INVESTMENTS IN LOAN POOL PARTICIPATIONS

As of December 31, 2013 and 2012, the Company's investment in loan pool participations totaled $34.7 million and $95.6 million.

The following table represents the demographics of the Company's investment in the loan pools including the initial UPB and the UPB as of December 31, 2013.



(Dollars in millions)				Unpaid Principal Balance				Kennedy				Expected
		Kennedy						Wilson		Investment		accretion over
Acquisition		Wilson				December 31,		initial equity		balance at		total estimated		Accreted
date	Location	Ownership		Initial⁽¹⁾		2013⁽²⁾		invested		12/31/13		collection period		to date
February 2010	Western U.S.	15.0	%	$	342.4	$	8.0	$	11.1	$	0.9	$	4.6	$	4.6
December 2011	United Kingdom	12.5	%	2,111.3		44.7		61.2		—		19.3		18.1
April 2012	Western U.S.	75.0	%	43.4		5.7		30.9		4.6		4.1		3.8
August 2012	Ireland	10.0	%	477.2		367.6		7.0		8.3		1.7		0.5
December 2012	United Kingdom	5.0	%	605.0		152.1		19.3		2.0		1.9		0.8
April 2013	United Kingdom	10.0	%	177.2		165.7		13.0		10.7		3.2		0.7
August 2013	United Kingdom	20.0	%	136.6		140.9		7.5		8.2		4.5		0.5
				$	3,893.1	$	884.7	$	150.0	$	34.7	$	39.3	$	29.0

—————

⁽¹⁾ Initial UPB presented at historical exchange rates

⁽²⁾ Estimated foreign exchange rate is £0.61 = $1 USD and €0.73 = $1 USD.

Investment Update - UK Loan Pool

In 2011, the Company, along with institutional partners, acquired a loan portfolio consisting of 58 performing loans (the “U.K. Loan Pool”). The Company, through a 50/50 joint venture with one of its partners, acquired a 25% participation interest in the pool for $440.9 million, of which $323.4 million was funded with debt that was fully repaid during 2013. As of December 31, 2013, the unpaid principal balance of the loans were $44.7 million due to collections and resolutions of $2.1 billion through December 31, 2013, representing 98% of the pool. As a result of the positive performance of the loan pool, all of the Company's initial equity contribution has been returned as of December 31, 2013. During the year ended December 31, 2013, the Company received $66.2 million in distributions related to resolutions in the UK Loan Pool and $23.2 million from its promoted interest. To date, Kennedy Wilson has accreted $18.1 millionn of the expected $19.3 million in interest income on the UK Loan Pool over the total estimated collection period (excluding asset management fees). As a result of the substantial liquidation of the loan pool, Kennedy Wilson has recognized a 2.8 million loss in foreign currency translations in the accompanying consolidated statements of operations.

The following table presents the interest income and foreign currency gain and (loss) recognized by Kennedy Wilson during the years ended December 31, 2013, 2012 and 2011 in each of the loan pools that were outstanding:



	Year Ended December 31,
(Dollars in millions)	2013			2012		2011
Interest income recognized	$	11.9		$	6.4	$	5.7
Foreign currency translation (loss) gain	(2.2		)	3.0		(2.6		)
	$	9.7		$	9.4	$	3.1