Attached files
| file | filename |
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| 8-K - FORM 8-K - Kennedy-Wilson Holdings, Inc. | q1-20128xk.htm |
| EX-99.2 - FIRST QUARTER 2012 SUPPLEMENTAL FINANCIAL INFORMATION - Kennedy-Wilson Holdings, Inc. | q12012supplemental.htm |
Kennedy Wilson Reports 1Q 2012 Earnings
Exhibit 99.1
Contact: Christina Cha
Director of Corporate Communication
Kennedy Wilson
(310) 887-6294 9701 Wilshire Blvd. Suite 700
ccha@kennedywilson.com Beverly Hills, CA 90212
www.kennedywilson.com
NEWS RELEASE
KENNEDY WILSON REPORTS FIRST QUARTER 2012 EARNINGS
Adjusted EBITDA increases by 27% from same period last year
BEVERLY HILLS, Calif. (May 7, 2012) - Kennedy-Wilson Holdings, Inc. (NYSE: KW) (“Kennedy Wilson”, "we," "us," "our," or the “Company”), an international real estate investment and services company, today reported a first quarter 2012 net loss attributable to common shareholders of $3.4 million (or $0.07 per basic and diluted share) compared to a net loss of $1.0 million (or $0.02 per basic and diluted share) for the same period in 2011. Net loss attributable to common shareholders, adjusted for stock-based compensation expense, was $2.5 million (or $0.05 per basic share) compared to net income of $0.2 million for the same period in 2011.
The Company's earnings before interest, taxes, depreciation and stock-based compensation expense (“Adjusted EBITDA”) for the first quarter 2012 was $19.2 million compared to $15.1 million for the same period in 2011.
“As part of our original business plans, we have begun to realize gains on some assets acquired in 2010 and 2011,” said William McMorrow, chairman and CEO of Kennedy Wilson. “We continue to see many opportunities to grow the recurring cash flow of the company through reinvestment of the return of capital and gains achieved from sales.”
Kennedy Wilson Recent Highlights
Balance Sheet
• | Our investment account (Kennedy Wilson's equity in real estate, joint ventures, loan investments, and marketable securities) decreased by 3% to $566.7 million from $582.8 million at December 31, 2011 due primarily to sales of real estate and marketable securities and resolution of loan investments. |
• | The Company received distributions from joint ventures and loan pool participations of $18.5 million during the three months ended March 31, 2012 as compared to $3.4 million for the same period in 2011, an increase of $15.1 million. |
• | Our cash position increased to $122.3 million at March 31, 2012 versus $115.9 million as of December 31, 2011. |
• | Our corporate debt to book equity as of March 31, 2012 was 0.7 to 1.0. |
• | Our deal-level leverage stood at 53% as of March 31, 2012. |
FOR IMMEDIATE RELEASE
Kennedy Wilson Reports 1Q 2012 Earnings
Operating metrics
• | During the three months ended March 31, 2012, the Company achieved an adjusted EBITDA of $19.2 million, a 27% increase from $15.1 million for the same period in 2011. |
• | During the three months ended March 31, 2012, the investments business achieved an EBITDA of $17.7 million, a 28% increase from $13.8 million for the same period in 2011. |
• | During the three months ended March 31, 2012, the services business achieved an EBITDA of $2.8 million, a 56% increase from $1.8 million for the same period in 2011. |
Acquisition/disposition program
• | During the three months ended March 31, 2012, the Company and its equity partners closed or are under contract to close approximately $441.0 million of real estate related investments. Since January 1, 2010, acquisitions total approximately $5.6 billion. |
• | During the three months ended March 31, 2012, the Company and its equity partners sold a 180-unit apartment building for a total gain of $16.0 million of which our share was $2.2 million. |
• | During the three months ended March 31, 2012, the Company sold a portion of its marketable securities for a net gain of $2.9 million. |
• | Subsequent to March 31, 2012, the Company and its equity partners sold a 213-unit residential tower and a 440-unit apartment building for combined gains of approximately $15.0 million of which our share was $5.5 million. |
• | As of May 4, 2012, the Company and its equity partners apartment portfolio, including units sold and deals under contract, totals 13,876 units. |
Services business
• | Management and leasing fees increased by 74% to $8.7 million for the three months ended March 31, 2012 from $5.0 million for the same period in 2011, driven primarily by higher asset management fees. |
• | Commissions decreased by 38% to $1.6 million for the three months ended March 31, 2012 from $2.6 million for the same period in 2011, driven primarily by higher acquisition fees in 2011. |
Debt financing
• | Since January 1, 2011, the Company and its equity partners have completed over $1.7 billion of property financings (including approximately $976.3 million of refinancings) at an average interest rate of 4.1% and a weighted average maturity of 4.1 years. |
United Kingdom and Ireland
• | 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 May 4, 2012, the unpaid principal balance was $1.4 billion due to loan resolutions of approximately $688.6 million, representing 33% of the pool. |
• | Subsequent to March 31, 2012, we announced a €250 million capital commitment from Fairfax Financial Holdings to acquire real estate and loans secured by real estate in the United Kingdom and Ireland. We are under contract to close our first investment within this platform - the historic 210-unit Gasworks apartment building in Dublin, Ireland located adjacent to Google's European headquarters. |
Japan
• | Maintained 95% occupancy in 50 apartment buildings with over 2,400 units. |
• | Refinanced approximately $80 million of property level debt for 5 years at an interest rate of 1.6%. |
FOR IMMEDIATE RELEASE
Kennedy Wilson Reports 1Q 2012 Earnings
• | Since September 2010, we have distributed a total of $44.7 million of which our share was $20.9 million. |
Conference Call and Webcast Details
The Company will hold a live conference call and webcast to discuss results on Tuesday, May 8 at 7:00 a.m. PT/ 10:00 a.m. ET.
The direct dial-in number for the conference call is (866) 831-6272 for U.S. and Canadian callers and (617) 213-8859 for international callers. The access code for the live call is 32692166.
A replay of the call will be available for one week beginning two hours after the live call and can be accessed by calling (888) 286-8010 for U.S. and Canadian callers and (617) 801-6888 for international callers. The access code for the replay is 80304293.
The webcast will be available at: http://www.media-server.com/m/acs/d37f28463d2521aa7204ee0e69d219cd. A replay of the webcast will be available two hours after the original webcast on the Company's investor relations web site for one year.
About Kennedy Wilson
Founded in 1977, Kennedy Wilson is an international real estate investment and services company headquartered in Beverly Hills, CA with 23 offices in the U.S., Europe and Japan. The company offers a comprehensive array of real estate services including auction, conventional sales, property services, research and investment management. Through its fund management and separate account businesses, Kennedy Wilson is a strategic investor of real estate investments in the U.S., Europe and Japan. For further information on Kennedy Wilson, please visit www.kennedywilson.com.
Forward-Looking Statements
Statements made by us in this report and in other reports and statements released by us that are not historical facts constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are necessarily estimates reflecting the judgment of our senior management based on our current estimates, expectations, forecasts and projections and include comments that express our current opinions about trends and factors that may impact future operating results. Disclosures that use words such as “believe,” “anticipate,” “estimate,” “intend,” “could,” “plan,” “expect,” “project” or the negative of these, as well as similar expressions, are intended to identify forward-looking statements. These statements are not guarantees of future performance, rely on a number of assumptions concerning future events, many of which are outside of our control, and involve known and unknown risks and uncertainties that could cause our actual results, performance or achievement, or industry results, to differ materially from any future results, performance or achievements, expressed or implied by such forward-looking statements. These risks and uncertainties may include these factors and the risks and uncertainties described elsewhere in this report and other filings with the Securities and Exchange Commission (the “SEC”), including the Item 1A. “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2011. Any such forward-looking statements, whether made in this report or elsewhere, should be considered in the context of the various disclosures made by us about our businesses including, without limitation, the risk factors discussed in our filings with the SEC. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements, whether as a result of new information, future events, changes in assumptions, or otherwise.
Non-GAAP Financial Information
FOR IMMEDIATE RELEASE
Kennedy Wilson Reports 1Q 2012 Earnings
In addition to the results reported in accordance with U.S. generally accepted accounting principles (GAAP) included within this press release, Kennedy Wilson has provided certain information, which includes non-GAAP financial measures (pro forma Statements of Income, Adjusted Net (Loss) Income Attributable to Kennedy Wilson Common Shareholders, Basic Adjusted Net (Loss) Income Attributable to Kennedy Wilson Common Shareholders Per Share, EBITDA and Adjusted EBITDA). Such information is reconciled to its closest GAAP measure in accordance with the SEC rules and is included in the attached supplemental tables. Management believes that these non-GAAP financial measures are useful to both management and the Company's shareholders in their analysis of the business and operating performance of the Company. Management also uses this information for operational planning and decision-making purposes. Non-GAAP financial measures are not and should not be considered a substitute for any GAAP measures. Additionally, non-GAAP financial measures as presented by Kennedy Wilson may not be comparable to similarly titled measures reported by other companies.
Tables Follow
FOR IMMEDIATE RELEASE
Kennedy Wilson Reports 1Q 2012 Earnings
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
March 31, 2012 | December 31, 2011 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 122,317,000 | $ | 115,926,000 | ||||
Accounts receivable | 3,535,000 | 3,114,000 | ||||||
Accounts receivable — related parties | 19,537,000 | 15,612,000 | ||||||
Notes receivable | 8,250,000 | 7,938,000 | ||||||
Notes receivable — related parties | 34,830,000 | 33,269,000 | ||||||
Real estate, net | 112,790,000 | 115,880,000 | ||||||
Investments in joint ventures | 336,699,000 | 343,367,000 | ||||||
Investment in loan pool participations | 91,162,000 | 89,951,000 | ||||||
Marketable securities | 13,571,000 | 23,005,000 | ||||||
Other assets | 19,837,000 | 20,749,000 | ||||||
Goodwill | 23,965,000 | 23,965,000 | ||||||
Total assets | $ | 786,493,000 | $ | 792,776,000 | ||||
Liabilities | ||||||||
Accounts payable | $ | 997,000 | $ | 1,798,000 | ||||
Accrued expenses and other liabilities | 27,461,000 | 24,262,000 | ||||||
Accrued salaries and benefits | 2,301,000 | 14,578,000 | ||||||
Deferred tax liability | 22,671,000 | 18,437,000 | ||||||
Senior notes payable | 249,398,000 | 249,385,000 | ||||||
Mortgage loans payable | 30,748,000 | 30,748,000 | ||||||
Junior subordinated debentures | 40,000,000 | 40,000,000 | ||||||
Total liabilities | 373,576,000 | 379,208,000 | ||||||
Equity | ||||||||
Common stock | 5,000 | 5,000 | ||||||
Additional paid-in capital | 408,217,000 | 407,335,000 | ||||||
Retained earnings | 3,765,000 | 9,708,000 | ||||||
Accumulated other comprehensive income | 11,619,000 | 5,035,000 | ||||||
Shares held in treasury at cost | (11,889,000 | ) | (11,848,000 | ) | ||||
Total Kennedy-Wilson Holdings, Inc. shareholders' equity | 411,717,000 | 410,235,000 | ||||||
Noncontrolling interests | 1,200,000 | 3,333,000 | ||||||
Total equity | 412,917,000 | 413,568,000 | ||||||
Total liabilities and equity | $ | 786,493,000 | $ | 792,776,000 | ||||
FOR IMMEDIATE RELEASE
Kennedy Wilson Reports 1Q 2012 Earnings
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations
Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
Revenue | ||||||||
Management and leasing fees | $ | 8,741,000 | $ | 5,011,000 | ||||
Commissions | 1,619,000 | 2,561,000 | ||||||
Sale of real estate | — | 417,000 | ||||||
Rental and other income | 1,470,000 | 738,000 | ||||||
Total revenue | 11,830,000 | 8,727,000 | ||||||
Operating expenses | ||||||||
Commission and marketing expenses | 965,000 | 638,000 | ||||||
Compensation and related expenses | 9,000,000 | 7,832,000 | ||||||
Cost of real estate sold | — | 397,000 | ||||||
General and administrative | 3,669,000 | 2,813,000 | ||||||
Depreciation and amortization | 937,000 | 434,000 | ||||||
Rental operating expenses | 870,000 | 411,000 | ||||||
Total operating expenses | 15,441,000 | 12,525,000 | ||||||
Equity in joint venture income | 5,516,000 | 5,256,000 | ||||||
Interest income from loan pool participations and notes receivable | 538,000 | 2,546,000 | ||||||
Operating income | 2,443,000 | 4,004,000 | ||||||
Non-operating income (expense) | ||||||||
Interest income | 1,117,000 | 266,000 | ||||||
Gain on sale of marketable securities | 2,931,000 | — | ||||||
Realized foreign currency exchange loss | (112,000 | ) | — | |||||
Interest expense | (6,170,000 | ) | (1,529,000 | ) | ||||
Income from continuing operation before benefit from (provision for) income taxes | 209,000 | 2,741,000 | ||||||
Benefit from (provision for) income taxes | 1,483,000 | (663,000 | ) | |||||
Income from continuing operations | 1,692,000 | 2,078,000 | ||||||
Discontinued Operations | ||||||||
Income from discontinued operations, net of income taxes | 2,000 | — | ||||||
Loss from sale of real estate, net of income taxes | (212,000 | ) | — | |||||
Net income | 1,482,000 | 2,078,000 | ||||||
Net income attributable to the noncontrolling interests | (2,798,000 | ) | (1,038,000 | ) | ||||
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. | (1,316,000 | ) | 1,040,000 | |||||
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 | $ | (3,352,000 | ) | $ | (996,000 | ) | ||
Basic and diluted loss per share attributable to Kennedy-Wilson Holdings, Inc. common shareholders | ||||||||
Continuing operations | $ | (0.06 | ) | $ | (0.02 | ) | ||
Discontinued operations, net of income taxes | — | — | ||||||
Earning per share - basic and diluted (a) | $ | (0.07 | ) | $ | (0.02 | ) | ||
Weighted average number of common shares outstanding | 51,160,270 | 40,022,940 | ||||||
Dividends declared per common share | $ | 0.05 | $ | — | ||||
—————
(a) EPS amounts may not add due to rounding.
FOR IMMEDIATE RELEASE
Kennedy Wilson Reports 1Q 2012 Earnings
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Pro Forma Consolidated Statements of Income
Three Months Ended March 31, | |||||||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||||||
Consolidated | Pro Rata Unconsolidated Investments | Pro Forma Total | Consolidated | Pro Rata Unconsolidated Investments | Pro Forma Total | ||||||||||||||||||||
Revenue | |||||||||||||||||||||||||
Management and leasing fees | $ | 8,741,000 | $ | — | $ | 8,741,000 | $ | 5,011,000 | $ | — | $ | 5,011,000 | |||||||||||||
Commissions | 1,619,000 | — | 1,619,000 | 2,561,000 | — | 2,561,000 | |||||||||||||||||||
Sale of real estate | — | 15,200,000 | 15,200,000 | 417,000 | 6,126,000 | 6,543,000 | |||||||||||||||||||
Rental and other income | 1,470,000 | 17,801,000 | 19,271,000 | 738,000 | 14,382,000 | 15,120,000 | |||||||||||||||||||
Interest income | — | 2,255,000 | 2,255,000 | — | 3,239,000 | 3,239,000 | |||||||||||||||||||
Total revenue | 11,830,000 | 35,256,000 | 47,086,000 | 8,727,000 | 23,747,000 | 32,474,000 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||
Commission and marketing expenses | 965,000 | — | 965,000 | 638,000 | — | 638,000 | |||||||||||||||||||
Compensation and related expenses | 9,000,000 | 400,000 | 9,400,000 | 7,832,000 | — | 7,832,000 | |||||||||||||||||||
Cost of real estate sold | — | 11,900,000 | 11,900,000 | 397,000 | 4,732,000 | 5,129,000 | |||||||||||||||||||
General and administrative | 3,669,000 | 100,000 | 3,769,000 | 2,813,000 | — | 2,813,000 | |||||||||||||||||||
Depreciation and amortization | 937,000 | 3,900,000 | 4,837,000 | 434,000 | 3,725,000 | 4,159,000 | |||||||||||||||||||
Rental operating expenses | 870,000 | 6,100,000 | 6,970,000 | 411,000 | 5,856,000 | 6,267,000 | |||||||||||||||||||
Total operating expenses | 15,441,000 | 22,400,000 | 37,841,000 | 12,525,000 | 14,313,000 | 26,838,000 | |||||||||||||||||||
Equity in joint venture income | 5,516,000 | (5,516,000 | ) | — | 5,256,000 | (5,256,000 | ) | — | |||||||||||||||||
Interest income from loan pool participations and notes receivable | 538,000 | (538,000 | ) | — | 2,546,000 | (2,546,000 | ) | — | |||||||||||||||||
Operating income | 2,443,000 | 6,802,000 | 9,245,000 | 4,004,000 | 1,632,000 | 5,636,000 | |||||||||||||||||||
Non-operating income (expense) | |||||||||||||||||||||||||
Interest income | 1,117,000 | (1,117,000 | ) | — | 266,000 | (266,000 | ) | — | |||||||||||||||||
Carried interest on realized investment | — | 1,900,000 | 1,900,000 | — | — | — | |||||||||||||||||||
Remeasurement gain | — | — | — | — | — | 4,100,000 | 4,100,000 | ||||||||||||||||||
Gain on sale of marketable securities | 2,931,000 | — | 2,931,000 | — | — | — | |||||||||||||||||||
Realized foreign currency exchange loss | (112,000 | ) | — | (112,000 | ) | — | — | — | |||||||||||||||||
Interest expense | (6,170,000 | ) | (7,285,000 | ) | (13,455,000 | ) | (1,529,000 | ) | (5,466,000 | ) | (6,995,000 | ) | |||||||||||||
Other non-operating expenses | — | (300,000 | ) | (300,000 | ) | — | — | — | |||||||||||||||||
Income from continuing operation before benefit from (provision for) income taxes | 209,000 | — | 209,000 | 2,741,000 | — | 2,741,000 | |||||||||||||||||||
Benefit from (provision for) income taxes | 1,483,000 | — | 1,483,000 | (663,000 | ) | — | (663,000 | ) | |||||||||||||||||
Income from continuing operations | 1,692,000 | — | 1,692,000 | 2,078,000 | — | 2,078,000 | |||||||||||||||||||
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 | $ | — | $ | 1,482,000 | $ | 2,078,000 | $ | — | $ | 2,078,000 | |||||||||||||
FOR IMMEDIATE RELEASE
Kennedy Wilson Reports 1Q 2012 Earnings
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Adjusted Net (Loss) Income Attributable to Kennedy Wilson Common Shareholders
Three months ended March 31, | ||||||||
2012 | 2011 | |||||||
Net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders | $ | (3,352,000 | ) | $ | (996,000 | ) | ||
Non-GAAP adjustments: | ||||||||
Add back: | ||||||||
Stock based compensation | 871,000 | 1,167,000 | ||||||
Adjusted Net (Loss) Income Attributable to Kennedy Wilson Common Shareholders | $ | (2,481,000 | ) | $ | 171,000 | |||
Basic weighted average number of common shares outstanding | 51,160,270 | 40,022,940 | ||||||
Basic Adjusted Net Loss Attributable to Kennedy Wilson Common Shareholders Per Share | $ | (0.05 | ) | $ | — | |||
Kennedy-Wilson Holdings, Inc. and Subsidiaries
EBITDA and Adjusted EBITDA
Three months ended March 31, | ||||||||
2012 | 2011 | |||||||
Net income | $ | 1,482,000 | $ | 2,078,000 | ||||
Add back: | ||||||||
Interest expense | 6,170,000 | 1,529,000 | ||||||
Kennedy Wilson's share of interest expense included in investment in joint ventures and loan pool participations | 7,285,000 | 5,466,000 | ||||||
Depreciation and amortization | 937,000 | 434,000 | ||||||
Kennedy Wilson's share of depreciation and amortization included in investment in joint ventures | 3,900,000 | 3,725,000 | ||||||
(Benefit from) provision for income taxes | (1,483,000 | ) | 663,000 | |||||
EBITDA | 18,291,000 | 13,895,000 | ||||||
Stock-based compensation | 871,000 | 1,167,000 | ||||||
Adjusted EBITDA | $ | 19,162,000 | $ | 15,062,000 | ||||
FOR IMMEDIATE RELEASE