|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Delaware
|
|
26-0508760
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
Large Accelerated Filer
|
x
|
|
Accelerated Filer
|
o
|
|
|
|
|
|
Non-Accelerated Filer
|
o
|
|
Smaller Reporting Company
|
o
|
|
||
|
|
|
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
|
Item 1.
|
Financial Statements (Unaudited)
|
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
(Dollars in millions, except share and per share amounts)
|
|
|
|
|
||||
Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
236.3
|
|
|
$
|
170.2
|
|
Cash held by consolidated investments (including $40.6 and $0 of restricted cash)
|
|
591.3
|
|
|
8.0
|
|
||
Accounts receivable (including $8.5 and $11.4 of related party)
|
|
42.2
|
|
|
16.6
|
|
||
Loans (including $0 and $4.1 of related party)
|
|
266.7
|
|
|
56.8
|
|
||
Real estate and acquired in place lease values, net of accumulated depreciation and amortization
|
|
3,839.6
|
|
|
688.1
|
|
||
Unconsolidated investments
|
|
504.9
|
|
|
786.1
|
|
||
Other assets
|
|
232.3
|
|
|
73.0
|
|
||
Total assets
|
|
$
|
5,713.3
|
|
|
$
|
1,798.8
|
|
|
|
|
|
|
||||
Liabilities and equity
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
||||
Accounts payable, accrued expenses and other liabilities
|
|
253.8
|
|
|
129.1
|
|
||
Investment debt
|
|
2,049.8
|
|
|
401.8
|
|
||
Senior notes payable
|
|
705.9
|
|
|
409.0
|
|
||
Junior subordinated debentures
|
|
—
|
|
|
40.0
|
|
||
Total liabilities
|
|
3,009.5
|
|
|
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, 94,807,377 and 82,592,607 shares issued and outstanding as of September 30, 2014 and December 31, 2013
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
991.2
|
|
|
801.3
|
|
||
Accumulated deficit
|
|
(22.6
|
)
|
|
(42.2
|
)
|
||
Accumulated other comprehensive income
|
|
(13.2
|
)
|
|
9.2
|
|
||
Total Kennedy-Wilson Holdings, Inc. shareholders' equity
|
|
955.4
|
|
|
768.3
|
|
||
Noncontrolling interests
|
|
1,748.4
|
|
|
50.6
|
|
||
Total equity
|
|
2,703.8
|
|
|
818.9
|
|
||
Total liabilities and equity
|
|
$
|
5,713.3
|
|
|
$
|
1,798.8
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in millions, except share and per share amounts)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
||||||||
Investment management, property services and research fees (includes $6.2, $15.7, $47.0, and $37.8 of related party fees)
|
|
$
|
12.9
|
|
|
$
|
20.9
|
|
|
$
|
65.0
|
|
|
$
|
54.0
|
|
Rental and hotel
|
|
93.5
|
|
|
10.5
|
|
|
161.3
|
|
|
27.3
|
|
||||
Sales of real estate
|
|
1.6
|
|
|
1.6
|
|
|
19.0
|
|
|
10.1
|
|
||||
Loans and other
|
|
5.7
|
|
|
0.5
|
|
|
11.7
|
|
|
1.4
|
|
||||
Total revenue
|
|
113.7
|
|
|
33.5
|
|
|
257.0
|
|
|
92.8
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Commission and marketing
|
|
2.0
|
|
|
1.0
|
|
|
3.8
|
|
|
2.8
|
|
||||
Rental and hotel operating
|
|
37.8
|
|
|
4.2
|
|
|
69.9
|
|
|
11.9
|
|
||||
Cost of real estate sold
|
|
1.1
|
|
|
0.9
|
|
|
14.6
|
|
|
7.9
|
|
||||
Compensation and related
|
|
26.8
|
|
|
20.9
|
|
|
79.6
|
|
|
52.8
|
|
||||
General and administrative
|
|
11.8
|
|
|
5.8
|
|
|
28.3
|
|
|
17.6
|
|
||||
Depreciation and amortization
|
|
34.7
|
|
|
4.5
|
|
|
67.3
|
|
|
12.0
|
|
||||
Total operating expenses
|
|
114.2
|
|
|
37.3
|
|
|
263.5
|
|
|
105.0
|
|
||||
Income from unconsolidated investments
|
|
12.1
|
|
|
13.2
|
|
|
45.9
|
|
|
30.1
|
|
||||
Operating income
|
|
11.6
|
|
|
9.4
|
|
|
39.4
|
|
|
17.9
|
|
||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
||||||||
Acquisition-related gains
|
|
28.9
|
|
|
1.6
|
|
|
199.2
|
|
|
11.1
|
|
||||
Acquisition-related expenses
|
|
(5.3
|
)
|
|
—
|
|
|
(16.9
|
)
|
|
(0.5
|
)
|
||||
Interest expense-investment
|
|
(13.8
|
)
|
|
(2.8
|
)
|
|
(30.2
|
)
|
|
(7.4
|
)
|
||||
Interest expense-corporate
(1)
|
|
(15.9
|
)
|
|
(10.3
|
)
|
|
(41.1
|
)
|
|
(29.7
|
)
|
||||
Other (expense) income
|
|
(1.9
|
)
|
|
0.1
|
|
|
1.0
|
|
|
0.5
|
|
||||
Income (loss) before (provision for) benefit from income taxes
|
|
3.6
|
|
|
(2.0
|
)
|
|
151.4
|
|
|
(8.1
|
)
|
||||
(Provision for) benefit from income taxes
|
|
(6.6
|
)
|
|
(0.8
|
)
|
|
(40.8
|
)
|
|
1.4
|
|
||||
Net income (loss)
|
|
(3.0
|
)
|
|
(2.8
|
)
|
|
110.6
|
|
|
(6.7
|
)
|
||||
Net loss (income) attributable to the noncontrolling interests
|
|
2.8
|
|
|
0.7
|
|
|
(59.9
|
)
|
|
2.6
|
|
||||
Preferred dividends and accretion of preferred stock issuance costs
|
|
(2.0
|
)
|
|
(2.0
|
)
|
|
(6.1
|
)
|
|
(6.1
|
)
|
||||
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
$
|
(2.2
|
)
|
|
$
|
(4.1
|
)
|
|
$
|
44.6
|
|
|
$
|
(10.2
|
)
|
Basic earnings per share
|
|
|
|
|
|
|
|
|
||||||||
(Loss) income per basic
|
|
$
|
(0.03
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
0.47
|
|
|
$
|
(0.15
|
)
|
Weighted average shares outstanding for basic
|
|
89,267,838
|
|
|
72,643,000
|
|
|
88,854,215
|
|
|
68,486,876
|
|
||||
Diluted earnings per share
|
|
|
|
|
|
|
|
|
||||||||
(Loss) income per diluted
|
|
$
|
(0.03
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
0.47
|
|
|
(0.15
|
)
|
|
Weighted average shares outstanding for diluted
|
|
89,267,838
|
|
|
72,643,000
|
|
|
90,169,008
|
|
|
68,486,876
|
|
||||
Dividends declared per common share
|
|
$
|
0.09
|
|
|
$
|
0.07
|
|
|
$
|
0.27
|
|
|
$
|
0.21
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended
September 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income
|
|
$
|
(3.0
|
)
|
|
$
|
(2.8
|
)
|
|
$
|
110.6
|
|
|
$
|
(6.7
|
)
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized foreign currency translation (loss) gain
|
|
(89.0
|
)
|
|
8.8
|
|
|
(67.1
|
)
|
|
(9.2
|
)
|
||||
Amounts reclassified out of AOCI during the period
|
|
—
|
|
|
—
|
|
|
(7.1
|
)
|
|
—
|
|
||||
Unrealized loss on marketable securities
|
|
(1.1
|
)
|
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
||||
Unrealized forward contract, foreign currency gain (loss)
|
|
20.1
|
|
|
(3.6
|
)
|
|
16.5
|
|
|
2.2
|
|
||||
Total other comprehensive (loss) gain for the period
|
|
(70.0
|
)
|
|
5.2
|
|
|
(58.8
|
)
|
|
(7.0
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive (loss) income
|
|
(73.0
|
)
|
|
2.4
|
|
|
51.8
|
|
|
(13.7
|
)
|
||||
Comprehensive loss (income) attributable to noncontrolling interests
|
|
58.0
|
|
|
0.7
|
|
|
(23.5
|
)
|
|
2.6
|
|
||||
Comprehensive (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
$
|
(15.0
|
)
|
|
$
|
3.1
|
|
|
$
|
28.3
|
|
|
$
|
(11.1
|
)
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Retained Earnings (Accumulated Deficit)
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
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
|
|
|
—
|
|
|
190.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
190.6
|
|
|||||||
Common stock issued under Amended and Restated 2009 Equity Participation Plan
|
—
|
|
|
—
|
|
|
3,140,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares forfeited
|
—
|
|
|
—
|
|
|
(2,475
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Repurchase and retirement of common stock
|
—
|
|
|
—
|
|
|
(124,005
|
)
|
|
—
|
|
|
(2.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.9
|
)
|
|||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.7
|
|
|||||||
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Unrealized foreign currency translation gain, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31.0
|
)
|
|
(36.4
|
)
|
|
(67.4
|
)
|
|||||||
Unrealized forward contract foreign currency loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.7
|
|
|
—
|
|
|
9.7
|
|
|||||||
Unrealized loss on marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
|
(1.1
|
)
|
|||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
|||||||
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25.0
|
)
|
|
—
|
|
|
—
|
|
|
(25.0
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50.7
|
|
|
—
|
|
|
59.9
|
|
|
110.6
|
|
|||||||
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
|
)
|
|
—
|
|
|
—
|
|
|
1,410.7
|
|
|
1,404.2
|
|
|||||||
Contributions from noncontrolling interests, excluding KWE
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.9
|
|
|
12.9
|
|
|||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24.3
|
)
|
|
(24.3
|
)
|
|||||||
Balance at September 30, 2014
|
132,550
|
|
|
$
|
—
|
|
|
94,807,377
|
|
|
$
|
—
|
|
|
$
|
991.2
|
|
|
$
|
(22.6
|
)
|
|
$
|
(13.2
|
)
|
|
$
|
1,748.4
|
|
|
$
|
2,703.8
|
|
|
|
Nine Months Ended September 30,
|
||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
110.6
|
|
|
$
|
(6.7
|
)
|
Adjustments to reconcile net income to net cash provided (used in) by operating activities:
|
|
|
|
|
||||
Net gain from sale of real estate
|
|
(4.4
|
)
|
|
(2.7
|
)
|
||
Acquisition-related gain
|
|
(199.2
|
)
|
|
(11.1
|
)
|
||
Depreciation and amortization
|
|
67.3
|
|
|
12.0
|
|
||
Provision for (benefit from) deferred income taxes
|
|
40.8
|
|
|
(1.0
|
)
|
||
Amortization of deferred loan costs
|
|
3.8
|
|
|
1.6
|
|
||
Amortization of discount and accretion of premium on issuance of the senior notes and investment debt
|
|
(2.7
|
)
|
|
(0.9
|
)
|
||
Income from unconsolidated investments
|
|
(46.6
|
)
|
|
(30.3
|
)
|
||
Operating distributions from unconsolidated investments
|
|
78.9
|
|
|
42.7
|
|
||
Stock-based compensation
|
|
8.7
|
|
|
5.5
|
|
||
Change in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
(18.0
|
)
|
|
(11.2
|
)
|
||
Other assets
|
|
0.4
|
|
|
(10.4
|
)
|
||
Accrued expenses and other liabilities
|
|
46.1
|
|
|
(4.6
|
)
|
||
Net cash from (used in) operating activities
|
|
85.7
|
|
|
(17.1
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Additions to loans
|
|
(476.4
|
)
|
|
(30.3
|
)
|
||
Collections of loans
|
|
95.9
|
|
|
43.0
|
|
||
Net proceeds from sale of real estate
|
|
16.3
|
|
|
10.5
|
|
||
Purchases of and additions to real estate
|
|
(1,538.2
|
)
|
|
(115.9
|
)
|
||
Proceeds from settlement of foreign forward contracts
|
|
7.5
|
|
|
—
|
|
||
Purchases of foreign currency options
|
|
(2.2
|
)
|
|
—
|
|
||
Investment in marketable securities
|
|
(11.5
|
)
|
|
—
|
|
||
Proceeds from maturities of short term investments
|
|
—
|
|
|
10.0
|
|
||
Capitalized development costs
|
|
—
|
|
|
(1.3
|
)
|
||
Distributions from unconsolidated investments
|
|
99.3
|
|
|
143.3
|
|
||
Contributions to unconsolidated investments
|
|
(139.6
|
)
|
|
(314.3
|
)
|
||
Net cash used in investing activities
|
|
(1,948.9
|
)
|
|
(255.0
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Borrowings under senior notes payable
|
|
297.2
|
|
|
—
|
|
||
Repayment of junior unsubordinated debt
|
|
(40.0
|
)
|
|
—
|
|
||
Borrowings under line of credit
|
|
90.0
|
|
|
125.0
|
|
||
Repayment of line of credit
|
|
(90.0
|
)
|
|
(125.0
|
)
|
||
Borrowings under investment debt
|
|
825.1
|
|
|
72.3
|
|
||
Repayment of investment debt
|
|
(32.2
|
)
|
|
(1.1
|
)
|
||
Debt issue costs
|
|
(28.5
|
)
|
|
(1.8
|
)
|
||
Issuance of common stock
|
|
190.6
|
|
|
276.0
|
|
||
Repurchase and retirement of common stock
|
|
(2.9
|
)
|
|
—
|
|
||
Repurchase of warrants
|
|
—
|
|
|
(1.4
|
)
|
||
Exercise of warrants
|
|
—
|
|
|
4.7
|
|
||
Proceeds from the issuance of KWE shares, net
|
|
1,351.1
|
|
|
—
|
|
||
Dividends paid
|
|
(28.4
|
)
|
|
(16.3
|
)
|
||
Change in restricted cash
|
|
(42.6
|
)
|
|
—
|
|
||
Acquisition of KWE shares from noncontrolling interest holders
|
|
(16.8
|
)
|
|
—
|
|
||
Contributions from noncontrolling interests, excluding KWE
|
|
12.9
|
|
|
0.9
|
|
||
Distributions to noncontrolling interests
|
|
(24.3
|
)
|
|
(0.4
|
)
|
||
Net cash provided by financing activities
|
|
2,461.2
|
|
|
332.9
|
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
|
10.8
|
|
|
(0.3
|
)
|
||
Net change in cash and cash equivalents
(1)
|
|
608.8
|
|
|
60.5
|
|
||
Cash and cash equivalents, beginning of period
|
|
178.2
|
|
|
120.9
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
787.0
|
|
|
$
|
181.4
|
|
|
|
Nine Months Ended September 30,
|
||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
||||
Cash paid for:
|
|
|
|
|
||||
Interest
|
|
$
|
74.2
|
|
|
$
|
44.1
|
|
Income taxes
|
|
0.1
|
|
|
2.3
|
|
|
|
September 30,
|
||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
||||
|
|
|
|
|
||||
Dividends declared but not paid on common stock
|
|
$
|
8.5
|
|
|
$
|
5.7
|
|
|
|
September 30,
|
|
December 31,
|
||||
(Dollars in millions)
|
|
2014
|
|
2013
|
||||
Loans
|
|
$
|
266.7
|
|
|
$
|
52.7
|
|
Loans — related parties
|
|
—
|
|
|
4.1
|
|
||
Total loans
|
|
$
|
266.7
|
|
|
$
|
56.8
|
|
|
|
September 30,
|
|
December 31,
|
||||
(Dollars in millions)
|
|
2014
|
|
2013
|
||||
Land
|
|
$
|
955.3
|
|
|
$
|
187.8
|
|
Buildings
|
|
2,657.5
|
|
|
484.1
|
|
||
Building improvements
|
|
48.4
|
|
|
12.7
|
|
||
In-place lease value
|
|
267.0
|
|
|
29.8
|
|
||
|
|
3,928.2
|
|
|
714.4
|
|
||
Less accumulated depreciation and amortization
|
|
(88.6
|
)
|
|
(26.3
|
)
|
||
Real estate, net
|
|
$
|
3,839.6
|
|
|
$
|
688.1
|
|
|
|
Unaudited
|
|
Unaudited
|
||||||||||||
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in millions, except for per share data)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Pro forma revenues
|
|
$
|
127.6
|
|
|
$
|
96.6
|
|
|
$
|
379.3
|
|
|
$
|
281.8
|
|
Pro forma income from unconsolidated investments
|
|
9.8
|
|
|
(0.9
|
)
|
|
35.8
|
|
|
(3.4
|
)
|
||||
Pro forma net income (loss) attributable to Kennedy-Wilson Holdings, Inc. common shareholders
(1)
|
|
(1.1
|
)
|
|
(12.1
|
)
|
|
(32.6
|
)
|
|
(21.7
|
)
|
||||
Pro forma net income (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.01
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.37
|
)
|
|
$
|
(0.32
|
)
|
Diluted
|
|
$
|
(0.01
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.37
|
)
|
|
$
|
(0.32
|
)
|
|
|
September 30,
|
|
December 31,
|
||||
(Dollars in millions)
|
|
2014
|
|
2013
|
||||
Investments in joint ventures
|
|
$
|
447.4
|
|
|
$
|
751.4
|
|
Investments in loan pool participations
|
|
57.5
|
|
|
34.7
|
|
||
Total
|
|
$
|
504.9
|
|
|
$
|
786.1
|
|
(Dollars in millions)
|
Multifamily
|
Commercial
|
Loan
|
Residential
|
Other
|
Total
|
||||||||||||
Western U.S.
|
$
|
145.2
|
|
$
|
105.8
|
|
$
|
50.1
|
|
$
|
67.6
|
|
$
|
—
|
|
$
|
368.7
|
|
United Kingdom
|
—
|
|
37.0
|
|
—
|
|
—
|
|
—
|
|
37.0
|
|
||||||
Spain
|
—
|
|
—
|
|
—
|
|
—
|
|
27.0
|
|
27.0
|
|
||||||
Other
|
0.2
|
|
5.0
|
|
—
|
|
0.2
|
|
9.3
|
|
14.7
|
|
||||||
Total
|
$
|
145.4
|
|
$
|
147.8
|
|
$
|
50.1
|
|
$
|
67.8
|
|
$
|
36.3
|
|
$
|
447.4
|
|
(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
|
|
|
Multifamily
|
|
Commercial
|
|
Residential
|
|
|
|
|||||||||||||||
(Dollars in millions)
|
Amount
|
No. of Properties
|
|
Amount
|
No. of Properties
|
|
Amount
|
No. of Properties
|
|
Total
|
No. of Properties
|
||||||||||||
Western U.S.
|
$
|
4.0
|
|
1
|
|
|
$
|
—
|
|
—
|
|
|
$
|
17.0
|
|
2
|
|
|
$
|
21.0
|
|
3
|
|
United Kingdom
(1)
|
—
|
|
—
|
|
|
57.2
|
|
14
|
|
|
—
|
|
—
|
|
|
57.2
|
|
14
|
|
||||
Total contributions
|
$
|
4.0
|
|
1
|
|
|
$
|
57.2
|
|
14
|
|
|
$
|
17.0
|
|
2
|
|
|
$
|
78.2
|
|
17
|
|
|
Multifamily
|
Commercial
|
Residential and Other
|
Loan Pools
|
Total
|
|||||||||||||||||||||||||
(Dollars in millions)
|
Operating
|
Investing
|
Operating
|
Investing
|
Operating
|
Investing
|
Operating
|
Investing
|
Operating
|
Investing
|
||||||||||||||||||||
Western U.S.
|
$
|
7.0
|
|
$
|
1.5
|
|
$
|
18.9
|
|
42.6
|
|
5.6
|
|
$
|
4.7
|
|
$
|
0.3
|
|
$
|
2.5
|
|
$
|
31.8
|
|
$
|
51.3
|
|
||
Japan
|
1.7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1.7
|
|
—
|
|
||||||||||
United Kingdom
|
—
|
|
—
|
|
9.0
|
|
10.4
|
|
—
|
|
—
|
|
5.2
|
|
6.3
|
|
14.2
|
|
16.7
|
|
||||||||||
Ireland
|
—
|
|
—
|
|
31.2
|
|
30.3
|
|
—
|
|
—
|
|
—
|
|
—
|
|
31.2
|
|
30.3
|
|
||||||||||
Spain
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1.0
|
|
—
|
|
—
|
|
—
|
|
1.0
|
|
||||||||||
Total
|
$
|
8.7
|
|
$
|
1.5
|
|
$
|
59.1
|
|
$
|
83.3
|
|
$
|
5.6
|
|
$
|
5.7
|
|
$
|
5.5
|
|
$
|
8.8
|
|
$
|
78.9
|
|
$
|
99.3
|
|
(Dollars in millions)
|
|
Kennedy Wilson Ownership
|
|
Unpaid Principal Balance
|
|
Kennedy Wilson Initial Equity Invested
|
|
Investment Balance at September 30, 2014
|
|
Expected Accretion Over Total Estimated Collection Period
|
|
|
||||||||||||||||
Acquisition Date
|
|
Location
|
|
|
Initial
(1)
|
|
September 30, 2014
(1)
|
|
|
|
|
Accreted to Date
|
||||||||||||||||
February 2010
(2)
|
|
Western U.S.
|
|
15.0%
|
|
$
|
342.4
|
|
|
$
|
—
|
|
|
$
|
11.2
|
|
|
$
|
0.5
|
|
|
$
|
4.5
|
|
|
$
|
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%
|
|
458.0
|
|
|
324.3
|
|
|
7.0
|
|
|
8.5
|
|
|
1.8
|
|
|
1.3
|
|
||||||
December 2012
|
|
United Kingdom
|
|
5.0%
|
|
631.2
|
|
|
104.9
|
|
|
19.3
|
|
|
2.8
|
|
|
2.2
|
|
|
2.0
|
|
||||||
April 2013
|
|
United Kingdom
|
|
10.0%
|
|
189.2
|
|
|
105.8
|
|
|
13.0
|
|
|
5.8
|
|
|
5.1
|
|
|
1.7
|
|
||||||
August 2013
|
|
United Kingdom
|
|
20.0%
|
|
138.7
|
|
|
138.7
|
|
|
7.5
|
|
|
8.5
|
|
|
4.7
|
|
|
1.6
|
|
||||||
May 2014
(3)
|
|
United Kingdom
|
|
4.4%
|
|
105.8
|
|
|
105.8
|
|
|
30.3
|
|
|
29.0
|
|
|
2.3
|
|
|
0.6
|
|
||||||
Total
|
|
|
|
|
|
$
|
1,908.7
|
|
|
$
|
782.3
|
|
|
$
|
119.2
|
|
|
$
|
57.5
|
|
|
$
|
24.9
|
|
|
$
|
15.8
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Income from unconsolidated investments - loan pools
|
$
|
2.3
|
|
|
$
|
3.7
|
|
|
$
|
7.0
|
|
|
$
|
9.1
|
|
Unrealized foreign currency translation (loss) gain
|
(2.9
|
)
|
|
2.1
|
|
|
(2.5
|
)
|
|
(2.9
|
)
|
||||
Total
|
$
|
(0.6
|
)
|
|
$
|
5.8
|
|
|
$
|
4.5
|
|
|
$
|
6.2
|
|
(Dollars in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Marketable securities
|
$
|
13.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13.6
|
|
Unconsolidated investments
|
—
|
|
|
—
|
|
|
90.4
|
|
|
90.4
|
|
||||
Currency forward contract
|
—
|
|
|
22.7
|
|
|
—
|
|
|
22.7
|
|
||||
Currency option contract
|
—
|
|
|
2.6
|
|
|
—
|
|
|
2.6
|
|
||||
Total
|
$
|
13.6
|
|
|
$
|
25.3
|
|
|
$
|
90.4
|
|
|
$
|
129.3
|
|
(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)
|
September 30, 2014
|
|
December 31, 2013
|
||||
Funds
|
$
|
27.7
|
|
|
$
|
33.5
|
|
FV Option
|
62.7
|
|
|
47.6
|
|
||
Total
|
$
|
90.4
|
|
|
$
|
81.1
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Beginning balance
|
$
|
78.5
|
|
|
$
|
74.0
|
|
|
$
|
81.1
|
|
|
$
|
68.4
|
|
Contributions
|
16.9
|
|
|
1.0
|
|
|
19.3
|
|
|
6.9
|
|
||||
Distributions
|
(5.0
|
)
|
|
(0.8
|
)
|
|
(10.0
|
)
|
|
(1.1
|
)
|
||||
Ending balance
|
$
|
90.4
|
|
|
$
|
74.2
|
|
|
$
|
90.4
|
|
|
$
|
74.2
|
|
|
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%
|
|
7.50% - 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)
|
|
|
|
|
|
Change in Unrealized Gains (Losses)
|
|||||||||||
Currency Hedged
|
Type
|
Underlying Currency
|
Notional Amount
|
Trade Date
|
Settlement/Expiration Date
|
Forward Rate/Strike Price
|
Fair Value
|
|
Three Months Ended September 30, 2014
|
|
Nine Months Ended September 30, 2014
|
||||||
EUR
|
Forward
|
USD
|
€93.5
|
5/31/2012 - 6/25/2014
|
6/4/2015 - 6/27/2019
|
1.240 - 1.4471
|
$
|
3.7
|
|
|
$
|
9.0
|
|
|
$
|
9.1
|
|
GBP
|
Forward
|
USD
|
£95.5
|
2/13/2014 - 8/27/2014
|
8/13/2015 - 2/27/2019
|
1.6356 - 1.6491
|
1.6
|
|
|
4.4
|
|
|
1.6
|
|
|||
EUR
(1)
|
Forward
|
GBP
|
€185.0
|
6/18/2014 - 8/26/2014
|
8/27/2015 - 8/28/2019
|
0.8021 - 0.8621
|
4.7
|
|
|
6.0
|
|
|
4.8
|
|
|||
Yen
(2)
|
Forward
|
USD
|
¥7,500.0
|
2/6/2013
|
2/8/2016
|
91.645
|
12.7
|
|
|
8.7
|
|
|
8.7
|
|
|||
Yen
(2)(3)
|
Option
|
USD
|
¥10,953.0
|
9/18/2014
|
3/27/2015 - 6/26/2015
|
108.45 -110.62
|
2.6
|
|
|
0.4
|
|
|
0.4
|
|
|||
Total
(4)
|
|
|
|
|
|
|
$
|
25.3
|
|
|
$
|
28.5
|
|
|
$
|
24.6
|
|
(Dollars in millions)
|
September 30, 2014
|
|
December 31, 2013
|
||||
Above-market leases, net of accumulated amortization of $4.0 million at September 30, 2014
|
78.9
|
|
|
—
|
|
||
Deposits and other, net of accumulated amortization of $1.7 million and
$1.2 million at September 30, 2014 and December 31, 2013, respectively |
22.6
|
|
|
13.0
|
|
||
Loan fees, net of accumulated amortization of $7.9 million and $4.5 million at September 30, 2014 and December 31, 2013, respectively
|
33.9
|
|
|
14.1
|
|
||
Hedge Assets
|
25.3
|
|
|
—
|
|
||
Goodwill
|
23.9
|
|
|
23.9
|
|
||
Office furniture and equipment net of accumulated depreciation of $4.4 million and $2.2 million at September 30, 2014 and December 31, 2013, respectively
|
21.4
|
|
|
10.4
|
|
||
Marketable securities
(1)
|
13.6
|
|
|
4.0
|
|
||
Prepaid expenses
|
12.7
|
|
|
7.6
|
|
||
Other Assets
|
$
|
232.3
|
|
|
$
|
73.0
|
|
(Dollars in millions)
|
|
|
|
Carrying Amount of Investment Debt as of
(1)
|
||||||
Types of Property Pledged as Collateral
|
|
Region
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
Multifamily
(1)
|
|
Western U.S.
|
|
$
|
449.1
|
|
|
$
|
261.0
|
|
Commercial
|
|
Western U.S.
|
|
133.6
|
|
|
110.4
|
|
||
Hotels
|
|
Western U.S
|
|
36.4
|
|
|
28.0
|
|
||
Multifamily
(1)
|
|
Japan
|
|
262.4
|
|
|
—
|
|
||
Commercial
|
|
Japan
|
|
2.4
|
|
|
2.4
|
|
||
Commercial
(1)
|
|
Ireland
|
|
320.5
|
|
|
—
|
|
||
Multifamily
(1)(3)
|
|
Ireland
|
|
173.3
|
|
|
—
|
|
||
Hotels
(1)
|
|
Ireland
|
|
76.1
|
|
|
—
|
|
||
Commercial
(1)(4)
|
|
United Kingdom
|
|
596.0
|
|
|
—
|
|
||
Investment debt
(2)
|
|
|
|
$
|
2,049.8
|
|
|
$
|
401.8
|
|
(Dollars in millions)
|
|
|
||
2014
|
|
$
|
7.4
|
|
2015
|
|
124.1
|
|
|
2016
|
|
60.8
|
|
|
2017
|
|
206.1
|
|
|
2018
|
|
330.3
|
|
|
Thereafter
|
|
1,299.8
|
|
|
|
|
2,028.5
|
|
|
Debt premium
|
|
21.3
|
|
|
|
|
$
|
2,049.8
|
|
|
|
|
September 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
|
|
3.6
|
|
353.6
|
|
|
350.0
|
|
4.0
|
|
354.0
|
|
||||||
Senior Notes
|
|
|
$
|
705.0
|
|
$
|
0.9
|
|
$
|
705.9
|
|
|
$
|
405.0
|
|
$
|
4.0
|
|
$
|
409.0
|
|
|
|
Nine Months Ended September 30, 2014
|
|
Nine Months Ended September 30, 2013
|
||||||||||||
(Dollars in millions)
|
|
Declared
|
|
Paid
|
|
Declared
|
|
Paid
|
||||||||
Preferred Stock
|
|
|
|
|
|
|
|
|
||||||||
Series A
(1)
|
|
$
|
4.5
|
|
|
$
|
4.5
|
|
|
$
|
4.5
|
|
|
$
|
4.5
|
|
Series B
(2)
|
|
1.6
|
|
|
1.6
|
|
|
1.6
|
|
|
1.6
|
|
||||
Total Preferred Stock
|
|
6.1
|
|
|
6.1
|
|
|
6.1
|
|
|
6.1
|
|
||||
Common Stock
(3)
|
|
25.0
|
|
|
22.3
|
|
|
16.0
|
|
|
10.2
|
|
||||
Total
(4)
|
|
$
|
31.1
|
|
|
$
|
28.4
|
|
|
$
|
22.1
|
|
|
$
|
16.3
|
|
|
|
Foreign Currency Translation
|
|
Forward Contract Foreign Currency
|
|
Marketable Securities
|
|
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
|
|
(107.5
|
)
|
|
24.3
|
|
|
(1.9
|
)
|
|
(85.1
|
)
|
||||
Amounts reclassified out of AOCI during the period
(1)
|
|
(0.3
|
)
|
|
(6.8
|
)
|
|
—
|
|
|
(7.1
|
)
|
||||
Taxes on unrealized gains (losses), arising during the period
|
|
40.4
|
|
|
(7.8
|
)
|
|
0.8
|
|
|
33.4
|
|
||||
Noncontrolling interest
|
|
36.4
|
|
|
—
|
|
|
—
|
|
|
36.4
|
|
||||
Balance at September 30, 2014
|
|
$
|
(26.7
|
)
|
|
$
|
14.6
|
|
|
$
|
(1.1
|
)
|
|
$
|
(13.2
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in millions, except share and per share amounts)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
$
|
(2.2
|
)
|
|
$
|
(4.1
|
)
|
|
$
|
44.6
|
|
|
$
|
(10.2
|
)
|
Net income and dividends allocated to participating securities
|
(0.5
|
)
|
|
—
|
|
|
(2.6
|
)
|
|
—
|
|
||||
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders, net of allocation to participating securities
|
(2.7
|
)
|
|
(4.1
|
)
|
|
42.0
|
|
|
(10.2
|
)
|
||||
Dividends declared on common shares
|
(8.1
|
)
|
|
(15.2
|
)
|
|
(24.1
|
)
|
|
(5.5
|
)
|
||||
Undistributed (losses) earnings attributable to Kennedy-Wilson Holdings, Inc. common shareholders, net of allocation to participating securities
|
$
|
(10.8
|
)
|
|
$
|
(19.3
|
)
|
|
$
|
17.9
|
|
|
$
|
(15.7
|
)
|
|
|
|
|
|
|
|
|
||||||||
Distributed earnings per share
|
$
|
0.09
|
|
|
$
|
0.07
|
|
|
$
|
0.27
|
|
|
$
|
0.21
|
|
Undistributed (losses) earnings per share
|
(0.12
|
)
|
|
(0.13
|
)
|
|
0.20
|
|
|
(0.36
|
)
|
||||
(Loss) income per basic
|
(0.03
|
)
|
|
(0.06
|
)
|
|
0.47
|
|
|
(0.15
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
(Loss) income per diluted
|
$
|
(0.03
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
0.47
|
|
|
$
|
(0.15
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding for basic
|
89,267,838
|
|
|
72,643,000
|
|
|
88,854,215
|
|
|
68,486,876
|
|
||||
Weighted average shares outstanding for diluted
(1)
|
89,267,838
|
|
|
72,643,000
|
|
|
90,169,008
|
|
|
68,486,876
|
|
||||
Dividends declared per common share
|
$
|
0.09
|
|
|
$
|
0.07
|
|
|
$
|
0.27
|
|
|
$
|
0.21
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Investments
|
|
|
|
|
|
|
|
|
||||||||
Rental and hotel
|
|
$
|
93.5
|
|
|
$
|
10.5
|
|
|
$
|
161.3
|
|
|
27.3
|
|
|
Sale of real estate
|
|
1.6
|
|
|
1.6
|
|
|
19.0
|
|
|
10.1
|
|
||||
Loan and other
|
|
5.7
|
|
|
0.5
|
|
|
11.7
|
|
|
1.4
|
|
||||
Total revenue
|
|
100.8
|
|
|
12.6
|
|
|
192.0
|
|
|
38.8
|
|
||||
Depreciation and amortization
|
|
(34.7
|
)
|
|
(4.5
|
)
|
|
(67.3
|
)
|
|
(12.0
|
)
|
||||
Operating expenses
|
|
(55.2
|
)
|
|
(13.7
|
)
|
|
(130.2
|
)
|
|
(45.0
|
)
|
||||
Income from unconsolidated investments
|
|
11.4
|
|
|
13.2
|
|
|
43.1
|
|
|
30.1
|
|
||||
Operating income
|
|
22.3
|
|
|
7.6
|
|
|
37.6
|
|
|
11.9
|
|
||||
Acquisition-related gains
|
|
28.9
|
|
|
1.6
|
|
|
199.2
|
|
|
11.1
|
|
||||
Acquisition-related expenses
|
|
(5.3
|
)
|
|
—
|
|
|
(16.9
|
)
|
|
(0.5
|
)
|
||||
Interest expense - investment
|
|
(13.8
|
)
|
|
(2.8
|
)
|
|
(30.2
|
)
|
|
(7.4
|
)
|
||||
Other
|
|
(2.1
|
)
|
|
1.0
|
|
|
0.8
|
|
|
0.3
|
|
||||
Net income
|
|
30.0
|
|
|
7.4
|
|
|
190.5
|
|
|
15.4
|
|
||||
Net (income) loss attributable to the noncontrolling interests
|
|
0.1
|
|
|
0.7
|
|
|
(62.6
|
)
|
|
2.6
|
|
||||
Net income attributable to Kennedy-Wilson Holdings, Inc common shareholders
|
|
$
|
30.1
|
|
|
$
|
8.1
|
|
|
$
|
127.9
|
|
|
$
|
18.0
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Services
|
|
|
|
|
|
|
|
|
||||||||
Investment management, property services and research fees (includes $8.3, $15.7, $48.9, and $37.8 of related party fees)
|
|
$
|
12.9
|
|
|
$
|
20.9
|
|
|
$
|
65.0
|
|
|
$
|
54.0
|
|
Total revenue
|
|
12.9
|
|
|
20.9
|
|
|
65.0
|
|
|
54.0
|
|
||||
Operating expenses
|
|
(14.5
|
)
|
|
(13.3
|
)
|
|
(40.4
|
)
|
|
(31.5
|
)
|
||||
Income from unconsolidated investments
|
|
0.7
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
||||
Operating (loss) income
|
|
(0.9
|
)
|
|
7.6
|
|
|
27.4
|
|
|
22.5
|
|
||||
Net loss attributable to the noncontrolling interests
|
|
2.7
|
|
|
—
|
|
|
2.7
|
|
|
—
|
|
||||
Net income attributable to Kennedy-Wilson Holdings, Inc common shareholders
|
|
$
|
1.8
|
|
|
$
|
7.6
|
|
|
$
|
30.1
|
|
|
$
|
22.5
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Corporate
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
$
|
(9.7
|
)
|
|
$
|
(5.8
|
)
|
|
$
|
(25.6
|
)
|
|
$
|
(16.5
|
)
|
Operating loss
|
|
(9.7
|
)
|
|
(5.8
|
)
|
|
(25.6
|
)
|
|
(16.5
|
)
|
||||
Interest expense-corporate
|
|
(15.9
|
)
|
|
(10.3
|
)
|
|
(41.1
|
)
|
|
(29.7
|
)
|
||||
Other
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.2
|
|
||||
Loss before (provision for) benefit from income taxes
|
|
(25.6
|
)
|
|
(16.0
|
)
|
|
(66.7
|
)
|
|
(46.0
|
)
|
||||
(Provision for) benefit from income taxes
|
|
(6.6
|
)
|
|
(0.8
|
)
|
|
(40.8
|
)
|
|
1.4
|
|
||||
Net loss
|
|
(32.2
|
)
|
|
(16.8
|
)
|
|
(107.5
|
)
|
|
(44.6
|
)
|
||||
Preferred dividends and accretion of preferred stock issuance costs
|
|
(2.0
|
)
|
|
(2.0
|
)
|
|
(6.1
|
)
|
|
(6.1
|
)
|
||||
Net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
$
|
(34.2
|
)
|
|
$
|
(18.8
|
)
|
|
$
|
(113.6
|
)
|
|
$
|
(50.7
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Consolidated
|
|
|
|
|
|
|
|
|
||||||||
Investment management, property services and research fees (includes $8.3, $15.7, $48.9, and $37.8 of related party fees)
|
|
$
|
12.9
|
|
|
$
|
20.9
|
|
|
$
|
65.0
|
|
|
54.0
|
|
|
Rental and hotel
|
|
93.5
|
|
|
10.5
|
|
|
161.3
|
|
|
27.3
|
|
||||
Sale of real estate
|
|
1.6
|
|
|
1.6
|
|
|
19.0
|
|
|
10.1
|
|
||||
Loans and other
|
|
5.7
|
|
|
0.5
|
|
|
11.7
|
|
|
1.4
|
|
||||
Total revenue
|
|
113.7
|
|
|
33.5
|
|
|
257.0
|
|
|
92.8
|
|
||||
Operating expenses
|
|
(79.5
|
)
|
|
(32.8
|
)
|
|
(196.2
|
)
|
|
(93.0
|
)
|
||||
Depreciation and amortization
|
|
(34.7
|
)
|
|
(4.5
|
)
|
|
(67.3
|
)
|
|
(12.0
|
)
|
||||
Total operating expenses
|
|
(114.2
|
)
|
|
(37.3
|
)
|
|
(263.5
|
)
|
|
(105.0
|
)
|
||||
Income from unconsolidated investments
|
|
12.1
|
|
|
13.2
|
|
|
45.9
|
|
|
30.1
|
|
||||
Operating income
|
|
11.6
|
|
|
9.4
|
|
|
39.4
|
|
|
17.9
|
|
||||
Acquisition-related gain
|
|
28.9
|
|
|
1.6
|
|
|
199.2
|
|
|
11.1
|
|
||||
Acquisition-related expenses
|
|
(5.3
|
)
|
|
—
|
|
|
(16.9
|
)
|
|
(0.5
|
)
|
||||
Interest expense - investment
|
|
(13.8
|
)
|
|
(2.8
|
)
|
|
(30.2
|
)
|
|
(7.4
|
)
|
||||
Interest expense - corporate
|
|
(15.9
|
)
|
|
(10.3
|
)
|
|
(41.1
|
)
|
|
(29.7
|
)
|
||||
Other
|
|
(1.9
|
)
|
|
0.1
|
|
|
1.0
|
|
|
0.5
|
|
||||
Income (loss) before benefit from income taxes
|
|
3.6
|
|
|
(2.0
|
)
|
|
151.4
|
|
|
(8.1
|
)
|
||||
(Provision for) benefit from income taxes
|
|
(6.6
|
)
|
|
(0.8
|
)
|
|
(40.8
|
)
|
|
1.4
|
|
||||
Net income (loss)
|
|
(3.0
|
)
|
|
(2.8
|
)
|
|
110.6
|
|
|
(6.7
|
)
|
||||
Net (income) loss attributable to the noncontrolling interests
|
|
2.8
|
|
|
0.7
|
|
|
(59.9
|
)
|
|
2.6
|
|
||||
Preferred dividends and accretion of preferred stock issuance costs
|
|
(2.0
|
)
|
|
(2.0
|
)
|
|
(6.1
|
)
|
|
(6.1
|
)
|
||||
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
$
|
(2.2
|
)
|
|
$
|
(4.1
|
)
|
|
$
|
44.6
|
|
|
$
|
(10.2
|
)
|
(Dollars in millions)
|
|
September 30, 2014
|
|
December 31, 2013
|
||||
Total Assets
|
|
|
|
|
||||
Investments
|
|
$
|
5,381.7
|
|
|
$
|
1,607.5
|
|
Services
|
|
49.4
|
|
|
49.3
|
|
||
Corporate
|
|
282.2
|
|
|
142.0
|
|
||
Total assets
|
|
$
|
5,713.3
|
|
|
$
|
1,798.8
|
|
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF SEPTEMBER 30, 2014
|
||||||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
71.0
|
|
|
$
|
46.8
|
|
|
$
|
118.5
|
|
|
$
|
—
|
|
|
$
|
236.3
|
|
Cash held by consolidated investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
591.3
|
|
|
—
|
|
|
591.3
|
|
||||||
Accounts receivable
|
|
—
|
|
|
—
|
|
|
21.2
|
|
|
21.0
|
|
|
—
|
|
|
42.2
|
|
||||||
Loans
|
|
—
|
|
|
38.4
|
|
|
15.5
|
|
|
250.6
|
|
|
(37.8
|
)
|
|
266.7
|
|
||||||
Real estate and acquired in place lease values, net of accumulated depreciation and amortization
|
|
—
|
|
|
—
|
|
|
345.4
|
|
|
3,494.2
|
|
|
—
|
|
|
3,839.6
|
|
||||||
Unconsolidated investments
|
|
—
|
|
|
9.3
|
|
|
334.5
|
|
|
161.1
|
|
|
—
|
|
|
504.9
|
|
||||||
Other assets
|
|
—
|
|
|
29.1
|
|
|
44.5
|
|
|
158.7
|
|
|
—
|
|
|
232.3
|
|
||||||
Investments in and advances to consolidated subsidiaries
|
|
964.9
|
|
|
1,650.8
|
|
|
1,061.3
|
|
|
—
|
|
|
(3,677.0
|
)
|
|
—
|
|
||||||
Total assets
|
|
$
|
964.9
|
|
|
$
|
1,798.6
|
|
|
$
|
1,869.2
|
|
|
$
|
4,795.4
|
|
|
$
|
(3,714.8
|
)
|
|
$
|
5,713.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable, accrued expenses and other liabilities
|
|
$
|
9.5
|
|
|
$
|
127.8
|
|
|
$
|
23.2
|
|
|
$
|
93.3
|
|
|
$
|
—
|
|
|
$
|
253.8
|
|
Senior notes payable
|
|
—
|
|
|
705.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
705.9
|
|
||||||
Investment debt
|
|
—
|
|
|
—
|
|
|
194.8
|
|
|
1,892.8
|
|
|
(37.8
|
)
|
|
2,049.8
|
|
||||||
Total liabilities
|
|
9.5
|
|
|
833.7
|
|
|
218.0
|
|
|
1,986.1
|
|
|
(37.8
|
)
|
|
3,009.5
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Kennedy-Wilson Holdings, Inc. shareholders' equity
|
|
955.4
|
|
|
964.9
|
|
|
1,650.8
|
|
|
1,061.3
|
|
|
(3,677.0
|
)
|
|
955.4
|
|
||||||
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
1,748.0
|
|
|
—
|
|
|
1,748.4
|
|
||||||
Total equity
|
|
955.4
|
|
|
964.9
|
|
|
1,651.2
|
|
|
2,809.3
|
|
|
(3,677.0
|
)
|
|
2,703.8
|
|
||||||
Total liabilities and equity
|
|
$
|
964.9
|
|
|
$
|
1,798.6
|
|
|
$
|
1,869.2
|
|
|
$
|
4,795.4
|
|
|
$
|
(3,714.8
|
)
|
|
$
|
5,713.3
|
|
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 SEPTEMBER 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
|
)
|
|
$
|
14.1
|
|
|
$
|
(0.7
|
)
|
|
$
|
—
|
|
|
$
|
12.9
|
|
Rental and hotel
|
|
—
|
|
|
—
|
|
|
5.6
|
|
|
87.9
|
|
|
—
|
|
|
93.5
|
|
||||||
Sale of real estate
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
1.5
|
|
|
—
|
|
|
1.6
|
|
||||||
Loans and other
|
|
—
|
|
|
0.1
|
|
|
(2.8
|
)
|
|
8.4
|
|
|
—
|
|
|
5.7
|
|
||||||
Total revenue
|
|
—
|
|
|
(0.4
|
)
|
|
17.0
|
|
|
97.1
|
|
|
—
|
|
|
113.7
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commission and marketing
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|
0.4
|
|
|
—
|
|
|
2.0
|
|
||||||
Rental and hotel operating
|
|
—
|
|
|
—
|
|
|
(5.5
|
)
|
|
43.3
|
|
|
—
|
|
|
37.8
|
|
||||||
Cost of real estate sold
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
||||||
Compensation and related
|
|
5.3
|
|
|
8.8
|
|
|
10.7
|
|
|
2.0
|
|
|
—
|
|
|
26.8
|
|
||||||
General and administrative
|
|
—
|
|
|
3.8
|
|
|
7.5
|
|
|
0.5
|
|
|
—
|
|
|
11.8
|
|
||||||
Depreciation and amortization
|
|
—
|
|
|
0.2
|
|
|
3.1
|
|
|
31.4
|
|
|
—
|
|
|
34.7
|
|
||||||
Total operating expenses
|
|
5.3
|
|
|
12.8
|
|
|
17.4
|
|
|
78.7
|
|
|
—
|
|
|
114.2
|
|
||||||
Income from unconsolidated subsidiaries
|
|
—
|
|
|
2.1
|
|
|
4.2
|
|
|
5.8
|
|
|
—
|
|
|
12.1
|
|
||||||
Income from consolidated subsidiaries
|
|
2.3
|
|
|
35.7
|
|
|
30.2
|
|
|
—
|
|
|
(68.2
|
)
|
|
—
|
|
||||||
Operating income (loss)
|
|
(3.0
|
)
|
|
24.6
|
|
|
34.0
|
|
|
24.2
|
|
|
(68.2
|
)
|
|
11.6
|
|
||||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquisition-related gains
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28.9
|
|
|
—
|
|
|
28.9
|
|
||||||
Acquisition-related expenses
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(5.2
|
)
|
|
—
|
|
|
(5.3
|
)
|
||||||
Interest expense-investment
|
|
—
|
|
|
—
|
|
|
(3.5
|
)
|
|
(10.3
|
)
|
|
—
|
|
|
(13.8
|
)
|
||||||
Interest expense-corporate
|
|
—
|
|
|
(15.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.9
|
)
|
||||||
Other income / (expense)
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(1.7
|
)
|
|
—
|
|
|
(1.9
|
)
|
||||||
Income (loss) before benefit from income taxes
|
|
(3.0
|
)
|
|
8.5
|
|
|
30.4
|
|
|
35.9
|
|
|
(68.2
|
)
|
|
3.6
|
|
||||||
(Provision for) benefit from income taxes
|
|
—
|
|
|
(6.1
|
)
|
|
5.1
|
|
|
(5.6
|
)
|
|
—
|
|
|
(6.6
|
)
|
||||||
Net income (loss)
|
|
(3.0
|
)
|
|
2.4
|
|
|
35.5
|
|
|
30.3
|
|
|
(68.2
|
)
|
|
(3.0
|
)
|
||||||
Net (income) loss attributable to the noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
2.8
|
|
||||||
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc.
|
|
(3.0
|
)
|
|
2.4
|
|
|
35.5
|
|
|
33.1
|
|
|
(68.2
|
)
|
|
(0.2
|
)
|
||||||
Preferred dividends and accretion of preferred stock issuance costs
|
|
(2.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.0
|
)
|
||||||
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
$
|
(5.0
|
)
|
|
$
|
2.4
|
|
|
$
|
35.5
|
|
|
$
|
33.1
|
|
|
$
|
(68.2
|
)
|
|
$
|
(2.2
|
)
|
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 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
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
62.6
|
|
|
$
|
2.4
|
|
|
$
|
—
|
|
|
$
|
65.0
|
|
Rental and hotel
|
|
—
|
|
|
—
|
|
|
12.0
|
|
|
149.3
|
|
|
—
|
|
|
161.3
|
|
||||||
Sale of real estate
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
18.3
|
|
|
—
|
|
|
19.0
|
|
||||||
Loans and other
|
|
—
|
|
|
0.2
|
|
|
1.5
|
|
|
10.0
|
|
|
—
|
|
|
11.7
|
|
||||||
Total revenue
|
|
—
|
|
|
0.2
|
|
|
76.8
|
|
|
180.0
|
|
|
—
|
|
|
257.0
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commission and marketing
|
|
—
|
|
|
—
|
|
|
3.0
|
|
|
0.8
|
|
|
—
|
|
|
3.8
|
|
||||||
Rental and hotel operating
|
|
—
|
|
|
—
|
|
|
(3.1
|
)
|
|
73.0
|
|
|
—
|
|
|
69.9
|
|
||||||
Cost of real estate sold
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
13.9
|
|
|
—
|
|
|
14.6
|
|
||||||
Compensation and related
|
|
8.7
|
|
|
39.0
|
|
|
27.0
|
|
|
4.9
|
|
|
—
|
|
|
79.6
|
|
||||||
General and administrative
|
|
—
|
|
|
9.4
|
|
|
11.5
|
|
|
7.4
|
|
|
—
|
|
|
28.3
|
|
||||||
Depreciation and amortization
|
|
—
|
|
|
0.7
|
|
|
7.9
|
|
|
58.7
|
|
|
—
|
|
|
67.3
|
|
||||||
Total operating expenses
|
|
8.7
|
|
|
49.1
|
|
|
47.0
|
|
|
158.7
|
|
|
—
|
|
|
263.5
|
|
||||||
Income from unconsolidated subsidiaries
|
|
—
|
|
|
3.3
|
|
|
35.1
|
|
|
7.5
|
|
|
—
|
|
|
45.9
|
|
||||||
Income from consolidated subsidiaries
|
|
119.3
|
|
|
245.2
|
|
|
183.1
|
|
|
—
|
|
|
(547.6
|
)
|
|
—
|
|
||||||
Operating income (loss)
|
|
110.6
|
|
|
199.6
|
|
|
248.0
|
|
|
28.8
|
|
|
(547.6
|
)
|
|
39.4
|
|
||||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquisition-related gains
|
|
—
|
|
|
(7.0
|
)
|
|
3.7
|
|
|
202.5
|
|
|
—
|
|
|
199.2
|
|
||||||
Acquisition-related expenses
|
|
—
|
|
|
—
|
|
|
(1.7
|
)
|
|
(15.2
|
)
|
|
—
|
|
|
(16.9
|
)
|
||||||
Interest expense-investment
|
|
—
|
|
|
—
|
|
|
(3.5
|
)
|
|
(26.7
|
)
|
|
—
|
|
|
(30.2
|
)
|
||||||
Interest expense-corporate
|
|
—
|
|
|
(41.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41.1
|
)
|
||||||
Other income / (expense)
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|
(0.5
|
)
|
|
—
|
|
|
1.0
|
|
||||||
Income (loss) before benefit from income taxes
|
|
110.6
|
|
|
151.5
|
|
|
248.0
|
|
|
188.9
|
|
|
(547.6
|
)
|
|
151.4
|
|
||||||
(Provision for) benefit from income taxes
|
|
—
|
|
|
(32.2
|
)
|
|
(3.0
|
)
|
|
(5.6
|
)
|
|
—
|
|
|
(40.8
|
)
|
||||||
Net income (loss)
|
|
110.6
|
|
|
119.3
|
|
|
245.0
|
|
|
183.3
|
|
|
(547.6
|
)
|
|
110.6
|
|
||||||
Net (income) loss attributable to the noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59.9
|
)
|
|
—
|
|
|
(59.9
|
)
|
||||||
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc.
|
|
110.6
|
|
|
119.3
|
|
|
245.0
|
|
|
123.4
|
|
|
(547.6
|
)
|
|
50.7
|
|
||||||
Preferred dividends and accretion of preferred stock issuance costs
|
|
(6.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
||||||
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
$
|
104.5
|
|
|
$
|
119.3
|
|
|
$
|
245.0
|
|
|
$
|
123.4
|
|
|
$
|
(547.6
|
)
|
|
$
|
44.6
|
|
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 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
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7.3
|
|
|
$
|
13.6
|
|
|
$
|
—
|
|
|
$
|
20.9
|
|
Rental and hotel
|
|
—
|
|
|
0.2
|
|
|
1.5
|
|
|
8.8
|
|
|
—
|
|
|
10.5
|
|
||||||
Sale of real estate
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
||||||
Loans and other
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
||||||
Total revenue
|
|
—
|
|
|
0.2
|
|
|
10.9
|
|
|
22.4
|
|
|
—
|
|
|
33.5
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commission and marketing
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
0.2
|
|
|
—
|
|
|
1.0
|
|
||||||
Rental and hotel operating
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
3.2
|
|
|
—
|
|
|
4.2
|
|
||||||
Cost of real estate sold
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
||||||
Compensation and related
|
|
2.0
|
|
|
11.5
|
|
|
3.8
|
|
|
3.6
|
|
|
—
|
|
|
20.9
|
|
||||||
General and administrative
|
|
—
|
|
|
2.0
|
|
|
1.4
|
|
|
2.4
|
|
|
—
|
|
|
5.8
|
|
||||||
Depreciation and amortization
|
|
—
|
|
|
0.1
|
|
|
1.3
|
|
|
3.1
|
|
|
|
|
4.5
|
|
|||||||
Total operating expenses
|
|
2.0
|
|
|
13.6
|
|
|
9.2
|
|
|
12.5
|
|
|
—
|
|
|
37.3
|
|
||||||
Income from unconsolidated investments, net of depreciation and amortization
|
|
—
|
|
|
0.3
|
|
|
19.5
|
|
|
(6.6
|
)
|
|
—
|
|
|
13.2
|
|
||||||
Income from consolidated subsidiaries
|
|
(0.7
|
)
|
|
23.6
|
|
|
2.8
|
|
|
—
|
|
|
(25.7
|
)
|
|
—
|
|
||||||
Operating income (expense)
|
|
(2.7
|
)
|
|
10.5
|
|
|
24.0
|
|
|
3.3
|
|
|
(25.7
|
)
|
|
9.4
|
|
||||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquisition-related gains
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|
1.6
|
|
||||||
Interest expense-investment
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(2.6
|
)
|
|
|
|
(2.8
|
)
|
|||||||
Interest expense-corporate
|
|
—
|
|
|
(10.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.3
|
)
|
||||||
Other income
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||||
(Loss) income before benefit from income taxes
|
|
(2.7
|
)
|
|
0.3
|
|
|
23.8
|
|
|
2.3
|
|
|
(25.7
|
)
|
|
(2.0
|
)
|
||||||
Benefit from (provision for) income taxes
|
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
(0.8
|
)
|
||||||
Net (loss) income
|
|
(2.7
|
)
|
|
(0.8
|
)
|
|
23.8
|
|
|
2.6
|
|
|
(25.7
|
)
|
|
(2.8
|
)
|
||||||
Net income attributable to the noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.8
|
|
|
—
|
|
|
0.7
|
|
||||||
Preferred dividends and accretion of preferred stock issuance costs
|
|
(2.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.0
|
)
|
||||||
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
$
|
(4.7
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
23.7
|
|
|
$
|
3.4
|
|
|
$
|
(25.7
|
)
|
|
$
|
(4.1
|
)
|
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 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
|
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
21.5
|
|
|
$
|
31.9
|
|
|
$
|
—
|
|
|
$
|
54.0
|
|
Rental and hotel
|
|
—
|
|
|
0.2
|
|
|
4.7
|
|
|
22.4
|
|
|
—
|
|
|
27.3
|
|
||||||
Sale of real estate
|
|
—
|
|
|
—
|
|
|
10.1
|
|
|
—
|
|
|
—
|
|
|
10.1
|
|
||||||
Loans and other
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
||||||
Total revenue
|
|
—
|
|
|
0.8
|
|
|
37.7
|
|
|
54.3
|
|
|
—
|
|
|
92.8
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commission and marketing
|
|
—
|
|
|
0.4
|
|
|
2.2
|
|
|
0.2
|
|
|
—
|
|
|
2.8
|
|
||||||
Rental and hotel operating
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|
9.3
|
|
|
—
|
|
|
11.9
|
|
||||||
Cost of real estate sold
|
|
—
|
|
|
—
|
|
|
7.9
|
|
|
—
|
|
|
—
|
|
|
7.9
|
|
||||||
Compensation and related
|
|
5.5
|
|
|
25.1
|
|
|
10.8
|
|
|
11.4
|
|
|
—
|
|
|
52.8
|
|
||||||
General and administrative
|
|
0.3
|
|
|
6.4
|
|
|
3.5
|
|
|
7.4
|
|
|
—
|
|
|
17.6
|
|
||||||
Depreciation and amortization
|
|
—
|
|
|
0.4
|
|
|
3.6
|
|
|
8.0
|
|
|
—
|
|
|
12.0
|
|
||||||
Total operating expenses
|
|
5.8
|
|
|
32.3
|
|
|
30.6
|
|
|
36.3
|
|
|
—
|
|
|
105.0
|
|
||||||
Income from unconsolidated investments, net of depreciation and amortization
|
|
—
|
|
|
0.3
|
|
|
39.7
|
|
|
(9.9
|
)
|
|
—
|
|
|
30.1
|
|
||||||
Income from consolidated subsidiaries
|
|
(0.8
|
)
|
|
58.3
|
|
|
12.3
|
|
|
—
|
|
|
(69.8
|
)
|
|
—
|
|
||||||
Operating income (expense)
|
|
(6.6
|
)
|
|
27.1
|
|
|
59.1
|
|
|
8.1
|
|
|
(69.8
|
)
|
|
17.9
|
|
||||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquisition-related gains
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.1
|
|
|
—
|
|
|
11.1
|
|
||||||
Acquisition-related expense
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(0.5
|
)
|
||||||
Interest expense-investment
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
(6.7
|
)
|
|
—
|
|
|
(7.4
|
)
|
||||||
Interest expense-corporate
|
|
|
|
(29.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29.7
|
)
|
|||||||
Other income
|
|
—
|
|
|
0.4
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
||||||
(Loss) income before benefit from income taxes
|
|
(6.6
|
)
|
|
(2.2
|
)
|
|
58.3
|
|
|
12.2
|
|
|
(69.8
|
)
|
|
(8.1
|
)
|
||||||
Benefit from (provision for) income taxes
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
||||||
Net (loss) income
|
|
(6.6
|
)
|
|
(0.8
|
)
|
|
58.3
|
|
|
12.2
|
|
|
(69.8
|
)
|
|
(6.7
|
)
|
||||||
Net income attributable to the noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
2.7
|
|
|
—
|
|
|
2.6
|
|
||||||
Preferred dividends and accretion of preferred stock issuance costs
|
|
(6.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
||||||
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
$
|
(12.7
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
58.2
|
|
|
$
|
14.9
|
|
|
$
|
(69.8
|
)
|
|
$
|
(10.2
|
)
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014
|
||||||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
Net (loss) income
|
|
$
|
(3.0
|
)
|
|
$
|
2.4
|
|
|
$
|
35.5
|
|
|
$
|
30.3
|
|
|
$
|
(68.2
|
)
|
|
$
|
(3.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized foreign currency translation (loss) gain
|
|
(89.0
|
)
|
|
(89.0
|
)
|
|
(21.4
|
)
|
|
(12.6
|
)
|
|
123.0
|
|
|
(89.0
|
)
|
||||||
Amounts reclassified out of AOCI during the period
|
|
—
|
|
|
—
|
|
|
9.5
|
|
|
(9.5
|
)
|
|
—
|
|
|
—
|
|
||||||
Loss on marketable securities
|
|
(1.1
|
)
|
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
(1.1
|
)
|
||||||
Unrealized forward contract foreign currency (loss) gain
|
|
20.1
|
|
|
20.1
|
|
|
6.5
|
|
|
11.3
|
|
|
(37.9
|
)
|
|
20.1
|
|
||||||
Total other comprehensive (loss) income for the period
|
|
$
|
(70.0
|
)
|
|
$
|
(70.0
|
)
|
|
$
|
(5.4
|
)
|
|
$
|
(10.8
|
)
|
|
$
|
86.2
|
|
|
$
|
(70.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income
|
|
$
|
(73.0
|
)
|
|
$
|
(67.6
|
)
|
|
$
|
30.1
|
|
|
$
|
19.5
|
|
|
$
|
18.0
|
|
|
$
|
(73.0
|
)
|
Comprehensive (income) loss attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58.0
|
|
|
—
|
|
|
58.0
|
|
||||||
Comprehensive income attributable to Kennedy-Wilson Holdings, Inc.
|
|
$
|
(73.0
|
)
|
|
$
|
(67.6
|
)
|
|
$
|
30.1
|
|
|
$
|
77.5
|
|
|
$
|
18.0
|
|
|
$
|
(15.0
|
)
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013
|
||||||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
Net (loss) income
|
|
$
|
(2.7
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
23.8
|
|
|
$
|
2.6
|
|
|
$
|
(25.7
|
)
|
|
$
|
(2.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized foreign currency translation gains
|
|
8.8
|
|
|
8.8
|
|
|
6.4
|
|
|
2.3
|
|
|
(17.5
|
)
|
|
8.8
|
|
||||||
Unrealized forward contract foreign currency loss
|
|
(3.6
|
)
|
|
(3.6
|
)
|
|
0.1
|
|
|
—
|
|
|
3.5
|
|
|
(3.6
|
)
|
||||||
Total other comprehensive income for the period
|
|
$
|
5.2
|
|
|
$
|
5.2
|
|
|
$
|
6.5
|
|
|
$
|
2.3
|
|
|
$
|
(14.0
|
)
|
|
$
|
5.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive (loss) income
|
|
$
|
2.5
|
|
|
$
|
4.4
|
|
|
$
|
30.3
|
|
|
$
|
4.9
|
|
|
$
|
(39.7
|
)
|
|
$
|
2.4
|
|
Comprehensive income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.8
|
|
|
—
|
|
|
0.7
|
|
||||||
Comprehensive (loss) income attributable to Kennedy-Wilson Holdings, Inc.
|
|
$
|
2.5
|
|
|
$
|
4.4
|
|
|
$
|
30.2
|
|
|
$
|
5.7
|
|
|
$
|
(39.7
|
)
|
|
$
|
3.1
|
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014
|
||||||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
Net income (loss)
|
|
$
|
110.6
|
|
|
$
|
119.3
|
|
|
$
|
245.0
|
|
|
$
|
183.3
|
|
|
$
|
(547.6
|
)
|
|
$
|
110.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized foreign currency translation (loss) gain
|
|
(67.1
|
)
|
|
(67.1
|
)
|
|
2.5
|
|
|
(16.5
|
)
|
|
81.1
|
|
|
(67.1
|
)
|
||||||
Amounts reclassified out of AOCI during the period
|
|
(7.1
|
)
|
|
(7.1
|
)
|
|
1.2
|
|
|
(8.3
|
)
|
|
14.2
|
|
|
(7.1
|
)
|
||||||
Loss on marketable securities
|
|
(1.1
|
)
|
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
(1.1
|
)
|
||||||
Unrealized forward contract foreign currency (loss) gain
|
|
16.5
|
|
|
16.5
|
|
|
5.3
|
|
|
10.1
|
|
|
(31.9
|
)
|
|
16.5
|
|
||||||
Total other comprehensive (loss) income for the period
|
|
$
|
(58.8
|
)
|
|
$
|
(58.8
|
)
|
|
$
|
9.0
|
|
|
$
|
(14.7
|
)
|
|
$
|
64.5
|
|
|
$
|
(58.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income
|
|
$
|
51.8
|
|
|
$
|
60.5
|
|
|
$
|
254.0
|
|
|
$
|
168.6
|
|
|
$
|
(483.1
|
)
|
|
$
|
51.8
|
|
Comprehensive (income) loss attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23.5
|
)
|
|
—
|
|
|
(23.5
|
)
|
||||||
Comprehensive income attributable to Kennedy-Wilson Holdings, Inc.
|
|
$
|
51.8
|
|
|
$
|
60.5
|
|
|
$
|
254.0
|
|
|
$
|
145.1
|
|
|
$
|
(483.1
|
)
|
|
$
|
28.3
|
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013
|
||||||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
Net (loss) income
|
|
$
|
(6.6
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
58.3
|
|
|
$
|
12.2
|
|
|
$
|
(69.8
|
)
|
|
$
|
(6.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized foreign currency translation gains
|
|
(9.2
|
)
|
|
(9.2
|
)
|
|
(11.6
|
)
|
|
(0.3
|
)
|
|
21.1
|
|
|
(9.2
|
)
|
||||||
Unrealized forward contract foreign currency loss
|
|
2.2
|
|
|
2.2
|
|
|
5.4
|
|
|
—
|
|
|
(7.6
|
)
|
|
2.2
|
|
||||||
Total other comprehensive income for the period
|
|
$
|
(7.0
|
)
|
|
$
|
(7.0
|
)
|
|
$
|
(6.2
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
13.5
|
|
|
$
|
(7.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive (loss) income
|
|
$
|
(13.6
|
)
|
|
$
|
(7.8
|
)
|
|
$
|
52.1
|
|
|
$
|
11.9
|
|
|
$
|
(56.3
|
)
|
|
$
|
(13.7
|
)
|
Comprehensive income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
2.8
|
|
|
—
|
|
|
2.6
|
|
||||||
Comprehensive (loss) income attributable to Kennedy-Wilson Holdings, Inc.
|
|
$
|
(13.6
|
)
|
|
$
|
(7.8
|
)
|
|
$
|
51.9
|
|
|
$
|
14.7
|
|
|
$
|
(56.3
|
)
|
|
$
|
(11.1
|
)
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014
|
||||||||||||||||||||
(Dollars in millions)
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Consolidated Total
|
||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
(0.1
|
)
|
|
$
|
(25.7
|
)
|
|
$
|
73.7
|
|
|
$
|
37.8
|
|
|
$
|
85.7
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to loans
|
|
—
|
|
|
—
|
|
|
(5.8
|
)
|
|
(470.6
|
)
|
|
(476.4
|
)
|
|||||
Collections of loans
|
|
—
|
|
|
—
|
|
|
15.1
|
|
|
80.8
|
|
|
95.9
|
|
|||||
Net proceeds from sale of real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16.3
|
|
|
16.3
|
|
|||||
Purchases of and additions to real estate
|
|
—
|
|
|
(0.6
|
)
|
|
(71.6
|
)
|
|
(1,466.0
|
)
|
|
(1,538.2
|
)
|
|||||
Proceeds from settlement of foreign forward contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.5
|
|
|
7.5
|
|
|||||
Purchases of foreign currency options
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.2
|
)
|
|
(2.2
|
)
|
|||||
Distributions from unconsolidated investments
|
|
—
|
|
|
0.3
|
|
|
51.6
|
|
|
47.4
|
|
|
99.3
|
|
|||||
Contributions to unconsolidated investments
|
|
—
|
|
|
(2.0
|
)
|
|
(47.9
|
)
|
|
(89.7
|
)
|
|
(139.6
|
)
|
|||||
Investment in marketable securities
|
|
—
|
|
|
—
|
|
|
(11.5
|
)
|
|
—
|
|
|
(11.5
|
)
|
|||||
(Investments in) distributions from consolidated subsidiaries, net
|
|
(159.3
|
)
|
|
(198.4
|
)
|
|
(65.0
|
)
|
|
422.7
|
|
|
—
|
|
|||||
Net cash (used in) provided by investing activities
|
|
(159.3
|
)
|
|
(200.7
|
)
|
|
(135.1
|
)
|
|
(1,453.8
|
)
|
|
(1,948.9
|
)
|
|||||
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
|
|
—
|
|
|
—
|
|
|
31.5
|
|
|
793.6
|
|
|
825.1
|
|
|||||
Borrowings under senior notes payable
|
|
—
|
|
|
297.2
|
|
|
—
|
|
|
—
|
|
|
297.2
|
|
|||||
Debt issue costs
|
|
—
|
|
|
(7.8
|
)
|
|
(0.6
|
)
|
|
(20.1
|
)
|
|
(28.5
|
)
|
|||||
Repayment of investment debt
|
|
—
|
|
|
(40.0
|
)
|
|
(0.1
|
)
|
|
(32.1
|
)
|
|
(72.2
|
)
|
|||||
Issuance of common stock
|
|
190.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
190.6
|
|
|||||
Dividends paid
|
|
(28.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28.4
|
)
|
|||||
Repurchase and retirement of common stock
|
|
(2.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.9
|
)
|
|||||
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.9
|
|
|
12.9
|
|
|||||
Distributions to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24.3
|
)
|
|
(24.3
|
)
|
|||||
Net cash provided by financing activities
|
|
159.3
|
|
|
249.4
|
|
|
30.8
|
|
|
2,021.7
|
|
|
2,461.2
|
|
|||||
Effect of currency exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.8
|
|
|
10.8
|
|
|||||
Net change in cash and cash equivalents
|
|
(0.1
|
)
|
|
23.0
|
|
|
(30.6
|
)
|
|
616.5
|
|
|
608.8
|
|
|||||
Cash and cash equivalents, beginning of year
|
|
—
|
|
|
48.2
|
|
|
77.2
|
|
|
52.8
|
|
|
178.2
|
|
|||||
Cash and cash equivalents, end of period
|
|
$
|
(0.1
|
)
|
|
$
|
71.2
|
|
|
$
|
46.6
|
|
|
$
|
669.3
|
|
|
$
|
787.0
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 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
|
|
|
$
|
(62.2
|
)
|
|
$
|
36.5
|
|
|
$
|
8.4
|
|
|
$
|
(17.1
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to loans
|
|
—
|
|
|
(8.2
|
)
|
|
(22.1
|
)
|
|
—
|
|
|
(30.3
|
)
|
|||||
Collections of loans
|
|
—
|
|
|
4.9
|
|
|
38.0
|
|
|
0.1
|
|
|
43.0
|
|
|||||
Net proceeds from sale of real estate
|
|
—
|
|
|
—
|
|
|
10.1
|
|
|
0.4
|
|
|
10.5
|
|
|||||
Purchases of and additions to real estate
|
|
—
|
|
|
—
|
|
|
(31.3
|
)
|
|
(84.6
|
)
|
|
(115.9
|
)
|
|||||
Capitalized Development Costs
|
|
—
|
|
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
|||||
Proceeds from maturities to short term investments
|
|
—
|
|
|
10.0
|
|
|
—
|
|
|
—
|
|
|
10.0
|
|
|||||
Distributions from unconsolidated investments
|
|
—
|
|
|
0.4
|
|
|
135.7
|
|
|
7.2
|
|
|
143.3
|
|
|||||
Contributions to unconsolidated investments
|
|
—
|
|
|
(2.3
|
)
|
|
(214.6
|
)
|
|
(97.4
|
)
|
|
(314.3
|
)
|
|||||
(Investment in) distributions from consolidated subsidiaries, net
|
|
(263.2
|
)
|
|
178.7
|
|
|
8.1
|
|
|
76.4
|
|
|
—
|
|
|||||
Net cash (used in) provided by investing activities
|
|
(263.2
|
)
|
|
182.2
|
|
|
(76.1
|
)
|
|
(97.9
|
)
|
|
(255.0
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings under line of credit
|
|
—
|
|
|
125.0
|
|
|
—
|
|
|
—
|
|
|
125.0
|
|
|||||
Repayment of lines of credit
|
|
—
|
|
|
(125.0
|
)
|
|
—
|
|
|
—
|
|
|
(125.0
|
)
|
|||||
Borrowings under investment debt
|
|
—
|
|
|
—
|
|
|
18.7
|
|
|
53.6
|
|
|
72.3
|
|
|||||
Repayment of investment debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|
(1.1
|
)
|
|||||
Debt issue costs
|
|
—
|
|
|
(1.3
|
)
|
|
(0.1
|
)
|
|
(0.4
|
)
|
|
(1.8
|
)
|
|||||
Issuance of common stock
|
|
276.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
276.0
|
|
|||||
Repurchase of warrants
|
|
(1.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
|||||
Dividends paid
|
|
(16.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.3
|
)
|
|||||
Contributions from noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
0.9
|
|
|||||
Intercompany receivables, net
|
|
—
|
|
|
(21.9
|
)
|
|
—
|
|
|
21.9
|
|
|
—
|
|
|||||
Distributions to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|||||
Exercise of warrants
|
|
4.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.7
|
|
|||||
Net cash provided by (used in) financing activities
|
|
263.0
|
|
|
(23.2
|
)
|
|
18.6
|
|
|
74.5
|
|
|
332.9
|
|
|||||
Effect of currency exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
0.2
|
|
|
(10.4
|
)
|
|
9.9
|
|
|
(0.3
|
)
|
|||||
Net change in cash and cash equivalents
|
|
—
|
|
|
97.0
|
|
|
(31.4
|
)
|
|
(5.1
|
)
|
|
60.5
|
|
|||||
Cash and cash equivalents, beginning of period
|
|
—
|
|
|
64.5
|
|
|
38.5
|
|
|
17.9
|
|
|
120.9
|
|
|||||
Cash and cash equivalents, end of period
|
|
$
|
—
|
|
|
$
|
161.5
|
|
|
$
|
7.1
|
|
|
$
|
12.8
|
|
|
$
|
181.4
|
|
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)
|
|
September 30, 2014
|
December 31,
2013 |
||||
Real estate and acquired in-place lease values, gross of accumulated depreciation and amortization of $88.6 and $26.3, respectively
|
|
$
|
3,928.2
|
|
$
|
714.4
|
|
Loans
|
|
266.7
|
|
56.8
|
|
||
Investment debt
|
|
(2,049.8
|
)
|
(401.8
|
)
|
||
Cash held by consolidated investments
|
|
591.3
|
|
8.0
|
|
||
Unconsolidated investments
(1)
, gross of accumulated depreciation and amortization of $68.8 and $106.0, respectively
|
|
546.7
|
|
865.2
|
|
||
Other
(2)
|
|
39.0
|
|
4.0
|
|
||
Consolidated investment account
|
|
3,322.1
|
|
1,246.6
|
|
||
Less:
|
|
|
|
||||
Noncontrolling interests
on investments, gross of depreciation and amortization of $33.0 and $4.5, respectively
|
|
(1,781.4
|
)
|
(55.1
|
)
|
||
Investment account
|
|
$
|
1,540.7
|
|
$
|
1,191.5
|
|
(Dollars in millions)
|
|
Commercial
(1)
|
|
Multifamily
(2)
|
|
Loans Secured by Real Estate
(3)
|
|
Residential, Hotel, and Other
(4)
|
|
Total
|
||||||||||
Western U.S.
|
|
$
|
214.8
|
|
|
$
|
360.6
|
|
|
$
|
70.0
|
|
|
$
|
189.3
|
|
|
$
|
834.7
|
|
Japan
|
|
4.1
|
|
|
83.0
|
|
|
—
|
|
|
0.4
|
|
|
87.5
|
|
|||||
United Kingdom
|
|
142.0
|
|
|
2.5
|
|
|
39.9
|
|
|
12.7
|
|
|
197.1
|
|
|||||
Ireland
|
|
87.0
|
|
|
70.3
|
|
|
21.3
|
|
|
123.8
|
|
|
302.4
|
|
|||||
Subtotal
|
|
$
|
447.9
|
|
|
$
|
516.4
|
|
|
$
|
131.2
|
|
|
$
|
326.2
|
|
|
$
|
1,421.7
|
|
KW share of cash held by consolidated investments
(5)
|
|
|
|
|
|
|
|
|
|
119.0
|
|
|||||||||
Total
|
|
|
|
|
|
|
|
|
|
$
|
1,540.7
|
|
(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
|
|
•
|
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. As a result of taking title to the property, the Company consolidated the assets and liabilities at fair value and recognized an acquisition-related gain of $28.6 million.
|
•
|
As of September 30, 2014, the Company and its consolidated subsidiaries had approximately $1.5 billion of potential liquidity, which includes approximately $665 million of availability under lines of credit for KWH and KWE.
|
•
|
During the three months ended September 30, 2014, the Company and its equity partners (including KWE) completed approximately $732 million of investment transactions. The Company invested $108 million in $452 million of acquisitions and received $52 million from $280 million of dispositions.
|
•
|
During the nine months ended September 30, 2014, the Company and its equity partners (including KWE) completed approximately $3.6 billion of investment transactions. The Company invested $403 million of equity in $2.6 billion of acquisitions and received $163 million from $963 million of dispositions.
|
•
|
Adjusted EBITDA was
$65.2 million
, a
74%
increase from
$37.5 million
for the same period in 2013.
|
•
|
For same property multifamily units, total revenues increased
8%
, net operating income increased
9%
and occupancy remained at
95%
from the same period in 2013.
|
•
|
For same property commercial real estate, total revenues increased
4%
, net operating income increased
6%
and occupancy was flat at
85%
from the same period in 2013.
|
•
|
The Company and its equity partners acquired approximately $452 million of real estate related investments (including $270 million acquired by KWE) in which the Company invested $108 million of equity representing an approximate 24% weighted average ownership stake. The Company's investments for the quarter were directed 60% to the United Kingdom and Ireland and 40% to the Western U.S.
|
•
|
The Company and its equity partners sold three commercial properties, two multifamily properties, one condo unit, and one residential investment which resulted in gross sales proceeds of $280 million. The Company’s share of the net proceeds (after repayment of debt) was $52 million including promoted interests (compared to $39 million of net book value).
|
•
|
Adjusted EBITDA was
$230.8 million
, a
142%
increase from
$95.2 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%
from the same period in 2013.
|
•
|
For same property commercial real estate, total revenues increased
3%
, net operating income increased
1%
and occupancy increased
1%
to
85%
from the same period in 2013.
|
•
|
Through September 30, 2014, the Company and its equity partners acquired approximately $2.6 billion of real estate related investments (including $2.0 billion acquired by KWE) in which the Company invested $403 million of equity representing an approximate 16% weighted average ownership stake. The Company's investments year-to-date were directed 82% to the United Kingdom and Ireland and 18% to the Western U.S.
|
•
|
Through September 30, 2014, the Company and its equity partners sold 16 commercial properties, three multifamily properties, six condo units, and three residential investments which resulted in gross sales proceeds of $963 million. The Company’s share of net proceeds (after repayment of debt) was $163 million including promoted interests (compared to $93 million of net book value).
|
•
|
Adjusted Fees were
$22.2 million
, a
1%
increase from
$22.0 million
for the same period in 2013.
|
•
|
Adjusted EBITDA was
$8.7 million
, which remained flat compared to the same period in 2013.
|
•
|
Adjusted Fees were
$89.1 million
, a
57%
increase from
$56.7 million
for the same period in 2013.
|
•
|
Adjusted EBITDA was
$47.0 million
, a
87%
increase from
$25.2 million
for the same period in 2013.
|
•
|
In July 2014, the Company increased its unsecured line of credit from $140 million to $300 million.
|
•
|
In September 2014, the Company paid off approximately $40.0 million of junior subordinated debt which was due in April 2037. At the time of satisfaction and discharge of its obligation, the Company was paying interest at a rate of 9.1%.
|
•
|
KWH owns 13.3% of KWE’s total share capital as of September 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. Since KWE's inception through September 30, 2014, the management fees paid or payable by KWE to KWH are approximately $8.7 million (50% paid in KWE shares).
|
•
|
Since its launch in February 2014, KWE has acquired 79 direct real estate assets with approximately 6.4 million square feet and three loan portfolios secured by 42 real estate assets totaling $2.0 billion in purchase price, which currently produce approximately $132 million of annualized net operating income(net rental income for property portfolios, EBITDA for hotels and interest income for loan portfolios).
|
•
|
During the third quarter, KWE completed approximately $505 million of financings secured by three portfolios with a total of 61 commercial properties located throughout the United Kingdom with a weighted average maturity of October 2019 and interest rate of 3 month GBP LIBOR+1.84%.
|
•
|
In September 2014, KWE entered into a three year unsecured floating rate revolving debt facility of approximately $365 million with a syndicate of banks. The facility was undrawn as of September 30, 2014.
|
•
|
In October 2014, KWE completed a secondary offering of approximately $565 million of ordinary shares. KWH acquired approximately $75 million of KWE’s ordinary shares maintaining its 13.3% ownership in KWE. In total, KWH owns approximately 18.0 million shares of KWE with a cost basis of $297.6 million.
|
•
|
In October 2014, the Company drew $50.0 million on its credit facility, with $250.0 million remained available to be drawn.
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
(Dollars in millions, except share and per share amounts)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
||||||||
Investment management, property services and research fees
|
|
$
|
12.9
|
|
|
$
|
20.9
|
|
|
$
|
65.0
|
|
|
$
|
54.0
|
|
Rental and hotel
|
|
93.5
|
|
|
10.5
|
|
|
161.3
|
|
|
27.3
|
|
||||
Sale of real estate
|
|
1.6
|
|
|
1.6
|
|
|
19.0
|
|
|
10.1
|
|
||||
Loans and other
|
|
5.7
|
|
|
0.5
|
|
|
11.7
|
|
|
1.4
|
|
||||
Total revenue
|
|
113.7
|
|
|
33.5
|
|
|
257.0
|
|
|
92.8
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Commission and marketing
|
|
2.0
|
|
|
1.0
|
|
|
3.8
|
|
|
2.8
|
|
||||
Rental and hotel operating
|
|
37.8
|
|
|
4.2
|
|
|
69.9
|
|
|
11.9
|
|
||||
Cost of real estate sold
|
|
1.1
|
|
|
0.9
|
|
|
14.6
|
|
|
7.9
|
|
||||
Compensation and related
|
|
26.8
|
|
|
20.9
|
|
|
79.6
|
|
|
52.8
|
|
||||
General and administrative
|
|
11.8
|
|
|
5.8
|
|
|
28.3
|
|
|
17.6
|
|
||||
Depreciation and amortization
|
|
34.7
|
|
|
4.5
|
|
|
67.3
|
|
|
12.0
|
|
||||
Total operating expenses
|
|
114.2
|
|
|
37.3
|
|
|
263.5
|
|
|
105.0
|
|
||||
Income from unconsolidated investments, net of depreciation and amortization
|
|
12.1
|
|
|
13.2
|
|
|
45.9
|
|
|
30.1
|
|
||||
Operating income
|
|
11.6
|
|
|
9.4
|
|
|
39.4
|
|
|
17.9
|
|
||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
||||||||
Acquisition-related gains
|
|
28.9
|
|
|
1.6
|
|
|
199.2
|
|
|
11.1
|
|
||||
Acquisition-related expenses
|
|
(5.3
|
)
|
|
—
|
|
|
(16.9
|
)
|
|
(0.5
|
)
|
||||
Interest expense-investment
|
|
(13.8
|
)
|
|
(2.8
|
)
|
|
(30.2
|
)
|
|
(7.4
|
)
|
||||
Interest expense-corporate
|
|
(15.9
|
)
|
|
(10.3
|
)
|
|
(41.1
|
)
|
|
(29.7
|
)
|
||||
Other income
|
|
(1.9
|
)
|
|
0.1
|
|
|
1.0
|
|
|
0.5
|
|
||||
Income (loss) before (provision for) benefit from income taxes
|
|
3.6
|
|
|
(2.0
|
)
|
|
151.4
|
|
|
(8.1
|
)
|
||||
Benefit from (provision for) income taxes
|
|
(6.6
|
)
|
|
(0.8
|
)
|
|
(40.8
|
)
|
|
1.4
|
|
||||
Net income (loss)
|
|
(3.0
|
)
|
|
(2.8
|
)
|
|
110.6
|
|
|
(6.7
|
)
|
||||
Net (income) loss attributable to the noncontrolling interests
|
|
2.8
|
|
|
0.7
|
|
|
(59.9
|
)
|
|
2.6
|
|
||||
Preferred stock dividends and accretion of issuance costs
|
|
(2.0
|
)
|
|
(2.0
|
)
|
|
(6.1
|
)
|
|
(6.1
|
)
|
||||
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc common shareholders
|
|
$
|
(2.2
|
)
|
|
$
|
(4.1
|
)
|
|
$
|
44.6
|
|
|
$
|
(10.2
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Consolidated EBITDA
|
|
$
|
85.8
|
|
|
$
|
40.1
|
|
|
$
|
355.5
|
|
|
$
|
105.7
|
|
Adjusted EBITDA
|
|
$
|
69.5
|
|
|
$
|
41.5
|
|
|
$
|
261.0
|
|
|
$
|
109.5
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income (loss)
|
|
$
|
(3.0
|
)
|
|
$
|
(2.8
|
)
|
|
$
|
110.6
|
|
|
$
|
(6.7
|
)
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Add back:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense-investment
|
|
13.8
|
|
|
2.8
|
|
|
30.2
|
|
|
7.4
|
|
||||
Interest expense-corporate
(2)
|
|
14.4
|
|
|
10.3
|
|
|
39.6
|
|
|
29.7
|
|
||||
Kennedy Wilson's share of interest expense included in unconsolidated investments
|
|
7.9
|
|
|
12.7
|
|
|
28.4
|
|
|
33.4
|
|
||||
Depreciation and amortization
|
|
34.7
|
|
|
4.5
|
|
|
67.3
|
|
|
12.0
|
|
||||
Kennedy Wilson's share of depreciation and amortization included in unconsolidated investments
|
|
9.9
|
|
|
11.8
|
|
|
37.1
|
|
|
31.3
|
|
||||
Loss on early extinguishment of corporate debt
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
||||
Provision for (benefit from) income taxes
|
|
6.6
|
|
|
0.8
|
|
|
40.8
|
|
|
(1.4
|
)
|
||||
Consolidated EBITDA
|
|
85.8
|
|
|
40.1
|
|
|
355.5
|
|
|
105.7
|
|
||||
Add back (less):
|
|
|
|
|
|
|
|
|
||||||||
Share-based compensation
|
|
5.3
|
|
|
2.0
|
|
|
8.7
|
|
|
5.4
|
|
||||
EBITDA attributable to noncontrolling interests
(3)
|
|
(21.6
|
)
|
|
(0.6
|
)
|
|
(103.2
|
)
|
|
(1.6
|
)
|
||||
Adjusted EBITDA
|
|
$
|
69.5
|
|
|
$
|
41.5
|
|
|
$
|
261.0
|
|
|
$
|
109.5
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Investments
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
$
|
100.8
|
|
|
$
|
12.6
|
|
|
$
|
192.0
|
|
|
$
|
38.8
|
|
Operating expenses
|
|
(89.9
|
)
|
|
(18.2
|
)
|
|
(197.5
|
)
|
|
(57.0
|
)
|
||||
Income from unconsolidated investments, net of depreciation and amortization
|
|
11.4
|
|
|
13.2
|
|
|
43.1
|
|
|
30.1
|
|
||||
Operating income
|
|
22.3
|
|
|
7.6
|
|
|
37.6
|
|
|
11.9
|
|
||||
Acquisition-related gains
|
|
28.9
|
|
|
1.6
|
|
|
199.2
|
|
|
11.1
|
|
||||
Other non-operating expenses
|
|
(21.2
|
)
|
|
(1.8
|
)
|
|
(46.3
|
)
|
|
(7.6
|
)
|
||||
Total Non-operating income (expense)
|
|
7.7
|
|
|
(0.2
|
)
|
|
152.9
|
|
|
3.5
|
|
||||
Net income
|
|
30.0
|
|
|
7.4
|
|
|
190.5
|
|
|
15.4
|
|
||||
Add back (less):
|
|
|
|
|
|
|
|
|
||||||||
Interest expense-investment
|
|
13.8
|
|
|
2.8
|
|
|
30.2
|
|
|
7.4
|
|
||||
Kennedy Wilson's share of interest expense included in unconsolidated investments
|
|
7.9
|
|
|
12.7
|
|
|
27.4
|
|
|
33.4
|
|
||||
Depreciation and amortization
|
|
34.7
|
|
|
4.5
|
|
|
67.3
|
|
|
12.0
|
|
||||
Kennedy Wilson's share of depreciation and amortization included in unconsolidated investments
|
|
9.2
|
|
|
11.8
|
|
|
35.1
|
|
|
31.3
|
|
||||
EBITDA attributable to noncontrolling interests
(1)
|
|
(24.3
|
)
|
|
(0.6
|
)
|
|
(105.9
|
)
|
|
(1.6
|
)
|
||||
Fees eliminated in consolidation
|
|
(6.1
|
)
|
|
(1.1
|
)
|
|
(13.8
|
)
|
|
(2.7
|
)
|
||||
Adjusted EBITDA
(2)
|
|
$
|
65.2
|
|
|
$
|
37.5
|
|
|
$
|
230.8
|
|
|
$
|
95.2
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Services
|
|
|
|
|
|
|
|
|
||||||||
Investment management, property services and research fees
|
|
$
|
12.9
|
|
|
$
|
20.9
|
|
|
$
|
65.0
|
|
|
$
|
54.0
|
|
Operating expenses
|
|
(14.5
|
)
|
|
(13.3
|
)
|
|
(40.4
|
)
|
|
(31.5
|
)
|
||||
Operating income
|
|
(1.6
|
)
|
|
7.6
|
|
|
24.6
|
|
|
22.5
|
|
||||
Income from unconsolidated investments, net of depreciation and amortization
|
|
0.7
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
||||
Net income
|
|
(0.9
|
)
|
|
7.6
|
|
|
27.4
|
|
|
22.5
|
|
||||
Add back:
|
|
|
|
|
|
|
|
|
||||||||
Kennedy Wilson's share of interest expense included in unconsolidated investments
|
|
0.1
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
||||
Kennedy Wilson's share of depreciation and amortization included in unconsolidated investments
|
|
0.7
|
|
|
—
|
|
|
2.0
|
|
|
—
|
|
||||
Operating expenses attributable to noncontrolling interests
|
|
2.7
|
|
|
—
|
|
|
2.7
|
|
|
—
|
|
||||
Fees eliminated in consolidation
|
|
6.1
|
|
|
1.1
|
|
|
13.8
|
|
|
2.7
|
|
||||
EBITDA
(1)
|
|
$
|
8.7
|
|
|
$
|
8.7
|
|
|
$
|
47.0
|
|
|
$
|
25.2
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Corporate
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
$
|
(9.7
|
)
|
|
$
|
(5.8
|
)
|
|
$
|
(25.6
|
)
|
|
$
|
(16.5
|
)
|
Operating loss
|
|
(9.7
|
)
|
|
(5.8
|
)
|
|
(25.6
|
)
|
|
(16.5
|
)
|
||||
Interest expense-corporate
|
|
(15.9
|
)
|
|
(10.3
|
)
|
|
(41.1
|
)
|
|
(29.7
|
)
|
||||
Other
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.2
|
|
||||
Loss before benefit from income taxes
|
|
(25.6
|
)
|
|
(16.0
|
)
|
|
(66.7
|
)
|
|
(46.0
|
)
|
||||
(Provision for) benefit from income taxes
|
|
(6.6
|
)
|
|
(0.8
|
)
|
|
(40.8
|
)
|
|
1.4
|
|
||||
Net loss
|
|
(32.2
|
)
|
|
(16.8
|
)
|
|
(107.5
|
)
|
|
(44.6
|
)
|
||||
Add back:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense-corporate
|
|
15.9
|
|
|
10.3
|
|
|
41.1
|
|
|
29.7
|
|
||||
Share-based compensation
|
|
5.3
|
|
|
2.0
|
|
|
8.7
|
|
|
5.4
|
|
||||
(Provision for) benefit from income taxes
|
|
6.6
|
|
|
0.8
|
|
|
40.8
|
|
|
(1.4
|
)
|
||||
EBITDA
(1)
|
|
$
|
(4.4
|
)
|
|
$
|
(3.7
|
)
|
|
$
|
(16.9
|
)
|
|
$
|
(10.9
|
)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Investment management, property services and research fees
|
|
$
|
12.9
|
|
|
$
|
20.9
|
|
|
$
|
65.0
|
|
|
$
|
54.0
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Add back:
|
|
|
|
|
|
|
|
|
||||||||
Fees eliminated in consolidation
(1)
|
|
6.1
|
|
|
1.1
|
|
|
13.8
|
|
|
2.7
|
|
||||
KW share of fees in unconsolidated service businesses
(2)
|
|
3.2
|
|
|
—
|
|
|
10.3
|
|
|
—
|
|
||||
Adjusted Fees
(3)
|
|
$
|
22.2
|
|
|
$
|
22.0
|
|
|
$
|
89.1
|
|
|
$
|
56.7
|
|
•
|
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 KW Group;
|
•
|
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 KW Group;
|
•
|
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)
|
|
$
|
2,028.5
|
|
|
$
|
7.4
|
|
|
$
|
391.0
|
|
|
1,078.9
|
|
|
551.2
|
|
||
Senior notes
(3)
|
|
705.0
|
|
|
—
|
|
|
—
|
|
|
350.0
|
|
|
355.0
|
|
|||||
Total borrowings
|
|
2,733.5
|
|
|
7.4
|
|
|
391.0
|
|
|
1,428.9
|
|
|
906.2
|
|
|||||
Operating leases
|
|
7.7
|
|
|
0.7
|
|
|
3.3
|
|
|
1.5
|
|
|
2.2
|
|
|||||
Total contractual cash obligations
|
|
$
|
2,741.2
|
|
|
$
|
8.1
|
|
|
$
|
394.3
|
|
|
$
|
1,430.4
|
|
|
$
|
908.4
|
|
(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: three months ending December 31, 2014 -
$32.5 million
; 1-3 years -
$346.4 million
; 4-5 years -
$166.3 million
; After 5 years -
$211.1 million
. The interest payments on variable rate debt have been calculated using the interest rate in effect at
September 30, 2014
.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
|
Principal Maturing in:
|
|
|
|
Fair Value
|
||||||||||||||||||||||||||
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
Total
|
|
September 30, 2014
|
||||||||||||||||
(Dollars in millions)
|
|
|
||||||||||||||||||||||||||||||
Interest rate sensitive assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents
|
|
$
|
827.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
827.6
|
|
|
$
|
827.6
|
|
Average interest rate
|
|
0.35
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.35
|
%
|
|
—
|
|
||||||||
Fixed rate receivables
|
|
253.5
|
|
|
6.3
|
|
|
1.1
|
|
|
5.8
|
|
|
—
|
|
|
—
|
|
|
266.7
|
|
|
266.7
|
|
||||||||
Average interest rate
(1)
|
|
10.21
|
%
|
|
10.66
|
%
|
|
6.00
|
%
|
|
2.16
|
%
|
|
—
|
%
|
|
—
|
%
|
|
10.53
|
%
|
|
—
|
|
||||||||
Variable rate receivables
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Average interest rate
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
|
||||||||
Total
|
|
$
|
1,081.1
|
|
|
$
|
6.3
|
|
|
$
|
1.1
|
|
|
$
|
5.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,094.3
|
|
|
$
|
1,094.3
|
|
Weighted average interest rate
|
|
2.66
|
%
|
|
10.66
|
%
|
|
6.00
|
%
|
|
2.16
|
%
|
|
—
|
%
|
|
—
|
%
|
|
2.83
|
%
|
|
|
|||||||||
Interest rate sensitive liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Variable rate borrowings
|
|
$
|
—
|
|
|
$
|
101.1
|
|
|
$
|
23.0
|
|
|
$
|
144.7
|
|
|
$
|
305.8
|
|
|
$
|
700.4
|
|
|
$
|
1,275.0
|
|
|
$
|
1,300.9
|
|
Average interest rate
|
|
—
|
%
|
|
5.33
|
%
|
|
2.56
|
%
|
|
3.71
|
%
|
|
3.94
|
%
|
|
4.35
|
%
|
|
3.27
|
%
|
|
—
|
|
||||||||
Fixed rate borrowings
|
|
—
|
|
|
2.9
|
|
|
14.4
|
|
|
56.6
|
|
|
24.3
|
|
|
1,360.2
|
|
|
1,458.4
|
|
|
1,493.6
|
|
||||||||
Average interest rate
|
|
—
|
%
|
|
5.00
|
%
|
|
5.92
|
%
|
|
1.61
|
%
|
|
3.55
|
%
|
|
6.16
|
%
|
|
5.93
|
%
|
|
—
|
|
||||||||
Total
|
|
$
|
—
|
|
|
$
|
104.0
|
|
|
$
|
37.4
|
|
|
$
|
201.3
|
|
|
$
|
330.1
|
|
|
$
|
2,060.6
|
|
|
$
|
2,733.4
|
|
|
$
|
2,794.5
|
|
Weighted average interest rate
|
|
—
|
%
|
|
5.32
|
%
|
|
3.85
|
%
|
|
3.12
|
%
|
|
3.91
|
%
|
|
5.54
|
%
|
|
4.69
|
%
|
|
|
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
|
|
|
|
4.1
|
|
Supplemental Indenture no. 2 dated as of September 5, 2014 to Indenture dated as of March 25, 2014
|
|
|
|
4.2
|
|
Supplemental Indenture no. 10 dated as of September 5, 2014 to Indenture dated as of November 28, 2012
|
|
|
|
4.3
|
|
Twenty-second Supplemental Indenture dated as of September 5, 2014 among Kennedy-Wilson, INC., KW Park Santa Fe, LLC and Wilmington Trust, National Association as Trustee
|
|
|
|
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:
|
November 10, 2014
|
By:
|
/
S
/ J
USTIN
E
NBODY
|
|
|
|
Justin Enbody
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer
|
|
|
|
and Accounting Officer)
|
By:
|
\s\ Kent Mouton
Name: Kent Mouton |
Title:
|
General Counsel
|
By:
|
\s\ Kent Mouton
Name: Kent Mouton |
By:
|
\s\ Jane Schweiger
Name: Jane Schweiger |
By:
|
\s\ Kent Mouton
Name: Kent Mouton
|
Title:
|
General Counsel
|
By:
|
\s\ Kent Mouton
Name: Kent Mouton |
By:
|
Name: Jane Schweiger |
By:
|
\s\ Kent Mouton
Name: Kent Mouton Title: General Counsel |
By:
|
\s\ Kent Mouton
Name: Kent Mouton
Title: Vice President |
By:
|
\s\ Jane Schweiger
Name: Jane Schweiger
Title: Vice President |
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: November 10, 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
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Chief Financial Officer
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Dated: November 10, 2014
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ William J. McMorrow
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William J. McMorrow
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Chief Executive Officer and Chairman
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Justin Enbody
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Justin Enbody
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Chief Financial Officer
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