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Company reports record third quarter GAAP EPS and Adjusted EBITDA

BEVERLY HILLS, Calif.–(BUSINESS WIRE)–Kennedy-Wilson Holdings, Inc. (NYSE: KW) today reported results for 3Q-2019:

 

3Q

 

YTD

(Amounts in millions, except per share data)

2019

 

2018

 

2019

 

2018

GAAP Results

 

 

 

 

 

 

 

GAAP Net Income to Common Shareholders

$20.7

 

 

$12.1

 

 

$66.2

 

 

$119.3

 

Per Diluted Share

0.15

 

 

0.09

 

 

0.47

 

 

0.83

 

 

 

 

 

 

 

 

 

Non-GAAP Results

 

 

 

 

 

 

 

Adjusted EBITDA

$142.5

 

 

$141.9

 

 

$450.0

 

 

$535.0

 

Adjusted Net Income

73.9

 

 

74.1

 

 

232.8

 

 

308.2

 

“Building on the momentum from the first half of the year, we delivered another strong quarter highlighted by continued impressive same-property results, the completion of $775 million in investment transactions, and further growth of our investment management platform,” said William McMorrow, Chairman and CEO of Kennedy Wilson. “As we celebrate our 10th year as a public company, I am proud of the accomplishments we have achieved as a global team over the past decade and remain very optimistic about the significant growth opportunities that lie ahead.”

3Q Highlights

  • Same Property Performance: NOI up 5% Driven by Strength in Multifamily Portfolio:

 

3Q – 2019 vs. 3Q – 2018

YTD – 2019 vs. YTD – 2018

 

Occupancy

 

Revenue

 

NOI

Occupancy

 

Revenue

 

NOI

Multifamily – Market Rate

0.6%

 

5.2%

 

6.5%

0.9%

 

5.3%

 

6.9%

Multifamily – Affordable

(0.1)%

 

4.0%

 

4.5%

(0.2)%

 

3.8%

 

4.3%

Commercial

(0.2)%

 

3.9%

 

4.8%

(0.3)%

 

4.1%

 

3.4%

Hotel

N/A

 

3.9%

 

(0.6)%

N/A

 

(1.0)%

 

(7.9)%

Total

 

 

4.4%

 

4.9%

 

 

3.7%

 

4.1%

  • New Platform with Security Benefit to Target $1.5 Billion in Asset Purchases:

    • The Company announced the formation of a new joint venture platform with Security Benefit targeting stabilized, income-producing, high-quality real estate investment opportunities in the Western U.S. The platform had an initial target of $500 million of assets, which was increased to $1.5 billion subsequent to 3Q-19. The Company currently has a 20% interest in the joint venture.
    • Once fully invested, the Company expects this joint venture platform to total in excess of $400 million of Fee-Bearing Capital.
  • Fee-Bearing Capital Growth: The Company’s Fee-Bearing Capital totaled $2.5 billion as of September 30, 2019, a 15% increase year-to-date. Investment management fees totaled $23 million in 3Q-19 (including $18 million in promote, recognized in income from unconsolidated investments), an increase of 82% from 3Q-18.
  • In-Place Estimated Annual NOI of $400 Million; Targeting an Additional $110 Million from Development and Leasing:

    • Targeting an additional $45 million of Estimated Annual NOI to be in place by YE-2021, and a further $64-$67 million by YE-2023.
  • 3Q-19 Adjusted EBITDA of $143 million (vs. $142 million in 3Q-18):

    • KW’s share of property NOI totaled $95 million in 3Q-19 (vs. $110 million in 3Q-18). The decrease is primarily due to the net sale of assets from 4Q-18 through 3Q-19 as well as the changes in foreign currency rates.
    • KW’s share of gains, including the sale of real estate and net fair-value gains, totaled $66 million in 3Q-19, an increase of $16 million from 3Q-18. The gains in 3Q-19 primarily relate to the sale of three multifamily assets in the Western U.S.
    • For 3Q-19, general and administrative and compensation and related expenses decreased by $6 million (vs. 3Q-18).

3Q-19 Investment Activity

  • Capital Recycling: Invested $82 million of cash, allocating 46% to new investments, 52% to capex and development initiatives, and 2% to share repurchases. For the year, the Company has invested $277 million of cash, allocating 52% to capex, 42% to new investments, and 6% to share repurchases.
  • Acquisitions: Completed $562 million of acquisitions at purchase price, of which the Company’s share was $83 million.

    • Sunset North Office Campus, Bellevue, WA: The Company, through its newly formed joint venture platform with Security Benefit, acquired Sunset North, an institutional quality, three-building campus totaling 464,000 square feet in Bellevue, Washington, for $227 million. The joint venture invested $77 million of equity, including $15 million of equity from Kennedy Wilson, and secured a 10-year, fixed rate, interest only loan for $150 million at 3.25%.
    • Fund Investments: The Company’s U.S. and European commingled funds acquired $250 million of real estate investments, in which the Company had a 12% weighted-average ownership.
  • Dispositions: Completed $211 million of dispositions, of which the Company’s share was $121 million and produced a weighted-average IRR of 26% to KW.

    • Western U.S. Multifamily Sales: Kennedy Wilson sold Indigo Springs and Villas at Kennedy Creek, two multifamily communities totaling 420 units in Greater Seattle, as well as Shore Park, a 393-unit multifamily community in Sacramento, CA, for a total of $204 million. Kennedy Wilson had a 57% weighted-average ownership in these assets. The dispositions generated a gain on sale of $59 million to Kennedy Wilson. The Company intends to recycle the majority of the proceeds via a tax-deferred 1031 exchange into an office property in Northern California, which is under contract and expected to close in 4Q-2019.

Balance Sheet

  • $811 million in Cash and Lines of Credit: As of September 30, 2019, Kennedy Wilson had total cash and cash equivalents of $386 million(1) and $425 million of capacity on its revolving line of credit.
  • Global Debt Profile: Kennedy Wilson’s debt had a weighted average interest rate of 3.9% per annum and a weighted average remaining maturity of 5.3 years, with 80% of total debt (at share) fixed and another 13% hedged against increases in interest rates.
  • Share Repurchase Program(2): In 2019, Kennedy Wilson has repurchased and retired 0.8 million shares at a weighted-average price of $20.75 per share, including 0.1 million shares repurchased in 3Q-19 at a weighted-average price of $21.49 per share. Since the $250 million share repurchase plan was authorized on March 20, 2018, the Company has repurchased and retired 10.0 million shares at a weighted-average price of $18.18 per share, with $68 million remaining as of September 30, 2019.

Subsequent Events

The Company announced that it entered into an agreement for a $300 million perpetual preferred investment in Kennedy Wilson by affiliates of Eldridge Industries (collectively, “Eldridge”). Under the terms of the agreement, Eldridge is purchasing $300 million in convertible perpetual preferred stock carrying a 5.75% annual dividend rate, with an initial conversion price of $25.00 per share, representing a premium of 15% to the daily volume weighted average price per share of Kennedy Wilson’s common stock over the 20 trading days ending, and including, October 16, 2019. The preferred stock is callable by Kennedy Wilson on and after October 15, 2024. The Company expects to use the proceeds to pay off in full its line of credit and term loan balance and to fund its development pipeline. The transaction is subject to customary closing conditions. Along with Eldridge’s equity investment, the previously announced joint venture platform between Eldridge affiliate Security Benefit and Kennedy Wilson increased its investment target from $500 million to $1.5 billion.

The Company acquired one multifamily property in the Western U.S. and is under separate binding contracts to purchase five multifamily properties and one office property in the Western U.S. and one office property in the UK for $688 million, subject to customary closing conditions. The Company expects to have an average ownership of approximately 46% in these properties.

The Company sold the Portmarnock Hotel in Dublin, Ireland and one retail property in the UK and is under separate binding contracts to sell five Western U.S. multifamily properties (including four properties that the Company expects to maintain its ownership interest in) at an aggregate sales price of approximately $455 million, subject to customary closing conditions. The Company has an average ownership interest of 23% in these properties. There can be no assurance that the Company will complete such transactions under contract.

Footnotes

(1) Includes $92.8 million of restricted cash, which is included in cash and cash equivalents.

(2) Future purchases under the program may be made in the open market, in privately negotiated transactions, through the net settlement of the company’s restricted stock grants or otherwise, with the amount and timing of the repurchases dependent on market conditions and subject to the Company’s discretion.

Conference Call and Webcast Details

Kennedy Wilson will hold a live conference call and webcast to discuss results at 7:00 a.m. PT/ 10:00 a.m. ET on Thursday, October 31. The direct dial-in number for the conference call is (800) 353-6461 for U.S. callers and (334) 323-0501 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 (888) 203-1112 for U.S. callers and (719) 457-0820 for international callers. The passcode for the replay is 5258319.

The webcast will be available at: https://services.choruscall.com/links/kw191031u7lt0nlO.html. 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 global real estate investment company. We own, operate, and invest in real estate both on our own and through our investment management platform. We focus on multifamily and office properties located in the Western U.S., UK, and Ireland. For further information on Kennedy Wilson, please visit www.kennedywilson.com.

Kennedy-Wilson Holdings, Inc.

Consolidated Balance Sheets

(Unaudited)

(Dollars in millions)

 

 

 

September 30,

2019

 

December 31,

2018

Assets

 

 

 

 

Cash and cash equivalents

 

$

385.8

 

 

$

488.0

 

Accounts receivable

 

51.3

 

 

56.6

 

Real estate and acquired in place lease values, net of accumulated depreciation and amortization

 

5,075.4

 

 

5,702.5

 

Unconsolidated investments (including $882.8 and $662.2 at fair value)

 

1,110.2

 

 

859.9

 

Other assets

 

313.1

 

 

274.8

 

Total assets

 

$

6,935.8

 

 

$

7,381.8

 

 

 

 

 

 

Liabilities

 

 

 

 

Accounts payable

 

$

15.7

 

 

$

24.1

 

Accrued expenses and other liabilities

 

511.4

 

 

513.7

 

Mortgage debt

 

2,644.7

 

 

2,950.3

 

KW unsecured debt

 

1,280.7

 

 

1,202.0

 

KWE unsecured bonds

 

1,207.6

 

 

1,260.5

 

Total liabilities

 

5,660.1

 

 

5,950.6

 

Equity

 

 

 

 

Common stock

 

 

 

 

Additional paid-in capital

 

1,751.8

 

 

1,744.6

 

Accumulated deficit

 

(80.1

)

 

(56.4

)

Accumulated other comprehensive loss

 

(436.6

)

 

(441.5

)

Total Kennedy-Wilson Holdings, Inc. shareholders’ equity

 

1,235.1

 

 

1,246.7

 

Noncontrolling interests

 

40.6

 

 

184.5

 

Total equity

 

1,275.7

 

 

1,431.2

 

Total liabilities and equity

 

$

6,935.8

 

 

$

7,381.8

 

Kennedy-Wilson Holdings, Inc.

Consolidated Statements of Operations

(Unaudited)

(Dollars in millions, except share amounts and per share data)

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2019

 

2018

 

2019

 

2018

Revenue

 

 

 

 

 

 

 

 

Rental

 

$

108.3

 

 

$

123.4

 

 

$

336.1

 

 

$

392.6

 

Hotel

 

25.1

 

 

43.5

 

 

62.9

 

 

117.6

 

Sale of real estate

 

 

 

6.5

 

 

1.1

 

 

48.7

 

Investment management, property services and research fees

 

9.6

 

 

12.4

 

 

27.3

 

 

34.8

 

Total revenue

 

143.0

 

 

185.8

 

 

427.4

 

 

593.7

 

Expenses

 

 

 

 

 

 

 

 

Rental operating

 

39.0

 

 

38.2

 

 

113.3

 

 

119.5

 

Hotel operating

 

17.3

 

 

30.6

 

 

47.6

 

 

90.8

 

Cost of real estate sold

 

 

 

5.8

 

 

1.2

 

 

45.6

 

Commission and marketing

 

1.2

 

 

1.1

 

 

2.9

 

 

4.6

 

Compensation and related (includes $6.3, $9.3, $23.9 and $27.9 of share-based compensation)

 

35.6

 

 

38.3

 

 

107.9

 

 

122.8

 

General and administrative

 

8.4

 

 

11.7

 

 

30.2

 

 

36.6

 

Depreciation and amortization

 

46.4

 

 

51.5

 

 

141.7

 

 

158.7

 

Total expenses

 

147.9

 

 

177.2

 

 

444.8

 

 

578.6

 

Income from unconsolidated investments, net of depreciation and amortization

 

84.0

 

 

24.0

 

 

131.6

 

 

60.9

 

Gain on sale of real estate, net

 

6.3

 

 

39.4

 

 

252.4

 

 

304.2

 

Acquisition-related expenses

 

(4.0

)

 

(0.4

)

 

(5.9

)

 

(0.6

)

Interest expense

 

(51.8

)

 

(55.2

)

 

(162.8

)

 

(181.3

)

Other income (loss)

 

 

 

3.4

 

 

(0.6

)

 

14.6

 

Income before (provision for) benefit from income taxes

 

29.6

 

 

19.8

 

 

197.3

 

 

212.9

 

Provision for income taxes

 

(10.2

)

 

(6.9

)

 

(35.1

)

 

(33.7

)

Net income

 

19.4

 

 

12.9

 

 

162.2

 

 

179.2

 

Net loss (income) attributable to noncontrolling interests

 

1.3

 

 

(0.8

)

 

(96.0

)

 

(59.9

)

Net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders

 

$

20.7

 

 

$

12.1

 

 

$

66.2

 

 

$

119.3

 

Basic earnings per share(1)

 

 

 

 

 

 

 

 

Income per basic

 

$

0.15

 

 

$

0.09

 

 

$

0.47

 

 

$

0.83

 

Weighted average shares outstanding for basic

 

139,947,518

 

 

141,003,413

 

 

139,669,971

 

 

143,450,695

 

Diluted earnings per share

 

 

 

 

 

 

 

 

Income per diluted

 

$

0.15

 

 

$

0.09

 

 

$

0.47

 

 

$

0.83

 

Weighted average shares outstanding for diluted

 

140,538,139

 

 

141,800,972

 

 

141,445,947

 

 

144,516,045

 

Dividends declared per common share

 

$

0.21

 

 

$

0.19

 

 

$

0.63

 

 

$

0.57

 

 

(1) Includes impact of the Company allocating income and dividends per basic and diluted share to participating securities.

Kennedy-Wilson Holdings, Inc.

Adjusted EBITDA

(Unaudited)

(Dollars in millions)

 
The table below reconciles net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders to Adjusted EBITDA, using Kennedy Wilson’s pro-rata share amounts for each adjustment item.
 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders

 

$

20.7

 

 

$

12.1

 

 

$

66.2

 

 

$

119.3

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Add back (Kennedy Wilson’s Share)(1):

 

 

 

 

 

 

 

 

Interest expense

 

58.4

 

 

60.9

 

 

182.1

 

 

193.1

 

Depreciation and amortization

 

46.9

 

 

52.8

 

 

142.7

 

 

161.0

 

Provision for income taxes

 

10.2

 

 

6.9

 

 

35.1

 

 

33.7

 

Share-based compensation

 

6.3

 

 

9.2

 

 

23.9

 

 

27.9

 

Adjusted EBITDA

 

$

142.5

 

 

$

141.9

 

 

$

450.0

 

 

$

535.0

 

(1) See Appendix for reconciliation of Kennedy Wilson’s Share amounts.

 

The table below provides a detailed reconciliation of net income to Adjusted EBITDA.

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Net income

 

$

19.4

 

 

$

12.9

 

 

$

162.2

 

 

$

179.2

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Add back:

 

 

 

 

 

 

 

 

Interest expense

 

51.8

 

 

55.2

 

 

162.8

 

 

181.3

 

Kennedy Wilson’s share of interest expense included in unconsolidated investments

 

7.7

 

 

7.1

 

 

23.6

 

 

18.3

 

Depreciation and amortization

 

46.4

 

 

51.5

 

 

141.7

 

 

158.7

 

Kennedy Wilson’s share of depreciation and amortization included in unconsolidated investments

 

2.1

 

 

3.4

 

 

6.4

 

 

10.0

 

Provision for income taxes

 

10.2

 

 

6.9

 

 

35.1

 

 

33.7

 

Share-based compensation

 

6.3

 

 

9.2

 

 

23.9

 

 

27.9

 

EBITDA attributable to noncontrolling interests(1)

 

(1.4

)

 

(4.3

)

 

(105.7

)

 

(74.1

)

Adjusted EBITDA

 

$

142.5

 

 

$

141.9

 

 

$

450.0

 

 

$

535.0

 

 

(1) EBITDA attributable to noncontrolling interest includes $1.6 million and $2.1 million of depreciation and amortization, $1.1 million and $1.4 million of interest for the three months ended September 30, 2019 and 2018, respectively. EBITDA attributable to noncontrolling interest includes $5.4 million and $7.7 million of depreciation and amortization, $4.3 million and $6.5 million of interest for the nine months ended September 30, 2019 and 2018, respectively.

Kennedy-Wilson Holdings, Inc.

Adjusted Net Income

(Unaudited)

(Dollars in millions, except share data)

 

The table below reconciles net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders to Adjusted Net Income, using Kennedy Wilson’s pro-rata share amounts for each adjustment item.

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders

 

$

20.7

 

 

$

12.1

 

 

$

66.2

 

 

$

119.3

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Add back (Kennedy Wilson’s Share)(1):

 

 

 

 

 

 

 

 

Depreciation and amortization

 

46.9

 

 

52.8

 

 

142.7

 

 

161.0

 

Share-based compensation

 

6.3

 

 

9.2

 

 

23.9

 

 

27.9

 

Adjusted Net Income

 

$

73.9

 

 

$

74.1

 

 

$

232.8

 

 

$

308.2

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding for diluted

 

140,538,139

 

 

141,800,972

 

 

141,445,947

 

 

144,516,045

 

 
 

(1) See Appendix for reconciliation of Kennedy Wilson’s Share amounts.

 

The table below provides a detailed reconciliation of net income to Adjusted Net Income.

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Net income

 

$

19.4

 

 

$

12.9

 

 

$

162.2

 

 

$

179.2

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Add back (less):

 

 

 

 

 

 

 

 

Depreciation and amortization

 

46.4

 

 

51.5

 

 

141.7

 

 

158.7

 

Kennedy Wilson’s share of depreciation and amortization included in unconsolidated investments

 

2.1

 

 

3.4

 

 

6.4

 

 

10.0

 

Share-based compensation

 

6.3

 

 

9.2

 

 

23.9

 

 

27.9

 

Net income attributable to the noncontrolling interests, before depreciation and amortization(1)

 

(0.3

)

 

(2.9

)

 

(101.4

)

 

(67.6

)

Adjusted Net Income

 

$

73.9

 

 

$

74.1

 

 

$

232.8

 

 

$

308.2

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding for diluted

 

140,538,139

 

 

141,800,972

 

 

141,445,947

 

 

144,516,045

 

 

(1) Includes $1.6 million and $2.1 million of depreciation and amortization for the three months ended September 30, 2019 and 2018, respectively, and $5.4 million and $7.7 million of depreciation and amortization for the nine months ended September 30, 2019 and 2018, respectively.

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, 2018, 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 income before interest expense, our share of interest expense included in income from investments in unconsolidated investments, depreciation and amortization, our share of depreciation and amortization included in income from unconsolidated investments, loss on early extinguishment of corporate debt and income taxes, 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 our management’s discretionary use, as it does not remove all non-cash items (such as acquisition-related gains) 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, property services and research fees adjusted to include Kennedy Wilson’s share of fees eliminated in consolidation, Kennedy Wilson’s share of fees in unconsolidated service businesses and performance fees included in unconsolidated investments. Effective January 1, 2018, we adopted new GAAP guidance on revenue recognition and implemented a change in accounting principles related to performance allocations, which resulted in us now accounting for performance allocations (commonly referred to as “performance fees” or “carried interest”) under the GAAP guidance for equity method investments and presenting performance allocations as a component of income from unconsolidated investments. Our management uses Adjusted fees to analyze our investment management and real estate services 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, property services and research fees and makes the Company comparable to other real estate companies that provide investment management and real estate services but do not have an ownership interest in the properties they manage.

Contacts

Daven Bhavsar, CFA

Vice President of Investor Relations

(310) 887-3431

dbhavsar@kennedywilson.com
www.kennedywilson.com

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