Kennedy-Wilson Holdings, Inc. (NYSE: KW), a leading
global real estate investment company with $28 billion in AUM
across its real estate equity and debt investment portfolio, today
reported the following results for the fourth quarter and full year
of 2024:
Financial Results
(Amounts in millions, except per share
data)
Q4
Full Year
GAAP Results
2024
2023
2024
2023
GAAP Net Income (Loss) to Common
Shareholders1
$
33.1
$
(247.8
)
$
(76.5
)
$
(341.8
)
Per Diluted Share
0.24
(1.78
)
(0.56
)
(2.46
)
(Amounts in millions)
Q4
Full Year
Non-GAAP Results
2024
2023
2024
2023
Adjusted EBITDA
$
190.8
$
(129.4
)
$
539.7
$
189.8
Adjusted Net Income (Loss)
75.3
(195.9
)
94.3
(151.3
)
Adjusted EBITDA - Key Components (at KW
share)
Baseline EBITDA: Property NOI, loan
income, and inv. mgt fees (net of compensation and general and
administrative expenses)
$
97.8
$
95.5
$
407.1
$
392.5
Realized gain/(loss) on the sale of real
estate
81.2
(10.7
)
196.4
111.6
Changes in the fair value of the
Co-investment portfolio and carried interests
9.1
(175.5
)
(42.9
)
(282.9
)
Other income/(loss)
2.7
(38.7
)
(20.9
)
(31.4
)
Adjusted EBITDA
$
190.8
$
(129.4
)
$
539.7
$
189.8
1
Includes non-cash charges totaling $33
million, $227 million, $213 million, and $473 million for Q4-24,
Q4-23, FY-24, and FY-23, respectively, which primarily includes
depreciation and amortization and fair value changes.
“The fourth quarter capped off an active year of completing over
$4 billion in capital deployment and achieving significant progress
across our key initiatives," said William McMorrow, Chairman and
CEO of Kennedy Wilson. "In Q4, we successfully generated $122
million in cash through our asset sale plan, repaid $262 million in
unsecured debt, and achieved an 83% growth in investment management
fees compared to Q4-23. We also saw improved earnings for both the
fourth quarter and the full year, with growth across all key
components of Adjusted EBITDA. As we enter 2025, our global
platform continues to gain momentum, focused on growing our rental
housing and investment management business while reducing unsecured
debt."
Portfolio & Operations
Update
- Investment Management Fees Increase by 83%: Investment
Management Fees grew by 83% in Q4-24 (vs Q4-23) to $30 million
primarily as a result of increasing levels of recurring base
management fees and originations from KW's debt investment
platform. Investment Management Fees grew by 60% to $99 million in
FY-24 (vs. FY-23).
- Q4 Assets Sales Generate $122 million of Cash: Completed
$615 million in gross asset sales, in which the Company's share was
43%. The sales generated $122 million of cash to KW and $81 million
of net gains on sale. Since Q3-23, the Company has generated $554
million of cash from non-core asset sales, including $475 million
in 2024.
- Estimated Annual NOI: Estimated Annual NOI of $467
million, with the change in Q4-24 primarily driven by non-core
asset dispositions and FX:
Est. Annual NOI To KW
($ in millions)
Fee-Bearing Capital
($ in billions)
As of Q4-23
$
492
$
8.4
As of Q3-24
492
8.8
Transaction activity, net1
(14
)
0.1
Assets stabilized/(unstabilized)
(3
)
—
Operations
4
—
FX and other
(12
)
(0.1
)
Total as of Q4-24
$
467
$
8.8
1
Includes real estate acquisitions,
dispositions, loan fundings and loan repayments completed during
Q4-24. The Company also completed $1.4 billion in loan originations
during Q4-24, which will primarily be funded in future
quarters.
- Strong Multifamily Same Property Performance1: Improving
Occupancy Leads to NOI Growth
Q4 -
2024 vs. Q4 - 2023
FY -
2024 vs. FY- 2023
Multifamily
Occupancy
Revenue
Expenses
NOI (Net Effective)
Occupancy
Revenue
Expenses
NOI (Net Effective)
Market Rate
1.0%
2.6%
(2.9)%
5.6%
1.0%
2.9%
2.1%
3.2%
Affordable
(1.3)%
8.1%
3.7%
10.5%
0.4%
6.1%
7.4%
5.5%
Combined
0.4%
3.7%
(1.6)%
6.5%
0.8%
3.5%
3.1%
3.6%
(1)
Excludes minority-held investments and
assets undergoing development or lease-up.
- Development and Lease-up Portfolio Expected To Add ~$65
million in Estimated Annual NOI:
- Development Spend Completes: In 2024, the Company spent
$40 million of cash on development vs. $151 million spent in 2023.
The Company has minimal equity commitments related to its current
development projects in FY-25.
Investment Management
Business
- Launched UK Single-Family Rental Housing Joint Venture with
Canadian Pension Plan Investment Board ("CPP Investments")
Targeting £1 Billion in Assets:
- CPP Investments initial commitment of £500 million to the
joint-venture, in which KW has a 10% ownership interest.
- In Q4-24, acquired seven development sites which grew platform
to over 900 planned units (including seed assets) and $361 million
of investment.
- Active pipeline of opportunities totaling over 1,000 units,
with the current platform capacity to potentially reach
approximately 4,000 units at full capital deployment.
- Fee-Bearing Capital Has $7.1 billion in Incremental
Commitments: In addition to the $8.8 billion in Fee-Bearing
Capital, the Company has future incremental Fee-Bearing Capital
consisting of the following:
- $4.1 billion in future fundings on previously originated loans
within the Debt Investment Platform.
- $3.0 billion in incremental non-discretionary capital available
from certain strategic partners for equity and debt
investment.
- Debt Investment Platform Completes $1.4 billion in Q4-24
Originations:
- Q4-24 Investment Activity Increases Platform By 9%: In
Q4-24, originated $1.4 billion of new construction loans, completed
$339 million in additional fundings on existing loans, and realized
$486 million in repayments. For 2024, total originations totaled
$3.5 billion.
- Debt Investment Platform to $9 Billion: Includes $4.9
billion in outstanding loans ($4.6 billion of Fee-Bearing Capital)
and $4.1 billion of future funding commitments. KW has an average
ownership of 4%.
- Strong Pipeline: Over $1 billion in new originations in
process for Q1-25 (including $394 million that have closed to
date), all of which relate to multifamily or student-housing
construction projects.
Real Estate Investment
Activity
- $379 million in Gross Acquisitions ($42 million at
share):
- Co-Investment Portfolio: Completed $379 million in gross
real estate acquisitions, including two multifamily properties in
the Pacific Northwest acquired by a fund managed by KW for $109
million and seven single-family housing sites acquired by the
Company's UK single-family rental platform for $270 million. The
Company had a weighted-average 11% ownership interest in these
acquisitions.
- $615 million in Gross Dispositions ($264 million at share)
Generate $122 million in Cash to KW:
- Consolidated Portfolio:
- Sold a 47-year old 460-unit multifamily property in Santa
Maria, CA for $116 million, which generated $36 million of cash and
a gain on sale of $56 million to KW. The Company acquired the
property in 2011 for $42 million.
- Co-Investment Portfolio:
- Recapitalization: Completed a recapitalization of a
multifamily property located in Seattle, WA, in which the Company
previously owned a 51% ownership interest. The recapitalization
resulted in the Company entering into a joint venture with new
capital partners and selling its ownership interest down to 10% of
the new joint venture. The recapitalization resulted in $25 million
of cash and a $33 million gain on sale to the Company.
- Sales: The Company sold $306 million of real estate
investments (KW share 11%) comprised of one retail asset and two
multifamily properties as well as sales from its non-core
residential holdings.
Balance Sheet and
Liquidity
- Cash and Line of Credit Availability: The Company repaid
$78 million on its revolving credit facility during Q4-24. As of
December 31, 2024, Kennedy Wilson had cash and cash equivalents of
$218 million(1) and $98 million drawn on its $550 million revolving
credit facility.
- KWE Bond Redemption: Completed €175 million redemption
of its €475 million outstanding euro-denominated 3.25% notes due
November 2025 (the "Notes") issued by Kennedy Wilson Europe Real
Estate Limited, a wholly-owned subsidiary of Kennedy Wilson. The
redemption was funded using cash proceeds from asset sales and
existing liquidity. A total of €300 million in aggregate nominal
amount of the Notes remain outstanding.
- Debt Profile: Kennedy Wilson's share of debt had a
weighted average effective annual interest rate of 4.6% and a
weighted-average maturity of 4.9 years as of December 31, 2024.
Approximately 97% of the Company's share of debt is either fixed
(77%) or hedged with interest rate derivatives (20%).
- Interest Rate Hedging Strategy: The Company hedges its
floating rate exposure through the use of interest rate caps and
swaps:
- Interest rate hedges have a weighted-average maturity of 1.2
years.
- Received $8 million of cash from interest rate derivatives in
Q4-24 and $41 million in FY-24, which are not reflected as an
offset to interest expense.
- Foreign Currency Hedging Strategy: Kennedy Wilson hedges
its exposure to foreign currency fluctuations by borrowing in the
currency in which it invests and using foreign currency hedging
instruments. As of December 31, 2024, the Company has hedged
approximately 90% of the carrying value of its foreign currency
investments, using local currency debt as well as hedging
instruments with a weighted-average term of 1.0 year.
- 2024 Dividend Taxability: The Company's 2024 dividend
distributions were characterized as 100.00% taxable. Please refer
to kennedywilson.com for further information.
Footnotes
(1)
Represents consolidated cash and includes
$94 million of restricted cash, which is included in cash and cash
equivalents and primarily relates to lender reserves associated
with consolidated mortgages that we hold on properties and reserves
held on behalf of the borrowers under our construction loans. These
reserves typically relate to interest, tax, insurance and future
capital expenditures at the properties. Additionally, we are
subject to withholding taxes to the extent we repatriate cash from
certain of our foreign subsidiaries. Under the KWE Notes covenants
we have to maintain certain interest coverage and leverage ratios
to remain in compliance (see "Indebtedness and Related Covenants"
for more detail on KWE Notes in the Company's quarterly report on
Form 10-Q for the quarter ended September 30, 2024, filed with the
Securities and Exchange Commission on November 5, 2024). Due to
these covenants, we evaluate the tax and covenant implications
before we distribute cash, which could impact the availability of
funds at the corporate level. The Company's share of cash,
including unconsolidated joint-ventures, totals $352 million.
Conference Call and Webcast
Details
Kennedy Wilson will hold a live conference call and webcast to
discuss results at 9:00 a.m. PT/ 12:00 p.m. ET on Thursday,
February 27. The direct dial-in number for the conference call is
(844) 340-4761 for U.S. callers and (412) 717-9616 for
international callers.
A replay of the call will be available for one week beginning
one hour after the live call and can be accessed by (877) 344-7529
for U.S. callers and (412) 317-0088 for international callers. The
passcode for the replay is 5703186.
The webcast will be available at:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=KDrNtGqb.
A replay of the webcast will be available one hour after the
original webcast on the Company’s investor relations web site for
three months.
About Kennedy Wilson
Kennedy Wilson (NYSE: KW) is a leading real estate investment
company with $28 billion of assets under management in high growth
markets across the United States, the UK and Ireland. Drawing on
decades of experience, our relationship-oriented team excels at
identifying opportunities and building value through market cycles,
closing more than $60 billion in total transactions across the
property spectrum since going public in 2009. Kennedy Wilson owns,
operates, and builds real estate within our high-quality, core real
estate portfolio and through our investment management platform,
where we target opportunistic equity and debt investments alongside
our partners. For further information, please visit
www.kennedywilson.com.
Kennedy-Wilson Holdings,
Inc.
Consolidated Balance
Sheets
(Unaudited)
(Dollars in millions)
December 31,
2024
2023
Assets
Cash and cash equivalents
$
217.5
$
313.7
Accounts receivable, net
38.7
57.3
Real estate and acquired in place lease
values (net of accumulated depreciation and amortization of $949.1
and $957.8)
4,290.4
4,837.3
Unconsolidated investments (including
$1,884.4 and $1,927.0 at fair value)
2,042.4
2,069.1
Loan purchases and originations, net
231.1
247.2
Other assets, net
141.0
187.5
Total assets
$
6,961.1
$
7,712.1
Liabilities
Accounts payable
$
10.8
$
17.9
Accrued expenses and other liabilities
(including $225.2 and $234.4 of deferred-tax liabilities)
529.4
597.8
Mortgage debt
2,597.2
2,840.9
KW unsecured debt
1,877.9
1,934.3
KWE unsecured bonds
309.8
522.8
Total liabilities
5,325.1
5,913.7
Equity
Cumulative perpetual preferred stock
789.7
789.9
Common stock
—
—
Additional paid-in capital
1,712.8
1,718.6
Accumulated deficit
(493.7
)
(349.0
)
Accumulated other comprehensive loss
(407.6
)
(404.4
)
Total Kennedy-Wilson Holdings, Inc.
shareholders’ equity
1,601.2
1,755.1
Noncontrolling interests
34.8
43.3
Total equity
1,636.0
1,798.4
Total liabilities and equity
$
6,961.1
$
7,712.1
Kennedy-Wilson Holdings,
Inc.
Consolidated Statements of
Operations
(Unaudited)
(Dollars in millions, except per
share data)
For the Three Months
Ended
For the Year Ended
December 31,
December 31,
2024
2023
2024
2023
Revenue
Rental
$
97.6
$
99.7
$
390.6
$
415.3
Hotel
—
14.4
9.3
57.1
Investment management fees
29.9
16.3
98.9
61.9
Loan
7.5
9.1
31.2
26.1
Other
0.5
0.6
1.4
2.2
Total revenue
135.5
140.1
531.4
562.6
Income (loss) from unconsolidated
investments
Principal co-investments
56.2
(155.1
)
56.2
(188.5
)
Carried interests
(4.6
)
(28.0
)
(49.7
)
(64.3
)
Total income (loss) from unconsolidated
investments
51.6
(183.1
)
6.5
(252.8
)
Gain (loss) on sale of real estate,
net
47.3
(11.0
)
160.1
127.6
Expenses
Rental
36.8
38.9
150.0
152.6
Hotel
—
10.5
7.6
37.9
Compensation and related (including $6.3,
$12.8, $23.6, $34.5 of share-based compensation
45.4
40.7
134.8
139.4
Carried interests compensation
(1.1
)
(9.6
)
(16.6
)
(15.1
)
General and administrative
10.8
10.2
38.8
35.7
Depreciation and amortization
36.1
39.5
148.3
157.8
Total expenses
128.0
130.2
462.9
508.3
Interest expense
(65.7
)
(66.7
)
(261.1
)
(259.2
)
Loss on early extinguishment of debt
(1.2
)
—
(1.7
)
(1.6
)
Other income (loss)
10.2
(27.0
)
4.2
(5.0
)
Income (loss) before provision for
income taxes
49.7
(277.9
)
(23.5
)
(336.7
)
(Provision for) benefit from income
taxes
(6.0
)
42.0
(10.2
)
55.3
Net income (loss)
43.7
(235.9
)
(33.7
)
(281.4
)
Net loss (income) attributable to
noncontrolling interests
0.3
(1.0
)
0.7
(22.4
)
Preferred dividends
(10.9
)
(10.9
)
(43.5
)
(38.0
)
Net income (loss) attributable to
Kennedy-Wilson Holdings, Inc. common shareholders
$
33.1
$
(247.8
)
$
(76.5
)
$
(341.8
)
Basic earnings (loss) per share
Earnings (loss) per share
$
0.24
$
(1.78
)
$
(0.56
)
$
(2.46
)
Weighted average shares outstanding
137,432,641
139,034,415
137,778,812
138,930,517
Diluted earnings (loss) per
share
Earnings (loss) per share
$
0.24
$
(1.78
)
$
(0.56
)
$
(2.46
)
Weighted average shares outstanding
137,932,019
139,034,415
137,778,812
138,930,517
Dividends declared per common share
$
0.12
$
0.24
$
0.60
$
0.96
Kennedy-Wilson Holdings,
Inc.
Adjusted EBITDA
(Unaudited)
(Dollars in millions)
The table below reconciles
Adjusted EBITDA to net income attributable to Kennedy-Wilson
Holdings, Inc. common shareholders, using Kennedy Wilson’s Pro-Rata
share amounts for each adjustment item.
Three Months Ended
Year Ended
December 31,
December 31,
2024
2023
2024
2023
Net income (loss) attributable to
Kennedy-Wilson Holdings, Inc. common shareholders
$
33.1
$
(247.8
)
$
(76.5
)
$
(341.8
)
Non-GAAP adjustments:
Add back (Kennedy Wilson's Share)(1):
Interest expense
97.4
96.3
389.6
355.9
Loss on early extinguishment of debt
1.2
—
1.7
1.6
Depreciation and amortization
35.9
39.1
147.2
156.0
Provision for (benefit from) income
taxes
6.0
(40.7
)
10.6
(54.4
)
Preferred dividends
10.9
10.9
43.5
38.0
Share-based compensation(2)
6.3
12.8
23.6
34.5
Adjusted EBITDA
$
190.8
$
(129.4
)
$
539.7
$
189.8
(1)
See Appendix for reconciliation of Kennedy
Wilson's Share amounts.
(2)
Q4-23 includes $5.5 million related to
one-time termination related costs.
Adjusted Net Income
(Unaudited)
(Dollars in millions, except
share data)
The table below reconciles Adjusted Net
Income to net income attributable to Kennedy-Wilson Holdings, Inc.
common shareholders, using Kennedy Wilson’s Pro-Rata share amounts
for each adjustment item.
Three Months Ended
Year Ended
December 31,
December 31,
2024
2023
2024
2023
Net income (loss) attributable to
Kennedy-Wilson Holdings, Inc. common shareholders
$
33.1
$
(247.8
)
$
(76.5
)
$
(341.8
)
Non-GAAP adjustments:
Add back (Kennedy Wilson's Share)(1):
Depreciation and amortization
35.9
39.1
147.2
156.0
Share-based compensation(2)
6.3
12.8
23.6
34.5
Adjusted Net Income (Loss)
$
75.3
$
(195.9
)
$
94.3
$
(151.3
)
Weighted average shares outstanding for
diluted
137,932,019
139,034,415
137,778,812
138,930,517
(1)
See Appendix for reconciliation of Kennedy
Wilson's Share amounts.
(2)
Q4-23 includes $5.5 million related to
one-time termination related costs.
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 Section 27A of
the Securities Act of 1933, as amended, and Section 21E 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," "may," "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 Item 1A. "Risk
Factors" section of our Annual Report on Form 10-K for the year
ended December 31, 2023, 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.
Common Definitions
- “KWH,” "KW," “Kennedy Wilson,” the "Company," "we," "our," or
"us" refers to Kennedy-Wilson Holdings, Inc. and its wholly-owned
subsidiaries.
- “Adjusted EBITDA” represents net (loss) income before interest
expense, loss (gain) on early extinguishment of debt, our share of
interest expense included in unconsolidated investments,
depreciation and amortization, our share of depreciation and
amortization included in unconsolidated investments, preferred
dividends, provision for (benefit from) income taxes, our share of
taxes included in unconsolidated investments, share-based
compensation expense for the Company, and EBITDA attributable to
noncontrolling interests. Please also see the reconciliation to
GAAP in the Company’s supplemental financial information included
in this release and also available at www.kennedywilson.com. Our
management uses Adjusted EBITDA to analyze our business because it
adjusts net income for items we believe do not accurately reflect
the nature of our business going forward or that relate to non-cash
compensation expense or noncontrolling interests. Such items may
vary for different companies for reasons unrelated to overall
operating performance. Additionally, we believe Adjusted EBITDA is
useful to investors to assist them in getting a more accurate
picture of our results from operations. However, Adjusted EBITDA is
not a recognized measurement under GAAP and when analyzing our
operating performance, readers should use Adjusted EBITDA in
addition to, and not as an alternative for, net income as
determined in accordance with GAAP. Because not all companies use
identical calculations, our presentation of Adjusted EBITDA may not
be comparable to similarly titled measures of other companies.
Furthermore, Adjusted EBITDA is not intended to be a measure of
free cash flow for management’s discretionary use, as it does not
remove all non-cash items or consider certain cash requirements
such as tax and debt service payments. The amount shown for
Adjusted EBITDA also differs from the amount calculated under
similarly titled definitions in our debt instruments, which are
further adjusted to reflect certain other cash and non-cash charges
and are used to determine compliance with financial covenants and
our ability to engage in certain activities, such as incurring
additional debt and making certain restricted payments.
- "Adjusted Fees" refers to Kennedy Wilson’s gross investment
management and property services fees adjusted to include Kennedy
Wilson's share of fees eliminated in consolidation, and performance
fees included in unconsolidated investments. Our management uses
Adjusted Fees to analyze our investment management and business
because the measure removes required eliminations under GAAP for
properties in which the Company provides services but also has an
ownership interest. These eliminations understate the economic
value of the investment management and property services fees and
makes the Company comparable to other real estate companies that
provide investment management but do not have an ownership interest
in the properties they manage. Our management believes that
adjusting GAAP fees to reflect these amounts eliminated in
consolidation presents a more holistic measure of the scope of our
investment management and real estate services business.
- "Adjusted Net Income" represents net income (loss) before
depreciation and amortization, Kennedy Wilson's share of
depreciation and amortization included in unconsolidated
investments, share-based compensation, and excluding net income
attributable to noncontrolling interests, before depreciation and
amortization. Please also see the reconciliation to GAAP in the
Company’s supplemental financial information included in this
release and also available at www.kennedywilson.com.
- "Baseline EBITDA" is a non-GAAP measure representing net (loss)
income less total income from unconsolidated investments, gain
(loss) on sale of real estate, net, other income (loss) and
non-controlling interest, plus share-based compensation, carried
interest compensation, depreciation and amortization, interest
expense, gain (loss) on early extinguishment of debt, benefit from
(provision for) income taxes, NOI from unconsolidated investments
(at KW’s share) and fees eliminated in consolidation.
- "Cap rate" represents the net operating income of an investment
for the year preceding its acquisition or disposition, as
applicable, divided by the purchase or sale price, as applicable.
Capitalization ("Cap") rates discussed in this report only include
data from income-producing properties. The Company calculates cap
rates based on information that is supplied to it during the
acquisition diligence process. This information is not audited or
reviewed by independent accountants and may be presented in a
manner that is different from similar information included in the
Company's financial statements prepared in accordance with GAAP. In
addition, cap rates represent historical performance and are not a
guarantee of future net operating income ("NOI"). Properties for
which a cap rate is discussed may not continue to perform at that
cap rate.
- "Carried interests” refers to amounts that are allocated to the
Company under Funds and the Co-Investment investments based on the
cumulative performance of such venture and are subject to preferred
return thresholds of the partners of such venture. In the case of
Funds, carried interests represent an allocation relating to the
performance of investment management services, whereas in the case
of a Co-Investment, carried interests represent returns for the
performance of the underlying investments in the Co-Investment
investments structures subject to collaborative
decision-making.
- "Carried interests compensation” refers to any carried
interests earned by certain commingled funds and separate account
investments to be allocated to certain non-NEO employees of the
Company, as approved by the compensation committee of the Company’s
board of directors.
- "Equity partners" refers to non-wholly-owned subsidiaries that
we consolidate in our financial statements under U.S. GAAP and
third-party equity providers.
- "Estimated Annual NOI" is a property-level non-GAAP measure
representing the estimated annual net operating income from each
property as of the date shown, inclusive of rent abatements (if
applicable). The calculation excludes depreciation and amortization
expense, and does not capture the changes in the value of our
properties that result from use or market conditions, nor the level
of capital expenditures, tenant improvements, and leasing
commissions necessary to maintain the operating performance of our
properties. For assets wholly-owned and fully occupied by KW, the
Company provides an estimated NOI for valuation purposes of $4.2
million, which includes an assumption for applicable market rents.
Any of the enumerated items above could have a material effect on
the performance of our properties. Also, where specifically noted,
for properties purchased in 2024, the NOI represents estimated Year
1 NOI from our original underwriting. Estimated year 1 NOI for
properties purchased in 2024 may not be indicative of the actual
results for those properties. Estimated annual NOI is not an
indicator of the actual annual net operating income that the
Company will or expects to realize in any period. Please also see
the definition of "Net operating income" below. Please also see the
reconciliation to GAAP in the Company’s supplemental financial
information included in this release and also available at
www.kennedywilson.com.
- "Fee-Bearing Capital" represents total third-party committed or
invested capital that we manage in our joint-ventures, commingled
funds, and debt platform that entitle us to earn fees, including
without limitation, asset management fees, construction management
fees, acquisition and disposition fees and/or promoted interest, if
applicable.
- "Gross Asset Value” refers to the gross carrying value of
assets, before debt, depreciation and amortization, and net of
noncontrolling interests.
- "Net operating income" or "NOI” is a non-GAAP measure
representing the income produced by a property calculated by
deducting certain property expenses from property revenues. Our
management uses net operating income to assess and compare the
performance of our properties and to estimate their fair value. Net
operating income does not include the effects of depreciation or
amortization or gains or losses from the sale of properties because
the effects of those items do not necessarily represent the actual
change in the value of our properties resulting from our value-add
initiatives or changing market conditions. Our management believes
that net operating income reflects the core revenues and costs of
operating our properties and is better suited to evaluate trends in
occupancy and lease rates. Please also see the reconciliation to
GAAP in the Company’s supplemental financial information included
in this release and also available at www.kennedywilson.com.
- "Noncontrolling interests" represents the portion of equity
ownership in a consolidated subsidiary not attributable to Kennedy
Wilson.
- "Principal co-investments” consists of the Company’s share of
income or loss earned on investments in which the Company can
exercise significant influence but does not have control. Income
from unconsolidated investments includes income from ordinary
course operations of the underlying investment, gains on sale, fair
value gains and losses.
- "Pro-Rata" represents Kennedy Wilson's share calculated by
using our proportionate economic ownership of each asset in our
portfolio. Please also refer to the pro-rata financial data in our
supplemental financial information.
- "Property NOI" or "Property-level NOI" is a non-GAAP measure
calculated by deducting the Company's Pro-Rata share of rental and
hotel property expenses from the Company's Pro-Rata rental, hotel
and loans and other revenues. Please also see the reconciliation to
GAAP in the Company’s supplemental financial information included
in this release and also available at www.kennedywilson.com.
- "Real Estate Assets under Management" ("AUM") generally refers
to the properties and other assets with respect to which the
Company provides (or participates in) oversight, investment
management services and other advice, and which generally consist
of real estate properties or loans, and investments in joint
ventures. AUM is principally intended to reflect the extent of the
Company's presence in the real estate market, not the basis for
determining management fees. AUM consists of the total estimated
fair value of the real estate properties, total loan commitments
made through out debt investment platform, inclusive of both
currently outstanding loan amounts and contractual future fundings,
and other real estate-related assets either owned by third parties,
wholly-owned by the Company or held by joint ventures and other
entities in which its sponsored funds or investment vehicles and
client accounts have invested. The estimated value of development
properties is included at estimated completion cost. The accuracy
of estimating fair value for investments cannot be determined with
precision and cannot be substantiated by comparison to quoted
prices in active markets and may not be realized in a current sale
or immediate settlement of the asset or liability (particularly
given the ongoing macroeconomic conditions such as, but not limited
to recent adverse developments affecting regional banks and other
financial institutions, and ongoing military conflicts around the
world and uncertainty with respect to fluctuating interest rates
continue to fuel recessionary fears and create volatility in
Kennedy Wilson's business results and operations). Recently, there
has also been a lack of liquidity in the capital markets as well as
limited transactions which has had an impact on the inputs
associated with fair values. Additionally, there are inherent
uncertainties in any fair value measurement technique, and changes
in the underlying assumptions used, including capitalization rates,
discount rates, liquidity risks, and estimates of future cash flows
could significantly affect the fair value measurement amounts. All
valuations of real estate involve subjective judgments.
- "Same property" refers to stabilized consolidated and
unconsolidated properties in which Kennedy Wilson has an ownership
interest during the entire span of both periods being compared.
This analysis excludes properties that during the comparable
periods (i) were acquired, (ii) were sold, (iii) are either under
development or undergoing lease up or major repositioning as part
of the Company’s asset management strategy, (iv) were investments
in which the Company holds a minority ownership position, and (v)
certain non-recurring income and expenses. The analysis only
includes Office, Multifamily and Hotel properties, where
applicable. To derive an appropriate measure of operating
performance across the comparable periods, the Company removes the
effects of foreign currency exchange rate movements by using the
reported period-end exchange rate to translate from local currency
into the U.S. dollar, for both periods. Amounts are calculated
using Kennedy Wilson’s ownership share in the Company’s
consolidated and unconsolidated properties. Management evaluates
the performance of the operating properties the Company owns and
manages using a “same property” analysis because the population of
properties in this analysis is consistent from period to period,
which allows management and investors to analyze (i) the Company’s
ongoing business operations and (ii) the revenues and expenses
directly associated with owning and operating the Company’s
properties and the impact to operations from trends in occupancy
rates, rental rates and operating costs. Same property metrics are
widely recognized measures in the real estate industry, however,
other publicly-traded real estate companies may not calculate and
report same property results in the same manner as the Company.
Please also see “Management’s Discussion and Analysis of Financial
Condition and Results of Operations - Certain Non-GAAP Measures and
Reconciliations” for a reconciliation of “same property” results to
the most comparable measure reported under GAAP.
Note about Non-GAAP and certain other
financial information included in this presentation
In addition to the results reported in accordance with U.S.
generally accepted accounting principles ("GAAP") included within
this presentation, Kennedy Wilson has provided certain information,
which includes non-GAAP financial measures (including Adjusted
EBITDA, Adjusted Net Income, Net Operating Income, and Adjusted
Fees, as defined above). Such information is reconciled to its
closest GAAP measure in accordance with the rules of the SEC, and
such reconciliations are included within this presentation. These
measures may contain cash and non-cash acquisition-related gains
and expenses and gains and losses from the sale of real-estate
related investments. Consolidated non-GAAP measures discussed
throughout this report contain income or losses attributable to
non-controlling interests. 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. Annualized
figures used throughout this release and supplemental financial
information, and our estimated annual net operating income metrics,
are not an indicator of the actual net operating income that the
Company will or expects to realize in any period.
KW-IR
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250226788898/en/
Investor Relations Daven Bhavsar, CFA (310) 887-3431
dbhavsar@kennedywilson.com
Corporate Headquarters 151 S. El Camino Drive Beverly
Hills, CA 90212 www.kennedywilson.com
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