S	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

£	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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•	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.

•	consolidated financial statements;

•	the following notes to the consolidated financial statements:

◦	Note 6, Secured and Unsecured Debt of the Company;

◦	Note 7, Secured and Unsecured Debt of the Operating Partnership;

◦	Note 9, Noncontrolling Interests on the Company's Consolidated Financial Statements;

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◦	Note 10, Stockholders' Equity of the Company;

◦	Note 11, Preferred and Common Units in the Operating Partnership's Consolidated Financial Statements;

◦	Note 20, Net Income Available to Common Stockholders Per Share of the Company;

◦	Note 21, Net Income Available to Common Unitholders Per Unit of the Operating Partnership;

◦	Note 23, Quarterly Financial Information of the Company (Unaudited);

◦	Note 24, Quarterly Financial Information of the Operating Partnership (Unaudited);

◦	Note 26, Pro Forma Results of the Company (Unaudited); and

◦	Note 27, Pro Forma Results of the Operating Partnership (Unaudited);

•	"Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources of the Company"; and

•	"Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources of the Operating Partnership".

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ITEM 1.	BUSINESS

(1)	Includes 20 office buildings acquired in 2011 and 2010 (see Note 3 to our consolidated financial statements included in this report for additional information).

(2)	Excludes five office buildings and one industrial building sold in 2011 and 2010 and two office buildings classified as held for sale at December 31, 2011 (see Note 19 to our consolidated financial statements included in this report for additional information).

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•	Corporate Governance Guidelines

•	Code of Business Conduct and Ethics

•	Audit Committee Charter

•	Executive Compensation Committee Charter

•	Nominating / Corporate Governance Committee Charter

•	the quality and location of our properties;

•	our ability to efficiently manage our assets as a low cost provider of commercial real estate through our seasoned management team possessing core capabilities in all aspects of real estate ownership, including property management, leasing, marketing, financing, accounting, legal, construction management, redevelopment, and new development;

•	our ability to capitalize on inflection points in a real estate cycle to add quality assets to our portfolio at substantial discounts to long-term value, through either acquisition or development;

•	our strong financial position that has and will continue to allow us to pursue attractive acquisition and redevelopment opportunities;

•	our access to development, redevelopment, acquisition, and leasing opportunities as a result of our extensive experience and significant working relationships with major West Coast property owners, corporate tenants, municipalities, and landowners given our over 60-year presence in the West Coast markets;

•	our capital recycling program (see “Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations —Liquidity Sources” for additional information pertaining to the Company's capital recycling program and related 2011 property dispositions); and

•	our existing pipeline of undeveloped land holdings.

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•	maximizing cash flow from our properties through active leasing, early renewals, and effective property management;

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•	structuring leases to maximize returns and internal growth;

•	managing portfolio credit risk through effective underwriting, including the use of credit enhancements and interests in collateral to mitigate portfolio credit risk;

•	managing operating expenses through the efficient use of internal management, leasing, marketing, financing, accounting, legal, and construction management functions;

•	maintaining and developing long-term relationships with a diverse tenant base;

•	managing our properties to offer the maximum degree of utility and operational efficiency to tenants;

•	building substantially all of our recent development projects to Leadership in Energy and Environmental Design (LEED) specifications, achieving gold or silver certification levels for several of our buildings, and actively pursuing LEED certification for much of our existing portfolio;

•	continuing to effectively manage capital improvements to enhance our properties’ competitive advantages in their respective markets and improve the efficiency of building systems;

•	enhancing our management team with individuals who have extensive local experience and are highly knowledgeable in their respective markets; and

•	attracting and retaining motivated employees by providing financial and other incentives to meet our operating and financial goals.

•	provide attractive yields and significant potential for growth in cash flow from property operations;

•	present growth opportunities in our existing or other strategic markets; and

•	demonstrate the potential for improved performance through intensive management, repositioning and leasing that should result in increased occupancy and rental revenues.

•	maintain a disciplined approach by emphasizing pre-leasing, commencing development in stages, or phasing, and cost control;

•	continue to execute our build-to-suit philosophy in which we develop properties to be leased by specific committed tenants providing for lower-risk development;

•	be the premier provider of two- to six-story campus style office buildings on the West Coast;

•	reinvest capital from dispositions of nonstrategic assets into new state-of-the-market development and acquisition assets with higher cash flow and rates of return; and

•	evaluate redevelopment opportunities in supply-constrained markets since such efforts generally achieve similar returns to new development with reduced entitlement risk and shorter construction periods.

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•	maintaining financial flexibility, including a low secured to unsecured debt ratio, to maximize our ability to access a variety of both public and private capital sources;

•	maintaining a staggered debt maturity schedule in which the maturity dates of our debt are spread over several years to l

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•	completing financing in advance of the need for capital; and

•	managing interest rate exposure by generally maintaining a greater amount of fixed-rate debt as compared to variable-rate debt.

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ITEM 1A	RISK FACTORS

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•	local oversupply or reduction in demand for office, industrial, or other commercial space, which may result in decreasing rental rates and greater concessions to tenants;

•	inability to collect rent from tenants

•	vacancies or inability to rent space on favorable terms or at all;

•	inability to finance property development and acquisitions on favorable terms or at all;

•	increased operating costs, including insurance premiums, utilities, and real estate taxes;

•	costs of complying with changes in governmental regulations;

•	the relative illiquidity of real estate investments;

•	changing submarket demographics; and

•	property damage resulting from seismic activity or other natural disasters.

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•	we may be unable to refinance our indebtedness at maturity, or the refinancing terms may be less favorable than the terms of our original indebtedness;

•	cash flows may be insufficient to meet required principal and interest payments;

•	we may be forced to dispose of one or more of our properties, possibly on disadvantageous terms;

•	we may default on our obligations, and the lenders or mortgagees may foreclose on our properties that secure the loans and receive an assignment of rents and leases; and

•	our default under one mortgage loan could result in a default on other indebtedness with cross default provisions.

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•	95% of the Operating Partnership's consolidated funds from operations (as defined in the Credit Facility) for such year; and

•

an amount which results in distributions to us (excluding any preferred partnership distributions to the extent the same have been deducted from consolidated funds from operations for such year) in an amount sufficient to permit us to pay dividends to our stockholders which we reasonably believe are necessary to (a) maintain our qualification as a REIT for federal and state income tax purposes and (b) avoid the payment of federal or state income or excise tax.

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•	we may potentially be unable to acquire a desired property because of competition from other real estate investors with significant capital, including both publicly traded REITs and institutional investment funds;

•	the possibility that, even if we enter into agreements for the acquisition of office and industrial properties, we may be unable to complete such acquisitions since they remain subject to customary conditions to closing including the completion of due diligence investigations to management's satisfaction;

•	we may be unable to finance acquisitions on favorable terms or at all;

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•	we may spend more than budgeted amounts in operating costs or to make necessary improvements or renovations to acquired properties;

•	we may lease acquired properties at economic lease terms different than projected;

•	we may acquire properties that are subject to liabilities for which we may have limited or no recourse; and

•	we may be unable to complete an acquisition after making a nonrefundable deposit and incurring certain other acquisition related costs.

•	we may be unable to lease acquired, developed, or redeveloped properties at projected economic lease terms or within budgeted timeframes;

•	we may not complete development or redevelopment properties on schedule or within budgeted amounts;

•	we may expend funds on and devote management's time to acquisition, development, or redevelopment properties that we may not complete;

•	we may encounter delays or refusals in obtaining all necessary zoning, land use, and other required entitlements, and building, occupancy, and other required governmental permits and authorizations;

•	we may encounter delays, refusals, unforeseen cost increases, and other impairments resulting from third-party litigation; and

•	we may fail to obtain the financial results expected from properties we acquire, develop, or redevelop.

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•	borrowers may fail to make debt service payments or pay the principal when due;

•	the value of the mortgaged property may be less than the principal amount of the mortgage note securing the property; and

•	interest rates payable on the mortgages may be lower than our cost for the funds used to acquire these mortgages.

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•	no more than 50% in value of the Company's capital stock may be owned, actually or constructively, by five or fewer individuals, including some entities, during the last half of a taxable year;

•	beneficial ownership of the Company's common stock must be held by a minimum of 100 persons for at least 335 days of a 12-month taxable year, or a proportionate part of a short taxable year; and

•

if the Operating Partnership, the Company or any entity which owns 10% or more of the Company's capital stock, actually or constructively own 10% or more of one of the Operating Partnership's tenants, a tenant of the Company or any partnership in which the Operating Partnership or the Company is a partner, then any rents received from that tenant will not be qualifying income for purposes of the Code's REIT gross income tests, regardless of whether the rent is received directly or through a partnership.

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•

The Company's charter authorizes the board of directors to issue up to 30,000,000 shares of the Company's preferred stock, including convertible preferred stock, without stockholder approval. The board of directors may establish the preferences, rights, and other terms, including the right to vote and the right to convert into common stock any shares issued. The issuance of preferred stock could delay or prevent a tender offer or a change of control even if a tender offer or a change of control was in our security holder's interest. As of December 31, 2011, 5,060,000 shares of the Company's preferred stock were issued and outstanding, consisting of 1,610,000 shares of the Company's Series E Preferred Stock and 3,450,000 shares of the Company's Series F Preferred Stock, and an additional 1,500,000 shares of preferred stock were designated as Series A Preferred Stock, which was reserved for possible issuance in exchange for the Operating Partnership's outstanding Series A Cumulative Redeemable Preferred Units (the “Series A Preferred Units”); and

•	The Company's charter states that any director, or the entire board of directors, may be removed from office at any time, but only for cause and then only by the affirmative vote of the holders of at least two thirds of the votes of the Company's capital stock entitled to be cast in the election of directors.

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•	the Company would not be allowed a deduction for distributions to our stockholders in computing the Company's taxable income and would be subject to federal income tax at regular corporate rates;

•	the Company could be subject to the federal alternative minimum tax and possibly increased state and local taxes; and

•	unless entitled to relief under statutory provisions, the Company could not elect to be taxed as a REIT for four taxable years following the year during which the Company was disqualified.

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ITEM 1B.	UNRESOLVED STAFF COMMENTS

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ITEM 2.

ITEM 2.	PROPERTIES

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(1)	Based on all leases at the respective properties in effect as of December 31, 2011. Includes month-to-month leases as of December 31, 2011.

(2)	Reflects annualized contractual base rent calculated on a straight-line basis in accordance with GAAP, excluding the amortization of deferred revenue related to tenant-funded tenant improvements, lease incentive amortization, above/below market rent amortization, and expense reimbursement revenue.  Excludes month-to-month leases and vacant space as of December 31, 2011.

(3)	For these properties, the leases are written on a triple net basis.

(4)	For this property, leases of approximately 5,000 rentable square feet are written on a modified gross basis, and a lease of approximately 2,000 rentable square feet is written on a full service gross basis.

(5)	For these properties, the leases are written on a modified gross basis.

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(6)	For these properties, the leases are written on a modified net basis.

(7)	For this property, a lease of approximately 20,000 rentable square feet is written on a modified net basis, and leases of approximately 17,000 rentable square feet are written on a modified gross basis. The remaining 6,000 rentable square feet is currently being marketed for lease.

(8)	For this property, leases of approximately19,000 rentable square feet are written on a modified net basis, and leases of approximately 28,000 rentable square feet are written on a modified gross basis.

(9)	For this property, leases of approximately 15,000 rentable square feet are written on a full service gross basis, leases of approximately 42,000 rentable square feet are written on a triple net basis, and leases of approximately 18,000 rentable square feet are written on a modified net basis.

(10)	For this property, a lease of approximately 15,000 rentable square feet is written on a modified gross basis, and a lease of approximately 56,000 rentable square feet is written on a triple net basis.

(11)	For these properties, leases of approximately 142,000 rentable square feet are written on a modified net basis, and a lease of approximately 37,000 rentable square feet is written on a modified gross basis.

(12)	For this property, a lease of approximately 41,000 rentable square feet is written on a modified gross basis. The remaining 11,000 rentable square feet is currently being marketed for lease.

(13)	For this property, a lease of approximately 47,000 rentable square feet is written on a modified net basis. Leases for 18,000 rentable square feet are written on a modified gross basis.

(14)	For this property, leases of approximately 30,000 rentable square feet are written on a modified gross basis.

(15)	For this property, a lease of approximately 70,000 rentable square feet is written on a modified net basis, and a lease of approximately 15,000 rentable square feet is written on a triple net basis.

(16)	For this property, leases of approximately 84,000 rentable square feet are written on a modified gross basis, and a lease of approximately 17,000 rentable square feet is written

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(17)	For this property, leases of approximately 76,000 rentable square feet are written on a modified net basis.

(18)	For this property, leases of approximately 123,000 rentable square feet are written on a modified net basis. Leases for 47,000 rentable square feet are written on a modified gross basis.

(19)	For this property, leases of approximately 230,000 rentable square feet are written on a direct expense stop basis. Leases for 21,000 rentable square feet are written on a full service gross basis.

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

(2)	The tenant is obligated to begin paying cash rent in December 2012, however, completion of tenant improvements and physical occupancy may occur in phases.

(3)	The redevelopment will occur in two phases and the existing tenant will occupy approximately 50% during both redevelopment phases. Capitalized carry costs will be prorated based on occupancy during redevelopment.

(4)	The redevelopment project includes one of our undeveloped land parcels, Sorrento Gateway Lot 7.

(5)	This building was acquired in December 2011 and is subject to a ground lease. Approximately 9% of the project is currently leased and occupied by an existing tenant and will not be redeveloped. Costs will be capitalized on the approximately 91% of the project that is being redeveloped.

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(1)	During the fourth quarter of 2011, we completed demolition of the industrial building at this site to prepare for the possible sale of the land since we successfully obtained entitlements to reposition this site for residential use. The ultimate decision to sell this site and the timing of any potential future sale will depend upon market conditions and other factors.

(1)	On January 30, 2012, we sold these two buildings to an unaffiliated third party for a net sales price of $146.1 million.

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(1)	Represents annualized contractual base rent calculated on a straight-line basis in accordance with GAAP, excluding the above/below market rent amortization and expense reimbursement revenue, for leases which rental revenue is being recognized by us as of December 31, 2011.

(2)	The Intuit Inc. leases, which contribute $1.6 million and $13.5 million of annualized base rental revenues, expire in August 2012

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(3)	The Bridgepoint Education Inc. leases, which contribute $1.0 million, $6.3 million, and $7.8 million of annualized base rental revenues, expire in February 2017, July 2018, and September 2018, respectively.

(4)

In November 2011, we executed a new lease with DIRECTV, Inc. ("DIRECTV") for approximately 299,000 rentable square feet at 2260 E. Imperial Highway in Los Angeles, CA. This lease will increase our annualized base rental revenues and percentage of total annualized base rental revenues from DIRECTV to approximately $22.2 million and 6.5%, respectively, and is expected to commence in the fourth quarter of 2012. DIRECTV is expected to become our largest tenant upon commencement of this lease.

(5)	We have entered into leases with various affiliates of the tenant listed above.

(6)	The CareFusion Corporation leases, which contribute $0.8 million and $9.3 million of annualized base rental revenues, expire in February 2012 and August 2017, respectively.

(7)	The Wells Fargo leases, which contribute $0.1 million, $1.5 million, $1.0 million, $0.4 million, $0.4 million, $1.9 million, $0.7 million, $0.1 million, and $0.7 million of annualized rental revenues, expire in February 2013, September 2013, November 2014, August 2015, July 2016, September 2017, January 2019, February 2019, and May 2019, respectively.

(8)	The Hewlett-Packard Company leases, which contribute $4.3 million and $1.9 million of annualized base rental revenues, expire in April 2012 and July 2015, respectively.

(9)	The BP Biofuels leases, which contribute $2.9 million and $2.3 million of annualized base rental revenues, expire in November 2015 and March 2017, respectively.

(10)	The Avnet, Inc. leases, which contribute $3.8 million and $0.4 million of annualized base rental revenues, expire in February 2013 and January 2018, respectively.

(11)	The Scan Heath Plan leases, which contribute $0.4 million and $3.6 million of annualized base rental revenues, expire in February 2012 and June 2015, respectively.

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(1)	The information presented reflects leasing activity through December 31, 2011. For leases that have been renewed early or space that has been re-leased to a new tenant, the expiration date and annualized base rent information presented takes into consideration the renewed or re-leased lease terms. Excludes space leased under month-to-month leases and vacant space as of December 31, 2011.

(2)	Reflects annualized contractual base rent calculated on a straight-line basis in accordance with GAAP, excluding the amortization of deferred revenue related to tenant-funded tenant improvements, lease incentive amortization, above/below market rent amortizat

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ITEM 3.	LEGAL PROCEEDINGS

ITEM 4.	MINE SAFETY DISCLOSURES

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ITEM 5.	MARKET FOR KILROY REALTY CORPORATION'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

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ITEM 6.

ITEM 6.	SELECTED FINANCIAL DATA - KILROY REALTY CORPORATION

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(1)	Represents the redemption value, less issuance costs of our issued and outstanding 1,500,000 Series A Preferred Units.

(2)	Includes the noncontrolling interest of the common units of the Operating Partnership.

(3)

We calculate FFO in accordance with the White Paper on FFO approved by the Board of Governors of NAREIT. The White Paper defines FFO as net income or loss calculated in accordance with GAAP, excluding extraordinary items, as defined by GAAP, gains and losses from sales of depreciable real estate and impairment write-downs associated with depreciable real estate, 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.

We believe that FFO is a useful supplemental measure of our operating performance. The exclusion from FFO of gains and losses from the sale of operating real estate assets allows investors and analysts to readily identify the operating results of the assets that form the core of our activity and assists in comparing those operating results between periods. Also, because FFO is generally recognized as the industry standard for reporting the operations of REITs, it facilitates comparisons of operating performance to other REITs. However, other REITs may use different methodologies to calculate FFO, and accordingly, our FFO may not be comparable to all other REITs.

Implicit in historical cost accounting for real estate assets in accordance with GAAP is the assumption that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies using historical cost accounting alone to be insufficient. Because FFO excludes depreciation and amortization of real estate assets, we believe that FFO along with the required GAAP presentations provides a more complete measurement of our performance relative to our competitors and a more appropriate basis on which to make decisions involving operating, financing, and investing activities than the required GAAP presentations alone would provide.

	However, FFO should not be viewed as an alternative measure of our 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 our properties, which are significant economic costs and could materially impact our results of operations.

Noncash adjustments to arrive at FFO were as follows: noncontrolling interest in earnings of the Operating Partnership, depreciation and amortization of real estate assets, and net gain (loss) from dispositions of operating properties. For additional information, see "Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations -Non-GAAP Supplemental Financial Measure: Funds From Operations” including a reconciliation of our GAAP net income available for common stockholders to FFO for the periods presented.

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(1)	Represents the redemption value, less issuance costs of the Operating Partnership's issued and outstanding 1,500,000 Series A Preferred Units.

(2)	Includes the noncontrolling interests in consolidated subsidiaries.

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ITEM 7.

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

•	global market and general economic conditions and their effect on our liquidity and financial conditions and those of our tenants;

•	adverse economic or real estate conditions in California and Washington including with respect to California's continuing budget deficits;

•	risks associated with investment in real estate assets which are illiquid, and trends in the real estate industry;

•	defaults on or non-renewal of leases by tenants;

•	any significant downturn in tenants' businesses;

•	the ability to re-lease property at or above current market rates;

•	costs to comply with government regulations;

•	the availability of cash for distribution and for debt service and exposure of risk of default under debt obligations;

•	significant competition, which may decrease the occupancy and rental rates of properties;

•	potential losses that may not be covered by insurance;

•	the ability to complete acquisitions and dispositions on announced terms;

•	the ability to successfully operate acquired properties;

•	the ability to successfully complete development and redevelopment properties on schedule and within budgeted amounts;

•	defaults on leases for land on which properties are located;

•	adverse changes to, or implementations of, applicable laws, regulations or legislation;

•	environmental uncertainties and risks related to natural disasters; and

•	the ability to maintain its status as a REIT.

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•	whether the lease agreement requires landlord approval of how the tenant improvement allowance is spent prior to installation of the tenant improvements;

•	whether the lease agreement requires the tenant to provide evidence to the landlord supporting the cost and what the tenant improvement allowance was spent on prior to payment by the landlord for such tenant improvements;

•	whether the tenant improvements are unique to the tenant or reusable by other tenants;

•	whether the tenant is permitted to alter or remove the tenant improvements without the consent of the landlord or without compensating the landlord for any lost utility or diminution in fair value; and

•	whether the ownership of the tenant improvements remains with the landlord or remains with the tenant at the end of the lease term.

•	estimating the final expenses, net of accruals, that are recoverable;

•	estimating the fixed and variable components of operating expenses for each building;

•	conforming recoverable expense pools to those used in establishing the base year or base allowance for the applicable underlying lease; and

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•	concluding whether an expense or capital expenditure is recoverable pursuant to the terms of the underlying lease.

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•	low occupancy levels or forecasted low occupancy levels at a specific property;

•	current period operating or cash flow losses combined with a historical pattern or future projection of potential continued operating or cash flow losses at a specific property;

•	deterioration in rental rates for a specific property as evidenced by sudden significant rental rate decreases or continuous rental rate decreases over numerous quarters, which could signal a continued decrease in future cash flow for that property;

•	deterioration of a given rental submarket as evidenced by significant increases in market vacancy and/or negative absorption rates or continuous increases in market vacancy and/or negative absorption rates over numerous quarters, which could signal a decrease in future cash flow for properties within that submarket;

•	significant increases in property sales yields, continuous increases in property sales yields over several quarters, or recent property sales at a loss within a given submarket, each of which could signal a decrease in the market value of properties;

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•	significant change in strategy or use of a specific property or any other event that could result in a decreased holding period, including classifying a property as held for sale, or significant development delay;

•	evidence of material physical damage to the property; and

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•	default by a significant tenant when any of the other indicators above are present.

•	provide benefit in future periods;

•	extend the useful life of the asset beyond our original estimates; and

•	increase the quality of the asset beyond our original estimates.

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(1)	First generation leasing includes space where we have made capital expenditures that result in additional revenue generated when the space is re-leased. Second generation leasing includes space where we have made capital expenditures to maintain the current market revenue stream.

(2)	Represents leasing activity for leases that commenced or signed during the period shown, including first and second generation space, net of month-to-month leases. Excludes leasing on new construction.

(3)	Calculated as the change between GAAP rents for new/renewed leases and the expiring GAAP rents for the same space. Excludes leases for which the space was vacant longer than one year, or vacant when the property was acquired .

(4)	Calculated as the change between stated rents for new/renewed leases and the expiring stated rents for the same space. Excludes leases for which the space was vacant longer than one year, or vacant when the property was acquired.

(5)	Excludes commenced and executed leases of approximately 766,000 and 621,900 rentable square feet, respectively, for which the space was vacant longer than one year or we are leasing the space for the first time. Space vacant for more than one year is excluded from our change in rents calculations to provide a meaningful market comparison.

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

(7)	During the year, 12 leases totaling approximately 176,000 rentable square feet were signed but not commenced as of December 31, 2011. Additionally, during the year, leases totaling approximately 524,200 rentable square feet executed on redevelopment properties are not reflected in the table.

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(1)	Excludes 370 3rd Street in San Francisco, California, which was added to our redevelopment portfolio upon acquisition.

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(1)	Occupancy percentages reported are based on our stabilized portfolio for the period presented.

(2)	Occupancy percentages reported are based on Office Properties and Industrial Properties owned and stabilized at January 1, 2010 and still owned and stabilized as of December 31, 2011.

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(1)	Properties owned and stabilized as of January 1, 2010 and still owned and stabilized as of December 31, 2011.

(2)	Includes results, from the dates of acquisition through the periods presented, for the ten office buildings we acquired during 2010 and ten office buildings we acquired during 2011 that were added to the stabilized portfolio.

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•	An increase of $48.9 million attributable to ten office buildings we acquired during 2010 and ten office buildings we acquired during 2011 that were added to the stabilized portfolio (the "Acquisitions Portfolio");

•	An increase of $10.3 million attributable to the properties owned and stabilized as of January 1, 2010 and still owned and stabilized as of December 31, 2011 (the "Core Portfolio") primarily as a result of:

▪	An increase in rental income of $8.9 million primarily resulting from an increase in average occupancy of 5.8%, from 86.2% for the year ended December 31, 2010, to 92.0% for the year ended December 31, 2011;

•	An increase in other property income due to the receipt of a $3.7 million cash distribution under a bankruptcy claim related to a former tenant that defaulted on their lease in 2009 partially offset by:

•	A decrease in tenant reimbursements of $0.6 million primarily the result of the renewal of several leases, which resulted in the reset of the base year expense level;

•	An increase in our provision for bad debts of $0.6 million primarily as a result of changes in our estimates of collectability for two watchlist tenants; and

•

An offsetting decrease of $3.6 million generated by one office building that was moved from the stabilized portfolio to the redevelopment portfolio in 2010 and two office buildings that were moved to the redevelopment portfolio from the stabilized portfolio upon commencement of redevelopment in 2011 (the "Redevelopment Properties"). The reduction in Net Operating Income is due to the expiration of the leases at two of the office buildings. Upon expiration of these leases, we commenced redevelopment of these properties. See "Factors that May Influence Future Operations — Development and Redevelopment Programs" for additional information.

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•	A decrease in share-based compensation expense (see Note 12 to our consolidated financial statements included in this report for more information); and

•	An adjustment to decrease our deferred compensation plan liability to fair value (see Note 16 to our consolidated financial statements included in this report and the discussion under the caption "— Interest Income and Other Net Investment Gains" below for more information).

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(1)	Properties owned and stabilized at January 1, 2009 and still owned and stabilized as of December 31, 2011.

(2)	Includes results from the dates of acquisition through the periods presented, for the ten office buildings we acquired during 2010. No buildings were acquired during 2009.

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•	An increase of $19.4 million attributable to the ten office buildings we acquired during 2010; and

•	An offsetting decrease of $4.3 million attributable to the properties owned and stabilized as of January 1, 2009 and still owned and stabilized as of December 31, 2011 (the "2010 Core Portfolio") primarily as a result of:

•	An increase of $1.1 million, or 0.5%, for the year ended December 31, 2010 as compared to the year ended December 31, 2009 generated by a 0.6% increase in average occupancy for the 2010 Core Portfolio from 85.6% for the year ended December 31, 2009 to 86.2% for the year ended December 31, 2010;

•	An offsetting decrease of $3.1 million in tenant reimbursements primarily as the result of the renewal of several

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•	An offsetting decrease of $1.2 million in other property income due to a reduction of lease termination fees and other miscellaneous income;

•	An offsetting increase to property expenses of approximately $2.3 million primarily resulting from:

•	$0.8 million in property expenses attributable to a casualty loss and costs associated with the initial clean-up and repair at one of our properties in Los Angeles that sustained damage from water intrusion;

•	$0.7 million in property expenses attributable to an increase in certain recurring operating costs such as repairs and maintenance, property management expenses, janitorial and other service-related costs;

•	$0.4 million in property expenses attributable to an increase in nonreimbursable legal fees related to tenant defaults that occurred during 2009 and

•	An offsetting decrease of $3.7 million primarily attributable to one redevelopment property that was moved from the stabilized portfolio to the redevelopment portfolio during the third quarter of 2010 upon the expiration of the lease for that building.

•	Approximately $12.3 million related to the 2010 Acquisitions Portfolio; and

•	Approximately $4.2 million related to the change in estimated useful life of the industrial property that we moved during the third quarter of 2010 from our stabilized portfolio into redevelopment to prepare the land for the potential sale to residential developers since we successfully obtained entitlements to reposition this site for residential use.

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(1)	Represents gross aggregate principal amount due at maturity before the effect of the unamortized discounts and premiums as of December 31, 2011.

(2)	Value based on $50.00 per unit liquidation preference.

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

(4)	Represents common units not owned by the Company.

(5)	Value based on closing price per share of the Company's common stock of $38.07 as of December 31, 2011.

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•	Net cash flow from operations;

•	Borrowings under the Credit Facility;

•	Proceeds from additional secured or unsecured debt financings;

•	Proceeds from public or private issuance of debt or equity securities; and

•	Proceeds from the disposition of nonstrategic assets through our capital recycling program.

•	Property or undeveloped land acquisitions;

•	Property operating and corporate expenses;

•	Capital expenditures, tenant improvement and leasing costs;

•	Debt service and principal payments, including debt maturities;

•	Distributions to common and preferred security holders;

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•	Development and redevelopment costs; and

•	Outstanding debt repurchases.

•	During the fourth quarter of 2011 we issued 355,305 shares under our at-the-market stock offering program. We commenced this at-the-market stock offering program, pursuant to which we may sell up to $200.0 million aggregate gross sales price of the Company's common stock from time to time, in July 2011 (see "— Liquidity Sources" below for additional information).

•	In November 2011, the Operating Partnership used borrowings under the Credit Facility to repay a secured mortgage loan with an outstanding principal balance of $52.0 million that was scheduled to mature in April 2012.

•	In October 2011, the Operating Partnership used borrowings under the Credit Facility to repay a secured mortgage loan with an outstanding principal balance of $68.7 million that was scheduled to mature in December 2011.

•	In July 2011, the Operating Partnership issued $325.0 million in aggregate principal amount of 4.80% unsecured senior notes due in 2018 (see Note 7 to our consolidated financial statements included in this report for additional information).

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•	In June 2011, the Operating Partnership amended the terms of the Credit Facility to, among other things, extend the maturity date to August 2015, reduce the interest rate to an annual rate of LIBOR plus 1.750% and reduce the facility fee to an annual rate of 0.35% (see Note 7 to our consolidated financial statements included in this report for additional information).

•	In April 2011, the Operating Partnership assumed secured debt with a principal balance of $30.0 million in conjunction with the acquisition of four office buildings in Kirkland, Washington (see Note 7 to our consolidated financial statements included in this report for additional information).

•

In April 2011, the Company completed an underwritten public offering of 6,037,500 shares of its common stock. The net offering proceeds, after deducting underwriting discounts and commissions and offering expenses, of approximately $221.0 million were contributed to the Operating Partnership (see Notes 10 and 11 to our consolidated financial statements included in this report for additional information).

•	In January 2011, the Operating Partnership borrowed $135.0 million under a mortgage loan. The mortgage loan is secured by one property in San Francisco, bears interest at an annual rate of 4.27%, requires interest-only payments for the first two years with a 30-year amortization schedule thereafter, and is scheduled to mature on February 1, 2018.

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(2)	The Credit Facility interest rate was calculated based on an annual rate of LIBOR plus 1.750% and 2.675% as of December 31, 2011 and December 31, 2010, respectively.

(3)	The facility fee is paid on a quarterly basis and is calculated based on the total borrowing capacity. In addition to the facility fee, we also incurred debt origination and legal costs

(4)	Under the original and amended terms of the Credit Facility, we may exercise an option to extend the maturity date by one year.

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(1)	Represents gross aggregate principal amount before the effect of the unamortized discounts and premiums as of December 31, 2011.

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(1)	Excludes the impact of the amortization of any debt discounts/premiums.

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(4)	As of December 31, 2011, 90.1% of our debt was contractually fixed. The information in the table above reflects our projected interest rate obligations for these fixed-rate payments based on the contractual interest rates, interest payment dates, and scheduled maturity dates.

(5)

As of December 31, 2011, 9.9% of our debt bore interest at variable rates all of which was incurred under the Credit Facility. The variable interest rate payments are based on LIBOR plus a spread of 1.750% as of December 31, 2011. The information in the table above reflects our projected interest rate obligations for these variable-rate payments based on outstanding principal balances as of December 31, 2011, the scheduled interest payment dates, and the contractual maturity dates.

(6)

One of our ground lease obligations is subject to a fair market value adjustment every five years; however, the lease includes ground rent subprotection and infrastructure rent credits which currently limit our annual rental obligations to $1.0 million. The contractual obligations for that ground lease included above assumes the lesser of $1.0 million or annual lease rental obligation in effect as of December 31, 2011. One of our ground lease obligations includes a component which is based on the percentage of gross income that exceeds the minimum ground rent. The minimum rent is subject to increases every five years based on 50% of the average annual percentage rent for the previous five years. Currently gross income does not exceed the threshold requiring us to pay percentage rent. The contractual obligations for that ground lease included above assumes the annual lease rental obligation in effect as of December 31, 2011. One of our ground leases that has a contractual 2022 expiration date has an option for the Company to purchase the land from November 2012 through October 2013. This table assumes that the Company exercises the purchase option at the end of 2012 for an estimated purchase price not to exceed $27.5 million.

(7)	Amounts represent commitments under signed leases and contracts for operating properties, excluding tenant-funded tenant improvements. The timing of these expenditures may fluctuate.

(8)	Amounts represent contractual commitments for redevelopment contracts and projects under construction as of December 31, 2011. The timing of these expenditures may fluctuate based on the ultimate progress of construction.

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(1)	Includes only tenants with lease terms of 12 months or longer. Excludes leases for month-to-month and first generation tenants.

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•	Decreases in our cash flows from operations, which could create further dependence on our Credit Facility;

•	An increase in the proportion of variable-rate debt, which could increase our sensitivity to interest rate fluctuations in the future;

•	A decrease in the value of our properties, which could have an adverse effect on the Operating Partnership's ability to incur additional debt, refinance existing debt at competitive rates, or comply with its existing debt obligations; and

•	A decrease in the value of the Company's common stock, which could impact our ability to issue equity.

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•	A net decrease of approximately $96.2 million provided by our various capital raising activities. Although we had increased acquisition activity in 2011, we financed a portion of this through $64.2 million of net proceeds from dispositions that we generated from our capital recycling program; and

•	A decrease of $10.8 million as a result of the dividends paid on the 6.0 million common shares we issued in our April 2011 equity offering.

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(1)	Reported amounts are attributable to common stockholders and common unitholders.

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ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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ITEM 9A.	CONTROLS AND PROCEDURES

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ITEM 9B.	OTHER INFORMATION

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

ITEM 11.	EXECUTIVE COMPENSATION

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES

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ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES

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(1)	Previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 3 to Form S-11 (No. 333-15553).

(2)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2003.

(3)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on February 11, 1998.

(4)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K/A as filed with the Securities and Exchange Commission on December 19, 1997.

(5)	Pursuant to Rule 406T of Regulation S−T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections.

(6)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2000.

(7)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on August 11, 2004.

(8)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 9, 2004.

(9)	Previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 2 to Form S-11 (No. 333-15553).

(10)	Previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Form S-11 (No. 333-15553).

(11)	Previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 5 to Form S-11 (No. 333-15553).

(12)	Previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 4 to Form S-11 (No. 333-15553).

(13)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on June 6, 1997.

(14)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on July 15, 1997.

(15)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on July 3, 1997.

(16)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended September 30, 1997.

(17)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on

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(18)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 29, 1997.

(19)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended September 30, 1998.

(20)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2001.

(21)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2004.

(22)	Previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 28, 2006.

(23)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on February 8, 2007.

(24)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2006.

(25)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on March 22, 2007.

(26)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on April 5, 2007.

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(27)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on April 11, 2007.

(28)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2007.

(29)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 12, 2008.

(30)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2007.

(31)	Previously filed by Kilroy Realty Corporation as an exhibit to Form 8-K as filed with the Securities and Exchange Commission on January 2, 2008.

(32)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended September 30, 2008.

(33)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on May 27, 2009.

(34)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2009.

(35)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on November 25, 2009.

(36)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2008.

(37)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2009.

(38)	Previously filed by Kilroy Realty, L.P. as an exhibit to the General Form for Registration of Securities on Form 10 as filed with the Securities and Exchange Commission on August 18, 2010.

(39)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8−K as filed with the Securities and Exchange Commission on May 25, 2010.

(40)	Previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Form S−8 as filed with the Securities and Exchange Commission on June 11, 2010.

(41)	Previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit on Form 8−K as filed with the Securities and Exchange Commission on November 4, 2010.

(42)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8−K as filed with the Securities and Exchange Commission on May 27, 2010.

(43)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8−K as filed with the Securities and Exchange Commission on August 11, 2010.

(44)	Previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on January 13, 2011.

(45)	Previously filed by Kilroy Corporation and Kilroy Realty, L.P. as an exhibit the Registration Statement on Form S-3 as filed with the Securities and Exchange Commission on March 1, 2011.

(46)	Previously filed by Kilroy Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on July 6, 2011.

(47)	Previously filed by Kilroy Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on June 23, 2011.

(48)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on July 28, 2011.

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1.	Organization and Ownership

(1)	Includes ten office properties acquired in 2011 for a total amount of $546.3 million (see Note 3 for additional information).

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2.	Basis of Presentation and Significant Accounting Policies

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•	For development and redevelopment properties that are pre-leased, we cease capitalization when revenue recognition commences, which is upon substantial completion of tenant improvements.

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For development and redevelopment properties that are not pre-leased, we may not immediately build out the tenant improvements. Therefore we cease capitalization when revenue recognition commences upon substantial completion of the tenant improvements, but in any event not later than one year after the cessation of major construction activities. We also cease capitalization on a development or redevelopment property when activities necessary to prepare the property for its intended use have been suspended.

•	For development or redevelopment properties with multiple tenants and staged leasing, we cease capitalization and begin depreciation on the portion of the development or redevelopment property for which revenue recognition has commenced.

(1)	Tenant improvements are amortized over the shorter of the lease term or the estimated useful life.

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•	the agreement has been fully executed and delivered;

•	services have been rendered;

•	the amount is fixed or determinable; and

•	the collectability of the amount is reasonably assured.

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•	Level 1—quoted prices for identical instruments in active markets;

•	Level 2—quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

•	Level 3—fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

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3.	Acquisitions

(1)	Excludes acquisition-related costs.

(2)	In connection with this acquisition, we assumed secured debt with an outstanding principal balance of $30.0 million and an initial premium of $1.0 million as a result of recording this debt at fair value on the acquisition date (see Note 7).

(3)	Property was added to our redevelopment portfolio upon acquisition.

(4)	This property is a part of Mission City Corporate Center.

(5)	These properties are part of Mission City Corporate Center. We assumed secured debt with an outstanding principal balance of $52.0 million, net of an initial discount of $0.9 million, in connection with this acquisition (see Note 7). In November 2011, we repaid this loan.

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(1)

The purchase of 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA, represent the two largest acquisitions and approximately 50% of the total aggregate purchase price of the properties acquired during the year ended December 31, 2011. The purchase of 303 Second Street, San Francisco, CA, and 100 First Street, San Francisco, CA, represent the two largest acquisitions and approximately 61% of the total purchase price of the total acquisitions for the year ended December 31, 2010.

(2)	The purchase price of all other acquisitions completed during the years ended December 31, 2011 and 2010 were individually less than 5% and in aggregate less than 10% of the Company's total assets as of December 31, 2010 and 2009, respectively.

(3)	In connection with the acquisitions of 601 108th Avenue N.E., Bellevue, WA, and 370 Third Street, San Francisco, CA, we assumed the lessee obligations under ground leases that are scheduled to expire in November 2093 and December 2022, respectively (see Notes 4 and 15 for additional information pertaining to these ground leases).

(4)	Represents buildings, building improvements, and tenant improvements.

(5)	Balance primarily relates to the building and improvements at 370 Third Street, San Francisco, CA, which was added to the Company's redevelopment portfolio at acquisition.

(6)	Represents in-place leases (approximately $29.4 million with a weighted average amortization period of 4.0 years), above-market leases (approximately $6.8 million with a weighted average amortization period of 4.5 years), unamortized leasing commissions (approximately $9.2 million with a weighted average amortization period of 2.6 years) and

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(7)	Represents below-market leases (approximately $19.5 million with a weighted average amortization period of 4.0 years) and an above-market ground lease obligation (approximately $5.2 million with a weighted average amortization period of 82.5 years), under which we are the lessee.

(8)	Represents the mortgage loan, which includes an unamortized premium of approximately $1.0 million at the date of acquisition, assumed in connection with the properties acquired in April 2011 (see Note 7).

(9)	Reflects the purchase price net of assumed secured debt and other lease-related obligations.

(10)	Represents in-place leases (approximately $31.7 million with a weighted average amortization period of 6.0 years), above-market leases (approximately $21.3 million with a weighted average period of 5.8 years), and unamortized leasing commissions (approximately $17.1 million with a weighted average amortization period of 4.5 years).

(11)	Represents unfunded tenant improvements and leasing commission obligations for in-place leases of which approximately $2.5 million was held in an escrow account as restricted cash at the date of acquisition. As of December 31, 2010, $6.4 million of obligations and $0.3 million of restricted cash remained included on our consolidated balance sheet.

(12)	Represents below-market leases (weighted average amortization period of 10.9 years).

(13)	Represents the mortgage debt assumed in connection with the acquisition of Mission City Corporate Center.

4.	Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, net

(1)	Included in deferred revenue and acquisition-related intangible liabilities, net in the consolidated balance sheets.

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(1)	The amortization of deferred leasing costs and in-place leases is recorded to depreciation and amortization expense in the consolidated statements of operations for the periods presented.

(2)	The amortization of net above-market operating leases is recorded as a decrease to rental income for the years ended December 31, 2011 and 2010, and the amortization of net below-market operating leases is recorded as an increase to rental income for the year ended December 31, 2009 in the consolidated statements of operations.

(3)	The amortization of the net above-market ground lease obligation is recorded as a decrease to ground lease expense in the consolidated statements of operations for the period presented.

(1)	Represents estimated annual net amortization related to above-/(below)-market operating leases. Amounts shown represent net below-market operating leases which will be recorded as an increase to rental income in the consolidated statements of operations.

(2)

Represents estimated annual net amortization related to (above)/below-market ground lease obligations. Amounts shown for 2012 represent net below-market ground lease obligations which will be recorded as an increase to ground lease expense in the consolidated statements of operations. Amounts shown for 2013-2016 and for the periods thereafter represent net above-market ground lease obligations which will be recorded as a decrease to ground lease expense in the consolidated statements of operations.

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(1)	All our secured debt had fixed rate interest rates for both periods presented.

(2)	In October 2011, we repaid this loan prior to the stated maturity with borrowings under the Credit Facility.

(3)

In June 2010, in connection with the acquisition of three office buildings in San Diego, California, we assumed a mortgage loan that is secured by the project. The assumed mortgage loan had a principal balance of $52.0 million at the acquisition date and was recorded at fair value at the date of acquisition resulting in an initial discount of approximately $0.9 million. This discount was accreted on a straight-line basis, which approximates the effective interest method, as additional interest expense from the acquisition date through the maturity date of the mortgage loan. This resulted in interest being recorded at an effective interest rate of 6.13% for financial reporting purposes. The mortgage loan and the three office buildings that secure the mortgage loan were held in a consolidated bankruptcy remote special purpose entity and were not available to satisfy the debts and other obligations of the Company or the Operating Partnership. In November 2011, we repaid this loan prior to the stated maturity with borrowings under the Credit Facility.

(4)

In April 2011, in connection with the acquisition of four office buildings in Kirkland, Washington, we assumed a mortgage loan that is secured by the project. The assumed mortgage loan had a principal balance of $30.0 million at the acquisition date and was recorded at fair value at the date of acquisition resulting in an initial premium of approximately $1.0 million. This premium will be accreted on a straight-line basis, which approximates the effective interest method, as a reduction to interest expense from the acquisition date through the maturity date of the mortgage loan. This will result in interest being recorded at an effective interest rate of 4.00% for financial reporting purposes.

(5)

The public facility bonds (the “Bonds”), the proceeds from which were used to finance infrastructure improvements on one of the Company’s undeveloped land parcels, were issued in February 2008 by the City of Carlsbad. The Bonds have annual maturities from September 1, 2012 through September 1, 2038, with interest rates ranging from 4.60% to 6.20%. Principal and interest payments for the Bonds will be charged through the assessment of special property taxes.

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(1)	Interest on the 3.25% Exchangeable Notes is payable semi-annually in arrears on April 15th and October 15th of each year.

(2)	Interest on the 4.25% Exchangeable Notes is payable semi-annually in arrears on May 15th and November 15th of each year.

(3)	The rate at which we record interest expense for financial reporting purposes, which reflects the amortization of the discounts on the Exchangeable Notes (see Note 2). This rate represents our conventional debt borrowing rate at the date of issuance.

(4)	The exchange rate, exchange price, and the number of shares to be delivered upon conversion are subject to adjustment under certain circumstances including increases in our common dividends.

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(1)	The capped calls mitigate the dilutive impact to us of the potential exchange of two-thirds of the 3.25% Exchangeable Notes into shares of common stock.

(2)	The capped calls mitigate the dilutive impact to us of the potential exchange of all of the 4.25% Exchangeable Notes into shares of common stock.

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(1)

The 6.625% unsecured senior notes were initially issued in a private placement transaction. In November 2010 we completed an exchange offer of the private unsecured notes for fully registered unsecured notes. The terms of the registered unsecured senior notes were substantially identical to the outstanding private unsecured senior notes, except for transfer restrictions and registration rights relating to the outstanding private unsecured senior notes. We did not receive any additional proceeds as a result of the exchange offer.

(2)	Interest on the 4.800% unsecured senior notes is payable semi-annually in arrears on January 15th and July 15th of each year.

(3)	Interest on the 6.625% unsecured senior notes is payable semi-annually in arrears on June 1st and December 1st of each year.

(4)	Interest on the 5.000% unsecured senior notes is payable semi-annually in arrears on May 3rd and November 3rd of each year.

(5)	This represents the rate at which interest expense is recorded for financial reporting purposes, which reflects the amortization of initial issuance discounts, excluding debt issuance costs.

(2)	The Credit Facility interest rate was calculated based on an annual rate of LIBOR plus 1.750% and 2.675% as of December 31, 2011 and December 31, 2010, respectively.

(3)	The facility fee is paid on a quarterly basis and is calculated based on the total borrowing capacity. In addition to the facility fee, we also incurred debt origination and legal costs

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(4)	Under the original and amended terms of the Credit Facility, we may exercise an option to extend the maturity date by one year.

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(1)	See Note 4 for additional information.

9.	Noncontrolling Interests on the Company's Consolidated Financial Statements

(i)	if distributions on the series have not been timely made for any six prior quarters, or the Operating Partnership is likely to become a publicly traded partnership for federal income tax purposes;

(ii)	if the Series A Preferred Units would not be considered “stock and securities” for federal income tax purposes; and

(iii)	at any time following September 30, 2015.

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10.	Stockholders' Equity of the Company

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(1)	The amount includes the value of the dividend equivalents that will be paid with additional fully-vested RSUs (see Note 12).

(1)	The amount includes nonvested shares.

(2)	The amount includes nonvested RSUs.

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(1)	The amount includes the value of the dividend equivalents that will be paid with additional fully-vested RSUs (see Note 12).

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12.	Share-Based Compensation

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(1)	The total shares vested include 11,485 of shares that were then tendered to satisfy minimum statutory tax withholding requirements related to the restricted shares that have vested in accordance with the terms of the 2006 Plan. We accept the return of shares at the current quoted market price of the Company's common stock to satisfy tax obligations.

(1)	Total fair value of shares vested was calculated based on the quoted closing share price of the Company's common stock on the NYSE on the day of vesting.

(2)	In addition, during the year ended December 31, 2009, we issued 51,040 shares of common stock under a share-based compensation program that were fully vested upon issuance. The grant date fair value per share of this award was $26.94.

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(1)	RSUs issued as dividend equivalents are vested upon issuance.

(2)	We accept the return of RSUs, at the current quoted market price of the Company's common stock, to satisfy minimum statutory tax-withholding requirements related to either RSUs that have vested or RSU dividend equivalents in accordance with the terms of the 2006 Plan.

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13.	Employee Benefit Plans

14.	Future Minimum Rent

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(1)	Excludes balances related to the properties held for sale at December 31, 2011 (see Note 19).

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15.	Commitments and Contingencies

(1)

One of our ground lease obligations is subject to a fair market value adjustment every five years; however, the lease includes ground rent subprotection and infrastructure rent credits which currently limit our annual rental obligations to $1.0 million. The contractual obligations for that ground lease included above assumes the lesser of $1.0 million or annual lease rental obligation in effect as of December 31, 2011.

(2)

Another one of our ground lease obligations includes a component which is based on the percentage of gross income that exceeds the minimum ground rent. The minimum rent is subject to increases every five years based on 50% of the average annual percentage rent for the previous five years. Currently gross income does not exceed the threshold requiring us to pay percentage rent. The contractual obligations for that ground lease included above assumes the annual lease rental obligation in effect as of December 31, 2011.

(3)	The contractual obligation included for the 370 3rd Street ground lease assumes that the Company will exercise the land purchase option during 2012. The amount presented above excludes an estimated purchase price which is not to exceed $27.5 million.

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16.	Fair Value Measurements and Disclosures

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17.	Other Significant Transactions or Events

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18.	Segment Disclosure

(1)	All operating revenues are comprised of amounts received from third-party tenants.

(2)	See Note 19 for the breakdown of income from discontinued operations by segment.

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(1)	Includes land, buildings, and improvements, undeveloped land and construction in progress, real estate assets and other assets held for sale, current receivables, deferred rent receivables, deferred leasing costs, and acquisition-related intangible assets, all shown on a net basis.

(2)	See Note 19 for the breakdown of the balance sheet accounts related to the properties held for sale.

(1)	Total consolidated acquisitions and capital expenditures are equal to the same amounts disclosed for total segments. Amounts represent balances on an accrual basis.

(2)	Includes expenditures for building improvements, tenant improvements, and deferred leasing costs for our operating properties.

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19.	Discontinued Operations

(1)	On January 30, 2012, we sold these two buildings to an unaffiliated third party for a net sales price of $146.1 million.

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20.

20.	Net Income Available to Common Stockholders Per Share of the Company

(1)

Dilutive securities were not included in the current period presentation of the 2010 weighted average share calculation due the reported net loss from continuing operations for the year ended December 31, 2010 resulting from the reclassification of the revenues and expenses of operating properties that were sold during 2011 or classified as held for sale as of December 31, 2011 to discontinued operations.

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(1)

Dilutive securities were not included in the current period presentation of the 2010 weighted average share calculation due the reported net loss from continuing operations for the year ended December 31, 2010 resulting from the reclassification of the revenues and expenses of operating properties that were sold during 2011 or classified as held for sale as of December 31, 2011 to discontinued operations.

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22.

22.	Tax Treatment of Distributions

(1)	Capital gains are comprised entirely of 15% rate gains.

(1)	Capital gains are comprised entirely of 15% rate gains.

(1)	Capital gains are comprised entirely of 15% rate gains.

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23.

23.	Quarterly Financial Information of the Company (Unaudited)

(1)	See Note 18 for definition of Net Operating Income.

(2)	All periods have been adjusted from amounts previously disclosed in our quarterly filings on Form 10-Q to reclassify amounts related to discontinued operations (see Note 19).

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24.

24.	Quarterly Financial Information of the Operating Partnership (Unaudited)

(1)	See Note 18 for definition of Net Operating Income.

(2)	All periods have been adjusted from amounts previously disclosed in our quarterly filings on Form 10-Q to reclassify amounts related to discontinued operations (see Note 19).

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(1)	The purchase of 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA, represent the largest acquisitions and approximately 50% of the total aggregate purchase price of the properties acquired during the year ended December 31, 2011.

(2)	The purchase of 303 Second Street and 100 First Street in San Francisco, CA represents the two largest acquisitions and 61% of the total purchase price of the Company's total acquisitions for the year ended December 31, 2010.

(3)	The pro forma results for the year ended December 31, 2011 was adjusted to exclude acquisition-related expenses of approximately $0.6 million incurred in 2011 for the acquisitions of 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA. The pro forma results for the year ended December 31, 2010 were adjusted to include these expenses.

(4)	The pro forma results for the year ended December 31, 2010 was adjusted to exclude acquisition-related expenses of approximately $0.8 million incurred in 2010 for the acquisitions of 303 Second Street and 100 First Street in San Francisco, CA. The pro forma results for the year ended December 31, 2009 were adjusted to include these expenses.

(5)

The pro forma results for all periods presented include incremental interest expense assuming the acquisitions were funded by pro forma borrowings under the Credit Facility. The pro forma interest expense estimate is calculated based on the actual interest rate in effect on the Credit Facility for each respective period. Actual funding of the acquisitions may be from different sources and the pro forma borrowings and related pro forma interest expense estimate assumed herein are not indicative of actual results.

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(1)	The purchase of 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA, represent the largest acquisitions and approximately 50% of the total aggregate purchase price of the properties acquired during the year ended December 31, 2011.

(2)	The purchase of 303 Second Street and 100 First Street in San Francisco, CA represents the two largest acquisitions and 61.0% of the total purchase price of the Company's total acquisitions for the year ended December 31, 2010.

(3)	The pro forma results for the year ended December 31, 2011 was adjusted to exclude acquisition-related expenses of approximately $0.6 million incurred in 2011 for the acquisitions of 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA. The pro forma results for the year ended December 31, 2010 were adjusted to include these expenses.

(4)	The pro forma results for the year ended December 31, 2010 was adjusted to exclude acquisition-related expenses of approximately $0.8 million incurred in 2010 for the acquisitions of 303 Second Street and 100 First Street in San Francisco, CA. The pro forma results for the year ended December 31, 2009 were adjusted to include these expenses.

(5)

The pro forma results for all periods presented include incremental interest expense assuming the acquisitions were funded by pro forma borrowings under the Credit Facility. The pro forma interest expense estimate is calculated based on the actual interest rate in effect on the Credit Facility for each respective period. Actual funding of the acquisitions may be from different sources and the pro forma borrowings and related pro forma interest expense estimate assumed herein are not indicative of actual results.

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(1)	Includes amounts reported in Discontinued Operations (see Note 19).

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(1)	The initial costs of buildings are depreciated over 35 years using a straight-line method of accounting; improvements capitalized subsequent to acquisition are depreciated over the shorter of the lease term or useful life, generally ranging from one to 20 years.

(2)	Represents our date of construction or acquisition, or our predecessor, the Kilroy Group.

(3)	Includes square footage from our stabilized portfolio.

(4)	These costs represent infrastructure costs incurred in 1989. During the third quarter of 2009, we exercised our option to terminate the ground lease at Kilroy Airport Center, Phase IV in Long Beach, California. We had previously leased this land, which is adjacent to our Office Properties at Kilroy Airport Center, Long Beach, for potential future development opportunities.

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(5)

(5)	Excludes approximately 299,000 rentable square feet as this building was under redevelopment at December 31, 2011. The cost basis is included in "Undeveloped land and construction in progress" below.

(6)	These properties secure a $13.3 million mortgage note.

(7)	These properties secure a $69.5 million mortgage note.

(8)	These properties secure a $71.5 million mortgage note.

(9)	This property secures a $29.8 million mortgage note.

(10)	These properties secure a $135.0 million mortgage note.

(11)	These properties secure a $30.2 million mortgage note.

(12)	Excludes approximately 98,000 rentable square feet as this building was under redevelopment at December 31, 2011. The cost basis is included in "Undeveloped land and construction in progress" below.

(13)	Excludes approximately 111,000 rentable square feet as this building was under redevelopment at December 31, 2011. The cost basis is included in "Undeveloped land and construction in progress" below.

(14)	Excludes approximately 410,000 rentable square feet as this building was under redevelopment at December 31, 2011. The cost basis is included in "Undeveloped land and construction in progress" below.

(15)	During the fourth quarter of 2011, we completed demolition of the industrial building on this site to prepare for the possible sale of the land, since we successfully obtained entitlements to reposition this site for residential use. Our ultimate decision to sell this site and the timing of any potential future sale will depend upon market conditions and other factors.

(16)	Represents the principal balance of the public facility bonds (the “Bonds”), the proceeds from which were used to finance infrastructure improvements on one of our undeveloped land parcels. The Bonds are secured by property tax payments.

(17)	Includes initial cost of redevelopment building transferred to construction in progress during the year ended December 31, 2011.

(18)	Represents gross aggregate principal amount before the effect of the unamortized premium of approximately $0.8 million as of December 31, 2011.

(1)	Related to the redevelopment property transferred to construction in progress during the year.

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(1)	Related to the redevelopment property transferred to construction in progress during the year.

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*	Filed herewith

†	Management contract or compensatory plan or arrangement.

(1)	Previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 3 to Form S-11 (No. 333-15553).

(2)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2003.

(3)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on February 11, 1998.

(4)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K/A as filed with the Securities and Exchange Commission on December 19, 1997.

(5)	Pursuant to Rule 406T of Regulation S−T, these interactive data files are deemed not filed or part of a registration statement or

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(6)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2000.

(7)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on August 11, 2004.

(8)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 9, 2004.

(9)	Previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 2 to Form S-11 (No. 333-15553).

(10)	Previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Form S-11 (No. 333-15553).

(11)	Previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 5 to Form S-11 (No.

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(12)	Previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 4 to Form S-11 (No. 333-15553).

(13)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on June 6, 1997.

(14)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on July 15, 1997.

(15)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on July 3, 1997.

(16)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended September 30, 1997.\

(17)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on November 21, 1997.

(18)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 29, 1997.

(19)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended September 30, 1998.

(20)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2001.

(21)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2004.

(22)	Previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 28, 2006.

(23)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on February 8, 2007.

(24)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2006.

(25)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on March 22, 2007.

(26)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on April 5, 2007.

(27)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on April 11, 2007.

(28)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2007.

(29)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 12, 2008.

(30)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2007.

(31)	Previously filed by Kilroy Realty Corporation as an exhibit to Form 8-K as filed with the Securities and Exchange Commission on January 2, 2008.

(32)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended September 30, 2008.

(33)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on May 27, 2009.

(34)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2009.

(35)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on November 25, 2009.

(36)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2008.

(37)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2009.

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(38)	Previously filed by Kilroy Realty, L.P., as an exhibit to the General Form for Registration of Securities on Form 10 as filed with the Securities and Exchange Commission on August 18, 2010.

(39)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8−K as filed with the Securities and Exchange Commission on May 25, 2010.

(40)	Previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Form S−8 as filed with the Securities and Exchange Commission on June 11, 2010.

(41)	Previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P., as an exhibit on Form 8−K as filed with the Securities and Exchange Commission on November 4, 2010.

(42)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8−K as filed with the Securities and Exchange Commission on May 27, 2010.

(43)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8−K as filed with the Securities and Exchange Commission on August 11, 2010.

(44)	Previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on January 13, 2011.

(45)	Previously filed by Kilroy Corporation and Kilroy Realty, L.P. as an exhibit the Registration Statement on Form S-3 as filed with the Securities and Exchange Commission on March 1, 2011.

(46)	Previously filed by Kilroy Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on July 6, 2011.

(47)	Previously filed by Kilroy Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on June 23, 2011.

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(48)	Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on July 28, 2011.