EX-99.1 2 a93013supplementalrelease.htm PRESS RELEASE, DATED NOVEMBER 5, 2013, AND THIRD QUARTER 2013 SUPPLEMENTAL FINAN 9.30.13 Supplemental & Release
Exhibit 99.1

 





Kennedy-Wilson Holdings, Inc.
Third Quarter 2013
Earnings Release and Supplemental Financial Information






                               
Premiere Ichibancho
Tokyo
The Ritz Carlton, Lake Tahoe
Lake Tahoe
State Street Building
Dublin

                                        
 


1



Kennedy-Wilson Holdings, Inc. and Subsidiaries
Supplemental Financial Information
For the Quarter Ended September 30, 2013


TABLE OF CONTENTS





Note about Non-GAAP financial information included in this presentation
In addition to the results reported in accordance with U.S. generally accepted accounting principles ("GAAP") included within this presentation, Kennedy-Wilson Holdings, Inc. ("Kennedy Wilson") has provided certain information, which includes non-GAAP financial measures (pro forma consolidated statements of operations, EBITDA, earnings before interest, taxes, depreciation, amortization and stock-based compensation ("Adjusted EBITDA"), net income attributable to common shareholders, adjusted for depreciation, amortization and stock-based compensation expense ("Adjusted Net Income"), and Basic Adjusted Net Income Attributable to Kennedy Wilson Common Shareholders Per Share). Such information is reconciled to its closest GAAP measure in accordance with the rules of the Securities and Exchange Commission and is included within this presentation. Management believes that these non-GAAP financial measures are useful to both management and Kennedy Wilson's shareholders in their analysis of the business and operating performance of Kennedy Wilson. Management also uses this information for operational planning and decision-making purposes. Non-GAAP financial measures are not and should not be considered a substitute for any GAAP measures. Additionally, non-GAAP financial measures as presented by Kennedy Wilson may not be comparable to similarly titled measures reported by other companies.

Common Definitions
Kennedy Wilson refers to its net investment account and gross investment account throughout this release. Kennedy Wilson's equity in real estate, joint ventures, acquired in-place leases and loan investments, net of depreciation and amortization comprises the "net investment account," the "gross investment account" is the net investment account presented before accumulated depreciation and amortization.


2


 

Contact:    Christina Cha                                                                            
Vice President of Corporate Communication
Kennedy Wilson
(310) 887-6294                                9701 Wilshire Blvd. Suite 700
ccha@kennedywilson.com                            Beverly Hills, CA 90212
www.kennedywilson.com                            

NEWS RELEASE    

KENNEDY WILSON REPORTS THIRD QUARTER 2013 EARNINGS
Adjusted EBITDA increases 142% from same period of last year

BEVERLY HILLS, CA. (November 5, 2013) - Kennedy-Wilson Holdings, Inc. (NYSE: KW), an international real estate investment and services company, today reported third quarter 2013 Adjusted EBITDA of $42.3 million, a 142% increase from $17.5 million for the same period in 2012. For the nine months ended September 30, 2013, Adjusted EBITDA was $111.3 million, a 101% increase from $55.5 million for the same period in 2012.

Adjusted Net Income for the third quarter 2013 was $14.4 million or $0.20 per basic share compared to Adjusted Net Income of $2.8 million for the same period in 2012, or $0.05 per basic share. U.S. GAAP net loss attributable to common shareholders for the third quarter 2013 was $4.1 million, or $0.06 per basic and diluted share, compared to a loss of $6.2 million, or $0.11 per basic and diluted share, for the same period in 2012.

"Kennedy Wilson and its equity partners acquired $1 billion of real estate investments this quarter and we raised approximately $120 million in equity further strengthening our balance sheet," said William McMorrow, chairman and CEO of Kennedy Wilson. "We continue to focus on sourcing attractive investment opportunities, improving the operating performance of our properties, and executing on select asset realizations."

Kennedy Wilson Recent Highlights

Investments business
Investment account
•
As of September 30, 2013, our gross investment account was $1.1 billion, compared to $908.9 million as of December 31, 2012. The net investment account was $1.0 billion as of September 30, 2013 compared to $837.6 million at December 31, 2012, after accumulated depreciation and amortization of $114.6 million and $71.3 million, respectively. The change in the net investment account was comprised of $387.1 million of cash contributed to and income earned on investments offset by $209.3 million of cash distributed from investments. During the nine months ended September 30, 2013, the Company and its equity partners received approximately $940 million in distributions from their investments.

3


•
As of September 30, 2013, the Company and its equity partners owned 22.9 million rentable square feet of real estate, including investments in 16,511 apartment units and 79 commercial properties. Additionally, as of September 30, 2013, the Company and its equity partners owned in excess of $1.6 billion in unpaid principal balance of loans secured by real estate.
Operating metrics
•
During the nine months ended September 30, 2013, our investments business achieved an EBITDA of $99.5 million, a 111% increase from $47.2 million for the same period in 2012.
•
During the nine months ended September 30, 2013, based on our investments in 11,755 same property multifamily units, rental revenues increased 5%, net operating income increased 7% and occupancy increased 1% at the property level from the same period in 2012. In addition, based on our investments in 2.8 million square feet of same property commercial real estate, rental revenues increased 15%, net operating income increased 18% and occupancy increased 4% at the property level from the same period in 2012.
Acquisition/disposition program
•
From January 1, 2010 through September 30, 2013, the Company and its equity partners acquired approximately $10.6 billion of real estate related investments (including unpaid principal balance of loan purchases). During the nine months ended September 30, 2013, the Company and its equity partners acquired $2.6 billion of real estate related investments, in which the Company invested $368.5 million of equity. Our investments were directed 71% to the United Kingdom and Ireland and 29% to the Western U.S.
•
During the fourth quarter of 2012, the Company and one of its equity partners acquired the mortgage on The Rock, a premier retail, residential and entertainment center in Manchester, United Kingdom. During the third quarter, the Company and its equity partner converted their mortgage note to a 100% equity ownership in the property resulting in a $28.8 million acquisition related gain. The Company's portion of the gain was $14.4 million and was recognized in equity in joint venture income.
•
During the nine months ended September 30, 2013, the Company and its equity partners sold a total of $177.4 million of real estate, which resulted in a gain of $41.3 million, of which our share was $13.2 million ($29.9 million of our equity invested) including nine commercial buildings, two multifamily properties and 52 condos.
Property level debt financing
•
As of September 30, 2013, the Company and its equity partners had approximately $3.2 billion of property level debt with a weighted average interest rate of 5.1% and a weighted average maturity of 6.1 years.
•
As of September 30, 2013 the Company and its equity partners property level debt was 54% at fixed interest rates, 31% floating with interest rate caps and 15% at floating interest rates.
Key investment updates
UK Loan Pool
•
Our book equity in this investment is $11.4 million; we own 12.5% before carried interest.
•
In December 2011, the Company and its equity partners acquired a loan pool secured by real estate located in the United Kingdom with an unpaid principal balance of $2.1 billion. As of September 30, 2013, the unpaid principal balance was $189.1 million due to loan resolutions of approximately $1.9 billion, representing approximately 91% of the pool. During the nine months ended September 30, 2013, the Company received $53.4 million in distributions related to resolutions.


4


Japan multifamily
•
Our book equity in this investment is $72.2 million; we own 40.9% before carried interest.
•
We maintained 96% occupancy in 50 apartment buildings as of September 30, 2013 with a total of 2,410 units.
•
Since Fairfax Financial became our partner in the Japanese multifamily portfolio in September 2010, we have distributed a total of $104.4 million, of which our share was $49.1 million.
Services business
•
Management and leasing fees and commissions increased by 52% to $54.0 million for the nine months ended September 30, 2013, from $35.5 million for the same period in 2012.
•
During the nine months ended September 30, 2013, our services business achieved an EBITDA of $22.6 million, a 102% increase from $11.2 million for the same period in 2012.
Corporate financing
•
In September 2013, the Company issued and sold 6.9 million shares of common stock primarily to institutional investors, resulting in gross proceeds of $127.7 million. A portion of the proceeds were used to pay off the outstanding balance on our line of credit.
•
In September 2013, the Company increased the availability on its line of credit to $140.0 million from $100.0 million and extended the line's maturity to October 1, 2016.
Subsequent events
•
In October 2013, Meyers Research, a wholly owned subsidiary, launched Zonda, a mobile application designed to provide market insight for the homebuilding industry by combining interactive tools and real-time data on approximately 300 metrics impacting housing.

Conference Call and Webcast Details
The Company will hold a live conference call and webcast to discuss results at 7:00 a.m. PT/ 10:00 a.m. ET on Wednesday, November 6.
The direct dial-in number for the conference call is (888) 895-5479 for U.S. callers and (847) 619-6250 for international callers. The confirmation number for the live call is 35911843.
A replay of the call will be available for one week beginning two hours after the live call and can be accessed by (888) 843-7419 for U.S. callers and (630) 652-3042 for international callers. The passcode for the replay is 35911843#.
The webcast will be available at: http://edge.media-server.com/m/p/68ekhgu8/lan/en. A replay of the webcast will be available two hours after the original webcast on the Company’s investor relations web site for one year.
About Kennedy Wilson
Founded in 1977, Kennedy Wilson is an international real estate investment and services company headquartered in Beverly Hills, CA with 24 offices in the U.S., U.K., Ireland, Spain and Japan. The Company offers a comprehensive array of real estate services including auction, conventional sales, property services, research and investment management. Through its fund management and separate account businesses, Kennedy Wilson is a strategic investor of real estate investments in the U.S., U.K., Ireland and Japan. For further information on Kennedy Wilson, please visit www.kennedywilson.com.




5


Forward-Looking Statements
Statements made by us in this report and in other reports and statements released by us that are not historical facts constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21 of the Securities Exchange Act of 1934, as amended. These forward-looking statements are necessarily estimates reflecting the judgment of our senior management based on our current estimates, expectations, forecasts and projections and include comments that express our current opinions about trends and factors that may impact future operating results. Disclosures that use words such as "believe," "anticipate," "estimate," "intend," "could," "plan," "expect," "project" or the negative of these, as well as similar expressions, are intended to identify forward-looking statements. These statements are not guarantees of future performance, rely on a number of assumptions concerning future events, many of which are outside of our control, and involve known and unknown risks and uncertainties that could cause our actual results, performance or achievement, or industry results, to differ materially from any future results, performance or achievements, expressed or implied by such forward-looking statements. These risks and uncertainties may include the factors and the risks and uncertainties described elsewhere in this report and other filings with the Securities and Exchange Commission (the "SEC"), including the Item 1A. "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2012, as amended by our subsequent filings with the SEC. Any such forward-looking statements, whether made in this report or elsewhere, should be considered in the context of the various disclosures made by us about our businesses including, without limitation, the risk factors discussed in our filings with the SEC. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements, whether as a result of new information, future events, changes in assumptions, or otherwise.

Non-GAAP Financial Information
In addition to the results reported in accordance with U.S. generally accepted accounting principles (GAAP) included within this press release, Kennedy Wilson has provided certain information, which includes non-GAAP financial measures (Pro Forma Statements of Operations, Adjusted Net Income Attributable to Kennedy Wilson Common Shareholders, Basic Adjusted Net Income Attributable to Kennedy Wilson Common Shareholders Per Share, EBITDA and Adjusted EBITDA). Additionally, there are certain revenue and expense line items in our pro forma consolidated statements of operations or income that would otherwise be classified as discontinued operations on a GAAP statement. Such information is reconciled to its closest GAAP measure in accordance with the SEC rules and is included in the attached supplemental tables. Management believes that these non-GAAP financial measures are useful to both management and the Company's shareholders in their analysis of the business and operating performance of the Company. Management also uses this information for operational planning and decision-making purposes. Non-GAAP financial measures are not and should not be considered a substitute for any GAAP measures. Additionally, non-GAAP financial measures as presented by Kennedy Wilson may not be comparable to similarly titled measures reported by other companies.

Tables Follow

6


Kennedy-Wilson Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
 
 
 
September 30, 2013
 
December 31, 2012
Assets
 
 
 
 
Cash and cash equivalents
 
$
181,371,000

 
$
120,855,000

Short term investments
 
—

 
10,000,000

Accounts receivable
 
6,051,000

 
3,647,000

Accounts receivable - related parties
 
31,433,000

 
22,393,000

Notes receivable
 
22,444,000

 
136,607,000

Notes receivable - related parties
 
5,785,000

 
—

Real estate, net of accumulated depreciation
 
518,047,000

 
289,449,000

Investments in joint ventures
 
742,221,000

 
543,193,000

Investments in loan pool participations
 
58,774,000

 
95,601,000

Other assets
 
51,103,000

 
38,079,000

Goodwill
 
23,965,000

 
23,965,000

Total assets
 
$
1,641,194,000

 
$
1,283,789,000

 
 
 
 
 
Liabilities
 
 
 
 
Accounts payable
 
$
1,735,000

 
$
1,762,000

Accrued expenses and other liabilities
 
37,220,000

 
29,417,000

Accrued salaries and benefits
 
20,081,000

 
24,981,000

Deferred tax liability
 
16,937,000

 
22,671,000

Mortgage loans and notes payable
 
340,366,000

 
236,538,000

Senior notes payable
 
409,196,000

 
409,640,000

Junior subordinated debentures
 
40,000,000

 
40,000,000

Total liabilities
 
865,535,000

 
765,009,000

Equity
 
 
 
 
Cumulative Preferred stock:
 
 
 
 
6.00% Series A, 100,000 shares
 
—

 
—

6.45% Series B, 32,550 shares
 
—

 
—

Common stock
 
8,000

 
6,000

Additional paid-in capital
 
792,449,000

 
512,835,000

Accumulated deficit
 
(32,049,000
)
 
(5,910,000
)
Accumulated other comprehensive income
 
5,553,000

 
12,569,000

Shares held in treasury
 
—

 
(9,856,000
)
Total Kennedy-Wilson Holdings, Inc. stockholders’ equity
 
765,961,000

 
509,644,000

Noncontrolling interests
 
9,698,000

 
9,136,000

Total equity
 
775,659,000

 
518,780,000

Total liabilities and equity
 
$
1,641,194,000

 
$
1,283,789,000




7


Kennedy-Wilson Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
 
 
For the Three Months Ended
 
For the Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2013
 
2012
 
2013
 
2012
Revenue
 
 
 
 
 
 
 
 
Management and leasing fees
 
$
4,462,000

 
$
4,015,000

 
$
13,925,000

 
$
11,272,000

Management and leasing fees - related parties
 
10,649,000

 
6,320,000

 
27,962,000

 
18,036,000

Commissions
 
836,000

 
1,477,000

 
2,296,000

 
3,513,000

Commissions - related parties
 
5,025,000

 
668,000

 
9,865,000

 
2,652,000

Sale of real estate
 
1,546,000

 
1,275,000

 
10,060,000

 
1,275,000

Rental and other income
 
10,690,000

 
1,485,000

 
27,452,000

 
4,432,000

Total revenue
 
33,208,000

 
15,240,000

 
91,560,000

 
41,180,000

Operating expenses
 
 
 
 
 
 
 
 
Commission and marketing expenses
 
1,011,000

 
1,371,000

 
2,845,000

 
3,676,000

Compensation and related expenses
 
20,956,000

 
11,364,000

 
52,840,000

 
30,658,000

Cost of real estate sold
 
883,000

 
1,275,000

 
7,885,000

 
1,275,000

General and administrative
 
5,760,000

 
5,014,000

 
17,574,000

 
13,571,000

Depreciation and amortization
 
4,531,000

 
989,000

 
12,003,000

 
2,903,000

Rental operating expenses
 
4,167,000

 
847,000

 
11,852,000

 
2,638,000

Total operating expenses
 
37,308,000

 
20,860,000

 
104,999,000

 
54,721,000

Equity in joint venture income
 
9,379,000

 
1,848,000

 
20,955,000

 
12,472,000

Interest income from loan pool participations and notes receivable
 
3,983,000

 
3,712,000

 
10,209,000

 
7,126,000

Operating income (loss)
 
9,262,000

 
(60,000
)
 
17,725,000

 
6,057,000

Non-operating income (expense)
 
 
 
 
 
 
 
 
Interest income
 
205,000

 
179,000

 
444,000

 
2,503,000

Acquisition-related gain
 
1,668,000

 
—

 
11,127,000

 
—

Acquisition-related expenses
 
—

 
—

 
(510,000
)
 
—

Gain on sale of marketable securities
 
—

 
—

 
—

 
2,931,000

Interest expense
 
(13,141,000
)
 
(6,755,000
)
 
(37,104,000
)
 
(19,979,000
)
Other
 
—

 
(6,000
)
 
—

 
(80,000
)
Loss from continuing operations before benefit from income taxes
 
(2,006,000
)
 
(6,642,000
)
 
(8,318,000
)
 
(8,568,000
)
(Provision for) benefit from income taxes
 
(726,000
)
 
2,500,000

 
1,446,000

 
5,121,000

Loss from continuing operations
 
(2,732,000
)
 
(4,142,000
)
 
(6,872,000
)
 
(3,447,000
)
Discontinued Operations
 
 
 
 
 
 
 
 
(Loss) income from discontinued operations, net of income taxes
 
(291,000
)
 
—

 
(294,000
)
 
2,000

Gain (loss) from sale of real estate, net of income taxes
 
338,000

 
—

 
555,000

 
(212,000
)
Net loss
 
(2,685,000
)
 
(4,142,000
)
 
(6,611,000
)
 
(3,657,000
)
Net loss (income) attributable to the noncontrolling interests
 
652,000

 
(64,000
)
 
2,550,000

 
(2,990,000
)
Net loss attributable to Kennedy-Wilson Holdings, Inc.
 
(2,033,000
)
 
(4,206,000
)
 
(4,061,000
)
 
(6,647,000
)
Preferred stock dividends and accretion of issuance costs
 
(2,036,000
)
 
(2,036,000
)
 
(6,108,000
)
 
(6,108,000
)
Net loss attributable to Kennedy-Wilson Holdings, Inc.
     common shareholders
 
$
(4,069,000
)
 
$
(6,242,000
)
 
$
(10,169,000
)
 
$
(12,755,000
)
Basic and diluted earnings per share
 
 
 
 
 
 
 
 
Earnings (loss) per basic and diluted share - continuing operations
 
$
(0.06
)
 
$
(0.11
)
 
$
(0.15
)
 
$
(0.23
)
Earnings (loss) per basic and diluted share - discontinued
 
—

 
—

 
—

 
—

Earnings (loss) per share - basic and diluted(a)
 
$
(0.06
)
 
$
(0.11
)
 
$
(0.15
)
 
$
(0.24
)
Weighted average shares outstanding for basic and diluted
 
72,643,080


58,043,357


68,486,876


53,551,708

Dividends declared per common share
 
$
0.07

 
$
0.05

 
$
0.21

 
$
0.15

————————————————
(a) EPS amounts may not add due to rounding

8


Kennedy-Wilson Holdings, Inc. and Subsidiaries
Adjusted Net Income Attributable to Kennedy Wilson Common Shareholders
(Unaudited)


 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2013
 
2012
 
2013
 
2012
Net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders
 
$
(4,069,000
)
 
$
(6,242,000
)
 
$
(10,169,000
)
 
$
(12,755,000
)
Non-GAAP adjustments:
 
 
 
 
 
 
 
 
Add back:
 
 
 
 
 
 
 
 
Depreciation and amortization
 
4,531,000

 
989,000

 
12,003,000

 
2,903,000

Kennedy Wilson's share of depreciation and amortization included in investment in joint ventures
 
11,871,000

 
5,085,000

 
31,348,000

 
12,985,000

Stock-based compensation
 
2,035,000

 
2,922,000

 
5,466,000

 
5,000,000

Adjusted Net Income Attributable to Kennedy-Wilson Holdings, Inc. Common Shareholders
 
$
14,368,000

 
$
2,754,000

 
$
38,648,000

 
$
8,133,000

Basic weighted average number of common shares outstanding
 
72,643,080

 
58,043,357

 
68,486,876

 
53,551,708

Basic Adjusted Net Income Attributable to Kennedy-Wilson Holdings, Inc. Common Shareholders Per Share
 
$
0.20

 
$
0.05

 
$
0.56

 
$
0.15




Kennedy-Wilson Holdings, Inc. and Subsidiaries
EBITDA and Adjusted EBITDA
(Unaudited)


 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2013
 
2012
 
2013
 
2012
Net loss
 
$
(2,685,000
)
 
$
(4,142,000
)
 
$
(6,611,000
)
 
$
(3,657,000
)
Non-GAAP adjustments:
 
 
 
 
 
 
 
 
Add back:
 
 
 
 
 
 
 
 
Interest expense
 
13,141,000

 
6,755,000

 
37,104,000

 
19,979,000

Kennedy Wilson's share of interest expense included in investment
     in joint ventures and loan pool participations
 
12,688,000

 
8,364,000

 
33,405,000

 
23,364,000

Depreciation and amortization
 
4,531,000

 
989,000

 
12,003,000

 
2,903,000

Kennedy Wilson's share of depreciation and amortization included
      in investment in joint ventures
 
11,871,000

 
5,085,000

 
31,348,000

 
12,985,000

Provision for (benefit from) income taxes
 
726,000

 
(2,500,000
)
 
(1,446,000
)
 
(5,121,000
)
EBITDA
 
40,272,000

 
14,551,000

 
105,803,000

 
50,453,000

Stock-based compensation
 
2,035,000

 
2,922,000

 
5,466,000

 
5,000,000

Adjusted EBITDA
 
$
42,307,000

 
$
17,473,000

 
$
111,269,000

 
$
55,453,000






9


Kennedy-Wilson Holdings, Inc. and Subsidiaries
Capitalization Summary
(Unaudited)



September 30, 2013

December 31, 2012
Market Data




Common stock price per share

$
18.56


$
13.98

Common stock and convertible preferred stock:





Basic shares outstanding (1)

81,389,879


63,772,598

Series A mandatory convertible preferred (2)

8,058,018


8,058,018

Series B mandatory convertible preferred (3)

3,042,056


3,042,056

Total common stock and convertible preferred stock

92,489,953


74,872,672






Equity Market Capitalization

$
1,716,613,528


$
1,046,719,955






Corporate Debt (4)




Senior notes payable

405,000,000


405,000,000

Junior subordinated debentures

40,000,000


40,000,000

Total debt

445,000,000


445,000,000

Noncontrolling interest

9,698,000


9,136,000

Total Capitalization

2,171,311,528


1,500,855,955

Less: cash and cash equivalents and short term investments

(181,371,000
)

(130,855,000
)
Total Enterprise Value

$
1,989,940,528


$
1,370,000,955

Warrants outstanding (5)

5,018,093


5,822,744


(1) Basic share count and common stock price per share as of September 30, 2013 and December 31, 2012, respectively
(2) $100 million of Series A mandatory convertible preferred with a mandatory conversion date of May 19, 2015 and a conversion rate of $12.41 per share.
(3) $32.5 million of Series B mandatory convertible preferred with a mandatory conversion date of November 3, 2018 and a conversion rate of $10.70 per share.
(4) Excludes $340.4 million and $236.5 million of consolidated property level debt at September 30, 2013 and December 31, 2012, respectively.
(5) The warrants carry an exercise price of $12.50 and expire on November 14, 2014.




10


Kennedy-Wilson Holdings, Inc. and Subsidiaries
Pro Forma Consolidated Statements of Operations (Non-GAAP)
(Unaudited)

The following statement of operations represents the sum of Kennedy Wilson's consolidated operations and a pro rata portion of Kennedy Wilson's unconsolidated investments:
 
 
Three months ended September 30,
 
 
2013
 
2012
 
 
Consolidated
 
Pro Rata Unconsolidated Investments
 
Pro Forma Total
 
Consolidated
 
Pro Rata Unconsolidated Investments
 
Pro Forma Total
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
Management and leasing fees
 
$
15,111,000

 
$
—

 
$
15,111,000

 
$
10,335,000

 
$
—

 
$
10,335,000

Commissions
 
5,861,000

 
—

 
5,861,000

 
2,145,000

 
—

 
2,145,000

Sale of real estate
 
1,546,000

 
34,686,000

 
36,232,000

 
1,275,000

 
—

 
1,275,000

Rental and other income
 
10,690,000

 
35,945,000

 
46,635,000

 
1,485,000

 
20,572,000

 
22,057,000

Interest income
 
—

 
4,387,000

 
4,387,000

 
—

 
4,549,000

 
4,549,000

Total revenue
 
33,208,000

 
75,018,000

 
108,226,000

 
15,240,000

 
25,121,000

 
40,361,000

Operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
Commission and marketing expenses
 
1,011,000

 
—

 
1,011,000

 
1,371,000

 
—

 
1,371,000

Compensation and related expenses
 
20,956,000

 
134,000

 
21,090,000

 
11,364,000

 
198,000

 
11,562,000

Cost of real estate sold
 
883,000

 
26,493,000

 
27,376,000

 
1,275,000

 
—

 
1,275,000

General and administrative
 
5,760,000

 
692,000

 
6,452,000

 
5,014,000

 
229,000

 
5,243,000

Depreciation and amortization
 
4,531,000

 
11,871,000

 
16,402,000

 
989,000

 
5,085,000

 
6,074,000

Rental operating expenses
 
4,167,000

 
14,868,000

 
19,035,000

 
847,000

 
7,055,000

 
7,902,000

Total operating expenses
 
37,308,000

 
54,058,000

 
91,366,000

 
20,860,000

 
12,567,000

 
33,427,000

Equity in joint venture income
 
9,379,000

 
(9,379,000
)
 
—

 
1,848,000

 
(1,848,000
)
 
—

Interest income from loan pool
     participations and notes receivable
 
3,983,000

 
(3,983,000
)
 
—

 
3,712,000

 
(3,712,000
)
 
—

Operating income (expense)
 
9,262,000

 
7,598,000

 
16,860,000

 
(60,000
)
 
6,994,000

 
6,934,000

Non-operating income (expense)
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
205,000

 
(205,000
)
 
—

 
179,000

 
(179,000
)
 
—

Gain on sale of interest in joint venture investments
 
—

 
—

 
—

 
—

 
2,352,000

 
2,352,000

Acquisition-related gain
 
1,668,000

 
14,679,000

 
16,347,000

 
—

 
—

 
—

Acquisition-related expenses
 
—

 
(9,207,000
)
 
(9,207,000
)
 
—

 
(440,000
)
 
(440,000
)
Interest expense
 
(13,141,000
)
 
(12,688,000
)
 
(25,829,000
)
 
(6,755,000
)
 
(8,364,000
)
 
(15,119,000
)
Other
 
—

 
(177,000
)
 
(177,000
)
 
(6,000
)
 
(363,000
)
 
(369,000
)
Loss before benefit from income taxes
 
(2,006,000
)
 
—

 
(2,006,000
)
 
(6,642,000
)
 
—

 
(6,642,000
)
(Provision for) benefit from income taxes
 
(726,000
)
 
—

 
(726,000
)
 
2,500,000

 
—

 
2,500,000

Net loss from continuing operations
 
$
(2,732,000
)
 
$
—

 
$
(2,732,000
)
 
$
(4,142,000
)
 
$
—

 
$
(4,142,000
)
Discontinued Operations
 
 
 
 
 
 
 
 
 
 
 
 
Loss from discontinued operations, net of income taxes
 
(291,000
)
 
—

 
(291,000
)
 
—

 
—

 
—

Loss from sale of real estate
 
338,000

 
—

 
338,000

 
—

 
—

 
—

Net loss from continuing operations
 
$
(2,685,000
)
 
$
—

 
$
(2,685,000
)
 
$
(4,142,000
)
 
$
—

 
$
(4,142,000
)



11


Kennedy-Wilson Holdings, Inc. and Subsidiaries
Pro Forma Consolidated Statements of Operations (Non-GAAP)
(Unaudited)

The following statement of operations represents the sum of Kennedy Wilson's consolidated operations and a pro rata portion of Kennedy Wilson's unconsolidated investments:

 
 
Nine months ended September 30,
 
 
2013
 
2012
 
 
Consolidated
 
Pro Rata Unconsolidated Investments
 
Pro Forma Total
 
Consolidated
 
Pro Rata Unconsolidated Investments
 
Pro Forma Total
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
Management and leasing fees
 
$
41,887,000

 
$
—

 
$
41,887,000

 
$
29,308,000

 
$
—

 
$
29,308,000

Commissions
 
12,161,000

 
—

 
12,161,000

 
6,165,000

 
—

 
6,165,000

Sale of real estate
 
10,060,000

 
45,889,000

 
55,949,000

 
1,275,000

 
58,800,000

 
60,075,000

Rental and other income
 
27,452,000

 
95,002,000

 
122,454,000

 
4,432,000

 
54,496,000

 
58,928,000

Interest income
 
—

 
15,398,000

 
15,398,000

 
—

 
12,687,000

 
12,687,000

Total revenue
 
91,560,000

 
156,289,000

 
247,849,000

 
41,180,000

 
125,983,000

 
167,163,000

Operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
Commission and marketing expenses
 
2,845,000

 
—

 
2,845,000

 
3,676,000

 
—

 
3,676,000

Compensation and related expenses
 
52,840,000

 
589,000

 
53,429,000

 
30,658,000

 
698,000

 
31,356,000

Cost of real estate sold
 
7,885,000

 
34,851,000

 
42,736,000

 
1,275,000

 
50,100,000

 
51,375,000

General and administrative
 
17,574,000

 
1,124,000

 
18,698,000

 
13,571,000

 
529,000

 
14,100,000

Depreciation and amortization
 
12,003,000

 
31,348,000

 
43,351,000

 
2,903,000

 
12,985,000

 
15,888,000

Rental operating expenses
 
11,852,000

 
40,060,000

 
51,912,000

 
2,638,000

 
18,855,000

 
21,493,000

Total operating expenses
 
104,999,000

 
107,972,000

 
212,971,000

 
54,721,000

 
83,167,000

 
137,888,000

Equity in joint venture income
 
20,955,000

 
(20,955,000
)
 
—

 
12,472,000

 
(12,472,000
)
 
—

Interest income from loan pool
     participations and notes receivable
 
10,209,000

 
(10,209,000
)
 
—

 
7,126,000

 
(7,126,000
)
 
—

Operating income
 
17,725,000

 
17,153,000

 
34,878,000

 
6,057,000

 
23,218,000

 
29,275,000

Non-operating income (expense)
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
444,000

 
(444,000
)
 
—

 
2,503,000

 
(2,503,000
)
 
—

Carried interest on realized investment
 
—

 
—

 
—

 
—

 
2,400,000

 
2,400,000

Gain on sale of interest in joint venture investment
 
—

 
—

 
—

 
—

 
2,352,000

 
2,352,000

Acquisition-related gain
 
11,127,000

 
29,723,000

 
40,850,000

 
—

 
—

 
—

Acquisition-related expenses
 
(510,000
)
 
(12,001,000
)
 
(12,511,000
)
 
—

 
(1,246,000
)
 
(1,246,000
)
Gain on sale of marketable securities
 
—

 
—

 
—

 
2,931,000

 
—

 
2,931,000

Interest expense
 
(37,104,000
)
 
(33,405,000
)
 
(70,509,000
)
 
(19,979,000
)
 
(23,364,000
)
 
(43,343,000
)
Other
 
—

 
(1,026,000
)
 
(1,026,000
)
 
(80,000
)
 
(857,000
)
 
(937,000
)
Loss before benefit from income taxes
 
(8,318,000
)
 
—

 
(8,318,000
)
 
(8,568,000
)
 
—

 
(8,568,000
)
Benefit from income taxes
 
1,446,000

 
—

 
1,446,000

 
5,121,000

 
—

 
5,121,000

Loss from continuing operations
 
$
(6,872,000
)
 
$
—

 
$
(6,872,000
)
 
$
(3,447,000
)
 
$
—

 
$
(3,447,000
)
Discontinued Operations
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income from discontinued operations, net of income taxes
 
(294,000
)
 
—

 
(294,000
)
 
2,000

 
—

 
2,000

Gain (loss) from sale of real estate
 
555,000

 
—

 
555,000

 
(212,000
)
 
—

 
(212,000
)
Net loss from continuing operations
 
$
(6,611,000
)
 
$
—

 
$
(6,611,000
)
 
$
(3,657,000
)
 
$
—

 
$
(3,657,000
)



12


Kennedy-Wilson Holdings, Inc. and Subsidiaries
EBITDA by Segment
(Unaudited)


 
 
Three months ended September 30,
 
Nine months ended September 30,
 
 
2013
 
2012
 
2013
 
2012
Investments
 
 
 
 
 
 
 
 
Rental income and sale of real estate
 
$
12,236,000

 
$
2,760,000

 
$
37,512,000

 
$
5,707,000

Operating expenses (including cost of real estate sold)
 
(17,891,000
)
 
(10,184,000
)
 
(56,085,000
)
 
(22,008,000
)
Equity in joint venture income
 
9,379,000

 
1,848,000

 
20,955,000

 
12,472,000

Income from loan pool participations and notes receivable
 
3,983,000

 
3,712,000

 
10,209,000

 
7,126,000

Operating income (expense)
 
7,707,000

 
(1,864,000
)
 
12,591,000

 
3,297,000

Acquisition-related gain
 
1,668,000

 
—

 
11,127,000

 
—

Acquisition-related expenses
 
—

 
—

 
(510,000
)
 
—

Gain on sale of marketable securities
 
—

 
—

 
—

 
2,931,000

Other
 
—

 
(6,000
)
 
—

 
(80,000
)
Interest income - related party
 
136,000

 
139,000

 
208,000

 
2,408,000

Interest expense
 
(2,876,000
)
 
(160,000
)
 
(7,435,000
)
 
(477,000
)
Income (loss) from continuing operations
 
6,635,000

 
(1,891,000
)
 
15,981,000

 
8,079,000

(Loss) income from discontinued operations, net of income taxes
 
(291,000
)
 
—

 
(294,000
)
 
2,000

Gain (loss) from sale of real estate, net of income taxes
 
338,000

 
—

 
555,000

 
(212,000
)
Net income (loss)
 
6,682,000

 
(1,891,000
)
 
16,242,000

 
7,869,000

Add back:
 
 
 
 
 
 
 
 
Interest expense
 
2,876,000

 
160,000

 
7,435,000

 
477,000

Kennedy Wilson's share of interest expense included investment in joint ventures and loan pool participation
 
12,688,000

 
8,364,000

 
33,405,000

 
23,364,000

Depreciation and amortization
 
4,153,000

 
856,000

 
11,084,000

 
2,538,000

Kennedy Wilson's share of depreciation and amortization included in investment in joint ventures
 
11,871,000

 
5,085,000

 
31,348,000

 
12,985,000

EBITDA
 
$
38,270,000

 
$
12,574,000

 
$
99,514,000

 
$
47,233,000




 
 
Three months ended September 30,
 
Nine months ended September 30,
 
 
2013
 
2012
 
2013
 
2012
Services
 
 
 
 
 
 
 
 
Management and leasing fees and commissions
 
$
20,972,000

 
$
12,480,000

 
$
54,048,000

 
$
35,473,000

Operating expenses
 
(13,473,000
)
 
(7,678,000
)
 
(31,992,000
)
 
(24,411,000
)
Operating income
 
7,499,000

 
4,802,000

 
22,056,000

 
11,062,000

Net income
 
7,499,000

 
4,802,000

 
22,056,000

 
11,062,000

Add back:
 
 
 
 
 
 
 
 
Depreciation and amortization
 
234,000

 
40,000

 
501,000

 
107,000

EBITDA
 
$
7,733,000

 
$
4,842,000

 
$
22,557,000

 
$
11,169,000




13


Kennedy-Wilson Holdings, Inc. and Subsidiaries
Investment Account
(Unaudited)
($ in millions)

 
 
September 30, 2013
Investment in joint ventures
 
$
742.2

Real estate, net of depreciation
 
518.0

Mortgage debt
 
(340.4
)
Notes receivable
 
28.2

Acquired in-place lease values, net of amortization(1)
 
8.6

Loan pool participations
 
58.8

Total net investment account
 
1,015.4

Add back:
 
 
Accumulated depreciation and amortization
 
24.0

Kennedy Wilson's share of accumulated depreciation and amortization included in investment in joint ventures
 
90.6

Total gross investment account
 
$
1,130.0

(1) Included in other assets.

Net Investment Account Detail as of September 30, 2013
 
 
 
 
 
 
 
 
 
 
($ in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans Secured by
 
 
 
 
 
 
 
 
Multifamily
 
Commercial
 
Real Estate
 
Residential, Hotel, and Other
 
Total
Western U.S.
 
$
214.5
 
 
$
199.5
 
 
$
84.8
 
 
$
112.5
 
 
$
611.3

Other U.S.
 
0.1
 
 
4.3
 
 
—
 
 
7.9
 
 
12.3

Japan
 
72.2
 
 
6.9
 
 
—
 
 
—
 
 
79.1

United Kingdom
 
—
 
 
99.9
 
 
57.7
 
 
—
 
 
157.6

Ireland
 
48.5
 
 
98.6
 
 
8.0
 
 
—
 
 
155.1

Total
 
$
335.3
 
 
$
409.2
 
 
$
150.5
 
 
$
120.4
 
 
$
1,015.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans Secured by
 
 
 
 
 
 
 
 
Multifamily
 
Commercial
 
Real Estate
 
Residential, Hotel, and Other
 
 
Units
Properties
Rentable Sq Ft
 
Properties
Rentable Sq. Ft
 
Current UPB
# of Loans
 
Acres
Units
Lots
Hotel Rooms
# of Inv.
Western U.S.
 
13,144

35

11,576,551

 
27

4,319,601

 
$
126.5

24

 
3,406

29

877

170

17

Other U.S.
 
208

2

165,276

 
2

355,925

 
—

—

 
38

—

—

—

4

Japan
 
2,410

50

936,000

 
1

9,633

 
—

—

 
—

—

—

—

—

United Kingdom
 
—

—

—

 
33

4,017,666

 
1,106.8

61

 
—

—

—

—

—

Ireland
 
749

3

606,711

 
16

896,853

 
403.7

126

 
—

—

—

—

—

Total
 
16,511

90

13,284,538

 
79

9,599,678

 
$
1,637

211

 
3,444

29

877

170

21



14


Kennedy-Wilson Holdings, Inc. and Subsidiaries
Investment Account
(Unaudited)
($ in millions)

 
 
December 31, 2012
Investment in joint ventures
 
$
543.2

Real estate, net of depreciation
 
289.4

Mortgage debt
 
(236.5
)
Notes receivable
 
136.6

Acquired in-place lease values, net of amortization (1)
 
9.3

Loan pool participations
 
95.6

Total net investment account
 
837.6

Add back:
 
 
Accumulated depreciation and amortization
 
12.0

Kennedy Wilson's share of accumulated depreciation and amortization included in investment in joint ventures
 
59.3

Total gross investment account
 
$
908.9

(1) Included in other assets.


Net Investment Account Detail as of December 31, 2012
 
 
 
 
 
 
 
($ in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multifamily
 
Commercial
 
Loans Secured by Real Estate
 
Residential and Other
 
Total
Western U.S.
$
171.7
 
 
$
167.9
 
 
$
69.0
 
 
$
106.9
 
 
$
515.5

Other U.S.
0.4
 
 
3.3
 
 
—
 
 
10.5
 
 
14.2

Japan
102.7
 
 
8.6
 
 
—
 
 
—
 
 
111.3

United Kingdom
—
 
 
—
 
 
120.4
 
 
—
 
 
120.4

Ireland
22.4
 
 
9.5
 
 
44.3
 
 
—
 
 
76.2

Total
$
297.2
 
 
$
189.3
 

$
233.7
 
 
$
117.4
 
 
$
837.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multifamily
 
Commercial
 
 
Loans Secured by Real Estate
 
Residential and Other
 
Units
Properties
Rentable Sq. Ft
 
Properties
Rentable Sq. Ft.
 
Current UPB
# of Loans
 
Acres
Units
Lots
# of Inv.
Western U.S.
11,649

31

10,123,838

 
24

3,976,041

 
$
126.6

33

 
3,337

44

935

16
 
Other U.S.
376

3

294,984

 
4

478,450

 
—

—

 
50

43

—

5
 
Japan
2,410

50

936,000

 
1

9,633

 
—

—

 
—

—

—

—
 
United Kingdom
—

—

—

 
—

—

 
1,481.5

48

 
—

—

—

—
 
Ireland
329

2

230,160

 
1

45,105

 
634.9

140

 
—

—

—

—
 
Total
14,764

86

11,584,982

 
30

4,509,229

 
$
2,243

221

 
3,387

87

935

21
 


15


Kennedy-Wilson Holdings, Inc. and Subsidiaries
Investment Level Estimated Balance Sheets
(Unaudited)

The following estimated investment level balance sheets represent the estimated combined balance sheets of investments in which Kennedy Wilson has an ownership interest:
 
 
September 30, 2013
 
December 31, 2012
 
 
 
 
 
Assets
 
 
 
 
         Cash and cash equivalents
 
$
123,019,000

 
$
86,659,000

         Real estate, net
 
5,400,259,000

 
3,569,003,000

         Loan Pools
 
675,816,000

 
1,070,303,000

         Other assets
 
370,644,000

 
293,769,000

                Total assets
 
$
6,569,738,000

 
$
5,019,734,000

Liabilities and equity
 
 
 
 
Liabilities
 
 
 
 
         Accounts payable, accrued and other
 
138,288,000

 
109,203,000

         Notes payable
 
7,943,000

 
39,710,000

         Mortgage loans payable
 
3,233,347,000

 
2,396,600,000

                Total liabilities
 
3,379,578,000

 
2,545,513,000

Equity
 
 
 
 
                Total equity
 
3,190,160,000

 
2,474,221,000

                Total liabilities and equity
 
$
6,569,738,000

 
$
5,019,734,000




16


Kennedy-Wilson Holdings, Inc. and Subsidiaries
Investment Level Estimated Income Statement
(Unaudited)

The following estimated investment level income statements represent the estimated combined income statements of investments in which Kennedy Wilson has an ownership interest:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2013
 
2012
 
2013
 
2012
Revenue
 
 
 
 
 
 
 
 
   Rental and other income
 
$
113,902,000

 
$
75,177,000

 
$
301,192,000

 
$
207,742,000

   Sale of real estate
 
112,994,000

 
4,603,000

 
177,407,000

 
255,444,000

   Interest income
 
29,919,000

 
19,613,000

 
82,048,000

 
37,334,000

Total revenue
 
256,815,000

 
99,393,000

 
560,647,000

 
500,520,000

 
 
 
 
 
 
 
 
 
Operating expenses
 
 
 
 
 
 
 
 
   Compensation and related expenses
 
328,000

 
429,000

 
1,442,000

 
1,740,000

   Cost of real estate sold
 
83,176,000

 
3,882,000

 
136,122,000

 
221,517,000

   General and administrative
 
2,230,000

 
413,000

 
3,241,000

 
2,067,000

   Depreciation and amortization
 
36,113,000

 
21,926,000

 
94,550,000

 
62,526,000

   Rental operating expenses
 
46,989,000

 
30,710,000

 
128,125,000

 
83,721,000

Total operating expenses
 
168,836,000

 
57,360,000

 
363,480,000

 
371,571,000

 
 
 
 
 
 
 
 
 
Operating income
 
87,979,000

 
42,033,000

 
197,167,000

 
128,949,000

 
 
 
 
 
 
 
 
 
Non-operating income (expense)
 
 
 
 
 
 
 
 
   Interest expense
 
(38,130,000
)
 
(23,324,000
)
 
(96,375,000
)
 
(66,876,000
)
   Other non-operating expense
 
(7,898,000
)
 
(5,712,000
)
 
(22,059,000
)
 
(11,834,000
)
Gain on sale of interest in property
 
—

 
19,218,000

 
—

 
21,177,000

Acquisition related expenses
 
(37,667,000
)
 
(1,432,000
)
 
(48,635,000
)
 
(4,600,000
)
Acquisition related gain
 
29,358,000

 
—

 
59,447,000

 
—

Net income
 
$
33,642,000

 
$
30,783,000

 
$
89,545,000

 
$
66,816,000


17


Kennedy-Wilson Holdings, Inc. and Subsidiaries
2013 Acquisition Activity
(Unaudited)
($ in millions)

Acquisitions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended September 30, 2013
 
Nine months ended September 30, 2013
Real Estate
Multifamily
 
Commercial
 
Residential & Other
 
Total Real Estate
 
Multifamily
 
Commercial
 
Residential & Other
 
Total Real Estate
Investment
$
—

 
$
894.3

 
$
—

 
$
894.3

 
$
608.6

 
$
1,100.6

 
$
19.2

 
$
1,728.4

KW Equity Invested
—

 
139.7

 
—

 
139.7

 
96.9

 
194.2

 
4.4

 
295.5

 
 
 
26 properties
3.9 million Sq Ft
 
 
 
 
 
6 properties
2,530 units
 
58 properties
5.2 million Sq Ft
 
16 lots
 
 

 
Three months ended September 30, 2013
 
Nine months ended September 30, 2013
Loans
Discounted Loan Purchases
 
Loan Originations
 
Total Loans
 
Discounted Loan Purchases
 
Loan Originations
 
Total Loans
Investment
$
131.3

 
$
23.9

 
$
155.2

 
$
865.2

 
$
23.9

 
$
889.1

KW Equity Invested
7.4

 
14.0

 
21.4

 
59.0

 
14.0

 
73.0

 
72% Discount
 
10.1% Avg Interest Rate
 
3 underlying properties
 
46% Avg Discount
 
10.1% Avg Interest Rate
 
146 underlying properties


18


Kennedy-Wilson Holdings, Inc. and Subsidiaries
Investment Summary: Real Estate
(Unaudited)
($ in millions)

Multifamily
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Operating Income (NOI)
 
 
 
 
 
 
 
# of Properties
 
# of Units
 
Occupancy (1)
 
YTD Annualized (2)
 
Debt (3)
 
Pre-Promote Ownership %
 
KW Book Equity (1)
Western U.S.
35

 
13,144

 
94.1
%
 
$
129.6

 
$
1,493.0

 
38.1
%
 
$
214.5

Other U.S.
2

 
208

 
88.0

 
0.3

 
1.5

 
5.0

 
0.1

Japan (4)
50

 
2,410

 
95.8

 
22.9

 
292.5

 
40.9

 
72.2

Ireland (4) (6)
3

 
749

 
92.0

 
9.7

 
109.3

 
50.0

 
48.5

Total
90

 
16,511

 
94.2
%
 
$
162.5

 
$
1,896.3

 
39.1
%
 
$
335.3


Commercial
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Operating Income (NOI)
 
 
 
 
 
 
 
# of Properties
 
Rentable Sq Ft
 
Occupancy (1)
 
YTD Annualized (2)
 
Debt (5)
 
Pre-Promote Ownership %
 
KW Book Equity (1)
Western U.S.
27

 
4,319,601

 
82.2
%
 
$
47.6

 
$
542.8

 
49.2
%
 
$
199.5

Other U.S.
2

 
355,925

 
74.9

 
2.2

 
23.0

 
33.5

 
4.3

Japan (4)
1

 
9,633

 
100.0

 
0.2

 
—

 
82.0

 
6.9

United Kingdom (4)
33

 
4,017,666

 
87.5

 
55.3

 
340.8

 
39.3

 
99.9

Ireland (4) (7)
16

 
896,853

 
98.5

 
37.3

 
341.0

 
32.8

 
98.6

Total
79

 
9,599,678

 
85.7
%
 
$
142.6

 
$
1,247.6

 
40.9
%
 
$
409.2



Residential, Hotel, and Other
 
 
 
 
 
 
 
 
 
 
 
# of Investments
 
ResidentialUnits
 
Total Acres
 
Residential Lots
 
Hotel Rooms
 
Pre-Promote Ownership%
 
KW Book Equity (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Western U.S.
17

 
29

 
3,406

 
877

 
170

 
64.6
%
 
$
112.5

Other U.S.
4

 
—

 
38

 
—

 
—

 
95.8

 
7.9

Total
21

 
29

 
3,444

 
877

 
170

 
66.6
%
 
$
120.4


(1) As of September 30, 2013.
(2) Represents year to date NOI on an annualized basis.
(3) Debt represents 100% debt balance against properties as of September 30, 2013.
(4) Estimated foreign exchange rates are ¥98 = $1 USD, €0.74 = $1 USD and £0.62 = $1 USD, related to NOI and debt.
(5) Debt represents 100% debt balance against properties as of September 30, 2013, excluding $5.9 million of partner loans.
(6) Includes the 8.5 acre site and 65 units that are in the process of being completed at Clancy Quay.
(7) Includes the 3.5 acre site adjacent to the State Street building.
 




19


Kennedy-Wilson Holdings, Inc. and Subsidiaries
Investment Summary: Discounted Loan Purchases and Loan Originations
(Unaudited)
($ in millions)


Discounted Loan Purchases

 
Initial # of Loans
 (1)
 
Initial UPB (2)
 
# of Unresolved Loans
 
Total Collections
 
Current UPB
 
Pre-Promote KW Share of Current UPB (net of venture-level debt) (5)
 
Venture-level Debt (3)
 
Pre-Promote Ownership%
 
KW Book Equity
Western U.S.
79

 
$
460.5

 
12

 
$
323.2

 
$
67.6

 
$
35.0

 
$
4.4

 
58.2
%
 
$
25.9

United Kingdom (4)
113

 
3,677.3

 
61

 
2,148.0

 
1,106.8

 
135.9

 
47.8

 
14.4

 
57.7

Ireland (4)
151

 
488.2

 
126

 
52.3

 
403.7

 
40.3

 
—

 
10.0

 
8.0

Total
343

 
$
4,626.0

 
199

 
$
2,523.5

 
$
1,578.1

 
$
211.2

 
$
52.2

 
15.2
%
 
$
91.6



Loan Originations

 
# of Loans
 
Current UPB
 
WAV Interest Rate
 
Venture-level Debt (3)
 
Pre-Promote Ownership%
 
KW Book Equity
Western U.S.
12

 
$
58.9

 
10.0
%
 
$
—

 
100.0
%
 
$
58.9

Total
12

 
$
58.9

 
10.0
%
 
$
—

 
100.0
%
 
$
58.9


(1) Represents total number of loans at initial acquisition of respective pools.
(2) Unpaid Principal Balance.
(3) Venture-level debt represents 100% debt balance against loans as of September 30, 2013.
(4) Estimated foreign exchange rate is £0.62 = $1 USD and €0.74 = $1 USD.
(5) Represents the amount of cash we would receive if the loans are resolved at par, excluding our promoted interests.



20


Kennedy-Wilson Holdings, Inc. and Subsidiaries
Same Property Analysis - Multifamily by Region
(Unaudited)
($ in millions)



Same property amounts are calculated as the amounts attributable to properties which have been owned by us directly or through joint ventures during the entire span of both periods compared.

Three Months Ended September 30,
 
Same Property Units
 
Average % Leased
 
Rental Revenues
 
Net Operating Income
2013 vs. 2012
 
2013
 
2013
 
2012
 
% Change
 
2013
 
2012
 
% Change
 
2013
 
2012
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Region:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Western U.S.
 
10,728

 
94.5
%
 
94.5
%
 
—
%
 
$
37.5

 
$
35.1

 
6.8
%
 
$
25.3

 
$
23.6

 
7.2
%
      Other U.S.
 
208

 
88.5

 
75.0

 
18.0

 
0.3

 
0.2

 
50.0

 
0.1

 
—

 
—

      Japan (1)
 
2,410

 
95.1

 
95.0

 
0.1

 
7.8

 
7.4

 
5.4

 
5.9

 
5.5

 
7.3

      Ireland
 
210

 
95.3

 
94.8

 
0.5

 
1.3

 
1.2

 
8.3

 
1.0

 
0.8

 
25.0

      Same Property Total
 
13,556

 
94.5
%
 
94.3
%
 
0.2
%
 
$
46.9

 
$
43.9

 
6.8
%
 
$
32.3

 
$
29.9

 
8.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Nine Months Ended September 30,
 
Same Property Units
 
Average % Leased
 
Rental Revenues
 
Net Operating Income
2013 vs. 2012
 
2013
 
2013
 
2012
 
% Change
 
2013
 
2012
 
% Change
 
2013
 
2012
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Region:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Western U.S.
 
9,247

 
94.7
%
 
94.4
%
 
0.3
%
 
$
94.1

 
$
88.2

 
6.7
 %
 
$
63.8

 
$
58.5

 
9.1
%
      Other U.S.
 
98

 
90.5

 
87.9

 
3.0

 
0.4

 
0.3

 
33.3

 
0.2

 
0.2

 
—

      Japan (1)
 
2,410

 
95.3

 
94.3

 
1.1

 
23.1

 
23.2

 
(0.4
)
 
17.2

 
16.9

 
1.8

      Ireland
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

      Same Property Total
 
11,755

 
94.8
%
 
94.3
%
 
0.5
%
 
$
117.6

 
$
111.7

 
5.3
 %
 
$
81.2

 
$
75.6

 
7.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Estimated foreign exchange rate is ¥98 = $1 USD and €0.74 = $1 USD.



21


Kennedy-Wilson Holdings, Inc. and Subsidiaries
Same Property Analysis - Commercial by Region
(Unaudited)
($ in millions)
 

Same property amounts are calculated as the amounts attributable to properties which have been owned by us directly or through joint ventures during the entire span of both periods compared.



Three Months Ended September 30,
 
Same Property Square Feet
 
Average % Leased
 
Rental Revenues
 
Net Operating Income
2013 vs. 2012
 
2013
 
2013
 
2012
 
% Change
 
2013
 
2012
 
% Change
 
2013
 
2012
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Region:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Western U.S.
 
2,549,898

 
85.5
%
 
82.9
%
 
3.1
%
 
$
14.2

 
$
12.4

 
14.5
%
 
$
8.3

 
$
7.3

 
13.7
%
      Other U.S.
 
355,925

 
75.6

 
69.6

 
8.6

 
1.3

 
1.2

 
8.3

 
0.6

 
0.5

 
20.0

      Japan (1)
 
9,633

 
100.0

 
100.0

 
—

 
0.1

 
0.1

 
—

 
0.1

 
0.1

 
—

      Same Property Total
 
2,915,456

 
84.3
%
 
81.3
%
 
3.7
%
 
$
15.6

 
$
13.7

 
13.9
%
 
$
9.0

 
$
7.9

 
13.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Nine Months Ended September 30,
 
Same Property Square Feet
 
Average % Leased
 
Rental Revenues
 
Net Operating Income
2013 vs. 2012
 
2013
 
2013
 
2012
 
% Change
 
2013
 
2012
 
% Change
 
2013
 
2012
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Region:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Western U.S.
 
2,434,850

 
83.9
%
 
80.7
%
 
4.0
%
 
$
41.2

 
$
35.7

 
15.4
%
 
$
24.8

 
$
21.0

 
18.1
%
      Other U.S.
 
355,925

 
74.2

 
69.8

 
6.3

 
3.8

 
3.4

 
11.8

 
1.7

 
1.4

 
21.4

      Japan (1)
 
9,633

 
100.0

 
100.0

 
—

 
0.2

 
0.2

 
—

 
0.2

 
0.2

 
—

      Same Property Total
 
2,800,408

 
82.7
%
 
79.4
%
 
4.2
%
 
$
45.2

 
$
39.3

 
15.0
%
 
$
26.7

 
$
22.6

 
18.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Estimated foreign exchange rate is ¥98 = $1 USD



22


Kennedy-Wilson Holdings, Inc. and Subsidiaries
Debt Schedule
(Unaudited)
($ in millions)

 
Consolidated Debt
 
Unconsolidated Asset Level Debt
 
Total Consolidated Debt + KW Share of Unconsolidated Asset Level Debt
 
 
Maturity
Unsecured Corporate Debt
 
Asset Level Debt (3)
 
Total
 
Total
 
KW Share
 
 
Amount Due at Maturity Date (2)
2013
$
—

 
$
0.9

 
$
0.9

 
$
62.9

 
$
40.0

 
$
40.9

 
$
42.2

2014
—

 
11.1

 
11.1

 
196.9

 
110.6

 
121.7

 
105.5

2015
—

 
19.5

 
19.5

 
241.6

 
97.8

 
117.3

 
90.7

2016
—

 
42.3

 
42.3

 
249.2

 
90.3

 
132.6

 
111.6

2017
—

 
32.6

 
32.6

 
563.3

 
241.8

 
274.4

 
253.2

2018
—

 
22.8

 
22.8

 
747.1

 
231.8

 
254.6

 
238.2

2019
350.0

(1 
) 
6.1

 
356.1

 
143.5

 
34.4

 
390.5

 
379.2

2020
—

 
122.1

 
122.1

 
147.5

 
62.5

 
184.5

 
174.7

Thereafter
95.0

 
83.0

 
178.0

 
540.9

 
121.5

 
299.4

 
286.4

Total
$
445.0

 
$
340.4

 
$
785.4

 
$
2,892.9

 
$
1,030.7

 
$
1,815.9

 
$
1,681.7


(1) Represents principal balance of senior notes.
(2) Amount does not reflect extension options.
(3) Includes $5.5 million of debt premium.



Weighted average interest rate (KW Share): 5.1%

Weighted average remaining maturity in years (KW Share): 6.1 years

Kennedy Wilson has exposure to fixed and floating rate debt through its consolidated properties and its joint venture investments. The table below details Kennedy Wilson's total consolidated and unconsolidated asset level debt by interest rate type.
 
Fixed Rate Debt
 
Floating with Interest Rate Caps (4)
 
Floating without Interest Rate Caps
 
Total Asset Level Debt (5)
Asset Level Debt
$
1,750.7

 
$
989.6

 
$
493.0

 
$
3,233.3


(4) Includes purchase of interest rate cap in October 2013 on $181.6 million of debt.
(5) Represents $340.4 million of consolidated asset level debt and $2.9 billion of unconsolidated asset level debt. 98% of such asset level debt is non-recourse to the Company.


23