EX-12.1 9 exhibit121.htm EXHIBIT 12.1 Exhibit
Exhibit 12.1

KILROY REALTY CORPORATION
Statement of Computation of Ratio of Earnings to Fixed Charges and
Consolidated Ratio of Earnings to Combined Fixed Charges and Preferred Dividends
(in thousands, except ratios)

 
 
Year Ended December 31,
 
 
2016
 
2015
 
2014
 
2013
 
2012
Earnings:
 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations (1)
 
$
303,798

 
$
238,604

 
$
59,313

 
$
14,935

 
$
(5,475
)
Plus Fixed Charges:
 
 
 
 
 
 
 
 
 
 
Interest expense (including amortization of loan costs)
 
55,803

 
57,682

 
67,571

 
75,870

 
79,114

Capitalized interest and loan costs
 
49,460

 
51,965

 
47,090

 
35,368

 
19,792

Estimate of interest within rental expense
 
3,032

 
3,138

 
4,270

 
4,073

 
3,475

Distributions on Cumulative Redeemable Preferred units
 
—

 
—

 
—

 
—

 
3,541

Fixed Charges
 
108,295

 
112,785

 
118,931

 
115,311

 
105,922

Plus: Amortization of capitalized interest (2)
 
9,865

 
8,412

 
7,001

 
5,823

 
5,318

Less: Capitalized interest and loan costs
 
(49,460
)
 
(51,965
)
 
(47,090
)
 
(35,368
)
 
(19,792
)
Less: Distributions on Cumulative Redeemable Preferred units
 
—

 
—

 
—

 
—

 
(3,541
)
Earnings
 
372,498

 
307,836

 
138,155

 
100,701

 
82,432

 
 
 
 
 
 
 
 
 
 
 
Combined Fixed Charges and Preferred Dividends:
 
 
 
 
 
 
 
 
 
 
Fixed Charges (from above)
 
108,295

 
112,785

 
118,931

 
115,311

 
105,922

Preferred Dividends
 
13,250

 
13,250

 
13,250

 
13,250

 
10,567

Combined Fixed Charges and Preferred Dividends
 
$
121,545

 
$
126,035

 
$
132,181

 
$
128,561

 
$
116,489

Consolidated ratio of earnings to fixed charges
 
3.44x
 
2.73x
 
1.16x
 
0.87x
 
0.78x
Consolidated ratio of earnings to combined fixed charges and preferred dividends
 
3.06x
 
2.44x
 
1.05x
 
0.78x
 
0.71x
(Surplus) Deficiency
 
$
(250,953
)
 
$
(181,801
)
 
$
(5,974
)
 
$
27,860

 
$
34,057

________________________
(1)The Company adopted Accounting Standards Update No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, effective January 1, 2015. As a result, properties classified as held for sale and/or disposed of subsequent to January 1, 2015 that do not represent a strategic shift are no longer presented as discontinued operations. In accordance with the accounting pronouncement, we adopted the guidance on a prospective basis. Therefore our earnings presented prior to adoption do not include the results of operations for properties classified as held for sale and/or disposed of prior to January 1, 2015.
(2)Amount represents an estimate of capitalized interest that has been amortized each year based on our established depreciation policy and an analysis of total interest costs and loan costs capitalized since 1997.

We have computed the ratio of earnings to fixed charges by dividing earnings by fixed charges. Earnings consist of income from continuing operations before the effect of noncontrolling interest plus fixed charges and amortization of capital interest, reduced by capitalized interest and loan costs and distributions on cumulative redeemable preferred units. Fixed charges consist of interest costs, whether expensed or capitalized, amortization of loan costs, an estimate of the interest within rental expense, and distributions on cumulative redeemable preferred units.

We have computed the consolidated ratio of earnings to combined fixed charges and preferred dividends by dividing earnings by combined fixed charges and preferred dividends. Earnings consist of income from continuing operations before the effect of noncontrolling interest plus fixed charges and amortization of capitalized interest, reduced by capitalized interest and loan costs and distributions on Series A cumulative redeemable preferred units. Fixed charges consist of interest costs, whether expensed or capitalized, amortization of loan costs, an estimate of the interest within rental expense, and distributions on Series A cumulative redeemable preferred units.