Note 2)229,334 210,949 
RIGHT OF USE GROUND LEASE ASSETS (Notes 2 and 11)127,657 95,523 
PREPAID EXPENSES AND OTHER ASSETS, NET (Note 4)60,063 53,560 
TOTAL ASSETS$10,471,517 $10,000,708 
LIABILITIES AND CAPITAL
LIABILITIES:
Secured debt, net (Notes 5 and 12)$249,690 $253,582 
Unsecured debt, net (Notes 5, 12 and 17)3,673,183 3,670,099 
Accounts payable, accrued expenses and other liabilities441,357 445,100 
Ground lease liabilities (Notes 2 and 11)125,676 97,778 
Accrued distributions (Note 17)61,845 59,431 
Deferred revenue and acquisition-related intangible liabilities, net (Note 2)160,687 128,523 
Rents received in advance and tenant security deposits68,441 68,874 
Total liabilities4,780,879 4,723,387 
COMMITMENTS AND CONTINGENCIES (Note 11)
CAPITAL:
Common units, 116,461,683 and 116,035,827 held by the general partner and 1,150,574 and 1,150,574
held by common limited partners issued and outstanding, respectively (Note 7)
5,498,252 5,079,818 
Noncontrolling interests in consolidated property partnerships (Note 1)192,386 197,503 
Total capital5,690,638 5,277,321 
TOTAL LIABILITIES AND CAPITAL$10,471,517 $10,000,708 













See accompanying notes to consolidated financial statements.
6


KILROY REALTY, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except unit and per unit data)

Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
REVENUES
Rental income (Note 10)$230,720 $227,122 $689,849 $664,111 
Other property income1,606 1,192 4,106 4,954 
Total revenues232,326 228,314 693,955 669,065 
EXPENSES
Property expenses40,842 39,236 120,183 116,048 
Real estate taxes24,153 23,868 71,528 67,924 
Ground leases (Notes 2 and 11)1,708 2,119 5,559 6,766 
General and administrative expenses (Note 9)22,990 18,572 69,482 76,179 
Leasing costs798 986 2,373 3,772 
Depreciation and amortization73,213 71,863 222,734 226,318 
Total expenses163,704 156,644 491,859 497,007 
OTHER INCOME (EXPENSES)
Interest income and other net investment gain (Note 12)976 1,869 3,686 1,579 
Interest expense (Note 5)(16,105)(19,468)(59,829)(49,796)
Gain on sale of depreciable operating property (Note 3)  457,831  
Total other (expenses) income (15,129)(17,599)401,688 (48,217)
NET INCOME53,493 54,071 603,784 123,841 
Net income attributable to noncontrolling interests in consolidated property partnerships and subsidiaries(6,005)(4,343)(17,586)(13,886)
NET INCOME AVAILABLE TO COMMON UNITHOLDERS$47,488 $49,728 $586,198 $109,955 
Net income available to common unitholders per unit – basic (Note 14) $0.40 $0.42 $4.98 $0.95 
Net income available to common unitholders per unit – diluted (Note 14)$0.40 $0.42 $4.96 $0.94 
Weighted average common units outstanding – basic (Note 14)117,607,370 117,158,160 117,568,687 114,394,706 
Weighted average common units outstanding – diluted (Note 14)118,113,254 117,599,493 118,045,008 114,864,764 

























See accompanying notes to consolidated financial statements.
7


KILROY REALTY, L.P.
CONSOLIDATED STATEMENTS OF CAPITAL
(Unaudited; in thousands, except unit and per unit data)
Partners’ CapitalNoncontrolling Interests in Consolidated Property Partnerships
Number of
Common
Units
Common
Units
Total
Capital
BALANCE AS OF DECEMBER 31, 2020117,186,401 $5,079,818 $197,503 $5,277,321 
Net income502,517 4,894 507,411 
Issuance of share-based compensation awards1,950 1,950 
Non-cash amortization of share-based compensation (Note 9)9,604