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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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Delaware
|
|
26-0508760
|
(State or other jurisdiction of
incorporation or organization)
|
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(I.R.S. Employer
Identification No.)
|
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Large Accelerated Filer
|
x
|
|
Accelerated Filer
|
o
|
|
|
|
|
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Non-Accelerated Filer
|
o
|
|
Smaller Reporting Company
|
o
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||
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Item 1.
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||
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Item 2.
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Item 3.
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Item 4.
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Item 1.
|
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 1.
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Financial Statements (Unaudited)
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
(Dollars in millions, except share and per share amounts)
|
|
|
|
|
||||
Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
349.5
|
|
|
$
|
170.2
|
|
Cash held by consolidated investments (including $42.6 and $0 of restricted cash)
|
|
292.8
|
|
|
8.0
|
|
||
Accounts receivable (including $6.3 and $11.4 of related party)
|
|
36.8
|
|
|
16.6
|
|
||
Loans (including $4.0 and $4.1 of related party)
|
|
402.3
|
|
|
56.8
|
|
||
Real estate and acquired in place lease values, net of accumulated depreciation and amortization
|
|
3,553.4
|
|
|
688.1
|
|
||
Unconsolidated investments
|
|
532.2
|
|
|
786.1
|
|
||
Other assets
|
|
187.7
|
|
|
73.0
|
|
||
Total assets
|
|
$
|
5,354.7
|
|
|
$
|
1,798.8
|
|
|
|
|
|
|
||||
Liabilities and equity
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
||||
Accounts payable, accrued expenses and other liabilities
|
|
285.7
|
|
|
129.1
|
|
||
Investment debt
|
|
1,528.7
|
|
|
401.8
|
|
||
Senior notes payable
|
|
706.0
|
|
|
409.0
|
|
||
Junior subordinated debentures
|
|
40.0
|
|
|
40.0
|
|
||
Total liabilities
|
|
2,560.4
|
|
|
979.9
|
|
||
|
|
|
|
|
||||
Equity
|
|
|
|
|
||||
Cumulative preferred stock, $0.0001 par value per share: 1,000,000 shares authorized $1,000 per share liquidation preference
|
|
—
|
|
|
—
|
|
||
Common stock, 91,683,127 and 82,592,607 shares issued and outstanding as of June 30, 2014 and December 31, 2013
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
986.3
|
|
|
801.3
|
|
||
Accumulated deficit
|
|
(11.8
|
)
|
|
(42.2
|
)
|
||
Accumulated other comprehensive income
|
|
1.6
|
|
|
9.2
|
|
||
Total Kennedy-Wilson Holdings, Inc. shareholders' equity
|
|
976.1
|
|
|
768.3
|
|
||
Noncontrolling interests
|
|
1,818.2
|
|
|
50.6
|
|
||
Total equity
|
|
2,794.3
|
|
|
818.9
|
|
||
Total liabilities and equity
|
|
$
|
5,354.7
|
|
|
$
|
1,798.8
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in millions, except share and per share amounts)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
||||||||
Investment management, property services and research fees (includes $33.3, $13.8, $40.6, and $22.2 of related party fees)
|
|
$
|
39.0
|
|
|
$
|
19.5
|
|
|
$
|
52.1
|
|
|
$
|
33.1
|
|
Rental and hotel
|
|
42.6
|
|
|
10.3
|
|
|
67.8
|
|
|
16.8
|
|
||||
Sale of real estate
|
|
6.1
|
|
|
6.1
|
|
|
17.4
|
|
|
8.5
|
|
||||
Loans and other
|
|
4.3
|
|
|
0.5
|
|
|
6.0
|
|
|
0.9
|
|
||||
Total revenue
|
|
92.0
|
|
|
36.4
|
|
|
143.3
|
|
|
59.3
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Commission and marketing
|
|
0.9
|
|
|
1.3
|
|
|
1.8
|
|
|
1.8
|
|
||||
Rental and hotel operating
|
|
17.9
|
|
|
4.6
|
|
|
32.1
|
|
|
7.7
|
|
||||
Cost of real estate sold
|
|
3.9
|
|
|
5.1
|
|
|
13.5
|
|
|
7.0
|
|
||||
Compensation and related
|
|
32.2
|
|
|
18.3
|
|
|
52.8
|
|
|
31.9
|
|
||||
General and administrative
|
|
8.4
|
|
|
6.4
|
|
|
16.5
|
|
|
11.8
|
|
||||
Depreciation and amortization
|
|
25.3
|
|
|
4.4
|
|
|
32.6
|
|
|
7.5
|
|
||||
Total operating expenses
|
|
88.6
|
|
|
40.1
|
|
|
149.3
|
|
|
67.7
|
|
||||
Income from unconsolidated investments
|
|
31.0
|
|
|
14.8
|
|
|
33.8
|
|
|
16.9
|
|
||||
Operating income
|
|
34.4
|
|
|
11.1
|
|
|
27.8
|
|
|
8.5
|
|
||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
||||||||
Acquisition-related gains
|
|
86.0
|
|
|
—
|
|
|
170.3
|
|
|
9.5
|
|
||||
Acquisition-related expenses
|
|
(7.6
|
)
|
|
(0.5
|
)
|
|
(11.6
|
)
|
|
(0.5
|
)
|
||||
Interest expense-investment
|
|
(11.1
|
)
|
|
(2.8
|
)
|
|
(16.4
|
)
|
|
(4.6
|
)
|
||||
Interest expense-corporate
|
|
(14.7
|
)
|
|
(9.7
|
)
|
|
(25.2
|
)
|
|
(19.4
|
)
|
||||
Other income
|
|
2.1
|
|
|
0.1
|
|
|
2.9
|
|
|
0.4
|
|
||||
Income (loss) before (provision for) benefit from income taxes
|
|
89.1
|
|
|
(1.8
|
)
|
|
147.8
|
|
|
(6.1
|
)
|
||||
(Provision for) benefit from income taxes
|
|
(25.4
|
)
|
|
0.5
|
|
|
(34.2
|
)
|
|
2.2
|
|
||||
Net income (loss)
|
|
63.7
|
|
|
(1.3
|
)
|
|
113.6
|
|
|
(3.9
|
)
|
||||
Net (income) loss attributable to the noncontrolling interests
|
|
(25.3
|
)
|
|
0.9
|
|
|
(62.7
|
)
|
|
1.9
|
|
||||
Preferred dividends and accretion of preferred stock issuance costs
|
|
(2.1
|
)
|
|
(2.1
|
)
|
|
(4.1
|
)
|
|
(4.1
|
)
|
||||
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
$
|
36.3
|
|
|
$
|
(2.5
|
)
|
|
$
|
46.8
|
|
|
$
|
(6.1
|
)
|
Basic earnings per share
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) per basic
|
|
$
|
0.39
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.51
|
|
|
$
|
(0.09
|
)
|
Weighted average shares outstanding for basic
|
|
89,140,498
|
|
|
70,976,247
|
|
|
88,645,002
|
|
|
66,432,823
|
|
||||
Diluted earnings per share
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) per diluted
|
|
$
|
0.38
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.50
|
|
|
(0.09
|
)
|
|
Weighted average shares outstanding for diluted
|
|
102,115,350
|
|
|
70,976,247
|
|
|
101,435,250
|
|
|
66,432,823
|
|
||||
Dividends declared per common share
|
|
$
|
0.09
|
|
|
$
|
0.07
|
|
|
$
|
0.18
|
|
|
$
|
0.14
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
63.7
|
|
|
$
|
(1.3
|
)
|
|
$
|
113.6
|
|
|
$
|
(3.9
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized foreign currency translation gain (loss)
|
|
23.1
|
|
|
(3.7
|
)
|
|
21.9
|
|
|
(18.0
|
)
|
||||
Amounts reclassified out of AOCI during the period
|
|
(8.3
|
)
|
|
—
|
|
|
(7.1
|
)
|
|
—
|
|
||||
Unrealized forward contract, foreign currency (loss) gain
|
|
(2.1
|
)
|
|
2.2
|
|
|
(3.6
|
)
|
|
5.8
|
|
||||
Total other comprehensive gain (loss) for the period
|
|
12.7
|
|
|
(1.5
|
)
|
|
11.2
|
|
|
(12.2
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income (loss)
|
|
76.4
|
|
|
(2.8
|
)
|
|
124.8
|
|
|
(16.1
|
)
|
||||
Comprehensive (income) loss attributable to noncontrolling interests
|
|
(44.1
|
)
|
|
0.9
|
|
|
(81.5
|
)
|
|
1.9
|
|
||||
Comprehensive income (loss) attributable to Kennedy-Wilson Holdings, Inc.
|
|
$
|
32.3
|
|
|
$
|
(1.9
|
)
|
|
$
|
43.3
|
|
|
$
|
(14.2
|
)
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Retained Earnings (Accumulated Deficit)
|
|
Accumulated
Other
Comprehensive
Income
|
|
Noncontrolling Interests
|
|
|
||||||||||||||||||||
(Dollars in millions, except share amounts)
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
Total
|
||||||||||||||||||||
Balance at December 31, 2013
|
132,550
|
|
|
|
|
|
82,592,607
|
|
|
$
|
—
|
|
|
$
|
801.3
|
|
|
$
|
(42.2
|
)
|
|
$
|
9.2
|
|
|
$
|
50.6
|
|
|
$
|
818.9
|
|
|
Issuance of shares, net
|
—
|
|
|
—
|
|
|
9,201,250
|
|
|
—
|
|
|
190.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
190.7
|
|
|||||||
Shares forfeited
|
—
|
|
|
—
|
|
|
(2,475
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Repurchase and retirement of common stock
|
—
|
|
|
—
|
|
|
(108,255
|
)
|
|
—
|
|
|
(2.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.6
|
)
|
|||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.4
|
|
|||||||
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Unrealized foreign currency translation gain, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|
18.8
|
|
|
21.6
|
|
|||||||
Unrealized forward contract foreign currency loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.4
|
)
|
|
—
|
|
|
(10.4
|
)
|
|||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
|||||||
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.4
|
)
|
|
—
|
|
|
—
|
|
|
(16.4
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50.9
|
|
|
—
|
|
|
62.7
|
|
|
113.6
|
|
|||||||
Consolidation of noncontrolling interests (Note 4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
291.8
|
|
|
291.8
|
|
|||||||
Acquisition of Kennedy Wilson Europe (KWE)
shares from noncontrolling interest holders |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.8
|
)
|
|
(16.8
|
)
|
|||||||
Issuance of KWE shares, net (Note 12)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.5
|
)
|
|
—
|
|
|
—
|
|
|
1,416.0
|
|
|
1,409.5
|
|
|||||||
Contributions from noncontrolling interests, excluding KWE
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.6
|
|
|
8.6
|
|
|||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13.5
|
)
|
|
(13.5
|
)
|
|||||||
Balance at June 30, 2014
|
132,550
|
|
|
$
|
—
|
|
|
91,683,127
|
|
|
$
|
—
|
|
|
$
|
986.3
|
|
|
$
|
(11.8
|
)
|
|
$
|
1.6
|
|
|
$
|
1,818.2
|
|
|
$
|
2,794.3
|
|
|
|
Six Months Ended June 30,
|
||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
113.6
|
|
|
$
|
(3.9
|
)
|
Adjustments to reconcile net income to net cash provided (used in) by operating activities:
|
|
|
|
|
||||
Net gain from sale of real estate
|
|
(3.9
|
)
|
|
(1.7
|
)
|
||
Acquisition-related gain
|
|
(170.3
|
)
|
|
(9.5
|
)
|
||
Depreciation and amortization
|
|
32.6
|
|
|
7.5
|
|
||
Provision for (benefit from) deferred income taxes
|
|
34.2
|
|
|
(1.8
|
)
|
||
Amortization of deferred loan costs
|
|
1.6
|
|
|
1.1
|
|
||
Amortization of discount and accretion of premium on issuance of the senior notes and investment debt
|
|
(1.2
|
)
|
|
(0.5
|
)
|
||
Income from unconsolidated investments
|
|
(34.1
|
)
|
|
(17.1
|
)
|
||
Operating distributions from unconsolidated investments
|
|
57.7
|
|
|
17.9
|
|
||
Stock-based compensation
|
|
3.4
|
|
|
3.4
|
|
||
Change in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
(15.8
|
)
|
|
(3.5
|
)
|
||
Other assets
|
|
(4.4
|
)
|
|
(8.1
|
)
|
||
Accrued expenses and other liabilities
|
|
51.7
|
|
|
(7.7
|
)
|
||
Net cash from (used in) operating activities
|
|
65.1
|
|
|
(23.9
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Additions to loans
|
|
(373.3
|
)
|
|
(14.3
|
)
|
||
Collections of loans
|
|
18.7
|
|
|
33.6
|
|
||
Net proceeds from sale of real estate
|
|
15.0
|
|
|
9.0
|
|
||
Purchases of and additions to real estate
|
|
(1,289.8
|
)
|
|
(108.3
|
)
|
||
Proceeds from sale of marketable securities
|
|
—
|
|
|
10.0
|
|
||
Investment in marketable securities
|
|
(6.9
|
)
|
|
—
|
|
||
Distributions from unconsolidated investments
|
|
55.6
|
|
|
75.3
|
|
||
Contributions to unconsolidated investments
|
|
(106.0
|
)
|
|
(200.5
|
)
|
||
Net cash used in investing activities
|
|
(1,686.7
|
)
|
|
(195.2
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Borrowings under senior notes payable
|
|
297.2
|
|
|
—
|
|
||
Borrowings under line of credit
|
|
90.0
|
|
|
85.0
|
|
||
Repayment of line of credit
|
|
(90.0
|
)
|
|
(55.0
|
)
|
||
Borrowings under investment debt
|
|
295.2
|
|
|
68.3
|
|
||
Repayment of investment debt
|
|
(14.0
|
)
|
|
(0.6
|
)
|
||
Debt issue costs
|
|
(11.3
|
)
|
|
(0.9
|
)
|
||
Issuance of common stock
|
|
190.7
|
|
|
153.9
|
|
||
Repurchase and retirement of common stock
|
|
(2.6
|
)
|
|
—
|
|
||
Repurchase of warrants
|
|
—
|
|
|
(1.4
|
)
|
||
Proceeds from the issuance of KWE shares, net
|
|
1,351.1
|
|
|
—
|
|
||
Dividends paid
|
|
(18.1
|
)
|
|
(9.1
|
)
|
||
Change in restricted cash
|
|
(42.6
|
)
|
|
—
|
|
||
Acquisition of KWE shares from noncontrolling interest holders
|
|
(16.8
|
)
|
|
—
|
|
||
Contributions from noncontrolling interests, excluding KWE
|
|
8.6
|
|
|
0.6
|
|
||
Distributions to noncontrolling interests
|
|
(13.5
|
)
|
|
(0.2
|
)
|
||
Net cash provided by financing activities
|
|
2,023.9
|
|
|
240.6
|
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
|
19.2
|
|
|
(2.7
|
)
|
||
Net change in cash and cash equivalents
|
|
421.5
|
|
|
18.8
|
|
||
Cash and cash equivalents, beginning of period
|
|
178.2
|
|
|
120.9
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
599.7
|
|
|
$
|
139.7
|
|
|
|
Six Months Ended June 30,
|
||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
||||
Cash paid for:
|
|
|
|
|
||||
Interest
|
|
$
|
34.7
|
|
|
$
|
23.3
|
|
Income taxes
|
|
0.1
|
|
|
2.3
|
|
|
|
Six Months Ended June 30,
|
||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
||||
|
|
|
|
|
||||
Dividends declared on common stock
|
|
$
|
8.2
|
|
|
$
|
5.2
|
|
|
|
June 30,
|
|
December 31,
|
||||
(Dollars in millions)
|
|
2014
|
|
2013
|
||||
Loans
|
|
$
|
398.3
|
|
|
$
|
52.7
|
|
Loans — related parties
|
|
4.0
|
|
|
4.1
|
|
||
Total loans
|
|
$
|
402.3
|
|
|
$
|
56.8
|
|
|
|
June 30,
|
|
December 31,
|
||||
(Dollars in millions)
|
|
2014
|
|
2013
|
||||
Land
|
|
$
|
935.5
|
|
|
$
|
187.8
|
|
Buildings
|
|
2,256.7
|
|
|
484.1
|
|
||
Building improvements
|
|
34.3
|
|
|
12.7
|
|
||
In-place lease value
|
|
384.3
|
|
|
29.8
|
|
||
|
|
3,610.8
|
|
|
714.4
|
|
||
Less accumulated depreciation and amortization
|
|
(57.4
|
)
|
|
(26.3
|
)
|
||
Real estate, net
|
|
$
|
3,553.4
|
|
|
$
|
688.1
|
|
(Dollars in millions)
|
|
|
At Acquisition
(5)
|
|||||||||||||||
Date acquired
|
Type
|
Description
|
Location
|
Land
|
Building
|
Intangible assets
|
Investment debt
|
KWH Shareholders' Equity
|
||||||||||
1/20/2014
|
Commercial
(1)
|
Portfolio of 14 commercial, retail, and industrial properties
|
United Kingdom
|
$
|
28.9
|
|
$
|
47.1
|
|
$
|
41.4
|
|
$
|
—
|
|
$
|
58.7
|
|
2/20/2014
|
Hotel
|
193 room hotel
|
Western U.S.
|
1.3
|
|
8.3
|
|
—
|
|
—
|
|
6.9
|
|
|||||
2/28/2014
|
Multifamily
|
24 apartment units, 2 penthouse units, and 1,000 square feet of retail
|
Ireland
|
0.6
|
|
15.1
|
|
0.4
|
|
9.6
|
|
6.5
|
|
|||||
3/28/2014
|
Commercial
(2)
|
26 commercial properties throughout England and Scotland
|
United Kingdom
|
54.0
|
|
132.0
|
|
54.0
|
|
—
|
|
29.3
|
|
|||||
3/31/2014
|
Multifamily
(3)
|
281 completed apartments and a partially completed residential block, 725k square feet of commercial space, and 7.4 acres of commercial development land
|
Ireland
|
32.7
|
|
80.9
|
|
1.2
|
|
78.9
|
|
35.9
|
|
|||||
4/1/2014
|
Commercial
|
98k square foot retail center
|
Western U.S.
|
2.4
|
|
5.8
|
|
0.4
|
|
6.0
|
|
1.9
|
|
|||||
4/30/2014
|
Multifamily
|
203 unit apartment building
|
Western U.S.
|
2.7
|
|
24.0
|
|
0.3
|
|
13.3
|
|
13.3
|
|
|||||
6/25/2014
|
Multifamily
(2)
|
81 unit apartment building
|
Ireland
|
4.8
|
|
15.0
|
|
0.4
|
|
—
|
|
2.7
|
|
|||||
6/26/2014
|
Commercial
(2)
|
13 commercial properties
|
Ireland
|
104.9
|
|
344.3
|
|
52.3
|
|
273.1
|
|
30.1
|
|
|||||
6/27/2014
|
Commercial
(2)(4)
|
20 commercial properties throughout England and Scotland
|
United Kingdom
|
106.8
|
|
300.7
|
|
127.0
|
|
—
|
|
70.6
|
|
|||||
6/30/2014
|
Multifamily
|
542 unit apartment building
|
Western U.S.
|
38.3
|
|
57.5
|
|
0.6
|
|
77.2
|
|
18.6
|
|
|||||
|
|
|
|
$
|
377.4
|
|
$
|
1,030.7
|
|
$
|
278.0
|
|
$
|
458.1
|
|
$
|
274.5
|
|
|
|
Unaudited
|
|
Unaudited
|
||||||||||||
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in millions, except for per share data)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Pro forma revenues
|
|
$
|
113.6
|
|
|
$
|
78.3
|
|
|
$
|
209.1
|
|
|
$
|
140.5
|
|
Pro forma income from unconsolidated investments
|
|
27.1
|
|
|
(0.7
|
)
|
|
26.0
|
|
|
2.7
|
|
||||
Pro forma net income (loss) attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
36.9
|
|
|
0.7
|
|
|
46.9
|
|
|
0.1
|
|
||||
Pro forma net income (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.41
|
|
|
$
|
0.01
|
|
|
$
|
0.53
|
|
|
$
|
—
|
|
Diluted
|
|
$
|
0.36
|
|
|
$
|
0.01
|
|
|
$
|
0.46
|
|
|
$
|
—
|
|
|
|
June 30,
|
|
December 31,
|
||||
(Dollars in millions)
|
|
2014
|
|
2013
|
||||
Investments in joint ventures
|
|
$
|
473.3
|
|
|
$
|
751.4
|
|
Investments in loan pool participations
|
|
58.9
|
|
|
34.7
|
|
||
Total
|
|
$
|
532.2
|
|
|
$
|
786.1
|
|
(Dollars in millions)
|
Multifamily
|
Commercial
|
Loan
|
Residential
|
Other
|
Total
|
||||||||||||
Western U.S.
|
$
|
134.3
|
|
$
|
157.4
|
|
$
|
50.1
|
|
$
|
50.0
|
|
$
|
9.3
|
|
$
|
401.1
|
|
United Kingdom
|
—
|
|
44.3
|
|
—
|
|
—
|
|
—
|
|
44.3
|
|
||||||
Spain
|
—
|
|
—
|
|
—
|
|
—
|
|
27.9
|
|
27.9
|
|
||||||
Total
|
$
|
134.3
|
|
$
|
201.7
|
|
$
|
50.1
|
|
$
|
50.0
|
|
$
|
37.2
|
|
$
|
473.3
|
|
(Dollars in millions)
|
Multifamily
|
Commercial
|
Loan
|
Residential
|
Other
|
Total
|
||||||||||||
Western U.S.
|
$
|
133.3
|
|
$
|
160.3
|
|
$
|
50.3
|
|
$
|
48.7
|
|
$
|
8.0
|
|
$
|
400.6
|
|
Japan
|
68.8
|
|
—
|
|
—
|
|
—
|
|
—
|
|
68.8
|
|
||||||
United Kingdom
|
—
|
|
104.5
|
|
6.3
|
|
—
|
|
—
|
|
110.8
|
|
||||||
Ireland
|
48.2
|
|
96.1
|
|
—
|
|
—
|
|
—
|
|
144.3
|
|
||||||
Spain
|
—
|
|
—
|
|
—
|
|
—
|
|
26.9
|
|
26.9
|
|
||||||
Total
|
$
|
250.3
|
|
$
|
360.9
|
|
$
|
56.6
|
|
$
|
48.7
|
|
$
|
34.9
|
|
$
|
751.4
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Operating distributions
|
$
|
1.3
|
|
|
$
|
0.5
|
|
|
$
|
1.7
|
|
|
$
|
2.5
|
|
Refinancing of property level debt
|
—
|
|
|
4.4
|
|
|
—
|
|
|
5.3
|
|
||||
Settlement of hedges
|
—
|
|
|
0.2
|
|
|
—
|
|
|
10.8
|
|
||||
Total
|
$
|
1.3
|
|
|
$
|
5.1
|
|
|
$
|
1.7
|
|
|
$
|
18.6
|
|
|
Multifamily
|
|
Commercial
|
|
|
|
|||||||||||
(Dollars in millions)
|
Amount
|
No. of Properties
|
|
Amount
|
No. of Properties
|
|
Total
|
No. of Properties
|
|||||||||
Western U.S.
|
$
|
4.0
|
|
1
|
|
|
$
|
—
|
|
—
|
|
|
$
|
4.0
|
|
1
|
|
United Kingdom
(1)
|
—
|
|
—
|
|
|
57.2
|
|
14
|
|
|
57.2
|
|
14
|
|
|||
Total contributions - new joint venture investments
|
$
|
4.0
|
|
1
|
|
|
$
|
57.2
|
|
14
|
|
|
$
|
61.2
|
|
15
|
|
|
Multifamily
|
Commercial
|
Residential and Other
|
Total
|
||||||||||||||||||||
(Dollars in millions)
|
Operating
|
Investing
|
Operating
|
Investing
|
Operating
|
Investing
|
Operating
|
Investing
|
||||||||||||||||
Western U.S.
|
$
|
4.8
|
|
$
|
1.5
|
|
$
|
3.0
|
|
4.4
|
|
3.6
|
|
$
|
3.3
|
|
$
|
11.4
|
|
$
|
9.2
|
|
||
Japan
|
1.7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1.7
|
|
—
|
|
||||||||
United Kingdom
|
—
|
|
—
|
|
5.3
|
|
9.8
|
|
—
|
|
—
|
|
5.3
|
|
9.8
|
|
||||||||
Ireland
|
—
|
|
—
|
|
31.6
|
|
30.3
|
|
—
|
|
—
|
|
31.6
|
|
30.3
|
|
||||||||
Spain
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1.0
|
|
—
|
|
1.0
|
|
||||||||
Total
|
$
|
6.5
|
|
$
|
1.5
|
|
$
|
39.9
|
|
$
|
44.5
|
|
$
|
3.6
|
|
$
|
4.3
|
|
$
|
50.0
|
|
$
|
50.3
|
|
(Dollars in millions)
|
|
Kennedy Wilson Ownership
|
|
Unpaid Principal Balance
|
|
Kennedy Wilson Initial Equity Invested
|
|
Investment Balance at June 30, 2014
|
|
Expected Accretion Over Total Estimated Collection Period
|
|
|
||||||||||||||||
Acquisition Date
|
|
Location
|
|
|
Initial
(1)
|
|
June 30, 2014
(1)
|
|
|
|
|
Accreted to Date
|
||||||||||||||||
February 2010
(2)
|
|
Western U.S.
|
|
15.0%
|
|
$
|
342.4
|
|
|
$
|
—
|
|
|
$
|
11.2
|
|
|
$
|
0.6
|
|
|
$
|
4.6
|
|
|
$
|
4.6
|
|
April 2012
|
|
Western U.S.
|
|
75.0%
|
|
43.4
|
|
|
2.8
|
|
|
30.9
|
|
|
2.4
|
|
|
4.3
|
|
|
4.0
|
|
||||||
August 2012
|
|
Ireland
|
|
10.0%
|
|
492.7
|
|
|
345.9
|
|
|
7.0
|
|
|
8.5
|
|
|
1.9
|
|
|
0.8
|
|
||||||
December 2012
|
|
United Kingdom
|
|
5.0%
|
|
661.9
|
|
|
110.2
|
|
|
19.3
|
|
|
2.7
|
|
|
2.0
|
|
|
1.6
|
|
||||||
April 2013
|
|
United Kingdom
|
|
10.0%
|
|
198.4
|
|
|
111.0
|
|
|
13.0
|
|
|
5.6
|
|
|
5.6
|
|
|
1.2
|
|
||||||
August 2013
|
|
United Kingdom
|
|
20.0%
|
|
145.5
|
|
|
145.5
|
|
|
7.5
|
|
|
8.7
|
|
|
4.9
|
|
|
1.2
|
|
||||||
May 2014
|
|
United Kingdom
|
|
33.3%
|
|
111.0
|
|
|
111.0
|
|
|
30.3
|
|
|
30.4
|
|
|
2.3
|
|
|
0.1
|
|
||||||
Total
|
|
|
|
|
|
$
|
1,995.3
|
|
|
$
|
826.4
|
|
|
$
|
119.2
|
|
|
$
|
58.9
|
|
|
$
|
25.6
|
|
|
$
|
13.5
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Income from unconsolidated investments
|
$
|
2.5
|
|
|
$
|
2.9
|
|
|
$
|
4.6
|
|
|
$
|
5.4
|
|
Foreign currency translation gain (loss)
|
0.2
|
|
|
(1.1
|
)
|
|
0.4
|
|
|
(5.0
|
)
|
||||
Total
|
$
|
2.7
|
|
|
$
|
1.8
|
|
|
$
|
5.0
|
|
|
$
|
0.4
|
|
(Dollars in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Marketable securities
|
$
|
11.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11.0
|
|
Unconsolidated investments
|
—
|
|
|
—
|
|
|
78.5
|
|
|
78.5
|
|
||||
Currency forward contract
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
|
(1.1
|
)
|
||||
Total
|
$
|
11.0
|
|
|
$
|
(1.1
|
)
|
|
$
|
78.5
|
|
|
$
|
88.4
|
|
(Dollars in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Marketable securities
|
$
|
4.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.0
|
|
Unconsolidated investments
|
—
|
|
|
—
|
|
|
81.1
|
|
|
81.1
|
|
||||
Currency forward contract
|
—
|
|
|
(9.6
|
)
|
|
—
|
|
|
(9.6
|
)
|
||||
Total
|
$
|
4.0
|
|
|
$
|
(9.6
|
)
|
|
$
|
81.1
|
|
|
$
|
75.5
|
|
(Dollars in millions)
|
June 30, 2014
|
|
December 31, 2013
|
||||
Funds
|
$
|
31.0
|
|
|
$
|
33.5
|
|
FV Option
|
47.5
|
|
|
47.6
|
|
||
Total
|
$
|
78.5
|
|
|
$
|
81.1
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Beginning balance
|
$
|
82.0
|
|
|
$
|
68.4
|
|
|
$
|
81.1
|
|
|
$
|
68.4
|
|
Contributions
|
1.0
|
|
|
5.6
|
|
|
2.4
|
|
|
5.8
|
|
||||
Distributions
|
(4.5
|
)
|
|
—
|
|
|
(5.0
|
)
|
|
(0.2
|
)
|
||||
Ending balance
|
$
|
78.5
|
|
|
$
|
74.0
|
|
|
$
|
78.5
|
|
|
$
|
74.0
|
|
|
Estimated Rates Used for
|
||
|
Capitalization Rates
|
|
Discount Rates
|
Office
|
6.00% - 7.50%
|
|
7.00% - 9.75%
|
Retail
|
6.00% - 10.00%
|
|
9.00% - 12.00%
|
Hotel
|
6.50%
|
|
8.00%
|
Multifamily
|
4.40% - 6.75%
|
|
4.90% - 9.00%
|
Loan
|
n/a
|
|
1.75% - 12.00%
|
Land and condominium units
|
n/a
|
|
8.00% - 12.00%
|
(Dollars in millions)
|
June 30, 2014
|
|
December 31, 2013
|
||||
Above-market leases, net of accumulated amortization of $1.2 million at June 30, 2014
|
79.5
|
|
|
—
|
|
||
Goodwill
|
23.9
|
|
|
23.9
|
|
||
Loan fees, net of accumulated amortization of $6.2 million and $4.5 million at
June 30, 2014 and December 31, 2013, respectively |
23.7
|
|
|
14.1
|
|
||
Deposits and other, net of accumulated amortization of $1.9 million and
$1.2 million at June 30, 2014 and December 31, 2013, respectively |
29.3
|
|
|
13.0
|
|
||
Marketable securities
(1)
|
11.0
|
|
|
4.0
|
|
||
Office furniture and equipment net of accumulated depreciation of $2.8 million and
$2.2 million at June 30, 2014 and December 31, 2013, respectively |
9.7
|
|
|
10.4
|
|
||
Prepaid expenses
|
10.6
|
|
|
7.6
|
|
||
Other Assets
|
$
|
187.7
|
|
|
$
|
73.0
|
|
(Dollars in millions)
|
|
|
|
Carrying Amount of Investment Debt as of
(1)
|
||||||
Types of Property Pledged as Collateral
|
|
Region
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
Multifamily
(1)
|
|
Western U.S.
|
|
$
|
349.8
|
|
|
$
|
261.0
|
|
Commercial
|
|
Western U.S.
|
|
136.9
|
|
|
110.4
|
|
||
Residential
|
|
Western U.S
|
|
30.0
|
|
|
28.0
|
|
||
Multifamily
(1)
|
|
Japan
|
|
283.7
|
|
|
—
|
|
||
Commercial
|
|
Japan
|
|
2.4
|
|
|
2.4
|
|
||
Commercial
(1)
|
|
Ireland
|
|
347.0
|
|
|
—
|
|
||
Multifamily
(1)
|
|
Ireland
|
|
200.6
|
|
|
—
|
|
||
Loans
(1)
|
|
Ireland
|
|
81.9
|
|
|
—
|
|
||
Commercial
(1)
|
|
United Kingdom
|
|
96.4
|
|
|
—
|
|
||
Investment debt
(2)
|
|
|
|
$
|
1,528.7
|
|
|
$
|
401.8
|
|
(Dollars in millions)
|
|
|
||
2014
|
|
$
|
30.5
|
|
2015
|
|
124.4
|
|
|
2016
|
|
60.0
|
|
|
2017
|
|
211.9
|
|
|
2018
|
|
351.7
|
|
|
Thereafter
|
|
728.7
|
|
|
|
|
1,507.2
|
|
|
Debt premium
|
|
21.5
|
|
|
|
|
$
|
1,528.7
|
|
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||||||||
(Dollars in millions)
|
|
|
Unamortized
|
|
|
|
Unamortized
|
|
|||||||||||||
|
Interest Rate
|
Maturity Date
|
Face Value
|
Net Premium/(Discount)
|
Carrying Value
|
|
Face Value
|
Net Premium/(Discount)
|
Carrying Value
|
||||||||||||
2042 Notes
|
7.75%
|
12/1/2042
|
$
|
55.0
|
|
$
|
—
|
|
$
|
55.0
|
|
|
$
|
55.0
|
|
$
|
—
|
|
$
|
55.0
|
|
2024 Notes
|
5.88%
|
4/1/2024
|
300.0
|
|
(2.7
|
)
|
297.3
|
|
|
—
|
|
—
|
|
—
|
|
||||||
2019 Notes
|
8.75%
|
4/1/2019
|
350.0
|
|
3.7
|
|
353.7
|
|
|
350.0
|
|
4.0
|
|
354.0
|
|
||||||
Senior Notes
|
|
|
$
|
705.0
|
|
$
|
1.0
|
|
$
|
706.0
|
|
|
$
|
405.0
|
|
$
|
4.0
|
|
$
|
409.0
|
|
|
|
Six Months Ended June 30, 2014
|
|
Six Months Ended June 30, 2013
|
||||||||||||
(Dollars in millions)
|
|
Declared
|
|
Paid
|
|
Declared
|
|
Paid
|
||||||||
Preferred Stock
|
|
|
|
|
|
|
|
|
||||||||
Series A
(1)
|
|
$
|
3.0
|
|
|
$
|
3.0
|
|
|
$
|
3.0
|
|
|
$
|
3.0
|
|
Series B
(2)
|
|
1.1
|
|
|
1.1
|
|
|
1.1
|
|
|
1.1
|
|
||||
Total Preferred Stock
|
|
4.1
|
|
|
4.1
|
|
|
4.1
|
|
|
4.1
|
|
||||
Common Stock
(3)
|
|
16.4
|
|
|
14.0
|
|
|
10.3
|
|
|
5.0
|
|
||||
Total
(4)
|
|
$
|
20.5
|
|
|
$
|
18.1
|
|
|
$
|
14.4
|
|
|
$
|
9.1
|
|
|
|
Foreign Currency Translation
|
|
Forward Contract Foreign Currency
|
|
Total Accumulated Other Comprehensive Income
|
||||||
(Dollars in millions)
|
|
|
|
|
|
|
||||||
Balance at December 31, 2013
|
|
$
|
4.3
|
|
|
$
|
4.9
|
|
|
$
|
9.2
|
|
Unrealized gains (losses), arising during the period
|
|
35.8
|
|
|
(5.2
|
)
|
|
30.6
|
|
|||
Amounts reclassified out of AOCI during the period
(1)
|
|
(0.3
|
)
|
|
(6.8
|
)
|
|
(7.1
|
)
|
|||
Taxes on unrealized losses, arising during the period
|
|
(13.9
|
)
|
|
1.6
|
|
|
(12.3
|
)
|
|||
Noncontrolling interest
|
|
(18.8
|
)
|
|
—
|
|
|
(18.8
|
)
|
|||
Balance at June 30, 2014
|
|
$
|
7.1
|
|
|
$
|
(5.5
|
)
|
|
$
|
1.6
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in millions, except share and per share amounts)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
$
|
36.3
|
|
|
$
|
(2.5
|
)
|
|
$
|
46.8
|
|
|
$
|
(6.1
|
)
|
Net income allocated to participating securities
|
(1.2
|
)
|
|
(0.2
|
)
|
|
(1.8
|
)
|
|
(0.5
|
)
|
||||
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc. common shareholders, net of allocation to participating securities
|
35.1
|
|
|
(2.7
|
)
|
|
45.0
|
|
|
(6.6
|
)
|
||||
Dividends declared on common shares
|
(8.0
|
)
|
|
(5.0
|
)
|
|
(16.0
|
)
|
|
(9.8
|
)
|
||||
Undistributed earnings attributable to Kennedy-Wilson Holdings, Inc. common shareholders, net of allocation to participating securities
|
$
|
27.1
|
|
|
$
|
(7.7
|
)
|
|
$
|
29.0
|
|
|
$
|
(16.4
|
)
|
|
|
|
|
|
|
|
|
||||||||
Distributed earnings per share
|
$
|
0.09
|
|
|
$
|
0.07
|
|
|
$
|
0.18
|
|
|
$
|
0.14
|
|
Undistributed earnings (losses) per share
|
0.30
|
|
|
(0.10
|
)
|
|
0.33
|
|
|
(0.23
|
)
|
||||
Income (loss) per basic
|
0.39
|
|
|
(0.03
|
)
|
|
0.51
|
|
|
(0.09
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) per diluted
|
$
|
0.38
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.50
|
|
|
$
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding for basic
|
89,140,498
|
|
|
70,976,247
|
|
|
88,645,002
|
|
|
66,432,823
|
|
||||
Weighted average shares outstanding for diluted
(1)
|
102,115,350
|
|
|
70,976,247
|
|
|
101,435,250
|
|
|
66,432,823
|
|
||||
Dividends declared per common share
|
$
|
0.09
|
|
|
$
|
0.07
|
|
|
$
|
0.18
|
|
|
$
|
0.14
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Investments
|
|
|
|
|
|
|
|
|
||||||||
Rental and hotel
|
|
$
|
42.6
|
|
|
$
|
10.3
|
|
|
$
|
67.8
|
|
|
16.8
|
|
|
Sale of real estate
|
|
6.1
|
|
|
6.1
|
|
|
17.4
|
|
|
8.5
|
|
||||
Loan and other
|
|
4.3
|
|
|
0.5
|
|
|
6.0
|
|
|
0.9
|
|
||||
Total revenue
|
|
53.0
|
|
|
16.9
|
|
|
91.2
|
|
|
26.2
|
|
||||
Operating expenses
|
|
(39.0
|
)
|
|
(18.7
|
)
|
|
(75.1
|
)
|
|
(31.3
|
)
|
||||
Depreciation and amortization
|
|
(25.3
|
)
|
|
(4.4
|
)
|
|
(32.6
|
)
|
|
(7.5
|
)
|
||||
Income from unconsolidated investments
|
|
29.9
|
|
|
14.8
|
|
|
31.7
|
|
|
16.9
|
|
||||
Operating income
|
|
18.6
|
|
|
8.6
|
|
|
15.2
|
|
|
4.3
|
|
||||
Acquisition-related gains
|
|
86.0
|
|
|
—
|
|
|
170.3
|
|
|
9.5
|
|
||||
Acquisition-related expenses
|
|
(7.6
|
)
|
|
(0.5
|
)
|
|
(11.6
|
)
|
|
(0.5
|
)
|
||||
Interest expense - investment
|
|
(11.1
|
)
|
|
(2.8
|
)
|
|
(16.4
|
)
|
|
(4.6
|
)
|
||||
Other
|
|
2.1
|
|
|
0.1
|
|
|
2.9
|
|
|
0.4
|
|
||||
Net income
|
|
88.0
|
|
|
5.4
|
|
|
160.4
|
|
|
9.1
|
|
||||
Net (income) loss attributable to the noncontrolling interests
|
|
(25.3
|
)
|
|
0.9
|
|
|
(62.7
|
)
|
|
1.9
|
|
||||
Net income attributable to Kennedy-Wilson Holdings, Inc common shareholders
|
|
$
|
62.7
|
|
|
$
|
6.3
|
|
|
$
|
97.7
|
|
|
$
|
11.0
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Services
|
|
|
|
|
|
|
|
|
||||||||
Investment management, property services and research fees (includes $33.3, $13.8, $40.6, and $22.2 of related party fees)
|
|
$
|
39.0
|
|
|
$
|
19.5
|
|
|
$
|
52.1
|
|
|
$
|
33.1
|
|
Total revenue
|
|
39.0
|
|
|
19.5
|
|
|
52.1
|
|
|
33.1
|
|
||||
Operating expenses
|
|
(14.7
|
)
|
|
(9.9
|
)
|
|
(25.9
|
)
|
|
(18.2
|
)
|
||||
Income from unconsolidated investments
|
|
1.1
|
|
|
—
|
|
|
2.1
|
|
|
—
|
|
||||
Operating income
|
|
25.4
|
|
|
9.6
|
|
|
28.3
|
|
|
14.9
|
|
||||
Net income attributable to Kennedy-Wilson Holdings, Inc common shareholders
|
|
$
|
25.4
|
|
|
$
|
9.6
|
|
|
$
|
28.3
|
|
|
$
|
14.9
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Corporate
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
$
|
(9.6
|
)
|
|
$
|
(7.2
|
)
|
|
$
|
(15.9
|
)
|
|
$
|
(10.9
|
)
|
Operating loss
|
|
(9.6
|
)
|
|
(7.2
|
)
|
|
(15.9
|
)
|
|
(10.9
|
)
|
||||
Interest expense-corporate
|
|
(14.7
|
)
|
|
(9.7
|
)
|
|
(25.2
|
)
|
|
(19.4
|
)
|
||||
Other
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.2
|
|
||||
Loss before (provision for) benefit from income taxes
|
|
(24.3
|
)
|
|
(16.8
|
)
|
|
(41.1
|
)
|
|
(30.1
|
)
|
||||
(Provision for) benefit from income taxes
|
|
(25.4
|
)
|
|
0.5
|
|
|
(34.2
|
)
|
|
2.2
|
|
||||
Net loss
|
|
(49.7
|
)
|
|
(16.3
|
)
|
|
(75.3
|
)
|
|
(27.9
|
)
|
||||
Preferred dividends and accretion of preferred stock issuance costs
|
|
(2.1
|
)
|
|
(2.1
|
)
|
|
(4.1
|
)
|
|
(4.1
|
)
|
||||
Net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
$
|
(51.8
|
)
|
|
$
|
(18.4
|
)
|
|
$
|
(79.4
|
)
|
|
$
|
(32.0
|
)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Consolidated
|
|
|
|
|
|
|
|
|
||||||||
Investment management, property services and research fees (includes $33.3, $13.8, $40.6, and $22.2 of related party fees)
|
|
$
|
39.0
|
|
|
$
|
19.5
|
|
|
$
|
52.1
|
|
|
33.1
|
|
|
Rental and hotel
|
|
42.6
|
|
|
10.3
|
|
|
67.8
|
|
|
16.8
|
|
||||
Sale of real estate
|
|
6.1
|
|
|
6.1
|
|
|
17.4
|
|
|
8.5
|
|
||||
Loans and other
|
|
4.3
|
|
|
0.5
|
|
|
6.0
|
|
|
0.9
|
|
||||
Total revenue
|
|
92.0
|
|
|
36.4
|
|
|
143.3
|
|
|
59.3
|
|
||||
Operating expenses
|
|
(63.3
|
)
|
|
(35.7
|
)
|
|
(116.7
|
)
|
|
(60.2
|
)
|
||||
Depreciation and amortization
|
|
(25.3
|
)
|
|
(4.4
|
)
|
|
(32.6
|
)
|
|
(7.5
|
)
|
||||
Total operating expenses
|
|
(88.6
|
)
|
|
(40.1
|
)
|
|
(149.3
|
)
|
|
(67.7
|
)
|
||||
Income from unconsolidated investments
|
|
31.0
|
|
|
14.8
|
|
|
33.8
|
|
|
16.9
|
|
||||
Operating income
|
|
34.4
|
|
|
11.1
|
|
|
27.8
|
|
|
8.5
|
|
||||
Acquisition-related gain
|
|
86.0
|
|
|
—
|
|
|
170.3
|
|
|
9.5
|
|
||||
Acquisition-related expenses
|
|
(7.6
|
)
|
|
(0.5
|
)
|
|
(11.6
|
)
|
|
(0.5
|
)
|
||||
Interest expense - investment
|
|
(11.1
|
)
|
|
(2.8
|
)
|
|
(16.4
|
)
|
|
(4.6
|
)
|
||||
Interest expense - corporate
|
|
(14.7
|
)
|
|
(9.7
|
)
|
|
(25.2
|
)
|
|
(19.4
|
)
|
||||
Other
|
|
2.1
|
|
|
0.1
|
|
|
2.9
|
|
|
0.4
|
|
||||
Income (loss) before benefit from income taxes
|
|
89.1
|
|
|
(1.8
|
)
|
|
147.8
|
|
|
(6.1
|
)
|
||||
(Provision for) benefit from income taxes
|
|
(25.4
|
)
|
|
0.5
|
|
|
(34.2
|
)
|
|
2.2
|
|
||||
Net income (loss)
|
|
63.7
|
|
|
(1.3
|
)
|
|
113.6
|
|
|
(3.9
|
)
|
||||
Net (income) loss attributable to the noncontrolling interests
|
|
(25.3
|
)
|
|
0.9
|
|
|
(62.7
|
)
|
|
1.9
|
|
||||
Preferred dividends and accretion of preferred stock issuance costs
|
|
(2.1
|
)
|
|
(2.1
|
)
|
|
(4.1
|
)
|
|
(4.1
|
)
|
||||
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
$
|
36.3
|
|
|
$
|
(2.5
|
)
|
|
$
|
46.8
|
|
|
$
|
(6.1
|
)
|
(Dollars in millions)
|
|
June 30, 2014
|
|
December 31, 2013
|
||||
Total Assets
|
|
|
|
|
||||
Investments
|
|
$
|
4,893.0
|
|
|
$
|
1,607.5
|
|
Services
|
|
104.8
|
|
|
49.3
|
|
||
Corporate
|
|
356.9
|
|
|
142.0
|
|
||
Total assets
|
|
$
|
5,354.7
|
|
|
$
|
1,798.8
|
|
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF JUNE 30, 2014
|
||||||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
328.4
|
|
|
$
|
20.4
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
349.5
|
|
Cash held by consolidated investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
292.8
|
|
|
—
|
|
|
292.8
|
|
||||||
Accounts receivable
|
|
—
|
|
|
—
|
|
|
16.0
|
|
|
20.8
|
|
|
—
|
|
|
36.8
|
|
||||||
Loans
|
|
—
|
|
|
57.1
|
|
|
180.9
|
|
|
221.0
|
|
|
(56.7
|
)
|
|
402.3
|
|
||||||
Real estate and acquired in place lease values, net of accumulated depreciation and amortization
|
|
—
|
|
|
—
|
|
|
194.2
|
|
|
3,359.2
|
|
|
—
|
|
|
3,553.4
|
|
||||||
Unconsolidated investments
|
|
—
|
|
|
9.3
|
|
|
290.7
|
|
|
232.2
|
|
|
—
|
|
|
532.2
|
|
||||||
Other assets
|
|
—
|
|
|
23.5
|
|
|
41.9
|
|
|
122.3
|
|
|
—
|
|
|
187.7
|
|
||||||
Investments in and advances to consolidated subsidiaries
|
|
988.6
|
|
|
1,401.3
|
|
|
859.8
|
|
|
1.4
|
|
|
(3,251.1
|
)
|
|
—
|
|
||||||
Total assets
|
|
$
|
988.6
|
|
|
$
|
1,819.6
|
|
|
$
|
1,603.9
|
|
|
$
|
4,250.4
|
|
|
$
|
(3,307.8
|
)
|
|
$
|
5,354.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable, accrued expenses and other liabilities
|
|
$
|
11.1
|
|
|
$
|
85.0
|
|
|
$
|
25.6
|
|
|
$
|
164.0
|
|
|
$
|
—
|
|
|
$
|
285.7
|
|
Senior notes payable
|
|
—
|
|
|
706.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
706.0
|
|
||||||
Investment debt
|
|
—
|
|
|
—
|
|
|
176.7
|
|
|
1,408.7
|
|
|
(56.7
|
)
|
|
1,528.7
|
|
||||||
Junior subordinated debentures
|
|
—
|
|
|
40.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40.0
|
|
||||||
Total liabilities
|
|
11.1
|
|
|
831.0
|
|
|
202.3
|
|
|
1,572.7
|
|
|
(56.7
|
)
|
|
2,560.4
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Kennedy-Wilson Holdings, Inc. shareholders' equity
|
|
977.5
|
|
|
988.6
|
|
|
1,401.3
|
|
|
859.8
|
|
|
(3,251.1
|
)
|
|
976.1
|
|
||||||
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
1,817.9
|
|
|
—
|
|
|
1,818.2
|
|
||||||
Total equity
|
|
977.5
|
|
|
988.6
|
|
|
1,401.6
|
|
|
2,677.7
|
|
|
(3,251.1
|
)
|
|
2,794.3
|
|
||||||
Total liabilities and equity
|
|
$
|
988.6
|
|
|
$
|
1,819.6
|
|
|
$
|
1,603.9
|
|
|
$
|
4,250.4
|
|
|
$
|
(3,307.8
|
)
|
|
$
|
5,354.7
|
|
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2013
|
||||||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
48.2
|
|
|
$
|
77.2
|
|
|
$
|
44.8
|
|
|
$
|
—
|
|
|
$
|
170.2
|
|
Cash held by consolidated investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.0
|
|
|
—
|
|
|
8.0
|
|
||||||
Accounts receivable
|
|
—
|
|
|
1.1
|
|
|
7.0
|
|
|
8.5
|
|
|
—
|
|
|
16.6
|
|
||||||
Intercompany receivables
|
|
—
|
|
|
9.0
|
|
|
—
|
|
|
—
|
|
|
(9.0
|
)
|
|
—
|
|
||||||
Loans receivable
|
|
—
|
|
|
59.7
|
|
|
53.7
|
|
|
0.8
|
|
|
(57.4
|
)
|
|
56.8
|
|
||||||
Real estate and acquired in place lease values, net of accumulated depreciation
|
|
—
|
|
|
—
|
|
|
145.3
|
|
|
542.8
|
|
|
—
|
|
|
688.1
|
|
||||||
Unconsolidated investments
|
|
—
|
|
|
7.5
|
|
|
598.0
|
|
|
180.6
|
|
|
—
|
|
|
786.1
|
|
||||||
Investments in and advances to consolidated subsidiaries
|
|
775.1
|
|
|
1,141.9
|
|
|
326.6
|
|
|
—
|
|
|
(2,243.6
|
)
|
|
—
|
|
||||||
Other assets
|
|
—
|
|
|
20.9
|
|
|
31.4
|
|
|
20.7
|
|
|
—
|
|
|
73.0
|
|
||||||
Total assets
|
|
$
|
775.1
|
|
|
$
|
1,288.3
|
|
|
$
|
1,239.2
|
|
|
$
|
806.2
|
|
|
$
|
(2,310.0
|
)
|
|
$
|
1,798.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable, accrued expense and other liabilities
|
|
$
|
6.8
|
|
|
$
|
64.2
|
|
|
$
|
22.9
|
|
|
$
|
35.2
|
|
|
$
|
—
|
|
|
129.1
|
|
|
Intercompany payables
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.0
|
|
|
(9.0
|
)
|
|
—
|
|
||||||
Senior notes payable
|
|
—
|
|
|
409.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
409.0
|
|
||||||
Intercompany loans payable
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57.4
|
|
|
(57.4
|
)
|
|
—
|
|
||||||
Investment debt
|
|
—
|
|
|
—
|
|
|
74.4
|
|
|
327.4
|
|
|
—
|
|
|
401.8
|
|
||||||
Junior subordinated debentures
|
|
—
|
|
|
40.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40.0
|
|
||||||
Total liabilities
|
|
6.8
|
|
|
513.2
|
|
|
97.3
|
|
|
429.0
|
|
|
(66.4
|
)
|
|
979.9
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Kennedy-Wilson Holdings, Inc. shareholders' equity
|
|
768.3
|
|
|
775.1
|
|
|
1,141.9
|
|
|
326.6
|
|
|
(2,243.6
|
)
|
|
768.3
|
|
||||||
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50.6
|
|
|
—
|
|
|
50.6
|
|
||||||
Total equity
|
|
768.3
|
|
|
775.1
|
|
|
1,141.9
|
|
|
377.2
|
|
|
(2,243.6
|
)
|
|
818.9
|
|
||||||
Total liabilities and equity
|
|
$
|
775.1
|
|
|
$
|
1,288.3
|
|
|
$
|
1,239.2
|
|
|
$
|
806.2
|
|
|
$
|
(2,310.0
|
)
|
|
$
|
1,798.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2014
|
||||||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment management, property services and research fees
|
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
35.4
|
|
|
$
|
3.2
|
|
|
$
|
—
|
|
|
$
|
39.0
|
|
Rental and hotel
|
|
—
|
|
|
—
|
|
|
3.0
|
|
|
39.6
|
|
|
—
|
|
|
42.6
|
|
||||||
Sale of real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.1
|
|
|
—
|
|
|
6.1
|
|
||||||
Loans and other
|
|
—
|
|
|
—
|
|
|
3.8
|
|
|
0.5
|
|
|
—
|
|
|
4.3
|
|
||||||
Total revenue
|
|
—
|
|
|
0.4
|
|
|
42.2
|
|
|
49.4
|
|
|
—
|
|
|
92.0
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commission and marketing
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
0.3
|
|
|
—
|
|
|
0.9
|
|
||||||
Rental and hotel operating
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
17.0
|
|
|
—
|
|
|
17.9
|
|
||||||
Cost of real estate sold
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.9
|
|
|
—
|
|
|
3.9
|
|
||||||
Compensation and related
|
|
1.7
|
|
|
20.2
|
|
|
8.8
|
|
|
1.5
|
|
|
—
|
|
|
32.2
|
|
||||||
General and administrative
|
|
—
|
|
|
2.7
|
|
|
—
|
|
|
5.7
|
|
|
—
|
|
|
8.4
|
|
||||||
Depreciation and amortization
|
|
—
|
|
|
0.2
|
|
|
2.6
|
|
|
22.5
|
|
|
—
|
|
|
25.3
|
|
||||||
Total operating expenses
|
|
1.7
|
|
|
23.1
|
|
|
12.9
|
|
|
50.9
|
|
|
—
|
|
|
88.6
|
|
||||||
Income from unconsolidated subsidiaries
|
|
—
|
|
|
1.2
|
|
|
29.2
|
|
|
0.6
|
|
|
—
|
|
|
31.0
|
|
||||||
Income from consolidated subsidiaries
|
|
65.3
|
|
|
127.6
|
|
|
75.8
|
|
|
—
|
|
|
(268.7
|
)
|
|
—
|
|
||||||
Operating income (loss)
|
|
63.6
|
|
|
106.1
|
|
|
134.3
|
|
|
(0.9
|
)
|
|
(268.7
|
)
|
|
34.4
|
|
||||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquisition-related gains
|
|
—
|
|
|
(7.0
|
)
|
|
—
|
|
|
93.0
|
|
|
—
|
|
|
86.0
|
|
||||||
Acquisition-related expenses
|
|
—
|
|
|
—
|
|
|
(1.2
|
)
|
|
(6.4
|
)
|
|
—
|
|
|
(7.6
|
)
|
||||||
Interest expense-investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.1
|
)
|
|
—
|
|
|
(11.1
|
)
|
||||||
Interest expense-corporate
|
|
—
|
|
|
(14.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14.7
|
)
|
||||||
Other income / (expense)
|
|
—
|
|
|
(1.8
|
)
|
|
2.7
|
|
|
1.2
|
|
|
—
|
|
|
2.1
|
|
||||||
Income (loss) before benefit from income taxes
|
|
63.6
|
|
|
82.6
|
|
|
135.8
|
|
|
75.8
|
|
|
(268.7
|
)
|
|
89.1
|
|
||||||
(Provision for) benefit from income taxes
|
|
—
|
|
|
(17.3
|
)
|
|
(8.1
|
)
|
|
—
|
|
|
—
|
|
|
(25.4
|
)
|
||||||
Net income (loss)
|
|
63.6
|
|
|
65.3
|
|
|
127.7
|
|
|
75.8
|
|
|
(268.7
|
)
|
|
63.7
|
|
||||||
Net (income) loss attributable to the noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25.3
|
)
|
|
—
|
|
|
(25.3
|
)
|
||||||
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc.
|
|
63.6
|
|
|
65.3
|
|
|
127.7
|
|
|
50.5
|
|
|
(268.7
|
)
|
|
38.4
|
|
||||||
Preferred dividends and accretion of preferred stock issuance costs
|
|
(2.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
||||||
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
$
|
61.5
|
|
|
$
|
65.3
|
|
|
$
|
127.7
|
|
|
$
|
50.5
|
|
|
$
|
(268.7
|
)
|
|
$
|
36.3
|
|
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2014
|
||||||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment management, property services and research fees
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
48.5
|
|
|
$
|
3.1
|
|
|
$
|
—
|
|
|
$
|
52.1
|
|
Rental and hotel
|
|
—
|
|
|
—
|
|
|
6.4
|
|
|
61.4
|
|
|
—
|
|
|
67.8
|
|
||||||
Sale of real estate
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
16.8
|
|
|
—
|
|
|
17.4
|
|
||||||
Loans and other
|
|
—
|
|
|
0.1
|
|
|
4.3
|
|
|
1.6
|
|
|
—
|
|
|
6.0
|
|
||||||
Total revenue
|
|
—
|
|
|
0.6
|
|
|
59.8
|
|
|
82.9
|
|
|
—
|
|
|
143.3
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commission and marketing
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
0.4
|
|
|
—
|
|
|
1.8
|
|
||||||
Rental and hotel operating
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|
29.7
|
|
|
—
|
|
|
32.1
|
|
||||||
Cost of real estate sold
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
12.8
|
|
|
—
|
|
|
13.5
|
|
||||||
Compensation and related
|
|
3.4
|
|
|
30.2
|
|
|
16.3
|
|
|
2.9
|
|
|
—
|
|
|
52.8
|
|
||||||
General and administrative
|
|
—
|
|
|
5.6
|
|
|
4.0
|
|
|
6.9
|
|
|
—
|
|
|
16.5
|
|
||||||
Depreciation and amortization
|
|
—
|
|
|
0.5
|
|
|
4.8
|
|
|
27.3
|
|
|
—
|
|
|
32.6
|
|
||||||
Total operating expenses
|
|
3.4
|
|
|
36.3
|
|
|
29.6
|
|
|
80.0
|
|
|
—
|
|
|
149.3
|
|
||||||
Income from unconsolidated subsidiaries
|
|
—
|
|
|
1.2
|
|
|
30.9
|
|
|
1.7
|
|
|
—
|
|
|
33.8
|
|
||||||
Income from consolidated subsidiaries
|
|
117.0
|
|
|
209.5
|
|
|
153.0
|
|
|
—
|
|
|
(479.5
|
)
|
|
—
|
|
||||||
Operating income (loss)
|
|
113.6
|
|
|
175.0
|
|
|
214.1
|
|
|
4.6
|
|
|
(479.5
|
)
|
|
27.8
|
|
||||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquisition-related gains
|
|
—
|
|
|
(7.0
|
)
|
|
3.7
|
|
|
173.6
|
|
|
—
|
|
|
170.3
|
|
||||||
Acquisition-related expenses
|
|
—
|
|
|
—
|
|
|
(1.6
|
)
|
|
(10.0
|
)
|
|
—
|
|
|
(11.6
|
)
|
||||||
Interest expense-investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.4
|
)
|
|
—
|
|
|
(16.4
|
)
|
||||||
Interest expense-corporate
|
|
—
|
|
|
(25.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25.2
|
)
|
||||||
Other income / (expense)
|
|
—
|
|
|
0.2
|
|
|
1.5
|
|
|
1.2
|
|
|
—
|
|
|
2.9
|
|
||||||
Income (loss) before benefit from income taxes
|
|
113.6
|
|
|
143.0
|
|
|
217.7
|
|
|
153.0
|
|
|
(479.5
|
)
|
|
147.8
|
|
||||||
(Provision for) benefit from income taxes
|
|
—
|
|
|
(26.1
|
)
|
|
(8.1
|
)
|
|
—
|
|
|
—
|
|
|
(34.2
|
)
|
||||||
Net income (loss)
|
|
113.6
|
|
|
116.9
|
|
|
209.6
|
|
|
153.0
|
|
|
(479.5
|
)
|
|
113.6
|
|
||||||
Net (income) loss attributable to the noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(62.7
|
)
|
|
—
|
|
|
(62.7
|
)
|
||||||
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc.
|
|
113.6
|
|
|
116.9
|
|
|
209.6
|
|
|
90.3
|
|
|
(479.5
|
)
|
|
50.9
|
|
||||||
Preferred dividends and accretion of preferred stock issuance costs
|
|
(4.1
|
)
|
|
—
|
|
|
|
|
|
|
—
|
|
|
(4.1
|
)
|
||||||||
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
$
|
109.5
|
|
|
$
|
116.9
|
|
|
$
|
209.6
|
|
|
$
|
90.3
|
|
|
$
|
(479.5
|
)
|
|
$
|
46.8
|
|
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2013
|
||||||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment management, property services, and research fees
|
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
7.3
|
|
|
$
|
11.8
|
|
|
$
|
—
|
|
|
$
|
19.5
|
|
Rental and hotel
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|
8.8
|
|
|
—
|
|
|
10.3
|
|
||||||
Sale of real estate
|
|
—
|
|
|
—
|
|
|
6.1
|
|
|
—
|
|
|
—
|
|
|
6.1
|
|
||||||
Loans and other
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
||||||
Total revenue
|
|
—
|
|
|
0.4
|
|
|
15.4
|
|
|
20.6
|
|
|
—
|
|
|
36.4
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commission and marketing
|
|
—
|
|
|
0.3
|
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
||||||
Rental and hotel operating
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
3.8
|
|
|
—
|
|
|
4.6
|
|
||||||
Cost of real estate sold
|
|
—
|
|
|
—
|
|
|
5.1
|
|
|
—
|
|
|
—
|
|
|
5.1
|
|
||||||
Compensation and related
|
|
1.7
|
|
|
8.6
|
|
|
3.4
|
|
|
4.6
|
|
|
—
|
|
|
18.3
|
|
||||||
General and administrative
|
|
0.3
|
|
|
2.3
|
|
|
0.7
|
|
|
3.1
|
|
|
—
|
|
|
6.4
|
|
||||||
Depreciation and amortization
|
|
—
|
|
|
0.1
|
|
|
1.2
|
|
|
3.1
|
|
|
—
|
|
|
4.4
|
|
||||||
Total operating expenses
|
|
2.0
|
|
|
11.3
|
|
|
12.2
|
|
|
14.6
|
|
|
—
|
|
|
40.1
|
|
||||||
Income from unconsolidated investments, net of depreciation and amortization
|
|
—
|
|
|
—
|
|
|
16.7
|
|
|
(2.0
|
)
|
|
0.1
|
|
|
14.8
|
|
||||||
Income from consolidated subsidiaries
|
|
0.6
|
|
|
20.3
|
|
|
0.7
|
|
|
—
|
|
|
(21.6
|
)
|
|
—
|
|
||||||
Operating income (expense)
|
|
(1.4
|
)
|
|
9.4
|
|
|
20.6
|
|
|
4.0
|
|
|
(21.5
|
)
|
|
11.1
|
|
||||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquisition-related expense
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(0.5
|
)
|
||||||
Interest expense-investment
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(2.6
|
)
|
|
—
|
|
|
(2.8
|
)
|
||||||
Interest expense-corporate
|
|
—
|
|
|
(9.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.7
|
)
|
||||||
Other income
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.1
|
|
||||||
(Loss) income before benefit from income taxes
|
|
(1.4
|
)
|
|
(0.1
|
)
|
|
20.2
|
|
|
1.1
|
|
|
(21.6
|
)
|
|
(1.8
|
)
|
||||||
Benefit from (provision for) income taxes
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
0.5
|
|
||||||
Net (loss) income
|
|
(1.4
|
)
|
|
0.7
|
|
|
20.2
|
|
|
0.8
|
|
|
(21.6
|
)
|
|
(1.3
|
)
|
||||||
Net income attributable to the noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
||||||
Preferred dividends and accretion of preferred stock issuance costs
|
|
(2.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
||||||
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
$
|
(3.5
|
)
|
|
$
|
0.7
|
|
|
$
|
20.2
|
|
|
$
|
1.7
|
|
|
$
|
(21.6
|
)
|
|
$
|
(2.5
|
)
|
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2013
|
||||||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment management, property services, and research fees
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
14.2
|
|
|
$
|
18.4
|
|
|
$
|
—
|
|
|
$
|
33.1
|
|
Rental and hotel
|
|
—
|
|
|
—
|
|
|
3.2
|
|
|
13.6
|
|
|
—
|
|
|
16.8
|
|
||||||
Sale of real estate
|
|
—
|
|
|
—
|
|
|
8.5
|
|
|
—
|
|
|
—
|
|
|
8.5
|
|
||||||
Loans and other
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
||||||
Total revenue
|
|
—
|
|
|
0.5
|
|
|
26.8
|
|
|
32.0
|
|
|
—
|
|
|
59.3
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commission and marketing
|
|
—
|
|
|
0.4
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
||||||
Rental and hotel operating
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|
6.0
|
|
|
—
|
|
|
7.7
|
|
||||||
Cost of real estate sold
|
|
—
|
|
|
—
|
|
|
7.0
|
|
|
—
|
|
|
—
|
|
|
7.0
|
|
||||||
Compensation and related
|
|
3.4
|
|
|
13.6
|
|
|
7.0
|
|
|
7.9
|
|
|
—
|
|
|
31.9
|
|
||||||
General and administrative
|
|
0.3
|
|
|
4.4
|
|
|
2.1
|
|
|
5.0
|
|
|
—
|
|
|
11.8
|
|
||||||
Depreciation and amortization
|
|
—
|
|
|
0.3
|
|
|
2.3
|
|
|
4.9
|
|
|
—
|
|
|
7.5
|
|
||||||
Total operating expenses
|
|
3.7
|
|
|
18.7
|
|
|
21.5
|
|
|
23.8
|
|
|
—
|
|
|
67.7
|
|
||||||
Income from unconsolidated investments, net of depreciation and amortization
|
|
—
|
|
|
—
|
|
|
20.2
|
|
|
(3.3
|
)
|
|
—
|
|
|
16.9
|
|
||||||
Income from consolidated subsidiaries
|
|
(0.2
|
)
|
|
34.7
|
|
|
9.5
|
|
|
—
|
|
|
(44.0
|
)
|
|
—
|
|
||||||
Operating income (expense)
|
|
(3.9
|
)
|
|
16.5
|
|
|
35.0
|
|
|
4.9
|
|
|
(44.0
|
)
|
|
8.5
|
|
||||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquisition-related gains
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.5
|
|
|
—
|
|
|
9.5
|
|
||||||
Acquisition-related expense
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(0.5
|
)
|
||||||
Interest expense-investment
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
(4.2
|
)
|
|
0.1
|
|
|
(4.6
|
)
|
||||||
Interest expense-corporate
|
|
—
|
|
|
(19.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19.4
|
)
|
||||||
Other income
|
|
—
|
|
|
0.2
|
|
|
0.3
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.4
|
|
||||||
(Loss) income before benefit from income taxes
|
|
(3.9
|
)
|
|
(2.7
|
)
|
|
34.6
|
|
|
9.9
|
|
|
(44.0
|
)
|
|
(6.1
|
)
|
||||||
Benefit from (provision for) income taxes
|
|
—
|
|
|
2.5
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
2.2
|
|
||||||
Net (loss) income
|
|
(3.9
|
)
|
|
(0.2
|
)
|
|
34.6
|
|
|
9.6
|
|
|
(44.0
|
)
|
|
(3.9
|
)
|
||||||
Net income attributable to the noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
1.9
|
|
||||||
Preferred dividends and accretion of preferred stock issuance costs
|
|
(4.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
||||||
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
$
|
(8.0
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
34.6
|
|
|
$
|
11.5
|
|
|
$
|
(44.0
|
)
|
|
$
|
(6.1
|
)
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 2014
|
||||||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
Net (loss) income
|
|
$
|
63.6
|
|
|
$
|
65.3
|
|
|
$
|
127.7
|
|
|
$
|
75.8
|
|
|
$
|
(268.7
|
)
|
|
$
|
63.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized foreign currency translation (loss) gain
|
|
23.1
|
|
|
23.1
|
|
|
29.1
|
|
|
(3.1
|
)
|
|
(49.1
|
)
|
|
23.1
|
|
||||||
Amounts reclassified out of AOCI during the period
|
|
(8.3
|
)
|
|
(8.3
|
)
|
|
(8.3
|
)
|
|
—
|
|
|
16.6
|
|
|
(8.3
|
)
|
||||||
Unrealized forward contract foreign currency (loss) gain
|
|
(2.1
|
)
|
|
(2.1
|
)
|
|
(3.6
|
)
|
|
(1.2
|
)
|
|
6.9
|
|
|
(2.1
|
)
|
||||||
Total other comprehensive (loss) income for the period
|
|
$
|
12.7
|
|
|
$
|
12.7
|
|
|
$
|
17.2
|
|
|
$
|
(4.3
|
)
|
|
$
|
(25.6
|
)
|
|
$
|
12.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income
|
|
$
|
76.3
|
|
|
$
|
78.0
|
|
|
$
|
144.9
|
|
|
$
|
71.5
|
|
|
$
|
(294.3
|
)
|
|
$
|
76.4
|
|
Comprehensive (income) loss attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(44.1
|
)
|
|
—
|
|
|
(44.1
|
)
|
||||||
Comprehensive income attributable to Kennedy-Wilson Holdings, Inc.
|
|
$
|
76.3
|
|
|
$
|
78.0
|
|
|
$
|
144.9
|
|
|
$
|
27.4
|
|
|
$
|
(294.3
|
)
|
|
$
|
32.3
|
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 2013
|
||||||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
Net (loss) income
|
|
$
|
(1.4
|
)
|
|
$
|
0.7
|
|
|
$
|
20.2
|
|
|
$
|
0.8
|
|
|
$
|
(21.6
|
)
|
|
$
|
(1.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized foreign currency translation gains
|
|
(3.7
|
)
|
|
(3.7
|
)
|
|
(5.1
|
)
|
|
(0.5
|
)
|
|
9.3
|
|
|
(3.7
|
)
|
||||||
Unrealized forward contract foreign currency loss
|
|
2.2
|
|
|
2.2
|
|
|
2.0
|
|
|
—
|
|
|
(4.2
|
)
|
|
2.2
|
|
||||||
Total other comprehensive income for the period
|
|
$
|
(1.5
|
)
|
|
$
|
(1.5
|
)
|
|
$
|
(3.1
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
5.1
|
|
|
$
|
(1.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive (loss) income
|
|
$
|
(2.9
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
17.1
|
|
|
$
|
0.3
|
|
|
$
|
(16.5
|
)
|
|
$
|
(2.8
|
)
|
Comprehensive income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
||||||
Comprehensive (loss) income attributable to Kennedy-Wilson Holdings, Inc.
|
|
$
|
(2.9
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
17.1
|
|
|
$
|
1.2
|
|
|
$
|
(16.5
|
)
|
|
$
|
(1.9
|
)
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2014
|
||||||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
Net income (loss)
|
|
$
|
113.6
|
|
|
$
|
116.9
|
|
|
$
|
209.6
|
|
|
$
|
153.0
|
|
|
$
|
(479.5
|
)
|
|
$
|
113.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized foreign currency translation (loss) gain
|
|
21.9
|
|
|
21.9
|
|
|
23.9
|
|
|
(3.9
|
)
|
|
(41.9
|
)
|
|
21.9
|
|
||||||
Amounts reclassified out of AOCI during the period
|
|
(7.1
|
)
|
|
(7.1
|
)
|
|
(8.3
|
)
|
|
1.2
|
|
|
14.2
|
|
|
(7.1
|
)
|
||||||
Unrealized forward contract foreign currency (loss) gain
|
|
(3.6
|
)
|
|
(3.6
|
)
|
|
(1.2
|
)
|
|
(1.2
|
)
|
|
6.0
|
|
|
(3.6
|
)
|
||||||
Total other comprehensive (loss) income for the period
|
|
$
|
11.2
|
|
|
$
|
11.2
|
|
|
$
|
14.4
|
|
|
$
|
(3.9
|
)
|
|
$
|
(21.7
|
)
|
|
$
|
11.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income
|
|
$
|
124.8
|
|
|
$
|
128.1
|
|
|
$
|
224.0
|
|
|
$
|
149.1
|
|
|
$
|
(501.2
|
)
|
|
$
|
124.8
|
|
Comprehensive (income) loss attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(81.5
|
)
|
|
—
|
|
|
(81.5
|
)
|
||||||
Comprehensive income attributable to Kennedy-Wilson Holdings, Inc.
|
|
$
|
124.8
|
|
|
$
|
128.1
|
|
|
$
|
224.0
|
|
|
$
|
67.6
|
|
|
$
|
(501.2
|
)
|
|
$
|
43.3
|
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2013
|
||||||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
Net (loss) income
|
|
$
|
(3.9
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
34.6
|
|
|
$
|
9.6
|
|
|
$
|
(44.0
|
)
|
|
$
|
(3.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized foreign currency translation gains
|
|
(18.0
|
)
|
|
(18.0
|
)
|
|
(18.0
|
)
|
|
(2.5
|
)
|
|
38.5
|
|
|
(18.0
|
)
|
||||||
Unrealized forward contract foreign currency loss
|
|
5.8
|
|
|
5.8
|
|
|
5.2
|
|
|
—
|
|
|
(11.0
|
)
|
|
5.8
|
|
||||||
Total other comprehensive income for the period
|
|
$
|
(12.2
|
)
|
|
$
|
(12.2
|
)
|
|
$
|
(12.8
|
)
|
|
$
|
(2.5
|
)
|
|
$
|
27.5
|
|
|
$
|
(12.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive (loss) income
|
|
$
|
(16.1
|
)
|
|
$
|
(12.4
|
)
|
|
$
|
21.8
|
|
|
$
|
7.1
|
|
|
$
|
(16.5
|
)
|
|
$
|
(16.1
|
)
|
Comprehensive income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
1.9
|
|
||||||
Comprehensive (loss) income attributable to Kennedy-Wilson Holdings, Inc.
|
|
$
|
(16.1
|
)
|
|
$
|
(12.4
|
)
|
|
$
|
21.8
|
|
|
$
|
9.0
|
|
|
$
|
(16.5
|
)
|
|
$
|
(14.2
|
)
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2014
|
||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Consolidated Total
|
||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
1.8
|
|
|
$
|
(75.3
|
)
|
|
$
|
58.5
|
|
|
$
|
80.1
|
|
|
$
|
65.1
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to loans
|
|
—
|
|
|
—
|
|
|
(5.7
|
)
|
|
(367.6
|
)
|
|
(373.3
|
)
|
|||||
Collections of loans
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
18.5
|
|
|
18.7
|
|
|||||
Net proceeds from sale of real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.0
|
|
|
15.0
|
|
|||||
Purchases of and additions to real estate
|
|
—
|
|
|
—
|
|
|
(4.4
|
)
|
|
(1,285.4
|
)
|
|
(1,289.8
|
)
|
|||||
Distributions from unconsolidated investments
|
|
—
|
|
|
0.2
|
|
|
44.4
|
|
|
11.0
|
|
|
55.6
|
|
|||||
Contributions to unconsolidated investments
|
|
—
|
|
|
(2.0
|
)
|
|
(19.1
|
)
|
|
(84.9
|
)
|
|
(106.0
|
)
|
|||||
Investment in marketable securities
|
|
—
|
|
|
—
|
|
|
(6.9
|
)
|
|
—
|
|
|
(6.9
|
)
|
|||||
(Investments in) distributions from consolidated subsidiaries, net
|
|
(171.9
|
)
|
|
67.1
|
|
|
(141.4
|
)
|
|
246.2
|
|
|
—
|
|
|||||
Net cash (used in) provided by investing activities
|
|
(171.9
|
)
|
|
65.3
|
|
|
(132.9
|
)
|
|
(1,447.2
|
)
|
|
(1,686.7
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings under line of credit
|
|
—
|
|
|
90.0
|
|
|
—
|
|
|
—
|
|
|
90.0
|
|
|||||
Repayment of line of credit
|
|
—
|
|
|
(90.0
|
)
|
|
—
|
|
|
—
|
|
|
(90.0
|
)
|
|||||
Borrowings under investment debt
|
|
—
|
|
|
—
|
|
|
18.0
|
|
|
277.2
|
|
|
295.2
|
|
|||||
Borrowings under senior notes payable
|
|
—
|
|
|
297.2
|
|
|
—
|
|
|
—
|
|
|
297.2
|
|
|||||
Debt issue costs
|
|
—
|
|
|
(7.0
|
)
|
|
(0.4
|
)
|
|
(3.9
|
)
|
|
(11.3
|
)
|
|||||
Repayment of investment debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14.0
|
)
|
|
(14.0
|
)
|
|||||
Issuance of common stock
|
|
190.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
190.7
|
|
|||||
Dividends paid
|
|
(18.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.1
|
)
|
|||||
Repurchase and retirement of common stock
|
|
(2.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.6
|
)
|
|||||
Proceeds from issuance of KWE shares
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,351.1
|
|
|
1,351.1
|
|
|||||
Restricted cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42.6
|
)
|
|
(42.6
|
)
|
|||||
Acquisition of KWE shares from noncontrolling interest holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.8
|
)
|
|
(16.8
|
)
|
|||||
Contributions from noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.6
|
|
|
8.6
|
|
|||||
Distributions to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13.5
|
)
|
|
(13.5
|
)
|
|||||
Net cash provided by financing activities
|
|
170.0
|
|
|
290.2
|
|
|
17.6
|
|
|
1,546.1
|
|
|
2,023.9
|
|
|||||
Effect of currency exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19.2
|
|
|
19.2
|
|
|||||
Net change in cash and cash equivalents
|
|
(0.1
|
)
|
|
280.2
|
|
|
(56.8
|
)
|
|
198.2
|
|
|
421.5
|
|
|||||
Cash and cash equivalents, beginning of year
|
|
—
|
|
|
48.2
|
|
|
77.2
|
|
|
52.8
|
|
|
178.2
|
|
|||||
Cash and cash equivalents, end of period
|
|
$
|
(0.1
|
)
|
|
$
|
328.4
|
|
|
$
|
20.4
|
|
|
$
|
251.0
|
|
|
$
|
599.7
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2013
|
||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Consolidated Total
|
||||||||||
Net cash (used in) provided by operating activities
|
|
$
|
(0.2
|
)
|
|
$
|
(46.4
|
)
|
|
$
|
16.8
|
|
|
$
|
5.9
|
|
|
$
|
(23.9
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to loans
|
|
—
|
|
|
(6.0
|
)
|
|
(8.3
|
)
|
|
—
|
|
|
(14.3
|
)
|
|||||
Collections of loans
|
|
—
|
|
|
—
|
|
|
33.6
|
|
|
—
|
|
|
33.6
|
|
|||||
Net proceeds from sale of real estate
|
|
—
|
|
|
—
|
|
|
9.0
|
|
|
—
|
|
|
9.0
|
|
|||||
Purchases of and additions to real estate
|
|
—
|
|
|
—
|
|
|
(30.8
|
)
|
|
(77.5
|
)
|
|
(108.3
|
)
|
|||||
Proceeds from sale of marketable securities
|
|
—
|
|
|
10.0
|
|
|
—
|
|
|
—
|
|
|
10.0
|
|
|||||
Distributions from unconsolidated investments
|
|
—
|
|
|
0.2
|
|
|
72.4
|
|
|
2.7
|
|
|
75.3
|
|
|||||
Contributions to unconsolidated investments
|
|
—
|
|
|
(2.3
|
)
|
|
(162.7
|
)
|
|
(35.5
|
)
|
|
(200.5
|
)
|
|||||
(Investment in) distributions from consolidated subsidiaries, net
|
|
(35.8
|
)
|
|
(24.6
|
)
|
|
26.5
|
|
|
33.9
|
|
|
—
|
|
|||||
Net cash (used in) provided by investing activities
|
|
(35.8
|
)
|
|
(22.7
|
)
|
|
(60.3
|
)
|
|
(76.4
|
)
|
|
(195.2
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings under line of credit
|
|
—
|
|
|
85.0
|
|
|
—
|
|
|
—
|
|
|
85.0
|
|
|||||
Repayment of lines of credit
|
|
—
|
|
|
(55.0
|
)
|
|
—
|
|
|
—
|
|
|
(55.0
|
)
|
|||||
Borrowings under investment debt
|
|
—
|
|
|
—
|
|
|
18.7
|
|
|
49.6
|
|
|
68.3
|
|
|||||
Repayment of investment debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|||||
Debt issue costs
|
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|||||
Issuance of common stock
|
|
153.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
153.9
|
|
|||||
Repurchase of warrants
|
|
(1.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
|||||
Dividends paid
|
|
(9.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.1
|
)
|
|||||
Contributions from noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
0.6
|
|
|||||
Distributions to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|||||
Intercompany receivables, net
|
|
—
|
|
|
(19.7
|
)
|
|
0.1
|
|
|
19.6
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
143.4
|
|
|
9.4
|
|
|
18.8
|
|
|
69.0
|
|
|
240.6
|
|
|||||
Effect of currency exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
(0.1
|
)
|
|
(1.4
|
)
|
|
(1.2
|
)
|
|
(2.7
|
)
|
|||||
Net change in cash and cash equivalents
|
|
107.4
|
|
|
(59.8
|
)
|
|
(26.1
|
)
|
|
(2.7
|
)
|
|
18.8
|
|
|||||
Cash and cash equivalents, beginning of period
|
|
—
|
|
|
64.5
|
|
|
38.5
|
|
|
17.9
|
|
|
120.9
|
|
|||||
Cash and cash equivalents, end of period
|
|
$
|
107.4
|
|
|
$
|
4.7
|
|
|
$
|
12.4
|
|
|
$
|
15.2
|
|
|
$
|
139.7
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Identify countries and markets with an attractive investment landscape
|
•
|
Establish operating platforms and service businesses in our target markets
|
•
|
Develop local intelligence and create long-lasting relationships; primarily with financial institutions
|
•
|
Leverage relationships and local knowledge to drive proprietary investment opportunities with a focus on off-market transactions
|
•
|
Acquire high quality assets, either on our own or with strategic partners, utilizing cash from our balance sheet and typically financing them on a long-term basis
|
•
|
Reposition assets and enhance cash flows post-acquisition
|
•
|
Continuously evaluate and selectively harvest asset and entity value through strategic realizations utilizing both the public and private markets
|
•
|
Utilize our services businesses to meet client needs, strengthen relationships with financial institutions, and position the Company as a valuable resource and partner to these institutions for any future real estate opportunities
|
(Dollars in millions)
|
|
June 30, 2014
|
December 31, 2013
|
||||
Real estate and acquired in-place lease values, gross of accumulated depreciation and amortization of $57.5 and $26.3, respectively
|
|
$
|
3,610.9
|
|
$
|
714.4
|
|
Loans
|
|
402.3
|
|
56.8
|
|
||
Investment debt
|
|
(1,528.7
|
)
|
(401.8
|
)
|
||
Cash held by consolidated investments
|
|
292.8
|
|
8.0
|
|
||
Unconsolidated investments
(1)
, gross of accumulated depreciation and amortization of $72.9 and $106.0, respectively
|
|
577.2
|
|
865.2
|
|
||
Other
(2)
|
|
(21.5
|
)
|
4.0
|
|
||
Consolidated investment account
|
|
3,333.0
|
|
1,246.6
|
|
||
Add back:
|
|
|
|
||||
Noncontrolling interests
on investments, gross of depreciation and amortization of $16.1 and $4.5, respectively
|
|
(1,834.3
|
)
|
(55.1
|
)
|
||
Investment account
|
|
$
|
1,498.7
|
|
$
|
1,191.5
|
|
(Dollars in millions)
|
|
Commercial
|
|
Multifamily
|
|
Loans Secured by Real Estate
|
|
Residential, Hotel, and Other
|
|
Total
|
||||||||||
Western U.S.
|
|
$
|
236.4
|
|
|
$
|
300.1
|
|
|
$
|
84.2
|
|
|
$
|
171.1
|
|
|
$
|
791.8
|
|
Japan
|
|
4.3
|
|
|
93.2
|
|
|
—
|
|
|
0.4
|
|
|
97.9
|
|
|||||
United Kingdom
|
|
220.9
|
|
|
—
|
|
|
48.5
|
|
|
—
|
|
|
269.4
|
|
|||||
Ireland
|
|
85.6
|
|
|
81.4
|
|
|
79.1
|
|
|
25.2
|
|
|
271.3
|
|
|||||
Subtotal
|
|
$
|
547.2
|
|
|
$
|
474.7
|
|
|
$
|
211.8
|
|
|
$
|
196.7
|
|
|
$
|
1,430.4
|
|
KW share of cash held by consolidated investments
|
|
|
|
|
|
|
|
|
|
68.3
|
|
|||||||||
Total
|
|
|
|
|
|
|
|
|
|
$
|
1,498.7
|
|
(Dollars in millions)
|
Commercial
|
|
Multifamily
|
|
Loans Secured by Real Estate
|
|
Residential and Other
|
|
Total
|
||||||||||
Western U.S.
|
$
|
252.0
|
|
|
$
|
277.8
|
|
|
$
|
112.5
|
|
|
$
|
150.9
|
|
|
$
|
793.2
|
|
Japan
|
4.5
|
|
|
91.4
|
|
|
—
|
|
|
0.4
|
|
|
96.3
|
|
|||||
United Kingdom
|
108.4
|
|
|
—
|
|
|
27.3
|
|
|
—
|
|
|
135.7
|
|
|||||
Ireland
|
102.1
|
|
|
51.4
|
|
|
8.3
|
|
|
—
|
|
|
161.8
|
|
|||||
Subtotal
|
$
|
467.0
|
|
|
$
|
420.6
|
|
|
$
|
148.1
|
|
|
$
|
151.3
|
|
|
$
|
1,187.0
|
|
KW share of cash held by consolidated investments
|
|
|
|
|
|
|
|
|
4.5
|
|
|||||||||
Total
|
|
|
|
|
|
|
|
|
$
|
1,191.5
|
|
•
|
During the second quarter, the Company and its equity partners sold a portfolio of commercial properties located primarily in Dublin, Ireland, to Kennedy Wilson Europe Real Estate Plc (LSE:KWE). As a result of the sale, the Company collected fees totaling $26.2 million in addition to a profit of $26.6 million on its 25% interest in the investment. This transaction was approved by the independent shareholders of KWE.
|
•
|
During the second quarter, as a result of amending an existing operating agreement with one of our equity partners, the Company gained control of an unconsolidated subsidiary that owns the majority of the Company's investments in Japan. This subsidiary holds approximately 2,400 multi-family units in 50 properties located primarily in Tokyo, Japan and its surrounding areas. The Company has an approximate 41% ownership interest in these investments. As a result of gaining control of this investment, the Company was required to consolidate the assets and liabilities at fair value and recognized an acquisition-related gain of $66.7 million of which $22.9 million was allocated to noncontrolling equity partners.
|
•
|
Shareholder equity increased
$207.8 million
or
27%
to
$976.1 million
at
June 30, 2014
from
$768.3 million
at
December 31, 2013
.
|
•
|
Adjusted EBITDA was
$97.4 million
, a
215%
increase from
$30.9 million
for the same period in 2013.
|
•
|
For same property multifamily units, total revenues increased
7%
, net operating income increased
10%
and occupancy remained at
95%
at the property level from the same period in 2013.
|
•
|
For same property commercial real estate, total revenues increased
3%
, net operating income increased
2%
and occupancy remained at
85%
at the property level from the same period in 2013.
|
•
|
The Company and its equity partners acquired $1.5 billion of real estate related investments. These acquisitions include $1.3 billion of real estate related investments acquired by KWE.
|
•
|
Adjusted EBITDA was
$165.5 million
, a
187%
increase from
$57.6 million
for the same period in 2013.
|
•
|
For same property multifamily units, total revenues increased
7%
, net operating income increased
10%
and occupancy remained at
95%
at the property level from the same period in 2013.
|
•
|
For same property commercial real estate, total revenues increased
4%
, net operating income increased
2%
and occupancy increased
2%
to
85%
at the property level from the same period in 2013.
|
•
|
The Company and its equity partners acquired approximately $2.2 billion of real estate related investments, in which the Company invested $364.3 million of equity. These acquisitions include $1.7 billion of real estate related investments acquired by KWE.
|
•
|
The Company's investments year-to-date were directed 87% to the United Kingdom and Ireland and 13% to the Western U.S.
|
•
|
Fees increased by
100%
to
$39.0 million
from
$19.5 million
for the same period in 2013.
|
•
|
Fees earned from investments that were eliminated in consolidation totaled
$6.1 million
compared to
$0.7 million
for the same period in 2013. In accordance with U.S. GAAP, these fees were excluded from total fees of
$39.0 million
and
$19.5 million
for 2014 and 2013, respectively.
|
•
|
Adjusted EBITDA was
$32.7 million
, a
217%
increase from
$10.3 million
for the same period in 2013.
|
•
|
Fees increased by
57%
to
$52.1 million
from
$33.1 million
for the same period in 2013.
|
•
|
Fees earned from investments that were eliminated in consolidation totaled
$7.7 million
compared to
$1.6 million
for the same period in 2013. In accordance with U.S. GAAP, these fees were excluded from total fees of
$52.1 million
and
$33.1 million
for 2014 and 2013, respectively.
|
•
|
Adjusted EBITDA was
$38.3 million
, a
132%
increase from
$16.5 million
for the same period in 2013.
|
•
|
Since its launch in February 2014, KWE has acquired 74 direct real estate assets with approximately 5.9 million square feet and two loan portfolios secured by 25 real estate assets totaling $1.7 billion in purchase price.
|
•
|
Kennedy Wilson owns 13.2% of KWE’s total share capital as of June 30, 2014 and one of our wholly-owned subsidiaries serves as KWE's external manager, in which capacity we receive certain management and performance fees.
|
•
|
In July 2014, Kennedy Wilson increased its unsecured corporate line of credit from $140 million to $300 million; the line of credit currently has no outstanding balance.
|
•
|
In July 2014, the Company acquired a multifamily portfolio comprised of three properties located across southern submarkets of Seattle, Washington. The portfolio consists of 1,212 units and was purchased for $127 million. Kennedy Wilson invested $45 million of equity in the transaction and assumed $85 million of financing, fixed at 4.25%, from Freddie Mac.
|
•
|
In August 2014, the Company converted its note secured by the landmark Shelbourne Hotel located in Dublin, Ireland into a direct 100% ownership interest in the property.
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
(Dollars in millions, except share and per share amounts)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
||||||||
Investment management, property services and research fees
|
|
$
|
39.0
|
|
|
$
|
19.5
|
|
|
$
|
52.1
|
|
|
$
|
33.1
|
|
Rental and hotel
|
|
42.6
|
|
|
10.3
|
|
|
67.8
|
|
|
16.8
|
|
||||
Sale of real estate
|
|
6.1
|
|
|
6.1
|
|
|
17.4
|
|
|
8.5
|
|
||||
Loans and other
|
|
4.3
|
|
|
0.5
|
|
|
6.0
|
|
|
0.9
|
|
||||
Total revenue
|
|
92.0
|
|
|
36.4
|
|
|
143.3
|
|
|
59.3
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Commission and marketing
|
|
0.9
|
|
|
1.3
|
|
|
1.8
|
|
|
1.8
|
|
||||
Rental and hotel operating
|
|
17.9
|
|
|
4.6
|
|
|
32.1
|
|
|
7.7
|
|
||||
Cost of real estate sold
|
|
3.9
|
|
|
5.1
|
|
|
13.5
|
|
|
7.0
|
|
||||
Compensation and related
|
|
32.2
|
|
|
18.3
|
|
|
52.8
|
|
|
31.9
|
|
||||
General and administrative
|
|
8.4
|
|
|
6.4
|
|
|
16.5
|
|
|
11.8
|
|
||||
Depreciation and amortization
|
|
25.3
|
|
|
4.4
|
|
|
32.6
|
|
|
7.5
|
|
||||
Total operating expenses
|
|
88.6
|
|
|
40.1
|
|
|
149.3
|
|
|
67.7
|
|
||||
Income from unconsolidated investments, net of depreciation and amortization
|
|
31.0
|
|
|
14.8
|
|
|
33.8
|
|
|
16.9
|
|
||||
Operating income
|
|
34.4
|
|
|
11.1
|
|
|
27.8
|
|
|
8.5
|
|
||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
||||||||
Acquisition-related gains
|
|
86.0
|
|
|
—
|
|
|
170.3
|
|
|
9.5
|
|
||||
Acquisition-related expenses
|
|
(7.6
|
)
|
|
(0.5
|
)
|
|
(11.6
|
)
|
|
(0.5
|
)
|
||||
Interest expense-investment
|
|
(11.1
|
)
|
|
(2.8
|
)
|
|
(16.4
|
)
|
|
(4.6
|
)
|
||||
Interest expense-corporate
|
|
(14.7
|
)
|
|
(9.7
|
)
|
|
(25.2
|
)
|
|
(19.4
|
)
|
||||
Other income
|
|
2.1
|
|
|
0.1
|
|
|
2.9
|
|
|
0.4
|
|
||||
Income (loss) before (provision for) benefit from income taxes
|
|
89.1
|
|
|
(1.8
|
)
|
|
147.8
|
|
|
(6.1
|
)
|
||||
(Provision for) benefit from income taxes
|
|
(25.4
|
)
|
|
0.5
|
|
|
(34.2
|
)
|
|
2.2
|
|
||||
Net income (loss)
|
|
63.7
|
|
|
(1.3
|
)
|
|
113.6
|
|
|
(3.9
|
)
|
||||
Net (income) loss attributable to the noncontrolling interests
|
|
(25.3
|
)
|
|
0.9
|
|
|
(62.7
|
)
|
|
1.9
|
|
||||
Preferred stock dividends and accretion of issuance costs
|
|
(2.1
|
)
|
|
(2.1
|
)
|
|
(4.1
|
)
|
|
(4.1
|
)
|
||||
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc common shareholders
|
|
$
|
36.3
|
|
|
$
|
(2.5
|
)
|
|
$
|
46.8
|
|
|
$
|
(6.1
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Consolidated EBITDA
|
|
$
|
162.1
|
|
|
$
|
35.4
|
|
|
$
|
269.7
|
|
|
$
|
65.6
|
|
Adjusted EBITDA
|
|
$
|
122.2
|
|
|
$
|
36.3
|
|
|
$
|
191.5
|
|
|
$
|
68.0
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income (loss)
|
|
$
|
63.7
|
|
|
$
|
(1.3
|
)
|
|
$
|
113.6
|
|
|
$
|
(3.9
|
)
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Add back:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense-investment
|
|
11.1
|
|
|
2.8
|
|
|
16.4
|
|
|
4.6
|
|
||||
Interest expense-corporate
|
|
14.7
|
|
|
9.7
|
|
|
25.2
|
|
|
19.4
|
|
||||
Kennedy Wilson's share of interest expense included in unconsolidated investments
|
|
9.5
|
|
|
10.1
|
|
|
20.5
|
|
|
20.7
|
|
||||
Depreciation and amortization
|
|
25.3
|
|
|
4.4
|
|
|
32.6
|
|
|
7.5
|
|
||||
Kennedy Wilson's share of depreciation and amortization included in unconsolidated investments
|
|
12.4
|
|
|
10.2
|
|
|
27.2
|
|
|
19.5
|
|
||||
Provision for (benefit from) income taxes
|
|
25.4
|
|
|
(0.5
|
)
|
|
34.2
|
|
|
(2.2
|
)
|
||||
Consolidated EBITDA
|
|
162.1
|
|
|
35.4
|
|
|
269.7
|
|
|
65.6
|
|
||||
Add back (less):
|
|
|
|
|
|
|
|
|
||||||||
Share-based compensation
|
|
1.7
|
|
|
1.7
|
|
|
3.4
|
|
|
3.4
|
|
||||
EBITDA attributable to noncontrolling interests
(1)
|
|
(41.6
|
)
|
|
(0.8
|
)
|
|
(81.6
|
)
|
|
(1.0
|
)
|
||||
Adjusted EBITDA to Kennedy Wilson common shareholders
|
|
$
|
122.2
|
|
|
$
|
36.3
|
|
|
$
|
191.5
|
|
|
$
|
68.0
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Investments
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
$
|
53.0
|
|
|
$
|
16.9
|
|
|
$
|
91.2
|
|
|
$
|
26.2
|
|
Operating expenses
|
|
(64.3
|
)
|
|
(23.1
|
)
|
|
(107.7
|
)
|
|
(38.8
|
)
|
||||
Income from unconsolidated investments, net of depreciation and amortization
|
|
29.9
|
|
|
14.8
|
|
|
31.7
|
|
|
16.9
|
|
||||
Operating income
|
|
18.6
|
|
|
8.6
|
|
|
15.2
|
|
|
4.3
|
|
||||
Other income (expense)
|
|
69.5
|
|
|
(3.7
|
)
|
|
145.2
|
|
|
3.6
|
|
||||
Net income
|
|
88.1
|
|
|
4.9
|
|
|
160.4
|
|
|
7.9
|
|
||||
Add back:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense-investment
|
|
11.1
|
|
|
2.8
|
|
|
16.4
|
|
|
4.6
|
|
||||
Kennedy Wilson's share of interest expense included in unconsolidated investments
|
|
8.8
|
|
|
10.1
|
|
|
19.5
|
|
|
20.7
|
|
||||
Depreciation and amortization
|
|
25.3
|
|
|
4.4
|
|
|
32.6
|
|
|
7.5
|
|
||||
Kennedy Wilson's share of depreciation and amortization included in unconsolidated investments
|
|
11.8
|
|
|
10.2
|
|
|
25.9
|
|
|
19.5
|
|
||||
EBITDA attributable to noncontrolling interests
(1)
|
|
(41.6
|
)
|
|
(0.8
|
)
|
|
(81.6
|
)
|
|
(1.0
|
)
|
||||
Fees eliminated in consolidation
|
|
(6.1
|
)
|
|
(0.7
|
)
|
|
(7.7
|
)
|
|
(1.6
|
)
|
||||
Adjusted EBITDA
(2)
|
|
$
|
97.4
|
|
|
$
|
30.9
|
|
|
$
|
165.5
|
|
|
$
|
57.6
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Services
|
|
|
|
|
|
|
|
|
||||||||
Investment management, property services and research fees
|
|
$
|
39.0
|
|
|
$
|
19.5
|
|
|
$
|
52.1
|
|
|
$
|
33.1
|
|
Operating expenses
|
|
(14.7
|
)
|
|
(9.9
|
)
|
|
(25.9
|
)
|
|
(18.2
|
)
|
||||
Operating income
|
|
24.3
|
|
|
9.6
|
|
|
26.2
|
|
|
14.9
|
|
||||
Income from unconsolidated investments, net of depreciation and amortization
|
|
1.1
|
|
|
—
|
|
|
2.1
|
|
|
—
|
|
||||
Net income
|
|
25.4
|
|
|
9.6
|
|
|
28.3
|
|
|
14.9
|
|
||||
Add back:
|
|
|
|
|
|
|
|
|
||||||||
Kennedy Wilson's share of interest expense included in unconsolidated investments
|
|
0.6
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
||||
Kennedy Wilson's share of depreciation and amortization included in unconsolidated investments
|
|
0.6
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
||||
Fees eliminated in consolidation
|
|
6.1
|
|
|
0.7
|
|
|
7.7
|
|
|
1.6
|
|
||||
EBITDA
(1)
|
|
$
|
32.7
|
|
|
$
|
10.3
|
|
|
$
|
38.3
|
|
|
$
|
16.5
|
|
|
|
Three Months Ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Corporate
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
$
|
(9.6
|
)
|
|
$
|
(7.2
|
)
|
|
$
|
(15.9
|
)
|
|
$
|
(10.9
|
)
|
Operating loss
|
|
(9.6
|
)
|
|
(7.2
|
)
|
|
(15.9
|
)
|
|
(10.9
|
)
|
||||
Interest expense-corporate
|
|
(14.7
|
)
|
|
(9.7
|
)
|
|
(25.2
|
)
|
|
(19.4
|
)
|
||||
Other
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.2
|
|
||||
Loss before benefit from income taxes
|
|
(24.3
|
)
|
|
(16.8
|
)
|
|
(41.1
|
)
|
|
(30.1
|
)
|
||||
(Provision for) benefit from income taxes
|
|
(25.4
|
)
|
|
0.5
|
|
|
(34.2
|
)
|
|
2.2
|
|
||||
Net loss
|
|
(49.7
|
)
|
|
(16.3
|
)
|
|
(75.3
|
)
|
|
(27.9
|
)
|
||||
Add back:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense-corporate
|
|
14.7
|
|
|
9.7
|
|
|
25.2
|
|
|
19.4
|
|
||||
Share-based compensation
|
|
1.7
|
|
|
1.7
|
|
|
3.4
|
|
|
3.4
|
|
||||
(Provision for) benefit from income taxes
|
|
25.4
|
|
|
(0.5
|
)
|
|
34.2
|
|
|
(2.2
|
)
|
||||
EBITDA
(1)
|
|
$
|
(7.9
|
)
|
|
$
|
(5.4
|
)
|
|
$
|
(12.5
|
)
|
|
$
|
(7.3
|
)
|
•
|
investment management, including acquisition, asset management and disposition services;
|
•
|
property services, including management of commercial real estate for third-party clients, fund investors, and investments held by the Company;
|
•
|
research, including consulting practice and data and analytics for the residential real estate development and new home construction industry;
|
•
|
auction and conventional sales, including innovative marketing and sales strategies for all types of commercial and residential real estate, including single family homes, mixed-use developments, estate homes, multifamily dwellings, new home projects, conversions and scattered properties; and
|
•
|
brokerage services, including innovative marketing programs tailored to client objectives for all types of investment grade and income producing real estate.
|
•
|
investment management, including acquisition, asset management and disposition services;
|
•
|
property services, including management of commercial real estate for third-party clients, fund investors, and investments held by the Company;
|
•
|
research, including consulting practice and data and analytics for the residential real estate development and new home construction industry;
|
•
|
auction and conventional sales, including innovative marketing and sales strategies for all types of commercial and residential real estate, including single family homes, mixed-use developments, estate homes, multifamily dwellings, new home projects, conversions and scattered properties; and
|
•
|
brokerage services, including innovative marketing programs tailored to client objectives for all types of investment grade and income producing real estate.
|
|
|
Payments Due by Period
|
||||||||||||||||||
(Dollars in millions)
|
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
4-5 years
|
|
After 5 years
|
||||||||||
Contractual Obligations
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings:
(1)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment debt
(2)
|
|
$
|
1,507.2
|
|
|
$
|
30.5
|
|
|
$
|
396.3
|
|
|
528.6
|
|
|
551.8
|
|
||
Subordinated debt
|
|
40.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40.0
|
|
|||||
Senior notes
(3)
|
|
705.0
|
|
|
—
|
|
|
—
|
|
|
350.0
|
|
|
355.0
|
|
|||||
Total borrowings
|
|
2,252.2
|
|
|
30.5
|
|
|
396.3
|
|
|
878.6
|
|
|
946.8
|
|
|||||
Operating leases
|
|
8.6
|
|
|
1.6
|
|
|
3.3
|
|
|
1.5
|
|
|
2.2
|
|
|||||
Total contractual cash obligations
|
|
$
|
2,260.8
|
|
|
$
|
32.1
|
|
|
$
|
399.6
|
|
|
$
|
880.1
|
|
|
$
|
949.0
|
|
(1)
|
See notes 8-11 of our Notes to Consolidated Financial Statements. Figures do not include scheduled interest payments. Assuming each debt obligation is held until maturity, we estimate that we will make the following interest payments: six months ending December 31, 2014 -
$53.9 million
; 1-3 years -
$319.2 million
; 4-5 years -
$147.6 million
; After 5 years -
$237.6 million
. The interest payments on variable rate debt have been calculated using the interest rate in effect at
June 30, 2014
.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
|
Principal Maturing in:
|
|
|
|
Fair Value
|
||||||||||||||||||||||||||
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
Total
|
|
June 30, 2014
|
||||||||||||||||
(Dollars in millions)
|
|
|
||||||||||||||||||||||||||||||
Interest rate sensitive assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents
|
|
$
|
642.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
642.3
|
|
|
$
|
642.3
|
|
Average interest rate
|
|
0.32
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.32
|
%
|
|
—
|
|
||||||||
Fixed rate receivables
|
|
384.6
|
|
|
8.2
|
|
|
3.6
|
|
|
5.9
|
|
|
—
|
|
|
—
|
|
|
402.3
|
|
|
402.3
|
|
||||||||
Average interest rate
(1)
|
|
9.93
|
%
|
|
10.74
|
%
|
|
10.24
|
%
|
|
2.16
|
%
|
|
—
|
%
|
|
—
|
%
|
|
10.27
|
%
|
|
—
|
|
||||||||
Variable rate receivables
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Average interest rate
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
|
||||||||
Total
|
|
$
|
1,026.9
|
|
|
$
|
8.2
|
|
|
$
|
3.6
|
|
|
$
|
5.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,044.6
|
|
|
$
|
1,044.6
|
|
Weighted average interest rate
|
|
3.92
|
%
|
|
10.74
|
%
|
|
10.24
|
%
|
|
2.16
|
%
|
|
—
|
%
|
|
—
|
%
|
|
4.15
|
%
|
|
|
|||||||||
Interest rate sensitive liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Variable rate borrowings
|
|
$
|
7.0
|
|
|
$
|
102.8
|
|
|
$
|
23.0
|
|
|
$
|
146.9
|
|
|
$
|
329.9
|
|
|
$
|
206.5
|
|
|
$
|
816.1
|
|
|
$
|
834.5
|
|
Average interest rate
|
|
3.73
|
%
|
|
5.30
|
%
|
|
2.55
|
%
|
|
3.86
|
%
|
|
4.08
|
%
|
|
4.35
|
%
|
|
4.11
|
%
|
|
—
|
|
||||||||
Fixed rate borrowings
|
|
—
|
|
|
2.9
|
|
|
14.4
|
|
|
61.1
|
|
|
24.9
|
|
|
1,332.8
|
|
|
1,436.1
|
|
|
1,485.2
|
|
||||||||
Average interest rate
|
|
—
|
%
|
|
5.00
|
%
|
|
5.91
|
%
|
|
1.61
|
%
|
|
3.51
|
%
|
|
6.31
|
%
|
|
6.05
|
%
|
|
—
|
|
||||||||
Total
|
|
$
|
7.0
|
|
|
$
|
105.7
|
|
|
$
|
37.4
|
|
|
$
|
208.0
|
|
|
$
|
354.8
|
|
|
$
|
1,539.3
|
|
|
$
|
2,252.2
|
|
|
$
|
2,319.7
|
|
Weighted average interest rate
|
|
3.73
|
%
|
|
5.30
|
%
|
|
3.85
|
%
|
|
3.20
|
%
|
|
4.04
|
%
|
|
6.04
|
%
|
|
5.35
|
%
|
|
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3.
|
Defaults upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Exhibit No.
|
|
Description
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on June 19, 2014).
|
|
|
|
10.1
|
|
First Amendment to Amended and Restated 2009 Equity Participation Plan (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on June 19, 2014).
|
|
|
|
10.2
|
|
Form of director restricted stock award agreement pursuant to amended and restated 2009 Equity Participation Plan.
|
|
|
|
31.1
|
|
Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 of the Chief Executive Officer.
|
|
|
|
31.2
|
|
Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 of the Chief Financial Officer.
|
|
|
|
32.1
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief Executive Officer.
|
|
|
|
32.2
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief Financial Officer.
|
|
|
KENNEDY-WILSON HOLDINGS, INC.
|
|
|
|
|
|
Dated:
|
August 8, 2014
|
By:
|
/
S
/ J
USTIN
E
NBODY
|
|
|
|
Justin Enbody
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer
|
|
|
|
and Accounting Officer)
|
{00005498;1}
|
|
|
1.
|
I have reviewed this report on Form 10-Q of Kennedy-Wilson Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ William J. McMorrow
|
|
|
William J. McMorrow
|
|
|
Chief Executive Officer and Chairman
|
|
Dated: August 8, 2014
|
1.
|
I have reviewed this report on Form 10-Q of Kennedy-Wilson Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Justin Enbody
|
|
|
Justin Enbody
|
|
|
Chief Financial Officer
|
|
Dated: August 8, 2014
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ William J. McMorrow
|
|
William J. McMorrow
|
|
Chief Executive Officer and Chairman
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Justin Enbody
|
|
Justin Enbody
|
|
Chief Financial Officer
|
|