x	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.

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•	Item 6. Selected Financial Data – Kilroy Realty Corporation;

•	Item 6. Selected Financial Data – Kilroy Realty, L.P.;

•	Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations:

◦	—Liquidity and Capital Resources of the Company; and

◦	—Liquidity and Capital Resources of the Operating Partnership;

•	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;

◦	Note 10, Stockholders’ Equity of the Company;

◦	Note 11, Preferred and Common Units of the Operating Partnership;

◦	Note 19, Net Income Available to Common Stockholders Per Share of the Company;

◦	Note 20, Net Income Available to Common Unitholders Per Unit of the Operating Partnership;

◦	Note 22, Quarterly Financial Information of the Company (Unaudited); and

◦	Note 23, Quarterly Financial Information of the Operating Partnership (Unaudited).

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ITEM 1.	BUSINESS

(1)	Estimated rentable square feet upon completion. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors That May Influence Future Results of Operations —Completed, In-Process and Future Development Pipeline” for more information.

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•	Corporate Governance Guidelines;

•	Code of Business Conduct and Ethics;

•	Audit Committee Charter;

•	Executive Compensation Committee Charter; and

•	Nominating / Corporate Governance Committee Charter.

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•	the quality, geographic location, physical characteristics and operating sustainability 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, and construction and development management;

•	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 65-year presence in the West Coast markets;

•	our active development program and our extensive future development pipeline of undeveloped land sites (see “Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations —Information on Leases Commenced and Executed” for additional information pertaining to the Company’s in-process and future development pipeline);

•	our capital recycling program (see “Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations —Liquidity and Capital Resources of the Operating Partnership” for additional information pertaining to the Company’s capital recycling program and related 2014 and 2015 property and land dispositions);

•	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, development or redevelopment; and

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

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

•	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 property management, leasing, marketing, financing, accounting, legal, and construction and development management functions;

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•	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 our current development projects to Leadership in Energy and Environmental Design (“LEED”) specifications. All of our development projects are now designed to achieve LEED certification, generally LEED Platinum or Gold;

•

actively pursuing LEED certification for over 1.7 million square feet of office space under construction. During the past few years we have significantly enhanced the sustainability profile of our portfolio, ending the year with 39% of our properties LEED certified and 56% ENERGY STAR certified. During 2014, the Company was recognized for our sustainability efforts with multiple industry leadership awards, including NAREIT's 2014 Office Leader in the Light Award. The company is also recognized by the Global Real Estate Sustainability Benchmark as the North American leader in sustainability and was ranked first among 151 North American participants across all asset types;

•	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 regional 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.

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

•	be the premier provider of modern and collaborative office buildings on the West Coast with focus on design and environment;

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

•	execute on our development projects under construction and our future development pipeline, including expanding entitlements; and

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

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•	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.

•	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 limit risk exposure at any particular point in the capital and credit market cycles;

•	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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•	local oversupply or reduction in demand for office 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;

•	changes in space utilization by our tenants due to technology, economic conditions and business culture;

•	the development of harmful mold or other airborne toxins or contaminants that could damage our properties or expose us to third-party liabilities; and

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

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•	95% of the Operating Partnership’s consolidated funds from operations (as defined in the agreements governing the unsecured revolving credit facility, unsecured term loan facility and unsecured term loan) 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 (as so defined) for such year) in an amount sufficient to permit us to pay dividends to our stockholders that 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 and private REITs, institutional investment funds and other real estate investors;

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•	even if we are able to acquire a desired property, competition from other real estate investors may significantly increase the purchase price;

•	even if we enter into agreements for the acquisition of a desired property, we may be unable to complete such acquisitions because 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;

•	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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•	we would not be able to exercise sole decision-making authority regarding the property, partnership, joint venture or other entity, which would allow for impasses on decisions that could restrict our ability to sell or transfer our interests in such entity or such entity’s ability to transfer or sell its assets;

•	partners or co-venturers might become bankrupt or fail to fund their share of required capital contributions, which could delay construction or development of a property or increase our financial commitment to the partnership or joint venture;

•	partners or co-venturers may pursue economic or other business interests, policies or objectives that are competitive or inconsistent with ours;

•	if we become a limited partner or non-managing member in any partnership or limited liability company, and such entity takes or expects to take actions that could jeopardize our status as a REIT or require us to pay tax, we may be forced to dispose of our interest in such entity;

•	disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and effort on our business; and

•	we may, in certain circumstances, be liable for the actions of our third-party partners or co-venturers.

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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.

•	direct obligations issued by the U.S. Treasury;

•	obligations issued or guaranteed by the U.S. government or its agencies;

•	taxable municipal securities;

•	obligations (including certificates of deposits) of banks and thrifts;

•	commercial paper and other instruments consisting of short-term U.S. dollar denominated obligations issued by corporations and banks;

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•	repurchase agreements collateralized by corporate and asset-backed obligations;

•	both registered and unregistered money market funds; and

•	other highly rated short-term securities.

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•	result in unauthorized access to, destruction, loss, theft, misappropriation or release of proprietary, confidential, sensitive or otherwise valuable information of ours or others, including personally identifiable and account information that could be used to compete against us or for disruptive, destructive or otherwise harmful purposes and outcomes;

•	result in unauthorized access to or changes to our financial accounting and reporting systems and related data;

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•	result in our inability to maintain building systems relied on by our tenants;

•	require significant management attention and resources to remedy any damage that result;

•	subject us to regulatory penalties or claims for breach of contract, damages, credits, penalties or terminations of leases or other agreements; or

•	damage our reputation among our tenants and investors.

•	actual or anticipated variations in our operating results, funds from operations, cash flows, liquidity or distributions;

•	our ability to successfully execute on our development program;

•	our ability to successfully complete acquisitions and operate acquired properties;

•	earthquakes;

•	changes in our earnings estimates or those of analysts;

•	publication of research reports about us, the real estate industry generally or the office and industrial sectors in which we operate;

•	the failure to maintain our current credit ratings or comply with our debt covenants;

•	increases in market interest rates that lead purchasers of our common stock to demand a higher dividend yield;

•	changes in market valuations of similar companies;

•	adverse market reaction to any debt or equity securities we may issue or additional debt we incur in the future;

•	additions or departures of key management personnel;

•	actions by institutional stockholders;

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•	speculation in the press or investment community;

•	high levels of volatility in the credit markets;

•	general market and economic conditions; and

•	the realization of any of the other risk factors included in this report.

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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, 2014, 8,000,000 shares of the Company’s preferred stock were issued and outstanding, consisting of 4,000,000 shares of the Company’s Series G Preferred Stock and 4,000,000 shares of the Company’s Series H Preferred Stock; 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 dividends paid to its 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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(1)	Estimated rentable square feet upon completion. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations —Factors That May Influence Future Results of Operations —Completed, In-Process and Future Development Pipeline” for more information.

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(1)	Based on all leases at the respective properties in effect as of December 31, 2014. Includes month-to-month leases as of December 31, 2014.

(2)

Annualized base rental revenue includes the impact of straight-lining rent escalations and the amortization of free rent periods and excludes the impact of the following: amortization of deferred revenue related tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases and expense reimbursement revenue. Excludes month-to-month leases and vacant space as of December 31, 2014.

(3)	For these properties, the leases are written on a full service gross basis.

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

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

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

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

(8)	For this property, leases of approximately 52,000 rentable square feet are written on a full service gross basis and approximately 246,000 rentable square feet are written on a modified gross basis.

(9)	For this property, leases of approximately 5,000 rentable square feet are written on a modified gross basis, approximately 272,000 rentable square feet are written on a full service gross basis and approximately 17,000 rentable square feet is written on a triple net basis.

(10)	For this property, leases of approximately 46,000 rentable square feet are written on a modified net basis and approximately 50,000 rentable square feet are written on a full service gross basis.

(11)	For this property, leases of approximately 26,000 rentable square feet are written on a full service gross basis, approximately 12,000 rentable square feet are written on a modified gross basis and approximately 104,000 rentable square feet are written on a gross basis.

(12)	As of December 31, 2014, we had executed a lease for the entire building on a modified net basis. This lease is expected to commence in the first quarter of 2015.

(13)	For this property, leases of approximately 23,000 rentable square feet are written on a full service gross basis and approximately 16,000 rentable square feet are written on a modified gross basis.

(14)	For this property, leases of approximately 29,000 rentable square feet are written on a gross basis and approximately 19,000 rentable square feet are written on a full service gross basis.

(15)	For this property, leases of approximately 26,000 rentable square feet are written on a full service gross basis and approximately 22,000 rentable square feet are written on a gross basis.

(16)	For this property, leases of approximately 28,000 rentable square feet are written on a full service gross basis and approximately 20,000 rentable square feet are written on a triple net basis.

(17)	For this property, leases of approximately 20,000 rentable square feet are written on a gross basis and approximately 29,000 rentable square feet are written on a triple net basis.

(18)	For this property, leases of approximately 617,000 rentable square feet are written on a full service gross basis, approximately 18,000 rentable square feet are written on a triple net basis, approximately 38,000 rentable square feet are written on a gross basis and approximately 26,000 rentable square feet are written on a modified gross basis.

(19)	For this property, leases of approximately 84,000 rentable square feet are written on a gross basis, approximately 355,000 rentable square feet are written on a full service gross basis and approximately 7,000 rentable square feet is written on a triple net basis.

(20)	For this property, leases of approximately 389,000 rentable square feet are written on a modified gross basis and approximately 37,000 rentable square feet are written on a full service gross basis.

(21)	As of the date of this report this building is 100% occupied.

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(1)	The Company anticipates the first building, totaling approximately 226,000 square feet, to be completed in the fourth quarter of 2015 and the second building, totaling approximately 113,000 square feet, to be completed in the first quarter of 2017.

(2)

In the second quarter of 2013, the Company commenced redevelopment of Phase I comprised of the historical buildings encompassing approximately 110,000 rentable square feet.  In the fourth quarter of 2013, the Company commenced development of Phase II comprised of approximately 370,000 rentable square feet for the office component and development of Phase III comprised of approximately 205,000 rentable square feet for the residential component.

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(1)	In May 2014, the Company completed the acquisition of this undeveloped land for a total purchase price of $95.0 million (plus approximately $2.3 million in accrued liabilities, which are not included in this purchase price).

(2)	In the fourth quarter of 2014, the Company closed on two adjacent land sites in the Central SOMA district for a total purchase price of $71.0 million (plus approximately $13.4 million in transaction costs and accrued liabilities, net, which are not included in this purchase price).

(3)	The Company is planning to demolish the existing two-story 45,195 rentable square foot office building and is currently pursuing entitlements to build a new five-story 150,000 rentable square foot building.

(4)	Estimated rentable square feet reflects existing office entitlements. The Company is currently pursuing mixed-use entitlements for this project, which would increase the estimated rentable square feet.

(1)

Annualized base rental revenue includes the impact of straight-lining rent escalations and the amortization of free rent periods and excludes the impact of the following: amortization of deferred revenue related tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases, and expense reimbursement revenue. Excludes month-to-month leases and vacant space as of December 31, 2014.

(2)	The Company has entered into leases with various affiliates of the tenant.

(3)	In December 2013, Scan Group renewed and expanded their lease at Kilroy Airport Center in Long Beach, California. As of December 31, 2014, revenue recognition had not commenced for the expansion premises. The annualized base rental revenue and rentable square feet

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(4)	The LinkedIn Corporation leases, which contribute $2.2 million and $26.1 million, expire in July 2019 and September 2026, respectively.

(5)	The Bridgepoint Education Inc. leases, which contribute $1.0 million, $6.3 million and $7.8 million, expire in February 2017, July 2018 and September 2018, respectively.

(6)	The Delta Dental leases, which contribute $0.4 million and $10.3 million, expire in May 2015 and May 2018, respectively.

(7)	The Scan Group leases, which contribute $0.3 million and $6.7 million, expire in June 2015 and April 2026, respectively.

(8)	The Microsoft Corporation leases, which contribute $3.1 million and $3.1 million, expire in February 2019 and December 2021, respectively.

(9)	The Pac-12 Enterprises leases, which contribute $0.1 million and $5.5 million, expire in October 2016 and July 2023, respectively.

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(1)

Annualized base rent includes the impact of straight-lining rent escalations and the amortization of free rent periods and excludes the impact of the following: amortization of deferred revenue related tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases and expense reimbursement revenue. Additionally, the underlying leases contain various expense structures including full service gross, modified gross and triple net. Amounts represent percentage of total portfolio annualized contractual base rental revenue.

(2)

The information presented for all lease expiration activity reflects leasing activity through December 31, 2014 for our stabilized portfolio. 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, vacant space and lease renewal options not executed as of December 31, 2014.

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

(1)	Purchases were made pursuant to capped call options the Company entered into in connection with the Operating Partnership's issuance of the 4.25% Exchangeable Notes. The capped call options are not part of the terms of the 4.25% Exchangeable Notes and do not affect the holders' rights under the 4.25% Exchangeable Notes.

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ITEM 6.	SELECTED FINANCIAL DATA – KILROY REALTY CORPORATION

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(1)	Represents the redemption value, less issuance costs of our 1,500,000 7.45% Series A Cumulative Preferred Units (“Series A Preferred Units”). The Series A Preferred Units were redeemed in 2012.

(2)	Includes the noncontrolling interest of the common units of the Operating Partnership and Redwood City Partners, LLC (a consolidated subsidiary created during 2013, see Note 3 “Acquisitions” to our consolidated financial statements included in this report for additional information).

(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. Our calculation of FFO includes the amortization of deferred revenue related to tenant-funded tenant improvements and excludes the depreciation of the related tenant improvement assets.

(4)	FFO includes amortization of deferred revenue related to tenant-funded tenant improvements of $11.0 million, $10.7 million, $9.1 million, $9.3 million and $9.7 million for the years ended December 31, 2014, 2013, 2012, 2011 and 2010, respectively.

(5)	Occupancy percentages and total square feet reported are based on the company’s stabilized office portfolio 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. All Series A Preferred Units were redeemed in 2012.

(2)	Includes the noncontrolling interests in consolidated subsidiaries and Redwood City Partners, LLC (a consolidated subsidiary created during 2013, see Note 3 “Acquisitions” to our consolidated financial statements included in this report for additional information).

(3)	Occupancy percentages and total square feet reported are based on the company’s stabilized office portfolio for the periods presented.

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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 our investment in real estate assets, which are illiquid, and with trends in the real estate industry;

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

•	any significant downturn in tenants’ businesses;

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

•	costs to comply with government regulations, including environmental remediations;

•	the availability of cash for distribution and 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 successfully complete acquisitions and dispositions on announced terms;

•	the ability to successfully operate acquired properties;

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

•	defaults on leases for land on which some of our properties are located;

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

•	environmental uncertainties and risks related to natural disasters; and

•	the Company’s 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.

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•	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

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

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•	low occupancy levels, forecasted low occupancy levels or near term lease expirations 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;

•	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

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

•	505, 555 and 605 N. Mathilda Avenue, Sunnyvale, California, which we acquired in December 2012 and was 100% pre-leased to LinkedIn, Inc. This development encompassed three buildings totaling 587,429 square feet and had a total estimated investment of $293.5 million. In September 2014, the project was substantially complete and added to the stabilized portfolio.

•	680 and 690 E. Middlefield Road, Mountain View, California, which we acquired in May 2012 and was 100% pre-leased to Synopsys, Inc. This development encompassed two buildings totaling 340,913 rentable square feet and had a total estimated investment of approximately $185.0 million. In October 2014, the project was substantially complete and added to the stabilized portfolio.

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350 Mission Street, SOMA, San Francisco, California, which we acquired in October 2012. This development project, which is 100% pre-leased to salesforce.com, Inc., has a total estimated investment of $279.3 million and will encompass approximately 450,000 rentable square feet upon completion. The property is expected to be LEED platinum certified, the first ground up development property in the city expected to receive this designation. Construction is currently in process and is currently expected to be completed towards the end of 2015, and the tenant is expected to occupy in phases.

•	333 Brannan Street, SOMA, San Francisco, California, which we acquired in July 2012. The development project is 100% pre-leased to Dropbox, has a total estimated investment of $102.1 million and is expected to encompass 185,000 rentable square feet. Construction is currently in process and is currently expected to be completed in the fourth quarter of 2015.

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Crossing/900, Redwood City, California, which we acquired in June 2013 with a local partner. This development project is 100% pre-leased to Box, Inc., has a total estimated investment of approximately $188.4 million and will encompass approximately 339,000 rentable square feet upon completion. Construction is currently in process and is expected to be completed in phases between the fourth quarter of 2015 and the first quarter of 2017.

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Columbia Square, Hollywood, California, which we acquired in September 2012. This development project is comprised of two phases, historical and new office and residential and is located in the heart of Hollywood, California, two blocks from the corner of Sunset Boulevard and Vine Street.  During 2013, we commenced development on both phases comprising approximately 685,000 rentable square feet. The two office components, comprising 480,000 square feet have an estimated investment of approximately $296.6 million and are expected to be completed in phases between the second quarter of 2015 and the first quarter of 2016, and stabilized in phases between the second quarter of 2015 and the first quarter of 2017.

•	The Heights at Del Mar, Del Mar, California, which we acquired in September 2013. The project is a 73,000 square foot office project and has a total estimated investment of $43.6 million. Construction on this project is currently in process and is expected to be completed in the fourth quarter of 2015.

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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, including first and second generation space, net of month-to-month leases. Excludes leasing on new construction.

(3)	Amounts exclude tenant-funded tenant improvements.

(4)	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.

(5)	Excludes commenced and executed leases of approximately 465,950 and 321,475 rentable square feet, respectively, for the year ended December 31, 2014, for which the space was vacant longer than one year or being leased 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 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.

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

(8)	For the year ended December 31, 2014, 25 new leases totaling 489,482 rentable square feet were signed but not commenced as of December 31, 2014.

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(1)

The information presented for all lease expiration activity reflects leasing activity through December 31, 2014 for our stabilized portfolio. 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, intercompany leases, vacant space, and lease renewal options not executed as of December 31, 2014.

(2)

Annualized base rent includes the impact of straight-lining rent escalations and the amortization of free rent periods and excludes the impact of the following: amortization of deferred revenue related tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases, and expense reimbursement revenue. Additionally, the underlying leases contain various expense structures including full service gross, modified gross and triple net. Percentages represent percentage of total portfolio annualized contractual base rental revenue. For additional information on tenant improvement and leasing commission costs incurred by the Company for the current reporting period, please see further discussion under the caption “Information on Leases Commenced and Executed.”

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(1)	Excludes the twelve properties held for sale as of December 31, 2013.

(2)	Excludes development and redevelopment property acquisitions.

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(1)	Occupancy percentages reported are based on our stabilized office portfolio as of the end of the period presented.

(2)	Occupancy percentages reported are based on office properties owned and stabilized as of January 1, 2013 and still owned and stabilized as of December 31, 2014. See discussion under “Results of Operations” for additional information.

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•	Same Store Properties – which includes the results of all of the office properties that were owned and included in our stabilized portfolio for two comparable reporting periods, i.e., owned and included in our stabilized portfolio as of January 1, 2013 and still owned and included in the stabilized portfolio as of December 31, 2014;

•	Acquisition Properties – which includes the results, from the dates of acquisition through the periods presented, for the four office buildings we acquired during 2013 and the five office building we acquired during the year ended December 31, 2014;

•	Stabilized Development and Redevelopment Properties – which includes the results generated by the following:

◦	One development project comprising three office buildings, that was completed and stabilized in the third quarter of 2014;

◦	One development project consisting of two office buildings, that was completed and stabilized in the fourth quarter of 2014;

◦	One redevelopment property that was stabilized in 2014 following its one year lease-up period; and

◦	Two office redevelopment buildings and one office development building that were stabilized in 2013.

•	Other Properties – which includes the results of three office properties and certain of our in-process and future development projects.

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•	An increase of $22.4 million attributable to the Stabilized Development and Redevelopment Properties, of which $17.0 million is attributable to the properties completed and/or stabilized in September and October of 2014 and $5.4 million is attributable to properties completed and/or stabilized in 2013;

•	An increase of $18.0 million attributable to the Same Store Properties primarily resulting from:

•	An increase in rental income of $16.3 million primarily resulting from an increase in tenant renewals and new leases at higher rental rates;

•	An increase in tenant reimbursements of $4.6 million primarily due to higher reimbursable property expenses and real estate taxes and increased occupancy;

•	An increase in other property income of $1.5 million. During the year ended December 31, 2014 we recognized lease termination fees of $6.3 million. During the year ended December 31, 2013 we received a $5.2 million property damage settlement payment at one of our properties;

•	A partially offsetting increase in property and related expenses of $4.3 million primarily resulting from:

•	An increase of $3.6 million in property expenses primarily as a result of a $2.6 million increase in certain recurring operating costs related to utilities, parking, janitorial, repairs and maintenance, and other service-related costs and $1.0 million of non-recurring expenses related to a property damage settlement;

•	A net increase in real estate taxes of $1.3 million primarily as a result of higher assessment of value at several properties; and

•	A decrease in the provision for bad debt of $0.6 million primarily due to an improvement in collections of tenant receivables.

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•	An increase of $14.5 million attributable to the Acquisition Properties, of which $7.4 million is attributable to properties acquired in 2013, $6.1 million related to a property acquired in the first quarter of 2014 and $1.0 million related to a property acquired in the fourth quarter of 2014.

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•	Same Store Properties – which includes the results of all of the office properties that were owned and included in our stabilized portfolio as of January 1, 2012 and still owned and included in the stabilized portfolio as of December 31, 2014;

•	Acquisition Properties – which includes the results, from the dates of acquisition through the periods presented, for the fourteen office buildings we acquired during 2012 and the four office buildings we acquired during 2013;

•	Stabilized Redevelopment Properties – which includes the results generated by one office building that was moved into the stabilized portfolio upon completion of redevelopment in the fourth quarter of 2012, one office building that was moved into the stabilized portfolio upon completion of development and one redevelopment property that stabilized in December 2013 at the end of the lease-up; and

•	Other Properties – which includes the results of properties not included in our stabilized portfolio. These properties consist of one office building that was in the “lease-up” phase.

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•	An increase of $37.2 million attributable to the Acquisition Properties;

•	An increase of $4.2 million attributable to the Same Store Properties primarily resulting from:

•	An increase in rental income of $6.5 million primarily resulting from an increase in tenant renewals and new leases at higher rental rates;

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•	An increase in tenant reimbursements of $2.1 million primarily due to higher reimbursable property expenses and real estate taxes;

•	An increase in other property income primarily due to the receipt of a $5.2 million property damage settlement payment at one of our properties; and

•	A partially offsetting increase in property and related expenses of $9.6 million primarily resulting from:

•

An increase of $7.6 million in property expenses primarily as a result of an increase in certain recurring operating costs of approximately $4.6 million related to property management expenses, utilities, insurance, and other service-related costs; $1.2 million of non-recurring expenses related to a property damage settlement and a $1.8 million decrease in property-related insurance proceeds in 2013 compared to 2012; and

•	An increase in real estate taxes of $1.8 million primarily as a result of higher assessment of value at several properties and a decrease in property tax refunds received in 2013 compared to 2012.

•	An increase of $7.4 million attributable to the Stabilized Development and Redevelopment Properties, of which $6.8 million is attributable to a full year of operating activity at a property stabilized in the fourth quarter of 2012: and

•	An increase of $6.4 million attributable to the Other Properties primarily resulting from income generated from one redevelopment property in lease-up that was 78% occupied at December 31, 2013 compared to 26% occupied at December 31, 2012.

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(1)	Represents gross aggregate principal amount due at maturity before the effect of net unamortized premiums as of December 31, 2014. The aggregate net unamortized premiums totaled approximately $4.4 million as of December 31, 2014.

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

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

(4)	Value based on closing price per share of our common stock of $69.07 as of December 31, 2014.

•	Net cash flow from operations;

•	Borrowings under the Operating Partnership’s unsecured revolving credit facility and term loan facility;

•	Proceeds from additional secured or unsecured debt financings;

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

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

•	Development and redevelopment costs;

•	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; and

•	Outstanding debt repayments.

•

During the year ended December 31, 2014, the Company completed its existing at-the-market stock offering program (the “July 2011 At-The-Market Program”) and in December 2014 commenced a new at-the-market stock offering program (the “December 2014 At-The-Market Program”) under which we may offer to sell shares of our common stock with an aggregate gross sales price of up $300.0 million. During 2014, we issued and sold a total of 1,599,123 shares of our common stock under our at-the-market stock offering programs at a weighted average price of $65.49 per share before selling commissions. The net offering proceeds (after deducting sales agent compensation) were approximately $103.1 million (see “—Liquidity Sources” below for additional information).

•	In July 2014, the Operating Partnership issued unsecured senior notes in an underwritten public offering with an aggregate principal balance of $400.0 million that are scheduled to mature in August 2029. The unsecured senior notes require semi-annual interest payments each February and August based on a stated annual interest rate of 4.250%.

•	In August 2014, we repaid the Series B unsecured senior notes with an outstanding principal balance of $83.0 million upon maturity (see Note 5 “Secured and Unsecured Debt of the Operating Partnership” to our consolidated financial statements included in this report for additional information).

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•

During the year ended December 31, 2014, we settled $37.0 million of early exchanges of the 4.25% Exchangeable Notes due 2014 and repaid the remaining $135.5 million principal balance upon maturity. In connection with the exchanges, we issued 1,575,981 net shares of common stock representing the value of the exchange option at maturity (see Note 5 “Secured and Unsecured Debt of the Operating Partnership” to our consolidated financial statements included in this report for additional information).

•

During the year ended December 31, 2014, we completed the sale of fourteen properties located in San Diego, one office property located in Irvine, one office property in San Rafael, one office property in Orange, and one undeveloped land parcel located in San Diego to unaffiliated third parties in six separate transactions for gross sales proceeds totaling approximately $432.6 million. (See “—Factors that May Influence Future Operations” included in this report for additional information).

(1)	We may elect to borrow, subject to bank approval and obtaining commitments for any additional borrowing capacity, up to an additional $311.0 million under an accordion feature under the terms of the unsecured revolving credit facility and unsecured term loan facility.

(2)

Our unsecured revolving credit facility interest rate was calculated based on an annual rate of LIBOR plus 1.250% as of December 31, 2014. In the second quarter of 2014, the Company amended the terms of our unsecured revolving credit facility to increase the borrowing capacity to $600.0 million, extended the maturity to July 2019 and reduced the annual interest rate to LIBOR plus 1.250%. The amendment did not affect the outstanding borrowings under the unsecured revolving credit facility.

(3)	Our unsecured revolving credit facility interest rate was calculated based on an annual rate of LIBOR plus 1.450% as of December 31, 2013.

(4)	Our facility fee is paid on a quarterly basis and is calculated based on the total borrowing capacity. In addition to the facility fee, we incurred debt origination and legal costs. As of December 31, 2014, $5.9 million of deferred financing costs remains to be amortized through the amended maturity date of our unsecured revolving credit facility.

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(1)	Represents gross aggregate principal amount due at maturity before the effect of net unamortized premiums as of December 31, 2014. The aggregate net unamortized premiums totaled approximately $4.4 million as of December 31, 2014.

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

(2)	Includes the impact of the amortization of any debt discounts/premiums, excluding debt issuance costs.

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(1)	Represents gross aggregate principal amount before the effect of the unamortized premium of approximately $10.3 million as of December 31, 2014.

(2)	Represents gross aggregate principal amount before the effect of the unamortized discount of approximately $5.9 million as of December 31, 2014.

(3)	As of December 31, 2014, 86.6% 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.

(4)

As of December 31, 2014, 7.7% of our debt bore interest at variable rates which was incurred under the unsecured term loan facility and unsecured term loan. The variable interest rate payments are based on LIBOR plus a spread of 1.400% as of December 31, 2014. 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, 2014, the scheduled interest payment dates and the contractual maturity dates.

(5)

As of December 31, 2014, 5.7% of our debt bore interest at variable rates, which was incurred under the unsecured revolving credit facility. The variable interest rate payments are based on LIBOR plus a spread of 1.250% as of December 31, 2014. 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, 2014, the scheduled interest payment dates and the contractual maturity dates.

(6)	Reflects minimum lease payments through the contractual lease expiration date before the impact of extension options.

(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 commitments under signed leases for pre-leased development projects and contractual commitments for projects under construction as of December 31, 2014. The timing of these expenditures may fluctuate based on the ultimate progress of construction. We may start additional construction in 2015 (see “—Development” for additional information).

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(1)	Excludes development properties.

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

(3)	Excludes leases for which the space was vacant for longer than one year, or vacant when the property was acquired by the Company.

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•	Decreases in our cash flows from operations, which could create further dependence on the unsecured revolving credit facility;

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

•	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.

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(1)	Includes amortization of deferred revenue related to tenant-funded tenant improvements of $11.0 million, $10.7 million, $9.1 million, $9.3 million and $9.7 million for the years ended December 31, 2014, 2013, 2012, 2011 and 2010, respectively. 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 AND FINANCIAL STATEMENT SCHEDULES

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1.	Organization and Ownership

(1)	Estimated rentable square feet upon completion.

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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, no 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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•	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 and non-lease related accrued liabilities assumed. Includes assumed unpaid leasing commissions and tenant improvements.

(2)	As of December 31, 2014, these properties, together the "Chesapeake Commons" project, were temporarily being held in a separate VIE to facilitate potential Section 1031 Exchanges (see Note 2 "Basis of Presentation and Significant Accounting Policies"). During January 2015, the Company closed out the Section 1031 Exchange related to this VIE.

(3)	The results of operations for the properties acquired during 2014 contributed $7.7 million and $2.8 million to revenues and net income from continuing operations, respectively, for the year ended December 31, 2014.

(4)	We acquired these properties through a special purpose entity wholly owned by the Finance Partnership.

(5)	In connection with this acquisition, we assumed secured debt with an outstanding principal balance of $83.9 million that was recorded at fair value on the acquisition date, resulting in a premium of approximately $11.6 million (see Note 7 “Secured and Unsecured Debt of the Operating Partnership” for additional information).

(6)

As of December 31, 2013, these properties, together the "Heights of Del Mar" project, were temporarily being held in a separate VIE to facilitate potential Section 1031 Exchanges (see Note 2 "Basis of Presentation and Significant Accounting Policies"). The $126.4 million purchase price includes $9.4 million for 4.2 acres of undeveloped land the Company acquired in connection with this acquisition.

(7)	The results of operations for the properties acquired during 2013 contributed $17.5 million and $0.9 million to revenues and net income from continuing operations, respectively, for the year ended December 31, 2013.

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(1)	The purchase price of the two acquisitions completed during the year ended December 31, 2014, and the two acquisitions completed during the year ended December 31, 2013 were individually less than 5% and in aggregate less than 10% of the Company’s total assets as of December 31, 2014 and December 31, 2013, respectively.

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

(3)	In connection with one of the 2013 acquisitions, we acquired undeveloped land of approximately 4.2 acres that was added to the Company's future development pipeline upon acquisition.

(4)

Represents in-place leases (approximately $12.3 million with a weighted average amortization period of 7.0 years) and leasing commissions (approximately $4.9 million with a weighted average amortization period of 7.0 years) for the year ended December 31, 2014. Represents in-place leases (approximately $19.6 million with a weighted average amortization period of 4.7 years), above-market leases (approximately $3.2 million with a weighted average amortization period of 6.1 years) and leasing commissions (approximately $7.9 million with a weighted average amortization period of 5.9 years) for the year ended December 31, 2013.

(5)	Represents below-market leases (approximately $7.0 million and $4.2 million with a weighted average amortization period of 6.1 years and 7.7 years) for the years ended December 31, 2014 and December 31, 2013, respectively.

(6)	Represents the mortgage loan, which includes an unamortized premium balance of approximately $11.6 million at the date of acquisition, assumed in connection with the properties acquired in January 2013 (see Note 7 “Secured and Unsecured Debt of the Operating Partnership” for additional information).

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

(1)

In connection with this acquisition, we also assumed $2.3 million in accrued liabilities, which are not included in the purchase price above. As of December 31, 2014, the purchase price and assumed liabilities are included in undeveloped land and construction in progress and the assumed liabilities are included in accounts payable, accrued expenses and other liabilities on our consolidated balance sheets.

(2)

In the fourth quarter of 2014, the Company closed on two adjacent land sites for a total purchase price of $71.0 million and approximately $13.4 million in transaction costs and accrued liabilities, net (see Note 15 “Commitments and Contingencies” for additional information on a portion of accrued liabilities for this transaction). The acquisitions, which were completed through the execution of two merger transactions,

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(1)	In connection with this acquisition, we also assumed $0.7 million in accrued liabilities, which are not included in the purchase price above. As of December 31, 2014 and 2013, the project is included in our future development pipeline and, as a result, the underlying assets were included as undeveloped land and construction in progress in our consolidated financial statements.

(2)	In November 2012, we exercised an option to purchase the land underlying the ground leases at this wholly owned property. This transaction closed in October 2013 and as of December 31, 2014 and 2013, the land was included as land and improvements in our consolidated financial statements.

(1)	This note was repaid as of December 31, 2013.

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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.

(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 above-market operating leases is recorded as a decrease to rental income in the consolidated statements of operations for the periods presented.

(3)	The amortization of the below-market ground lease obligation is recorded as an increase to ground lease expense in the consolidated statements of operations for the periods presented.

(4)	The amortization of below-market operating leases is recorded as an increase to rental income in the consolidated statements of operations for the periods presented.

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

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(1)	Represents estimated annual amortization related to above-market operating leases. Amounts will be recorded as a decrease to rental income in the consolidated statements of operations.

(2)	Represents estimated annual amortization related to below-market ground lease obligations. Amounts will be recorded as an increase to ground lease expense in the consolidated statements of operations.

(3)	Represents estimated annual amortization related to below-market operating leases. Amounts will be recorded as an increase to rental income in the consolidated statements of operations.

(4)	Represents estimated annual amortization related to above-market ground lease obligations. Amounts will be recorded as a decrease to ground lease expense in the consolidated statements of operations.

5.	Receivables

(1)	Excludes current receivables, net related to real estate held for sale.

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(1)	All interest rates presented are fixed-rate interest rates.

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

(3)	Amounts reported include the amounts of unamortized debt premiums of $10.3 million and $14.6 million as of December 31, 2014 and 2013, respectively.

(4)	In January 2013, in connection with the acquisition of two office buildings in Seattle, Washington, we assumed a mortgage loan that is secured by the project. The loan requires monthly principal and interest payments based on a 6.4 year amortization period. As of December 31, 2014 and 2013, the mortgage loan had unamortized debt premiums of $8.0 million and $9.9 million, respectively.

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

(2)	The rate at which we record interest expense for financial reporting purposes, which reflects the amortization of the discounts on the 4.25% Exchangeable Notes. This rate represents our conventional debt borrowing rate at the date of issuance.

(3)	The exchange rate, exchange price, and the number of shares to be delivered upon conversation were subject to adjustment under certain circumstances including increases in our common dividends as of December 31, 2013.

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(1)	The Company repaid the 3.25% Exchangeable Notes in April 2012. Interest payments and discount amortization for the years ended December 31, 2014 and 2013 were solely attributable to the 4.25% Exchangeable Notes.

(1)	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)	Interest on the 4.250% unsecured senior notes is payable semi-annually in arrears on February 15th and August 15th of each year.

(3)	Interest on the 3.800% unsecured senior notes is payable semi-annually in arrears on January 15th and July 15th of each year.

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

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

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

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(1)	We may elect to borrow, subject to bank approval and obtaining commitments for any additional borrowing capacity, up to an additional $311.0 million under an accordion feature under the terms of the unsecured revolving credit facility and unsecured term loan facility.

(2)	Our unsecured revolving credit facility interest rate was calculated based on an annual rate of LIBOR plus 1.250% as of December 31, 2014.

(3)	Our unsecured revolving credit facility interest rate was calculated based on an annual rate of LIBOR plus 1.450% as of December 31, 2013.

(4)	Our facility fee is paid on a quarterly basis and is calculated based on the total borrowing capacity. In addition to the facility fee, we incurred debt origination and legal costs. As of December 31, 2014, $5.9 million of deferred financing costs remains to be amortized through the amended maturity date of our unsecured revolving credit facility.

(1)	Our unsecured term loan facility interest rate was calculated based on an annual rate of LIBOR plus 1.40% as of December 31, 2014.

(2)	Our unsecured term loan facility interest rate was calculated based on an annual rate of LIBOR plus 1.75% as of December 31, 2013.

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(1)	Includes gross principal balance of outstanding debt before impact of net unamortized premiums totaling approximately $4.4 million.

8.	Deferred Revenue and Acquisition Related Liabilities, net

(1)	Excludes deferred revenue related to tenant-funded tenant improvements related to properties held for sale at December 31, 2013.

(2)	See Note 2 “Basis of Presentation and Significant Accounting Policies” and Note 4 “Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, net” for additional information.

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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 “Share-Based Compensation” for additional information).

(1)	The amount includes nonvested shares.

(2)	The amount includes nonvested RSUs. Does not include the 247,089 and 143,022 market measure-based RSUs since not all the necessary performance conditions have been met as of December 31, 2014 and 2013, respectively.

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11.	Preferred and Common Units of the Operating Partnership

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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 “Share-Based Compensation” for additional information).

(1)	Does not include the 247,089 and 143,022 market measure-based RSUs since not all the necessary performance conditions have been met as of December 31, 2014 and 2013, respectively.

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(1)	Represents the grant-date fair value for all awards excluding the 2014 Performance-Based RSU Grant. As discussed above, the 2014 Performance-Based RSU Grant was re-measured upon stockholder approval of the amended 2006 Plan on May 22, 2014.

(2)	Includes dividend equivalents issued in accordance with the award agreements.

(3)	Includes dividend equivalents vested in accordance with the award agreements.

(4)

Represents vested RSUs that were settled in cash or shares of the Company’s common stock. Total shares settled include 8,526 shares that were tendered in accordance with the terms of the 2006 Plan to satisfy minimum statutory tax withholding requirements related to the RSUs settled. We accept the return of RSUs, at the current quoted closing share price of the Company’s common stock to satisfy tax obligations.

(5)	On January 29, 2014, the market-measure requirements related to the RSU awards granted in 2013 were met, and as a result, the shares were transferred to time-based restricted stock units since at that point the awards became subject to only time-based vesting requirements pursuant to the award agreements.

(6)	On January 29, 2014, the market-measure requirements related to the RSU award were met and, as a result, the RSUs were transferred to restricted stock based on the employee’s distribution election and remain subject to time-based vesting requirements pursuant to the award agreement.

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(1)	Represents the grant-date fair value for all awards excluding the 2014 Performance-Based RSU Grant. As discussed above, the 2014 Performance-Based RSU Grant was re-measured upon stockholder approval of the amended 2006 Plan on May 22, 2014.

(1)	Represents the grant-date fair value for all awards excluding the 2014 Time-Based RSU Grant. As discussed above, the 2014 Time-Based RSU Grant was re-measured upon stockholder approval of the amended 2006 Plan on May 22, 2014.

(2)	Includes dividend equivalents issued in accordance with the award agreements.

(3)	Includes dividend equivalents vested in accordance with the award agreements.

(4)

Represents vested RSUs that were settled in shares of the Company’s common stock. Total shares settled include 5,694 shares that were tendered in accordance with the terms of the 2006 Plan to satisfy minimum statutory tax withholding requirements related to the RSUs settled. We accept the return of RSUs at the current quoted closing share price of the Company’s common stock to satisfy tax obligations.

(5)	For shares vested but not yet settled, we accept the return of RSUs at the current quoted closing share price of the Company’s common stock to satisfy minimum statutory tax-withholding requirements related to either the issuance or vesting of RSUs in accordance with the terms of the 2006 Plan.

(6)	On January 29, 2014, the market-measure requirements related to the RSU awards granted in 2013 were met. As of December 31, 2014 the awards are only subject to time-based vesting requirements.

(7)	During January 2014, RSUs were transferred to restricted stock based on the elected distribution date.

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

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(1)	Includes dividend equivalents issued in accordance with the award agreements.

(2)	Includes dividend equivalents vested in accordance with the award agreements.

(3)	The total shares vested include 11,020 shares that were tendered in accordance with the terms of the 2006 Plan to satisfy minimum statutory tax withholding requirements related to the restricted shares that have vested. We accept the return of shares at the current quoted closing share 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 date of vesting.

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(1)	The intrinsic value of a stock option is the amount by which the fair value of the underlying stock exceeds the exercise price of an option.

(2)	As of December 31, 2014, the average remaining life of stock options outstanding was 7.2 years

(3)	As of December 31, 2014, the average remaining life of stock options exercisable was approximately 7.2 years.

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13.	Employee Benefit Plans

14.	Future Minimum Rent

15.	Commitments and Contingencies

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(1)	Reflects the contractual expiration date prior to the impact of any extension or purchase options held by the Company.

(2)	The Company has three 10 year and one 45 year extension option for this ground lease, which if exercised would extend the expiration date to December 2116.

(1)	Reflects the minimum ground lease obligations before the impact of ground lease extension options.

(2)

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, 2014.

(3)

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 assume the annual lease rental obligation in effect as of December 31, 2014.

(4)	One of our ground lease obligations is subject to a fair market value adjustment every five years based on a combination of CPI adjustments and third-party appraisals limited to maximum increases annually. The contractual obligations included above assume the annual lease rental obligation in effect as of December 31, 2014.

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16.	Fair Value Measurements and Disclosures

(1)	Fair value calculated using Level 1 inputs based on quoted prices in active markets for identical securities.

(2)	The marketable securities are held in a limited rabbi trust.

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(1)	Fair value calculated using Level II inputs, which are based on model-derived valuations in which significant inputs and significant value drivers are observable in active markets.

(2)	During the year ended December 31, 2014, we repaid the 4.25% Exchangeable Notes. As of December 31, 2014, there were no exchangeable debt instruments (see Note 7 “Secured and Unsecured Debt of the Operating Partnership” for additional information).

(3)

Fair value calculated primarily using Level I inputs, which are based on quoted prices for identical instruments in active markets. The carrying value and fair value of the Level I instruments was $1,269.4 million and $1,322.2 million, respectively, as of December 31, 2014. The carrying value and fair value of the Level I instruments at December 31, 2013, was $873.5 million and $929.3 million, respectively. The carrying value and fair value of the Level II instruments was $513.7 million and $536.3 million, respectively, as of December 31, 2014. The carrying value and fair value of the Level II instruments at December 31, 2013, was $557.7 million and $593.7 million, respectively.

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18.	Discontinued Operations and Land Held for Sale

(1)	Represents gross sales price before the impact of broker commissions and closing costs.

(2)	The San Diego Properties included the following: 10020 Pacific Mesa Boulevard, 6055 Lusk Avenue, 5010 and 5005 Wateridge Vista Drive, 15435 and 15445 Innovation Drive, and 15051, 15073, 15231, 15253, 15333 and 15378 Avenue of Science. These properties were held for sale as of December 31, 2013.

(3)	The industrial portfolio was sold in two tranches in November and December 2012 to two separate third party buyers.

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

(1)	Participating securities include nonvested shares, certain time-based RSUs and vested market measure-based RSUs.

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20.	Net Income Available to Common Unitholders Per Unit of the Operating Partnership

(1)	Participating securities include nonvested shares, certain time-based RSUs and vested market measure-based RSUs.

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21.	Tax Treatment of Distributions

(1)	Capital gains are comprised entirely of 20% rate gains for 2014 and 2013 and 15% rate gains for 2012.

(1)	Capital gains are comprised entirely of 20% rate gains for 2014 and 2013 and 15% rate gains for 2012.

(1)	Capital gains are comprised entirely of 20% rate gains for 2014 and 2013 and 15% rate gains for 2012.

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

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

22.	Quarterly Financial Information of the Company (Unaudited)

(1)

The summation of the quarterly financial data may not equal the annual number reported on the consolidated statements of operations due to rounding. The summation of the quarterly net income (loss) available to common stockholders per share does not equal the annual number reported on the consolidated statements of operations due to the Company's public offerings of common stock and its at-the-market stock offering programs that occurred during the years ended December 31, 2014 and 2013.

(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 18 “Discontinued Operations” for additional information).

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

(1)

The summation of the quarterly financial data may not equal the annual number reported on the consolidated statements of operations due to rounding. The summation of the quarterly net income (loss) available to common unitholders per unit does not equal the annual number reported on the consolidated statements of operations due to the impact of the Company's public offerings of common stock and its at-the-market stock offering programs that occurred during the years ended December 31, 2014 and 2013.

(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 18 “Discontinued Operations”).

24.	Subsequent Events

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(1)	Includes amounts reported in Discontinued Operations (see Note 18 “Discontinued Operations”).

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(1)	The initial costs of buildings and improvements 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.

(5)	These properties secure a $6.6 million mortgage note.

(6)	These properties secure a $66.6 million mortgage note.

(7)	This property secures a $39.3 million mortgage note.

(8)	This property secures a $51.9 million mortgage note.

(9)	These properties secure a $97.0 million mortgage note.

(10)	This property secures a $130.8 million mortgage note.

(11)	These properties secure a $26.2 million mortgage note.

(12)	These properties secure a $81.2 million mortgage note.

(13)	These properties secure a $34.0 million mortgage note.

(14)	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.

(15)	Represents gross aggregate principal amount before the effect of the unamortized premium of approximately $10.3 million as of December 31, 2014.

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*	Filed herewith

†	Management contract or compensatory plan or arrangement.

(1)	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.