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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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26-0508760
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large Accelerated Filer
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o
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Accelerated Filer
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x
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Non-Accelerated Filer
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o
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Smaller Reporting Company
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o
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 1.
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Financial Statements (Unaudited)
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March 31,
2013 |
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December 31,
2012 |
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Assets
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||||
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Cash and cash equivalents
|
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$
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198,448,000
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$
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120,855,000
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Short-term investments
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10,000,000
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10,000,000
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Accounts receivable
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6,747,000
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3,647,000
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Accounts receivable — related parties
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19,027,000
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22,393,000
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Notes receivable
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19,578,000
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136,607,000
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Notes receivable — related parties
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2,544,000
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—
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Real estate, net of accumulated depreciation
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403,612,000
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289,449,000
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Investments in joint ventures ($68,360,000 and $68,363,000 carried at fair value
as of March 31, 2013 and December 31, 2012, respectively) |
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575,256,000
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543,193,000
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Investments in loan pool participations
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84,236,000
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95,601,000
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Other assets
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42,688,000
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38,079,000
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Goodwill
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23,965,000
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23,965,000
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Total assets
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$
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1,386,101,000
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$
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1,283,789,000
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Liabilities and equity
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Liabilities
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Accounts payable
|
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$
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1,114,000
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$
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1,762,000
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Accrued expenses and other liabilities
|
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25,425,000
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29,417,000
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Accrued salaries and benefits
|
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4,664,000
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24,981,000
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Deferred tax liability
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13,931,000
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22,671,000
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Senior notes payable
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409,497,000
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409,640,000
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Mortgage loans payable
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251,135,000
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236,538,000
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Junior subordinated debentures
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40,000,000
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40,000,000
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Total liabilities
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745,766,000
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765,009,000
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Equity
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Cumulative preferred stock, $0.0001 par value: 1,000,000 shares authorized
$1,000 per share liquidation preference: |
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6.00% Series A, 100,000 shares issued and outstanding as of March 31, 2013 and
December 31, 2012, mandatorily convertible on May 19, 2015 |
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—
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—
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6.45% Series B, 32,550 shares issued and outstanding as of March 31, 2013 and
December 31, 2012, mandatorily convertible on November 3, 2018 |
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—
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—
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Common stock, $0.0001 par value, 125,000,000 shares authorized,
73,789,645 and 64,789,646 shares issued and 72,772,598 and 63,772,598 shares outstanding as of March 31, 2013 and December 31, 2012, respectively |
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7,000
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6,000
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Additional paid-in capital
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653,082,000
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512,835,000
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Accumulated deficit
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(14,636,000
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)
|
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(5,910,000
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)
|
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Accumulated other comprehensive income
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1,807,000
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12,569,000
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Common stock held in treasury, at cost, $0.0001 par value, 1,017,048 held at March 31, 2013 and
December 31, 2012, respectively |
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(9,856,000
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)
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(9,856,000
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)
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Total Kennedy-Wilson Holdings, Inc. shareholders' equity
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630,404,000
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509,644,000
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Noncontrolling interests
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9,931,000
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9,136,000
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Total equity
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640,335,000
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518,780,000
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Total liabilities and equity
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$
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1,386,101,000
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$
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1,283,789,000
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Three Months Ended March 31,
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2013
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2012
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Revenue
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Management and leasing fees
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$
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4,709,000
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$
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3,156,000
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Management and leasing fees — related party
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7,957,000
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5,585,000
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Commissions
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524,000
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666,000
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Commissions — related party
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392,000
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953,000
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Sale of real estate
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2,418,000
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—
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Rental income
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6,397,000
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1,470,000
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Total revenue
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22,397,000
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11,830,000
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Operating expenses
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||||
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Commission and marketing expenses
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498,000
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965,000
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Compensation and related expenses
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13,620,000
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9,000,000
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|
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Cost of real estate sold
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1,872,000
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|
—
|
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General and administrative
|
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5,427,000
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3,669,000
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Depreciation and amortization
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3,057,000
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937,000
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Rental operating expenses
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3,103,000
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870,000
|
|
||
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Total operating expenses
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27,577,000
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15,441,000
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|
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Equity in joint venture (loss) income
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(344,000
|
)
|
|
5,516,000
|
|
||
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Interest income from loan pool participations and notes receivable
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|
2,945,000
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|
538,000
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|
||
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Operating (expense) income
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|
(2,579,000
|
)
|
|
2,443,000
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||
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Non-operating income (expense)
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||||
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Interest income
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40,000
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30,000
|
|
||
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Interest income — related party
|
|
—
|
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1,087,000
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||
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Acquisition-related gain
|
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9,459,000
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|
|
—
|
|
||
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Gain on sale of marketable securities
|
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—
|
|
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2,931,000
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|
||
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Realized foreign currency exchange loss
|
|
—
|
|
|
(112,000
|
)
|
||
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Interest expense
|
|
(11,432,000
|
)
|
|
(6,170,000
|
)
|
||
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(Loss) income from continuing operations before benefit from income taxes
|
|
(4,512,000
|
)
|
|
209,000
|
|
||
|
Benefit from income taxes
|
|
1,703,000
|
|
|
1,483,000
|
|
||
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(Loss) income from continuing operations
|
|
(2,809,000
|
)
|
|
1,692,000
|
|
||
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Discontinued operations
|
|
|
|
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||||
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(Loss) income from discontinued operations, net of income taxes
|
|
(3,000
|
)
|
|
2,000
|
|
||
|
Gain (loss) from sale of real estate, net of income taxes
|
|
217,000
|
|
|
(212,000
|
)
|
||
|
Net (loss) income
|
|
(2,595,000
|
)
|
|
1,482,000
|
|
||
|
Net loss (income) attributable to the noncontrolling interests
|
|
999,000
|
|
|
(2,798,000
|
)
|
||
|
Net loss attributable to Kennedy-Wilson Holdings, Inc.
|
|
(1,596,000
|
)
|
|
(1,316,000
|
)
|
||
|
Preferred dividends and accretion of preferred stock issuance costs
|
|
(2,036,000
|
)
|
|
(2,036,000
|
)
|
||
|
Net loss attributable to Kennedy-Wilson Holdings, Inc. common
shareholders |
|
$
|
(3,632,000
|
)
|
|
$
|
(3,352,000
|
)
|
|
Basic and diluted loss per share attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
|
|
|
||||
|
Continuing operations
|
|
$
|
(0.06
|
)
|
|
$
|
(0.06
|
)
|
|
Discontinued operations, net of income taxes
|
|
—
|
|
|
—
|
|
||
|
Earning per share - basic and diluted
(a)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.07
|
)
|
|
Weighted average number of common shares outstanding
|
|
61,853,258
|
|
|
51,160,270
|
|
||
|
Dividends declared per common share
|
|
$
|
0.07
|
|
|
$
|
0.05
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
|
2013
|
|
2012
|
||||
|
|
|
|
|
|
||||
|
Net (loss) income
|
|
$
|
(2,595,000
|
)
|
|
$
|
1,482,000
|
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
||||
|
Unrealized gain on marketable securities
|
|
—
|
|
|
5,463,000
|
|
||
|
Unrealized foreign currency translation loss
|
|
(14,358,000
|
)
|
|
(2,867,000
|
)
|
||
|
Unrealized forward contract, foreign currency gain
|
|
3,596,000
|
|
|
3,988,000
|
|
||
|
Total other comprehensive (loss) income for the period
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|
(10,762,000
|
)
|
|
6,584,000
|
|
||
|
|
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|
||||
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Comprehensive (loss) income
|
|
(13,357,000
|
)
|
|
8,066,000
|
|
||
|
Comprehensive loss (income) attributable to noncontrolling interests
|
|
999,000
|
|
|
(2,798,000
|
)
|
||
|
Comprehensive (loss) income attributable to Kennedy-Wilson Holdings, Inc.
|
|
$
|
(12,358,000
|
)
|
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$
|
5,268,000
|
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|
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Preferred Stock
|
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Retained Earnings (Accumulated Deficit)
|
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Accumulated
Other
Comprehensive
Income
|
|
Treasury Stock
|
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Noncontrolling Interests
|
|
|
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Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
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Total
|
|||||||||||||||||||||||
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Balance at December 31, 2012
|
132,550
|
|
|
$
|
—
|
|
|
63,772,598
|
|
|
$
|
6,000
|
|
|
$
|
512,835,000
|
|
|
$
|
(5,910,000
|
)
|
|
$
|
12,569,000
|
|
|
$
|
(9,856,000
|
)
|
|
$
|
9,136,000
|
|
|
$
|
518,780,000
|
|
|
Issuance of 9,000,000 shares of common stock
|
—
|
|
|
—
|
|
|
9,000,000
|
|
|
1,000
|
|
|
133,801,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
133,802,000
|
|
||||||||
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,435,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,435,000
|
|
||||||||
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Unrealized foreign currency translation
loss, net of tax of $9,575,000 |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,358,000
|
)
|
|
—
|
|
|
—
|
|
|
(14,358,000
|
)
|
||||||||
|
Unrealized forward contract foreign
currency gain, net of tax of $2,396,000 |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,596,000
|
|
|
—
|
|
|
—
|
|
|
3,596,000
|
|
||||||||
|
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,025,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,025,000
|
)
|
||||||||
|
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,094,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,094,000
|
)
|
||||||||
|
Accretion of preferred stock issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,000
|
|
|
(11,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,596,000
|
)
|
|
—
|
|
|
—
|
|
|
(999,000
|
)
|
|
(2,595,000
|
)
|
||||||||
|
Consolidation of noncontrolling interests
(Note 4) |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,812,000
|
|
|
1,812,000
|
|
||||||||
|
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,000
|
)
|
|
(18,000
|
)
|
||||||||
|
Balance at March 31, 2013
|
132,550
|
|
|
$
|
—
|
|
|
72,772,598
|
|
|
$
|
7,000
|
|
|
$
|
653,082,000
|
|
|
$
|
(14,636,000
|
)
|
|
$
|
1,807,000
|
|
|
$
|
(9,856,000
|
)
|
|
$
|
9,931,000
|
|
|
$
|
640,335,000
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
|
2013
|
|
2012
|
||||
|
Cash flows from operating activities:
|
|
|
|
|
||||
|
Net (loss) income
|
|
$
|
(2,595,000
|
)
|
|
$
|
1,482,000
|
|
|
Adjustments to reconcile net (loss) income to net cash used in operating activities:
|
|
|
|
|
||||
|
Net loss (gain) from sale of real estate
|
|
(763,000
|
)
|
|
212,000
|
|
||
|
Acquisition-related gain
|
|
(9,459,000
|
)
|
|
—
|
|
||
|
Gain from sale of marketable securities
|
|
—
|
|
|
(2,931,000
|
)
|
||
|
Depreciation and amortization
|
|
3,057,000
|
|
|
937,000
|
|
||
|
(Benefit from) provision for deferred income taxes
|
|
(1,703,000
|
)
|
|
(84,000
|
)
|
||
|
Amortization of deferred loan costs
|
|
548,000
|
|
|
252,000
|
|
||
|
Amortization of discount and accretion of premium on issuance of the senior notes and mortgage loan payable
|
|
(212,000
|
)
|
|
13,000
|
|
||
|
Equity in joint venture income
|
|
344,000
|
|
|
(5,516,000
|
)
|
||
|
Accretion of interest income on loan pool participations and notes receivable
|
|
(2,560,000
|
)
|
|
(538,000
|
)
|
||
|
Operating distributions from joint ventures
|
|
6,116,000
|
|
|
12,749,000
|
|
||
|
Operating distributions from loan pool participation
|
|
2,328,000
|
|
|
1,151,000
|
|
||
|
Stock-based compensation
|
|
1,769,000
|
|
|
871,000
|
|
||
|
Change in assets and liabilities:
|
|
|
|
|
||||
|
Accounts receivable
|
|
(3,042,000
|
)
|
|
(421,000
|
)
|
||
|
Accounts receivable—related parties
|
|
3,366,000
|
|
|
(3,925,000
|
)
|
||
|
Other assets
|
|
(2,044,000
|
)
|
|
110,000
|
|
||
|
Accounts payable
|
|
(648,000
|
)
|
|
(801,000
|
)
|
||
|
Accrued expenses and other liabilities
|
|
(6,416,000
|
)
|
|
2,681,000
|
|
||
|
Accrued salaries and benefits
|
|
(15,651,000
|
)
|
|
(12,277,000
|
)
|
||
|
Net cash used in operating activities
|
|
(27,565,000
|
)
|
|
(6,035,000
|
)
|
||
|
Cash flows from investing activities:
|
|
|
|
|
||||
|
Additions to notes receivable
|
|
(5,700,000
|
)
|
|
(61,000
|
)
|
||
|
Additions to notes receivable—related parties
|
|
(2,544,000
|
)
|
|
(1,561,000
|
)
|
||
|
Net proceeds from sale of real estate
|
|
3,410,000
|
|
|
17,905,000
|
|
||
|
Purchases of and additions to real estate
|
|
(15,607,000
|
)
|
|
(15,414,000
|
)
|
||
|
Proceeds from sale of interest in an entity
|
|
26,739,000
|
|
|
—
|
|
||
|
Proceeds from sale of marketable securities
|
|
—
|
|
|
21,386,000
|
|
||
|
Distributions from joint ventures
|
|
15,013,000
|
|
|
4,598,000
|
|
||
|
Contributions to joint ventures
|
|
(45,928,000
|
)
|
|
(5,318,000
|
)
|
||
|
Distributions from loan pool participations
|
|
13,829,000
|
|
|
—
|
|
||
|
Contributions to loan pool participations
|
|
(6,152,000
|
)
|
|
—
|
|
||
|
Net cash (used in) provided by investing activities
|
|
(16,940,000
|
)
|
|
21,535,000
|
|
||
|
Cash flows from financing activities:
|
|
|
|
|
||||
|
Borrowings under line of credit
|
|
35,000,000
|
|
|
—
|
|
||
|
Repayment of line of credit
|
|
(35,000,000
|
)
|
|
—
|
|
||
|
Repayment of mortgage loans payable
|
|
(121,000
|
)
|
|
—
|
|
||
|
Debt issue costs
|
|
(356,000
|
)
|
|
—
|
|
||
|
Issuance of common stock
|
|
133,802,000
|
|
|
—
|
|
||
|
Repurchase of common stock
|
|
—
|
|
|
(41,000
|
)
|
||
|
Dividends paid
|
|
(7,119,000
|
)
|
|
(4,098,000
|
)
|
||
|
Distributions to noncontrolling interests
|
|
(18,000
|
)
|
|
(4,931,000
|
)
|
||
|
Net cash provided by (used in) financing activities
|
|
126,188,000
|
|
|
(9,070,000
|
)
|
||
|
Effect of currency exchange rate changes on cash and cash equivalents
|
|
(4,090,000
|
)
|
|
(39,000
|
)
|
||
|
Net change in cash and cash equivalents
|
|
77,593,000
|
|
|
6,391,000
|
|
||
|
Cash and cash equivalents, beginning of period
|
|
120,855,000
|
|
|
115,926,000
|
|
||
|
Cash and cash equivalents, end of period
|
|
$
|
198,448,000
|
|
|
$
|
122,317,000
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
|
2013
|
|
2012
|
||||
|
Cash paid for:
|
|
|
|
|
||||
|
Interest
(1)
|
|
$
|
18,653,000
|
|
|
$
|
1,367,000
|
|
|
Interest capitalized
|
|
457,000
|
|
|
962,000
|
|
||
|
Income taxes
|
|
—
|
|
|
50,000
|
|
||
|
|
|
Three Months Ended March 31,
|
||||||
|
|
|
2013
|
|
2012
|
||||
|
|
|
|
|
|
||||
|
Unrealized gain (loss) on marketable securities, net of tax
|
|
$
|
—
|
|
|
$
|
(5,463,000
|
)
|
|
Accretion of preferred stock issuance costs
|
|
11,000
|
|
|
11,000
|
|
||
|
Dividends declared on common stock
|
|
—
|
|
|
2,591,000
|
|
||
|
|
|
Cumulative earnings method
|
|
Look-through method
|
||||
|
|
|
|
|
|
||||
|
Operating Cash Flows:
|
|
|
|
|
||||
|
Operating distributions from joint ventures
|
|
$
|
6,886,000
|
|
|
$
|
12,749,000
|
|
|
Net cash used in operating activities
|
|
(11,898,000
|
)
|
|
(6,035,000
|
)
|
||
|
|
|
|
|
|
||||
|
Investing Cash Flows:
|
|
|
|
|
||||
|
Investing distributions from joint ventures
|
|
10,461,000
|
|
|
4,598,000
|
|
||
|
Net cash provided by investing activities
|
|
27,398,000
|
|
|
21,535,000
|
|
||
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
|
2013
|
|
2012
|
||||
|
Note receivable, variable interest rate of 5.00% over LIBOR, interest only,
due December 2016, secured by a shopping center and 107 residential units in the United Kingdom |
|
$
|
—
|
|
|
$
|
122,770,000
|
|
|
Note receivable, fixed interest rate of 2.16%, due February 2017, secured by an
office building in San Diego, CA |
|
5,741,000
|
|
|
—
|
|
||
|
Note receivable, fixed interest rate of 10.75%, interest only, due April 2013,
secured by a hotel in San Diego, California (1) |
|
4,275,000
|
|
|
4,275,000
|
|
||
|
Note receivable, fixed interest rate of 10.50%, interest only, due December 2013,
secured by two office/research and development buildings in San Jose, CA |
|
3,759,000
|
|
|
3,759,000
|
|
||
|
Note receivable, fixed interest rate of 11.50%, interest only, due November 2013,
secured by 25 acres of land and an adjacent 204-slip marina in Portland, OR |
|
3,000,000
|
|
|
3,000,000
|
|
||
|
Note receivable, fixed interest rate of 4%, interest only, due June 2017
|
|
1,193,000
|
|
|
1,193,000
|
|
||
|
Note receivable, fixed interest rate of 8%, interest only, due May 2013,
secured by personal guarantees of borrowers |
|
900,000
|
|
|
900,000
|
|
||
|
Other
|
|
710,000
|
|
|
710,000
|
|
||
|
Notes receivable
|
|
19,578,000
|
|
|
136,607,000
|
|
||
|
Note receivable from a joint venture investment, fixed interest rate of 12%, principal
and accrued interest due August 31, 2016. |
|
2,544,000
|
|
|
—
|
|
||
|
Notes receivable — related parties
|
|
2,544,000
|
|
|
—
|
|
||
|
Notes receivable and notes receivable — related parties
|
|
$
|
22,122,000
|
|
|
$
|
136,607,000
|
|
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
|
2013
|
|
2012
|
||||
|
Land
|
|
$
|
128,434,000
|
|
|
$
|
99,595,000
|
|
|
Buildings
|
|
278,842,000
|
|
|
193,302,000
|
|
||
|
Building improvements
|
|
5,000,000
|
|
|
3,964,000
|
|
||
|
|
|
412,276,000
|
|
|
296,861,000
|
|
||
|
Less accumulated depreciation
|
|
(8,664,000
|
)
|
|
(7,412,000
|
)
|
||
|
Real estate, net
|
|
$
|
403,612,000
|
|
|
$
|
289,449,000
|
|
|
|
|
Unaudited
|
||||||
|
|
|
Three months ended March 31,
|
||||||
|
Dollars in thousands, except for per share data
|
|
2013
|
|
2012
|
||||
|
Pro forma revenues
|
|
$
|
25,253
|
|
|
$
|
14,338
|
|
|
Pro forma net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
(3,372
|
)
|
|
(3,138
|
)
|
||
|
Pro forma net loss per share:
|
|
|
|
|
||||
|
Basic and diluted
|
|
$
|
(0.05
|
)
|
|
$
|
(0.06
|
)
|
|
|
Multifamily
|
Commercial
|
Loan
|
Residential
|
Other
|
Total
|
||||||||||||
|
West Coast of United States
|
$
|
125,567,000
|
|
$
|
136,967,000
|
|
$
|
42,495,000
|
|
$
|
57,652,000
|
|
$
|
460,000
|
|
$
|
363,141,000
|
|
|
Japan
|
83,682,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
83,682,000
|
|
||||||
|
United Kingdom
|
—
|
|
19,204,000
|
|
31,075,000
|
|
—
|
|
—
|
|
50,279,000
|
|
||||||
|
Ireland
|
21,538,000
|
|
8,941,000
|
|
36,200,000
|
|
—
|
|
—
|
|
66,679,000
|
|
||||||
|
Other
|
357,000
|
|
3,310,000
|
|
19,000
|
|
219,000
|
|
7,570,000
|
|
11,475,000
|
|
||||||
|
Total
|
$
|
231,144,000
|
|
$
|
168,422,000
|
|
$
|
109,789,000
|
|
$
|
57,871,000
|
|
$
|
8,030,000
|
|
$
|
575,256,000
|
|
|
|
Multifamily
|
Commercial
|
Loan
|
Residential
|
Other
|
Total
|
||||||||||||
|
West Coast of United States
|
$
|
126,860,000
|
|
$
|
141,572,000
|
|
$
|
41,855,000
|
|
$
|
51,784,000
|
|
$
|
460,000
|
|
$
|
362,531,000
|
|
|
Japan
|
102,658,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
102,658,000
|
|
||||||
|
Ireland
|
22,359,000
|
|
9,530,000
|
|
36,729,000
|
|
—
|
|
—
|
|
68,618,000
|
|
||||||
|
Other
|
356,000
|
|
3,518,000
|
|
20,000
|
|
222,000
|
|
5,270,000
|
|
9,386,000
|
|
||||||
|
Total
|
$
|
252,233,000
|
|
$
|
154,620,000
|
|
$
|
78,604,000
|
|
$
|
52,006,000
|
|
$
|
5,730,000
|
|
$
|
543,193,000
|
|
|
|
|
|
|
Kennedy Wilson Ownership
|
|
Unpaid Principal Balance
|
|
Kennedy Wilson Initial Equity Invested
|
|
Investment Balance at March 31, 2013
|
|
Expected Accretion Over Total Estimated Collection Period
|
|
|
||||||||||||||
|
Acquisition Date
|
|
Location
|
|
|
Initial
|
|
March 31, 2013
|
|
|
|
|
Accreted to Date
|
||||||||||||||||
|
February 2010
|
|
Western U.S.
|
|
15.0%
|
|
$
|
342,395,000
|
|
|
$
|
20,282,000
|
|
|
$
|
11,154,000
|
|
|
$
|
2,304,000
|
|
|
$
|
4,586,000
|
|
|
$
|
4,565,000
|
|
|
December 2011
|
|
United Kingdom
|
|
12.5%
|
|
2,111,326,000
|
|
|
417,436,000
|
|
|
61,200,000
|
|
|
58,309,000
|
|
|
22,740,000
|
|
|
11,478,000
|
|
||||||
|
April 2012
|
|
Western U.S.
|
|
75.0%
|
|
43,383,000
|
|
|
7,448,000
|
|
|
30,900,000
|
|
|
5,853,000
|
|
|
3,431,000
|
|
|
3,209,000
|
|
||||||
|
August 2012
|
|
Ireland
|
|
10.0%
|
|
477,169,000
|
|
|
416,688,000
|
|
|
7,032,000
|
|
|
7,353,000
|
|
|
605,000
|
|
|
103,000
|
|
||||||
|
December 2012
|
|
United Kingdom
|
|
50.0%
|
|
232,254,000
|
|
|
218,398,000
|
|
|
16,012,000
|
|
|
10,417,000
|
|
|
1,879,000
|
|
|
201,000
|
|
||||||
|
|
|
|
|
|
|
$
|
3,206,527,000
|
|
|
$
|
1,080,252,000
|
|
|
$
|
126,298,000
|
|
|
$
|
84,236,000
|
|
|
$
|
33,241,000
|
|
|
$
|
19,556,000
|
|
|
|
|
|
|
Three Months Ended March 31, 2013
|
|
Three Months Ended March 31, 2012
|
||||||||||||
|
|
|
|
|
|
|
Foreign
|
|
|
|
Foreign
|
||||||||
|
|
|
|
|
Interest
|
|
Currency
|
|
Interest
|
|
Currency
|
||||||||
|
Acquisition
|
|
|
|
Income
|
|
Translation Gain
|
|
Income
|
|
Translation Gain
|
||||||||
|
Date
|
|
Location
|
|
Recognized
|
|
(Loss)
|
|
Recognized
|
|
(Loss)
|
||||||||
|
February 2010
(1)
|
|
Western U.S.
|
|
$
|
(183,000
|
)
|
|
$
|
—
|
|
|
$
|
(1,947,000
|
)
|
|
$
|
—
|
|
|
December 2010
(2)
|
|
Western U.S.
|
|
150,000
|
|
|
—
|
|
|
267,000
|
|
|
—
|
|
||||
|
December 2011
|
|
United Kingdom
|
|
2,033,000
|
|
|
(3,041,000
|
)
|
|
1,864,000
|
|
|
2,050,000
|
|
||||
|
November 2011
|
|
Western U.S.
|
|
—
|
|
|
—
|
|
|
145,000
|
|
|
—
|
|
||||
|
April 2012
|
|
Western U.S.
|
|
311,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
August 2012
|
|
Ireland
|
|
105,000
|
|
|
(222,000
|
)
|
|
—
|
|
|
—
|
|
||||
|
December 2012
|
|
United Kingdom
|
|
103,000
|
|
|
(616,000
|
)
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
$
|
2,519,000
|
|
|
$
|
(3,879,000
|
)
|
|
$
|
329,000
|
|
|
$
|
2,050,000
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
Short-term investments
|
$
|
—
|
|
|
$
|
10,000,000
|
|
|
$
|
—
|
|
|
$
|
10,000,000
|
|
|
Investment in joint ventures
|
—
|
|
|
—
|
|
|
68,360,000
|
|
|
68,360,000
|
|
||||
|
Currency forward contract
|
—
|
|
|
(862,000
|
)
|
|
—
|
|
|
(862,000
|
)
|
||||
|
|
$
|
—
|
|
|
$
|
9,138,000
|
|
|
$
|
68,360,000
|
|
|
$
|
77,498,000
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
Short-term investments
|
$
|
—
|
|
|
$
|
10,000,000
|
|
|
$
|
—
|
|
|
$
|
10,000,000
|
|
|
Investments in joint ventures
|
—
|
|
|
—
|
|
|
68,363,000
|
|
|
68,363,000
|
|
||||
|
Currency forward contract
|
—
|
|
|
(1,188,000
|
)
|
|
—
|
|
|
(1,188,000
|
)
|
||||
|
|
$
|
—
|
|
|
$
|
8,812,000
|
|
|
$
|
68,363,000
|
|
|
$
|
77,175,000
|
|
|
|
March 31, 2013
|
|
December 31, 2012
|
||||
|
Funds
|
$
|
25,792,000
|
|
|
$
|
25,795,000
|
|
|
FV Option
|
42,568,000
|
|
|
42,568,000
|
|
||
|
|
$
|
68,360,000
|
|
|
$
|
68,363,000
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2013
|
|
2012
|
||||
|
Beginning balance
|
$
|
68,363,000
|
|
|
$
|
51,382,000
|
|
|
Unrealized and realized gains
|
—
|
|
|
—
|
|
||
|
Unrealized and realized losses
|
—
|
|
|
(32,000
|
)
|
||
|
Contributions
|
212,000
|
|
|
31,000
|
|
||
|
Distributions
|
(215,000
|
)
|
|
(242,000
|
)
|
||
|
Ending balance
|
$
|
68,360,000
|
|
|
$
|
51,139,000
|
|
|
|
|
Estimated Rates Used for
|
||
|
|
|
Capitalization rates
|
|
Discount Rates
|
|
Multifamily
|
|
5.75% - 7.00%
|
|
7.50% - 9.00%
|
|
Commercial
|
|
6.25% - 7.50%
|
|
7.50% - 9.75%
|
|
Retail
|
|
8.00%
|
|
9.00% - 12.00%
|
|
Land and condominium units
|
|
n/a
|
|
8.00% - 12.00%
|
|
Loan
|
|
n/a
|
|
2.00% - 9.30%
|
|
|
March 31, 2013
|
|
December 31, 2012
|
||||
|
Office furniture and equipment, net of accumulated depreciation of $1,348,000 and $1,240,000 at March 31, 2013 and December 31, 2012, respectively
|
$
|
2,975,000
|
|
|
$
|
2,841,000
|
|
|
Prepaid expenses
|
8,013,000
|
|
|
5,330,000
|
|
||
|
Loan fees, net of accumulated amortization of $3,030,000 and $2,413,000 at
March 31, 2013 and December 31, 2012, respectively |
13,508,000
|
|
|
14,508,000
|
|
||
|
Acquired in-place leases, net of accumulated amortization of $4,585,000 and $3,086,000 at
March 31, 2013 and December 31, 2012, respectively |
8,987,000
|
|
|
9,311,000
|
|
||
|
Deposits and other, net of accumulated amortization of $294,000 and
$230,000 at March 31, 2013 and December 31, 2012, respectively |
9,205,000
|
|
|
6,089,000
|
|
||
|
Other Assets
|
$
|
42,688,000
|
|
|
$
|
38,079,000
|
|
|
|
|
|
March 31, 2013
|
|
December 31, 2012
|
||||||||||||||||
|
|
|
|
|
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
|
$
|
55,000,000
|
|
$
|
—
|
|
$
|
55,000,000
|
|
|
$
|
55,000,000
|
|
$
|
—
|
|
$
|
55,000,000
|
|
|
2019 Notes
|
8.75%
|
4/1/2019
|
350,000,000
|
|
4,497,000
|
|
354,497,000
|
|
|
350,000,000
|
|
4,640,000
|
|
354,640,000
|
|
||||||
|
Senior notes
|
|
|
$
|
405,000,000
|
|
$
|
4,497,000
|
|
$
|
409,497,000
|
|
|
$
|
405,000,000
|
|
$
|
4,640,000
|
|
$
|
409,640,000
|
|
|
|
|
|
|
Carrying Amount of Mortgage Notes as of
(1)
|
||||||
|
Types of Property Pledged as Collateral
|
|
Region
|
|
March 31,
2013 |
|
December 31,
2012 |
||||
|
Notes receivable
|
|
United Kingdom
|
|
$
|
—
|
|
|
$
|
78,705,000
|
|
|
Multi family properties
(1)
|
|
Western U.S.
|
|
190,951,000
|
|
|
97,649,000
|
|
||
|
Commercial buildings
|
|
Western U.S.
|
|
54,296,000
|
|
|
54,296,000
|
|
||
|
Total mortgage loans payable
|
|
|
|
245,247,000
|
|
|
230,650,000
|
|
||
|
|
|
|
|
|
|
|
||||
|
Notes payable
|
|
|
|
5,888,000
|
|
|
5,888,000
|
|
||
|
Total notes payable
|
|
|
|
5,888,000
|
|
|
5,888,000
|
|
||
|
|
|
|
|
|
|
|
||||
|
Mortgage and notes payable
(2)
|
|
|
|
$
|
251,135,000
|
|
|
$
|
236,538,000
|
|
|
2013
|
|
$
|
13,612,000
|
|
|
2014
|
|
9,994,000
|
|
|
|
2015
|
|
4,551,000
|
|
|
|
2016
|
|
16,694,000
|
|
|
|
2017
|
|
30,022,000
|
|
|
|
Thereafter
|
|
170,364,000
|
|
|
|
|
|
245,237,000
|
|
|
|
Debt premium
|
|
5,898,000
|
|
|
|
|
|
$
|
251,135,000
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
|
2013
|
|
2012
|
||||
|
Management and leasing fees
|
|
$
|
7,957,000
|
|
|
$
|
5,585,000
|
|
|
Commissions
|
|
392,000
|
|
|
953,000
|
|
||
|
Related party revenue
|
|
$
|
8,349,000
|
|
|
$
|
6,538,000
|
|
|
|
|
Three Months Ended March 31, 2013
|
|
Three Months Ended March 31, 2012
|
||||||||||||
|
|
|
Declared
|
|
Paid
|
|
Declared
|
|
Paid
|
||||||||
|
Preferred Stock
|
|
|
|
|
|
|
|
|
||||||||
|
Series A
|
|
$
|
1,500,000
|
|
|
$
|
1,500,000
|
|
|
$
|
1,500,000
|
|
|
$
|
1,500,000
|
|
|
Series B
|
|
525,000
|
|
|
525,000
|
|
|
525,000
|
|
|
525,000
|
|
||||
|
Total Preferred Stock
|
|
2,025,000
|
|
|
2,025,000
|
|
|
2,025,000
|
|
|
2,025,000
|
|
||||
|
Common Stock
|
|
5,094,000
|
|
|
5,094,000
|
|
|
2,591,000
|
|
|
2,073,000
|
|
||||
|
Total
(1)
|
|
$
|
7,119,000
|
|
|
$
|
7,119,000
|
|
|
$
|
4,616,000
|
|
|
$
|
4,098,000
|
|
|
|
|
Foreign Currency Translation
|
|
Forward Contract Foreign Currency
|
|
Total Accumulated Other Comprehensive Income
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Balance at December 31, 2012
|
|
$
|
10,800,000
|
|
|
$
|
1,769,000
|
|
|
$
|
12,569,000
|
|
|
Unrealized (losses) gains, arising during the period
|
|
(23,933,000
|
)
|
|
5,992,000
|
|
|
(17,941,000
|
)
|
|||
|
Taxes on unrealized (losses) gains, arising during the period
|
|
9,575,000
|
|
|
(2,396,000
|
)
|
|
7,179,000
|
|
|||
|
Balance at March 31, 2013
|
|
$
|
(3,558,000
|
)
|
|
$
|
5,365,000
|
|
|
$
|
1,807,000
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
|
2013
|
|
2012
|
||||
|
Investments
|
|
|
|
|
||||
|
Sale of real estate
|
|
$
|
2,418,000
|
|
|
$
|
—
|
|
|
Rental income
|
|
6,397,000
|
|
|
1,470,000
|
|
||
|
Total revenue
|
|
8,815,000
|
|
|
1,470,000
|
|
||
|
Operating expenses
|
|
12,564,000
|
|
|
4,693,000
|
|
||
|
Depreciation and amortization
|
|
2,796,000
|
|
|
822,000
|
|
||
|
Total operating expenses
|
|
15,360,000
|
|
|
5,515,000
|
|
||
|
Equity in joint venture (loss) income
|
|
(344,000
|
)
|
|
5,516,000
|
|
||
|
Interest income from loan pool participations and notes receivable
|
|
2,945,000
|
|
|
538,000
|
|
||
|
Operating (loss) income
|
|
(3,944,000
|
)
|
|
2,009,000
|
|
||
|
Acquisition-related gain
|
|
9,459,000
|
|
|
—
|
|
||
|
Gain on sale of marketable securities
|
|
—
|
|
|
2,931,000
|
|
||
|
Realized foreign currency exchange loss
|
|
—
|
|
|
(112,000
|
)
|
||
|
Interest income - related party
|
|
—
|
|
|
1,087,000
|
|
||
|
Interest expense
|
|
(1,742,000
|
)
|
|
(158,000
|
)
|
||
|
Income from continuing operations
|
|
3,773,000
|
|
|
5,757,000
|
|
||
|
Discontinued Operations
|
|
|
|
|
||||
|
(Loss) income from discontinued operations, net of income taxes
|
|
(3,000
|
)
|
|
2,000
|
|
||
|
Gain (loss) from sale of real estate, net of income taxes
|
|
217,000
|
|
|
(212,000
|
)
|
||
|
Income before benefit from income taxes
|
|
$
|
3,987,000
|
|
|
$
|
5,547,000
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
|
2013
|
|
2012
|
||||
|
Services
|
|
|
|
|
||||
|
Management and leasing fees and commissions
|
|
$
|
5,233,000
|
|
|
$
|
3,822,000
|
|
|
Management and leasing fees and commissions - related party
|
|
8,349,000
|
|
|
6,538,000
|
|
||
|
Total revenue
|
|
13,582,000
|
|
|
10,360,000
|
|
||
|
Operating expenses
|
|
8,366,000
|
|
|
7,604,000
|
|
||
|
Depreciation and amortization
|
|
120,000
|
|
|
33,000
|
|
||
|
Total operating expenses
|
|
8,486,000
|
|
|
7,637,000
|
|
||
|
Operating income
|
|
5,096,000
|
|
|
2,723,000
|
|
||
|
Income before benefit from income taxes
|
|
$
|
5,096,000
|
|
|
$
|
2,723,000
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
|
2013
|
|
2012
|
||||
|
Corporate
|
|
|
|
|
||||
|
Operating expenses
|
|
$
|
3,590,000
|
|
|
$
|
2,207,000
|
|
|
Depreciation and amortization
|
|
141,000
|
|
|
82,000
|
|
||
|
Total operating expenses
|
|
3,731,000
|
|
|
2,289,000
|
|
||
|
Operating loss
|
|
(3,731,000
|
)
|
|
(2,289,000
|
)
|
||
|
Interest income
|
|
40,000
|
|
|
30,000
|
|
||
|
Interest expense
|
|
(9,690,000
|
)
|
|
(6,012,000
|
)
|
||
|
Loss before benefit from income taxes
|
|
(13,381,000
|
)
|
|
(8,271,000
|
)
|
||
|
Benefit from income taxes
|
|
1,703,000
|
|
|
1,483,000
|
|
||
|
Net loss
|
|
$
|
(11,678,000
|
)
|
|
$
|
(6,788,000
|
)
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
|
2013
|
|
2012
|
||||
|
Consolidated
|
|
|
|
|
||||
|
Management fees and commissions
|
|
$
|
5,233,000
|
|
|
$
|
3,822,000
|
|
|
Management fees and commissions - related party
|
|
8,349,000
|
|
|
6,538,000
|
|
||
|
Sale of real estate
|
|
2,418,000
|
|
|
—
|
|
||
|
Rental and other income
|
|
6,397,000
|
|
|
1,470,000
|
|
||
|
Total revenue
|
|
22,397,000
|
|
|
11,830,000
|
|
||
|
Operating expenses
|
|
24,520,000
|
|
|
14,504,000
|
|
||
|
Depreciation and amortization
|
|
3,057,000
|
|
|
937,000
|
|
||
|
Total operating expenses
|
|
27,577,000
|
|
|
15,441,000
|
|
||
|
Equity in joint venture (loss) income
|
|
(344,000
|
)
|
|
5,516,000
|
|
||
|
Interest income from loan pool participations and notes receivable
|
|
2,945,000
|
|
|
538,000
|
|
||
|
Operating (loss) income
|
|
(2,579,000
|
)
|
|
2,443,000
|
|
||
|
Interest income
|
|
40,000
|
|
|
30,000
|
|
||
|
Interest income - related party
|
|
—
|
|
|
1,087,000
|
|
||
|
Acquisition-related gain
|
|
9,459,000
|
|
|
—
|
|
||
|
Gain on sale of marketable securities
|
|
—
|
|
|
2,931,000
|
|
||
|
Realized foreign currency exchange loss
|
|
—
|
|
|
(112,000
|
)
|
||
|
Interest expense
|
|
(11,432,000
|
)
|
|
(6,170,000
|
)
|
||
|
(Loss) income from continuing operations before benefit from income taxes
|
|
(4,512,000
|
)
|
|
209,000
|
|
||
|
Benefit from income taxes
|
|
1,703,000
|
|
|
1,483,000
|
|
||
|
(Loss) income from continuing operations
|
|
(2,809,000
|
)
|
|
1,692,000
|
|
||
|
Discontinued Operations
|
|
|
|
|
||||
|
(Loss) income from discontinued operations, net of income taxes
|
|
(3,000
|
)
|
|
2,000
|
|
||
|
Gain (loss) from sale of real estate, net of income taxes
|
|
217,000
|
|
|
(212,000
|
)
|
||
|
Net (loss) income
|
|
$
|
(2,595,000
|
)
|
|
$
|
1,482,000
|
|
|
|
|
March 31, 2013
|
|
December 31, 2012
|
||||
|
Total Assets
|
|
|
|
|
||||
|
Investments
|
|
$
|
1,095,839,000
|
|
|
$
|
1,070,607,000
|
|
|
Services
|
|
86,038,000
|
|
|
105,370,000
|
|
||
|
Corporate
|
|
204,224,000
|
|
|
107,812,000
|
|
||
|
Total assets
|
|
$
|
1,386,101,000
|
|
|
$
|
1,283,789,000
|
|
|
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF MARCH 31, 2013
|
||||||||||||||||||||||||
|
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Cash and cash equivalents
|
|
$
|
127,007,000
|
|
|
$
|
30,894,000
|
|
|
$
|
23,177,000
|
|
|
$
|
17,370,000
|
|
|
$
|
—
|
|
|
$
|
198,448,000
|
|
|
Short-term investments
|
|
—
|
|
|
10,000,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000,000
|
|
||||||
|
Accounts receivable
|
|
—
|
|
|
910,000
|
|
|
3,164,000
|
|
|
2,673,000
|
|
|
—
|
|
|
6,747,000
|
|
||||||
|
Accounts receivable — related parties
|
|
—
|
|
|
176,000
|
|
|
3,016,000
|
|
|
15,835,000
|
|
|
—
|
|
|
19,027,000
|
|
||||||
|
Intercompany receivables
|
|
—
|
|
|
4,534,000
|
|
|
—
|
|
|
1,084,000
|
|
|
(5,618,000
|
)
|
|
—
|
|
||||||
|
Notes receivable
|
|
—
|
|
|
1,902,000
|
|
|
16,776,000
|
|
|
900,000
|
|
|
—
|
|
|
19,578,000
|
|
||||||
|
Notes receivable - related parties
|
|
—
|
|
|
—
|
|
|
2,544,000
|
|
|
—
|
|
|
—
|
|
|
2,544,000
|
|
||||||
|
Intercompany loans receivable
|
|
—
|
|
|
42,027,000
|
|
|
—
|
|
|
—
|
|
|
(42,027,000
|
)
|
|
—
|
|
||||||
|
Real estate, net of accumulated depreciation
|
|
—
|
|
|
—
|
|
|
107,666,000
|
|
|
295,946,000
|
|
|
—
|
|
|
403,612,000
|
|
||||||
|
Investments in joint ventures
|
|
—
|
|
|
7,970,000
|
|
|
463,501,000
|
|
|
103,785,000
|
|
|
—
|
|
|
575,256,000
|
|
||||||
|
Investments in and advances to consolidated subsidiaries
|
|
503,524,000
|
|
|
861,558,000
|
|
|
172,906,000
|
|
|
—
|
|
|
(1,537,988,000
|
)
|
|
—
|
|
||||||
|
Investments in loan pool participations
|
|
—
|
|
|
—
|
|
|
84,236,000
|
|
|
—
|
|
|
—
|
|
|
84,236,000
|
|
||||||
|
Other assets
|
|
231,000
|
|
|
16,979,000
|
|
|
11,401,000
|
|
|
14,077,000
|
|
|
—
|
|
|
42,688,000
|
|
||||||
|
Goodwill
|
|
—
|
|
|
—
|
|
|
17,216,000
|
|
|
6,749,000
|
|
|
—
|
|
|
23,965,000
|
|
||||||
|
Total assets
|
|
$
|
630,762,000
|
|
|
$
|
976,950,000
|
|
|
$
|
905,603,000
|
|
|
$
|
458,419,000
|
|
|
$
|
(1,585,633,000
|
)
|
|
$
|
1,386,101,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Accounts payable
|
|
$
|
—
|
|
|
$
|
332,000
|
|
|
$
|
224,000
|
|
|
$
|
558,000
|
|
|
$
|
—
|
|
|
$
|
1,114,000
|
|
|
Accrued expenses and other liabilities
|
|
358,000
|
|
|
6,377,000
|
|
|
7,999,000
|
|
|
10,691,000
|
|
|
—
|
|
|
25,425,000
|
|
||||||
|
Intercompany payables
|
|
—
|
|
|
1,084,000
|
|
|
—
|
|
|
4,534,000
|
|
|
(5,618,000
|
)
|
|
—
|
|
||||||
|
Accrued salaries and benefits
|
|
—
|
|
|
2,703,000
|
|
|
1,186,000
|
|
|
775,000
|
|
|
—
|
|
|
4,664,000
|
|
||||||
|
Deferred tax liability
|
|
—
|
|
|
13,433,000
|
|
|
1,245,000
|
|
|
(747,000
|
)
|
|
—
|
|
|
13,931,000
|
|
||||||
|
Senior notes payable
|
|
—
|
|
|
409,497,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
409,497,000
|
|
||||||
|
Intercompany loans payable
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,027,000
|
|
|
(42,027,000
|
)
|
|
—
|
|
||||||
|
Mortgage loans payable
|
|
—
|
|
|
—
|
|
|
33,391,000
|
|
|
217,744,000
|
|
|
—
|
|
|
251,135,000
|
|
||||||
|
Junior subordinated debentures
|
|
—
|
|
|
40,000,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40,000,000
|
|
||||||
|
Total liabilities
|
|
358,000
|
|
|
473,426,000
|
|
|
44,045,000
|
|
|
275,582,000
|
|
|
(47,645,000
|
)
|
|
745,766,000
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Kennedy-Wilson Holdings, Inc. shareholders' equity
|
|
630,404,000
|
|
|
503,524,000
|
|
|
861,558,000
|
|
|
172,906,000
|
|
|
(1,537,988,000
|
)
|
|
630,404,000
|
|
||||||
|
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,931,000
|
|
|
—
|
|
|
9,931,000
|
|
||||||
|
Total equity
|
|
630,404,000
|
|
|
503,524,000
|
|
|
861,558,000
|
|
|
182,837,000
|
|
|
(1,537,988,000
|
)
|
|
640,335,000
|
|
||||||
|
Total liabilities and equity
|
|
$
|
630,762,000
|
|
|
$
|
976,950,000
|
|
|
$
|
905,603,000
|
|
|
$
|
458,419,000
|
|
|
$
|
(1,585,633,000
|
)
|
|
$
|
1,386,101,000
|
|
|
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2012
|
||||||||||||||||||||||||
|
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
64,517,000
|
|
|
$
|
38,489,000
|
|
|
$
|
17,849,000
|
|
|
$
|
—
|
|
|
$
|
120,855,000
|
|
|
Short-term investments
|
|
—
|
|
|
10,000,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000,000
|
|
||||||
|
Accounts receivable
|
|
—
|
|
|
377,000
|
|
|
2,105,000
|
|
|
1,165,000
|
|
|
—
|
|
|
3,647,000
|
|
||||||
|
Accounts receivable — related parties
|
|
—
|
|
|
186,000
|
|
|
4,774,000
|
|
|
17,433,000
|
|
|
—
|
|
|
22,393,000
|
|
||||||
|
Intercompany receivables
|
|
—
|
|
|
3,269,000
|
|
|
—
|
|
|
—
|
|
|
(3,269,000
|
)
|
|
—
|
|
||||||
|
Notes receivable
|
|
—
|
|
|
1,902,000
|
|
|
133,805,000
|
|
|
900,000
|
|
|
—
|
|
|
136,607,000
|
|
||||||
|
Intercompany loans receivable
|
|
—
|
|
|
39,587,000
|
|
|
—
|
|
|
—
|
|
|
(39,587,000
|
)
|
|
—
|
|
||||||
|
Real estate, net of accumulated depreciation
|
|
—
|
|
|
—
|
|
|
93,928,000
|
|
|
195,521,000
|
|
|
—
|
|
|
289,449,000
|
|
||||||
|
Investments in joint ventures
|
|
—
|
|
|
5,670,000
|
|
|
450,199,000
|
|
|
87,324,000
|
|
|
—
|
|
|
543,193,000
|
|
||||||
|
Investments in and advances to consolidated subsidiaries
|
|
514,310,000
|
|
|
873,768,000
|
|
|
142,441,000
|
|
|
—
|
|
|
(1,530,519,000
|
)
|
|
—
|
|
||||||
|
Investment in loan pool participations
|
|
—
|
|
|
—
|
|
|
95,601,000
|
|
|
—
|
|
|
—
|
|
|
95,601,000
|
|
||||||
|
Other assets
|
|
—
|
|
|
18,443,000
|
|
|
11,505,000
|
|
|
8,131,000
|
|
|
—
|
|
|
38,079,000
|
|
||||||
|
Goodwill
|
|
—
|
|
|
—
|
|
|
17,216,000
|
|
|
6,749,000
|
|
|
—
|
|
|
23,965,000
|
|
||||||
|
Total assets
|
|
$
|
514,310,000
|
|
|
$
|
1,017,719,000
|
|
|
$
|
990,063,000
|
|
|
$
|
335,072,000
|
|
|
$
|
(1,573,375,000
|
)
|
|
$
|
1,283,789,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Accounts payable
|
|
$
|
—
|
|
|
$
|
785,000
|
|
|
$
|
236,000
|
|
|
$
|
741,000
|
|
|
$
|
—
|
|
|
$
|
1,762,000
|
|
|
Accrued expenses and other liabilities
|
|
—
|
|
|
14,878,000
|
|
|
7,249,000
|
|
|
7,290,000
|
|
|
—
|
|
|
29,417,000
|
|
||||||
|
Intercompany payables
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,269,000
|
|
|
(3,269,000
|
)
|
|
—
|
|
||||||
|
Accrued salaries and benefits
|
|
4,666,000
|
|
|
17,917,000
|
|
|
1,614,000
|
|
|
784,000
|
|
|
—
|
|
|
24,981,000
|
|
||||||
|
Deferred tax liability
|
|
—
|
|
|
20,189,000
|
|
|
2,327,000
|
|
|
155,000
|
|
|
—
|
|
|
22,671,000
|
|
||||||
|
Senior notes payable
|
|
—
|
|
|
409,640,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
409,640,000
|
|
||||||
|
Intercompany loans payable
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,587,000
|
|
|
(39,587,000
|
)
|
|
—
|
|
||||||
|
Mortgage loans and notes payable
|
|
—
|
|
|
—
|
|
|
112,096,000
|
|
|
124,442,000
|
|
|
—
|
|
|
236,538,000
|
|
||||||
|
Junior subordinated debentures
|
|
—
|
|
|
40,000,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40,000,000
|
|
||||||
|
Total liabilities
|
|
4,666,000
|
|
|
503,409,000
|
|
|
123,522,000
|
|
|
176,268,000
|
|
|
(42,856,000
|
)
|
|
765,009,000
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Kennedy-Wilson Holdings, Inc. shareholders' equity
|
|
509,644,000
|
|
|
514,310,000
|
|
|
873,768,000
|
|
|
142,441,000
|
|
|
(1,530,519,000
|
)
|
|
509,644,000
|
|
||||||
|
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(7,227,000
|
)
|
|
16,363,000
|
|
|
—
|
|
|
9,136,000
|
|
||||||
|
Total equity
|
|
509,644,000
|
|
|
514,310,000
|
|
|
866,541,000
|
|
|
158,804,000
|
|
|
(1,530,519,000
|
)
|
|
518,780,000
|
|
||||||
|
Total liabilities and equity
|
|
$
|
514,310,000
|
|
|
$
|
1,017,719,000
|
|
|
$
|
990,063,000
|
|
|
$
|
335,072,000
|
|
|
$
|
(1,573,375,000
|
)
|
|
$
|
1,283,789,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2013
|
||||||||||||||||||||||||
|
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Management and leasing fees
|
|
$
|
—
|
|
|
$
|
75,000
|
|
|
$
|
2,807,000
|
|
|
$
|
1,827,000
|
|
|
$
|
—
|
|
|
$
|
4,709,000
|
|
|
Management and leasing fees — related party
|
|
—
|
|
|
—
|
|
|
3,656,000
|
|
|
4,301,000
|
|
|
—
|
|
|
7,957,000
|
|
||||||
|
Commissions
|
|
—
|
|
|
—
|
|
|
454,000
|
|
|
70,000
|
|
|
—
|
|
|
524,000
|
|
||||||
|
Commissions — related party
|
|
—
|
|
|
—
|
|
|
—
|
|
|
392,000
|
|
|
—
|
|
|
392,000
|
|
||||||
|
Sale of real estate
|
|
—
|
|
|
—
|
|
|
2,418,000
|
|
|
—
|
|
|
—
|
|
|
2,418,000
|
|
||||||
|
Rental income
|
|
—
|
|
|
—
|
|
|
1,680,000
|
|
|
4,717,000
|
|
|
—
|
|
|
6,397,000
|
|
||||||
|
Total revenue
|
|
—
|
|
|
75,000
|
|
|
11,015,000
|
|
|
11,307,000
|
|
|
—
|
|
|
22,397,000
|
|
||||||
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Commission and marketing expenses
|
|
—
|
|
|
109,000
|
|
|
377,000
|
|
|
12,000
|
|
|
—
|
|
|
498,000
|
|
||||||
|
Compensation and related expenses
|
|
1,769,000
|
|
|
4,949,000
|
|
|
3,645,000
|
|
|
3,257,000
|
|
|
—
|
|
|
13,620,000
|
|
||||||
|
Cost of real estate sold
|
|
—
|
|
|
—
|
|
|
1,872,000
|
|
|
—
|
|
|
—
|
|
|
1,872,000
|
|
||||||
|
General and administrative
|
|
38,000
|
|
|
2,158,000
|
|
|
1,322,000
|
|
|
1,909,000
|
|
|
—
|
|
|
5,427,000
|
|
||||||
|
Depreciation and amortization
|
|
—
|
|
|
141,000
|
|
|
1,143,000
|
|
|
1,773,000
|
|
|
—
|
|
|
3,057,000
|
|
||||||
|
Rental operating expenses
|
|
—
|
|
|
—
|
|
|
884,000
|
|
|
2,219,000
|
|
|
—
|
|
|
3,103,000
|
|
||||||
|
Total operating expenses
|
|
1,807,000
|
|
|
7,357,000
|
|
|
9,243,000
|
|
|
9,170,000
|
|
|
—
|
|
|
27,577,000
|
|
||||||
|
Equity in joint venture income (loss)
|
|
—
|
|
|
—
|
|
|
965,000
|
|
|
(1,309,000
|
)
|
|
—
|
|
|
(344,000
|
)
|
||||||
|
Interest income from loan pool participations and notes receivable
|
|
—
|
|
|
38,000
|
|
|
2,927,000
|
|
|
18,000
|
|
|
(38,000
|
)
|
|
2,945,000
|
|
||||||
|
Income from consolidated subsidiaries
|
|
(788,000
|
)
|
|
14,403,000
|
|
|
8,752,000
|
|
|
—
|
|
|
(22,367,000
|
)
|
|
—
|
|
||||||
|
Operating (loss) income
|
|
(2,595,000
|
)
|
|
7,159,000
|
|
|
14,416,000
|
|
|
846,000
|
|
|
(22,405,000
|
)
|
|
(2,579,000
|
)
|
||||||
|
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Interest income
|
|
—
|
|
|
40,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40,000
|
|
||||||
|
Acquisition-related gain
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,459,000
|
|
|
—
|
|
|
9,459,000
|
|
||||||
|
Interest expense
|
|
—
|
|
|
(9,690,000
|
)
|
|
(227,000
|
)
|
|
(1,553,000
|
)
|
|
38,000
|
|
|
(11,432,000
|
)
|
||||||
|
(Loss) income from continuing operations before benefit from income taxes
|
|
(2,595,000
|
)
|
|
(2,491,000
|
)
|
|
14,189,000
|
|
|
8,752,000
|
|
|
(22,367,000
|
)
|
|
(4,512,000
|
)
|
||||||
|
Benefit from income taxes
|
|
—
|
|
|
1,703,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,703,000
|
|
||||||
|
(Loss) income from continuing operations
|
|
(2,595,000
|
)
|
|
(788,000
|
)
|
|
14,189,000
|
|
|
8,752,000
|
|
|
(22,367,000
|
)
|
|
(2,809,000
|
)
|
||||||
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Income from discontinued operations, net of income taxes
|
|
—
|
|
|
—
|
|
|
(3,000
|
)
|
|
—
|
|
|
—
|
|
|
(3,000
|
)
|
||||||
|
Gain from sale of real estate, net of income taxes
|
|
—
|
|
|
—
|
|
|
217,000
|
|
|
—
|
|
|
—
|
|
|
217,000
|
|
||||||
|
Net (loss) income
|
|
(2,595,000
|
)
|
|
(788,000
|
)
|
|
14,403,000
|
|
|
8,752,000
|
|
|
(22,367,000
|
)
|
|
(2,595,000
|
)
|
||||||
|
Net loss attributable to the noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
999,000
|
|
|
—
|
|
|
999,000
|
|
||||||
|
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc.
|
|
(2,595,000
|
)
|
|
(788,000
|
)
|
|
14,403,000
|
|
|
9,751,000
|
|
|
(22,367,000
|
)
|
|
(1,596,000
|
)
|
||||||
|
Preferred dividends and accretion of preferred stock issuance costs
|
|
(2,036,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,036,000
|
)
|
||||||
|
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
$
|
(4,631,000
|
)
|
|
$
|
(788,000
|
)
|
|
$
|
14,403,000
|
|
|
$
|
9,751,000
|
|
|
$
|
(22,367,000
|
)
|
|
$
|
(3,632,000
|
)
|
|
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2012
|
||||||||||||||||||||||||
|
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Management and leasing fees
|
|
$
|
—
|
|
|
$
|
20,000
|
|
|
$
|
1,590,000
|
|
|
$
|
1,546,000
|
|
|
$
|
—
|
|
|
$
|
3,156,000
|
|
|
Management and leasing fees — related party
|
|
—
|
|
|
—
|
|
|
2,394,000
|
|
|
3,191,000
|
|
|
—
|
|
|
5,585,000
|
|
||||||
|
Commissions
|
|
—
|
|
|
43,000
|
|
|
562,000
|
|
|
61,000
|
|
|
—
|
|
|
666,000
|
|
||||||
|
Commissions — related party
|
|
—
|
|
|
—
|
|
|
953,000
|
|
|
—
|
|
|
—
|
|
|
953,000
|
|
||||||
|
Rental income
|
|
—
|
|
|
—
|
|
|
156,000
|
|
|
1,314,000
|
|
|
—
|
|
|
1,470,000
|
|
||||||
|
Total revenue
|
|
—
|
|
|
63,000
|
|
|
5,655,000
|
|
|
6,112,000
|
|
|
—
|
|
|
11,830,000
|
|
||||||
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Commission and marketing expenses
|
|
—
|
|
|
—
|
|
|
899,000
|
|
|
66,000
|
|
|
—
|
|
|
965,000
|
|
||||||
|
Compensation and related expenses
|
|
871,000
|
|
|
3,027,000
|
|
|
2,972,000
|
|
|
2,130,000
|
|
|
—
|
|
|
9,000,000
|
|
||||||
|
General and administrative
|
|
—
|
|
|
1,735,000
|
|
|
938,000
|
|
|
996,000
|
|
|
—
|
|
|
3,669,000
|
|
||||||
|
Depreciation and amortization
|
|
—
|
|
|
82,000
|
|
|
93,000
|
|
|
762,000
|
|
|
—
|
|
|
937,000
|
|
||||||
|
Rental operating expenses
|
|
—
|
|
|
—
|
|
|
240,000
|
|
|
630,000
|
|
|
—
|
|
|
870,000
|
|
||||||
|
Total operating expenses
|
|
871,000
|
|
|
4,844,000
|
|
|
5,142,000
|
|
|
4,584,000
|
|
|
—
|
|
|
15,441,000
|
|
||||||
|
Equity in joint venture income
|
|
—
|
|
|
65,000
|
|
|
202,000
|
|
|
5,249,000
|
|
|
—
|
|
|
5,516,000
|
|
||||||
|
Interest income from loan pool participations and notes receivable
|
|
—
|
|
|
—
|
|
|
518,000
|
|
|
20,000
|
|
|
—
|
|
|
538,000
|
|
||||||
|
Income from consolidated subsidiaries
|
|
2,353,000
|
|
|
7,356,000
|
|
|
6,380,000
|
|
|
—
|
|
|
(16,089,000
|
)
|
|
—
|
|
||||||
|
Operating income
|
|
1,482,000
|
|
|
2,640,000
|
|
|
7,613,000
|
|
|
6,797,000
|
|
|
(16,089,000
|
)
|
|
2,443,000
|
|
||||||
|
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Interest income
|
|
—
|
|
|
30,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
||||||
|
Interest income — related party
|
|
—
|
|
|
1,087,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,087,000
|
|
||||||
|
Gain on sale of marketable securities
|
|
—
|
|
|
2,931,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,931,000
|
|
||||||
|
Realized foreign currency exchange loss
|
|
—
|
|
|
(112,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(112,000
|
)
|
||||||
|
Interest expense
|
|
—
|
|
|
(5,706,000
|
)
|
|
(47,000
|
)
|
|
(417,000
|
)
|
|
—
|
|
|
(6,170,000
|
)
|
||||||
|
Income before benefit from income taxes
|
|
1,482,000
|
|
|
870,000
|
|
|
7,566,000
|
|
|
6,380,000
|
|
|
(16,089,000
|
)
|
|
209,000
|
|
||||||
|
Benefit from income taxes
|
|
—
|
|
|
1,483,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,483,000
|
|
||||||
|
Income from continuing operations
|
|
1,482,000
|
|
|
2,353,000
|
|
|
7,566,000
|
|
|
6,380,000
|
|
|
(16,089,000
|
)
|
|
1,692,000
|
|
||||||
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Income from discontinued operations, net of income taxes
|
|
—
|
|
|
—
|
|
|
2,000
|
|
|
—
|
|
|
—
|
|
|
2,000
|
|
||||||
|
Loss from sale of real estate, net of income taxes
|
|
—
|
|
|
—
|
|
|
(212,000
|
)
|
|
—
|
|
|
—
|
|
|
(212,000
|
)
|
||||||
|
Net income
|
|
1,482,000
|
|
|
2,353,000
|
|
|
7,356,000
|
|
|
6,380,000
|
|
|
(16,089,000
|
)
|
|
1,482,000
|
|
||||||
|
Net income attributable to the noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,798,000
|
)
|
|
—
|
|
|
(2,798,000
|
)
|
||||||
|
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc.
|
|
1,482,000
|
|
|
2,353,000
|
|
|
7,356,000
|
|
|
3,582,000
|
|
|
(16,089,000
|
)
|
|
(1,316,000
|
)
|
||||||
|
Preferred dividends and accretion of preferred stock issuance costs
|
|
(2,036,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,036,000
|
)
|
||||||
|
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders
|
|
$
|
(554,000
|
)
|
|
$
|
2,353,000
|
|
|
$
|
7,356,000
|
|
|
$
|
3,582,000
|
|
|
$
|
(16,089,000
|
)
|
|
$
|
(3,352,000
|
)
|
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2013
|
||||||||||||||||||||||||
|
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
|
Net (loss) income
|
|
$
|
(2,595,000
|
)
|
|
$
|
(788,000
|
)
|
|
$
|
14,403,000
|
|
|
$
|
8,752,000
|
|
|
$
|
(22,367,000
|
)
|
|
$
|
(2,595,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Unrealized foreign currency translation loss
|
|
(14,358,000
|
)
|
|
(14,358,000
|
)
|
|
(12,919,000
|
)
|
|
(2,025,000
|
)
|
|
29,302,000
|
|
|
(14,358,000
|
)
|
||||||
|
Unrealized forward contract foreign currency gain
|
|
3,596,000
|
|
|
3,596,000
|
|
|
3,238,000
|
|
|
—
|
|
|
(6,834,000
|
)
|
|
3,596,000
|
|
||||||
|
Total other comprehensive loss for the period
|
|
$
|
(10,762,000
|
)
|
|
$
|
(10,762,000
|
)
|
|
$
|
(9,681,000
|
)
|
|
$
|
(2,025,000
|
)
|
|
$
|
22,468,000
|
|
|
$
|
(10,762,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Comprehensive (loss) income
|
|
$
|
(13,357,000
|
)
|
|
$
|
(11,550,000
|
)
|
|
$
|
4,722,000
|
|
|
$
|
6,727,000
|
|
|
$
|
101,000
|
|
|
$
|
(13,357,000
|
)
|
|
Comprehensive loss attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
999,000
|
|
|
—
|
|
|
999,000
|
|
||||||
|
Comprehensive (loss) income attributable to Kennedy-Wilson Holdings, Inc.
|
|
$
|
(13,357,000
|
)
|
|
$
|
(11,550,000
|
)
|
|
$
|
4,722,000
|
|
|
$
|
7,726,000
|
|
|
$
|
101,000
|
|
|
$
|
(12,358,000
|
)
|
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2012
|
||||||||||||||||||||||||
|
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
||||||||||||
|
Net income
|
|
$
|
1,482,000
|
|
|
$
|
2,353,000
|
|
|
$
|
7,356,000
|
|
|
$
|
6,380,000
|
|
|
$
|
(16,089,000
|
)
|
|
$
|
1,482,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Unrealized holding gains on available-for-sale securities
|
|
—
|
|
|
5,463,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,463,000
|
|
||||||
|
Unrealized foreign currency translation gains (loss)
|
|
—
|
|
|
96,000
|
|
|
(3,007,000
|
)
|
|
44,000
|
|
|
—
|
|
|
(2,867,000
|
)
|
||||||
|
Unrealized forward contract foreign currency gain
|
|
—
|
|
|
—
|
|
|
3,988,000
|
|
|
—
|
|
|
—
|
|
|
3,988,000
|
|
||||||
|
Total other comprehensive income for the period
|
|
$
|
—
|
|
|
$
|
5,559,000
|
|
|
$
|
981,000
|
|
|
$
|
44,000
|
|
|
$
|
—
|
|
|
$
|
6,584,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Comprehensive income
|
|
$
|
1,482,000
|
|
|
$
|
7,912,000
|
|
|
$
|
8,337,000
|
|
|
$
|
6,424,000
|
|
|
$
|
(16,089,000
|
)
|
|
$
|
8,066,000
|
|
|
Comprehensive income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,798,000
|
)
|
|
—
|
|
|
(2,798,000
|
)
|
||||||
|
Comprehensive income attributable to Kennedy-Wilson Holdings, Inc.
|
|
$
|
1,482,000
|
|
|
$
|
7,912,000
|
|
|
$
|
8,337,000
|
|
|
$
|
3,626,000
|
|
|
$
|
(16,089,000
|
)
|
|
$
|
5,268,000
|
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2013
|
||||||||||||||||||||
|
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Consolidated Total
|
||||||||||
|
Net cash provided by (used in) operating activities
|
|
$
|
89,000
|
|
|
$
|
(39,686,000
|
)
|
|
$
|
8,362,000
|
|
|
$
|
3,670,000
|
|
|
$
|
(27,565,000
|
)
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Additions to notes receivable
|
|
—
|
|
|
—
|
|
|
(5,700,000
|
)
|
|
—
|
|
|
(5,700,000
|
)
|
|||||
|
Proceeds from sale of interest in a entity
|
|
—
|
|
|
—
|
|
|
26,739,000
|
|
|
—
|
|
|
26,739,000
|
|
|||||
|
Additions to notes receivable—related parties
|
|
—
|
|
|
—
|
|
|
(2,544,000
|
)
|
|
—
|
|
|
(2,544,000
|
)
|
|||||
|
Net proceeds from sale of real estate
|
|
—
|
|
|
—
|
|
|
3,410,000
|
|
|
—
|
|
|
3,410,000
|
|
|||||
|
Purchases of and additions to real estate
|
|
—
|
|
|
—
|
|
|
(774,000
|
)
|
|
(14,833,000
|
)
|
|
(15,607,000
|
)
|
|||||
|
Distributions from joint ventures
|
|
—
|
|
|
—
|
|
|
15,013,000
|
|
|
—
|
|
|
15,013,000
|
|
|||||
|
Contributions to joint ventures
|
|
—
|
|
|
(2,303,000
|
)
|
|
(23,075,000
|
)
|
|
(20,550,000
|
)
|
|
(45,928,000
|
)
|
|||||
|
Distributions from loan pool participations
|
|
—
|
|
|
—
|
|
|
13,829,000
|
|
|
—
|
|
|
13,829,000
|
|
|||||
|
Contributions to loan pool participations
|
|
—
|
|
|
—
|
|
|
(6,152,000
|
)
|
|
—
|
|
|
(6,152,000
|
)
|
|||||
|
(Investments in) distributions from consolidated subsidiaries, net
|
|
235,000
|
|
|
13,743,000
|
|
|
(43,888,000
|
)
|
|
29,910,000
|
|
|
—
|
|
|||||
|
Net cash provided by (used in) investing activities
|
|
235,000
|
|
|
11,440,000
|
|
|
(23,142,000
|
)
|
|
(5,473,000
|
)
|
|
(16,940,000
|
)
|
|||||
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Borrowings under line of credit
|
|
—
|
|
|
35,000,000
|
|
|
—
|
|
|
—
|
|
|
35,000,000
|
|
|||||
|
Repayment of line of credit
|
|
—
|
|
|
(35,000,000
|
)
|
|
—
|
|
|
—
|
|
|
(35,000,000
|
)
|
|||||
|
Debt issue costs
|
|
—
|
|
|
(356,000
|
)
|
|
—
|
|
|
—
|
|
|
(356,000
|
)
|
|||||
|
Repayment of mortgage loans payable
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(121,000
|
)
|
|
(121,000
|
)
|
|||||
|
Issuance of common stock
|
|
133,802,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
133,802,000
|
|
|||||
|
Dividends paid
|
|
(7,119,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,119,000
|
)
|
|||||
|
Intercompany receivables, net
|
|
—
|
|
|
(2,621,000
|
)
|
|
—
|
|
|
2,621,000
|
|
|
—
|
|
|||||
|
Distributions to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,000
|
)
|
|
(18,000
|
)
|
|||||
|
Net cash provided by (used in) financing activities
|
|
126,683,000
|
|
|
(2,977,000
|
)
|
|
—
|
|
|
2,482,000
|
|
|
126,188,000
|
|
|||||
|
Effect of currency exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
(2,400,000
|
)
|
|
(532,000
|
)
|
|
(1,158,000
|
)
|
|
(4,090,000
|
)
|
|||||
|
Net change in cash and cash equivalents
|
|
127,007,000
|
|
|
(33,623,000
|
)
|
|
(15,312,000
|
)
|
|
(479,000
|
)
|
|
77,593,000
|
|
|||||
|
Cash and cash equivalents, beginning of year
|
|
—
|
|
|
64,517,000
|
|
|
38,489,000
|
|
|
17,849,000
|
|
|
120,855,000
|
|
|||||
|
Cash and cash equivalents, end of period
|
|
$
|
127,007,000
|
|
|
$
|
30,894,000
|
|
|
$
|
23,177,000
|
|
|
$
|
17,370,000
|
|
|
$
|
198,448,000
|
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2012
|
||||||||||||||||||||
|
|
|
Parent
|
|
Kennedy-Wilson, Inc.
|
|
Guarantor Subsidiaries
|
|
Non-guarantor Subsidiaries
|
|
Consolidated Total
|
||||||||||
|
Net cash (used in) provided by operating activities
|
|
$
|
—
|
|
|
$
|
(15,708,000
|
)
|
|
$
|
15,604,000
|
|
|
$
|
(5,931,000
|
)
|
|
$
|
(6,035,000
|
)
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Additions to notes receivable
|
|
—
|
|
|
—
|
|
|
(61,000
|
)
|
|
—
|
|
|
(61,000
|
)
|
|||||
|
Additions to notes receivable - related parties
|
|
—
|
|
|
(1,561,000
|
)
|
|
—
|
|
|
—
|
|
|
(1,561,000
|
)
|
|||||
|
Net proceeds from sale of real estate
|
|
—
|
|
|
—
|
|
|
17,905,000
|
|
|
—
|
|
|
17,905,000
|
|
|||||
|
Purchases of and additions to real estate
|
|
—
|
|
|
—
|
|
|
(15,689,000
|
)
|
|
275,000
|
|
|
(15,414,000
|
)
|
|||||
|
Proceeds from sales of marketable securities
|
|
—
|
|
|
21,386,000
|
|
|
—
|
|
|
—
|
|
|
21,386,000
|
|
|||||
|
Distributions from joint ventures
|
|
—
|
|
|
—
|
|
|
4,533,000
|
|
|
65,000
|
|
|
4,598,000
|
|
|||||
|
Contributions to joint ventures
|
|
—
|
|
|
(1,203,000
|
)
|
|
(4,115,000
|
)
|
|
—
|
|
|
(5,318,000
|
)
|
|||||
|
(Investment in) distributions from consolidated subsidiaries, net
|
|
4,139,000
|
|
|
3,316,000
|
|
|
(15,355,000
|
)
|
|
7,900,000
|
|
|
—
|
|
|||||
|
Net cash provided by (used in) investing activities
|
|
4,139,000
|
|
|
21,938,000
|
|
|
(12,782,000
|
)
|
|
8,240,000
|
|
|
21,535,000
|
|
|||||
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Repurchase of common stock
|
|
(41,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41,000
|
)
|
|||||
|
Dividends paid
|
|
(4,098,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,098,000
|
)
|
|||||
|
Distributions to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,931,000
|
)
|
|
(4,931,000
|
)
|
|||||
|
Net cash (used in) provided by financing activities
|
|
(4,139,000
|
)
|
|
—
|
|
|
—
|
|
|
(4,931,000
|
)
|
|
(9,070,000
|
)
|
|||||
|
Effect of currency exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
(39,000
|
)
|
|
—
|
|
|
(39,000
|
)
|
|||||
|
Net change in cash and cash equivalents
|
|
—
|
|
|
6,230,000
|
|
|
2,783,000
|
|
|
(2,622,000
|
)
|
|
6,391,000
|
|
|||||
|
Cash and cash equivalents, beginning of period
|
|
—
|
|
|
95,812,000
|
|
|
2,553,000
|
|
|
17,561,000
|
|
|
115,926,000
|
|
|||||
|
Cash and cash equivalents, end of period
|
|
$
|
—
|
|
|
$
|
102,042,000
|
|
|
$
|
5,336,000
|
|
|
$
|
14,939,000
|
|
|
$
|
122,317,000
|
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
|
March 31, 2013
|
|
December 31, 2012
|
||||
|
Investment in joint ventures
|
|
$
|
575.3
|
|
|
$
|
543.2
|
|
|
Real estate, net of depreciation
|
|
403.6
|
|
|
289.4
|
|
||
|
Mortgage debt
|
|
(251.1
|
)
|
|
(236.5
|
)
|
||
|
Notes receivable
|
|
22.1
|
|
|
136.6
|
|
||
|
Acquired in-place lease value, net of amortization
(1)
|
|
9.0
|
|
|
9.3
|
|
||
|
Loan pool participations
|
|
84.2
|
|
|
95.6
|
|
||
|
Total net investment account
|
|
843.1
|
|
|
837.6
|
|
||
|
Add back:
|
|
|
|
|
||||
|
Accumulated depreciation and amortization
|
|
68.6
|
|
|
59.3
|
|
||
|
Kennedy Wilson's share of accumulated depreciation and amortization included in investment in joint ventures
|
|
17.9
|
|
|
14.4
|
|
||
|
Total gross investment account
|
|
$
|
929.6
|
|
|
$
|
911.3
|
|
|
|
Dollars in millions
|
||||||||||||||||||
|
|
Multifamily
|
|
Loans Secured by
Real Estate
|
|
Commercial
|
|
Residential, Hotel, and Other
(1)
|
|
Total
|
||||||||||
|
Western U.S.
|
$
|
195.0
|
|
|
$
|
74.4
|
|
|
$
|
163.7
|
|
|
$
|
112.7
|
|
|
$
|
545.8
|
|
|
Other U.S.
|
0.4
|
|
|
—
|
|
|
3.2
|
|
|
9.4
|
|
|
13.0
|
|
|||||
|
Japan
|
83.7
|
|
|
—
|
|
|
7.6
|
|
|
—
|
|
|
91.3
|
|
|||||
|
United Kingdom
|
—
|
|
|
99.8
|
|
|
19.2
|
|
|
—
|
|
|
119.0
|
|
|||||
|
Ireland
|
21.5
|
|
|
43.6
|
|
|
8.9
|
|
|
—
|
|
|
74.0
|
|
|||||
|
Total
|
$
|
300.6
|
|
|
$
|
217.8
|
|
|
$
|
202.6
|
|
|
$
|
122.1
|
|
|
$
|
843.1
|
|
|
|
Dollars in millions
|
||||||||||||||||||
|
|
Multifamily
|
|
Loans Secured by
Real Estate |
|
Commercial
|
|
Residential, Hotel, and Other
(1)
|
|
Total
|
||||||||||
|
Western U.S.
|
$
|
171.7
|
|
|
$
|
69.0
|
|
|
$
|
167.9
|
|
|
$
|
106.9
|
|
|
$
|
515.5
|
|
|
Other U.S.
|
0.4
|
|
|
—
|
|
|
3.3
|
|
|
10.5
|
|
|
14.2
|
|
|||||
|
Japan
|
102.7
|
|
|
—
|
|
|
8.6
|
|
|
—
|
|
|
111.3
|
|
|||||
|
United Kingdom
|
—
|
|
|
120.4
|
|
|
—
|
|
|
—
|
|
|
120.4
|
|
|||||
|
Ireland
|
22.4
|
|
|
44.3
|
|
|
9.5
|
|
|
—
|
|
|
76.2
|
|
|||||
|
Total
|
$
|
297.2
|
|
|
$
|
233.7
|
|
|
$
|
189.3
|
|
|
$
|
117.4
|
|
|
$
|
837.6
|
|
|
•
|
As of
March 31, 2013
, our net investment account (Kennedy Wilson's equity in real estate, joint ventures, acquired in-place leases and loan investments, net of depreciation and amortization) was
$843.1
million compared to
$837.6
million at December 31, 2012. This change was comprised of
$46.6 million
of cash contributed to and income earned on investments and
$41.1 million
of cash distributed from investments. The gross investment account (before accumulated depreciation and amortization) was
$929.6
million and
$911.3
million as of
March 31, 2013
and December 31, 2012, respectively. Accumulated depreciation and amortization was
$86.5 million
and
$73.7 million
as of
March 31, 2013
and December 31, 2012, respectively.
|
|
•
|
As of
March 31, 2013
, the Company and its equity partners owned 17.1 million rentable square feet of real estate including investments in 14,764 apartment units and 54 commercial properties. Additionally, as of
March 31, 2013
, the Company and its equity partners owned in excess of $1.0 billion in unpaid principal balance of loans secured by real estate.
|
|
•
|
During the
three
months ended
March 31, 2013
, our investments business achieved an EBITDA of
$28.5 million
, a
61%
increase from
$17.7 million
for the same period in 2012.
|
|
•
|
During the three months ended March 31, 2013, based on our investments in
11,923
same property multifamily units, rental revenues, net operating income and occupancy at the property level increased by
4.8%
,
5.7%
and
0.4%
, respectively, for the same period in 2012. In addition, based on our investments in
3.2 million
square feet of same property commercial real estate, rental revenues, net operating income and occupancy at the property level increased by
10.3%
,
19.3%
and
4.6%
, respectively.
|
|
•
|
From January 1, 2010 through
March 31, 2013
, the Company and its equity partners have acquired approximately $8.2 billion of real estate-related investments (including unpaid principal balance of loan purchases). During the three months ended
March 31, 2013
, the Company and its equity partners acquired $233.4 million of real estate-related investments. This includes $226.0 million of real estate and $7.4 million of unpaid principal balance of loans secured by real estate in which we invested $38.0 million and $5.7 million, respectively.
|
|
•
|
In March 2013, the Company acquired the interests of some of its existing partners in a 615-unit apartment building in Northern California, increasing its ownership from 15% to 94%. The original 15% interest had a book value of $0, due to prior distributions. As a result of consolidating this investment, the Company realized a $9.5 million acquisition-related gain.
|
|
•
|
During the
three
months ended
March 31, 2013
, the Company and its equity partners completed approximately
$207.6
million of property re-financings at an average interest rate of
2.31%
and a weighted average maturity of
7.4
years. This includes re-financings of $122.1 million at a fixed interest rate of 1.35% in our Japanese multifamily portfolio.
|
|
•
|
During the
three
months ended
March 31, 2012
, the Company and its equity partners completed a re-financing of
$80.5
million in the Japanese multifamily portfolio at a fixed interest rate of
1.61%
and a maturity of
5.0
years.
|
|
•
|
Our book equity in this investment is
$58.3 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
March 31, 2013
, the unpaid principal balance was
$417.4 million
due to loan resolutions of approximately
$1.7 billion
, representing approximately
80%
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 resolutions in the loan pool, the venture level debt was fully paid off on March 21, 2013.
|
|
•
|
Our book equity in this investment is
$83.7
million; we own 40.9% before carried interest.
|
|
•
|
We maintained 97% occupancy in 50 apartment buildings with a total of over 2,400 units.
|
|
•
|
During the
three
months ended
March 31, 2013
, we settled several Japanese yen-related hedges resulting in cash proceeds of $23.7 million. Our share was $11.1 million, which reduced our basis in the joint venture.
|
|
•
|
Since Fairfax Financial became our partner in the Japanese multifamily portfolio in September 2010, we have distributed a total of
$85.2 million
, of which our share was
$39.9 million
.
|
|
•
|
Management and leasing fees and commissions increased by
31%
to
$13.6 million
for the
three
months ended
March 31, 2013
from
$10.4 million
for the same period in 2012.
|
|
•
|
During the
three
months ended
March 31, 2013
, our services business achieved an EBITDA of
$5.2 million
, an
86%
increase from
$2.8 million
for the same period in 2012.
|
|
•
|
In March 2013, we issued
9.0 million
shares of common stock primarily to institutional investors, resulting in gross proceeds of
$141.3 million
, of which $35.0 million was used to pay off the then outstanding balance on our line of credit.
|
|
•
|
Subsequent to
March 31, 2013
, we and our equity partners have acquired approximately $0.9 billion of real estate-related investments, including 0.8 million rentable square feet of real estate, comprised of 638 apartment units and three commercial properties along with $0.8 billion of unpaid principal balance in loans secured by real estate in which we invested $75.1 million.
|
|
•
|
In April 2013, we issued 1.4 million shares of common stock as a result of the underwriters fully exercising their option to purchase additional shares, which resulted in gross proceeds of $21.2 million.
|
|
•
|
Subsequent to
March 31, 2013
, we received $33.4 million in distributions related to resolutions on the UK loan pool.
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
|
2013
|
|
2012
|
||||
|
Revenue
|
|
|
|
|
||||
|
Management and leasing fees
|
|
$
|
12,666,000
|
|
|
$
|
8,741,000
|
|
|
Commissions
|
|
916,000
|
|
|
1,619,000
|
|
||
|
Sale of real estate
|
|
2,418,000
|
|
|
—
|
|
||
|
Rental income
|
|
6,397,000
|
|
|
1,470,000
|
|
||
|
Total revenue
|
|
22,397,000
|
|
|
11,830,000
|
|
||
|
Operating expenses
|
|
|
|
|
||||
|
Commission and marketing expenses
|
|
498,000
|
|
|
965,000
|
|
||
|
Compensation and related expenses
|
|
13,620,000
|
|
|
9,000,000
|
|
||
|
Cost of real estate sold
|
|
1,872,000
|
|
|
—
|
|
||
|
General and administrative
|
|
5,427,000
|
|
|
3,669,000
|
|
||
|
Depreciation and amortization
|
|
3,057,000
|
|
|
937,000
|
|
||
|
Rental operating expenses
|
|
3,103,000
|
|
|
870,000
|
|
||
|
Total operating expenses
|
|
27,577,000
|
|
|
15,441,000
|
|
||
|
Equity in joint venture (loss) income
|
|
(344,000
|
)
|
|
5,516,000
|
|
||
|
Interest income from loan pool participations and notes receivable
|
|
2,945,000
|
|
|
538,000
|
|
||
|
Operating (expense) income
|
|
(2,579,000
|
)
|
|
2,443,000
|
|
||
|
Non-operating income (expense)
|
|
|
|
|
||||
|
Interest income
|
|
40,000
|
|
|
1,117,000
|
|
||
|
Acquisition-related gain
|
|
9,459,000
|
|
|
—
|
|
||
|
Gain on sale of marketable securities
|
|
—
|
|
|
2,931,000
|
|
||
|
Realized foreign currency exchange loss
|
|
—
|
|
|
(112,000
|
)
|
||
|
Interest expense
|
|
(11,432,000
|
)
|
|
(6,170,000
|
)
|
||
|
(Loss) income from continuing operations before benefit from income taxes
|
|
(4,512,000
|
)
|
|
209,000
|
|
||
|
Benefit from income taxes
|
|
1,703,000
|
|
|
1,483,000
|
|
||
|
(Loss) income from continuing operations
|
|
(2,809,000
|
)
|
|
1,692,000
|
|
||
|
Discontinued Operations
|
|
|
|
|
||||
|
(Loss) income from discontinued operations, net of income taxes
|
|
(3,000
|
)
|
|
2,000
|
|
||
|
Gain (loss) from sale of real estate, net of income taxes
|
|
217,000
|
|
|
(212,000
|
)
|
||
|
Net (loss) income
|
|
(2,595,000
|
)
|
|
1,482,000
|
|
||
|
Net loss (income) attributable to the noncontrolling interests
|
|
999,000
|
|
|
(2,798,000
|
)
|
||
|
Net loss attributable to Kennedy-Wilson Holdings, Inc.
|
|
(1,596,000
|
)
|
|
(1,316,000
|
)
|
||
|
Preferred dividends and accretion of preferred stock issuance costs
|
|
(2,036,000
|
)
|
|
(2,036,000
|
)
|
||
|
Net loss attributable to Kennedy-Wilson Holdings, Inc. common
shareholders
|
|
$
|
(3,632,000
|
)
|
|
$
|
(3,352,000
|
)
|
|
EBITDA
(1)
|
|
$
|
30,118,000
|
|
|
$
|
18,291,000
|
|
|
Adjusted EBITDA
(2)
|
|
$
|
31,887,000
|
|
|
$
|
19,162,000
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
|
2013
|
|
2012
|
||||
|
Net (loss) income
|
|
$
|
(2,595,000
|
)
|
|
$
|
1,482,000
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
||||
|
Add back:
|
|
|
|
|
||||
|
Interest expense
|
|
11,432,000
|
|
|
6,170,000
|
|
||
|
Kennedy Wilson's share of interest expense included in
investment in joint ventures and loan pool participation |
|
10,617,000
|
|
|
7,285,000
|
|
||
|
Depreciation and amortization
|
|
3,057,000
|
|
|
937,000
|
|
||
|
Kennedy Wilson's share of depreciation and amortization
included in investment in joint ventures |
|
9,310,000
|
|
|
3,900,000
|
|
||
|
Benefit from income taxes
|
|
(1,703,000
|
)
|
|
(1,483,000
|
)
|
||
|
EBITDA
(1)
|
|
30,118,000
|
|
|
18,291,000
|
|
||
|
Stock-based compensation
|
|
1,769,000
|
|
|
871,000
|
|
||
|
Adjusted EBITDA
(2)
|
|
$
|
31,887,000
|
|
|
$
|
19,162,000
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
|
2013
|
|
2012
|
||||
|
Investments
|
|
|
|
|
||||
|
Rental income and sale of real estate
|
|
$
|
8,815,000
|
|
|
$
|
1,470,000
|
|
|
Operating expenses
|
|
(15,360,000
|
)
|
|
(5,515,000
|
)
|
||
|
Equity in joint venture (loss) income
|
|
(344,000
|
)
|
|
5,516,000
|
|
||
|
Interest income from loan pool participations and notes receivable
|
|
2,945,000
|
|
|
538,000
|
|
||
|
Operating (loss) income
|
|
(3,944,000
|
)
|
|
2,009,000
|
|
||
|
Acquisition-related gain
|
|
9,459,000
|
|
|
—
|
|
||
|
Gain on sale of marketable securities
|
|
—
|
|
|
2,931,000
|
|
||
|
Realized foreign currency exchange loss
|
|
—
|
|
|
(112,000
|
)
|
||
|
Interest income - related party
|
|
—
|
|
|
1,087,000
|
|
||
|
Interest expense
|
|
(1,742,000
|
)
|
|
(158,000
|
)
|
||
|
Income from continuing operations
|
|
3,773,000
|
|
|
5,757,000
|
|
||
|
Discontinued operations
|
|
|
|
|
||||
|
(Loss) income from discontinued operations, net of income taxes
|
|
(3,000
|
)
|
|
2,000
|
|
||
|
Gain (loss) from sale of real estate, net of income taxes
|
|
217,000
|
|
|
(212,000
|
)
|
||
|
Income before benefit from taxes
|
|
3,987,000
|
|
|
5,547,000
|
|
||
|
Non-GAAP adjustments:
|
|
|
|
|
||||
|
Add back:
|
|
|
|
|
||||
|
Interest expense
|
|
1,742,000
|
|
|
158,000
|
|
||
|
Kennedy Wilson's share of interest expense included in
investment in joint ventures and loan pool participation
|
|
10,617,000
|
|
|
7,285,000
|
|
||
|
Depreciation and amortization
|
|
2,796,000
|
|
|
822,000
|
|
||
|
Kennedy Wilson's share of depreciation and amortization
included in investment in joint ventures
|
|
9,310,000
|
|
|
3,900,000
|
|
||
|
EBITDA and Adjusted EBITDA
(1) (2)
|
|
$
|
28,452,000
|
|
|
$
|
17,712,000
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
|
2013
|
|
2012
|
||||
|
Services
|
|
|
|
|
||||
|
Management and leasing fees and commissions
|
|
$
|
13,582,000
|
|
|
$
|
10,360,000
|
|
|
Operating expenses
|
|
(8,486,000
|
)
|
|
(7,637,000
|
)
|
||
|
Operating income
|
|
5,096,000
|
|
|
2,723,000
|
|
||
|
Income before benefit for income taxes
|
|
5,096,000
|
|
|
2,723,000
|
|
||
|
Non-GAAP adjustments:
|
|
|
|
|
||||
|
Add back:
|
|
|
|
|
||||
|
Depreciation and amortization
|
|
120,000
|
|
|
33,000
|
|
||
|
EBITDA and Adjusted EBITDA
(1) (2)
|
|
$
|
5,216,000
|
|
|
$
|
2,756,000
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
|
2013
|
|
2012
|
||||
|
Corporate:
|
|
|
|
|
||||
|
Operating expenses
|
|
$
|
(3,731,000
|
)
|
|
$
|
(2,289,000
|
)
|
|
Operating loss
|
|
(3,731,000
|
)
|
|
(2,289,000
|
)
|
||
|
Interest income
|
|
40,000
|
|
|
30,000
|
|
||
|
Interest expense
|
|
(9,690,000
|
)
|
|
(6,012,000
|
)
|
||
|
Benefit for income taxes
|
|
1,703,000
|
|
|
1,483,000
|
|
||
|
Net loss
|
|
(11,678,000
|
)
|
|
(6,788,000
|
)
|
||
|
Non-GAAP adjustments:
|
|
|
|
|
||||
|
Add back:
|
|
|
|
|
||||
|
Interest expense
|
|
9,690,000
|
|
|
6,012,000
|
|
||
|
Depreciation and amortization
|
|
141,000
|
|
|
82,000
|
|
||
|
Benefit for income taxes
|
|
(1,703,000
|
)
|
|
(1,483,000
|
)
|
||
|
EBITDA
(1)
|
|
(3,550,000
|
)
|
|
(2,177,000
|
)
|
||
|
Stock-based compensation
|
|
1,769,000
|
|
|
871,000
|
|
||
|
Adjusted EBITDA
(2)
|
|
$
|
(1,781,000
|
)
|
|
$
|
(1,306,000
|
)
|
|
|
Dividends declared
|
||
|
Preferred shareholders
|
$
|
26,593,000
|
|
|
Common shareholders
|
22,489,000
|
|
|
|
Total dividends
(1)
|
$
|
49,082,000
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
|
|
|
Nine Months Ending
|
|
|
|
|
|
|
||||||||||
|
|
|
Total
|
|
12/31/2013
|
|
1-3 years
|
|
4-5 years
|
|
After 5 years
|
||||||||||
|
Contractual Obligations
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Borrowings:
(1)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Mortgage loan payable
(2)
|
|
$
|
245,237,000
|
|
|
$
|
13,612,000
|
|
|
$
|
31,239,000
|
|
|
$
|
46,787,000
|
|
|
$
|
153,599,000
|
|
|
Subordinated debt
|
|
40,000,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40,000,000
|
|
|||||
|
Senior Notes
(3)
|
|
405,000,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
405,000,000
|
|
|||||
|
Total borrowings
|
|
690,237,000
|
|
|
13,612,000
|
|
|
31,239,000
|
|
|
46,787,000
|
|
|
598,599,000
|
|
|||||
|
Operating leases
|
|
14,502,000
|
|
|
2,270,000
|
|
|
8,122,000
|
|
|
1,427,000
|
|
|
2,683,000
|
|
|||||
|
Total contractual cash obligations
|
|
$
|
704,739,000
|
|
|
$
|
15,882,000
|
|
|
$
|
39,361,000
|
|
|
$
|
48,214,000
|
|
|
$
|
601,282,000
|
|
|
(1)
|
See notes 9-12
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: nine months ending December 31, 2013 -
$36,225,000
; 1-3 years -
$142,977,000
; 4-5 years -
$88,243,000
; After 5 years -
$149,605,000
. The interest payments on variable rate debt have been calculated using the interest rate in effect at
March 31, 2013
.
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
|
Principal Maturing in:
|
|
|
|
Fair Value
March 31,
|
||||||||||||||||||||||||||
|
(in thousands)
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
Thereafter
|
|
Total
|
|
2013
|
||||||||||||||||
|
Interest rate sensitive assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Cash equivalents
|
$
|
198,431
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
198,431
|
|
|
$
|
198,431
|
|
|
Average interest rate
|
0.23
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.23
|
%
|
|
|
|||||||||
|
Variable rate receivables
|
10,016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,016
|
|
|
10,016
|
|
||||||||
|
Average interest rate
|
0.58
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.58
|
%
|
|
|
|||||||||
|
Fixed rate receivables
|
9,644
|
|
|
3,000
|
|
|
—
|
|
|
3,737
|
|
|
5,741
|
|
|
—
|
|
|
22,122
|
|
|
22,122
|
|
||||||||
|
Average interest rate
|
10.43
|
%
|
|
11.50
|
|
|
—
|
|
|
9.45
|
|
|
2.16
|
|
|
—
|
|
|
8.26
|
%
|
|
|
|||||||||
|
Total
|
$
|
218,091
|
|
|
$
|
3,000
|
|
|
$
|
—
|
|
|
$
|
3,737
|
|
|
$
|
5,741
|
|
|
$
|
—
|
|
|
$
|
230,569
|
|
|
$
|
230,569
|
|
|
Weighted average interest rate
|
0.70
|
%
|
|
11.50
|
%
|
|
—
|
%
|
|
9.45
|
%
|
|
2.16
|
%
|
|
—
|
%
|
|
1.02
|
%
|
|
|
|||||||||
|
Interest rate sensitive liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Variable rate borrowings
|
—
|
|
|
4,391
|
|
|
7,032
|
|
|
—
|
|
|
—
|
|
|
52,475
|
|
|
63,898
|
|
|
63,898
|
|
||||||||
|
Average interest rate
|
—
|
|
|
4.25
|
%
|
|
3.71
|
%
|
|
—
|
%
|
|
—
|
|
|
2.24
|
%
|
|
2.54
|
%
|
|
|
|||||||||
|
Fixed rate borrowings
(1)
|
1,873
|
|
|
5,888
|
|
|
—
|
|
|
—
|
|
|
12,000
|
|
|
606,578
|
|
|
626,339
|
|
|
664,470
|
|
||||||||
|
Average interest rate
|
5.72
|
%
|
|
15.00
|
|
|
—
|
|
|
—
|
|
|
6.75
|
|
|
7.49
|
|
|
7.54
|
%
|
|
|
|||||||||
|
Total
|
$
|
1,873
|
|
|
$
|
10,279
|
|
|
$
|
7,032
|
|
|
$
|
—
|
|
|
$
|
12,000
|
|
|
$
|
659,053
|
|
|
$
|
690,237
|
|
|
$
|
728,368
|
|
|
Weighted average interest rate
|
5.72
|
%
|
|
10.41
|
%
|
|
3.71
|
%
|
|
—
|
%
|
|
6.75
|
%
|
|
7.07
|
%
|
|
7.08
|
%
|
|
|
|||||||||
|
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
|
|
|
|
|
|
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:
|
May 9, 2013
|
By:
|
/
S
/ J
USTIN
E
NBODY
|
|
|
|
|
Justin Enbody
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer
|
|
|
|
|
and Accounting Officer)
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|