EX-99.1 2 a10-k2012supplementalrelea.htm PRESS RELEASE, DATED MARCH 12, 2013, AND FOURTH QUARTER AND FULL YEAR 2012 SUPP 10-K 2012 Supplemental & Release
Exhibit 99.1

 





Kennedy-Wilson Holdings, Inc.
Fourth Quarter and Full Year 2012
Earnings Release and Supplemental Financial Information










 




Kennedy-Wilson Holdings, Inc.
Supplemental Financial Information
For the Quarter Ended December 31, 2012


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 and Adjusted EBITDA). 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.







 

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 FOURTH QUARTER AND FULL YEAR 2012 EARNINGS
Adjusted EBITDA for FY 2012 grows by 41% to $100.3 million;
Company increases dividend by 40% to $0.07 per common share for first quarter 2013

BEVERLY HILLS, Calif. (March 12, 2013) - Kennedy-Wilson Holdings, Inc. (NYSE: KW) ("Kennedy Wilson," "we," "us," "our," or the "Company"), an international real estate investment and services company, today reported a fourth quarter 2012 net income attributable to common shareholders of $8.9 million (or $0.15 and $0.14 per basic and diluted share, respectively) compared to a net income attributable to common shareholders of $8.0 million (or $0.17 and $0.14 per basic and diluted share, respectively) for the same period in 2011. Net income attributable to common shareholders, adjusted for stock-based compensation expense, was $12.0 million (or $0.20 per basic share) compared to a net income of $9.3 million for the same period in 2011 (or $0.20 per basic share).

Full year 2012 net loss attributable to common shareholders was $3.9 million (or $0.07 per basic and diluted share) compared to a loss of $2.4 million (or $0.05 per basic and diluted share) for the same period in 2011. Net income attributable to common shareholders for the full year 2012, adjusted for stock-based compensation expense and common stock issuance discount treated as preferred dividend (for 2011), was $4.3 million (or $0.08 per basic share) compared to net income of $3.3 million (or $0.08 per basic share) for the same period in 2011.

The Company's earnings before interest, taxes, depreciation, and stock-based compensation expense ("Adjusted EBITDA") for the fourth quarter of 2012 was $44.9 million, a 51% increase from $29.7 million for the same period in 2011. The Company's Adjusted EBITDA for the full year ended December 31, 2012 was $100.3 million, a 41% increase from $71.2 million for the same period 2011.

"The company had a very active and successful fourth quarter with more than $1.3 billion of acquisitions in the U.S., United Kingdom and Ireland," said William McMorrow, chairman and CEO of Kennedy Wilson. "Our key operating metrics and recurring cash flow are improving each quarter, and we continue to see significant investment opportunities in our core markets."

The company also announced that it will pay a dividend of $0.07 per share, a 40% increase from the previous quarter, to common shareholders of record as of March 22, 2013 with a payment date of April 2, 2013. The quarterly payment equates to an annual dividend of $0.28 per common share.





Kennedy Wilson Recent Highlights

Investments business
Investment Account
•
As of December 31, 2012, our investment account (Kennedy Wilson's equity in real estate, joint ventures, loan investments and marketable securities, less mortgage debt) increased by 42% to $828.3 million from $582.8 million at December 31, 2011. This change was comprised of approximately $469.6 million (including $230.3 million during the fourth quarter) of cash contributed to, offset by income earned on investments and approximately $224.0 million (including $60.0 million during the fourth quarter) of cash distributed from investments.
•
As of December 31, 2012, the Company and its equity partners owned 16.1 million rentable square feet of real estate including 14,764 apartment units and 30 commercial properties. Additionally, as of December 31, 2012, the Company and its equity partners owned $2.2 billion in loans secured by real estate and over 3,300 acres of land.
Operating metrics
•
During the three months ended December 31, 2012, our investments business achieved an Adjusted EBITDA of $42.0 million, a 159% increase from $16.1 million for the same period in 2011.
•
During the year ended December 31, 2012, our investments business achieved an Adjusted EBITDA of $88.5 million, a 68% increase from $52.7 million for the same period in 2011.
•
During the year ended December 31, 2012, based on 9,015 same property multifamily units, rental revenues and net operating income increased by 3.6% and 5.9%, respectively, while percentage leased decreased by 0.2% from 2011. In addition, based on 2.2 million square feet of same property commercial real estate, rental revenues, net operating income and occupancy increased by 9.9%, 13.2% and 5.1%, respectively.
Acquisition/disposition program
•
From January 1, 2010 through December 31, 2012, the Company and its equity partners, acquired approximately $8.0 billion of real estate related investments (includes unpaid principal balance of loan purchases). During 2012, the Company and its equity partners acquired $2.9 billion of real estate related investments. This includes $1.4 billion of real estate and $1.5 billion of loans secured by real estate in which we invested $206.1 million and $196.2 million, respectively.
•
During the year ended December 31, 2012, the Company and its equity partners sold six multifamily properties (through property sales and sale of equity interest) located in the Western U.S. for a total of $251.7 million, which resulted in a total gain of $33.7 million, of which our share was $10.1 million ($20.7 million of our equity invested).
Property level debt financing
•
During the year ended December 31, 2012, the Company and its equity partners completed approximately $928.7 million of property financings and re-financings at an average interest rate of 3.8% and a weighted average maturity of 6.0 years.
•
During the year ended December 31, 2011, the Company and its equity partners completed approximately $1.6 billion of property financings and re-financings at an average interest rate of 4.2% and a weighted average maturity of 3.3 years.





Key Investment Updates
UK Loan Pool
•
Our current equity in this investment is $60.4 million; we own 12.5% before carried interest.
•
In December 2011, we and our 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 December 31, 2012, the unpaid principal balance was $765.8 million due to loan resolutions of approximately $1.3 billion, representing 64% of the pool. The total debt incurred at the venture level at the time of purchase of these loans was $323.4 million with a maturity date of October 2014. As a result of the loan resolutions, the venture level debt has been paid down by $297.6 million to $25.8 million as of December 31, 2012.
KW Residential, LLC
•
Our current equity in this investment is $102.7 million; we own 40.9% before carried interest.
•
Maintained 96.4% occupancy in 50 apartment buildings with over 2,400 units.
•
Since Fairfax Financial became our partner in the Japanese apartment portfolio in September 2010, we have distributed a total of $56.5 million, of which our share was $26.4 million.
Services business
•
Management and leasing fees and commissions decreased by 42% to $17.8 million for the three months ended December 31, 2012 from $30.8 million for the same period in 2011.
•
During the three months ended December 31, 2012, our services business achieved an EBITDA of $9.0 million, a 53% decrease from $19.2 million for the same period in 2011.
•
Management and leasing fees and commissions decreased by 7% to $53.3 million for the year ended December 31, 2012 from $57.1 million for the same period in 2011. Included in management and leasing fees and commissions for the year ended December 31, 2012 and 2011 are $4.4 million and $21.6 million, respectively, of acquisition fees related to the acquisition of the Bank of Ireland stock and the UK loan pool in 2011. Excluding the acquisition fees, the Company achieved a 38% increase in management and leasing fees and commissions for the year ended December 31, 2012 as compared to the same period in 2011.
•
During the year ended December 31, 2012, our services business achieved an EBITDA of $20.2 million, a 22% decrease from $25.7 million for the same period in 2011. Excluding the acquisition fees related to the acquisition of the Bank of Ireland stock and the UK loan pool in 2011 of $4.4 million and $21.6 million for the year ended December 31, 2012 and 2011, respectively, the Company achieved a 282% increase in its services EBITDA for the year ended December 31, 2012 as compared to the same period in 2011.
Corporate financing
•
In July 2012, the Company issued 8.6 million shares of common stock primarily to institutional investors, resulting in gross proceeds of $112.1 million, of which $40.0 million was used to pay off the outstanding balance on our line of credit.
•
During the three months ended December 31, 2012, the Company issued $155.0 million of senior notes.
Subsequent events
•
Subsequent to December 31, 2012, we have acquired or have entered into contracts to acquire approximately $1.2 billion of real estate related investments which include 1.6 million rentable square feet of real estate, comprised of 725 apartment units and one commercial property along with $727.6



million of loans secured by real estate and 301 residential lots. We expect the acquisitions to be joint venture investments.
•
Subsequent to December 31, 2012, KW Residential, LLC settled several Japanese yen related hedges resulting in cash proceeds of $23.7 million to the joint venture, of which our share was $10.6 million.
•
In December 2012, we invested $43.6 million of our equity and borrowed $79.3 million to acquire a loan secured by a shopping center in the United Kingdom. Additionally, in partnership with an institutional investor, we acquired a loan pool with an unpaid principal balance of $232.3 million, comprised of seven loans secured by 23 underlying properties in the United Kingdom.  Our investment in the pool totaled $16.0 million. Subsequent to December 31, 2012, we sold 50% of our interest in both investments to an institutional investor.  As a result of the sale, the loan secured by a shopping center will no longer be consolidated.
•
During March 2013, we drew $35 million on our unsecured credit facility.

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, March 13.
The direct dial-in number for the conference call is (800) 706-7745 for U.S. callers and (617) 614-3472 for international callers. The confirmation number for the live call is 14209752.
A replay of the call will be available for one week beginning two hours after the live call and can be accessed by (888) 286-8010 for U.S. callers and (617) 801-6888 for international callers. The passcode for the replay is 20403213.
The webcast will be available at: http://edge.media-server.com/m/p/rgvcnd5k/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.

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 (the "Securities Act") and Section 21 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). 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 these 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, 2011. 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 Loss Attributable to Kennedy Wilson Common Shareholders, Basic Adjusted Net Loss 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




Kennedy-Wilson Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
 
 
 
December 31,
 
 
2012
 
2011
Assets
 
 
 
 
Cash and cash equivalents
 
$
120,855,000

 
$
115,926,000

Short term investments
 
10,000,000

 
—

Accounts receivable
 
3,647,000

 
3,114,000

Accounts receivable—related parties
 
22,393,000

 
15,612,000

Notes receivable
 
136,607,000

 
7,938,000

Notes receivable—related parties
 
—

 
33,269,000

Real estate, net of accumulated depreciation
 
289,449,000

 
115,880,000

Investments in joint ventures
 
543,193,000

 
343,367,000

Investments in loan pool participations
 
95,601,000

 
89,951,000

Marketable securities
 
—

 
23,005,000

Other assets
 
38,079,000

 
20,749,000

Goodwill
 
23,965,000

 
23,965,000

Total assets
 
$
1,283,789,000

 
$
792,776,000


 
 
 
 
Liabilities
 
 
 
 
Accounts payable
 
$
1,762,000

 
$
1,798,000

Accrued expenses and other liabilities
 
29,417,000

 
24,262,000

Accrued salaries and benefits
 
24,981,000

 
14,578,000

Deferred tax liability
 
22,671,000

 
18,437,000

Mortgage loans and notes payable
 
236,538,000

 
30,748,000

Senior notes payable
 
409,640,000

 
249,385,000

Junior subordinated debentures
 
40,000,000

 
40,000,000

Total liabilities
 
765,009,000

 
379,208,000

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

 
—

6.45% Series B, 32,550 shares
 
—

 
—

Common stock
 
6,000

 
5,000

Additional paid-in capital
 
512,835,000

 
407,335,000

Retained earnings (accumulated deficit)
 
(5,910,000
)
 
9,708,000

Accumulated other comprehensive income
 
12,569,000

 
5,035,000

Shares held in treasury
 
(9,856,000
)
 
(11,848,000
)
Total Kennedy-Wilson Holdings, Inc. stockholders’ equity
 
509,644,000

 
410,235,000

Noncontrolling interests
 
9,136,000

 
3,333,000

Total equity
 
518,780,000

 
413,568,000

Total liabilities and equity
 
$
1,283,789,000

 
$
792,776,000

See accompanying notes to consolidated financial statements.



8


Kennedy-Wilson Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations
 
 
For the Three Months Ended
 
For the Year Ended
 
 
December 31,
 
December 31,
 
 
2012
 
2011
 
2012
 
2011
Revenue
 
 
 
 
 
 
 
 
Management and leasing fees
 
$
10,996,000

 
$
9,308,000

 
$
40,304,000

 
$
27,116,000

Commissions
 
6,790,000

 
21,531,000

 
12,955,000

 
29,960,000

Sale of real estate
 
996,000

 
—

 
2,271,000

 
417,000

Rental and other income
 
4,094,000

 
1,781,000

 
8,526,000

 
5,140,000

Total revenue
 
22,876,000

 
32,620,000

 
64,056,000

 
62,633,000

Operating expenses
 
 
 
 
 
 
 
 
Commission and marketing expenses
 
874,000

 
950,000

 
4,550,000

 
3,965,000

Compensation and related expenses
 
25,176,000

 
16,567,000

 
55,834,000

 
41,129,000

Cost of real estate sold
 
955,000

 
—

 
2,230,000

 
397,000

General and administrative
 
5,797,000

 
5,273,000

 
19,448,000

 
14,455,000

Depreciation and amortization
 
2,034,000

 
970,000

 
4,937,000

 
2,798,000

Rental operating expenses
 
1,858,000

 
1,060,000

 
4,496,000

 
3,308,000

Total operating expenses
 
36,694,000

 
24,820,000

 
91,495,000

 
66,052,000

Equity in joint venture income
 
9,055,000

 
5,346,000

 
21,527,000

 
12,507,000

Interest income from loan pool participations and notes receivable
 
2,130,000

 
2,051,000

 
9,256,000

 
7,886,000

Operating (loss) income
 
(2,633,000
)
 
15,197,000

 
3,344,000

 
16,974,000

Non-operating income (expense)
 
 
 
 
 
 
 
 
Interest income
 
435,000

 
1,072,000

 
2,938,000

 
2,306,000

Acquisition related gain
 
25,476,000

 
—

 
25,476,000

 
6,348,000

Gain on sale of marketable securities
 
1,422,000

 
—

 
4,353,000

 
—

Acquisition-related expenses
 
(675,000
)
 
—

 
(675,000
)
 
—

Interest expense
 
(8,616,000
)
 
(6,634,000
)
 
(28,595,000
)
 
(20,507,000
)
Income from continuing operations before (provision for) benefit from income taxes
 
15,409,000

 
9,635,000

 
6,841,000

 
5,121,000

(Provision for) benefit from income taxes
 
(4,913,000
)
 
(148,000
)
 
208,000

 
2,014,000

Income from continuing operations
 
10,496,000

 
9,487,000

 
7,049,000

 
7,135,000

Discontinued Operations
 
 
 
 
 
 
 
 
Income from discontinued operations, net of income taxes
 
—

 
8,000

 
2,000

 
8,000

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

 
335,000

 
(212,000
)
 
335,000

Net income
 
10,496,000

 
9,830,000

 
6,839,000

 
7,478,000

Net income (loss) attributable to the noncontrolling interests
 
401,000

 
163,000

 
(2,589,000
)
 
(1,132,000
)
Net income attributable to Kennedy-Wilson Holdings, Inc.
 
10,897,000

 
9,993,000

 
4,250,000

 
6,346,000

Preferred stock dividends and accretion of issuance costs
 
(2,036,000
)
 
(2,036,000
)
 
(8,144,000
)
 
(8,744,000
)
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc.
     common shareholders
 
$
8,861,000

 
$
7,957,000

 
$
(3,894,000
)
 
$
(2,398,000
)
Basic earnings per share
 
 
 
 
 
 
 
 
Income (loss) per basic - continuing operations
 
$
0.15

 
$
0.16

 
$
(0.07
)
 
$
(0.06
)
Income (loss) per basic - discontinued
 
—

 
0.01

 
—

 
0.01

Earnings (loss) per share - basic (a)
 
$
0.15

 
$
0.17

 
$
(0.07
)
 
$
(0.05
)
Weighted average shares outstanding for basic
 
60,450,450

 
47,412,858

 
55,285,833

 
42,415,770

Diluted earnings per share
 
 
 
 
 
 
 
 
Income (loss) per diluted - continuing operations
 
$
0.14

 
$
0.13

 
$
(0.07
)
 
$
(0.06
)
Income (loss) per diluted - discontinued
 
—

 
0.01

 
—

 
0.01

Earnings per share - diluted (a)
 
$
0.14

 
$
0.14

 
$
(0.07
)
 
$
(0.06
)
Weighted average shares outstanding for diluted
 
61,166,123

 
58,896,137

 
55,285,833

 
42,415,770

Dividends declared per common share
 
$
0.20

 
$
0.11

 
$
0.05

 
$
0.04

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

9


Kennedy-Wilson Holdings, Inc. and Subsidiaries
Adjusted Net Loss Attributable to Kennedy Wilson Common Shareholders


 
 
Three Months Ended
 
Year Ended
 
 
December 31,
 
December 31,
 
 
2012
 
2011
 
2012
 
2011
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc. common shareholders
 
$
8,861,000

 
$
7,957,000

 
$
(3,894,000
)
 
$
(2,398,000
)
Non-GAAP adjustments:
 
 
 
 
 
 
 
 
Add back:
 
 
 
 
 
 
 
 
Stock based compensation
 
3,147,000

 
1,294,000

 
8,147,000

 
5,055,000

Common stock issuance discount treated as preferred dividend
 
—

 
—

 
—

 
600,000

Adjusted Net Income Attributable to
Kennedy Wilson Holdings, Inc. Common Shareholders
 
$
12,008,000

 
$
9,251,000

 
$
4,253,000

 
$
3,257,000

Basic weighted average number of
common shares outstanding
 
60,450,450

 
47,412,858

 
55,285,833

 
42,415,770

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

 
$
0.20

 
$
0.08

 
$
0.08




Kennedy-Wilson Holdings, Inc. and Subsidiaries
EBITDA and Adjusted EBITDA


 
 
Three Months Ended
 
Year Ended
 
 
December 31,
 
December 31,
 
 
2012
 
2011
 
2012
 
2011
Net income
 
$
10,496,000

 
$
9,830,000

 
$
6,839,000

 
$
7,478,000

Non-GAAP adjustments:
 
 
 
 
 
 
 
 
Add back:
 
 
 
 
 
 
 
 
Interest expense
 
8,616,000

 
6,634,000

 
28,595,000

 
20,507,000

Kennedy Wilson's share of interest expense included in investment
     in joint ventures and loan pool participations
 
6,048,000

 
8,472,000

 
29,412,000

 
23,453,000

Depreciation and amortization
 
2,034,000

 
970,000

 
4,937,000

 
2,798,000

Kennedy Wilson's share of depreciation and amortization included
      in investment in joint ventures
 
9,614,000

 
2,342,000

 
22,599,000

 
13,900,000

Provision for (benefit from) income taxes
 
4,913,000

 
148,000

 
(208,000
)
 
(2,014,000
)
EBITDA
 
41,721,000

 
28,396,000

 
92,174,000

 
66,122,000

Stock-based compensation
 
3,147,000

 
1,294,000

 
8,147,000

 
5,055,000

Adjusted EBITDA
 
$
44,868,000

 
$
29,690,000

 
$
100,321,000

 
$
71,177,000




10


Kennedy-Wilson Holdings, Inc.
Capitalization Summary

 
 
December 31, 2012
 
December 31, 2011
Market Data
 
 
 
 
Common stock price per share
 
$
13.98

 
$
10.58

Common stock and convertible preferred stock:
 


 

Basic shares outstanding
 
63,772,598

 
51,825,998

Series A mandatory convertible preferred (1)
 
8,058,018

 
8,058,018

Series B mandatory convertible preferred (2)
 
3,042,056

 
3,042,056

Total common stock and convertible preferred stock
 
74,872,672

 
62,926,072

 
 
 
 
 
Equity Market Capitalization
 
$
1,046,719,955

 
$
665,757,842

 
 
 
 
 
Corporate Debt (3)
 
 
 
 
Senior notes payable
 
405,000,000

 
250,000,000

Junior subordinated debentures
 
40,000,000

 
40,000,000

Total debt
 
$
445,000,000

 
$
290,000,000

Noncontrolling interest
 
9,136,000

 
3,333,000

Total Capitalization
 
$
1,500,855,955

 
$
959,090,842

Less: cash and cash equivalents and short term investments
 
(130,855,000
)
 
(115,926,000
)
Total Enterprise Value
 
$
1,370,000,955

 
$
843,164,842

Warrants outstanding (4)
 
5,822,744

 
6,435,644


(1) $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.
(2) $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.
(3) Excludes $236.5 million and $30.7 million of consolidated property level debt for the year ended December 31, 2012 and December 31, 2011, respectively.
(4) The warrants carry an exercise price of $12.50 and expire on November 14, 2014.



11


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

 
 
Three months ended December 31,
 
 
2012
 
2011
 
 
Consolidated
 
Pro Rata Unconsolidated Investments
 
Pro Forma Total
 
Consolidated
 
Pro Rata Unconsolidated Investments
 
Pro Forma Total
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
Management and leasing fees
 
$
10,996,000


$
—

 
$
10,996,000

 
$
9,308,000


$
—

 
$
9,308,000

Commissions
 
6,790,000


—

 
6,790,000

 
21,531,000


—

 
21,531,000

Sale of real estate
 
996,000


3,051,000

 
4,047,000

 
—


5,640,000

 
5,640,000

Rental and other income
 
4,094,000


23,983,000

 
28,077,000

 
1,781,000


8,751,000

 
10,532,000

Interest income
 
—


3,569,000

 
3,569,000

 
—


3,654,000

 
3,654,000

Total revenue
 
22,876,000

 
30,603,000

 
53,479,000

 
32,620,000

 
18,045,000

 
50,665,000

Operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
Commission and marketing expenses
 
874,000


—

 
874,000

 
950,000


—

 
950,000

Compensation and related expenses
 
25,176,000


261,000

 
25,437,000

 
16,567,000


243,000

 
16,810,000

Cost of real estate sold
 
955,000


2,678,000

 
3,633,000

 
—


3,726,000

 
3,726,000

General and administrative
 
5,797,000


266,000

 
6,063,000

 
5,273,000


860,000

 
6,133,000

Depreciation and amortization
 
2,034,000


9,614,000

 
11,648,000

 
970,000


2,342,000

 
3,312,000

Rental operating expenses
 
1,858,000


8,445,000

 
10,303,000

 
1,060,000


4,550,000

 
5,610,000

Total operating expenses
 
36,694,000

 
21,264,000

 
57,958,000

 
24,820,000

 
11,721,000

 
36,541,000

Equity in joint venture income (loss)
 
9,055,000


(9,055,000
)
 
—

 
5,346,000


(5,346,000
)
 
—

Interest income from loan pool
     participations and notes receivable
 
2,130,000


(2,130,000
)
 
—

 
2,051,000


(2,051,000
)
 
—

Operating (loss) income
 
(2,633,000
)
 
(1,846,000
)
 
(4,479,000
)
 
15,197,000

 
(1,073,000
)
 
14,124,000

Non-operating income (expense)
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
435,000


(435,000
)
 
—

 
1,072,000


(1,072,000
)
 
—

Acquisition related gain
 
25,476,000


—

 
25,476,000

 
—


5,800,000

 
5,800,000

Gain on sale of marketable securities
 
1,422,000


—

 
1,422,000

 
—


—

 
—

Acquisition-related expenses
 
(675,000
)
 
(1,182,000
)
 
(1,857,000
)
 
—

 
(111,000
)
 
(111,000
)
Gain on early extinguishment of mortgage debt
 
—


—

 
—

 
—


1,100,000

 
1,100,000

Gain on refinancing
 
—

 
1,463,000

 
1,463,000

 
—

 
—

 
—

Fair value gain
 
—


9,535,000

 
9,535,000

 
—


4,296,000

 
4,296,000

Interest expense
 
(8,616,000
)

(6,048,000
)
 
(14,664,000
)
 
(6,634,000
)

(8,472,000
)
 
(15,106,000
)
Other non-operating expenses
 
—


(1,487,000
)
 
(1,487,000
)
 
—


(468,000
)
 
(468,000
)
Income before benefit from income taxes
 
15,409,000

 
—

 
15,409,000

 
9,635,000

 
—

 
9,635,000

Provision for income taxes
 
(4,913,000
)

—

 
(4,913,000
)
 
(148,000
)

—

 
(148,000
)
Income from continuing operations
 
$
10,496,000

 
$
—

 
$
10,496,000

 
$
9,487,000

 
$
—

 
$
9,487,000

Discontinued Operations
 
 
 
 
 
 
 
 
 
 
 
 
  Income from discontinued operations, net of income taxes
 
—




 
—

 
8,000


—

 
8,000

Gain from sale of real estate
 
—




 
—

 
335,000


—

 
335,000

Net income
 
$
10,496,000

 
$
—

 
$
10,496,000

 
$
9,830,000

 
$
—

 
$
9,830,000




12


Kennedy-Wilson Holdings, Inc.
Pro Forma Consolidated Statements of Operations (Non-GAAP)
 
 
Twelve months ended December 31,
 
 
2012
 
2011
 
 
Consolidated
 
Pro Rata Unconsolidated Investments
 
Pro Forma Total
 
Consolidated
 
Pro Rata Unconsolidated Investments
 
Pro Forma Total
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
Management and leasing fees
 
$
40,304,000


$
—

 
$
40,304,000

 
$
27,116,000


$
—

 
$
27,116,000

Commissions
 
12,955,000


—

 
12,955,000

 
29,960,000


—

 
29,960,000

Sale of real estate
 
2,271,000


61,851,000

 
64,122,000

 
417,000


39,804,000

 
40,221,000

Rental and other income
 
8,526,000


78,479,000

 
87,005,000

 
5,140,000


54,760,000

 
59,900,000

Interest income
 
—


16,256,000

 
16,256,000

 
—


12,492,000

 
12,492,000

Total revenue
 
64,056,000

 
156,586,000

 
220,642,000

 
62,633,000

 
107,056,000

 
169,689,000

Operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
Commission and marketing expenses
 
4,550,000


—

 
4,550,000

 
3,965,000


—

 
3,965,000

Compensation and related expenses
 
55,834,000


959,000

 
56,793,000

 
41,129,000


700,000

 
41,829,000

Cost of real estate sold
 
2,230,000


52,778,000

 
55,008,000

 
397,000


33,400,000

 
33,797,000

General and administrative
 
19,448,000


795,000

 
20,243,000

 
14,455,000


1,300,000

 
15,755,000

Depreciation and amortization
 
4,937,000


22,599,000

 
27,536,000

 
2,798,000


13,900,000

 
16,698,000

Rental operating expenses
 
4,496,000


27,300,000

 
31,796,000

 
3,308,000


20,900,000

 
24,208,000

Total operating expenses
 
91,495,000

 
104,431,000

 
195,926,000

 
66,052,000

 
70,200,000

 
136,252,000

Equity in joint venture income
 
21,527,000


(21,527,000
)
 
—

 
12,507,000


(12,507,000
)
 
—

Interest income from loan pool
     participations and notes receivable
 
9,256,000


(9,256,000
)
 
—

 
7,886,000


(7,886,000
)
 
—

Operating income
 
3,344,000

 
21,372,000

 
24,716,000

 
16,974,000

 
16,463,000

 
33,437,000

Non-operating income (expense)
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
2,938,000


(2,938,000
)
 
—

 
2,306,000


(2,306,000
)
 
—

Acquisition related gain
 
25,476,000


—

 
25,476,000

 
6,348,000


5,800,000

 
12,148,000

Gain on sale of marketable securities
 
4,353,000


—

 
4,353,000

 
—


—

 
—

Acquisition-related expenses
 
(675,000
)
 
(2,428,000
)
 
(3,103,000
)
 
—

 
(438,000
)
 
(438,000
)
Gain on early extinguishment of mortgage debt
 
—


—

 
—

 
—


1,100,000

 
1,100,000

Carried interest on realized investment
 
—


2,400,000

 
2,400,000

 
—


—

 
—

Gain on sale of interest in joint venture investments
 
—


2,352,000

 
2,352,000

 
—


—

 
—

Gain on refinancing
 
—

 
1,463,000

 
1,463,000

 
—

 
—

 
—

Fair value gain
 
—


9,535,000

 
9,535,000

 
—


4,296,000

 
4,296,000

Interest expense
 
(28,595,000
)

(29,412,000
)
 
(58,007,000
)
 
(20,507,000
)

(23,453,000
)
 
(43,960,000
)
Other non-operating expenses
 
—


(2,344,000
)
 
(2,344,000
)
 
—


(1,462,000
)
 
(1,462,000
)
Income before benefit from income taxes
 
6,841,000

 
—

 
6,841,000

 
5,121,000

 
—

 
5,121,000

Benefit from income taxes
 
208,000


—

 
208,000

 
2,014,000


—

 
2,014,000

Income from continuing operations
 
$
7,049,000

 
$
—

 
$
7,049,000

 
$
7,135,000

 
$
—

 
$
7,135,000

Discontinued Operations
 
 
 
 
 
 
 
 
 
 
 
 
  Income from discontinued operations, net of income taxes
 
2,000


—

 
2,000

 
8,000


—

 
8,000

(Loss) gain from sale of real estate
 
(212,000
)

—

 
(212,000
)
 
335,000


—

 
335,000

Net income
 
$
6,839,000

 
$
—

 
$
6,839,000

 
$
7,478,000

 
$
—

 
$
7,478,000




13


Kennedy-Wilson Holdings, Inc.
EBITDA by Segment




Three months ended December 31,

Twelve months ended December 31,


2012

2011

2012

2011
Investments









Rental and other income and sale of real estate

$
5,090,000

 
$
1,781,000


$
10,797,000

 
$
5,557,000

Operating expenses

(19,159,000
)
 
(7,019,000
)

(41,247,000
)
 
(21,722,000
)
Equity in joint venture income

9,055,000

 
5,278,000


21,527,000

 
12,507,000

Income from loan pool participations and notes receivable

2,130,000

 
2,051,000


9,256,000

 
7,886,000

Operating (loss) income

(2,884,000
)
 
2,091,000


333,000

 
4,228,000

Interest income - related party

397,000

 
2,021,000


2,805,000

 
2,021,000

Acquisition related gain

25,476,000

 
—


25,476,000

 
6,348,000

Gain on sale of marketable securities

1,422,000

 
—


4,353,000

 
—

Acquisition-related expenses
 
—

 
—

 
(675,000
)
 
—

Interest expense

(1,983,000
)
 
(1,327,000
)

(2,460,000
)
 
(1,552,000
)
Income from continuing operations

22,428,000

 
2,785,000


29,832,000

 
11,045,000

Income from discontinued operations, net of income taxes

—

 
8,000


2,000

 
8,000

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

—

 
335,000


(212,000
)
 
335,000

Net income

22,428,000

 
3,128,000


29,622,000

 
11,388,000

Add back:



 



 

Interest expense

1,983,000

 
1,327,000


2,460,000

 
1,552,000

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

6,048,000

 
8,472,000


29,412,000

 
23,453,000

Depreciation and amortization

1,889,000

 
851,000


4,427,000

 
2,420,000

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

9,614,000

 
2,342,000


22,599,000

 
13,900,000

EBITDA

$
41,962,000

 
$
16,120,000


$
88,520,000

 
$
52,713,000






Three months ended December 31,

Twelve months ended December 31,


2012

2011

2012

2011
Services









 


Management and leasing fees and commissions

$
17,786,000

 
$
30,839,000

 
$
53,259,000

 
$
57,076,000

Operating expenses

(8,837,000
)
 
(11,658,000
)
 
(33,248,000
)
 
(31,499,000
)
Operating income

8,949,000

 
19,181,000

 
20,011,000

 
25,577,000

Net income

8,949,000

 
19,181,000

 
20,011,000

 
25,577,000

Add back:


 

 

 

Depreciation and amortization

54,000

 
45,000

 
161,000

 
143,000

EBITDA

$
9,003,000

 
$
19,226,000

 
$
20,172,000

 
$
25,720,000




14


Investment Level Estimated Balance Sheet (unaudited)

The following estimated investment level balance sheet represents the estimated combined balance sheet of investments in which Kennedy Wilson has an ownership interest:
 
 
December 31, 2012

December 31, 2011
 
 
 
 
 
Assets
 
 
 
 
         Cash and cash equivalents
 
$
86,659,000

 
$
66,110,000

         Real estate, net
 
3,569,003,000

 
3,309,352,000

         Loan Pools
 
1,070,303,000

 
548,191,000

         Other assets
 
293,769,000

 
177,283,000

                Total assets
 
$
5,019,734,000

 
$
4,100,936,000

Liabilities and equity
 
 
 
 
Liabilities
 
 
 
 
         Accounts payable, accrued and other
 
109,203,000

 
75,925,000

         Notes payable
 
39,710,000

 
54,749,000

         Mortgage loans payable
 
2,396,600,000

 
2,163,184,000

                Total liabilities
 
2,545,513,000

 
2,293,858,000

Equity
 
 
 
 
                Total equity
 
2,474,221,000

 
1,807,078,000

                Total liabilities and equity
 
$
5,019,734,000

 
$
4,100,936,000




Investment Level Estimated Income Statement (unaudited)

The following estimated investment level income statement represents the estimated combined income statement of investments in which Kennedy Wilson has an ownership interest:
 
 
Year Ended December 31,
 
 
2012
 
2011
Revenue
 
 
 
 
   Rental and other income
 
$
286,693,000

 
$
279,079,000

   Sale of real estate
 
265,351,000

 
113,885,000

   Interest income
 
53,611,000

 
26,487,000

Total revenue
 
605,655,000

 
419,451,000


 
 
 
 
Operating expenses
 
 
 
 
   Compensation and related expenses
 
2,348,000

 
1,590,000

   Cost of real estate sold
 
229,789,000

 
104,398,000

   General and administrative
 
1,944,000

 
3,132,000

   Depreciation and amortization
 
81,056,000

 
72,770,000

   Rental operating expenses
 
117,828,000

 
119,917,000

Total operating expenses
 
432,965,000

 
301,807,000


 
 
 
 
Net operating income
 
172,690,000

 
117,644,000


 
 
 
 
Non-operating income (expense)
 
 
 
 
   Interest expense
 
(97,578,000
)
 
(89,146,000
)
   Other non-operating (expense) income
 
(5,611,000
)
 
15,251,000

Net income
 
$
69,501,000

 
$
43,749,000


15


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

 
 
12/31/2012
Investment in joint ventures
 
$
543.2

Real estate
 
289.4

Mortgage debt
 
(236.5
)
Notes receivable
 
136.6

Loan pool participations
 
95.6

Total
 
$
828.3



Investment Account Detail at December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans Secured by
 
 
 
 
 
 
 
 
 
 
 
Multifamily
 
Real Estate
 
Commercial
 
Residential, Hotel, and Other
 
Total
Western U.S.
 
$
170.8
 
 
$
69.0
 
 
$
159.5
 
 
$
106.9
 
 
$
506.2

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
 
 
44.3
 
 
9.5
 
 
—
 
 
76.2

Total
 
$
296.3
 
 
$
233.7
 
 
$
180.9
 
 
$
117.4
 
 
$
828.3

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

31

10,123,838

 
$
126.6

108

 
24

3,976,041

 
3,337

44

935

170

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
 
329

2

230,160

 
1,481.5

66

 
—

—

 
—

—

—

—

—

Ireland
 
—

—

—

 
634.9

153

 
1

45,105

 
—

—

—

—

—

Total
 
14,764

86

11,584,982

 
$
2,243

327

 
30

4,509,229

 
3,387

87

935

170

21





16


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

 
 
12/31/2011
Investment in joint ventures
 
$
343.4

Real estate
 
115.9

Mortgage debt
 
(30.7
)
Notes receivable
 
41.2

Loan pool participations
 
90.0

Marketable securities
 
23.0

Total
 
$
582.8



Investment Account Detail at December 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multifamily
 
Loans Secured by Real Estate
 
Commercial
 
Residential and Other
 
Total
Western U.S.
$
131.3
 
 
$
106.5
 
 
$
52.3
 
 
$
78.4
 
 
$
368.5

Other U.S.
0.2
 
 
4.8
 
 
0.7
 
 
4.2
 
 
9.9

Japan
112.1
 
 
—
 
 
9.3
 
 
—
 
 
121.4

United Kingdom
—
 
 
60.0
 
 
—
 
 
—
 
 
60.0

Ireland
—
 
 
—
 
 
—
 
 
23.0
 
 
23.0

Total
$
243.6
 
 
$
171.3
 
$
62.3
 
 
$
105.6
 
 
$
582.8

 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
Multifamily
 
Loans Secured by Real Estate
 
Commercial
 
Residential and Other
 
 
 
Units
Properties
Rentable Sq. Ft
 
Current UPB
# of Loans
 
Properties
Rentable Sq. Ft.
 
Acres
Units
Lots
# of Inv.
 
 
Western U.S.
10,509

29

9,287,599

 
$
359.7

58

 
16

2,966,971

 
3,298

22

856

11

 
 
Other U.S.
266

2

212,354

 
—

—

 
5

554,877

 
50

—

—

5

 
 
Japan
2,410

50

936,000

 
—

—

 
1

9,633

 
—

—

—

—

 
 
United Kingdom
—

—

—

 
1,665.5

18

 
—

—

 
—

—

—

1

 
 
Ireland
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
13,185

81

10,435,953

 
$
2,025.2

76

 
22

3,531,481

 
3,348

22

856

17

 
 



17


Kennedy-Wilson Holdings, Inc. and Subsidiaries
2012 Acquisition Activity
($ in millions)


Acquisitions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
($ in millions)
Year Ended December 31, 2012
 
Three months ended December 31, 2012
Real Estate
Multifamily
 
Commercial
 
Residential & Other
 
Total Real Estate
 
Multifamily
 
Commercial
 
Residential & Other
 
Total Real Estate
Investment
$
529.1

 
$
788.6

 
$
112.5

 
$
1,430.2

 
$
160.9

 
$
212.1

 
$
87.6

 
$
460.6

KW Equity Invested
$
100.7

 
$
79.8

 
$
25.6

 
$
206.1

 
$
61.9

 
$
42.7

 
$
23.5

 
$
128.1

 
11 properties
2,841 units
 
17 properties
2.7 million Sq Ft
 
170 hotel rooms,
69 condos, 79 lots
 
 
 
4 properties
880 units
 
6 properties
0.7 million Sq Ft
 
170 hotel rooms,
69 condos
 
 

($ in millions)
Year Ended December 31, 2012
 
Three months ended December 31, 2012
Loans
Discounted Loan Purchases
 
Loan Originations
 
Total Loans
 
Discounted Loan Purchases
 
Loan Originations
 
Total Loans
Investment
$
1,434.8

 
$
20.8

 
$
1,455.6

 
$
869.3

 
$
12.3

 
$
881.6

KW Equity Invested
$
185.2

 
$
11.0

 
$
196.2

 
$
94.2

 
$
6.8

 
$
101.0

 
35% Avg Discount
 
11% Avg Interest Rate
 
135 underlying properties
 
44% Avg Discount
 
11% Avg Interest Rate
 
27 underlying properties


18


Kennedy-Wilson Holdings, Inc.
Investment Summary: Real Estate
($ in millions)
Multifamily
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Operating Income (NOI)
 
 
 
 
 
 
 
# of Properties
 
# of Units
 
Occupancy (1)
 
YTD Annualized (2)
 
Debt (3)
 
Pre-Promote Ownership %
 
KW Book Equity
Western U.S.
31

 
11,649

 
95.1
%
 
$
102.5

 
$
1,240.6

 
34.3
%
 
$
170.8

Other U.S.
3

 
376

 
83.9

 
0.9

 
5.8

 
9.9

 
0.4

Japan (4)
50

 
2,410

 
96.4

 
28.9

 
309.7

 
40.9

 
102.7

Ireland (4)
2

 
329

 
95.4

 
4.6

 
45.3

 
50.0

 
22.4

Total
86

 
14,764

 
95.0
%
 
$
136.9

 
$
1,601.4

 
36.1
%
 
$
296.3

Commercial
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
Net Operating Income (NOI)
 
 
 
 
 
 
 
# of Properties
 
Rentable Sq Ft
 
Occupancy (1)
 
YTD Annualized (2)
 
Debt (5)
 
Pre-Promote Ownership %
 
KW Book Equity
Western U.S.
24

 
3,976,041

 
83.1
%
 
$
43.7

 
$
508.5

 
44.0
%
 
$
159.5

Other U.S.
4

 
478,450

 
78.1

 
2.7

 
38.2

 
19.7

 
3.3

Japan (4)
1

 
9,633

 
100.0

 
0.4

 
—

 
82.0

 
8.6

Ireland (4)
1

 
45,105

 
100.0

 
2.7

 
—

 
50.0

 
9.5

Total
30

 
4,509,229

 
82.8
%
 
$
49.5

 
$
546.7

 
43.3
%
 
$
180.9


(1) As of December 31, 2012
(2) Represents year to date NOI on an annualized basis.
(3) Debt represents 100% debt balance against properties as of December 31, 2012.
(4) Estimated foreign exchange rates are ¥86 = $1 USD and €0.76 = $1 USD, related to NOI and debt.
(5) Debt represents 100% debt balance against properties as of December 31, 2012, excluding $5.9 million of partner loans.


Kennedy-Wilson Holdings, Inc.
Investment Summary: Real Estate
($ in millions)
Residential, Hotel, and Other
 
 
 
 
 
 
 
 
 
 
 
# of Investments
 
ResidentialUnits
 
Total Acres
 
Residential Lots
 
Hotel Rooms
 
Pre-Promote Ownership%
 
KW Book Equity (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Western U.S.
16

 
44

 
3,337

 
935

 
170

 
65.5
%
 
$
106.9

Other U.S.
5

 
43

 
50

 
—

 
—

 
98.0

 
10.5

Total
21

 
87

 
3,387

 
935

 
170

 
68.4
%
 
$
117.4




 



19


Kennedy-Wilson Holdings, Inc.
Investment Summary: Discounted Loan Purchases and Loan Originations
($ 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)
 
Venture-level Debt (3)
 
Pre-Promote Ownership%
 
KW Book Equity
Western U.S.
99

 
$
535.5

 
24

 
$
369.2

 
$
78.0

 
$
27.6

 
$
17.7

 
49.6
%
 
$
20.4

United Kingdom (4)
66

 
2,827.0

 
48

 
1,366.2

 
1,481.5

 
510.8

 
104.5

 
40.7

 
120.4

 Ireland (4)
153

 
635.7

 
140

 
14.7

 
634.9

 
91.2

 
71.4

 
20.0

 
44.3

Total
318

 
$
3,998.2

 
212

 
$
1,750.1

 
$
2,194.4

 
$
629.6

 
$
193.6

 
35.0
%
 
$
185.1



Loan Originations

 
# of Loans
 
Current UPB
 
WAV Interest Rate
 
Venture-level Debt (3)
 
Pre-Promote Ownership%
 
KW Book Equity
Western U.S.
9

 
$
48.6

 
10.0
%
 
$
—

 
100.0
%
 
$
48.6

Total
9

 
$
48.6

 
10.0
%
 
$
—

 
100.0
%
 
$
48.6


(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 December 31, 2012.
(4) Estimated foreign exchange rate is £0.62 = $1 USD and €0.76 = $1 USD. KW owns a 50% interest in an entity which in turn owns 25% of the United Kingdom loan pool. This entity has debt of $25.8 million as of December 31, 2012.


20

Kennedy-Wilson Holdings, Inc.
Same Property Analysis - Multifamily by Region
($ in millions)
Three Months Ended December 31,
 
Same Property Units
 
Average % Leased
 
Rental Revenues
 
Net Operating Income
2012 vs. 2011
 
2012
 
2012
 
2011
 
% Change
 
2012
 
2011
 
% Change
 
2012
 
2011
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Region:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Western U.S.
 
8,589

 
95.4
%
 
94.1
%
 
1.4
 %
 
$
28.7

 
$
27.1

 
5.9
%
 
$
19.3

 
$
16.9

 
14.2
%
      Other U.S.
 
266

 
88.2

 
91.2

 
(3.3
)
 
0.4

 
0.4

 
—

 
0.2

 
0.2

 
—

      Japan
 
2,410

 
96.2

 
95.1

 
1.2

 
10.3

 
9.6

 
7.3

 
7.9

 
7.1

 
11.3

      Same Property Total
 
11,265

 
95.4
%
 
94.2
%
 
1.3
 %
 
$
39.4

 
$
37.1

 
6.2
%
 
$
27.4

 
$
24.2

 
13.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31,
 
Same Property Units
 
Average % Leased
 
Rental Revenues
 
Net Operating Income
2012 vs. 2011
 
2012
 
2012
 
2011
 
% Change
 
2012
 
2011
 
% Change
 
2012
 
2011
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Region:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Western U.S.
 
6,339

 
94.7
%
 
94.8
%
 
(0.1
)%
 
$
83.4

 
$
80.4

 
3.7
%
 
$
55

 
$
51.5

 
6.8
%
      Other U.S.
 
266

 
90.8

 
93.3

 
(2.7
)
 
1.7

 
1.6

 
6.3

 
0.9

 
0.8

 
12.5

      Japan
 
2,410

 
94.9

 
95.2

 
(0.3
)
 
39.0

 
37.8

 
3.2

 
28.9

 
27.8

 
4.0

      Same Property Total
 
9,015

 
94.6
%
 
94.9
%
 
(0.3
)%
 
$
124.1

 
$
119.8

 
3.6
%
 
$
84.8

 
$
80.1

 
5.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


21


Kennedy-Wilson Holdings, Inc.
Same Property Analysis - Commercial by Region
($ in millions)
Three Months Ended December 31,
 
Same Property Units
 
Average % Occupancy
 
Rental Revenues
 
Net Operating Income
2012 vs. 2011
 
2012
 
2012
 
2011
 
% Change
 
2012
 
2011
 
% Change
 
2012
 
2011
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Region:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Western U.S.
 
2,311,333

 
84.1
%
 
77.4
%
 
8.7
 %
 
$
12.4

 
$
11.2

 
10.7
%
 
$
7.1

 
$
6.2

 
14.5
 %
      Other U.S.
 
478,450

 
77.7

 
78.3

 
(0.8
)
 
1.7

 
1.7

 
—

 
0.7

 
0.8

 
(12.5
)
      Japan
 
9,633

 
100.0

 
100.0

 
—

 
0.1

 
0.1

 
—

 
0.1

 
0.1

 
—

      Same Property Total
 
2,799,416

 
83.1
%
 
77.6
%
 
7.1
 %
 
$
14.2

 
$
13.0

 
9.2
%
 
$
7.9

 
$
7.1

 
11.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31,
 
Same Property Units
 
Average % Occupancy
 
Rental Revenues
 
Net Operating Income
2012 vs. 2011
 
2012
 
2012
 
2011
 
% Change
 
2012
 
2011
 
% Change
 
2012
 
2011
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Region:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Western U.S.
 
1,779,375

 
79.2
%
 
73.5
%
 
7.8
 %
 
$
38.6

 
$
34.5

 
11.9
%
 
$
22.7

 
$
19.4

 
17.0
 %
      Other U.S.
 
478,450

 
74.2

 
77.2

 
(3.9
)
 
6.5

 
6.5

 
—

 
2.7

 
2.9

 
(6.9
)
      Japan
 
9,633

 
100.0

 
100.0

 
—

 
0.5

 
0.5

 
—

 
0.4

 
0.5

 
(20.0
)
      Same Property Total
 
2,267,458

 
78.2
%
 
74.4
%
 
5.1
 %
 
$
45.6

 
$
41.5

 
9.9
%
 
$
25.8

 
$
22.8

 
13.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

22


Kennedy-Wilson Holdings, Inc.
Debt Schedule
($ 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
 
Total
 
Total
 
KW Share
 
 
Amount Due at Maturity Date (2)
2013
$
—

 
$
12.9

 
$
12.9

 
$
184.2

 
$
88.1

 
$
101.0

 
$
91.9

2014
—

 
8.8

 
8.8

 
223.1

 
112.8

 
121.6

 
109.3

2015
—

 
82.0

 
82.0

 
139.1

 
45.4

 
127.4

 
131.8

2016
—

 
15.3

 
15.3

 
373.6

 
149.4

 
164.7

 
137.1

2017
—

 
28.6

 
28.6

 
568.2

 
229.9

 
258.5

 
248.0

2018
—

 
15.3

 
15.3

 
175.3

 
36.9

 
52.2

 
46.2

2019
350.0

(1 
) 
2.0

 
352.0

 
140.9

 
32.4

 
384.4

 
379.4

2020
—

 
29.1

 
29.1

 
132.1

 
41.3

 
70.4

 
66.0

Thereafter
95.0

 
42.5

 
137.5

 
223.6

 
58.3

 
195.8

 
172.4

Total
$
445.0

 
$
236.5

 
$
681.5

 
$
2,160.1

 
$
794.5

 
$
1,476.0

 
$
1,382.1


(1) Represents principal balance of senior notes.
(2) Amount does not reflect extension options.


Weighted average interest rate (KW Share): 5.5%

Weighted average remaining maturity in years (KW Share): 6.3 years



23