Kennedy Wilson Reports Fourth Quarter and Full Year 2012 Earnings

  Kennedy Wilson Reports Fourth Quarter and Full Year 2012 Earnings

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

Business Wire

BEVERLY HILLS, Calif. -- March 12, 2013

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

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

The Company's earnings before interest, taxes, depreciation, and stock-based
compensation expense ("Adjusted EBITDA") for the fourth quarter of 2012 was
$44.9 million, a 51% increase from $29.7 million for the same period in 2011.
The Company's Adjusted EBITDA for the full year ended December31, 2012 was
$100.3 million, a 41% increase from $71.2 million for the same period 2011.

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

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

Kennedy Wilson Recent Highlights

Investments business

Investment Account

  *As of December31, 2012, our investment account (Kennedy Wilson's equity
    in real estate, joint ventures, loan investments and marketable
    securities, less mortgage debt) increased by 42% to $828.3 million from
    $582.8 million at December31, 2011. This change was comprised of
    approximately $469.6 million (including $230.3 million during the fourth
    quarter) of cash contributed to, offset by income earned on investments
    and approximately $224.0 million (including $60.0 million during the
    fourth quarter) of cash distributed from investments.
  *As of December31, 2012, the Company and its equity partners owned 16.1
    million rentable square feet of real estate including 14,764 apartment
    units and 30 commercial properties. Additionally, as of December31, 2012,
    the Company and its equity partners owned $2.2 billion in loans secured by
    real estate and over 3,300 acres of land.

Operating metrics

  *During the three months ended December31, 2012, our investments business
    achieved an Adjusted EBITDA of $42.0 million, a 159% increase from $16.1
    million for the same period in 2011.
  *During the year ended December31, 2012, our investments business achieved
    an Adjusted EBITDA of $88.5 million, a 68% increase from $52.7 million for
    the same period in 2011.
  *During the year ended December 31, 2012, based on 9,015 same property
    multifamily units, rental revenues and net operating income increased by
    3.6% and 5.9%, respectively, while percentage leased decreased by 0.2%
    from 2011. In addition, based on 2.2 million square feet of same property
    commercial real estate, rental revenues, net operating income and
    occupancy increased by 9.9%, 13.2% and 5.1%, respectively.

Acquisition/disposition program

  *From January 1, 2010 through December31, 2012, the Company and its equity
    partners, acquired approximately $8.0 billion of real estate related
    investments (includes unpaid principal balance of loan purchases). During
    2012, the Company and its equity partners acquired $2.9 billion of real
    estate related investments. This includes $1.4 billion of real estate and
    $1.5 billion of loans secured by real estate in which we invested $206.1
    million and $196.2 million, respectively.
  *During the year ended December 31, 2012, the Company and its equity
    partners sold six multifamily properties (through property sales and sale
    of equity interest) located in the Western U.S. for a total of $251.7
    million, which resulted in a total gain of $33.7 million, of which our
    share was $10.1 million ($20.7 million of our equity invested).

Property level debt financing

  *During the year ended December 31, 2012, the Company and its equity
    partners completed approximately $928.7 million of property financings and
    re-financings at an average interest rate of 3.8% and a weighted average
    maturity of 6.0 years.
  *During the year ended December 31, 2011, the Company and its equity
    partners completed approximately $1.6 billion of property financings and
    re-financings at an average interest rate of 4.2% and a weighted average
    maturity of 3.3 years.

Key Investment Updates

UK Loan Pool

  *Our current equity in this investment is $60.4 million; we own 12.5%
    before carried interest.
  *In December 2011, we and our equity partners acquired a loan pool secured
    by real estate located in the United Kingdom with an unpaid principal
    balance of $2.1 billion. As of December31, 2012, the unpaid principal
    balance was $765.8 million due to loan resolutions of approximately $1.3
    billion, representing 64% of the pool. The total debt incurred at the
    venture level at the time of purchase of these loans was $323.4 million
    with a maturity date of October 2014. As a result of the loan resolutions,
    the venture level debt has been paid down by $297.6 million to $25.8
    million as of December31, 2012.

KW Residential, LLC

  *Our current equity in this investment is $102.7 million; we own 40.9%
    before carried interest.
  *Maintained 96.4% occupancy in 50 apartment buildings with over 2,400
    units.
  *Since Fairfax Financial became our partner in the Japanese apartment
    portfolio in September 2010, we have distributed a total of $56.5 million,
    of which our share was $26.4 million.

Services business

  *Management and leasing fees and commissions decreased by 42% to $17.8
    million for the three months ended December31, 2012 from $30.8 million
    for the same period in 2011.
  *During the three months ended December31, 2012, our services business
    achieved an EBITDA of $9.0 million, a 53% decrease from $19.2 million for
    the same period in 2011.
  *Management and leasing fees and commissions decreased by 7% to $53.3
    million for the year ended December31, 2012 from $57.1 million for the
    same period in 2011. Included in management and leasing fees and
    commissions for the year ended December31, 2012 and 2011 are $4.4 million
    and $21.6 million, respectively, of acquisition fees related to the
    acquisition of the Bank of Ireland stock and the UK loan pool in 2011.
    Excluding the acquisition fees, the Company achieved a 38% increase in
    management and leasing fees and commissions for the year ended
    December31, 2012 as compared to the same period in 2011.
  *During the year ended December31, 2012, our services business achieved an
    EBITDA of $20.2 million, a 22% decrease from $25.7 million for the same
    period in 2011. Excluding the acquisition fees related to the acquisition
    of the Bank of Ireland stock and the UK loan pool in 2011 of $4.4 million
    and $21.6 million for the year ended December31, 2012 and 2011,
    respectively, the Company achieved a 282% increase in its services EBITDA
    for the year ended December31, 2012 as compared to the same period in
    2011.

Corporate financing

  *In July 2012, the Company issued 8.6 million shares of common stock
    primarily to institutional investors, resulting in gross proceeds of
    $112.1 million, of which $40.0 million was used to pay off the outstanding
    balance on our line of credit.
  *During the three months ended December31, 2012, the Company issued $155.0
    million of senior notes.

Subsequent events

  *Subsequent to December31, 2012, we have acquired or have entered into
    contracts to acquire approximately $1.2 billion of real estate related
    investments which include 1.6 million rentable square feet of real estate,
    comprised of 725 apartment units and one commercial property along with
    $727.6 million of loans secured by real estate and 301 residential lots.
    We expect the acquisitions to be joint venture investments.
  *Subsequent to December 31, 2012, KW Residential, LLC settled several
    Japanese yen related hedges resulting in cash proceeds of $23.7 million to
    the joint venture, of which our share was $10.6 million.
  *In December 2012, we invested $43.6 million of our equity and borrowed
    $79.3 million to acquire a loan secured by a shopping center in the United
    Kingdom. Additionally, in partnership with an institutional investor, we
    acquired a loan pool with an unpaid principal balance of $232.3 million,
    comprised of seven loans secured by 23 underlying properties in the United
    Kingdom. Our investment in the pool totaled $16.0 million. Subsequent to
    December 31, 2012, we sold 50% of our interest in both investments to an
    institutional investor. As a result of the sale, the loan secured by a
    shopping center will no longer be consolidated.
  *During March 2013, we drew $35 million on our unsecured credit facility.

Conference Call and Webcast Details

The company will hold a live conference call and webcast to discuss results at
7:00 a.m. PT/ 10:00 a.m. ET on Wednesday, March 13.

The direct dial-in number for the conference call is (800) 706-7745 for U.S.
callers and (617) 614-3472 for international callers. The confirmation number
for the live call is 14209752.

A replay of the call will be available for one week beginning two hours after
the live call and can be accessed by (888) 286-8010 for U.S. callers and (617)
801-6888 for international callers. The passcode for the replay is 20403213.

The webcast will be available at:
http://edge.media-server.com/m/p/rgvcnd5k/lan/en. A replay of the webcast will
be available two hours after the original webcast on the Company’s investor
relations web site for one year.

About Kennedy Wilson

Founded in 1977, Kennedy Wilson is an international real estate investment and
services company headquartered in Beverly Hills, CA with 24 offices in the
U.S., U.K., Ireland, Spain and Japan. The company offers a comprehensive array
of real estate services including auction, conventional sales, property
services, research and investment management. Through its fund management and
separate account businesses, Kennedy Wilson is a strategic investor of real
estate investments in the U.S., U.K., Ireland and Japan. For further
information on Kennedy Wilson, please visit www.kennedywilson.com.

Forward-Looking Statements

Statements made by us in this report and in other reports and statements
released by us that are not historical facts constitute "forward-looking
statements" within the meaning of Section27A of the Securities Act of 1933,
as amended (the "Securities Act") and Section21 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). These forward-looking statements
are necessarily estimates reflecting the judgment of our senior management
based on our current estimates, expectations, forecasts and projections and
include comments that express our current opinions about trends and factors
that may impact future operating results. Disclosures that use words such as
"believe," "anticipate," "estimate," "intend," "could," "plan," "expect,"
"project" or the negative of these, as well as similar expressions, are
intended to identify forward-looking statements. These statements are not
guarantees of future performance, rely on a number of assumptions concerning
future events, many of which are outside of our control, and involve known and
unknown risks and uncertainties that could cause our actual results,
performance or achievement, or industry results, to differ materially from any
future results, performance or achievements, expressed or implied by such
forward-looking statements. These risks and uncertainties may include these
factors and the risks and uncertainties described elsewhere in this report and
other filings with the Securities and Exchange Commission (the "SEC"),
including the Item1A. "Risk Factors" section of our Annual Report on Form
10-K for the year ended December31, 2011. Any such forward-looking
statements, whether made in this report or elsewhere, should be considered in
the context of the various disclosures made by us about our businesses
including, without limitation, the risk factors discussed in our filings with
the SEC. Except as required under the federal securities laws and the rules
and regulations of the SEC, we do not have any intention or obligation to
update publicly any forward-looking statements, whether as a result of new
information, future events, changes in assumptions, or otherwise.

Non-GAAP Financial Information

In addition to the results reported in accordance with U.S. generally accepted
accounting principles (GAAP) included within this press release, Kennedy
Wilson has provided certain information, which includes non-GAAP financial
measures (Pro Forma Statements of Operations, Adjusted Net Loss Attributable
to Kennedy Wilson Common Shareholders, Basic Adjusted Net Loss Attributable to
Kennedy Wilson Common Shareholders Per Share, EBITDA and Adjusted EBITDA).
Additionally, there are certain revenue and expense line items in our pro
forma consolidated statements of operations or income that would otherwise be
classified as discontinued operations on a GAAP statement. Such information is
reconciled to its closest GAAP measure in accordance with the SEC rules and is
included in the attached supplemental tables. Management believes that these
non-GAAP financial measures are useful to both management and the Company's
shareholders in their analysis of the business and operating performance of
the Company. Management also uses this information for operational planning
and decision-making purposes. Non-GAAP financial measures are not and should
not be considered a substitute for any GAAP measures. Additionally, non-GAAP
financial measures as presented by Kennedy Wilson may not be comparable to
similarly titled measures reported by other companies.

Kennedy-Wilson Holdings, Inc. and Subsidiaries

Consolidated Balance Sheets
                            
                                   December 31,
                                   2012                   2011
Assets
Cash and cash                      $ 120,855,000               $ 115,926,000
equivalents
Short term investments             10,000,000                  —
Accounts receivable                3,647,000                   3,114,000
Accounts
receivable—related                 22,393,000                  15,612,000
parties
Notes receivable                   136,607,000                 7,938,000
Notes
receivable—related                 —                           33,269,000
parties
Real estate, net of
accumulated                        289,449,000                 115,880,000
depreciation
Investments in joint               543,193,000                 343,367,000
ventures
Investments in loan                95,601,000                  89,951,000
pool participations
Marketable securities              —                           23,005,000
Other assets                       38,079,000                  20,749,000
Goodwill                           23,965,000                 23,965,000    
Total assets                       $ 1,283,789,000            $ 792,776,000 
                                                               
Liabilities
Accounts payable                   $ 1,762,000                 $ 1,798,000
Accrued expenses and               29,417,000                  24,262,000
other liabilities
Accrued salaries and               24,981,000                  14,578,000
benefits
Deferred tax liability             22,671,000                  18,437,000
Mortgage loans and                 236,538,000                 30,748,000
notes payable
Senior notes payable               409,640,000                 249,385,000
Junior subordinated                40,000,000                 40,000,000    
debentures
Total liabilities                  765,009,000                379,208,000   
Equity
Cumulative Preferred
stock:
6.00% Series A,                    —                           —
100,000 shares
6.45% Series B, 32,550             —                           —
shares
Common stock                       6,000                       5,000
Additional paid-in                 512,835,000                 407,335,000
capital
Retained earnings                  (5,910,000      )           9,708,000
(accumulated deficit)
Accumulated other                  12,569,000                  5,035,000
comprehensive income
Shares held in                     (9,856,000      )           (11,848,000   )
treasury
Total Kennedy-Wilson
Holdings, Inc.                     509,644,000                 410,235,000
stockholders’ equity
Noncontrolling                     9,136,000                  3,333,000     
interests
Total equity                       518,780,000                413,568,000   
Total liabilities and              $ 1,283,789,000            $ 792,776,000 
equity
                                                                             
                                                                             

         See accompanying notes to consolidated financial statements.

Kennedy-Wilson Holdings, Inc. and Subsidiaries

Consolidated Statements of Operations
                                                          
                            For the Three Months Ended           For the Year Ended
                            December 31,                         December 31,
                            2012             2011              2012             2011
Revenue
Management and              $ 10,996,000       $ 9,308,000       $ 40,304,000       $ 27,116,000
leasing fees
Commissions                 6,790,000          21,531,000        12,955,000         29,960,000
Sale of real estate         996,000            —                 2,271,000          417,000
Rental and other            4,094,000         1,781,000        8,526,000         5,140,000    
income
Total revenue               22,876,000         32,620,000        64,056,000         62,633,000
Operating expenses
Commission and              874,000            950,000           4,550,000          3,965,000
marketing expenses
Compensation and            25,176,000         16,567,000        55,834,000         41,129,000
related expenses
Cost of real estate         955,000            —                 2,230,000          397,000
sold
General and                 5,797,000          5,273,000         19,448,000         14,455,000
administrative
Depreciation and            2,034,000          970,000           4,937,000          2,798,000
amortization
Rental operating            1,858,000         1,060,000        4,496,000         3,308,000    
expenses
Total operating             36,694,000         24,820,000        91,495,000         66,052,000
expenses
Equity in joint             9,055,000          5,346,000         21,527,000         12,507,000
venture income
Interest income
from loan pool              2,130,000         2,051,000        9,256,000         7,886,000    
participations and
notes receivable
Operating (loss)            (2,633,000   )     15,197,000        3,344,000          16,974,000
income
Non-operating
income (expense)
Interest income             435,000            1,072,000         2,938,000          2,306,000
Acquisition related         25,476,000         —                 25,476,000         6,348,000
gain
Gain on sale of
marketable                  1,422,000          —                 4,353,000          —
securities
Acquisition-related         (675,000     )     —                 (675,000     )     —
expenses
Interest expense            (8,616,000   )     (6,634,000  )     (28,595,000  )     (20,507,000  )
Income from
continuing
operations before           15,409,000         9,635,000         6,841,000          5,121,000
(provision for)
benefit from income
taxes
(Provision for)
benefit from income         (4,913,000   )     (148,000    )     208,000           2,014,000    
taxes
Income from
continuing                  10,496,000         9,487,000         7,049,000          7,135,000
operations
Discontinued
Operations
Income from
discontinued                —                  8,000             2,000              8,000
operations, net of
income taxes
Gain (loss) from
sale of real                —                 335,000          (212,000     )     335,000      
estate, net of
income taxes
Net income                  10,496,000         9,830,000         6,839,000          7,478,000
Net income (loss)
attributable to the         401,000           163,000          (2,589,000   )     (1,132,000   )
noncontrolling
interests
Net income
attributable to             10,897,000         9,993,000         4,250,000          6,346,000
Kennedy-Wilson
Holdings, Inc.
Preferred stock
dividends and               (2,036,000   )     (2,036,000  )     (8,144,000   )     (8,744,000   )
accretion of
issuance costs
Net income (loss)
attributable to
Kennedy-Wilson              $ 8,861,000       $ 7,957,000      $ (3,894,000 )     $ (2,398,000 )
Holdings, Inc.
common shareholders
Basic earnings per
share
Income (loss) per
basic - continuing          $ 0.15             $ 0.16            $ (0.07      )     $ (0.06      )
operations
Income (loss) per
basic -                     —                 0.01             —                 0.01         
discontinued
Earnings (loss) per         $ 0.15            $ 0.17           $ (0.07      )     $ (0.05      )
share - basic ^(a)
Weighted average
shares outstanding          60,450,450        47,412,858       55,285,833        42,415,770   
for basic
Diluted earnings
per share
Income (loss) per
diluted -                   $ 0.14             $ 0.13            $ (0.07      )     $ (0.06      )
continuing
operations
Income (loss) per
diluted -                   —                 0.01             —                 0.01         
discontinued
Earnings per share          $ 0.14            $ 0.14           $ (0.07      )     $ (0.06      )
- diluted ^(a)
Weighted average
shares outstanding          72,266,197        58,896,137       55,285,833        42,415,770   
for diluted
Dividends declared          $ 0.20            $ 0.11           $ 0.05            $ 0.04       
per common share
                                                                                                 
_________

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

Kennedy-Wilson Holdings, Inc. and Subsidiaries

Adjusted Net Loss Attributable to Kennedy Wilson Common Shareholders
                                                         
                         Three Months Ended                       Year Ended
                         December 31,                             December 31,
                         2012              2011                2012              2011
Net income
(loss)
attributable
to                       $ 8,861,000          $ 7,957,000         $ (3,894,000 )       $ (2,398,000 )
Kennedy-Wilson
Holdings, Inc.
common
shareholders
Non-GAAP
adjustments:
Add back:
Stock based              3,147,000            1,294,000           8,147,000            5,055,000
compensation
Common stock
issuance
discount                 —                   —                  —                   600,000      
treated as
preferred
dividend
Adjusted Net
Income
Attributable
to
                         $ 12,008,000        $ 9,251,000        $ 4,253,000         $ 3,257,000  
Kennedy Wilson
Holdings, Inc.
Common
Shareholders
Basic weighted
average number
of                       60,450,450          47,412,858         55,285,833          42,415,770   

common shares
outstanding
Basic Adjusted
Net Loss
Attributable
to
                         $ 0.20              $ 0.20             $ 0.08              $ 0.08       
Kennedy Wilson
Holdings, Inc.
Common
Shareholders
Per Share
                                                                                                    
                                                                                                    

Kennedy-Wilson Holdings, Inc. and Subsidiaries

EBITDA and Adjusted EBITDA
                                                          
                         Three Months Ended                        Year Ended
                         December 31,                              December 31,
                         2012              2011                 2012               2011
Net income               $ 10,496,000         $ 9,830,000          $ 6,839,000           $ 7,478,000
Non-GAAP
adjustments:
Add back:
Interest                 8,616,000            6,634,000            28,595,000            20,507,000
expense
Kennedy
Wilson's share
of interest
expense
included in
investment               6,048,000            8,472,000            29,412,000            23,453,000

in joint
ventures and
loan pool
participations
Depreciation
and                      2,034,000            970,000              4,937,000             2,798,000
amortization
Kennedy
Wilson's share
of
depreciation
and
amortization             9,614,000            2,342,000            22,599,000            13,900,000
included

in investment
in joint
ventures
Provision for
(benefit from)           4,913,000           148,000             (208,000      )       (2,014,000   )
income taxes
EBITDA                   41,721,000           28,396,000           92,174,000            66,122,000
Stock-based              3,147,000           1,294,000           8,147,000            5,055,000    
compensation
Adjusted                 $ 44,868,000        $ 29,690,000        $ 100,321,000        $ 71,177,000 
EBITDA

Contact:

Kennedy Wilson
Christina Cha
Vice President of Corporate Communication
310-887-6294
ccha@kennedywilson.com
www.kennedywilson.com