Kennedy Wilson(US:KW)2019-05-02 20:19Financial Performance - Total revenue for the three months ended March 31, 2019, was $140.7 million, compared to $131.9 million for the same period in 2018, representing a year-over-year increase of approximately 5.9%[246] - Adjusted EBITDA for the three months ended March 31, 2019, was $120.2 million, compared to $122.7 million for the same period in 2018, indicating a slight decrease of about 2.0%[246] - Net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders for the three months ended March 31, 2019, was a loss of $5.3 million, compared to a profit of $31.4 million for the same period in 2018[246] - Total revenue for the three months ended March 31, 2019, was $190.1 million, a decrease from $190.1 million in the same period in 2018[247] - Adjusted EBITDA for the three months ended March 31, 2019, was $120.2 million, compared to $122.6 million for the same period in 2018[249] - Comprehensive income attributable to Kennedy-Wilson Holdings, Inc. common shareholders was $11.6 million for the three months ended March 31, 2019, down from $20.4 million in 2018[283] - Adjusted Net Income for the three months ended March 31, 2019, was $53.9 million, down from $63.2 million in 2018[330] - The company reported a net income of $1.6 million for Q1 2019, compared to a net loss of $1.0 million in Q1 2018[333] Revenue Breakdown - Rental revenue for the three months ended March 31, 2019, was $115.8 million, while hotel revenue was $15.0 million, contributing significantly to total revenue[246] - Rental income decreased by $18.5 million to $115.8 million due to the deconsolidation of Irish multifamily assets sold into the AXA Joint Venture[253] - Hotel income fell by $21.3 million to $15.0 million primarily due to the sale of the Ritz Carlton, Lake Tahoe hotel and other properties[254] - Sale of real estate revenue decreased to $1.1 million from $9.4 million, attributed to the completion of the 200 Capital Dock project[255] - Same Property Revenue for Q1 2019 was $119.4 million, an increase from $115.8 million in Q1 2018, representing a growth of 2.8%[335] - Commercial Same Property Revenue increased to $46.0 million in Q1 2019 from $44.1 million in Q1 2018, a growth of 4.3%[335] - Multifamily Market Rate Portfolio Same Property Revenue rose to $54.4 million in Q1 2019, compared to $51.7 million in Q1 2018, marking a 5.2% increase[335] - Hotel Same Property Revenue decreased to $12.8 million in Q1 2019 from $14.1 million in Q1 2018, a decline of 9.2%[335] Expenses and Costs - Total expenses for the three months ended March 31, 2019, were $153.1 million, compared to $128.5 million for the same period in 2018, reflecting an increase of approximately 19.2%[246] - Interest expense for the three months ended March 31, 2019, was $55.3 million, which included $37.1 million in interest expense and $18.2 million from corporate debt[246] - The company incurred acquisition-related expenses of $0.8 million during the three months ended March 31, 2019[246] - The share-based compensation expense for the three months ended March 31, 2019, was $10.4 million, reflecting the company's ongoing commitment to employee incentives[246] - Hotel expenses decreased to $14.6 million for the three months ended March 31, 2019, down from $30.8 million in the same period in 2018, attributed to the sale of Park Inns hotels and the Ritz Carlton, Lake Tahoe hotel[267] - Interest expense decreased to $55.3 million for the three months ended March 31, 2019, from $58.9 million in 2018, due to the deconsolidation of multifamily assets and increased capitalized interest[277] Investments and Development - The company raised an additional $200 million of fee-bearing capital during the first quarter of 2019[249] - The company expects to incur an additional $702.0 million to complete ongoing development and redevelopment projects, with $342 million expected to be funded through cash[288] - The company is developing 2,531 affordable and/or age-restricted multifamily units, expecting to receive $27.9 million in cash from developer fees and tax credit sales upon completion[289] - The company has a total of 817,000 square feet in development projects, with an estimated total cost of $1.557 billion, of which $981 million is expected to be incurred[293] - The company typically invests between $50 million to $100 million annually for capital expenditures in its consolidated and unconsolidated investment portfolio[297] Cash Flow and Liquidity - For the three months ended March 31, 2019, the company reported net cash used in operating activities of $25.1 million, compared to cash provided of $48.8 million in the same period of 2018[300][301] - The company generated net cash provided by investing activities of $100.8 million for the three months ended March 31, 2019, primarily from the sale of Ritz Carlton Lake Tahoe hotel and non-core retail properties[302] - Net cash used in financing activities totaled $122.9 million for the three months ended March 31, 2019, with significant repayments of mortgage debt totaling $251.4 million[304] - The company has unfulfilled capital commitments totaling $97.6 million to its unconsolidated investments as of March 31, 2019[298][309] - The company expects to fund $342 million of its share of remaining costs to complete projects with cash, subject to changes in financing availability[294] - As of March 31, 2019, the company had approximately $943.0 million of potential liquidity, including $500.0 million available under lines of credit and $442.9 million in cash[285] Debt and Financing - As of March 31, 2019, total contractual cash obligations amount to $5.556 billion, including mortgage debt of $3.008 billion[307] - The company has a share repurchase plan approved for up to $250 million, with $76.8 million remaining under the plan as of March 31, 2019[296] - As of March 31, 2019, the total amount of 2024 Notes included in the consolidated balance sheets was $1.1 billion[313] - KWE has approximately $651.5 million in outstanding KWE Bonds with a fixed interest rate of 3.95%, effectively reduced to 3.35% through swap arrangements[314] - KWE established a £2.0 billion (approximately $2.6 billion) Euro Medium Term Note Programme, with $617.0 million drawn down under this programme[315] - The A&R Facility consists of a $500 million revolving line of credit and a $200 million term loan facility, with a maturity date of March 31, 2021[317] - As of March 31, 2019, the Company had an outstanding balance of $75.0 million on the A&R Facility, leaving $500.0 million available to be drawn[318] - The A&R Facility requires a maximum consolidated leverage ratio of not greater than 65% and a minimum fixed charge coverage ratio of at least 1.70 to 1.00[320] - As of March 31, 2019, the Company was in compliance with all covenant calculations[322] Operational Metrics - The company reported net operating income (NOI) of $41.7 million from unconsolidated investments, net of depreciation and amortization, for the three months ended March 31, 2019[246] - On 14,583 same property multifamily units, total revenues increased by 5.5% and net operating income increased by 7.1%[250] - Occupancy for same property commercial real estate increased to 97.1% from 96.8% year-over-year[250] - Income from unconsolidated investments increased to $41.7 million for the three months ended March 31, 2019, compared to $26.0 million in 2018, driven by the deconsolidation of multifamily assets into the AXA Joint Venture[273] - The company experienced a decrease in income from unconsolidated investments, reporting a loss of $41.7 million in Q1 2019 compared to a loss of $26.0 million in Q1 2018[333] - The company’s same property analysis reflects a weighted ownership in each underlying property, indicating a strategic focus on property management and performance metrics[332]