Kennedy Wilson Reports Full Year and Fourth Quarter Earnings

  Kennedy Wilson Reports Full Year and Fourth Quarter Earnings

   The Company's Adjusted EBITDA for FY 2013 grows by 85% to $185.1 million

 Kennedy Wilson increases dividend by 29% to $0.09 per common share for first
                                 quarter 2014

Business Wire

BEVERLY HILLS, Calif. -- February 26, 2014

Kennedy-Wilson Holdings, Inc. (NYSE: KW) ("Kennedy Wilson") and its
consolidated subsidiaries (collectively "the Company, our, we, or us"), a
global real estate investment and services company, today reported year end
2013 Adjusted EBITDA of $185.1 million, a 85% increase from $100.2 million for
2012. For the fourth quarter 2013, Adjusted EBITDA was $73.9 million, a 65%
increase from $44.7 million for the same period in 2012.

Kennedy Wilson reported Adjusted Net Income to common shareholders for the
year end 2013 of $57.1 million or $0.80 per basic share, compared to $31.7
million or $0.57 per basic share, for the same period in 2012. Adjusted Net
Income to shareholders for the fourth quarter 2013 was $18.5 million or $0.23
per basic share, compared to $23.5 million or $0.39 per basic share, for the
same period in 2012. Kennedy Wilson's U.S. GAAP net loss attributable to
common shareholders for the year end 2013 was $14.5 million, or $0.21 per
basic and diluted share, compared to a loss of $3.9 million, or $0.07 per
basic share and diluted share, for the same period in 2012. U.S. GAAP net loss
attributable to common shareholders for the fourth quarter 2013 was $4.3
million, or $0.05 per basic and diluted share, compared to income of $8.8
million, or $0.15 per basic and diluted share, for the same period in 2012.

"We had a banner year in 2013 continuing our trend of sourcing attractive
investments globally," said William McMorrow, chairman and CEO of Kennedy
Wilson. “We remain well positioned to take advantage of great opportunities in
2014 and beyond."

Kennedy Wilson also announced that it will pay a dividend of $0.09 per share,
a 29% increase from the previous quarter, to common shareholders of record as
of March 31, 2014 with a payment date of April 8, 2014. The quarterly payment
equates to an annual dividend of $0.36 per common share.

Recent Highlights

Balance Sheet

  *The Company's total assets increased $515.0 million or 40% to $1.8 billion
    at December31, 2013 from $1.3 billion at December31, 2012.
  *The Company's total equity increased $300.1 million or 58% to $818.9
    million at December31, 2013 from $518.8 million at December31, 2012.
  *As of December31, 2013, our gross investment account was $1.2 billion,
    compared to $908.9 million as of December31, 2012. Our net investment
    account was $1.1 billion as of December31, 2013 compared to $837.6
    million at December31, 2012, after accumulated depreciation and
    amortization of $135.7 million and $71.3 million, respectively. The change
    in the net investment account was comprised of $535.8 million of cash
    contributed to and income earned on investments offset by $273.1 million
    of cash distributed from investments.

Investments business

Operating metrics

  *During the year end December31, 2013, our investments segment achieved an
    Adjusted EBITDA of $171.8 million, a 94% increase from $88.5 million for
    the same period in 2012.
  *During the year end December31, 2013, based on the Company and its equity
    partner's investments in 11,755 same property multifamily units, rental
    revenues increased 5%, net operating income increased 7% and occupancy
    remained flat at 94% at the property level from the same period in 2012.
    In addition, based on the Company and its equity partner's investments in
    2.9 million square feet of same property commercial real estate, rental
    revenues increased 13%, net operating income increased 17% and occupancy
    increased 5% to 83% at the property level from the same period in 2012.

Acquisition/disposition program

  *During 2013, the Company and its equity partners acquired $2.8 billion of
    real estate related investments including unpaid principal balance ("UPB")
    on loan purchases, in which the Company invested $386.0 million of equity.
    Our investments in 2013 were directed 58% to the United Kingdom and
    Ireland and 42% to the Western U.S. During 2012, the Company and its
    equity partners acquired $2.9 billion of real estate related investments
    including UPB on loan purchases, in which the Company invested $402.3
    million of equity. Our investments in 2012 were directed 69% to Western
    U.S. and 31% to the United Kingdom and Ireland.
  *During the fourth quarter, Kennedy Wilson gained control of certain real
    estate assets, of which the largest was the Ritz Carlton, Lake Tahoe hotel
    investment. As a result of gaining control of the hotel, the Company
    recognized an acquisition-related gain of $45.5 million of which $22.6
    million was allocated to noncontrolling equity partners.
  *During 2013, the Company and its equity partners sold a total of $232.3
    million of real estate, which resulted in a gain on sale of $59.2 million
    (excluding any distributions during the ownership period), of which our
    share was $15.6 million (based on $37.6 million of our equity invested),
    including 17 commercial buildings, 2 multifamily properties and 53 condos.

Services business

  *Management and leasing fees and commissions increased by 28% to $68.1
    million for the year end December31, 2013 from $53.3 million for the same
    period in 2012.
  *During the year end December31, 2013, our services segment achieved an
    Adjusted EBITDA of $27.4 million, a 36% increase from $20.2 million for
    the same period in 2012.
  *In December 2013, the Company and its equity partners acquired a minority
    stake in a real estate and asset management servicing platform in Spain
    from Banco Popular that manages €23.0 billion in assets ($27.2 million of
    our equity invested).

Subsequent events

  *On February 25, 2014, we agreed to acquire £122.0 million (approximately
    $203.0 million) of ordinary shares in the initial public offering of
    Kennedy Wilson Europe Real Estate Plc (“KWE”, LSE:KWE). Our investment
    will consist of £87.0 million (approximately $145.0 million) of cash
    subscription and the contribution of £35.0 million (approximately $58.0
    million) of assets acquired by Kennedy Wilson in the first quarter of
    2014. Our subscription is conditional on KWE's admission to the London
    Stock Exchange ("Admission") which is expected to occur on or around
    February 28, 2014. We will own approximately 13.4% of KWE's total share
    capital immediately following Admission. One of our wholly-owned
    subsidiaries will act as KWE's external manager, in which capacity we will
    be entitled to receive certain management and performance fees. In
    addition, KWE will be provided priority access to all investment
    opportunities sourced by us in Europe.
  *Subsequent to December 31, 2013, the Company and its equity partners have
    acquired $329.6 million of real estate related investments that includes
    1.7 million rentable square feet of real estate comprising 17 commercial
    properties along with $157.4 million of loans secured by real estate. Our
    equity contribution for these investments is approximately $150.0 million
    and represents a 66% ownership. These amounts exclude our investment in
    KWE discussed above.
  *In January 2014, Kennedy Wilson issued and sold 9.2 million shares of
    common stock, resulting in gross proceeds of $197.3 million.

Conference Call and Webcast Details

Kennedy Wilson will hold a live conference call and webcast to discuss results
at 7:00 a.m. PT/ 10:00 a.m. ET on Thursday, February 27.

The direct dial-in number for the conference call is (888) 895-5479 for U.S.
callers and (847) 619-6250 for international callers. The confirmation number
for the live call is 36721281.

A replay of the call will be available for one week beginning two hours after
the live call and can be accessed by (888) 843-7419 for U.S. callers and (630)
652-3042 for international callers. The passcode for the replay is 36721281#.

The webcast will be available at:
http://edge.media-server.com/m/p/urtn8uyz/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 a vertically integrated global 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, on its own
or with partners, invests opportunistically in a variety of real estate
related investments, including commercial, multi-family, loan purchases and
originations, residential, and hotels. Kennedy Wilson offers a comprehensive
array of real estate services including investment management, property
services, auction, conventional sales, brokerage and research. 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 and Section21 of the Securities Exchange Act of 1934, as amended.
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 the 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 end
December31, 2013, as amended by our subsequent filings with the SEC. 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, the Company
has provided certain information, which includes non-GAAP financial measures
(Pro Forma Statements of Operations, Adjusted Net Income Attributable to
Kennedy Wilson Common Shareholders, Basic Adjusted Net Income 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 Kennedy Wilson'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
(Unaudited)
(Dollars in millions, except share amounts)

                                           December 31,
                                               2013            2012
Assets
Cash and cash equivalents                      $ 178.2             $ 120.9
Short term investments                         —                   10.0
Accounts receivable                            5.2                 3.6
Accounts receivable—related parties            11.4                22.4
Notes receivable                               52.7                136.6
Notes receivable—related parties               4.1                 —
Real estate, net of accumulated
depreciation of $15.8 and $7.4 at              668.8               289.4
December 31, 2013 and 2012
Investments in joint ventures ($79.0
and $68.4 carried at fair value as of          751.4               543.2
December 31, 2013 and 2012)
Investments in loan pool                       34.7                95.6
participations
Other assets                                   68.4                38.1
Goodwill                                       23.9               24.0      
Total assets                                   $ 1,798.8          $ 1,283.8 
                                                                   
Liabilities
Accounts payable                               $ 2.6               $ 1.8
Accrued expenses and other liabilities         64.3                29.4
Accrued salaries and benefits                  32.2                25.0
Deferred tax liability                         24.1                22.7
Mortgage loans and notes payable               407.7               236.5
Senior notes payable                           409.0               409.6
Junior subordinated debentures                 40.0               40.0      
Total liabilities                              979.9              765.0     
Equity
Cumulative preferred stock, $0.0001
par value, 1,000,000 shares
authorized, $1,000 per share
liquidation preference:
6.00% Series A, 100,000 shares issued
and outstanding as of December 31,             —                   —
2013 and 2012, mandatorily convertible
on May 19, 2015
6.45% Series B, 32,550 shares issued
and outstanding as of December 31,
2013 and 2012, respectively,                   —                   —
mandatorily convertible on November 3,
2018
Common stock, $0.0001 par value,
125,000,000 shares authorized,
82,592,607 and 64,789,646 shares               —                   —
issued and 82,592,607 and 63,772,598
shares outstanding as of December 31,
2013 and 2012, respectively
Additional paid-in capital                     801.3               512.8
Retained earnings (accumulated                 (42.2     )         (5.9      )
deficit)
Accumulated other comprehensive income         9.2                 12.6
Shares held in treasury                        —                  (9.8      )
Total Kennedy-Wilson Holdings, Inc.            768.3               509.7
shareholders’ equity
Noncontrolling interests                       50.6               9.1       
Total equity                                   818.9              518.8     
Total liabilities and equity                   $ 1,798.8          $ 1,283.8 
                                                                             
                                                                             

Kennedy-Wilson Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
(Dollars in millions, except share amounts and per share data)
                                                       
                            For the Three Months Ended        For the Year Ended
                            December 31,                      December 31,
                            2013           2012             2013           2012
Revenue
Management and              $   12.2         $   11.0         $   54.1         $   40.3
leasing fees
Commissions                 1.8              6.8              14.0             13.0
Rental and other            15.6             4.1              43.0             8.5
income
Sale of real estate         —               1.0             10.1            2.3        
Total revenue               29.6             22.9             121.2            64.1
Operating expenses
Commission and              0.8              0.9              3.6              4.6
marketing expenses
Rental operating            7.0              1.9              18.9             4.5
expenses
Cost of real estate         —                1.0              7.9              2.2
sold
Compensation and            23.9             25.2             76.7             55.8
related expenses
General and                 6.9              5.8              24.6             19.5
administrative
Depreciation and            5.4             2.0             17.4            4.9        
amortization
Total operating             44.0             36.8             149.1            91.5
expenses
Equity in joint             8.8              9.1              29.8             21.5
venture income
Interest income
from loan pool              3.3             2.1             13.5            9.2        
participations and
notes receivable
Operating (loss)            (2.3       )     (2.7       )     15.4             3.3
income
Non-operating
income (expense)
Interest income             0.2              0.4              0.6              2.9
Acquisition-related         45.5             25.5             56.6             25.5
gain
Gain on sale of
marketable                  —                1.4              —                4.3
securities
Acquisition-related         (1.1       )     (0.7       )     (1.6       )     (0.7       )
expenses
Interest expense -          (10.2      )     (6.6       )     (39.9      )     (26.1      )
corporate debt
Interest expense -          (4.4       )     (2.0       )     (11.8      )     (2.5       )
property level debt
Realized foreign
currency                    (2.8       )     —               (2.8       )     —          
translation
Income from
continuing
operations before           24.9             15.3             16.5             6.7
(provision for)
benefit from income
taxes
(Provision for)
benefit from income         (4.3       )     (4.9       )     (2.9       )     0.2        
taxes
Income from
continuing                  20.6             10.4             13.6             6.9
operations
Discontinued
Operations
Loss from
discontinued                —                —                (0.3       )     —
operations, net of
income taxes
Gain (loss) from
sale of real                —               —               0.6             (0.2       )
estate, net of
income taxes
Net income                  20.6             10.4             13.9             6.7
Net (income) loss
attributable to the         (22.9      )     0.4             (20.3      )     (2.5       )
noncontrolling
interests
Net (loss) income
attributable to             (2.3       )     10.8             (6.4       )     4.2
Kennedy-Wilson
Holdings, Inc.
Preferred stock
dividends and               (2.0       )     (2.0       )     (8.1       )     (8.1       )
accretion of
issuance costs
Net (loss) income
attributable to
Kennedy-Wilson              $   (4.3   )     $   8.8         $   (14.5  )     $   (3.9   )
Holdings, Inc.
common shareholders
Basic earnings per
share
Income (loss) per
basic - continuing          $   (0.05  )     $   0.15         $   (0.21  )     $   (0.07  )
operations
Income (loss) per
basic -                     —               —               —               —          
discontinued
Earnings (loss) per         $   (0.05  )     $   0.15        $   (0.21  )     $   (0.07  )
share - basic ^(a)
Weighted average
shares outstanding          79,173,585      60,450,450      71,159,919      55,285,833 
for basic
Diluted earnings
per share
Income (loss) per
diluted -                   $   (0.05  )     $   0.15         $   (0.21  )     $   (0.07  )
continuing
operations
Income (loss) per
diluted -                   —               —               —               —          
discontinued
Earnings per share          $   (0.05  )     $   0.15        $   (0.21  )     $   (0.07  )
- diluted ^(a)
Weighted average
shares outstanding          79,173,585      61,166,123      71,159,919      55,285,833 
for diluted
Dividends declared          $   0.07        $   0.05        $   0.28        $   0.20   
per common share
^(a) EPS amounts may not add due to rounding.



Kennedy-Wilson Holdings, Inc. and Subsidiaries
Adjusted Net Income Attributable to Kennedy Wilson Common Shareholders
(Unaudited)
(Dollars in millions, except share amounts and per share data)
                                                  
                       Three Months Ended                Year Ended
                       December 31,                      December 31,
                       2013           2012             2013           2012
Net (loss)
income
attributable
to                     $   (4.3   )     $   8.8          $   (14.5  )     $    (3.9  )
Kennedy-Wilson
Holdings, Inc.
common
shareholders
Non-GAAP
adjustments:
Add back:
Depreciation
and                    5.4              2.0              17.4             4.9
amortization
Kennedy
Wilson's share
of
depreciation
and                    15.4             9.6              46.7             22.6
amortization
included in
investment in
joint ventures
Share-based            2.0             3.1             7.5             8.1        
compensation
Adjusted Net           $   18.5        $   23.5        $   57.1        $    31.7  
Income
Basic Weighted
Average Number
of Common              79,173,585      60,450,450      71,159,919      55,285,833 
Shares
Outstanding
Basic Adjusted
Net Income Per         $   0.23        $   0.39        $   0.80        $    0.57  
Share
                                                                                     
                                                                                     

Kennedy-Wilson Holdings, Inc. and Subsidiaries
EBITDA and Adjusted EBITDA
(Unaudited)
                                                
                             Three Months Ended        Year Ended
                             December 31,              December 31,
                             2013       2012         2013        2012
Net income                   $ 20.6       $ 10.4       $ 13.9        $ 6.7
Non-GAAP
adjustments:
Add back:
Interest expense -           10.2         6.6          39.9          26.1
corporate debt
Interest expense -           4.4          2.0          11.8          2.5
property level debt
Kennedy Wilson's
share of interest
expense included in          11.6         6.1          45.0          29.5
investment in joint
ventures and loan
pool participations
Depreciation and             5.4          2.0          17.4          4.9
amortization
Kennedy Wilson's
share of
depreciation and
amortization                 15.4         9.6          46.7          22.6
included in
investment in joint
ventures
Provision for
(benefit from)               4.3         4.9         2.9          (0.2    )
income taxes
EBITDA                       71.9         41.6         177.6         92.1
Share-based                  2.0         3.1         7.5          8.1     
compensation
Adjusted EBITDA              $ 73.9      $ 44.7      $ 185.1      $ 100.2 
                                                                             
                                                                             

Contact:

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