Exhibit 99.1

First Quarter 2004 Supplemental Financial Report

Some of the enclosed information presented in this supplemental and on the Company’s May 5, 2004 conference call is forward-looking in nature, including information concerning project development timing and investment amounts. Although the information is based on Kilroy Realty Corporation’s current expectations, actual results could vary from expectations stated here. Numerous factors will affect Kilroy Realty Corporation’s actual results, some of which are beyond its control. These include the timing and strength of regional economic growth, the strength of commercial and industrial real estate markets, competitive market conditions, future interest rate levels and capital market conditions. You are cautioned not to place undue reliance on this information, which speaks only as of the date of this report. Kilroy Realty Corporation assumes no obligation to update publicly any forward-looking information, whether as a result of new information, future events or otherwise, except to the extent it is required to do so in connection with its ongoing requirements under Federal securities laws to disclose material information. For a discussion of important risks related to Kilroy Realty Corporation’s business, and an investment in its securities, including risks that could cause actual results and events to differ materially from results and events referred to in the forward-looking information, see the discussion under the caption “Business Risks” in Kilroy Realty Corporation’s annual report on Form 10-K for the year ended December 31, 2003. In light of these risks, uncertainties and assumptions, the forward-looking events contained in this supplemental information and on the Company’s May 5, 2004 conference call might not occur.

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Table of Contents

		Page
Corporate Data and Financial Highlights
Company Background		1
Financial Highlights		2
Common Stock Data		3
Consolidated Balance Sheets		4
Consolidated Statements of Operations		5
Funds From Operations and Funds Available for Distribution		6
Portfolio Data
Stabilized Portfolio Occupancy Overview		7-10
Same Store Analysis		11
Leasing Activity		12
Stabilized Portfolio Capital Expenditures		13
Lease Expiration Summary and Lease Expirations by Region		14-17
Top Ten Office and Top Ten Industrial Tenants		18
Summary of Tenants Representing 5.0% or Greater of Annual Base Rental Revenues		19
Acquisitions & Dispositions		20
Development
In-Process and Committed Development and Redevelopment Projects		21
Future Development Pipeline		22
Debt and Capitalization Data
Capital Structure		23
Debt Analysis		24-25
Non-GAAP Supplemental Measures		26-30

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Company Background

Kilroy Realty Corporation (NYSE: KRC) owns, develops, and operates office and industrial real estate, primarily in Southern California. The Company operates as a self-administered real estate investment trust. As of March 31, 2004, the Company’s stabilized portfolio consisted of 81 office buildings and 50 industrial buildings, which encompassed an aggregate of 7.2 million and 4.9 million square feet, respectively, and was 90.9% occupied.

Board of Directors				Senior Management				Investor Relations
John B. Kilroy, Sr.		Chairman		John B. Kilroy, Jr.		President and CEO		12200 W. Olympic Blvd, Suite 200
Edward F. Brennan				Jeffrey C. Hawken		Executive VP and COO		Los Angeles, CA 90064
John R. D’Eathe				Richard E. Moran Jr.		Executive VP and CFO		(310) 481-8400
William P. Dickey				Conan Cotrell		Sr. VP Marketing and Leasing		Web: www.kilroyrealty.com
Matthew J. Hart				John T. Fucci		Sr. VP Asset Management		E-mail: investorrelations@kilroyrealty.com
John B. Kilroy, Jr.				Tyler H. Rose		Sr. VP and Treasurer
Dale F. Kinsella				Steve Scott		Sr. VP San Diego Development
				Justin W. Smart		Sr. VP Los Angeles Development
				Ann Marie Whitney		Sr. VP and Controller

Equity Research Coverage

A.G. Edwards & Sons, Inc.				Merrill Lynch & Co., Inc.
David AuBuchon		(314) 955-5452		Steve Sakwa		(212) 449-0335
Banc of America Securities LLC				Prudential Securities
Lee Schalop		(212) 847-5677		Jim Sullivan		(212) 778-2515
Deutsche Bank Securities, Inc.				RBC Capital Markets
Lou Taylor		(212) 250-4912		David Copp		(415) 633-8558
Friedman, Billings, Ramsey & Co., Inc.				UBS Securities
David Loeb		(703) 469-1289		Keith Mills		(212) 713-3098
Green Street Advisors				WR Hambrecht
Jim Sullivan		(949) 640-8780		Christopher Hartung		(415) 551-3114
KeyBanc Capital Markets
Frank Greywitt		(216) 263-4795

1

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Financial Highlights

(unaudited, $ in thousands, except per share amounts)

		Three Months Ended
		3/31/2004				12/31/2003				9/30/2003				6/30/2003				3/31/2003
INCOME ITEMS (Including Discontinued Operations):
Revenues		$	55,422			$	54,205			$	70,064			$	50,440			$	55,016
Net Straight Line Rent (1)			2,484				2,790				700				3,420				1,101
Lease Termination Fees (2)			901				654				18,325				11				4,344
Net Operating Income (3), (4)			41,366				40,386				54,743				40,081				41,494
Capitalized Interest and Loan Fees			2,050				2,024				2,486				3,874				3,397
Net Income Available to Common Shareholders			5,984				4,938				20,039				13,360				10,929
EBITDA (4), (5), (7)			34,424				33,062				49,955				36,118				37,682
Funds From Operations (4), (6), (7)			20,956				20,197				37,473				24,893				26,320
Funds Available for Distribution (4), (6), (7), (8)			17,168				15,397				29,274				17,984				22,633
Net Income per common share – diluted		$	0.21			$	0.18			$	0.72			$	0.49			$	0.40
Funds From Operations per common share – diluted		$	0.65			$	0.62			$	1.17			$	0.78			$	0.83
Dividend per share		$	0.495			$	0.495			$	0.495			$	0.495			$	0.495
RATIOS (Including Discontinued Operations):
Operating Margins			74.7	%			74.5	%			78.1	%			77.2	%			74.7	%
Interest Coverage Ratio (9)			3.7	x			3.6	x			5.6	x			4.8	x			4.9	x
Fixed Charge Coverage Ratio (10)			2.8	x			2.6	x			4.1	x			3.3	x			3.4	x
FFO Payout Ratio (11)			76.7	%			79.3	%			42.6	%			63.2	%			59.9	%
FAD Payout Ratio (12)			93.6	%			104.0	%			54.5	%			87.5	%			69.7	%
		3/31/2004				12/31/2003				9/30/2003				6/30/2003				3/31/2003
ASSETS:
Real Estate Held for Investment Before Depreciation		$	1,711,852			$	1,726,286			$	1,707,220			$	1,698,357			$	1,706,969
Total Assets			1,509,365				1,512,635				1,505,973				1,497,814				1,511,197
CAPITALIZATION:
Total Debt		$	767,294			$	761,048			$	750,839			$	765,501			$	776,615
Total Preferred Equity (13)			160,250				160,250				155,000				155,000				155,000
Total Market Equity Value (13)			1,152,889				1,059,904				920,526				874,046				700,498
Total Market Capitalization (13)			2,080,433				1,981,203				1,826,365				1,794,547				1,632,113
Total Debt / Total Market Capitalization			37.0	%			38.5	%			41.2	%			42.6	%			47.6	%
Total Debt and Preferred / Total Market Capitalization			44.7	%			46.6	%			49.7	%			51.3	%			57.1	%

(1) Represents the straight-line rent recognized during the period offset by cash received during the period that was applied to deferred rents receivable balances for terminated leases.

(2) Lease termination fees for the three months ended September 30, 2003 includes a $18.0 lease termination fee related to a settlement with Peregrine Systems, Inc. Approximately $2.6 million of this fee was reserved for financial reporting purposes through the provision for bad debts as it relates to future annual payments due from Peregrine under the settlement agreement.

(3) Net Operating Income is defined as operating revenues (rental income, tenant reimbursements and other property income) less property and related expenses (property expenses, real estate taxes, provision for bad debs and ground leases) and excludes interest income and expense, depreciation and amortization, and corporate general and administrative expenses.

(4) Please refer to pages 26 and 27 for Management Statements on Net Operating Income, EBITDA before minority interests and impairment loss, Funds From Operations and Funds Available for Distribution.

(5) EBITDA is reported before minority interests and impairment loss. Please refer to page 29 for a reconciliation of GAAP net income to EBITDA before minority interests and impairment loss.

(6) Please refer to page 6 for a reconciliation of GAAP Net Income to Funds From Operations and Funds Available for Distribution.

(7) Reported amounts are attributable to common shareholders and unitholders.

(8) Please refer to page 30 for Reconciliation of Funds Available for Distribution to GAAP Net Cash Provided by Operating Activities.

(9) Calculated as EBITDA before minority interests and impairment loss divided by total interest expense, including discontinued operations.

(10) Calculated as EBITDA before minority interests and impairment loss divided by total interest expense, including discontinued operations, current year accrued preferred dividends and distributions on Cumulative Redeemable Preferred units.

(11) Calculated as current year dividends accrued to common shareholders divided by Funds From Operations.

(12) Calculated as current year dividends accrued to common shareholders divided by Funds Available for Distribution.

(13) See “Capital Structure” on page 23.

2

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Common Stock Data (NYSE: KRC)

		Three Months Ended
		3/31/2004			12/31/2003			9/30/2003			6/30/2003			3/31/2003
High Price		$	35.50		$	33.55		$	29.38		$	28.19		$	23.76
Low Price		$	31.68		$	27.83		$	27.14		$	22.70		$	20.74
Closing Price		$	35.50		$	32.75		$	28.55		$	27.50		$	22.10
Dividend per share - annualized		$	1.98		$	1.98		$	1.98		$	1.98		$	1.98
Closing common shares (in 000’s)(1)			28,328			28,209			28,029			27,565			27,475
Closing partnership units (in 000’s)(1)			4,148			4,154			4,214			4,219			4,222
			32,476			32,363			32,243			31,784			31,697

(1) As of the end of the period.

3

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Consolidated Balance Sheets

(unaudited, $ in thousands)

		3/31/2004				12/31/2003				9/30/2003				6/30/2003				3/31/2003
ASSETS:
Land and improvements		$	289,317			$	289,730			$	289,730			$	275,328			$	282,030
Buildings and improvements, net			1,297,624				1,305,145				1,291,698				1,244,711				1,258,593
Undeveloped land and construction in progress, net			124,911				131,411				125,792				178,318				166,346
Total real estate held for investment			1,711,852				1,726,286				1,707,220				1,698,357				1,706,969
Accumulated depreciation and amortization			(329,409	)			(321,372	)			(308,640	)			(297,050	)			(290,365	)
Real estate held for investment, net			1,382,443				1,404,914				1,398,580				1,401,307				1,416,604
Property held for sale, net			18,303				—				—				—				—
Total real estate assets, net			1,400,746				1,404,914				1,398,580				1,401,307				1,416,604
Cash and cash equivalents			6,730				9,892				16,078				6,865				7,787
Restricted cash			9,785				8,558				8,797				7,588				7,479
Current receivables, net			5,988				4,919				2,424				2,604				2,821
Deferred rent receivables, net			39,288				36,804				34,014				33,575				30,567
Deferred leasing costs, net			36,094				36,651				35,703				32,548				32,145
Deferred financing costs, net			3,318				3,657				4,297				6,291				5,394
Prepaid expenses and other assets			7,416				7,240				6,080				7,036				8,400
TOTAL ASSETS		$	1,509,365			$	1,512,635			$	1,505,973			$	1,497,814			$	1,511,197
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Liabilities:
Secured debt		$	617,294			$	526,048			$	528,839			$	510,501			$	514,115
Unsecured line of credit			150,000				235,000				222,000				255,000				262,500
Accounts payable, accrued expenses and other liabilities			40,908				41,147				42,596				41,592				43,384
Accrued distributions			16,477				16,369				15,960				15,733				15,776
Rents received in advance, tenant security deposits and deferred revenue			19,332				20,904				21,570				19,491				19,434
Total liabilities			844,011				839,468				830,965				842,317				855,209
Minority Interests:
7.450% Series A Cumulative Redeemable Preferred unitholders(1)			73,653				73,716				73,716				73,716				73,716
9.375% Series C Cumulative Redeemable Preferred unitholders			—				—				34,464				34,464				34,464
9.250% Series D Cumulative Redeemable Preferred unitholders			44,321				44,321				44,321				44,321				44,321
Common unitholders of the Operating Partnership			65,094				66,502				68,142				66,874				67,000
Total minority interests			183,068				184,539				220,643				219,375				219,501
Stockholders’ Equity:
7.800% Series E Cumulative Redeemable Preferred stock			38,437				38,437				—				—				—
Common stock			283				282				280				274				273
Additional paid-in capital			512,359				508,568				505,743				495,558				494,993
Deferred compensation			(2,839	)			(852	)			(1,313	)			(1,707	)			(2,023	)
Distributions in excess of earnings			(61,487	)			(53,449	)			(44,423	)			(50,587	)			(50,384	)
Accumulated net other comprehensive loss			(4,467	)			(4,358	)			(5,922	)			(7,416	)			(6,372	)
Total stockholders’ equity			482,286				488,628				454,365				436,122				436,487
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY		$	1,509,365			$	1,512,635			$	1,505,973			$	1,497,814			$	1,511,197

(1) On March 5, 2004, the Company amended the terms of its Series A Cumulative Redeemable Preferred Units (“Series A Preferred Units”) to reduce the distribution rate and extend the redemption date to September 30, 2009. Commencing March 5, 2004, distributions on the Series A Preferred Units accrued at an annual rate of 7.45%. Prior to March 5, 2004, distributions on the Series A Preferred Units accrued at an annual rate of 8.075%.

4

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Consolidated Statements of Operations

(unaudited, $ in thousands, except per share amounts)

		Three Months Ended March 31,
		2004				2003				% Change
REVENUES:
Rental income		$	48,075			$	42,917			12.0	%
Tenant reimbursements			5,479				5,579			(1.8	%)
Other property income			1,020				4,524			(77.5	%)
Total revenues			54,574				53,020			2.9	%
EXPENSES:
Property expenses			9,156				8,405			8.9	%
Real estate taxes			4,015				3,784			6.1	%
Provision for bad debts			258				421			(38.7	%)
Ground leases			330				319			3.4	%
General and administrative expenses			7,249				3,858			87.9	%
Interest expense			9,210				7,688			19.8	%
Depreciation and amortization			14,043				13,508			4.0	%
Total expenses			44,261				37,983			16.5	%
OTHER INCOME:
Interest and other income			307				46			567.4	%
Total other income			307				46			567.4	%
INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTERESTS			10,620				15,083			70.4	%
MINORITY INTERESTS:
Distributions on Cumulative Redeemable Preferred units			(2,521	)			(3,375	)		74.7	%
Minority interest in earnings of Operating Partnership attributable to continuing operations			(877	)			(1,565	)		(44.0	%)
Total minority interests			(3,398	)			(4,940	)		(31.2	%)
INCOME FROM CONTINUING OPERATIONS			7,222				10,143			(28.8	%)
DISCONTINUED OPERATIONS:
Revenues from discontinued operations			848				1,996			(57.5	%)
Expenses from discontinued operations			(466	)			(1,089	)		(57.2	%)
Impairment loss on property held for sale			(726	)			—			(100.0	%)
Minority interest attributable to discontinued operations			(109	)			(121	)		(9.9	%)
Total (loss) income from discontinued operations			(453	)			786			(157.6	%)
NET INCOME			6,769				10,929			(38.1	%)
PREFERRED DIVIDENDS			(785	)			—			100.0	%
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS		$	5,984			$	10,929			(45.2	%)
Weighted average shares outstanding - basic			28,117				27,221			3.3	%
Weighted average shares outstanding - diluted			28,303				27,430			3.2	%
NET INCOME PER COMMON SHARE:
Net income per common share - basic		$	0.21			$	0.40			(47.5	%)
Net income per common share - diluted		$	0.21			$	0.40			(47.5	%)

5

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Funds From Operations and Funds Available for Distribution

(unaudited, $ in thousands, except per share amounts)

		Three Months Ended March 31,
		2004				2003				% Change
FUNDS FROM OPERATIONS: (1)
Net income available to common shareholders		$	5,984			$	10,929			(45.2	%)
Adjustments:
Minority interest in earnings of Operating Partnership			986				1,686			(41.5	%)
Depreciation and amortization of real estate assets			13,986				13,705			2.1	%
Funds From Operations (2)		$	20,956			$	26,320			(20.4	%)
Weighted average common shares/units outstanding - basic			32,268				31,453			2.6	%
Weighted average common shares/units outstanding - diluted			32,454				31,662			2.5	%
FFO per common share/unit - basic		$	0.65			$	0.84			(22.6	%)
FFO per common share/unit - diluted		$	0.65			$	0.83			(21.7	%)
FUNDS AVAILABLE FOR DISTRIBUTION: (1)
Funds From Operations		$	20,956			$	26,320			(20.4	%)
Adjustments:
Amortization of deferred financing costs			809				507			59.6	%
Non-cash amortization of restricted stock grants			899				994			(9.6	%)
Impairment loss on property held for sale			726				—			100.0	%
Tenant improvements, leasing commissions and recurring capital expenditures			(3,738	)			(4,087	)		(8.5	%)
Net effect of straight-line rents (3)			(2,484	)			(1,101	)		125.6	%
Funds Available for Distribution (2)		$	17,168			$	22,633			(24.1	%)

(1) See page 27 for Management Statements on Funds From Operations and Funds Available for Distribution.

(2) Reported amounts are attributable to common shareholders and unitholders.

(3) Represents the straight-line rent income recognized during the period offset by cash received during the period that was applied to deferred rents receivable balances for terminated leases.

6

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview

		# of Buildings		Portfolio Breakdown						Total Square Feet		Occupancy at:
				NOI			Sq. Ft.					3/31/2004			12/31/2003			9/30/2003
STABILIZED PORTFOLIO:
OCCUPANCY BY PRODUCT TYPE:
Office:
Los Angeles		26		32.3	%		23.8	%		2,873,060		82.9	%		82.4	%		82.0	%
Orange County		7		3.0	%		3.2	%		387,327		91.0	%		80.0	%		75.5	%
San Diego		40		37.8	%		25.3	%		3,044,216		93.4	%		92.3	%		91.5	%
Other		8		5.2	%		7.3	%		878,960		90.5	%		91.1	%		90.4	%
Subtotal		81		78.3	%		59.6	%		7,183,563		88.7	%		87.6	%		86.8	%
Industrial:
Los Angeles		4		3.4	%		3.2	%		388,805		70.7	%		70.7	%		70.7	%
Orange County		44		17.1	%		34.8	%		4,194,381		95.7	%		96.3	%		96.2	%
Other		2		1.2	%		2.4	%		295,417		100.0	%		100.0	%		100.0	%
Subtotal		50		21.7	%		40.4	%		4,878,603		94.0	%		94.5	%		94.4	%
OCCUPANCY BY REGION:
Los Angeles		30		35.7	%		27.0	%		3,261,865		81.5	%		81.0	%		80.7	%
Orange County		51		20.1	%		38.0	%		4,581,708		95.3	%		94.9	%		94.5	%
San Diego		40		37.8	%		25.3	%		3,044,216		93.4	%		92.3	%		91.5	%
Other		10		6.4	%		9.7	%		1,174,377		92.9	%		93.1	%		92.6	%
TOTAL STABILIZED PORTFOLIO		131		100.0	%		100.0	%		12,062,166		90.9	%		90.3	%		89.8	%

AVERAGE OCCUPANCY - STABILIZED PORTFOLIO
		Office			Industrial			Total
Quarter-to-Date		88.5	%		94.2	%		90.8	%

7

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview

		City/Submarket		# of Buildings		Square Feet		Occupancy
Office:
Los Angeles, California
23925 Park Sorrento		Calabasas		1		11,789		100.0	%
23975 Park Sorrento		Calabasas		1		100,592		100.0	%
24025 Park Sorrento		Calabasas		1		102,264		100.0	%
26541 Agoura Road		Calabasas		1		90,878		38.4	%
181/185 S. Douglas Street		El Segundo		1		61,604		47.0	%
Kilroy Airport Center, El Segundo		El Segundo		3		699,192		98.6	%
999 Sepulveda Blvd.		El Segundo		1		133,339		4.6	%
525 N. Brand Blvd.		Glendale		1		46,043		100.0	%
Kilroy Airport Center, Long Beach		Long Beach		7		949,198		87.2	%
12200 W. Olympic Blvd.		Los Angeles		1		151,019		63.7	%
12100 W. Olympic Blvd.		Los Angeles		1		151,000		48.3	%
12312 W. Olympic Blvd.		Los Angeles		1		78,000		100.0	%
1633 26th Street		Santa Monica		1		44,915		100.0	%
2100 Colorado Avenue		Santa Monica		3		94,844		100.0	%
3130 Wilshire Blvd.		Santa Monica		1		88,338		90.9	%
501 Santa Monica Blvd.		Santa Monica		1		70,045		97.1	%
Total Los Angeles Office				26		2,873,060		82.9	%
Orange County, California
4175 E. La Palma Avenue		Anaheim		1		43,263		51.5	%
8101 Kaiser Blvd.		Anaheim		1		60,177		93.6	%
601 Valencia		Brea		1		60,891		100.0	%
9451 Toledo Way		Irvine		1		27,200		100.0	%
111 Pacifica		Irvine Spectrum		1		67,530		94.0	%
2501 Pullman		Santa Ana		1		51,750		100.0	%
1700 E. Carnegie		Santa Ana		1		76,516		92.0	%
Total Orange County Office				7		387,327		91.0	%

8

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview

		City/Submarket		# of Buildings		Square Feet		Occupancy
Office:
San Diego, California
12340 El Camino Real		Del Mar		1		87,592		38.5	%
12390 El Camino Real		Del Mar		1		72,332		100.0	%
12348 High Bluff Drive		Del Mar		1		38,710		100.0	%
3579 Valley Center Drive		Del Mar		1		52,375		100.0	%
3611 Valley Center Drive		Del Mar		1		129,680		96.0	%
3661 Valley Center Drive		Del Mar		1		129,752		100.0	%
3721 Valley Center Drive		Del Mar		1		114,782		79.9	%
3811 Valley Center Drive		Del Mar		1		112,067		41.1	%
12225 / 12235 El Camino Real		Del Mar		2		115,513		75.5	%
6215 / 6220 Greenwich Drive		Governor Park		2		212,214		100.0	%
15051 Ave of Science		Rancho Bernardo		1		70,617		100.0	%
15073 Ave of Science		Rancho Bernardo		1		46,759		100.0	%
15378 Ave of Science		Rancho Bernardo		1		68,910		100.0	%
15435 / 15445 Innovation Drive		Rancho Bernardo		2		103,000		100.0	%
10421 Pacific Center Court		Sorrento Mesa		1		79,871		69.5	%
4939 / 4955 Directors Place		Sorrento Gateway		2		136,908		100.0	%
5005 / 5010 Wateridge Vista Drive		Sorrento Gateway		2		172,778		100.0	%
10243 Genetic Center		Sorrento Mesa		1		102,875		100.0	%
10390 Pacific Center Court		Sorrento Mesa		1		68,400		100.0	%
6055 Lusk Avenue		Sorrento Mesa		1		93,000		100.0	%
6260 Sequence Drive		Sorrento Mesa		1		130,000		100.0	%
6290 / 6310 Sequence Drive		Sorrento Mesa		2		152,415		100.0	%
6340 / 6350 Sequence Drive		Sorrento Mesa		2		199,000		100.0	%
Pacific Corporate Center		Sorrento Mesa		6		332,542		100.0	%
4690 Executive Drive		University Towne Center		1		50,929		100.0	%
9455 Towne Center Drive		University Towne Center		1		45,195		100.0	%
9785 / 9791 Towne Center Drive		University Towne Center		2		126,000		100.0	%
Total San Diego Office				40		3,044,216		93.4	%
Other
Kilroy Airport Center, Sea-Tac		Seattle, WA		3		532,430		95.0	%
5151/5155 Camino Ruiz		Carmarillo, CA		4		265,372		85.1	%
2829 Townsgate Road		Thousand Oaks, CA		1		81,158		79.2	%
Total Other Office				8		878,960		90.5	%
Total Office				81		7,183,563		88.7	%

9

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview

		City/ Submarket		# of Buildings		Square Feet		Occupancy
Industrial
Los Angeles, California
2031 E. Mariposa Avenue		El Segundo		1		192,053		100.0	%
2260 E. El Segundo Blvd.		El Segundo		1		113,820		0.0	%
2265 E. El Segundo Blvd.		El Segundo		1		76,570		100.0	%
2270 E. El Segundo Blvd.		El Segundo		1		6,362		100.0	%
Total Los Angeles Industrial				4		388,805		70.7	%
Orange County, California
1000 E. Ball Road		Anaheim		1		100,000		100.0	%
1230 S. Lewis Road		Anaheim		1		57,730		100.0	%
1250 N. Tustin Avenue		Anaheim		1		84,185		100.0	%
3125 E. Coronado Street		Anaheim		1		144,000		100.0	%
3130 - 3150 Miraloma		Anaheim		1		144,000		100.0	%
3250 E. Carpenter		Anaheim		1		41,225		100.0	%
3340 E. La Palma Avenue		Anaheim		1		153,320		100.0	%
5115 E. La Palma Avenue		Anaheim		1		286,139		100.0	%
5325 E. Hunter Avenue		Anaheim		1		109,449		0.0	%
Anaheim Tech Center		Anaheim		5		593,992		100.0	%
La Palma Business Center		Anaheim		2		145,480		51.3	%
Brea Industrial Complex		Brea		7		276,278		100.0	%
Brea Industrial-Lambert Road		Brea		2		178,811		100.0	%
1675 MacArthur		Costa Mesa		1		50,842		100.0	%
25202 Towne Center Drive		Foothill Ranch		1		303,533		100.0	%
12400 Industry Street		Garden Grove		1		64,200		100.0	%
12681 / 12691 Pala Drive		Garden Grove		1		84,700		100.0	%
12752 / 12822 Monarch Street		Garden Grove		1		277,037		100.0	%
7421 Orangewood Avenue		Garden Grove		1		82,602		100.0	%
Garden Grove Industrial Complex		Garden Grove		6		275,971		100.0	%
17150 Von Karman		Irvine		1		157,458		100.0	%
2055 S.E. Main Street		Irvine		1		47,583		100.0	%
9401 Toledo Way		Irvine		1		244,800		100.0	%
1951 E. Carnegie Avenue		Santa Ana		1		100,000		100.0	%
2525 Pullman		Santa Ana		1		103,380		100.0	%
14831 Franklin Avenue		Tustin		1		36,256		100.0	%
2911 Dow Avenue		Tustin		1		51,410		100.0	%
Total Orange County Industrial				44		4,194,381		95.7	%
Other
5115 N. 27th Avenue		Phoenix, AZ		1		130,877		100.0	%
3735 Imperial Highway		Stockton, CA		1		164,540		100.0	%
Total Other Industrial				2		295,417		100.0	%
Total Industrial				50		4,878,603		94.0	%

10

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Same Store Analysis ⁽¹⁾

($ in thousands)

Same Store Analysis (GAAP Basis)
		Three Months Ended March 31,
		2004				2003				% Change
Total Same Store Portfolio
Number of properties			126				126
Square Feet			11,506,658				11,506,658
Percent of Stabilized Portfolio			95.4	%			97.5	%
Average Occupancy			92.7	%			92.4	%
Operating Revenues:
Rental income		$	43,820			$	41,838			4.7	%
Tenant reimbursements			5,452				4,999			9.1	%
Other income			1,018				260			291.5	%
Total operating revenues			50,290				47,097			6.8	%
Operating Expenses:
Property expenses			8,354				7,834			6.6	%
Real estate taxes			3,652				3,668			(0.4	%)
Provision for bad debts			139				151			(7.9	%)
Ground leases			330				309			6.8	%
Total operating expenses			12,475				11,962			4.3	%
GAAP Net Operating Income		$	37,815			$	35,135			7.6	%

Same Store Analysis (Cash Basis)
		Three Months Ended March 31,
		2004			2003			% Change
Total operating revenues		$	48,553		$	44,892		8.2	%
Total operating expenses			12,475			11,962		4.3	%
Cash Net Operating Income		$	36,078		$	32,930		9.6	%

(1) Same store defined as all stabilized properties owned at January 1, 2003 and still owned and in the stabilized portfolio at March 31, 2004.

11

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Leasing Activity

Quarter-to-Date
		1st & 2nd Generation								2nd Generation															Weighted Average Lease Term (Mo.)
													Maintenance Capex Per Sq.Ft.(2)			Changes in Rents(3)			Changes in Cash Rents(4)			Retention Rates(5)
		# of Leases(1)				Square Feet(1)				TI/LC Per Sq.Ft.
		New		Renewal		New		Renewal
Office		15		9		118,739		51,997		$	20.03		$	0.25		10.5	%		10.6	%		59.7	%		58
Industrial		1		3		4,000		84,900		$	0.65		$	0.00		(3.8	%)		(10.3	%)		76.8	%		34
Total		16		12		122,739		136,897		$	11.62		$	0.15		6.2	%		4.9	%		69.2	%		50

(1) Represents leasing activity for leases commencing during the period shown, net of month-to-month leases. Excludes leasing on new construction.

(2) Calculated over entire stabilized portfolio.

(3) Calculated as the change between GAAP rents for new/renewed leases and the expiring GAAP rents for the same space.

(4) Calculated as the change between stated rents for new/renewed leases and the expiring stated rents for the same space. The change in cash rents for two of the office leases reported during the quarter was calculated using the leases’ stabilized stated rent. The starting stated rents for these two leases were discounted for the first six months.

(5) Calculated as the percentage of space either renewed or expanded into by existing tenants at lease expiration.

12

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Stabilized Portfolio Capital Expenditures

($ in thousands)

Non-Recurring Capital Expenditures:
		Q1 2004
Capital Improvements		$	—
Tenant Improvements & Leasing Commissions(1)			—
Total		$	—
Recurring Capital Expenditures:
		Q1 2004
Capital Improvements
Office		$	1,862
Industrial			10
			1,872
Tenant Improvements & Leasing Commissions (1)
Office			1,555
Industrial			311
			1,866
Total
Office			3,417
Industrial			321
		$	3,738

(1) Represents cash paid and leasing costs incurred for leases commencing during the period shown.

13

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Lease Expiration Summary Schedule

($ in thousands)

Year of Expiration		# of Expiring Leases		Total Square Feet(1)		% of Total Leased Sq. Ft.			Annual Base Rent			Annual Rent per Sq. Ft.(2)
OFFICE:
Remaining 2004 (3)		31		160,759		2.6	%			4,326			26.91
2005		57		628,735		10.0	%			12,670			20.15
2006		56		698,073		11.1	%			15,690			22.48
2007		52		1,145,962		18.2	%			20,556			17.94
2008		41		1,029,004		16.3	%			21,555			20.95
2009		29		888,083		14.1	%			19,721			22.21
2010		11		309,273		4.9	%			8,559			27.67
2011		10		322,363		5.1	%			4,962			15.39
2012		4		187,585		3.0	%			6,244			33.29
2013 and beyond		17		933,803		14.8	%			28,820			30.86
Subtotal		308		6,303,640		100.0	%		$	143,103		$	22.70
INDUSTRIAL:
Remaining 2004 (3)		8		291,776		6.4	%			1,950			6.68
2005		14		693,060		15.1	%			5,612			8.10
2006		15		582,629		12.7	%			4,193			7.20
2007		12		578,591		12.6	%			4,001			6.92
2008		9		1,021,388		22.3	%			6,977			6.83
2009		10		663,890		14.5	%			4,160			6.27
2010		2		39,130		0.9	%			340			8.69
2011		4		386,606		8.4	%			2,684			6.94
2012		—		—		—				—			—
2013 and beyond		2		327,402		7.1	%			3,101			9.47
Subtotal		76		4,584,472		100.0	%		$	33,018		$	7.20
TOTAL PORTFOLIO:
Remaining 2004 (3)		39		452,535		4.2	%			6,276			13.87
2005		71		1,321,795		12.1	%			18,282			13.83
2006		71		1,280,702		11.8	%			19,883			15.53
2007		64		1,724,553		15.8	%			24,557			14.24
2008		50		2,050,392		18.8	%			28,532			13.92
2009		39		1,551,973		14.3	%			23,881			15.39
2010		13		348,403		3.2	%			8,899			25.54
2011		14		708,969		6.5	%			7,646			10.78
2012		4		187,585		1.7	%			6,244			33.29
2013 and beyond		19		1,261,205		11.6	%			31,921			25.31
Total		384		10,888,112		100.0	%		$	176,121		$	16.18

(1) Excludes space leased under month-to-month leases and vacant space at March 31, 2004.

(2) Reflects annualized rent calculated on a straight-line basis.

(3) Represents leases expiring during the remainder of 2004 for which renewals have not been executed.

14

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Lease Expiration Schedule Detail by Region

($ in thousands)

		Los Angeles County													Orange County
		# of Expiring Leases		Total Square Feet(1)		% of Total Regional Sq. Ft.			Annual Base Rent			Annual Rent per Sq. Ft.(2)			# of Expiring Leases		Total Square Feet(1)		% of Total Regional Sq. Ft.			Annual Base Rent			Annual Rent per Sq. Ft.(2)
Year of Expiration
OFFICE:
Remaining 2004 (3)		23		96,565		4.0	%			3,154			32.66		1		2,046		0.6	%			48			23.46
2005		27		168,434		7.0	%			4,455			26.45		9		75,497		21.7	%			1,574			20.85
2006		37		365,791		15.2	%			9,949			27.20		5		66,764		19.2	%			951			14.24
2007		27		456,915		19.0	%			9,885			21.63		6		20,653		5.9	%			302			14.62
2008		21		402,990		16.8	%			11,913			29.56		8		151,469		43.5	%			2,066			13.64
2009		25		564,285		23.5	%			13,833			24.51		1		18,420		5.3	%			358			19.44
2010		8		73,461		3.1	%			2,122			28.89		—		—		—				—			—
2011		4		48,636		2.0	%			1,423			29.26		1		13,381		3.8	%			353			26.38
2012		1		12,518		0.5	%			329			26.28		—		—		—				—			—
2013 and beyond		7		210,595		8.8	%			6,164			29.27		—		—		—				—			—
Subtotal		180		2,400,190		100.0	%		$	63,227		$	26.34		31		348,230		100.0	%		$	5,652		$	16.23
INDUSTRIAL:
Remaining 2004 (3)		1		76,570		27.8	%			163			2.13		7		215,206		5.4	%			1,787			8.30
2005		1		192,053		69.8	%			2,147			11.18		13		501,007		12.5	%			3,465			6.92
2006		—		—		—				—			—		14		418,089		10.4	%			3,013			7.21
2007		—		—		—				—			—		12		578,591		14.4	%			4,001			6.92
2008		—		—		—				—			—		9		1,021,388		25.4	%			6,977			6.83
2009		1		6,362		2.3	%			101			15.88		9		657,528		16.4	%			4,059			6.17
2010		—		—		—				—			—		2		39,130		1.0	%			340			8.69
2011		—		—		—				—			—		3		255,729		6.4	%			1,892			7.40
2012		—		—		—				—			—		—		—		—				—			—
2013 and beyond		—		—		—				—			—		2		327,402		8.2	%			3,101			9.47
Subtotal		3		274,985		100.0	%		$	2,411		$	8.77		71		4,014,070		100.0	%		$	28,635		$	7.13
TOTAL PORTFOLIO:
Remaining 2004 (3)		24		173,135		6.5	%			3,317			19.16		8		217,252		5.0	%			1,835			8.45
2005		28		360,487		13.5	%			6,602			18.31		22		576,504		13.2	%			5,039			8.74
2006		37		365,791		13.7	%			9,949			27.20		19		484,853		11.1	%			3,964			8.18
2007		27		456,915		17.1	%			9,885			21.63		18		599,244		13.7	%			4,303			7.18
2008		21		402,990		15.1	%			11,913			29.56		17		1,172,857		26.9	%			9,043			7.71
2009		26		570,647		21.4	%			13,934			24.42		10		675,948		15.5	%			4,417			6.53
2010		8		73,461		2.7	%			2,122			28.89		2		39,130		0.9	%			340			8.69
2011		4		48,636		1.8	%			1,423			29.26		4		269,110		6.2	%			2,245			8.34
2012		1		12,518		0.5	%			329			26.28		—		—		—				—			—
2013 and beyond		7		210,595		7.9	%			6,164			29.27		2		327,402		7.5	%			3,101			9.47
Total		183		2,675,175		100.0	%		$	65,638		$	24.54		102		4,362,300		100.0	%		$	34,287		$	7.86

^{( 1)} Excludes space leased under month-to-month leases and vacant space at March 31, 2004.

⁽²⁾ Reflects annualized rent calculated on a straight-line basis.

⁽³⁾ Represents leases expiring during the remainder of 2004 for which renewals have not been executed.

15

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Lease Expiration Schedule Detail by Region

($ in thousands)

		San Diego County													Other
		# of Expiring Leases		Total Square Feet(1)		% of Total Regional Sq. Ft.			Annual Base Rent			Annual Rent per Sq. Ft.(2)			`# of Expiring Leases		Total Square Feet(1)		% of Total Regional Sq. Ft.			Annual Base Rent			Annual Rent per Sq. Ft.(2)
Year of Expiration
OFFICE:
Remaining 2004 (3)		1		50,929		1.8	%			960			18.85		6		11,219		1.5	%			164			14.62
2005		5		277,197		9.8	%			4,617			16.66		16		107,607		14.8	%			2,024			18.81
2006		4		203,707		7.2	%			3,776			18.54		10		61,811		8.5	%			1,014			16.40
2007		10		550,833		19.5	%			8,240			14.96		9		117,561		16.2	%			2,129			18.11
2008		6		238,904		8.4	%			5,028			21.05		6		235,641		32.5	%			2,548			10.81
2009		3		305,378		10.8	%			5,530			18.11		—		—		—				—			—
2010		3		235,812		8.3	%			6,437			27.30		—		—		—				—			—
2011		1		68,910		2.4	%			929			13.48		4		191,436		26.4	%			2,257			11.79
2012		3		175,067		6.2	%			5,915			33.79		—		—		—				—			—
2013 and beyond		10		723,208		25.6	%			22,656			31.33		—		—		—				—			—
Subtotal		46		2,829,945		100.0	%		$	64,088		$	22.65		51		725,275		100.0	%		$	10,136		$	13.98
INDUSTRIAL:
Remaining 2004 (3)		—		—		—				—			—		—		—		—				—			—
2005		—		—		—				—			—		—		—		—				—			—
2006		—		—		—				—			—		1		164,540		55.7	%			1,180			7.17
2007		—		—		—				—			—		—		—		—				—			—
2008		—		—		—				—			—		—		—		—				—			—
2009		—		—		—				—			—		—		—		—				—			—
2010		—		—		—				—			—		—		—		—				—			—
2011		—		—		—				—			—		1		130,877		44.3	%			792			6.05
2012		—		—		—				—			—		—		—		—				—			—
2013 and beyond		—		—		—				—			—		—		—		—				—			—
Subtotal		—		—		—				—			—		2		295,417		100.0	%		$	1,972		$	6.68
TOTAL PORTFOLIO:
Remaining 2004 (3)		1		50,929		1.8	%			960			18.85		6		11,219		1.1	%			164			14.62
2005		5		277,197		9.8	%			4,617			16.66		16		107,607		10.5	%			2,024			18.81
2006		4		203,707		7.2	%			3,776			18.54		11		226,351		22.2	%			2,194			9.69
2007		10		550,833		19.5	%			8,240			14.96		9		117,561		11.5	%			2,129			18.11
2008		6		238,904		8.4	%			5,028			21.05		6		235,641		23.1	%			2,548			10.81
2009		3		305,378		10.8	%			5,530			18.11		—		—		—				—			—
2010		3		235,812		8.3	%			6,437			27.30		—		—		—				—			—
2011		1		68,910		2.4	%			929			13.48		5		322,313		31.6	%			3,049			9.46
2012		3		175,067		6.2	%			5,915			33.79		—		—		—				—			—
2013 and beyond		10		723,208		25.6	%			22,656			31.33		—		—		—				—			—
Total		46		2,829,945		100.0	%		$	64,088		$	22.65		53		1,020,692		100.0	%		$	12,108		$	11.86

(1) Excludes space leased under month-to-month leases and vacant space at March 31, 2004.

(2) Reflects annualized rent calculated on a straight-line basis.

(3) Represents leases expiring during the remainder of 2004 for which renewals have not been executed.

16

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Quarterly Lease Expirations for 2004

($ in thousands)

Year of Expiration		# of Expiring Leases (1)		Total Square Feet(1), (2)		% of Total Leased Sq. Ft.			Annual Base Rent			Annual Rent per Sq. Ft.(3)
OFFICE:
Q2 2004		8		24,117		0.4	%			489			20.28
Q3 2004		12		84,789		1.4	%			1,778			20.97
Q4 2004		11		51,853		0.8	%			2,059			39.71
Subtotal		31		160,759		2.6	%		$	4,326		$	26.91
INDUSTRIAL:
Q2 2004		2		96,185		2.2	%			1,040			10.81
Q3 2004		5		175,458		3.8	%			715			4.08
Q4 2004		1		20,133		0.4	%			195			9.69
Subtotal		8		291,776		6.4	%		$	1,950		$	6.68
TOTAL PORTFOLIO:
Q2 2004		10		120,302		1.1	%			1,529			12.71
Q3 2004		17		260,247		2.4	%			2,493			9.58
Q4 2004		12		71,986		0.7	%			2,254			31.31
Total		39		452,535		4.2	%		$	6,276		$	13.87

(1) Represents leases expiring during the remainder of 2004 for which renewals have not been executed.

(2) Excludes space leased under month-to-month leases and vacant space at March 31,2004.

(3) Reflects annualized rent calculated on a straight-line basis.

17

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Top Ten Office and Top Ten Industrial Tenants

($ in thousands)

Tenant Name		Annual Base Rental Revenues (1)			Rentable Square Feet		Percentage of Total Annual Base Rental Revenues			Percentage of Total Rentable Square Feet
Office Properties:
The Boeing Company(2)		$	14,439		839,109		7.5	%		6.9	%
AMN Healthcare			8,179		175,672		4.3	%		1.4	%
DirecTV, Inc.			6,708		183,066		3.5	%		1.5	%
Diversa Corporation			5,033		136,908		2.6	%		1.1	%
Epson America, Inc.			4,157		162,852		2.2	%		1.3	%
Fair Isaac & Company			3,985		129,752		2.1	%		1.1	%
Fish & Richardson			3,941		96,218		2.1	%		0.8	%
Peregrine Systems, Inc.			3,592		104,450		1.9	%		0.9	%
Newgen Results Corporation			3,465		102,875		1.8	%		0.9	%
Epicor Software Corporation			3,457		172,778		1.8	%		1.4	%
Total Office Properties		$	56,956		2,103,680		29.8	%		17.3	%
Industrial Properties:
Celestica California, Inc.		$	2,652		303,533		1.4	%		2.5	%
Qwest Communications Corporation			2,434		244,800		1.3	%		2.0	%
Mattel, Inc.			2,151		192,053		1.1	%		1.6	%
Packard Hughes Interconnect			1,710		157,458		0.9	%		1.3	%
NBTY Manufacturing, LLC			1,488		286,139		0.8	%		2.4	%
United Plastics Group, Inc.			1,223		188,000		0.6	%		1.5	%
Kraft Foods, Inc.			1,184		164,540		0.6	%		1.4	%
Targus, Inc.			1,058		200,646		0.6	%		1.7	%
Extron Electronics			960		157,730		0.5	%		1.3	%
Ricoh Electronics			817		100,000		0.4	%		0.8	%
Total Industrial Properties		$	15,677		1,994,899		8.2	%		16.5	%

(1) Reflects annualized rent calculated on a straight-line basis.

(2) The Company executed an amendment with The Boeing Company for one of its leases encompassing 286,151 rentable square feet. The Annual Base Rental Revenues reflect the current rent under the existing lease. Under the terms of the amended lease, the estimated annual base rental revenue from The Boeing Company is $12.4 million, or 6.5% of the Company's total annual base rental revenues.

18

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Summary of Tenants Representing 5.0% or Greater of Annual Base Rental Revenues

($ in thousands)

The Boeing Company		Rentable Square Feet		Annual Base Rental Revenues (1)			Lease Expiration Date
Boeing Satellite Systems
2260 E. Imperial Highway, El Segundo(2)		286,151		$	7,499		July 31, 2007
1231 N. Miller Street, Anaheim		113,242			688		March 31, 2009
2240 E. Imperial Highway, El Segundo		100,978			1,784		January 31, 2006
1145 N. Ocean Blvd., Anaheim		65,447			435		October 31, 2005
2250 E. Imperial Highway, El Segundo		7,791			273		November 30, 2004
		573,609			10,679
Boeing Airplane-on-Ground Division
17930 Pacific Highway, Seattle		211,139			2,232		December 31, 2007
Boeing Capital Corporation
3780 Kilroy Airport Way, Long Beach		43,636			1,225		September 30, 2005
Boeing Realty Corporation
3760 Kilroy Airport Way, Long Beach		10,725			303		August 31, 2005
Total		839,109		$	14,439

(1) Reflects annualized rent calculated on a straight-line basis.

(2) The Annual Base Rental Revenues reflects the current rent under the existing lease. The Company executed an amendment with Boeing Satellite Systems which is effective August 1, 2004. Under the terms of the amended lease, the estimated annual base rental revenues will be approximately $5.5 million.

19

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

2004 Acquisitions & Dispositions

($ in thousands)

ACQUISITIONS:

Property		Location		Type		Month of Acquisition		Square Feet		Purchase Price
1st QUARTER:
NONE

DISPOSITIONS:

Property		Location		Type		Month of Disposition		Square Feet		Sales Price
1st QUARTER:
NONE

20

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

In-Process and Committed Development and Redevelopment Projects

($ in thousands)

DEVELOPMENT PROJECTS:

Project

Location

Type

Estimated Construction Period

Est. Stabilization Date(1)

Rentable Square Feet

Total Estimated Investment

Total Spent as of 3/31/2004

% Committed (2)

Start Date

Compl. Date

PROJECTS IN LEASE-UP:

12400 High Bluff

Del Mar, CA

Office

2Q 2002

3Q 2003

3Q 2004

208,961

$

62,495

$

58,859

100%

PROJECTS UNDER CONSTRUCTION:

None

COMMITTED PROJECTS:

None

TOTAL IN-PROCESS AND COMMITTED PROJECTS:

208,961

$

62,495

$

58,859

100%

REDEVELOPMENT PROJECTS:

Project		Location		Pre and Post Redevelopment Type		Estimated Construction Period				Est. Stabilization Date(1)		Rentable Square Feet		Existing Investment (3)			Estimated Redevelopment Costs			Total Estimated Investment			Total Spent as of 3/31/2004			% Committed (2)
						Start Date		Compl. Date
PROJECTS IN LEASE-UP:
5717 Pacific Center Blvd.		Sorrento Mesa, CA		Office to Life Science		1Q 2003		1Q 2004		1Q 2005		67,995		$	8,790		$	10,010		$	19,204		$	10,395		0%
PROJECTS UNDER CONSTRUCTION:
909 Sepulveda Blvd.		El Segundo, CA		Office		1Q 2003		3Q 2004		3Q 2005		248,148			37,799			25,944			65,026			46,671		18%
COMMITTED PROJECTS:
None
TOTAL IN-PROCESS AND COMMITTED PROJECTS:												316,143		$	46,589		$	35,954		$	84,230		$	57,066		14%

(1) Based on management's estimation of the earlier of stabilized occupancy (95%) or one year from the date of substantial completion.

(2) Percentage committed includes executed leases and letters of intent, calculated on a square footage basis.

(3) Represents total capitalized costs at the commencement of redevelopment.

21

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Future Development Pipeline

($ in thousands)

Project		Location		Type		Total Site Acreage		Estimated Rentable Square Feet		Total Estimated Investment			Total Spent as of 3/31/2004
SAN DIEGO COUNTY:
Innovation Corporate Center - Lot 2		Rancho Bernardo, CA		Office		3.0		50,000		$	13,654		$	3,238
Innovation Corporate Center - Lot 4		Rancho Bernardo, CA		Office		3.4		75,000			14,243			3,911
Innovation Corporate Center - Lot 9		Rancho Bernardo, CA		Office		3.2		65,867			13,000			3,847
Innovation Corporate Center - Lot 10		Rancho Bernardo, CA		Office		2.1		37,405			8,273			2,643
Pacific Corporate Center - Lots 3, 4 & 6		Sorrento Mesa, CA		Office		10.9		225,000			50,585			14,891
Pacific Corporate Center - Lot 8		Sorrento Mesa, CA		Office		5.0		95,000			26,874			7,566
Santa Fe Summit - Phase I		56-Corridor, CA		Office		7.6		200,839			48,166			7,534
Santa Fe Summit - Phase II		56-Corridor, CA		Office		7.6		203,006			54,475			7,534
Sorrento Gateway - Lot 1		Sorrento Mesa, CA		Office		3.4		60,000			16,343			4,169
Sorrento Gateway - Lot 2		Sorrento Mesa, CA		Office		4.4		80,000			24,623			7,746
Sorrento Gateway - Lot 3		Sorrento Mesa, CA		Office		3.4		60,000			17,939			5,456
Sorrento Gateway - Lot 7		Sorrento Mesa, CA		Office		4.1		57,000			21,102			7,039
TOTAL FUTURE DEVELOPMENT PIPELINE						58.1		1,209,117		$	309,277		$	75,574

22

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Capital Structure

At March 31, 2004

($ in thousands)

		Shares/Units At March 31, 2004		Aggregate Principal Amount or $ Value Equivalent			% of Total Market Capitalization
DEBT:
Secured Debt				$	617,294		29.8	%
Unsecured Line of Credit					150,000		7.2	%
Total Debt				$	767,294		37.0	%
EQUITY:
7.450% Series A Cumulative Redeemable Preferred Units(1)		1,500,000		$	75,000		3.6	%
9.250% Series D Cumulative Redeemable Preferred Units (1)		900,000			45,000		2.2	%
7.800% Series E Cumulative Redeemable Preferred Stock(2)		1,610,000			40,250		1.9	%
Common Units Outstanding(3)		4,147,863			147,249		7.1	%
Common Shares Outstanding(3)		28,327,872			1,005,640		48.2	%
Total Equity				$	1,313,139		63.0	%
TOTAL MARKET CAPITALIZATION				$	2,080,433		100.0	%

(1) Value based on $50.00 per share liquidation preference.

(2) Value based on $25.00 per share liquidation preference.

(3) Value based on closing share price of $35.50 at March 31, 2004.

23

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Debt Analysis

At March 31, 2004

($ in thousands)

TOTAL DEBT COMPOSITION
		% of Total Debt			Weighted Average
					Interest Rate			Maturity
Secured vs. Unsecured Debt:
Secured Debt		80.5	%		5.8	%		5.2
Unsecured Debt		19.5	%		4.8	%		1.0
Floating vs. Fixed Rate Debt:
Fixed Rate Debt(1),(2)		86.5	%		6.1	%		4.8
Floating Rate Debt		13.5	%		2.7	%		1.2
Total Debt					5.6	%		4.3
Total Debt Including Loan Fees					6.2	%

UNSECURED LINE OF CREDIT
Total Line		Outstanding Balance			Expiration Date
$425,000		$	150,000		March 2005

CAPITALIZED INTEREST & LOAN FEES
Quarter-to-Date		Year-to-Date
$2.1		$	2.1

(1) Includes the impact of the interest-rate swap agreements listed on page 25.

(2) The fixed rate debt includes the Company’s $81.0 million and $34.0 million loans that require monthly interest-only payments based on a variable annual interest rate of LIBOR plus 175 basis points through July 2004 and September 2004, respectively. The weighted average interest for the Company’s fixed rate debt was calculated using the respective fixed annual interest rates of 5.57% and 4.95% for these loans that are effective in August 2004 and October 2004.

24

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Debt Analysis

At March 31, 2004

($ in thousands)

DEBT MATURITY SCHEDULE

Floating/Fixed Rate		Effective Rate			Maturity Date			2004			2005			2006			2007			2008			After 2008			Total
Unsecured Debt:
Floating		2.60	%		3/15/2005						$	150,000														$	150,000
Secured Debt:
Floating		2.84	%		9/29/2004	(1)			43,799																		43,799
Fixed		8.35	%		1/31/2005				1,392			72,982															74,374
Fixed		8.45	%		12/1/2005				474			10,349															10,823
Floating		2.49	%		12/23/2005	(2)						29,000															29,000
Floating		2.84	%		1/1/2006										31,000												31,000
Fixed		6.51	%		8/12/2007				165			232			248			17,049									17,694
Fixed		7.21	%		8/12/2007				115			166			178			4,325									4,784
Fixed		3.80	%		8/1/2008				1,110			1,529			1,588			1,650			73,401						79,278
Fixed		7.20	%		4/1/2009				1,479			2,099			2,256			2,423			2,603			75,477			86,337
Fixed		6.70	%		1/10/2012				735			1,040			1,112			1,189			1,271			72,793			78,140
Fixed		5.57	%		8/1/2012	(3)			352			1,097			1,160			1,226			1,297			75,868			81,000
Fixed		4.95	%		8/1/2012	(4)			83			511			536			563			591			31,716			34,000
Fixed		8.21	%		10/1/2013				425			607			659			715			776			1,036			4,218
Fixed		8.26	%		11/1/2014				812			1,164			1,264			1,373			1,492			11,474			17,579
Fixed		7.15	%		5/1/2017				891			1,266			1,359			1,459			1,567			18,726			25,268
		5.17	%						51,832			122,042			41,360			31,972			82,998			287,090			617,294
Effect of SWAPS		0.44	%
Total		5.61	%					$	51,832		$	272,042		$	41,360		$	31,972		$	82,998		$	287,090		$	767,294

(1) Maturity date does not reflect the one-year extension option.

(2) Maturity date does not reflect the two one-year extension options.

(3) This loan requires monthly interest-only payments based on a variable annual interest rate of LIBOR plus 175 basis points through July 2004. Beginning in August 2004 through maturity, this loan requires monthly principal and interest payments based on a fixed annual interest rate of 5.57%.

(4) This loan requires monthly interest-only payments based on a variable annual interest rate of LIBOR plus 175 basis points through September 2004. Beginning in October 2004 through maturity, this loan requires monthly principal and interest payments based on a fixed annual interest rate of 4.95%.

HEDGING INSTRUMENTS

Notional Amount		Instrument		Rate		Maturity
50,000		Cap		4.25%		01/2005
50,000		Cap		4.25%		01/2005
50,000		Swap		4.46%		01/2005
50,000		Swap		2.57%		11/2005
25,000		Swap		2.98%		12/2006
25,000		Swap		2.98%		12/2006
$250,000

25

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Management Statements on Non-GAAP Supplemental Measures

Included in this section are management's statements regarding certain non-GAAP financial measures provided in this supplemental financial report and, with respect to Funds From Operations ("FFO"), in the Company's earnings release on May 4, 2004, and the reasons why management believes that these measures provide useful information to investors about the Company's financial condition and results of operations.

Net Operating Income:

Management believes that Net Operating Income (“NOI”) is a useful supplemental measure of the Company’s operating performance. The Company defines NOI as operating revenues (rental income, tenant reimbursements and other income) less property and related expenses (property expenses, real estate taxes, provision for bad debts and ground leases). Other real estate investment trusts (“REITs”) may use different methodologies for calculating NOI, and accordingly, the Company’s NOI may not be comparable to other REITs.

Because NOI excludes general and administrative expenses, interest expense, depreciation and amortization, gains and losses from property dispositions, discontinued operations, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. The Company uses NOI to evaluate its operating performance on a segment basis since NOI allows the Company to evaluate the impact that factors such as occupancy levels, lease structure, rental rates, and tenant base, which vary by segment type, have on the Company’s results, margins and returns. In addition, management believes that NOI provides useful information to the investment community about the Company’s financial and operating performance when compared to other REITs since NOI is generally recognized as a standard measure of performance in the real estate industry.

However, NOI should not be viewed as an alternative measure of the Company’s financial performance since it does not reflect general and administrative expenses, interest expense, depreciation and amortization costs, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company’s properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact the Company’s results from operations.

Same Store Net Operating Income:

Management believes that Same Store NOI is a useful supplemental measure of the Company's operating performance. Same Store NOI represents the NOI for the stabilized properties that were operational for two comparable reporting periods. Because Same Store NOI excludes the change in NOI from properties developed, redeveloped, acquired and disposed of, it highlights operating trends such as occupancy levels, rental rates and operating costs on properties that were operational for two comparable periods. Other REITs may use different methodologies for calculating Same Store NOI, and accordingly, the Company's Same Store NOI may not be comparable to other REITs.

However, Same Store NOI should not be viewed as an alternative measure of the Company's financial performance since it does not reflect the operations of the Company's entire portfolio, nor does it reflect the impact of general and administrative expenses, interest expense, depreciation and amortization costs, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact the Company's results from operations.

26

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Management Statements on Non-GAAP Supplemental Measures

EBITDA:

Management believes that earnings before interest, depreciation, amortization, minority interests and impairment loss (“EBITDA”) is a useful supplemental measure of the Company's operating performance. When considered with other GAAP measures and FFO, management believes EBITDA gives the investment community a more complete understanding of the Company’s operating results before the impact of investing and financing transactions and facilitates comparisons with competitors. Management also believes it is appropriate to present EBITDA as it is used in several of the Company’s financial covenants for both its secured and unsecured debt. However, EBITDA should not be viewed as an alternative measure of the Company’s operating performance since it excludes financing costs as well as depreciation and amortization costs which are significant economic costs that could materially impact the Company’s results of operations and liquidity. Other REITs may use different methodologies for calculating EBITDA and, accordingly, the Company's EBITDA may not be comparable to other REITs.

Funds From Operations:

Management believes that FFO is a useful supplemental measure of the Company's operating performance. The Company computes FFO in accordance with the White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding extraordinary items, as defined by GAAP, and gains and losses from sales of depreciable operating property, 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. Other REITs may use different methodologies for calculating FFO and, accordingly, the Company's FFO may not be comparable to other REITs.

Because FFO excludes depreciation and amortization, gains and losses from property dispositions, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, providing perspective on operating performance not immediately apparent from net income. In addition, management believes that FFO provides useful information to the investment community about the Company's operating performance when compared to other REITs since FFO is generally recognized as the industry standard for reporting the operations of REITs.

However, 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 that could materially impact the Company’s results of operations.

Funds Available for Distribution:

Management believes that Funds Available for Distribution ("FAD") is a useful supplemental measure of the Company's liquidity. The Company computes FAD by adding to FFO the non-cash amortization of deferred financing costs and restricted stock compensation, and then subtracting tenant improvements, leasing commissions, and recurring capital expenditures, and eliminating the net effect of straight-line rents. FAD provides an additional perspective on the Company’s ability to fund cash needs and make distributions to shareholders by adjusting for the effect of these non-cash items included in FFO, as well as recurring capital expenditures and leasing costs. Management also believes that FAD provides useful information to the investment community about the Company's financial position as compared to other REITs since FAD is a liquidity measure used by other REITs. However, other REITs may use different methodologies for calculating FAD and, accordingly, the Company's FAD may not be comparable to other REITs.

27

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Reconciliation of Same Store Net Operating Income to Net Income

($ in thousands)

		Three Months Ended March 31,
		2004				2003
Same Store Cash Net Operating Income		$	36,078			$	32,930
Adjustment:
GAAP Straight Line Rental Income			1,737				2,205
Same Store GAAP Net Operating Income (1)			37,815				35,135
Adjustment:
Non-Same Store GAAP Net Operating Income			3,551				6,359
Net Operating Income, as defined (1)			41,366				41,494
Adjustments:
Net Operating Income, as defined, from discontinued operations			(551	)			(1,403	)
Other Expenses:
General and administrative expenses			(7,249	)			(3,858	)
Interest expense			(9,210	)			(7,688	)
Depreciation and amortization			(14,043	)			(13,508	)
Other Income:
Interest and other income			307				46
Income from Continuing Operations			10,620				15,083
Minority interests			(3,398	)			(4,940	)
(Loss) income from discontinued operations			(453	)			786
Preferred dividends			(785	)			—
Net Income Available for Common Shareholders		$	5,984			$	10,929

(1) Please refer to page 26 for Management Statements on Net Operating Income and Same Store Net Operating Income.

28

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Reconciliation of EBITDA to Net Income

($ in thousands)

		Three Months Ended March 31,
		2004			2003
Net Income Available for Common Shareholders		$	5,984		$	10,929
Preferred dividends			785			—
Adjustments for Continuing Operations:
Interest expense			9,210			7,688
Depreciation and amortization			14,043			13,508
Distributions on Cumulative Redeemable Preferred units			2,521			3,375
Minority interest in earnings of Operating Partnership			877			1,565
Adjustments for Discontinued Operations:
Interest expense			—			56
Depreciation and amortization			169			440
Impairment loss on property held for sale			726			—
Minority interest in earnings of Operating Partnership			109			121
EBITDA Before Minority Interests and Impairment Loss		$	34,424		$	37,682

(1) Please refer to page 27 for a Management Statement on EBITDA before minority interests and impairment loss.

29

Kilroy Realty Corporation

First Quarter 2004 Supplemental Financial Report

Reconciliation of Funds Available for Distribution to GAAP Net Cash Provided by Operating Activities

(unaudited, $ in thousands)

		Three Months Ended March 31,
		2004				2003
Funds Available for Distribution (1)		$	17,168			$	22,633
Adjustments:
Tenant improvements, leasing commissions and
recurring capital expenditures			3,738				4,087
Depreciation for furniture, fixtures and equipment			226				243
Accrued preferred dividends			785				—
Provision for uncollectible tenant receivables			(23	)			(389	)
Changes in assets and liabilities (1)			(3,102	)			(8,176	)
GAAP Net Cash Provided by Operating Activities		$	18,792			$	18,398

(1) Please refer to page 27 for a Management Statement on Funds Available for Distribution.

(2) Includes changes in the following assets and liabilities and miscellaneous other adjustments: current receivables; deferred leasing costs; prepaid expenses and other assets; accounts payable, accrued expenses and other liabilities; and rents received in advance, security deposits, deferred revenue and other.

30