Exhibit 12.1
KILROY REALTY CORPORATION
Statement of Computation of Consolidated Ratio of Earnings to Combined Fixed Charges
and Preferred Dividends
(in thousands, except ratios)
2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||
Earnings: | ||||||||||||||||||||
Income from continuing operations before minority interest | $ | 51,662 | $ | 8,787 | $ | 37,039 | $ | 60,643 | $ | 37,127 | ||||||||||
Plus Fixed Charges: | ||||||||||||||||||||
Interest expense (including amortization of loan fees) | 43,541 | 38,956 | 33,678 | 30,056 | 30,088 | |||||||||||||||
Capitalized interest and loan fees | 11,310 | 8,881 | 7,707 | 10,704 | 11,930 | |||||||||||||||
Estimate of interest within rental expense | 1,252 | 1,238 | 1,242 | 1,195 | 1,099 | |||||||||||||||
Distributions on Cumulative Redeemable | 5,588 | 5,588 | 9,579 | 13,163 | 13,500 | |||||||||||||||
Fixed Charges | 61,691 | 54,663 | 52,206 | 55,118 | 56,617 | |||||||||||||||
Plus: Amortization of capitalized interest(1) | 2,691 | 2,403 | 2,166 | 1,903 | 1,579 | |||||||||||||||
Less: Capitalized interest and loan fees | (11,310 | ) | (8,881 | ) | (7,707 | ) | (10,704 | ) | (11,930 | ) | ||||||||||
Less: Distributions on Cumulative Redeemable | (5,588 | ) | (5,588 | ) | (9,579 | ) | (13,163 | ) | (13,500 | ) | ||||||||||
Earnings | $ | 99,146 | $ | 51,384 | $ | 74,125 | $ | 93,797 | $ | 69,893 | ||||||||||
Combined Fixed Charges and Preferred Dividends: | ||||||||||||||||||||
Fixed Charges (from above) | 61,691 | 54,663 | 52,206 | 55,118 | 56,617 | |||||||||||||||
Preferred Dividends | 9,608 | 9,608 | 3,553 | 349 | ||||||||||||||||
Combined Fixed Charges and Preferred Dividends | $ | 71,299 | $ | 64,271 | $ | 55,759 | $ | 55,467 | $ | 56,617 | ||||||||||
Consolidated ratio of earnings to combined fixed | 1.39x | 0.80x | 1.33x | 1.69x | 1.23x | |||||||||||||||
Deficiency | $ | 12,887 | ||||||||||||||||||
(1) | 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 fees capitalized since 1997. |
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 consists of income from continuing operations before the effect of minority interest plus fixed charges and amortization of capitalized interest, reduced by capitalized interest and loan fees and distributions on Cumulative Redeemable Preferred units. Fixed charges consist of interest costs, whether expensed or capitalized, amortization of loan fees, an estimate of the interest within rental expense, and distributions on Cumulative Redeemable Preferred units. For the year ended December 31, 2006, our earnings were adequate to cover combined fixed charges and preferred dividends.