Workflow
Kennedy Wilson(KW)
icon
Search documents
Toll Brothers sells apartment platform to Kennedy Wilson
Yahoo Finance· 2025-09-18 15:50
Group 1 - Kennedy Wilson is acquiring Toll Brothers Apartment Living platform for $347 million, which includes a portfolio of completed properties and assets under development valued at $2.2 billion [7] - The transaction is expected to close in October and will enhance Kennedy Wilson's national platform in the rental housing space, totaling over 80,000 units [4][7] - The acquisition will allow Kennedy Wilson to manage 20 apartment and student housing properties from Toll Brothers, totaling over $3 billion in assets under management [7] Group 2 - Kennedy Wilson plans to invest approximately $90 million in the acquired interests, indicating a strong commitment to the rental housing sector [3] - The deal will create a mutually beneficial pipeline of shared deal flow, as Kennedy Wilson will refer for-sale housing opportunities to Toll Brothers, while receiving rental housing opportunities in return [5] - Toll Brothers aims to focus on its core homebuilding business and transition to a more asset-light model following the sale [6]
Kennedy Wilson to Acquire Toll Brothers' Apartment Living Platform for $347 Million, Adding Over $5 Billion of Assets Under Management
Businesswire· 2025-09-18 10:05
Core Viewpoint - Kennedy Wilson has agreed to acquire Toll Brothers' Apartment Living platform for a total purchase price of $347 million [1] Group 1: Transaction Details - The acquisition includes Toll Brothers' in-house development team and interests in a portfolio of completed properties and assets under development [1] - The total purchase price for the transaction is $347 million [1]
Kennedy Wilson(KW) - 2025 Q2 - Quarterly Report
2025-08-07 20:27
[Forward-Looking Statements](index=4&type=section&id=FORWARD%2DLOCKING%20STATEMENTS) Forward-looking statements are estimates based on management's judgment and current expectations, with actual results potentially differing materially due to inherent risks - Forward-looking statements are estimates based on **current management judgment and expectations**, not guarantees of future performance[11](index=11&type=chunk) - Actual results may differ materially due to **known and unknown risks and uncertainties**, including those detailed in the Item 1A. 'Risk Factors' section of the Annual Report on Form 10-K[12](index=12&type=chunk) - The company has no intention or obligation to publicly update any forward-looking statements[12](index=12&type=chunk) [Non-GAAP Measures and Certain Definitions](index=4&type=section&id=Non-GAAP%20Measures%20and%20Certain%20Definitions) Key non-GAAP financial measures and industry-specific terms are defined, clarifying their utility for management and shareholders, but are not GAAP substitutes - Non-GAAP measures like **Adjusted EBITDA, Adjusted Net Income (Loss), and Net Operating Income (NOI)** are used by management and shareholders for business analysis and operational planning, but are not substitutes for GAAP measures[13](index=13&type=chunk) - **Adjusted EBITDA** represents net (loss) income before interest, depreciation, amortization, taxes, preferred dividends, share-based compensation, and noncontrolling interests, aiming to reflect core operating performance[14](index=14&type=chunk) - **NOI** is a non-GAAP measure reflecting property income by deducting certain expenses from revenues, used to assess property performance and fair value, excluding depreciation, amortization, and gains/losses from sales[24](index=24&type=chunk) - **Real Estate Assets under Management (AUM)** refers to properties and assets for which the company provides oversight and investment management services, reflecting its market presence rather than management fees[27](index=27&type=chunk) [PART I FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, equity, and cash flows, are presented with detailed notes [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) Consolidated balance sheets show a slight decrease in total assets and liabilities from December 2024 to June 2025, with cash increasing and real estate/mortgage debt decreasing | Metric | June 30, 2025 (Millions USD) | December 31, 2024 (Millions USD) | |:---|:---|:---|\n| Cash and cash equivalents | $309.1 | $217.5 |\n| Real estate and acquired in place lease values, net | $4,078.8 | $4,290.4 |\n| Unconsolidated investments | $2,034.7 | $2,042.4 |\n| Total assets | $6,796.9 | $6,961.1 |\n| Mortgage debt | $2,385.2 | $2,597.2 |\n| KW unsecured debt | $1,884.4 | $1,877.9 |\n| KWE unsecured bonds | $352.7 | $309.8 |\n| Total liabilities | $5,200.6 | $5,325.1 |\n| Total Kennedy-Wilson Holdings, Inc. shareholders' equity | $1,563.0 | $1,601.2 |\n| Total equity | $1,596.3 | $1,636.0 | - Total assets decreased by **$164.2 million** from **$6,961.1 million** at December 31, 2024, to **$6,796.9 million** at June 30, 2025[32](index=32&type=chunk) - Cash and cash equivalents increased by **$91.6 million**, from **$217.5 million** to **$309.1 million**[32](index=32&type=chunk) [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) Net income significantly improved for Q2 2025 due to real estate sales gains, but the six-month net loss increased due to lower gains and higher other losses | Metric (Millions USD) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | |:---|:---|:---|:---|:---|\n| Total revenue | $135.7 | $132.0 | $264.0 | $268.4 |\n| Total (loss) income from unconsolidated investments | $(0.2) | $(18.1) | $11.2 | $(24.8) |\n| Gain on sale of real estate, net | $55.1 | $0.2 | $54.3 | $106.6 |\n| Total expenses | $110.4 | $110.2 | $217.2 | $224.3 |\n| Net income (loss) | $5.6 | $(48.3) | $(24.0) | $(10.6) |\n| Net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders | $(6.4) | $(59.1) | $(47.2) | $(32.2) |\n| Basic loss per share | $(0.05) | $(0.43) | $(0.34) | $(0.23) |\n| Diluted loss per share | $(0.05) | $(0.43) | $(0.34) | $(0.23) | - Net income for the three months ended June 30, 2025, was **$5.6 million**, a significant improvement from a net loss of **$48.3 million** in the same period of 2024, primarily due to a **$54.9 million** increase in gain on sale of real estate, net[35](index=35&type=chunk) - For the six months ended June 30, 2025, net loss attributable to common shareholders increased to **$47.2 million** from **$32.2 million** in 2024, despite a positive shift in income from unconsolidated investments[35](index=35&type=chunk) [Consolidated Statements of Comprehensive Loss](index=9&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) Comprehensive income improved in Q2 and H1 2025, driven by significant unrealized foreign currency translation gains, despite some derivative losses | Metric (Millions USD) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | |:---|:---|:---|:---|:---|\n| Net income (loss) | $5.6 | $(48.3) | $(24.0) | $(10.6) |\n| Unrealized foreign currency translation gain (loss) | $59.7 | $(2.8) | $86.3 | $(20.3) |\n| Unrealized foreign currency derivative contracts (loss) gain | $(37.1) | $5.2 | $(49.0) | $15.1 |\n| Total other comprehensive income (loss) for the period | $25.6 | $2.4 | $40.3 | $(0.1) |\n| Comprehensive income (loss) | $31.2 | $(45.9) | $16.3 | $(10.7) |\n| Comprehensive income (loss) attributable to Kennedy-Wilson Holdings, Inc. | $28.6 | $(45.7) | $13.2 | $(10.4) | - Comprehensive income attributable to Kennedy-Wilson Holdings, Inc. was **$28.6 million** for the three months ended June 30, 2025, a significant improvement from a loss of **$45.7 million** in the prior year, primarily due to a **$59.7 million** unrealized foreign currency translation gain[38](index=38&type=chunk) - For the six months ended June 30, 2025, the company reported comprehensive income of **$13.2 million**, compared to a loss of **$10.4 million** in the same period of 2024, driven by **$86.3 million** in unrealized foreign currency translation gains[38](index=38&type=chunk) [Consolidated Statements of Equity](index=10&type=section&id=Consolidated%20Statements%20of%20Equity) Total equity decreased from December 2024 to June 2025, influenced by common stock repurchases, dividends, and unrealized foreign currency translation gains offset by derivative losses | Metric (Millions USD) | Balance at Dec 31, 2024 | Balance at Jun 30, 2025 | |:---|:---|:---|\n| Total Kennedy-Wilson Holdings, Inc. shareholders' equity | $1,601.2 | $1,563.0 |\n| Noncontrolling interests | $34.8 | $33.3 |\n| Total equity | $1,636.0 | $1,596.3 | - Total equity decreased by **$39.7 million** from **$1,636.0 million** at December 31, 2024, to **$1,596.3 million** at June 30, 2025[45](index=45&type=chunk) - During the six months ended June 30, 2025, the company repurchased **393,493 shares** of common stock for **$2.5 million** and paid **$33.1 million** in common stock dividends and **$21.8 million** in preferred stock dividends[45](index=45&type=chunk) - Unrealized foreign currency translation gain, net of tax, contributed **$87.7 million** to other comprehensive income for the six months ended June 30, 2025, partially offset by a **$49.2 million** unrealized foreign currency derivative contract loss[45](index=45&type=chunk) [Consolidated Statements of Cash Flows](index=13&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash flow from operations shifted to a net use in H1 2025, while investing activities provided significantly more cash, and financing activities used more cash due to debt repayments | Metric (Millions USD) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | |:---|:---|:---|\n| Net cash (used in) provided by operating activities | $(9.9) | $31.1 |\n| Net cash provided by investing activities | $462.1 | $173.6 |\n| Net cash used in financing activities | $(364.4) | $(151.9) |\n| Net change in cash and cash equivalents | $91.6 | $52.8 |\n| Cash and cash equivalents, end of period | $309.1 | $366.5 | - Net cash used in operating activities was **$9.9 million** for the six months ended June 30, 2025, compared to **$31.1 million** provided in the prior year, primarily due to payment of discretionary compensation and interest[51](index=51&type=chunk)[382](index=382&type=chunk) - Net cash provided by investing activities significantly increased to **$462.1 million** in 2025 from **$173.6 million** in 2024, driven by **$423.9 million** from consolidated real estate sales and **$167.3 million** in distributions from unconsolidated investments[51](index=51&type=chunk)[383](index=383&type=chunk) - Net cash used in financing activities increased to **$364.4 million** in 2025 from **$151.9 million** in 2024, mainly due to **$304.0 million** in mortgage debt repayments and **$9.2 million** in common stock repurchases[51](index=51&type=chunk)[385](index=385&type=chunk) [Notes to Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies, significant transactions, and financial instrument valuations, offering crucial context to the financial statements [NOTE 1—BASIS OF PRESENTATION](index=15&type=section&id=NOTE%201%E2%80%94BASIS%20OF%20PRESENTATION) Kennedy Wilson is a real estate investment company focused on rental housing, industrial properties, and real estate loan origination/management in the U.S., UK, and Ireland - Kennedy Wilson is a real estate investment company operating in the U.S., UK, and Ireland, focusing on rental housing, industrial properties, and real estate loan origination/management[59](index=59&type=chunk) - The company's operations are segmented into Consolidated Portfolio (primarily wholly-owned multifamily assets) and Co-Investment Portfolio (co-investments in real estate, loans, fees, and carried interests)[59](index=59&type=chunk) - Interim financial statements are unaudited and prepared in conformity with U.S. GAAP, requiring management estimates and assumptions that could differ from actual results[60](index=60&type=chunk)[63](index=63&type=chunk) [NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS](index=15&type=section&id=NOTE%202%E2%80%94SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES%20AND%20ADOPTION%20OF%20NEW%20ACCOUNTING%20PRONOUNCEMENTS) This note outlines Kennedy Wilson's significant accounting policies for revenue recognition, real estate, investments, and fair value, and discusses the evaluation of new accounting pronouncements - Revenue recognition policies cover rental income (straight-line), hotel income (delivery/rendering), investment management fees (fixed percentage, recognized upon service completion), loan income (stated interest rate, effective interest method), and real estate sales (title transfer, no continuing involvement)[64](index=64&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) - Unconsolidated investments are accounted for using the equity method or the fair value option (for **72 co-investments and Funds**) to reflect changes in underlying investment value[75](index=75&type=chunk)[77](index=77&type=chunk) - Carried interests are recognized based on cumulative performance of ventures, subject to preferred return thresholds, and are adjusted at each reporting period based on fair value changes[78](index=78&type=chunk)[79](index=79&type=chunk) - The company is evaluating the impact of new FASB ASUs on income tax disclosures (ASU 2023-09, effective after Dec 15, 2024) and expense disaggregation (ASU 2024-03, effective after Dec 15, 2026)[87](index=87&type=chunk)[88](index=88&type=chunk) [NOTE 3—REAL ESTATE AND IN-PLACE LEASE VALUE](index=19&type=section&id=NOTE%203%E2%80%94REAL%20ESTATE%20AND%20IN-PLACE%20LEASE%20VALUE) Consolidated real estate investments decreased to $4,078.8 million by June 2025, with $54.3 million in net gains on sales in H1 2025, a decrease from H1 2024 | Metric (Millions USD) | June 30, 2025 | December 31, 2024 | |:---|:---|:---|\n| Land | $964.2 | $979.6 |\n| Buildings | $3,419.0 | $3,548.7 |\n| Building improvements | $408.7 | $466.9 |\n| In-place lease values | $250.4 | $244.3 |\n| Less accumulated depreciation and amortization | $(963.5) | $(949.1) |\n| Real estate and acquired in place lease values, net | $4,078.8 | $4,290.4 | - Consolidated real estate and acquired in-place lease values, net, decreased by **$211.6 million** from **$4,290.4 million** at December 31, 2024, to **$4,078.8 million** at June 30, 2025[91](index=91&type=chunk) - During the six months ended June 30, 2025, Kennedy Wilson spent **$25.7 million** on the consolidated acquisition of an industrial development in the United Kingdom[94](index=94&type=chunk) - Gain on sale of real estate, net, was **$54.3 million** for H1 2025, including a **$32.2 million** gain from deconsolidating a multifamily property and **$21.7 million** from selling non-core office assets, a decrease from **$106.6 million** in H1 2024[95](index=95&type=chunk)[96](index=96&type=chunk) [NOTE 4—UNCONSOLIDATED INVESTMENTS](index=20&type=section&id=NOTE%204%E2%80%94UNCONSOLIDATED%20INVESTMENTS) Unconsolidated investments slightly decreased to $2,034.7 million by June 2025, with H1 2025 income improving significantly due to fair value increases and improved operations | Investment Type (Millions USD) | June 30, 2025 | December 31, 2024 | |:---|:---|:---|\n| Multifamily | $1,195.1 | $1,142.9 |\n| Commercial | $400.9 | $353.4 |\n| Hotel | $122.3 | $249.7 |\n| Funds | $105.8 | $96.7 |\n| Residential and Other | $210.6 | $199.7 |\n| Total Unconsolidated Investments | $2,034.7 | $2,042.4 | - Unconsolidated investments decreased slightly from **$2,042.4 million** at December 31, 2024, to **$2,034.7 million** at June 30, 2025, with **$1,829.6 million** accounted for under fair value[103](index=103&type=chunk)[104](index=104&type=chunk) - Cash distributions from joint ventures totaled **$167.3 million** for the six months ended June 30, 2025, primarily from recapitalization of Kona Village, multifamily refinances, and loan payoffs[105](index=105&type=chunk) - Income from unconsolidated investments was **$11.2 million** for H1 2025, a significant improvement from a **$24.8 million** loss in H1 2024, driven by fair value increases in multifamily assets and improved hotel operations, offset by decreases in carried interests accruals[106](index=106&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) [NOTE 5—FAIR VALUE MEASUREMENTS AND THE FAIR VALUE OPTION](index=23&type=section&id=NOTE%205%E2%80%94FAIR%20VALUE%20MEASUREMENTS%20AND%20THE%20FAIR%20VALUE%20OPTION) This note details fair value measurements for unconsolidated investments and currency derivative contracts, with $1.8 billion of investments valued at fair value and currency derivatives used to hedge foreign currency risk | Metric (Millions USD) | June 30, 2025 | December 31, 2024 | |:---|:---|:---|\n| Unconsolidated investments (Level 3) | $1,829.6 | $1,884.4 |\n| Net currency derivative contracts (Level 2) | $(58.7) | $(1.2) |\n| Total Fair Value Measurements | $1,770.9 | $1,883.2 | - As of June 30, 2025, **$1,829.6 million** of unconsolidated investments were accounted for under fair value, with cumulative fair value gains of **$264.9 million**[118](index=118&type=chunk)[120](index=120&type=chunk) - The company uses discounted cash flow analysis and direct capitalization approach for real estate valuation, with unobservable inputs like capitalization rates (**4.00%-10.70%**) and discount rates (**6.30%-18.50%**) varying by property type[124](index=124&type=chunk)[126](index=126&type=chunk)[129](index=129&type=chunk)[290](index=290&type=chunk) - Currency derivative contracts, classified as Level 2, had a net liability of **$58.7 million** at June 30, 2025, and are used to hedge foreign currency risk, with **96%** of euro-denominated and **86%** of GBP-denominated investments hedged[117](index=117&type=chunk)[133](index=133&type=chunk)[137](index=137&type=chunk)[139](index=139&type=chunk) - Interest rate swaps and caps are used to hedge exposure to rising interest rates, with undesignated contracts resulting in **$2.6 million** in fair value losses for H1 2025[140](index=140&type=chunk) [NOTE 6—LOANS](index=27&type=section&id=NOTE%206%E2%80%94LOANS) Kennedy Wilson's loan portfolio decreased to $209.9 million by June 2025, with loan income declining due to lower ownership percentages in newer loans, and a $3.1 million credit loss reserve recorded | Metric (Millions USD) | June 30, 2025 | December 31, 2024 | |:---|:---|:---|\n| Loan purchases and originations, net | $209.9 | $231.1 | - Loan purchases and originations, net, decreased by **$21.2 million** from **$231.1 million** at December 31, 2024, to **$209.9 million** at June 30, 2025[147](index=147&type=chunk) - Loan income for the six months ended June 30, 2025, was **$11.5 million**, down from **$16.1 million** in the same period of 2024, attributed to lower ownership percentages in newer loans[147](index=147&type=chunk) - The company recorded a **$3.1 million** credit loss reserve for the six months ended June 30, 2025, reflecting current expected credit losses[148](index=148&type=chunk) [NOTE 7—OTHER ASSETS, NET](index=28&type=section&id=NOTE%207%E2%80%94OTHER%20ASSETS%2C%20NET) Other assets, net, decreased to $122.4 million by June 2025, with key components including straight-line rent receivable, goodwill, and right-of-use assets from operating leases | Metric (Millions USD) | June 30, 2025 | December 31, 2024 | |:---|:---|:---|\n| Straight line rent receivable | $36.1 | $40.5 |\n| Goodwill | $23.9 | $23.9 |\n| Interest rate caps and swaps | $7.3 | $12.9 |\n| Hedge assets | $0.5 | $4.9 |\n| Deferred taxes, net | $6.2 | $7.0 |\n| Right of use asset, net | $10.1 | $10.1 |\n| Other assets, net | $122.4 | $141.0 | - Other assets, net, decreased by **$18.6 million** from **$141.0 million** at December 31, 2024, to **$122.4 million** at June 30, 2025[150](index=150&type=chunk) - The company, as a lessee, has operating leases with total undiscounted rental payments of **$38.1 million**, resulting in a right-of-use asset, net, of **$10.1 million**[151](index=151&type=chunk)[152](index=152&type=chunk) [NOTE 8—MORTGAGE DEBT](index=28&type=section&id=NOTE%208%E2%80%94MORTGAGE%20DEBT) Mortgage debt decreased to $2,385.2 million by June 2025, with a weighted average interest rate of 4.94% (4.6% effective with hedges), and significant maturities in 2025 and 2026 | Metric (Millions USD) | June 30, 2025 | December 31, 2024 | |:---|:---|:---|\n| Mortgage debt | $2,385.2 | $2,597.2 |\n| Weighted average interest rate | 4.94% | 4.84% |\n| Weighted average effective interest rate (with hedges) | 4.6% | 4.6% |\n| Fixed rate debt | 67% | 70% |\n| Floating rate debt with interest caps and swaps | 32% | 27% |\n| Floating rate debt without interest caps and swaps | 1% | 2% | - Total mortgage debt decreased by **$212.0 million** from **$2,597.2 million** at December 31, 2024, to **$2,385.2 million** at June 30, 2025[155](index=155&type=chunk) - As of June 30, 2025, **67%** of property-level debt was fixed rate, and **32%** was floating rate with interest caps and swaps, maintaining a weighted average effective interest rate of **4.6%** with hedging[155](index=155&type=chunk) | Year | Aggregate Maturities (Millions USD) | |:---|:---|\n| 2025 (remainder) | $93.1 |\n| 2026 | $418.3 |\n| 2027 | $355.6 |\n| 2028 | $345.4 |\n| 2029 | $204.3 |\n| Thereafter | $981.7 |\n| Total Mortgage Debt | $2,385.2 | [NOTE 9—KW UNSECURED DEBT](index=30&type=section&id=NOTE%209%E2%80%94KW%20UNSECURED%20DEBT) KW unsecured debt slightly increased to $1,884.4 million by June 2025, primarily comprising senior notes and revolving credit facility borrowings, with the company in compliance with all covenants | Metric (Millions USD) | June 30, 2025 | December 31, 2024 | |:---|:---|:---|\n| Credit facility | $102.4 | $98.3 |\n| 2029 Notes | $601.2 | $601.3 |\n| 2030 Notes | $600.0 | $600.0 |\n| 2031 Notes | $601.3 | $601.4 |\n| Total KW Unsecured Debt | $1,884.4 | $1,877.9 | - KW unsecured debt increased by **$6.5 million** from **$1,877.9 million** at December 31, 2024, to **$1,884.4 million** at June 30, 2025[159](index=159&type=chunk) - As of June 30, 2025, the Third A&R Facility had **$102.4 million** outstanding with **$447.6 million** available to be drawn[162](index=162&type=chunk) - The company was in compliance with all financial covenants related to its credit facility and senior notes as of June 30, 2025, with a maximum balance sheet leverage ratio of **1.24 to 1.00**[161](index=161&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) [NOTE 10—KWE UNSECURED BONDS](index=31&type=section&id=NOTE%2010%E2%80%94KWE%20UNSECURED%20BONDS) KWE unsecured bonds increased to $352.7 million by June 2025, with a $13.5 million loss in OCI due to euro strengthening, and plans for full redemption in October 2025 | Metric (Millions USD) | June 30, 2025 | December 31, 2024 | |:---|:---|:---|\n| KWE Euro Medium Term Note Programme | $352.8 | $310.0 |\n| Total KWE Unsecured Bonds | $352.7 | $309.8 | - KWE unsecured bonds increased by **$42.9 million** from **$309.8 million** at December 31, 2024, to **$352.7 million** at June 30, 2025[169](index=169&type=chunk) - During the six months ended June 30, 2025, Kennedy Wilson recorded a **$13.5 million** loss in other comprehensive income due to the strengthening of the euro against the GBP, as the KWE Notes are designated as net investment hedges[171](index=171&type=chunk) - KWE was in compliance with all restrictive covenants, including net indebtedness, secured indebtedness, interest coverage, and unencumbered assets ratios, as of June 30, 2025[172](index=172&type=chunk)[173](index=173&type=chunk) [NOTE 11—EQUITY](index=32&type=section&id=NOTE%2011%E2%80%94EQUITY) This note details equity activities, including dividend payments, share-based compensation, common stock repurchases, and changes in accumulated other comprehensive loss | Metric (Millions USD) | 6 Months Ended June 30, 2025 (Paid) | 6 Months Ended June 30, 2024 (Paid) | |:---|:---|:---|\n| Preferred Stock Dividends | $21.8 | $21.8 |\n| Common Stock Dividends | $34.9 | $67.2 | - Kennedy Wilson recognized **$12.8 million** in share-based compensation expense for the six months ended June 30, 2025, compared to **$11.2 million** in the prior year[175](index=175&type=chunk) - During H1 2025, the company repurchased **393,493 shares** for **$2.5 million** under its stock repurchase program, with **$100.9 million** remaining under the plan as of June 30, 2025[177](index=177&type=chunk)[376](index=376&type=chunk) | Component (Millions USD) | Balance at Dec 31, 2024 | Unrealized gains (losses) | Reclassified out of AOCI | Deferred taxes | Noncontrolling interests | Balance at Jun 30, 2025 | |:---|:---|:---|:---|:---|:---|:---|\n| Foreign Currency Translation | $(156.6) | $89.0 | $2.3 | $(2.7) | $(1.7) | $(68.8) |\n| Currency Derivative Contracts | $105.8 | $(58.7) | $(0.4) | $9.7 | — | $56.6 |\n| Interest Rate Swaps | $1.6 | — | — | — | — | $1.6 |\n| Total Accumulated Other Comprehensive Loss | $(49.2) | $30.3 | $1.9 | $7.0 | $(1.7) | $(10.6) | [NOTE 12—EARNINGS PER SHARE](index=33&type=section&id=NOTE%2012%E2%80%94EARNINGS%20PER%20SHARE) Basic and diluted loss per share improved to $(0.05) in Q2 2025 but increased to $(0.34) for H1 2025, with potentially dilutive securities excluded as anti-dilutive | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | |:---|:---|:---|:---|:---|\n| Net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders (Millions USD) | $(6.4) | $(59.1) | $(47.2) | $(32.2) |\n| Weighted average shares outstanding for basic | 138,144,013 | 137,588,910 | 137,946,790 | 138,142,769 |\n| Basic loss per share | $(0.05) | $(0.43) | $(0.34) | $(0.23) |\n| Diluted loss per share | $(0.05) | $(0.43) | $(0.34) | $(0.23) | - Basic and diluted loss per share for the three months ended June 30, 2025, improved to **$(0.05)** from **$(0.43)** in the prior year[183](index=183&type=chunk) - For the six months ended June 30, 2025, basic and diluted loss per share was **$(0.34)**, compared to **$(0.23)** in the same period of 2024[183](index=183&type=chunk) - A total of **40,207,143** potentially dilutive securities for the six months ended June 30, 2025, were not included in diluted weighted average shares as they were anti-dilutive[183](index=183&type=chunk) [NOTE 13—SEGMENT INFORMATION](index=33&type=section&id=NOTE%2013%E2%80%94SEGMENT%20INFORMATION) Kennedy Wilson operates through Consolidated Portfolio and Co-Investment Portfolio segments, with Segment Adjusted EBITDA as the key performance metric - The company's operations are defined by two business segments: **Consolidated Portfolio** and **Co-Investment Portfolio**[185](index=185&type=chunk) - **Consolidated Portfolio** primarily involves ownership of multifamily assets, typically wholly-owned with longer hold periods and accretive asset management opportunities[59](index=59&type=chunk)[189](index=189&type=chunk) - **Co-Investment Portfolio** consists of co-investments in real estate and real estate-related assets (including loans) through commingled funds and joint ventures, generating fees and carried interests[59](index=59&type=chunk)[190](index=190&type=chunk) - **Segment Adjusted EBITDA** is the key operating metric used by the Chief Operating Decision Makers to evaluate segment performance[188](index=188&type=chunk) [NOTE 14—INCOME TAXES](index=39&type=section&id=NOTE%2014%E2%80%94INCOME%20TAXES) The income tax provision for H1 2025 was a $0.5 million benefit on a pre-tax loss, resulting in a 2.0% effective tax rate, significantly lower than the prior year due to specific tax charges - For the six months ended June 30, 2025, the company recorded a tax benefit of **$0.5 million** on a pre-tax book loss of **$24.5 million**, resulting in an effective tax rate of **2.0%**[204](index=204&type=chunk)[357](index=357&type=chunk) - Significant items impacting the tax provision include tax charges for non-deductible executive compensation under IRC Section 162(m) and an increased valuation allowance against deferred tax assets on the KWE investment[204](index=204&type=chunk)[357](index=357&type=chunk) - The company is evaluating the full effect of the recently signed One Big Beautiful Bill Act on its effective tax rate and financial statements[205](index=205&type=chunk) [NOTE 15—GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS](index=40&type=section&id=NOTE%2015%E2%80%94GUARANTOR%20AND%20NON-GUARANTOR%20FINANCIAL%20STATEMENTS) This note provides condensed consolidating financial information for the Parent, subsidiary issuer, guarantor, and non-guarantor subsidiaries, detailing assets, liabilities, equity, revenues, and expenses - The note presents condensed consolidating financial information for the Parent, subsidiary issuer (Kennedy-Wilson, Inc.), guarantor subsidiaries, and non-guarantor subsidiaries[208](index=208&type=chunk) - Kennedy Wilson owns **100%** of all guarantor subsidiaries, thus no separate financial statements are required for them[209](index=209&type=chunk) - Consolidating balance sheets show total assets of **$6,796.9 million** and total liabilities and equity of **$6,796.9 million** as of June 30, 2025[212](index=212&type=chunk) - Consolidating statements of operations for Q2 2025 show a consolidated net income of **$5.6 million** and a net loss attributable to common shareholders of **$6.4 million**[216](index=216&type=chunk) [NOTE 16 - SUBSEQUENT EVENTS](index=47&type=section&id=NOTE%2016%20-%20SUBSEQUENT%20EVENTS) Kennedy Wilson announced the full redemption of its €300 million euro-denominated notes due November 2025, scheduled for October 3, 2025, funded by asset sales, liquidity, or credit facility borrowings - Kennedy Wilson announced the full redemption of its **€300 million** (approximately **$353.0 million**) outstanding euro-denominated **3.25%** notes due November 2025[227](index=227&type=chunk)[393](index=393&type=chunk) - The redemption will be completed on **October 3, 2025**, and funded by cash proceeds from asset sales, existing liquidity, and/or borrowings under the revolving credit facility[227](index=227&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Kennedy Wilson's financial condition, operational results, liquidity, and capital resources, including investment strategy, segment performance, and market risks [Company Overview](index=48&type=section&id=Company%20Overview) Kennedy Wilson is a real estate investment and asset management company with over $30.1 billion in AUM, focusing on rental housing, industrial properties, and real estate loan origination across the U.S., UK, and Ireland - Kennedy Wilson is a real estate investment and asset manager with over **$30.1 billion** in Real Estate Assets Under Management (AUM) as of June 30, 2025[230](index=230&type=chunk)[231](index=231&type=chunk) - The company focuses on investing in rental housing (market rate and affordable units) and industrial properties, and originating/managing real estate loans, primarily senior construction loans[230](index=230&type=chunk) - Investment management fees totaled **$61.4 million** for the six months ended June 30, 2025, representing a **30% growth** over the same period in 2024[230](index=230&type=chunk) - The global investment portfolio is heavily weighted towards equity and debt investments in the rental housing sector, including **68,986 multifamily units** (**39,894 owned, 27,914 financed**)[231](index=231&type=chunk) [Investment Approach](index=49&type=section&id=Investment%20Approach) Kennedy Wilson's investment approach focuses on identifying high-growth markets, leveraging local platforms for proprietary opportunities, repositioning assets, exploring development, and selectively realizing value - The company identifies high-growth markets and establishes local operating platforms to drive proprietary investment opportunities, focusing on off-market transactions[235](index=235&type=chunk) - Key strategies include acquiring high-quality assets through its investment management platform, repositioning them to enhance cash flows, and exploring development opportunities[235](index=235&type=chunk) - The company continuously evaluates and selectively harvests asset and entity value through strategic realizations in public and private markets[235](index=235&type=chunk) [Quarter to Date Highlights](index=51&type=section&id=Quarter%20to%20Date%20Highlights) For Q2 2025, net loss attributable to common shareholders significantly improved to $6.4 million, and Adjusted EBITDA increased by 85%, driven by higher real estate sales gains and investment management fees | Metric (Millions USD) | Q2 2025 | Q2 2024 | Change (%) | |:---|:---|:---|:---|\n| Net loss attributable to common shareholders | $(6.4) | $(59.1) | 89.2% (improvement) |\n| Adjusted EBITDA | $147.1 | $79.3 | 85% |\n| Investment management fees | $36.4 | $26.1 | 39% |\n| Same-property multifamily revenue growth | 2.9% | N/A | N/A |\n| Same-property multifamily NOI growth | 3.5% | N/A | N/A | - Net loss attributable to common shareholders improved to **$6.4 million** in Q2 2025 from **$59.1 million** in Q2 2024, primarily due to recapitalization and deconsolidation of a multifamily property, sales of non-core office assets, and higher investment management fees[237](index=237&type=chunk) - Adjusted EBITDA increased by **85%** to **$147.1 million** in Q2 2025 from **$79.3 million** in Q2 2024[234](index=234&type=chunk)[237](index=237&type=chunk) - Investment management fees grew by **39%** to **$36.4 million**, including a **$7 million** development completion fee[239](index=239&type=chunk) - Stabilized multifamily portfolio showed strong performance with **2.9%** same-property revenue growth and **3.5%** same-property NOI growth[239](index=239&type=chunk) [Year to Date Highlights](index=51&type=section&id=Year%20to%20Date%20Highlights) For H1 2025, net loss attributable to common shareholders increased to $47.2 million, and Adjusted EBITDA decreased by 13%, primarily due to lower real estate sales gains and hotel operations compared to the prior year | Metric (Millions USD) | H1 2025 | H1 2024 | Change (%) | |:---|:---|:---|:---|\n| Net loss attributable to common shareholders | $(47.2) | $(32.2) | (46.6)% (worsening) |\n| Adjusted EBITDA | $245.3 | $282.5 | (13)% |\n| Investment management fees | $61.4 | $47.4 | 29.5% |\n| Same-property multifamily revenue growth | 3.0% | N/A | N/A |\n| Same-property multifamily NOI growth | 3.9% | N/A | N/A | - Net loss attributable to common shareholders increased to **$47.2 million** in H1 2025 from **$32.2 million** in H1 2024, primarily due to higher gains on sales in the prior period (Shelbourne hotel) and lower hotel NOI[238](index=238&type=chunk) - Adjusted EBITDA decreased by **13%** to **$245.3 million** in H1 2025 from **$282.5 million** in H1 2024[236](index=236&type=chunk)[238](index=238&type=chunk) - Investment management fees increased by **29.5%** to **$61.4 million**, driven by higher origination fees and a development completion fee[240](index=240&type=chunk) - Stabilized multifamily portfolio achieved **3.0%** same-property revenue growth and **3.9%** same-property NOI growth, with occupancy increasing to **94.6%**[240](index=240&type=chunk) [Business Segments](index=52&type=section&id=Business%20Segments) Kennedy Wilson operates through Consolidated and Co-Investment Portfolios, investing across rental housing, real estate credit, commercial, and residential/hotel assets, with a focus on development and fair value investment management [Consolidated Portfolio](index=52&type=section&id=Consolidated%20Portfolio) The Consolidated Portfolio, primarily wholly-owned multifamily assets held at historical depreciated cost, had total assets of $4,312.8 million and equity of $1,425.4 million as of June 30, 2025 - The Consolidated Portfolio comprises wholly-owned real estate and related assets, primarily multifamily communities, held at historical depreciated cost[244](index=244&type=chunk)[245](index=245&type=chunk) | Metric (Millions USD) | June 30, 2025 | December 31, 2024 | |:---|:---|:---|\n| Cash | $147.3 | $117.4 |\n| Real estate | $4,078.8 | $4,290.4 |\n| Total Assets | $4,312.8 | $4,507.5 |\n| Mortgage debt | $2,385.2 | $2,597.2 |\n| KWE bonds | $352.7 | $309.8 |\n| Total Liabilities | $2,887.4 | $3,025.7 |\n| Equity | $1,425.4 | $1,481.8 | - Total assets for the Consolidated Portfolio decreased by **$194.7 million** from **$4,507.5 million** at December 31, 2024, to **$4,312.8 million** at June 30, 2025[246](index=246&type=chunk) [Co-Investment Portfolio](index=52&type=section&id=Co-Investment%20Portfolio) The Co-Investment Portfolio, primarily fair value investments alongside partners, had total assets of $5,342.1 million and equity of $2,244.6 million by June 2025, generating investment management fees and accrued carried interests - The Co-Investment Portfolio involves investing alongside partners, typically with a **5% to 50%** ownership interest (weighted average of **38%**), and assets are primarily held at fair value (approximately **90%**)[247](index=247&type=chunk)[248](index=248&type=chunk) | Metric (Millions USD) | June 30, 2025 | December 31, 2024 | |:---|:---|:---|\n| Cash | $134.3 | $137.5 |\n| Real estate | $4,854.2 | $4,564.9 |\n| Loans | $215.5 | $243.2 |\n| Total Assets | $5,342.1 | $5,182.5 |\n| Mortgage debt | $2,977.6 | $2,757.5 |\n| Total Liabilities | $3,097.5 | $2,909.0 |\n| Equity | $2,244.6 | $2,273.5 | - As of June 30, 2025, fee-bearing capital was **$9.2 billion**, and the company recognized **$61.4 million** in base investment management fees and had **$17.4 million** in net accrued carried interests receivable[249](index=249&type=chunk) [Co-Investment Portfolio Investment Platforms](index=53&type=section&id=Co-Investment%20Portfolio%20Investment%20Platforms) Kennedy Wilson utilizes separate accounts with institutional partners, four closed-end commingled funds, and the Vintage Housing Holdings (VHH) partnership for affordable and age-restricted properties within its Co-Investment Portfolio - Separate account platforms involve investing alongside institutional equity partners, with Kennedy Wilson acting as general partner and receiving investment management fees, holding a weighted average ownership of **42%**[251](index=251&type=chunk) - The company manages four closed-end commingled funds, targeting value-add properties in the U.S. and Europe, with a weighted average ownership of **13%**, earning investment management fees and potential carried interests[252](index=252&type=chunk) - The Vintage Housing Holdings (VHH) partnership focuses on acquiring and developing income and age-restricted properties[253](index=253&type=chunk) [Investment Types](index=53&type=section&id=Investment%20Types) Kennedy Wilson invests across diverse real estate types, including rental housing (multifamily, single-family, affordable), real estate credit, commercial (industrial, office), and residential/hotel assets - The global rental housing portfolio consists of **39,894 multifamily units** (**27,199 market rate, 12,695 affordable**) and **1,177 single-family housing units**, with a new UK single-family rental housing joint venture launched in Q4 2024[255](index=255&type=chunk)[256](index=256&type=chunk)[259](index=259&type=chunk) - The VHH platform, in which the company holds an approximate **50% GP interest**, manages **60 affordable housing projects** totaling **12,695 units**, with a carrying value of **$343.3 million** and cumulative fair value gains of **$365.2 million** since acquisition[113](index=113&type=chunk)[261](index=261&type=chunk)[266](index=266&type=chunk) - The global credit platform holds interests in **125 loans** with an unpaid principal balance of **$4.8 billion** (KW share **$215.4 million**), primarily variable rate construction and bridge loans, with three loans currently non-performing[271](index=271&type=chunk)[273](index=273&type=chunk) - Commercial investments include **12.2 million sq ft** of industrial properties (Co-Investment Portfolio, **18%** ownership) and **9.5 million sq ft** of office properties (**3.8 million sq ft** Consolidated, **5.7 million sq ft** Co-Investment)[274](index=274&type=chunk)[275](index=275&type=chunk) - Residential, Hotel and Other investments include **1,069 residential acres** in Hawaii/Western U.S., a **35%** ownership in the Kona Village Resort, and a minority interest in Zonda[278](index=278&type=chunk)[279](index=279&type=chunk)[280](index=280&type=chunk) [Development and Redevelopment](index=56&type=section&id=Development%20and%20Redevelopment) Kennedy Wilson is nearing completion of a $5 billion development pipeline, with 288 multifamily units actively under development and an additional $13 million expected to be spent, fully funded by a construction loan - The company is nearing completion of a **10-year development pipeline** totaling **$5 billion** in 2024[281](index=281&type=chunk) - As of June 30, 2025, **288 multifamily units** are actively under development, with an expected additional spend of **$13 million** to complete, funded by a property-level construction loan[281](index=281&type=chunk)[282](index=282&type=chunk)[371](index=371&type=chunk) - The VHH platform has **1,870 affordable/age-restricted units** under development or lease-up, with no expected cash equity basis at completion, and is projected to receive **$23.2 million** in cash from developer fees and tax credit sales[368](index=368&type=chunk) [Fair Value Investments](index=57&type=section&id=Fair%20Value%20Investments) As of June 30, 2025, $1.8 billion of investments were held at estimated fair value, with cumulative gains of $264.9 million, valued using discounted cash flow and direct capitalization approaches amidst macroeconomic volatility - As of June 30, 2025, **$1.8 billion** (**90%** of Co-Investment Portfolio, **27%** of total assets) of investments were held at estimated fair value, with cumulative fair value gains of **$264.9 million**[285](index=285&type=chunk) - Valuation methodologies include discounted cash flow analysis (typically 10-year holding period, market discount rates, reversionary capitalization rates) and direct capitalization (market-derived capitalization rates applied to income streams)[286](index=286&type=chunk)[287](index=287&type=chunk)[288](index=288&type=chunk) - Macroeconomic conditions, such as inflation, interest rates, and market liquidity, continue to create volatility and impact fair value measurements, which involve subjective judgments[284](index=284&type=chunk)[292](index=292&type=chunk) | Property Type | Valuation Approach | Capitalization Rates | Discount Rates | |:---|:---|:---|:---|\n| Multifamily - Affordable | Income approach - discounted cash flow | 6.25% —7.00% | 8.25% — 9.00% |\n| Multifamily - Affordable GP interest | Income approach - discounted cash flow | 6.25% —7.00% | 17.00% — 18.50% |\n| Multifamily - Market Rate | Income approach - direct capitalization | 4.50% — 6.90% | N/A |\n| Office | Income approach - discounted cash flow | 5.20% — 8.00% | 7.50% — 9.50% |\n| Office | Income approach - direct capitalization | 5.30% — 10.70% | N/A |\n| Industrial | Income approach - discounted cash flow | 5.00% — 6.30% | 6.30% — 7.80% |\n| Industrial | Income approach - direct capitalization | 4.00% — 9.00% | N/A |\n| Hotel | Income approach - discounted cash flow | 6.00% | 8.30% | [Real Estate Assets Under Management (AUM)](index=58&type=section&id=Real%20Estate%20Assets%20Under%20Management%20(AUM)) Real Estate Assets Under Management (AUM) increased by 7.5% to approximately $30.1 billion by June 2025, driven by new loan originations, acquisitions, and foreign exchange rate increases | Metric (Millions USD) | December 31, 2024 | Increases | Decreases | June 30, 2025 | |:---|:---|:---|:---|\n| AUM | $27,952.9 | $3,531.5 | $(1,425.5) | $30,058.9 | - AUM increased by **7.5%** to approximately **$30.1 billion** as of June 30, 2025[294](index=294&type=chunk) - The increase in AUM is attributed to new loan originations, commingled fund acquisitions, and foreign exchange rate increases, partially offset by loan repayments and non-core asset sales[294](index=294&type=chunk) [Foreign Currency and Currency Derivative Instruments](index=59&type=section&id=Foreign%20Currency%20and%20Currency%20Derivative%20Instruments) This section refers to Item 3 for a detailed discussion on foreign currency and currency derivative instruments, indicating that the company manages foreign currency risk exposure through hedging strategies - The company manages foreign currency risk exposure through currency derivative contracts, such as forward contracts and options[296](index=296&type=chunk) [Kennedy Wilson Consolidated Financial Results: Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024](index=60&type=section&id=Kennedy%20Wilson%20Consolidated%20Financial%20Results%3A%20Three%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20the%20Three%20Months%20Ended%20June%2030%2C%202024) For Q2 2025, net loss attributable to common shareholders significantly improved, and Segment Adjusted EBITDA increased by 85%, driven by higher real estate sales gains, improved fair value fluctuations, and strong multifamily NOI growth [Financial Highlights](index=62&type=section&id=Financial%20Highlights) GAAP net loss to common shareholders significantly improved to $6.4 million in Q2 2025, and Segment Adjusted EBITDA increased by 85% to $154.7 million, driven by higher real estate sales gains and improved fair value fluctuations - GAAP net loss to common shareholders improved to **$6.4 million** in Q2 2025 from **$59.1 million** in Q2 2024, driven by higher gain on sale of real estate, net, and improved fair value fluctuations[299](index=299&type=chunk) - Segment Adjusted EBITDA increased by **85%** to **$154.7 million** in Q2 2025 from **$81.9 million** in Q2 2024[299](index=299&type=chunk) [Operational Highlights](index=62&type=section&id=Operational%20Highlights) Q2 2025 saw strong NOI and revenue growth in multifamily units, mixed performance in office properties, and significant investment activities including asset recapitalization, sales, and loan originations - Same-property market rate multifamily units (**16,911 units**) experienced a **3.1%** increase in net operating income and a **2.0%** increase in total revenues, with occupancy rising to **94.9%** in Q2 2025[301](index=301&type=chunk) - Same-property affordable rate multifamily units (**10,367 units**) saw a **4.9%** increase in net operating income and a **6.2%** increase in total revenues, despite a **1.2%** decrease in occupancy to **93.7%**[301](index=301&type=chunk) - Same-property office real estate (**3.3 million sq ft**) experienced a **(5.7)%** decrease in net operating income and a **2.7%** increase in total revenues, with occupancy decreasing to **91.6%**[301](index=301&type=chunk) - Key investment transactions included recapitalizing and deconsolidating a **1,008-unit multifamily property**, selling non-core office assets for **$123.1 million** cash and a **$52.4 million** gain, and originating **$1,237.1 million** in new senior construction loans[301](index=301&type=chunk) [Foreign Exchange - Results of Operations](index=63&type=section&id=Foreign%20Exchange%20-%20Results%20of%20Operations) Foreign exchange rate fluctuations positively impacted Q2 2025 revenues, net income, and Adjusted EBITDA, primarily due to the strengthening of the Euro and GBP against the U.S. Dollar | Metric (Millions USD) | Q2 2025 (Impact) | Q2 2024 (Impact) | |:---|:---|:---|\n| Revenues | $2.3 | $(0.2) |\n| Net (loss) income | $14.8 | $1.1 |\n| Adjusted EBITDA | $18.5 | $0.7 | - Foreign exchange rate changes resulted in a **$2.3 million** increase in revenues, a **$14.8 million** increase in net income, and an **$18.5 million** increase in Adjusted EBITDA for Q2 2025[302](index=302&type=chunk) - The Euro strengthened by **9.0%** and GBP by **6.1%** against the U.S. Dollar during Q2 2025, contributing to translation gains[326](index=326&type=chunk) [Consolidated Portfolio Segment](index=63&type=section&id=Consolidated%20Portfolio%20Segment) In Q2 2025, rental income in the Consolidated Portfolio decreased due to asset sales, while gain on sale of real estate significantly increased, and both depreciation/amortization and interest expense declined - Rental income decreased by **$4.5 million** to **$93.3 million** in Q2 2025, primarily due to asset sales and deconsolidations, partially offset by new operating properties[303](index=303&type=chunk) - Gain on sale of real estate, net, was **$55.1 million** in Q2 2025, a substantial increase from **$0.2 million** in Q2 2024, driven by a multifamily property recapitalization and sales of non-core office assets[304](index=304&type=chunk) - Depreciation and amortization decreased to **$34.5 million** in Q2 2025 from **$36.4 million** in Q2 2024 due to sales and deconsolidations of consolidated assets[309](index=309&type=chunk) - Interest expense decreased to **$38.4 million** in Q2 2025 from **$39.4 million** in Q2 2024, due to lower consolidated mortgage balances and cash payments received from interest rate derivatives[310](index=310&type=chunk) [Co-Investment Portfolio Segment](index=64&type=section&id=Co-Investment%20Portfolio%20Segment) The Co-Investment Portfolio segment saw increased investment management fees in Q2 2025, while loan income decreased, and income from unconsolidated investments improved despite decreases in carried interests accruals - Investment management fees increased to **$36.4 million** in Q2 2025 from **$26.1 million** in Q2 2024, primarily due to a **$7 million** development completion fee and an acquisition fee[311](index=311&type=chunk) - Loan income decreased to **$5.7 million** in Q2 2025 from **$8.0 million** in Q2 2024, as newer loan originations had lower ownership percentages[312](index=312&type=chunk) - Income from unconsolidated investments improved from a **$(18.1) million** loss in Q2 2024 to a **$(0.2) million** loss in Q2 2025, driven by fair value increases in VHH and foreign exchange gains, despite decreases in carried interests accruals[313](index=313&type=chunk)[315](index=315&type=chunk)[316](index=316&type=chunk) - Co-Investment Portfolio expenses increased to **$17.8 million** in Q2 2025 from **$16.8 million** in Q2 2024, due to lower reversal of previously recognized carried interest expense allocations and lower credit loss reserves[320](index=320&type=chunk) [Non-Segment Items](index=65&type=section&id=Non-Segment%20Items) Non-segment compensation and interest expenses increased in Q2 2025, other income shifted to a loss due to fair value decreases and dead deal costs, and the income tax provision was a charge compared to a prior-year benefit - Non-segment compensation expense increased to **$11.0 million** in Q2 2025 from **$10.0 million** in Q2 2024, due to higher stock-based compensation[321](index=321&type=chunk) - Non-segment interest expense increased to **$26.2 million** in Q2 2025 from **$24.4 million** in Q2 2024, due to higher average outstanding balances on the line of credit[322](index=322&type=chunk) - Other (loss) income shifted to a loss of **$1.9 million** in Q2 2025 from an income of **$3.0 million** in Q2 2024, primarily due to mark-to-market fair value decreases on interest rate caps and swaps and **$2.0 million** in dead deal costs[323](index=323&type=chunk) - The income tax provision was **$4.4 million** in Q2 2025, compared to an **$11.8 million** benefit in Q2 2024, with an effective tax rate of **44.0%**, impacted by non-deductible executive compensation and valuation allowance[324](index=324&type=chunk) [Other Comprehensive (Loss) Income](index=65&type=section&id=Other%20Comprehensive%20(Loss)%20Income) Comprehensive income attributable to common shareholders significantly improved in Q2 2025, driven by unrealized foreign currency translation gains from a strengthening Euro and GBP, partially offset by derivative losses | Metric (Millions USD) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | |:---|:---|:---|\n| Net loss attributable to common shareholders | $(6.4) | $(59.1) |\n| Unrealized foreign currency translation gains (losses), net | $58.1 | $(2.9) |\n| Unrealized foreign currency derivative contract (losses) gains, net | $(37.1) | $5.2 |\n| Comprehensive income (loss) attributable to Kennedy-Wilson Holdings, Inc. common shareholders | $17.6 | $(56.8) | - Comprehensive income attributable to common shareholders was **$17.6 million** in Q2 2025, compared to a loss of **$56.8 million** in Q2 2024[326](index=326&type=chunk) - The improvement was driven by **$58.1 million** in unrealized foreign currency translation gains, net, due to the strengthening of the euro (**9.0%**) and GBP (**6.1%**) against the U.S. Dollar[326](index=326&type=chunk) - These gains were partially offset by **$37.1 million** in unrealized foreign currency derivative contract losses, net[326](index=326&type=chunk) [Kennedy Wilson Consolidated Financial Results: Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024](index=67&type=section&id=Kennedy%20Wilson%20Consolidated%20Financial%20Results%3A%20Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20the%20Six%20Months%20Ended%20June%2030%2C%202024) For H1 2025, net loss attributable to common shareholders increased, and Segment Adjusted EBITDA decreased, primarily due to lower real estate sales gains and hotel operations compared to the prior year, despite positive foreign exchange impacts [Financial Highlights](index=69&type=section&id=Financial%20Highlights) GAAP net loss to common shareholders increased to $47.2 million in H1 2025, and Segment Adjusted EBITDA decreased by 13% to $262.0 million, primarily due to lower real estate sales gains and hotel operations - GAAP net loss to common shareholders increased to **$47.2 million** in H1 2025 from **$32.2 million** in H1 2024[329](index=329&type=chunk) - The decrease in net income was primarily due to higher gains on sales in H1 2024 (Shelbourne hotel), lower NOI from hotel operations, and fair value losses on interest rate derivatives in H1 2025[329](index=329&type=chunk) - Segment Adjusted EBITDA decreased by **13%** to **$262.0 million** in H1 2025 from **$281.4 million** in H1 2024[330](index=330&type=chunk) [Operational Highlights](index=70&type=section&id=Operational%20Highlights) H1 2025 saw strong NOI and revenue growth in multifamily units, declines in office NOI, and significant investment activities including acquisitions, recapitalization, asset sales, and loan originations - Same-property market rate multifamily units (**16,911 units**) experienced a **3.6%** increase in net operating income and a **2.3%** increase in total revenues, with occupancy rising to **95.0%** in H1 2025[332](index=332&type=chunk) - Same-property affordable rate multifamily units (**10,367 units**) saw a **5.1%** increase in net operating income and a **5.8%** increase in total revenues, despite a **1.2%** decrease in occupancy to **93.6%**[332](index=332&type=chunk) - Same-property office real estate (**3.3 million sq ft**) experienced a **(4.0)%** decrease in net operating income and a **(2.1)%** decrease in total revenues, with occupancy flat at **91.9%**[332](index=332&type=chunk) - Key investment transactions included acquiring an industrial development site (**$48 million**) and six multifamily properties (**$493.7 million**), recapitalizing a multifamily property, selling non-core office assets for **$132.0 million** cash and a **$54.6 million** gain, and originating **$1,961.2 million** in new construction loans[332](index=332&type=chunk) [Foreign Exchange - Results of Operations](index=70&type=section&id=Foreign%20Exchange%20-%20Results%20of%20Operations) Foreign exchange rate fluctuations positively impacted H1 2025 revenues, net income, and Adjusted EBITDA, primarily due to the strengthening of the Euro and GBP against the U.S. Dollar | Metric (Millions USD) | H1 2025 (Impact) | H1 2024 (Impact) | |:---|:---|:---|\n| Revenues | $2.6 | $(0.7) |\n| Net (loss) income | $18.0 | $4.4 |\n| Segment Adjusted EBITDA | $22.1 | $3.5 | - Foreign exchange rate changes resulted in a **$2.6 million** increase in revenues, an **$18.0 million** increase in net income, and a **$22.1 million** increase in Segment Adjusted EBITDA for H1 2025[334](index=334&type=chunk) - The Euro strengthened by **13.6%** and GBP by **9.6%** against the U.S. Dollar during H1 2025, contributing to translation gains[359](index=359&type=chunk) [Consolidated Portfolio Segment](index=70&type=section&id=Consolidated%20Portfolio%20Segment) In H1 2025, rental income in the Consolidated Portfolio decreased due to asset sales, hotel income was absent, and both gain on sale of real estate and interest expense declined - Rental income decreased by **$4.6 million** to **$190.6 million** in H1 2025, due to asset sales and deconsolidations, offset by development stabilization[335](index=335&type=chunk) - Hotel income was **$0** in H1 2025, compared to **$9.3 million** in H1 2024, due to the sale of the Shelbourne hotel[336](index=336&type=chunk) - Gain on sale of real estate, net, was **$54.3 million** in H1 2025, a decrease from **$106.6 million** in H1 2024, with H1 2025 gains from multifamily recapitalization and non-core office sales[337](index=337&type=chunk) - Depreciation and amortization decreased to **$68.6 million** in H1 2025 from **$75.3 million** in H1 2024, as the company was a net seller of assets[343](index=343&type=chunk) - Interest expense decreased to **$74.2 million** in H1 2025 from **$79.3 million** in H1 2024, due to decreases in consolidated mortgage balances from asset sales[344](index=344&type=chunk) [Co-Investment Portfolio Segment](index=71&type=section&id=Co-Investment%20Portfolio%20Segment) For H1 2025, investment management fees increased, loan income decreased, and income from unconsolidated investments improved significantly, despite increases in segment expenses - Investment management fees increased to **$61.4 million** in H1 2025 from **$47.4 million** in H1 2024, primarily due to higher origination fees, a **$7 million** development completion fee, and higher base management fees from AUM growth[345](index=345&type=chunk) - Loan income decreased to **$11.5 million** in H1 2025 from **$16.1 million** in H1 2024, due to lower ownership percentages in newer loan originations[346](index=346&type=chunk) - Income from unconsolidated investments improved to **$11.2 million** in H1 2025 from a **$(24.8) million** loss in H1 2024, driven by fair value increases in multifamily assets and improved hotel operations, offset by decreases in carried interests accruals[348](index=348&type=chunk)[349](index=349&type=chunk)[350](index=350&type=chunk)[351](index=351&type=chunk) - Co-Investment Portfolio expenses increased to **$32.4 million** in H1 2025 from **$27.6 million** in H1 2024, due to higher corporate expense allocation and a lower reversal of previously recognized carried interest expense allocations[354](index=354&type=chunk) [Non-Segment Items](index=73&type=section&id=Non-Segment%20Items) Non-segment compensation and interest expenses increased in H1 2025, other income decreased due to foreign exchange losses and dead deal costs, and the income tax provision shifted to a benefit from a prior-year expense - Non-segment compensation and related expenses increased to **$20.5 million** in H1 2025 from **$19.8 million** in H1 2024, due to higher share-based compensation[355](index=355&type=chunk) - Non-segment interest expense increased to **$51.7 million** in H1 2025 from **$49.2 million** in H1 2024, due to higher average outstanding balance on the revolving line of credit[356](index=356&type=chunk) - Other income decreased to **$6.1 million** in H1 2025 from **$12.6 million** in H1 2024, primarily due to **$4.9 million** in foreign exchange losses and **$2.0 million** in dead deal costs, contrasting with **$5.1 million** in fair value gains on interest rate derivatives in the prior period[356](index=356&type=chunk) - The income tax benefit was **$0.5 million** in H1 2025, compared to an expense of **$14.9 million** in H1 2024, with an effective tax rate of **2.0%**, impacted by non-deductible executive compensation and valuation allowance[357](index=357&type=chunk) [Other Comprehensive Income (Loss)](index=73&type=section&id=Other%20Comprehensive%20Income%20(Loss)) Comprehensive loss attributable to common shareholders improved in H1 2025, driven by unrealized foreign currency translation gains from a strengthening Euro and GBP, partially offset by derivative losses | Metric (Millions USD) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | |:---|:---|:---|:---|\n| Net loss attributable to common shareholders | $(47.2) | $(32.2) |\n| Unrealized foreign currency translation gain (loss), net | $84.6 | $(20.2) |\n| Unrealized foreign currency derivative contract (loss) gain, net | $(49.0) | $15.0 |\n| Comprehensive loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders | $(8.6) | $(32.2) | - Comprehensive loss attributable to common shareholders was **$8.6 million** in H1 2025, compared to a loss of **$32.2 million** in H1 2024[359](index=359&type=chunk) - The improvement was driven by **$84.6 million** in unrealized foreign currency translation gains, net, due to the strengthening of the Euro (**13.6%**) and GBP (**9.6%**) against the U.S. Dollar[359](index=359&type=chunk) - These gains were partially offset by **$49.0 million** in unrealized foreign currency derivative contract losses, net[359](index=359&type=chunk) [Liquidity and Capital Resources](index=74&type=section&id=Liquidity%20and%20Capital%20Resources) Kennedy Wilson manages liquidity through internal funds, asset sales, credit facilities, and capital markets, with $309.1 million in consolidated cash and $447.6 million available on its revolving credit facility as of June 30, 2025 - Liquidity and capital resources are used for acquisitions, development, loan funding, capital expenditures, working capital, debt payments, and dividends, financed by internal funds, asset sales, credit facilities, and capital markets[361](index=361&type=chunk)[362](index=362&type=chunk) - As of June 30, 2025, the company had **$309.1 million** in consolidated cash (including **$113.2 million** restricted), **$134.3 million** in unconsolidated Co-Investment Portfolio cash, and **$447.6 million** available under its revolving credit facility[363](index=363&type=chunk) - The company expects to spend an additional **$13.0 million** to complete an actively developing multifamily project, fully funded by a property-level construction loan[367](index=367&type=chunk) - VHH platform development projects are expected to generate **$23.2 million** in cash from developer fees and tax credit sales upon completion, with no expected cash equity basis[368](index=368&type=chunk) [Unstabilized and Value Add Capital Expenditure Programs](index=75&type=section&id=Unstabilized%20and%20Value%20Add%20Capital%20Expenditure%20Programs) Kennedy Wilson has seven unstabilized commercial assets requiring an estimated $19.5 million in additional capital expenditures for stabilization or value-add initiatives, typically funded by capital calls or refinancing - Seven unstabilized assets, comprising **1.4 million commercial square feet**, require an estimated **$19.5 million** in additional costs for stabilization, lease-up, or value-add initiatives[372](index=372&type=chunk)[374](index=374&type=chunk) - The estimated costs and timeframes for these projects are subject to uncertainties and may be significantly higher than current estimates[372](index=372&type=chunk)[375](index=375&type=chunk) - Value-add initiatives, including property rehabilitation and amenity upgrades, are a key driver for increasing net operating income and are typically funded by capital calls, refinancing, or supplemental financings[375](index=375&type=chunk) [Other Items](index=76&type=section&id=Other%20Items) Kennedy Wilson has $100.9 million remaining under its stock repurchase plan, operates a Deferred Compensation Program, a Carried Interests Sharing Program, and a global employee Co-Investment Program - As of June 30, 2025, **$100.9 million** remained under the company's **$500 million** common stock repurchase plan[376](index=376&type=chunk) - The Deferred Compensation Program for certain employees recognized **$3.2 million** in compensation for the six months ended June 30, 2025[377](index=377&type=chunk) - The Carried Interests Sharing Program, which allocates **35% to 50%** of earned carried interests to employees, recorded a reversal of **$3.3 million** in H1 2025[378](index=378&type=chunk) - The global employee Co-Investment Program allows employees to invest alongside the company, with total employee investment capped at **1.5%** of the company's equity[379](index=379&type=chunk) [Cash Flows](index=76&type=section&id=Cash%20Flows) For H1 2025, Kennedy Wilson used cash in operating activities, provided significant cash from investing activities, and increased cash usage in financing activities [Operating](index=77&type=section&id=Operating) Net cash used in operating activities was $
Kennedy Wilson(KW) - 2025 Q2 - Earnings Call Transcript
2025-08-07 17:00
Financial Data and Key Metrics Changes - The company reported a GAAP EPS loss of $0.05 per share compared to a loss of $0.43 per share in Q2 of the previous year [15] - Baseline EBITDA for Q2 was $117 million, a 12% increase year over year, bringing the trailing twelve-month baseline EBITDA to $425 million [15] - Adjusted EBITDA totaled $147 million, significantly up from $79 million in Q2 of the previous year [15] Business Line Data and Key Metrics Changes - Assets under management grew to a record $30 billion, increasing by 70% since the beginning of 2021 [6] - The rental housing sector, representing 65% of assets under management, comprises approximately 70,000 units [7] - The company originated $1.3 billion in new rental housing construction loans, marking the second-largest quarter in originations to date [7] Market Data and Key Metrics Changes - The U.S. apartment sector is experiencing strong rental demand due to a persistent housing shortage and declining new supply, setting the stage for rental growth [12][13] - In the Pacific Northwest, NOI growth was the strongest across the portfolio at 5.6%, driven by demand from companies like Amazon and Starbucks [22] - The Mountain West region, particularly Idaho, saw impressive NOI growth of 7.2% due to higher rents and lower real estate taxes [23] Company Strategy and Development Direction - The company is focused on increasing its exposure to rental housing, aiming for this sector to grow to over 80% of assets under management over the next two years [7] - The strategy includes expanding the multifamily and affordable housing sectors while disposing of non-core assets [20] - The company plans to continue recycling capital into higher return investment opportunities within its investment management platform [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the real estate fundamentals strengthening and the compelling risk-adjusted opportunities in the rental housing sector [12] - The company anticipates a record level of new capital deployment in the remainder of 2025, supported by strong partnerships and a robust pipeline of activity [14] - Management highlighted the importance of maintaining a diversified investment management business to enhance shareholder value [14] Other Important Information - The company generated $275 million from asset sales for the year, keeping it on track to meet its goal of $400 million by year-end [11] - The company has $113 million of consolidated unrestricted cash and $450 million of undrawn availability on its credit facility [19] - The company began utilizing its share repurchase plan, repurchasing approximately 400,000 shares at an average price of $6.21 [19] Q&A Session Summary Question: Can you discuss the UK single-family rental business and its attractiveness? - The UK single-family rental market is in its early stages, with significant growth potential and a focus on a build-to-rent strategy [34][36] - Targeted returns are mid-teens at the asset level, potentially reaching the 20s with fees included [37] Question: How does the company view competition in the debt platform? - The company will continue to focus on residential construction lending, with potential expansion into bridge lending and permanent solutions [42] - The company has expertise in other property types but will primarily focus on housing [43] Question: What are the plans for non-core asset sales for the remainder of the year? - The company is on track to exceed its goal of $400 million in asset sales, having already generated $275 million [44] Question: What are the preferences between affordable versus market-rate multifamily investments? - The company is interested in expanding exposure to both affordable and market-rate sectors, with a focus on the U.S. market [47][48] - The company aims to increase the number of units it manages to between 90,000 and 100,000 over the next few years [51] Question: How is the company addressing upcoming debt maturities? - The company plans to continue disposing of non-core assets to free up capital for debt maturities and refinancing [63] - The average rate on maturing debt is close to 6%, which is above the current borrowing cost [65]
Kennedy Wilson(KW) - 2025 Q2 - Quarterly Results
2025-08-06 20:32
[Earnings Release](index=3&type=section&id=Earnings%20Release) [News Release](index=3&type=section&id=News%20Release) **Kennedy Wilson** reported strong **Q2 2025** results, with **Adjusted EBITDA** at **$147.1 million** and **AUM** reaching **$30 billion**, driven by asset sales and **fee growth** Q2 2025 Financial Highlights (vs. Q2 2024) | Metric | Q2 2025 (USD) | Q2 2024 (USD) | | :--- | :--- | :--- | | **GAAP Net Loss to Common Shareholders** | ($6.4 million) | ($59.1 million) | | GAAP EPS (Diluted) | ($0.05) | ($0.43) | | **Adjusted EBITDA** | $147.1 million | $79.3 million | | **Adjusted Net Income (Loss)** | $34.5 million | ($16.8 million) | - CEO William McMorrow attributed the strong financial results to the execution of the **asset sale program** and **strengthening fundamentals**, highlighting that **Assets under Management (AUM)** grew to a **record $30 billion**, leading to a **39% increase** in **investment management fees** to a quarterly record of **$36 million**[6](index=6&type=chunk) - Key operational achievements in **Q2 2025** include: **Baseline EBITDA** grew by **12% YoY** to **$117 million**; **Fee-Bearing Capital** increased to a **record $9.2 billion**; and the **Debt Investment Platform** originated **$1.2 billion** in **new construction loans** and grew to **$10.1 billion**[7](index=7&type=chunk)[8](index=8&type=chunk)[11](index=11&type=chunk) Multifamily Same Property NOI Growth (Q2-2025 vs. Q2-2024) | Portfolio | Revenue Growth (%) | Expense Growth (%) | NOI Growth (%) | | :--- | :--- | :--- | :--- | | Market Rate | 2.0% | (0.2)% | 3.1% | | Affordable | 6.2% | 8.6% | 4.9% | | **Total** | **2.9%** | **1.6%** | **3.5%** | - The company generated **$250 million** in cash from dispositions and recapitalizations, including the sale of **$409 million** in **non-core consolidated assets**, also repaying **$170 million** on its **revolving credit facility** and repurchasing **0.4 million shares**[13](index=13&type=chunk)[15](index=15&type=chunk) - Subsequent to the quarter's end, the company announced the **full redemption** of its **€300 million 3.25% notes** due **November 2025**, to be completed on **October 3, 2025**[14](index=14&type=chunk) [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) **Consolidated Balance Sheet** shows **total assets** of **$6.80 billion** and **total liabilities** of **$5.20 billion** as of **June 30, 2025**, with **Q2 2025 net loss** at **$6.4 million** [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) Balance Sheet Summary (as of June 30, 2025) | Account | Amount (in millions USD) | | :--- | :--- | | **Assets** | | | Cash and cash equivalents | $309.1 | | Real estate, net | $4,078.8 | | Unconsolidated investments | $2,034.7 | | **Total Assets** | **$6,796.9** | | **Liabilities & Equity** | | | Mortgage debt | $2,385.2 | | Total unsecured debt | $2,237.1 | | **Total Liabilities** | **$5,200.6** | | **Total Equity** | **$1,596.3** | [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 Statement of Operations Summary (vs. Q2 2024) | Line Item | Q2 2025 (in millions USD) | Q2 2024 (in millions USD) | | :--- | :--- | :--- | | **Total Revenue** | $135.7 | $132.0 | | **Gain on sale of real estate, net** | $55.1 | $0.2 | | Total Expenses | $110.4 | $110.2 | | **Interest Expense** | ($62.5) | ($63.8) | | Net Income (Loss) | $5.6 | ($48.3) | | **Net Loss to Common Shareholders** | **($6.4)** | **($59.1)** | [Non-GAAP Metrics](index=10&type=section&id=Non-GAAP%20Metrics) **Q2 2025 Adjusted EBITDA** significantly increased to **$147.1 million**, with **Adjusted Net Income** at **$34.5 million**, reversing a prior-year loss Adjusted EBITDA Reconciliation Summary (Q2 2025) | Item | Amount (in millions USD) | | :--- | :--- | | **Net loss to common shareholders** | ($6.4) | | Add back: **Interest expense** (KW Share) | $95.2 | | Add back: **Depreciation** & amortization (KW Share) | $34.4 | | Add back: Provision for income taxes | $4.4 | | Add back: Preferred dividends | $10.9 | | Add back: **Share-based compensation** | $6.5 | | **Adjusted EBITDA** | **$147.1** | Adjusted Net Income Reconciliation Summary (Q2 2025) | Item | Amount (in millions USD) | | :--- | :--- | | **Net loss to common shareholders** | ($6.4) | | Add back: **Depreciation** & amortization (KW Share) | $34.4 | | Add back: **Share-based compensation** | $6.5 | | **Adjusted Net Income (Loss)** | **$34.5** | [Supplemental Financial Information](index=15&type=section&id=Supplemental%20Financial%20Information) [Capitalization and Value Summary](index=16&type=section&id=Capitalization%20and%20Value%20Summary) As of **June 30, 2025**, **Kennedy Wilson's total enterprise value** was **$8.33 billion**, primarily from **income-producing assets** generating **$467.7 million** in **NOI** and **$9.2 billion** in **fee-bearing capital** Capitalization Summary (as of June 30, 2025) | Metric | Value (in millions USD) | | :--- | :--- | | **Equity Market Capitalization** | $1,192.6 | | **Total Kennedy Wilson's share of debt** | $7,577.9 | | **Total Capitalization** | $8,770.5 | | Less: **Kennedy Wilson's share of cash** | ($440.1) | | **Total Enterprise Value** | **$8,330.4** | Components of Value (KW's Share) | Category | Key Metric | Value (in millions USD) | | :--- | :--- | :--- | | **Income Producing Assets** | **Est. Annual NOI** | $467.7 | | **Lease-up, Development, etc.** | **KW Gross Asset Value** | $1,627.0 | | **Investment Management** | **Fee-Bearing Capital** | $9,200 | | **Net Debt** | **Total Net Debt** | $7,137.8 | [Stabilized Portfolio Analysis](index=19&type=section&id=Stabilized%20Portfolio%20Analysis) The **stabilized portfolio** generates **$467.7 million** in **Estimated Annual NOI**, primarily from **Multifamily** and **Office** segments, with **Mountain West**, **Ireland**, and the **UK** as major geographic contributors - The **stabilized portfolio's Estimated Annual NOI** of **$467.7 million** is primarily driven by **Multifamily** (**$298.1 million**) and **Office** (**$119.2 million**) assets[49](index=49&type=chunk) - Geographically, the largest contributors to **NOI** are the **Mountain West** (**$116.9 million**), **Ireland** (**$88.3 million**), and the **UK** (**$74.8 million**)[46](index=46&type=chunk) [Segment Investment Summary](index=20&type=section&id=Segment%20Investment%20Summary) Stabilized Portfolio by Segment (KW Share) | KW Segment | Est. Annual NOI (USD) | Fee Bearing Capital (USD) | KW Gross Asset Value (USD) | Avg. KW Own. % (%) | | :--- | :--- | :--- | :--- | :--- | | Consolidated | $234.6 million | $0 | $4,381.6 million | 97% | | Co-investment | $233.1 million | $9.2 billion | $4,125.7 million | 23% | | **Total** | **$467.7 million** | **$9.2 billion** | **$8,507.3 million** | **37%** | [Multifamily Portfolio](index=21&type=section&id=Multifamily%20Portfolio) - The **total stabilized multifamily portfolio** consists of **37,736 units** with a **94.2% occupancy rate** (**KW Share**) and generates **$298.1 million** in **Estimated Annual NOI**[51](index=51&type=chunk) - The **Western U.S. portfolio** (**34,226 units**) generates **$249.2 million** in **NOI**, while the **Ireland portfolio** (**3,510 units**) generates **$48.9 million**[51](index=51&type=chunk) [Office Portfolio](index=22&type=section&id=Office%20Portfolio) - The **stabilized office portfolio** comprises **7.1 million rentable square feet** with a **91.4% occupancy rate** (**KW Share**), generating **$119.2 million** in **Estimated Annual NOI**[53](index=53&type=chunk) - The **European office portfolio** (**2.7 million sq. ft.**) is the primary contributor with **$91.1 million** in **NOI**, compared to the **Western U.S. portfolio** (**4.4 million sq. ft.**) which generates **$28.1 million** in **NOI**[53](index=53&type=chunk) [Industrial Portfolio](index=23&type=section&id=Industrial%20Portfolio) - The **stabilized industrial portfolio** consists of **11.5 million rentable square feet** with a high **98.3% occupancy** (**KW Share**), generating **$19.5 million** in **Estimated Annual NOI**[56](index=56&type=chunk) [Loan Investment Portfolio](index=24&type=section&id=Loan%20Investment%20Portfolio) - The **loan portfolio** includes **125 loans** with a total **KW share balance** of **$215.4 million**, generating **$18.5 million** in **annual interest income** at an average **interest rate** of **8.6%**[58](index=58&type=chunk) - In **Q2 2025**, the company originated **13 new loans** with a **gross commitment** of **$1.24 billion** and realized **$321.3 million** in **repayments**[58](index=58&type=chunk) [Other Investments](index=25&type=section&id=Other%20Investments) - **Other investments** include a **retail portfolio** generating **$12.4 million** in **NOI** and a **residential/other portfolio** with a **KW Gross Asset Value** of **$274.5 million**, which includes the **UK Single Family Rental platform**[60](index=60&type=chunk) [Lease-up and Development Portfolio](index=26&type=section&id=Lease-up%20and%20Development%20Portfolio) The **lease-up portfolio** has a **gross asset value** of **$700.5 million** and is expected to generate **$46-$49 million** in **stabilized NOI**, with **1,870 units** in the **affordable housing pipeline** Lease-up Portfolio Summary (KW Share) | of Assets | Commercial Sq. Ft. | Leased % (%) | Est. Stabilized NOI (USD) | KW Gross Asset Value (USD) | | :--- | :--- | :--- | :--- | :--- | | 7 | 1,392,000 | 22% | $46 million - $49 million | $700.5 million | - The **Vintage Housing affordable platform** has **1,870 units** in its **lease-up and development pipeline**, which are expected to generate **$9.6 million** in **stabilized NOI** (**KW Share**) upon completion[71](index=71&type=chunk) [Debt and Liquidity](index=29&type=section&id=Debt%20and%20Liquidity) **Kennedy Wilson's total debt** is **$7.58 billion** with **net debt** of **$7.14 billion**, a **4.6-year weighted average maturity**, and **4.7% effective interest rate**, with **98%** of debt fixed or hedged Debt Summary (KW Share as of June 30, 2025) | Metric | Value (USD) | | :--- | :--- | | **Total Debt** | $7,577.9 million | | **Net Debt** | $7,137.8 million | | **Weighted Avg. Effective Interest Rate** | 4.7% | | **Weighted Avg. Years to Maturity** | 4.6 years | - The company's **debt** is largely insulated from **interest rate volatility**, with **74%** being **fixed-rate** and **24% hedged**, leaving only **2%** exposed to **floating rates**[77](index=77&type=chunk) - **Secured investment-level debt** totals **$5.32 billion**, with the largest allocations to the **Multifamily** (**$3.62 billion**) and **Office** (**$1.23 billion**) sectors[77](index=77&type=chunk) [Investment Management Platform](index=31&type=section&id=Investment%20Management%20Platform) The **investment management platform** had **$30 billion** in **Real Estate AUM** as of **June 30, 2025**, with **Q2 2025 total adjusted fees** increasing to **$34.9 million** Adjusted Fees (Q2 2025 vs Q2 2024) | Fee Description | Q2 2025 (in millions USD) | Q2 2024 (in millions USD) | | :--- | :--- | :--- | | Investment Management — Base | $15.9 | $16.2 | | Investment Management — Transaction | $20.7 | $10.1 | | Investment Management — Carried Interests | ($2.0) | ($12.3) | | **Total Adjusted Fees** | **$34.9** | **$14.1** | - The company's **accrued net carried interests receivable** stood at **$13.4 million** as of **June 30, 2025**[78](index=78&type=chunk) [Same Property Analysis](index=32&type=section&id=Same%20Property%20Analysis) For **Q2 2025**, **multifamily same-property NOI** grew **3.5%**, while **office NOI** declined **5.7%**, primarily due to an **8.3% revenue drop** in **Western U.S. assets** [Same Property - Multifamily](index=32&type=section&id=Same%20Property%20-%20Multifamily) Multifamily Same Property Performance (Q2 2025 vs Q2 2024) | Portfolio | Revenue Change (%) | Expense Change (%) | NOI Change (%) | | :--- | :--- | :--- | :--- | | Market Rate | +2.0% | -0.2% | +3.1% | | Affordable | +6.2% | +8.6% | +4.9% | | **Total** | **+2.9%** | **+1.6%** | **+3.5%** | [Same Property - Office](index=34&type=section&id=Same%20Property%20-%20Office) Office Same Property Performance (Q2 2025 vs Q2 2024, incl. straight-line rents) | Region | Revenue Change (%) | Expense Change (%) | NOI Change (%) | | :--- | :--- | :--- | :--- | | Western U.S. | -8.3% | +5.6% | -19.3% | | Europe | -0.7% | +37.0% | -2.7% | | **Total** | **-2.7%** | **+13.3%** | **-5.7%** | [Real Estate Investment Transactions](index=38&type=section&id=Real%20Estate%20Investment%20Transactions) In **Q2 2025**, **Kennedy Wilson** was a **net seller of real estate**, acquiring **$490.8 million** of assets at a **5.2% cap rate** and disposing of **$618.0 million** at a **6.5% cap rate** Q2 2025 Transaction Summary (100% Value) | Transaction Type | Aggregate Price (USD) | Cap Rate (%) | | :--- | :--- | :--- | | Acquisitions | $490.8 million | 5.2% | | Dispositions | $618.0 million | 6.5% | [Segment Detail](index=39&type=section&id=Segment%20Detail) For **Q2 2025**, the **Consolidated segment** generated **$96.4 million** in **Segment Adjusted EBITDA**, with the **Co-Investment segment** contributing **$58.3 million**, indicating strong growth Segment Adjusted EBITDA (Q2 2025 vs Q2 2024) | Segment | Q2 2025 (in millions USD) | Q2 2024 (in millions USD) | | :--- | :--- | :--- | | Consolidated | $96.4 | $48.4 | | Co-Investment | $58.3 | $33.5 | | **Total** | **$154.7** | **$81.9** | [Pro-rata Financial Information](index=41&type=section&id=Pro-rata%20Financial%20Information) **KW's share** of **unconsolidated investments** included **$4.85 billion** in **net real estate assets** and **$2.98 billion** in **mortgage debt** as of **June 30, 2025**, generating **$77.8 million** in **rental revenue** KW Share of Unconsolidated Investments (as of June 30, 2025) | Account | Amount (in millions USD) | | :--- | :--- | | Cash and cash equivalents | $134.3 | | Real estate, net | $4,854.2 | | Mortgage debt | $2,977.6 | [Appendix](index=45&type=section&id=Appendix) [Reconciliation of Non-GAAP Measures](index=46&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The **appendix** provides **detailed reconciliations** for **non-GAAP** and **supplemental metrics** like **Estimated Annual NOI**, **Adjusted Fees**, **Baseline EBITDA**, and **Same Property NOI**, ensuring **transparency** - The **Estimated Annual NOI** of **$467.7 million** is reconciled from **Q2-25 Property-Level NOI** of **$114.7 million**, after adjustments for **transactions**, **lease-up**, and other items[126](index=126&type=chunk) - Detailed tables reconcile **Kennedy Wilson's Share** of **interest expense**, **depreciation**, and **taxes** from **consolidated figures** by adjusting for **noncontrolling interests** and adding the share from **unconsolidated investments**[128](index=128&type=chunk) - **Same Property NOI** is reconciled to **GAAP Net Income**, detailing adjustments for **non-same-property assets**, **unconsolidated investments**, and various **non-cash or non-recurring items**[132](index=132&type=chunk)[141](index=141&type=chunk) - **Baseline EBITDA** of **$117.0 million** for **Q2 2025** is reconciled from **GAAP Net Income** by adjusting for **non-core items** like **gains on sale**, **taxes**, **interest**, and **depreciation**, and including **NOI from unconsolidated investments**[147](index=147&type=chunk)
How Much Upside is Left in Kennedy-Wilson (KW)? Wall Street Analysts Think 30.26%
ZACKS· 2025-07-28 14:55
Group 1 - Kennedy-Wilson (KW) closed at $7.6, with a 9.2% gain over the past four weeks, and a mean price target of $9.9 indicating a 30.3% upside potential [1] - The average price targets range from a low of $7.70 to a high of $13.00, with a standard deviation of $2.76, suggesting variability in analyst estimates [2] - Analysts show strong agreement in revising earnings estimates higher, which correlates with potential stock price increases [4][11] Group 2 - The Zacks Consensus Estimate for KW has increased by 109.1% due to one estimate moving higher over the last 30 days without any negative revisions [12] - KW holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] - While consensus price targets may not be reliable for predicting exact gains, they can indicate the direction of price movement [14]
Can Kennedy-Wilson (KW) Climb 32.71% to Reach the Level Wall Street Analysts Expect?
ZACKS· 2025-07-10 14:57
Core Viewpoint - Kennedy-Wilson (KW) has shown a significant price increase of 11.3% over the past four weeks, with a mean price target of $9.9 indicating a potential upside of 32.7% from the current price of $7.46 [1] Price Targets and Analyst Consensus - The average price targets for KW range from a low of $7.70 to a high of $13.00, with a standard deviation of $2.76, suggesting variability in analyst estimates [2] - The lowest estimate indicates a 3.2% increase, while the highest suggests a 74.3% upside, highlighting the potential for significant price movement [2] - A low standard deviation among price targets indicates a high degree of agreement among analysts regarding the stock's price direction [9] Earnings Estimates and Market Sentiment - Analysts have shown increasing optimism about KW's earnings prospects, with a strong consensus on revising EPS estimates higher, which correlates with potential stock price increases [11] - The Zacks Consensus Estimate for the current year has risen by 245.5% over the past month, indicating positive sentiment among analysts [12] - KW holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, further supporting its potential upside [13] Caution on Price Targets - While price targets are commonly referenced by investors, they can often mislead, as empirical research shows that they rarely predict actual stock price movements accurately [7][10] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [8]
Kennedy Wilson(KW) - 2025 Q1 - Earnings Call Presentation
2025-06-16 14:57
Kennedy Wilson Overview - Kennedy Wilson manages a global investment portfolio with 39,000 multifamily units and 12 million sq ft of industrial space[5] - The company has a 36-year track record as a global real estate operator and investor[15] - Kennedy Wilson anticipates generating over $400 million from asset sales in 2025, with $125 million already repaid on the credit facility in Q2[12] Financial Performance - The estimated annual NOI from the stabilized portfolio is $473 million[13,18] - Investment Management Fees TTM are $103 million[13] - Fee-bearing capital is $8.7 billion as of Q1 2025[23,46] Portfolio Composition - Multifamily, Loans, and Industrial represent 72% of the stabilized portfolio[18] - The global multifamily portfolio totals approximately 39,000 units with an estimated annual NOI of $302 million and 95% occupancy[24,25] - Rental housing represents approximately 66% of AUM, totaling $12 billion[48,50] Investment Management Platform - The company targets 20%+ growth in investment management fees[12] - There is a $4.4 billion pipeline of fee-bearing capital from future fundings[47] - The credit platform has $9.1 billion in loan commitments[5,57]
Kennedy Wilson(KW) - 2025 Q1 - Quarterly Report
2025-05-08 20:23
Financial Performance - Total revenue for Q1 2025 was $128.3 million, a decrease of 5.9% from $136.4 million in Q1 2024[32]. - Net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders was $40.8 million in Q1 2025, compared to a net income of $26.9 million in Q1 2024[32]. - Basic loss per share for Q1 2025 was $0.30, down from a basic income per share of $0.19 in Q1 2024[32]. - Comprehensive loss for Q1 2025 was $14.9 million, compared to comprehensive income of $35.2 million in Q1 2024[35]. - The company recorded a pre-tax book loss of $34.5 million for the three months ended March 31, 2025, with a tax benefit of $4.9 million[191]. - GAAP net loss to common shareholders was $40.8 million for the three months ended March 31, 2025, compared to a net income of $26.9 million for the same period in 2024[273]. Assets and Liabilities - Total assets as of March 31, 2025, increased to $7,157.1 million from $6,961.1 million as of December 31, 2024, reflecting a growth of approximately 2.8%[30]. - Total liabilities increased to $5,564.9 million as of March 31, 2025, compared to $5,325.1 million at the end of 2024, representing a rise of about 4.5%[30]. - Total equity decreased to $1,592.2 million as of March 31, 2025, down from $1,636.0 million, a decline of about 2.7%[30]. - The company had cash and cash equivalents of $356.6 million at the end of the period, a decrease from $541.9 million at the end of March 2024[43]. - As of March 31, 2025, total mortgage debt amounted to $2,620.7 million, an increase from $2,597.2 million as of December 31, 2024, reflecting a growth of approximately 0.9%[146]. - The company has a total of $2,053.6 million in unsecured debt as of March 31, 2025, compared to $1,877.9 million as of December 31, 2024, indicating an increase of approximately 9.3%[151]. Investment Performance - The company reported a significant share of net operating income from its Co-Investment Portfolio, which is crucial for evaluating investment performance[18]. - Income from unconsolidated investments increased to $11.4 million in Q1 2025, compared to a loss of $6.7 million in Q1 2024[32]. - The company has significant influence over its joint venture interests, which are accounted for under the equity method, with ownership ranging from 5% to 50%[92]. - The company reported a total of $2,084.7 million in joint venture investments as of March 31, 2025, compared to $2,042.4 million as of December 31, 2024, indicating an increase of about 2.1%[94]. - Operating distributions from joint ventures totaled $16.0 million for the three months ended March 31, 2025, compared to $6.4 million in the prior year, marking a substantial increase of approximately 150%[97]. Cash Flow and Financing - Net cash used in operating activities was $51.9 million, a significant increase from $5.6 million in the prior year[43]. - The company reported a net cash provided by financing activities of $218.8 million, compared to a net cash used of $9.8 million in the same period of 2024[43]. - The company paid $18.3 million in common dividends, down from $34.1 million in the same period of 2024[43]. - The company has a credit facility with $272.7 million outstanding and $277.3 million available to be drawn as of March 31, 2025[154]. - The company completed loan purchases and originations of $205.1 million as of March 31, 2025, compared to $231.1 million as of December 31, 2024[137]. Market and Economic Conditions - The company focuses on investing in high growth markets, particularly in the rental housing sector and industrial properties across the U.S., UK, and Ireland[50]. - The company expects ongoing macroeconomic conditions to potentially impact the fair value of its investments, highlighting the uncertainty in the current financial environment[112]. - A significant portion of the company's investments are located outside the U.S., and fluctuations in foreign currency rates will impact results of operations[277]. Operational Metrics - The company emphasizes the importance of same property metrics for consistent performance analysis across comparable periods[27]. - Occupancy for same property multifamily units increased to 95.0% from 93.9%, with net operating income rising by 4.0% and total revenues increasing by 2.6%[276]. - For affordable rate multifamily units, occupancy decreased by 1.1% to 93.5%, while net operating income increased by 5.5% and total revenues rose by 5.3%[276]. Shareholder Returns - Dividends declared per common share decreased to $0.12 in Q1 2025 from $0.24 in Q1 2024[32]. - The company declared and paid cash distributions of $10.9 million on preferred stock and $16.6 million on common stock for the three months ended March 31, 2025[166]. - The company did not repurchase any shares under its stock repurchase program during the three months ended March 31, 2025, after repurchasing 882,454 shares for $7.5 million in the same period of 2024[169].
Kennedy Wilson(KW) - 2025 Q1 - Earnings Call Transcript
2025-05-08 17:02
Financial Data and Key Metrics Changes - The company reported a GAAP EPS loss of $0.30 per share for Q1 2025, compared to an income of $0.19 per share in Q1 2024, which included $0.47 per share from the sale of the Shelburne Hotel [12] - Baseline EBITDA for Q1 2025 was $108 million, a 5% increase year-over-year, bringing the trailing twelve-month baseline EBITDA to $412 million [12] - Assets under management grew by 26% over the past two years to $29 billion, producing approximately $575 million in estimated annual NOI and fees [5] Business Line Data and Key Metrics Changes - The rental housing sector, representing 66% of assets under management, is expected to grow to over 80% in the next three years [6] - Same property multifamily occupancy increased to 95%, with same property revenue growing by 3% and same property NOI by 4.3% in Q1 [7] - Investment management fees grew by 17% in Q1 to $25 million, reflecting strong performance in the credit platform and continued growth in equity platforms [8][24] Market Data and Key Metrics Changes - U.S. real estate transaction volumes increased by 23% in Q1, with no material changes in sentiment observed in Q2 [6] - The Pacific Northwest portfolio saw the strongest NOI growth of 6.6%, driven by return-to-office mandates [19] - In Ireland, same property NOI in the apartment portfolio increased by 3.5%, supported by occupancy growth and strong operating expense management [21] Company Strategy and Development Direction - The company is focused on simplifying its business through asset sales, reducing unsecured debt, and increasing free cash flow [10] - The asset sale program aims to generate between $400 million to $450 million in cash by year-end, with $150 million to $200 million expected to close by the end of Q2 [10] - The company is expanding its credit solutions to include mezzanine debt and preferred equity investments, enhancing its ability to capture opportunities within the credit space [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving fee revenue growth targets of 20% to 25% annually, supported by a strong Q2 pipeline [9] - The company believes that the best risk-adjusted returns are found in the rental housing sector due to demand driven by housing shortages and declining new supply [6] - Management noted that the current economic environment presents attractive investment opportunities, and the company is well-positioned to capitalize on these [9] Other Important Information - The company has reduced its unsecured debt by $250 million over the last two years and plans to continue this trend [10] - Total debt is 96% fixed or hedged, with a weighted average maturity of 4.8 years and an effective interest rate of 4.7% [16] - The company has a strong pipeline of advanced stages totaling $375 million in its new U.K. single-family rental platform [26] Q&A Session Summary Question: Regarding fee-bearing capital growth - Management confirmed confidence in achieving 20% to 25% annual growth in fees, supported by a strong pipeline and future fundings [29][30] Question: On liquidity and partner capital costs - Management acknowledged increased competition but emphasized strong relationships and flexibility in pricing to remain competitive [31][32][34] Question: Stock buyback plans - Management indicated that current cash usage is focused on paying down unsecured debt, with stock buybacks reconsidered post-debt reduction [35][36][37] Question: Dispositions and cap rates - Management confirmed that dispositions are well underway, with most expected to close in June, but refrained from commenting on specific cap rates [40][42] Question: Loan origination rates - Management noted some downward pressure on spreads due to increased competition, but still finds the rates attractive relative to alternatives [49][51] Question: Exposure to government-backed housing - Management reported that about 15% of tenants have some form of HUD backing, but expressed no immediate concerns regarding capital availability [56][60]