Kilroy Realty (KRC) Q4 2023 earnings summary

Executive summary

• Q4 revenue was $269.0M; net income available to common stockholders was $47.3M, or $0.40 per diluted share, and FFO was $1.08 per diluted share.

• Stabilized portfolio occupancy was 85.0% and leased occupancy was 86.4% at year-end; residential occupancy averaged 92.5% in Q4.

• Same Store NOI declined 10.6% YoY and Same Store Cash NOI declined 1.2%; NOI included $6.4M of rental income reversals from tenants moved to cash-basis revenue recognition.

Financial highlights

• Q4 revenue was $269.0M vs. $284.3M YoY; net income available to common stockholders was $47.3M vs. $52.6M, and diluted EPS was $0.40 vs. $0.45.

• FY 2023 revenue was $1.130B vs. $1.097B; net income available to common stockholders was $212.2M vs. $232.6M, and diluted EPS was $1.80 vs. $1.98.

• Q4 adjusted EBITDA was $171.4M vs. $174.4M; FFO per diluted share was $1.08 vs. $1.17, while FAD was $109.5M vs. $104.7M YoY.

• FY FFO per diluted share was $4.62 vs. $4.68; FAD was $480.3M vs. $444.8M YoY.

Outlook and guidance

• FY 2024 Nareit-defined FFO guidance is $4.10–$4.25 per diluted share, with a midpoint of $4.18.

• 2024 assumptions include Same Store Cash NOI change of (4.0%) to (6.0%) and average occupancy of 82.5%–84.0%.

• Guidance assumes G&A of $72M–$80M, development spending of $200M–$300M, and 120.25M weighted average diluted shares and units.

• Guidance excludes potential acquisitions, dispositions, capital markets activity, impairment charges, and events outside management’s control; actual results may differ materially.