Guarantor And Non-Guarantor Financial Statements

9 Months Ended

12 Months Ended

Sep. 30, 2011

Dec. 31, 2010

Guarantor And Non-Guarantor Financial Statements [Abstract]

Guarantor And Non-Guarantor Financial Statements

NOTE 20—GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS

The following consolidating financial information and condensed consolidating financial information includes:

(1) Condensed consolidating balance sheets as of September 30, 2011 and December 31, 2010; consolidating statements of operations and comprehensive (loss) income for the three- and nine months ended September 30, 2011 and 2010; and condensed consolidating statements of cash flows for the nine months ended September 30, 2011 and 2010 of (a) Kennedy-Wilson Holdings, Inc., as the parent, (b) Kennedy-Wilson, Inc., as the subsidiary issuer, (c) the guarantor subsidiaries, (d) the non-guarantor subsidiaries and (e) Kennedy-Wilson Holdings, Inc. on a consolidated basis; and

(2) Elimination entries necessary to consolidate Kennedy-Wilson Holdings, Inc., as the parent, with Kennedy-Wilson, Inc. and its guarantor and non-guarantor subsidiaries.

Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10 (d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor subsidiaries.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2011

	Parent		Kennedy-Wilson, Inc.		Guarantor Subsidiaries  (1)		Non-guarantor Subsidiaries		Elimination			Consolidated Total
Assets
Cash and cash equivalents	$	—	$	140,646,000	$	6,101,000	$	667,000	$	—		$	147,414,000
Accounts receivable		—		488,000		1,164,000		299,000		—			1,951,000
Accounts receivable — related parties		—		3,709,000		6,623,000		264,000		—			10,596,000
Notes receivable		—		3,586,000		12,360,000		1,000,000		—			16,946,000
Notes receivable — related parties		—		22,292,000		—		—		—			22,292,000
Real estate, net		—		—		66,359,000		47,260,000		—			113,619,000
Investments in joint ventures		—		7,116,000		330,249,000		7,673,000		—			345,038,000
Investment in and advances to consolidated subsidiaries		339,864,000		477,567,000		37,320,000		—		(854,751,000	)		—
Marketable securities		—		—		5,658,000		—		—			5,658,000
Loan pool participations		—		—		31,590,000		—		—			31,590,000
Other assets		—		13,346,000		3,640,000		3,954,000		—			20,940,000
Goodwill		—		—		17,216,000		6,749,000		—			23,965,000
Total assets	$	339,864,000	$	668,750,000	$	518,280,000	$	67,866,000	$	(854,751,000	)	$	740,009,000
Liabilities and equity
Liabilities
Accounts payable	$	52,000	$	70,000	$	212,000	$	19,000	$	—		$	353,000
Accrued expenses and other liabilities		1,799,000		13,427,000		14,139,000		1,531,000		—			30,896,000
Accrued salaries and benefits		—		3,445,000		1,330,000		239,000		—			5,014,000
Accrued and deferred tax liability		—		22,572,000		—		—		—			22,572,000
Senior notes payable		—		249,372,000		—		—		—			249,372,000
Mortgage loans payable		—		—		9,548,000		28,669,000		—			38,217,000
Junior subordinated debentures		—		40,000,000		—		—		—			40,000,000
Total liabilities		1,851,000		328,886,000		25,229,000		30,458,000		—			386,424,000
Equity
Kennedy-Wilson Holdings, Inc. shareholders' equity		338,013,000		339,864,000		477,567,000		37,320,000		(854,751,000	)		338,013,000
Noncontrolling interests		—		—		15,484,000		88,000		—			15,572,000
Total equity		338,013,000		339,864,000		493,051,000		37,408,000		(854,751,000	)		353,585,000
Total liabilities and equity	$	339,864,000	$	668,750,000	$	518,280,000	$	67,866,000	$	(854,751,000	)	$	740,009,000

⁽¹⁾  Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned as of September 30, 2011 by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10(d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor subsidiaries.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2010

	Parent		Kennedy- Wilson, Inc.		Guarantor Subsidiaries (1)		Non-guarantor Subsidiaries		Elimination			Consolidated Total
Assets
Cash and cash equivalents	$	—	$	42,793,000	$	3,350,000	$	825,000	$	—		$	46,968,000
Accounts receivable		—		348,000		1,551,000		198,000		—			2,097,000
Accounts receivable — related parties		—		1,652,000		5,268,000		142,000		—			7,062,000
Notes receivable		—		862,000		18,402,000		1,000,000		—			20,264,000
Notes receivable — related parties		—		3,837,000		—		—		—			3,837,000
Real estate, net		—		—		56,207,000		26,494,000		—			82,701,000
Investments in joint ventures		—		2,501,000		257,521,000		6,864,000		—			266,886,000
Investment in and advances to consolidated subsidiaries		300,244,000		368,820,000		20,251,000		—		(689,315,000	)		—
Loan pool participations		—		—		25,218,000		—		—			25,218,000
Other assets		—		4,945,000		3,417,000		488,000		—			8,850,000
Goodwill		—		—		17,216,000		6,749,000		—			23,965,000
Total assets	$	300,244,000	$	425,758,000	$	408,401,000	$	42,760,000	$	(689,315,000	)	$	487,848,000
Liabilities and equity
Liabilities
Accounts payable	$	52,000	$	673,000	$	725,000	$	54,000	$	—		$	1,504,000
Accrued expenses and other liabilities		—		1,830,000		6,914,000		320,000		—			9,064,000
Accrued salaries and benefits		—		8,857,000		1,553,000		311,000		—			10,721,000
Accrued and deferred tax liability		—		25,871,000		—		—		—			25,871,000
Notes payable		—		20,533,000		—		4,250,000		—			24,783,000
Borrowings under line of credit		—		27,750,000		—		—		—			27,750,000
Mortgage loans payable		—		—		17,752,000		17,497,000		—			35,249,000
Junior subordinated debentures		—		40,000,000		—		—		—			40,000,000
Total liabilities		52,000		125,514,000		26,944,000		22,432,000		—			174,942,000
Equity
Kennedy-Wilson Holdings, Inc. shareholders' equity		300,192,000		300,244,000		368,820,000		20,251,000		(689,315,000	)		300,192,000
Noncontrolling interests		—		—		12,637,000		77,000		—			12,714,000
Total equity		300,192,000		300,244,000		381,457,000		20,328,000		(689,315,000	)		312,906,000
Total liabilities and equity	$	300,244,000	$	425,758,000	$	408,401,000	$	42,760,000	$	(689,315,000	)	$	487,848,000

⁽¹⁾  Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned as of December 31, 2010 by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10(d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor Subsidiaries.

CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011

	Parent			Kennedy- Wilson, Inc.			Guarantor Subsidiaries  (1)			Non-guarantor Subsidiaries			Elimination		Consolidated Total
Revenue
Management and leasing fees	$	—		$	30,000		$	4,034,000		$	798,000		$	—	$	4,862,000
Management and leasing fees — related party		—			—			2,607,000			382,000			—		2,989,000
Commissions		—			—			1,262,000			67,000			—		1,329,000
Commissions — related party		—			—			1,930,000			—			—		1,930,000
Rental and other income		—			—			446,000			1,220,000			—		1,666,000
Total revenue		—			30,000			10,279,000			2,467,000			—		12,776,000
Operating expenses
Commission and marketing expenses		—			500,000			1,019,000			122,000			—		1,641,000
Compensation and related expenses		1,296,000			2,389,000			4,041,000			747,000			—		8,473,000
General and administrative		—			1,736,000			1,416,000			177,000			—		3,329,000
Depreciation and amortization		—			68,000			193,000			670,000			—		931,000
Rental operating expenses		—			—			542,000			653,000			—		1,195,000
Total operating expenses		1,296,000			4,693,000			7,211,000			2,369,000			—		15,569,000
Equity in joint venture income (loss)		—			54,000			(651,000	)		(49,000	)		—		(646,000	)
(Loss) income from consolidated subsidiaries		(3,580,000	)		3,417,000			(227,000	)		—			390,000		—
Interest income from loan pool participations and notes receivable		—			—			1,028,000			20,000			—		1,048,000
Operating (loss) income		(4,876,000	)		(1,192,000	)		3,218,000			69,000			390,000		(2,391,000	)
Non-operating income (expense)
Interest income		—			74,000			—			—			—		74,000
Interest income — related party		—			561,000			—			—			—		561,000
Interest expense		—			(6,020,000	)		199,000			(296,000	)		—		(6,117,000	)
(Loss) income before benefit for income taxes		(4,876,000	)		(6,577,000	)		3,417,000			(227,000	)		390,000		(7,873,000	)
Benefit from income taxes		—			2,997,000			—			—			—		2,997,000
Net (loss) income		(4,876,000	)		(3,580,000	)		3,417,000			(227,000	)		390,000		(4,876,000	)
Net loss (income) attributable to the noncontrolling interests		—			—			45,000			(3,000	)		—		42,000
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc.		(4,876,000	)		(3,580,000	)		3,462,000			(230,000	)		390,000		(4,834,000	)
Preferred dividends and accretion of preferred stock issuance costs		(2,036,000	)		—			—			—			—		(2,036,000	)
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders		(6,912,000	)		(3,580,000	)		3,462,000			(230,000	)		390,000		(6,870,000	)
Other comprehensive income, net of tax		(1,783,000	)		(1,783,000	)		(1,783,000	)		—			3,566,000		(1,783,000	)
Total comprehensive (loss) income	$	(8,695,000	)	$	(5,363,000	)	$	1,679,000		$	(230,000	)	$	3,956,000	$	(8,653,000	)

⁽¹⁾  Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned for the three months ended September 30, 2011 by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10(d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor Subsidiaries.

CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2010

	Parent			Kennedy- Wilson, Inc.			Guarantor Subsidiaries  (1)			Non-guarantor Subsidiaries			Elimination			Consolidated Total
Revenue
Management and leasing fees	$	—		$	26,000		$	1,619,000		$	655,000		$	—		$	2,300,000
Management and leasing fees — related party		—			—			3,576,000			253,000			—			3,829,000
Commissions		—			443,000			1,325,000			205,000			—			1,973,000
Commissions — related party		—			—			2,014,000			20,000			—			2,034,000
Rental and other income		—			—			1,129,000			508,000			—			1,637,000
Total revenue		—			469,000			9,663,000			1,641,000			—			11,773,000
Operating expenses
Commission and marketing expenses		—			—			201,000			62,000			—			263,000
Compensation and related expenses		2,055,000			6,409,000			3,257,000			693,000			—			12,414,000
General and administrative		—			2,621,000			635,000			201,000			—			3,457,000
Depreciation and amortization		—			40,000			358,000			218,000			—			616,000
Rental and operating		—			—			729,000			168,000			—			897,000
Total operating expenses		2,055,000			9,070,000			5,180,000			1,342,000			—			17,647,000
Equity in joint venture (loss) income		—			(3,000	)		5,162,000			32,000			—			5,191,000
(Loss) income from consolidated subsidiaries		(1,644,000	)		13,590,000			149,000			—			(12,095,000	)		—
Interest income from loan pool participations and notes receivable		—			5,000			4,185,000			19,000			—			4,209,000
Operating (loss) income		(3,699,000	)		4,991,000			13,979,000			350,000			(12,095,000	)		3,526,000
Non-operating income (expense)
Interest income		—			53,000			—			—			—			53,000
Interest income — related party		—			91,000			—			—			—			91,000
Loss on extinguishment of debt		—			(4,788,000	)		—			—			—			(4,788,000	)
Interest expense		—			(1,608,000	)		(389,000	)		(201,000	)		—			(2,198,000	)
(Loss) income before provision for income taxes		(3,699,000	)		(1,261,000	)		13,590,000			149,000			(12,095,000	)		(3,316,000	)
Provision for income taxes		—			(383,000	)		—			—			—			(383,000	)
Net (loss) income		(3,699,000	)		(1,644,000	)		13,590,000			149,000			(12,095,000	)		(3,699,000	)
Net income attributable to the noncontrolling interests		—			—			(1,212,000	)		(3,000	)		—			(1,215,000	)
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc.		(3,699,000	)		(1,644,000	)		12,378,000			146,000			(12,095,000	)		(4,914,000	)
Preferred dividends and accretion of preferred stock issuance costs		(1,804,000	)		—			—			—			—			(1,804,000	)
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders		(5,503,000	)		(1,644,000	)		12,378,000			146,000			(12,095,000	)		(6,718,000	)
Other comprehensive income, net of tax		2,912,000			2,912,000			2,912,000			—			(5,824,000	)		2,912,000
Total comprehensive (loss) income	$	(2,591,000	)	$	1,268,000		$	15,290,000		$	146,000		$	(17,919,000	)	$	(3,806,000	)

⁽¹⁾  Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned for the three months ended September 30, 2010 by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10(d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor subsidiaries.

CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011

	Parent			Kennedy-Wilson, Inc.			Guarantor Subsidiaries  (1)			Non-guarantor Subsidiaries			Elimination			Consolidated Total
Revenue
Management and leasing fees	$	—		$	95,000		$	7,252,000		$	2,310,000		$	—		$	9,657,000
Management and leasing fees — related party		—			—			7,236,000			915,000			—			8,151,000
Commissions		—			397,000			4,279,000			166,000			—			4,842,000
Commissions — related party		—			—			3,577,000			10,000			—			3,587,000
Sale of real estate		—			—			417,000			—			—			417,000
Rental and other income		—			—			1,134,000			2,225,000			—			3,359,000
Total revenue		—			492,000			23,895,000			5,626,000			—			30,013,000
Operating expenses
Commission and marketing expenses		—			500,000			2,239,000			276,000			—			3,015,000
Compensation and related expenses		3,761,000			7,874,000			10,717,000			2,210,000			—			24,562,000
Cost of real estate sold		—			—			397,000			—			—			397,000
General and administrative		—			5,156,000			3,367,000			660,000			—			9,183,000
Depreciation and amortization		—			161,000			640,000			1,027,000			—			1,828,000
Rental operating expenses		—			—			1,267,000			981,000			—			2,248,000
Total operating expenses		3,761,000			13,691,000			18,627,000			5,154,000			—			41,233,000
Equity in joint venture income		—			122,000			7,017,000			90,000			—			7,229,000
Income from consolidated subsidiaries		1,475,000			24,345,000			6,465,000			—			(32,285,000	)		—
Interest income from loan pool participations and notes receivable		—			12,000			5,763,000			60,000			—			5,835,000
Operating (loss) income		(2,286,000	)		11,280,000			24,513,000			622,000			(32,285,000	)		1,844,000
Non-operating income (expense)
Interest income		—			264,000			—			—			—			264,000
Interest income — related party		—			970,000			—			—			—			970,000
Remeasurement gain		—			—			—			6,348,000			—			6,348,000
Interest expense		—			(13,201,000	)		(168,000	)		(505,000	)		—			(13,874,000	)
(Loss) income before benefit from income taxes		(2,286,000	)		(687,000	)		24,345,000			6,465,000			(32,285,000	)		(4,448,000	)
Benefit from income taxes		—			2,162,000			—			—			—			2,162,000
Net (loss) income		(2,286,000	)		1,475,000			24,345,000			6,465,000			(32,285,000	)		(2,286,000	)
Net income attributable to the noncontrolling interests		—			—			(1,284,000	)		(11,000	)		—			(1,295,000	)
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc.		(2,286,000	)		1,475,000			23,061,000			6,454,000			(32,285,000	)		(3,581,000	)
Preferred dividends and accretion of preferred stock issuance costs		(6,708,000	)		—			—			—			—			(6,708,000	)
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders		(8,994,000	)		1,475,000			23,061,000			6,454,000			(32,285,000	)		(10,289,000	)
Other comprehensive income, net of tax		(1,576,000	)		(1,576,000	)		(1,576,000	)		—			3,152,000			(1,576,000	)
Total comprehensive (loss) income	$	(10,570,000	)	$	(101,000	)	$	21,485,000		$	6,454,000		$	(29,133,000	)	$	(11,865,000	)

⁽¹⁾  Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned for the nine months ended September 30, 2011 by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10(d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor subsidiaries.

CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010

	Parent			Kennedy- Wilson, Inc.			Guarantor Subsidiaries  (1)			Non-guarantor Subsidiaries			Elimination			Consolidated Total
Revenue
Management and leasing fees	$	—		$	60,000		$	4,271,000		$	2,182,000		$	—		$	6,513,000
Management and leasing fees — related party		—			—			8,764,000			825,000			—			9,589,000
Commissions		—			467,000			3,624,000			262,000			—			4,353,000
Commissions — related party		—			—			4,299,000			20,000			—			4,319,000
Sale of real estate		—			—			3,937,000			—			—			3,937,000
Rental and other income		—			—			1,373,000			1,561,000			—			2,934,000
Total revenue		—			527,000			26,268,000			4,850,000			—			31,645,000
Operating expenses
Commission and marketing expenses		—			—			1,822,000			210,000			—			2,032,000
Compensation and related expenses		8,201,000			9,654,000			9,374,000			2,171,000			—			29,400,000
Cost of real estate sold		—			—			2,714,000			—			—			2,714,000
General and administrative		—			5,017,000			2,586,000			660,000			—			8,263,000
Depreciation and amortization		—			116,000			561,000			520,000			—			1,197,000
Rental operating expenses		—			—			903,000			518,000			—			1,421,000
Total operating expenses		8,201,000			14,787,000			17,960,000			4,079,000			—			45,027,000
Equity in joint venture (loss) income		—			(3,000	)		5,326,000			(161,000	)		—			5,162,000
Income from consolidated subsidiaries		11,739,000			39,868,000			240,000			—			(51,847,000	)		—
Interest income from loan pool participations and notes receivable		—			30,000			7,893,000			27,000			—			7,950,000
Operating income (loss)		3,538,000			25,635,000			21,767,000			637,000			(51,847,000	)		(270,000	)
Non-operating income (expense)
Interest income		—			168,000			—			—			—			168,000
Interest income — related party		—			477,000			—			—			—			477,000
Remeasurement gain		—			—			2,108,000			—			—			2,108,000
Gain on extinguishment of debt		—			—			16,670,000			—			—			16,670,000
Interest expense		—			(5,418,000	)		(677,000	)		(397,000	)		—			(6,492,000	)
Loss on extinguishment of debt		—			(4,788,000	)		—			—			—			(4,788,000	)
Income before provision for income taxes		3,538,000			16,074,000			39,868,000			240,000			(51,847,000	)		7,873,000
Provision for income taxes		—			(4,335,000	)		—			—			—			(4,335,000	)
Net income		3,538,000			11,739,000			39,868,000			240,000			(51,847,000	)		3,538,000
Net income attributable to the noncontrolling interests		—			—			(2,364,000	)		(10,000	)		—			(2,374,000	)
Net income attributable to Kennedy-Wilson Holdings, Inc.		3,538,000			11,739,000			37,504,000			230,000			(51,847,000	)		1,164,000
Preferred dividends and accretion of preferred stock issuance costs		(2,524,000	)		—			—			—			—			(2,524,000	)
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders		1,014,000			11,739,000			37,504,000			230,000			(51,847,000	)		(1,360,000	)
Other comprehensive income, net of tax		5,098,000			5,098,000			5,098,000			—			(10,196,000	)		5,098,000
Total comprehensive income	$	6,112,000		$	16,837,000		$	42,602,000		$	230,000		$	(62,043,000	)	$	3,738,000

⁽¹⁾  Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned for the nine months ended September 30, 2010 by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10(d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor subsidiaries.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011

	Parent			Kennedy- Wilson, Inc.			Guarantor Subsidiaries  (1)			Non-guarantor Subsidiaries			Consolidated Total
Cash flows provided by (used in) provided by operating activities:	$	—		$	(22,096,000	)	$	8,778,000		$	(1,151,000	)	$	(14,469,000	)
Cash flows from investing activities:
Additions of notes receivable		—			(2,724,000	)		(2,920,000	)		—			(5,644,000	)
Settlement of notes receivable		—			—			559,000			—			559,000
Additions to notes receivable — related party		—			(23,322,000	)		—			—			(23,322,000	)
Settlement of notes receivable — related party		—			4,867,000			—			—			4,867,000
Net proceeds from sale of real estate		—			—			416,000			—			416,000
Purchases of and additions to real estate		—			—			(2,220,000	)		290,000			(1,930,000	)
Investment in Marketable Securities		—			—			(7,382,000	)		—			(7,382,000	)
Distributions from joint ventures		—			—			16,827,000			1,680,000			18,507,000
Contributions to joint ventures		—			(4,614,000	)		(88,366,000	)		(2,512,000	)		(95,492,000	)
Contributions to loan pool participations		—			—			(2,901,000	)		—			(2,901,000	)
(Investments in) distributions from consolidated subsidiaries, net		(39,440,000	)		(46,257,000	)		75,084,000			10,613,000			—
Net cash used in investing activities		(39,440,000	)		(72,050,000	)		(10,903,000	)		10,071,000			(112,322,000	)
Cash flow from financing activities:
Issuance of senior notes payable		—			249,344,000			—			—			249,344,000
Repayment of notes payable		—			(20,533,000	)		—			(4,250,000	)		(24,783,000	)
Borrowings under lines of credit		—			19,000,000			—			—			19,000,000
Repayment of lines of credit		—			(46,750,000	)		—			—			(46,750,000	)
Borrowings under mortgage loans payable		—			—			5,077,000			12,000,000			17,077,000
Repayment of mortgage loans payable		—			—			(13,281,000	)		(16,828,000	)		(30,109,000	)
Debt issue costs		—			(7,486,000	)		—			—			(7,486,000	)
Issuance of common stock		51,360,000			—			—			—			51,360,000
Repurchase of common stock		(36,000	)		—			—			—			(36,000	)
Repurchase of warrants		(2,434,000	)		—			—			—			(2,434,000	)
Dividends paid		(7,874,000	)		—			—			—			(7,874,000	)
Contributions from noncontrolling interests		—			—			2,259,000			—			2,259,000
Distributions from noncontrolling interests		—			—			(696,000	)		—			(696,000	)
Net cash provided by (used in) financing activities		41,016,000			193,575,000			(6,641,000	)		(9,078,000	)		218,872,000
Effect of currency exchange rate changes on cash and cash equivalents		(1,576,000	)		(1,576,000	)		11,517,000			—			8,365,000
Net change in cash and cash equivalents		—			97,853,000			2,751,000			(158,000	)		100,446,000
Cash and cash equivalents, beginning of period		—			42,793,000			3,350,000			825,000			46,968,000
Cash and cash equivalents, end of period	$	—		$	140,646,000		$	6,101,000		$	667,000		$	147,414,000

⁽¹⁾  Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned for the nine months ended September 30, 2011 by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10(d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor subsidiaries.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010

	Parent			Kennedy- Wilson, Inc.			Guarantor Subsidiaries  (1)			Non-guarantor Subsidiaries			Consolidated Total
Cash flows (used in) provided by operating activities:	$	(2,547,000	)	$	(8,251,000	)	$	8,830,000		$	1,001,000		$	(967,000	)
Cash flows from investing activities:
Additions to notes receivable		—			—			(26,190,000	)		(1,000,000	)		(27,190,000	)
Settlements of notes receivable		—			15,000			55,000			—			70,000
Additions to notes receivable — related party		—			(3,975,000	)		—			—			(3,975,000	)
Settlements of notes receivable — related party		—			8,721,000			—			—			8,721,000
Net proceeds from sale of real estate		—			—			3,639,000			—			3,639,000
Purchases of and additions to real estate		—			—			(14,430,000	)		(4,148,000	)		(18,578,000	)
Distribution from joint ventures		—			—			4,424,000			38,000			4,462,000
Contributions to joint ventures		—			(1,070,000	)		(60,305,000	)		(5,458,000	)		(66,833,000	)
Contributions to loan pool participations		—			—			(9,612,000	)		—			(9,612,000	)
(Investments in) distributions from consolidated subsidiaries, net		(113,451,000	)		17,770,000			86,837,000			8,844,000			—
Net cash (used in) provided by investing activities		(113,451,000	)		21,461,000			(15,582,000	)		(1,724,000	)		(109,296,000	)
Cash flow from financing activities:
Borrowings under notes payable		—			—			—			4,250,000			4,250,000
Repayment of notes payable		—			(4,200,000	)		—			—			(4,200,000	)
Borrowings under lines of credit		—			37,250,000			—			—			37,250,000
Repayment of lines of credit		—			(25,500,000	)		—			—			(25,500,000	)
Borrowings under mortgage loans payable		—			—			20,016,000			—			20,016,000
Repayment of mortgage loans payable		—			—			(16,521,000	)		(3,242,000	)		(19,763,000	)
Repayment of convertible subordinated debt		—			(32,550,000	)		—			—			(32,550,000	)
Debt issue costs		—			—			(645,000	)		—			(645,000	)
Issuance of preferred stock		132,294,000			—			—			—			132,294,000
Repurchase of common stock		(10,180,000	)		—			—			—			(10,180,000	)
Repurchase of warrants		(8,584,000	)		—			—			—			(8,584,000	)
Dividends paid		(2,508,000	)		—			—			—			(2,508,000	)
Contributions from noncontrolling interests		—			—			6,952,000			—			6,952,000
Distributions from noncontrolling interests		—			—			(2,096,000	)		—			(2,096,000	)
Net cash provided by (used in) financing activities		111,022,000			(25,000,000	)		7,706,000			1,008,000			94,736,000
Effect of currency exchange rate changes on cash and cash equivalents		4,976,000			3,481,000			—			—			8,457,000
Net change in cash and cash equivalents		—			(8,309,000	)		954,000			285,000			(7,070,000	)
Cash and cash equivalents, beginning of period		—			54,777,000			2,648,000			359,000			57,784,000
Cash and cash equivalents, end of period	$	—		$	46,468,000		$	3,602,000		$	644,000		$	50,714,000

⁽¹⁾  Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned for the nine months ended September 30, 2010 by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10 (d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor subsidiaries.

NOTE 25—GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS

The following consolidating financial information and condensed consolidating financial information includes:

(1) Condensed consolidating balance sheets as of December 31, 2010 and 2009, respectively; consolidating statements of operations and comprehensive (loss) income for the years ended December 31, 2010, 2009 and 2008, respectively; and condensed consolidating statements of cash flows for the years ended December 31, 2010, 2009 and 2008, respectively, of (a) Kennedy-Wilson Holdings, Inc., as the parent, (b) Kennedy-Wilson, Inc., as the subsidiary issuer, (c) the guarantor subsidiaries, (d) the non-guarantor subsidiaries and (e) Kennedy-Wilson Holdings, Inc. on a consolidated basis; and

(2) Elimination entries necessary to consolidate Kennedy-Wilson Holdings, Inc., as the parent, with Kennedy-Wilson, Inc. and its guarantor and non-guarantor subsidiaries

Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10(d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor subsidiaries.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2010

	Parent		Kennedy-Wilson, Inc.		Guarantor Subsidiaries (1)		Non-guarantor Subsidiaries		Elimination			Consolidated Total
Assets
Cash and cash equivalents	$	—	$	42,793,000	$	3,350,000	$	825,000	$	—		$	46,968,000
Accounts receivable		—		348,000		1,551,000		198,000		—			2,097,000
Accounts receivable — related parties		—		1,652,000		5,268,000		142,000		—			7,062,000
Notes receivable		—		862,000		18,402,000		1,000,000		—			20,264,000
Notes receivable — related parties		—		3,837,000		—		—		—			3,837,000
Real estate, net		—		—		56,207,000		26,494,000		—			82,701,000
Investments in joint ventures		—		2,501,000		257,521,000		6,864,000		—			266,886,000
Investment in and advances to consolidated subsidiaries		300,244,000		368,820,000		20,251,000		—		(689,315,000	)		—
Loan pool participations		—		—		25,218,000		—		—			25,218,000
Other assets		—		4,945,000		3,417,000		488,000		—			8,850,000
Goodwill		—		—		17,216,000		6,749,000		—			23,965,000
Total assets	$	300,244,000	$	425,758,000	$	408,401,000	$	42,760,000	$	(689,315,000	)	$	487,848,000
Liabilities and equity
Liabilities
Accounts payable	$	52,000	$	673,000	$	725,000	$	54,000	$	—		$	1,504,000
Accrued expenses and other liabilities		—		1,830,000		6,914,000		320,000		—			9,064,000
Accrued salaries and benefits		—		8,857,000		1,553,000		311,000		—			10,721,000
Accrued and deferred tax liability		—		25,871,000		—		—		—			25,871,000
Notes payable		—		20,533,000		—		4,250,000		—			24,783,000
Borrowings under line of credit		—		27,750,000		—		—		—			27,750,000
Mortgage loans payable		—		—		17,752,000		17,497,000		—			35,249,000
Junior subordinated debentures		—		40,000,000		—		—		—			40,000,000
Total liabilities		52,000		125,514,000		26,944,000		22,432,000		—			174,942,000
Equity
Kennedy-Wilson Holdings, Inc. shareholders' equity		300,192,000		300,244,000		368,820,000		20,251,000		(689,315,000	)		300,192,000
Noncontrolling interests		—		—		12,637,000		77,000		—			12,714,000
Total equity		300,192,000		300,244,000		381,457,000		20,328,000		(689,315,000	)		312,906,000
Total liabilities and equity	$	300,244,000	$	425,758,000	$	408,401,000	$	42,760,000	$	(689,315,000	)	$	487,848,000

⁽¹⁾  Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned as of December 31, 2010 by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10(d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor subsidiaries.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2009

	Parent		Kennedy-Wilson, Inc.		Guarantor Subsidiaries (1)		Non-guarantor Subsidiaries		Elimination			Consolidated Total
Assets
Cash and cash equivalents	$	—	$	54,777,000	$	2,648,000	$	359,000	$	—		$	57,784,000
Accounts receivable		—		548,000		100,000		239,000		—			887,000
Accounts receivable — related parties		—		926,000		3,216,000		136,000		—			4,278,000
Income tax receivable		—		6,848,000		—		—		—			6,848,000
Notes receivable		—		500,000		41,000		—		—			541,000
Notes receivable — related parties		—		6,644,000		—		—		—			6,644,000
Real estate, net of accumulated depreciation		—		—		17,596,000		22,985,000		—			40,581,000
Real estate available for sale		—		—		2,472,000		—		—			2,472,000
Investments in joint ventures		—		1,282,000		182,106,000		1,864,000		—			185,252,000
Investment in and advances to consolidated subsidiaries		177,460,000		225,325,000		11,465,000		—		(414,250,000	)		—
Other assets		228,000		5,433,000		725,000		619,000		—			7,005,000
Goodwill		—		—		17,216,000		6,749,000		—			23,965,000
Total assets	$	177,688,000	$	302,283,000	$	237,585,000	$	32,951,000	$	(414,250,000	)	$	336,257,000
Liabilities and equity
Liabilities
Accounts payable	$	374,000	$	36,000	$	411,000	$	39,000	$	—		$	860,000
Accrued expenses and other liabilities		—		2,542,000		5,822,000		284,000		—			8,648,000
Accrued salaries and benefits		—		3,201,000		839,000		361,000		—			4,401,000
Deferred tax liability		—		15,439,000		—		—		—			15,439,000
Notes payable		—		26,133,000		—		—		—			26,133,000
Borrowings under line of credit		—		10,000,000		—		—		—			10,000,000
Mortgage loans payable		—		—		3,228,000		20,740,000		—			23,968,000
Convertible subordinated debt		—		27,472,000		—		—		—			27,472,000
Junior subordinated debentures		—		40,000,000		—		—		—			40,000,000
Total liabilities		374,000		124,823,000		10,300,000		21,424,000		—			156,921,000
Equity
Kennedy-Wilson Holdings, Inc. shareholders' equity		177,314,000		177,460,000		225,325,000		11,465,000		(414,250,000	)		177,314,000
Noncontrolling interests		—		—		1,960,000		62,000		—			2,022,000
Total equity		177,314,000		177,460,000		227,285,000		11,527,000		(414,250,000	)		179,336,000
Total liabilities and equity	$	177,688,000	$	302,283,000	$	237,585,000	$	32,951,000	$	(414,250,000	)	$	336,257,000

⁽¹⁾  Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned for the year ended December 31, 2009 by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10(d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor subsidiaries.

CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2010

	Parent			Kennedy-Wilson, Inc.			Guarantor Subsidiaries (1)			Non-guarantor Subsidiaries			Elimination			Consolidated Total
Revenue
Management and leasing fees	$	—		$	183,000		$	5,873,000		$	2,857,000		$	—		$	8,913,000
Management and leasing fees — related party		—			—			11,258,000			1,159,000			—			12,417,000
Commissions		—			684,000			5,338,000			337,000			—			6,359,000
Commissions — related party		—			—			5,355,000			20,000			—			5,375,000
Sale of real estate		—			—			3,937,000			—			—			3,937,000
Sale of real estate—related party		—			—			9,535,000			—			—			9,535,000
Rental and other income		—			—			1,903,000			2,097,000			—			4,000,000
Total revenue		—			867,000			43,199,000			6,470,000			—			50,536,000
Operating expenses
Commission and marketing expenses		—			—			2,841,000			345,000			—			3,186,000
Compensation and related expenses		8,094,000			14,063,000			13,121,000			2,877,000			—			38,155,000
Merger-related compensation and related expense		2,225,000			—			—			—			—			2,225,000
Cost of real estate sold		—			—			2,714,000			—			—			2,714,000
Cost of real estate sold—related party		—			—			8,812,000			—			—			8,812,000
General and administrative		227,000			6,753,000			3,453,000			881,000			—			11,314,000
Depreciation and amortization		—			159,000			764,000			695,000			—			1,618,000
Rental operating expenses		—			—			1,234,000			679,000			—			1,913,000
Total operating expenses		10,546,000			20,975,000			32,939,000			5,477,000			—			69,937,000
Equity in joint venture income (loss)		—			—			10,629,000			(81,000	)		—			10,548,000
Income from loan pool participations and notes receivable		—			46,000			11,760,000			49,000			—			11,855,000
Income from consolidated subsidiaries		17,031,000			50,902,000			426,000			—			(68,359,000	)		—
Operating income		6,485,000			30,840,000			33,075,000			961,000			(68,359,000	)		3,002,000
Non-operating income (expense)
Interest income		—			153,000			39,000			—			—			192,000
Interest income — related party		—			662,000			—			—			—			662,000
Remeasurement gain		—			—			2,108,000			—			—			2,108,000
Gain on early extinguishment of mortgage debt		—			—			16,670,000			—			—			16,670,000
Loss on extinguishment of debt		—			(4,788,000	)		—			—			—			(4,788,000	)
Interest expense		—			(6,109,000	)		(990,000	)		(535,000	)		—			(7,634,000	)
Income before provision for income taxes		6,485,000			20,758,000			50,902,000			426,000			(68,359,000	)		10,212,000
Provision for income taxes		—			(3,727,000	)		—			—			—			(3,727,000	)
Net income		6,485,000			17,031,000			50,902,000			426,000			(68,359,000	)		6,485,000
Net income attributable to the noncontrolling interests		—			—			(2,963,000	)		(16,000	)		—			(2,979,000	)
Net income attributable to Kennedy-Wilson Holdings, Inc.		6,485,000			17,031,000			47,939,000			410,000			(68,359,000	)		3,506,000
Preferred dividends and accretion of preferred stock issuance costs		(4,558,000	)		—			—			—			—			(4,558,000	)
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders		1,927,000			17,031,000			47,939,000			410,000			(68,359,000	)		(1,052,000	)
Other comprehensive income, net of tax		6,440,000			6,440,000			6,440,000			—			(12,880,000	)		6,440,000
Total comprehensive income	$	8,367,000		$	23,471,000		$	54,379,000		$	410,000		$	(81,239,000	)	$	5,388,000

⁽¹⁾  Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned for the year ended December 31, 2010 by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10(d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor subsidiaries.

CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

FOR THE YEAR ENDED DECEMBER 31, 2009

	Parent			Kennedy-Wilson, Inc.			Guarantor Subsidiaries (1)			Non-guarantor Subsidiaries			Elimination			Consolidated Total
Revenue
Management and leasing fees	$	—		$	49,000		$	5,724,000		$	3,253,000		$	—		$	9,026,000
Management and leasing fees — related party		—			—			8,775,000			1,363,000			—			10,138,000
Commissions		—			708,000			3,360,000			136,000			—			4,204,000
Commissions — related party		—			—			727,000			—			—			727,000
Sale of real estate		—			—			52,699,000			—			—			52,699,000
Sale of real estate—related party		—			—			6,698,000			—			—			6,698,000
Rental and other income		—			26,000			575,000			2,142,000			—			2,743,000
Total revenue		—			783,000			78,558,000			6,894,000			—			86,235,000
Operating expenses
Commission and marketing expenses		—			—			2,891,000			520,000			—			3,411,000
Compensation and related expenses		3,857,000			6,199,000			11,744,000			2,989,000			—			24,789,000
Merger-related compensation and related expense		12,468,000			—			—			—			—			12,468,000
Cost of real estate sold		—			—			36,179,000			—			—			36,179,000
Cost of real estate sold—related party		—			—			5,752,000			—			—			5,752,000
General and administrative		3,000			1,466,000			3,960,000			922,000			—			6,351,000
Merger-related general and administrative		3,652,000			—			—			—			—			3,652,000
Depreciation and amortization		—			133,000			309,000			680,000			—			1,122,000
Rental operating expenses		—			—			302,000			846,000			—			1,148,000
Total operating expenses		19,980,000			7,798,000			61,137,000			5,957,000			—			94,872,000
Equity in joint venture income (loss)		—			—			8,137,000			(118,000	)		—			8,019,000
Income (loss) from consolidated subsidiaries		10,323,000			21,091,000			(579,000	)		—			(30,835,000	)		—
Operating (loss) income		(9,657,000	)		14,706,000			24,979,000			819,000			(30,835,000	)		(618,000	)
Non-operating income (expense)
Interest income		—			102,000			—			—			—			102,000
Interest income — related party		—			400,000			—			—			—			400,000
Interest expense		—			(7,894,000	)		(3,882,000	)		(1,398,000	)		—			(13,174,000	)
Other than temporary impairment		—			(322,000	)		(6,000	)		—			—			(328,000	)
(Loss) income before benefit from income taxes		(9,657,000	)		6,362,000			21,091,000			(579,000	)		(30,835,000	)		(13,618,000	)
Benefit from income taxes		—			3,961,000			—			—			—			3,961,000
Net (loss) income		(9,657,000	)		10,323,000			21,091,000			(579,000	)		(30,835,000	)		(9,657,000	)
Net income (loss) attributable to the noncontrolling interests		—			—			(5,704,000	)		25,000			—			(5,679,000	)
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc.		(9,657,000	)		10,323,000			15,387,000			(554,000	)		(30,835,000	)		(15,336,000	)
Other comprehensive income, net of tax		2,601,000			2,601,000			2,601,000			—			(5,202,000	)		2,601,000
Total comprehensive (loss) income	$	(7,056,000	)	$	12,924,000		$	17,988,000		$	(554,000	)	$	(36,037,000	)	$	(12,735,000	)

⁽¹⁾  Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned for the year ended December 31, 2009 by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10 (d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor subsidiaries.

CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE YEAR ENDED DECEMBER 31, 2008

	Parent		Kennedy-Wilson, Inc.			Guarantor Subsidiaries  (1)			Non-guarantor Subsidiaries			Elimination			Consolidated Total
Revenue
Management and leasing fees	$	—	$	929,000		$	6,632,000		$	3,110,000		$	—		$	10,671,000
Management and leasing fees — related party		—		54,000			7,095,000			1,231,000			—			8,380,000
Commissions		—		1,055,000			4,799,000			52,000			—			5,906,000
Commissions — related party		—		23,000			4,257,000			15,000			—			4,295,000
Rental and other income		—		842,000			198,000			1,933,000			—			2,973,000
Total revenue		—		2,903,000			22,981,000			6,341,000			—			32,225,000
Operating expenses
Commission and marketing expenses		—		25,000			2,252,000			550,000			—			2,827,000
Compensation and related expenses		1,015,000		4,974,000			12,208,000			3,095,000			—			21,292,000
General and administrative		—		2,512,000			2,797,000			765,000			—			6,074,000
Depreciation and amortization		—		225,000			156,000			539,000			—			920,000
Rental operating expenses		—		5,000			649,000			804,000			—			1,458,000
Total operating expenses		1,015,000		7,741,000			18,062,000			5,753,000			—			32,571,000
Equity in joint venture income		—		926,000			9,138,000			33,000			—			10,097,000
Income (loss) from consolidated subsidiaries		1,682,000		12,817,000			(1,164,000	)		—			(13,335,000	)		—
Operating income		667,000		8,905,000			12,893,000			621,000			(13,335,000	)		9,751,000
Non-operating income (expense)
Interest income		—		220,000			1,000			—			—			221,000
Interest income — related party		—		341,000			—			—			—			341,000
Interest expense		—		(6,734,000	)		(77,000	)		(1,785,000	)		—			(8,596,000	)
Other than temporary impairment		—		(445,000	)		—			—			—			(445,000	)
Income (loss) before provision for income taxes		667,000		2,287,000			12,817,000			(1,164,000	)		(13,335,000	)		1,272,000
Provision for income taxes		—		(605,000	)		—			—			—			(605,000	)
Net income (loss)		667,000		1,682,000			12,817,000			(1,164,000	)		(13,335,000	)		667,000
Net (income) loss attributable to the noncontrolling interests		—		(3,000	)		(81,000	)		30,000			—			(54,000	)
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc.		667,000		1,679,000			12,736,000			(1,134,000	)		(13,335,000	)		613,000
Other comprehensive income, net of tax		240,000		240,000			240,000			—			(480,000	)		240,000
Total comprehensive income (loss)	$	907,000	$	1,919,000		$	12,976,000		$	(1,134,000	)	$	(13,815,000	)	$	853,000

⁽¹⁾  Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned for the year ended December 31, 2008 by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10 (d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor subsidiaries.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2010

	Parent			Kennedy- Wilson, Inc.			Guarantor Subsidiaries (1)			Non-guarantor Subsidiaries			Consolidated Total
Cash flows (used in) provided by operating activities:	$	(2,670,000	)	$	(9,635,000	)	$	13,074,000		$	1,388,000		$	2,157,000
Cash flows from investing activities:
Additions to notes receivable		—			(377,000	)		(24,259,000	)		(1,000,000	)		(25,636,000	)
Settlements of notes receivable		—			15,000			8,423,000			—			8,438,000
Additions to notes receivable - related party		—			(5,914,000	)		—			—			(5,914,000	)
Settlements of notes receivable - related party		—			8,721,000			—			—			8,721,000
Net proceeds from sale of real estate		—			—			3,639,000			—			3,639,000
Net proceeds from sale of real estate - related party		—			—			9,548,000			—			9,548,000
Purchases of and additions to real estate		—			—			(19,590,000	)		(4,174,000	)		(23,764,000	)
Distributions from joint ventures		—			—			9,790,000			387,000			10,177,000
Contributions to joint ventures		—			(1,220,000	)		(77,203,000	)		(5,468,000	)		(83,891,000	)
Contributions to loan pool participations		—			—			(16,154,000	)		—			(16,154,000	)
(Investments in) distributions from consolidated subsidiaries, net		(108,730,000	)		13,161,000			87,197,000			8,372,000			—
Net cash (used in) provided by investing activities		(108,730,000	)		14,386,000			(18,609,000	)		(1,883,000	)		(114,836,000	)
Cash flow from financing activities:
Borrowings under notes payable		—			—			—			4,250,000			4,250,000
Repayment of notes payable		—			(5,600,000	)		—			—			(5,600,000	)
Borrowings under lines of credit		—			48,250,000			—			—			48,250,000
Repayment of lines of credit		—			(30,500,000	)		—			—			(30,500,000	)
Borrowings under mortgage loans payable		—			—			20,016,000			—			20,016,000
Repayment of mortgage loans payable		—			—			(21,492,000	)		(3,243,000	)		(24,735,000	)
Repayment of convertible subordinated debt		—			(32,550,000	)		—			—			(32,550,000	)
Debt issue costs		—			(598,000	)		—			(46,000	)		(644,000	)
Issuance of preferred stock		132,294,000			—			—			—			132,294,000
Repurchase of common stock		(11,301,000	)		—			—			—			(11,301,000	)
Repurchase of warrants		(11,500,000	)		—			—			—			(11,500,000	)
Dividends paid		(4,533,000	)		—			—			—			(4,533,000	)
Contributions from noncontrolling interests		—			—			10,955,000			—			10,955,000
Distributions from noncontrolling interests		—			—			(3,242,000	)		—			(3,242,000	)
Net cash provided by (used in) financing activities		104,960,000			(20,998,000	)		6,237,000			961,000			91,160,000
Effect of currency exchange rate changes on cash and cash equivalents		6,440,000			4,263,000			—			—			10,703,000
Net change in cash and cash equivalents		—			(11,984,000	)		702,000			466,000			(10,816,000	)
Cash and cash equivalents, beginning of year		—			54,777,000			2,648,000			359,000			57,784,000
Cash and cash equivalents, end of year	$	—		$	42,793,000		$	3,350,000		$	825,000		$	46,968,000

⁽¹⁾  Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned for the year ended December 31, 2010 by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10(d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor subsidiaries.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2009

	Parent			Kennedy-Wilson, Inc.			Guarantor Subsidiaries (1)			Non-guarantor Subsidiaries			Consolidated Total
Cash flows (used in) provided by operating activities:	$	(17,648,000	)	$	(6,449,000	)	$	(1,497,000	)	$	368,000		$	(25,226,000	)
Cash flows from investing activities:
Additions to notes receivable		—			(500,000	)		—			—			(500,000	)
Settlements of notes receivable		—			300,000			2,000			—			302,000
Additions to notes receivable - related party		—			(8,774,000	)		—			—			(8,774,000	)
Settlements of notes receivable - related party		—			2,935,000			—			—			2,935,000
Additions to notes receivable from sale of real estate		—			(2,663,000	)		—			—			(2,663,000	)
Settlements of notes receivable from sale of real estate		—			1,858,000			—			—			1,858,000
Net proceeds from sale of real estate held for sale		—			—			58,027,000			—			58,027,000
Purchases of and additions to real estate		—			—			(35,730,000	)		(70,000	)		(35,800,000	)
Assets acquired in merger		89,181,000			—			—			—			89,181,000
Distributions from joint ventures		—			—			2,283,000			91,000			2,374,000
Contributions to joint ventures		—			(1,000,000	)		(36,933,000	)		—			(37,933,000	)
(Investments in) distributions from consolidated subsidiaries, net		(67,267,000	)		43,705,000			24,422,000			(860,000	)		—
Net cash provided by (used in) investing activities		21,914,000			35,861,000			12,071,000			(839,000	)		69,007,000
Cash flow from financing activities:
Borrowings under notes payable		—			37,059,000			—			—			37,059,000
Repayment of notes payable		—			(32,114,000	)		—			—			(32,114,000	)
Borrowings under lines of credit		—			20,500,000			—			—			20,500,000
Repayment of lines of credit		—			(24,000,000	)		—			—			(24,000,000	)
Borrowings under mortgage loans payable		—			—			30,286,000			—			30,286,000
Repayment of mortgage loans payable		—			—			(35,866,000	)		—			(35,866,000	)
Debt issue costs		—			(160,000	)		(638,000	)		—			(798,000	)
Issuance of common stock		59,000			—			—			—			59,000
Repurchase of common stock		(3,690,000	)		—			—			—			(3,690,000	)
Dividends paid		(3,235,000	)		—			—			—			(3,235,000	)
Contributions from noncontrolling interests		—			—			6,804,000			—			6,804,000
Distributions from noncontrolling interests		—			—			(10,712,000	)		—			(10,712,000	)
Net cash (used in) provided by financing activities		(6,866,000	)		1,285,000			(10,126,000	)		—			(15,707,000	)
Effect of currency exchange rate changes on cash and cash equivalents		2,600,000			1,279,000			—			—			3,879,000
Net change in cash and cash equivalents		—			31,976,000			448,000			(471,000	)		31,953,000
Cash and cash equivalents, beginning of year		—			22,801,000			2,200,000			830,000			25,831,000
Cash and cash equivalents, end of year	$	—		$	54,777,000		$	2,648,000		$	359,000		$	57,784,000

⁽¹⁾  Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned for the year ended December 31, 2009 by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10 (d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor subsidiaries.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2008

	Parent			Kennedy-Wilson, Inc.			Guarantor Subsidiaries (1)			Non-guarantor Subsidiaries			Consolidated Total
Cash flows (used in) provided by operating activities:	$	(159,000	)	$	(19,386,000	)	$	5,866,000		$	(990,000	)	$	(14,669,000	)
Cash flows from investing activities:
Settlements of notes receivable		—			7,000			19,000			—			26,000
Settlements of notes receivable - related party		—			—			6,000			—			6,000
Additions to notes receivable - related party		—			(300,000	)		—			—			(300,000	)
Net proceeds from sale of real estate held for sale		—			5,181,000			—			—			5,181,000
Purchases of and additions to real estate		—			(195,000	)		(17,186,000	)		(24,079,000	)		(41,460,000	)
Distributions from joint ventures		—			6,011,000			6,406,000			486,000			12,903,000
Contributions to joint ventures		—			(2,169,000	)		(70,173,000	)		(787,000	)		(73,129,000	)
(Investments in) distributions from consolidated subsidiaries, net		(47,067,000	)		(30,466,000	)		72,212,000			5,321,000			—
Net cash used in investing activities		(47,067,000	)		(21,931,000	)		(8,716,000	)		(19,059,000	)		(96,773,000	)
Cash flow from financing activities:
Borrowings under notes payable		—			20,161,000			—			—			20,161,000
Repayment of notes payable		—			(8,973,000	)		—			—			(8,973,000	)
Borrowings under lines of credit		—			47,957,000			—			—			47,957,000
Repayment of lines of credit		—			(39,457,000	)		—			—			(39,457,000	)
Borrowings under mortgage loans payable		—			120,000			9,420,000			20,776,000			30,316,000
Repayment of mortgage loans payable		—			(4,204,000	)		(6,612,000	)		(36,000	)		(10,852,000	)
Issuance of convertible subordinated debt		2,813,000			27,187,000			—			—			30,000,000
Debt issue costs		—			(518,000	)		—			—			(518,000	)
Issuance of common stock		52,447,000			—			—			—			52,447,000
Repurchase of common stock		(6,170,000	)		—			—			—			(6,170,000	)
Dividends paid		(2,264,000	)		—			—			—			(2,264,000	)
Contributions from noncontrolling interests		—			—			482,000			—			482,000
Distributions from noncontrolling interests		—			—			(504,000	)		—			(504,000	)
Net cash provided by financing activities		46,826,000			42,273,000			2,786,000			20,740,000			112,625,000
Effect of currency exchange rate changes on cash and cash equivalents		400,000			—			—			—			400,000
Net change in cash and cash equivalents		—			956,000			(64,000	)		691,000			1,583,000
Cash and cash equivalents, beginning of year		—			21,845,000			2,264,000			139,000			24,248,000
Cash and cash equivalents, end of year	$	—		$	22,801,000		$	2,200,000		$	830,000		$	25,831,000

⁽¹⁾  Included in the guarantor subsidiaries column below are data for certain guarantor subsidiaries that were less than 100% owned for the year ended December 31, 2008 by Kennedy-Wilson at the time the notes were originally issued. Such guarantor subsidiaries were restructured prior to the date of this prospectus such that Kennedy-Wilson now owns 100% of all of the guarantor subsidiaries. As a result, in accordance with Rule 3-10(d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for such guarantor subsidiaries.