Kennedy Wilson(KW) - 2025 Q2 - Quarterly Report

Forward-Looking Statements 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] - 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] - The company has no intention or obligation to publicly update any forward-looking statements[12] Non-GAAP Measures and Certain Definitions 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] - 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] - 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] - 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] PART I FINANCIAL INFORMATION Item 1. Financial Statements (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 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] - Cash and cash equivalents increased by $91.6 million, from $217.5 million to $309.1 million[32] Consolidated Statements of Operations 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] - 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] Consolidated Statements of Comprehensive Loss 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] - 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] Consolidated Statements of Equity 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] - 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] - 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] Consolidated Statements of Cash Flows 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][382] - 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][383] - 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][385] Notes to Consolidated Financial Statements 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 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] - 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] - 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][63] NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS 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][66][67][69][70] - 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][77] - 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][79] - 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][88] NOTE 3—REAL ESTATE AND IN-PLACE LEASE VALUE 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] - 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] - 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][96] NOTE 4—UNCONSOLIDATED INVESTMENTS 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][104] - 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] - 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][108][109][110] NOTE 5—FAIR VALUE MEASUREMENTS AND THE FAIR VALUE OPTION 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][120] - 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][126][129][290] - 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][133][137][139] - 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] NOTE 6—LOANS 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] - 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] - The company recorded a $3.1 million credit loss reserve for the six months ended June 30, 2025, reflecting current expected credit losses[148] NOTE 7—OTHER ASSETS, NET 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] - 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][152] NOTE 8—MORTGAGE DEBT 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] - 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] | 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 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] - As of June 30, 2025, the Third A&R Facility had $102.4 million outstanding with $447.6 million available to be drawn[162] - 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][167][168] NOTE 10—KWE UNSECURED BONDS 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] - 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] - 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][173] NOTE 11—EQUITY 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] - 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][376] | 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 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] - 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] - 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] NOTE 13—SEGMENT INFORMATION 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] - Consolidated Portfolio primarily involves ownership of multifamily assets, typically wholly-owned with longer hold periods and accretive asset management opportunities[59][189] - 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][190] - Segment Adjusted EBITDA is the key operating metric used by the Chief Operating Decision Makers to evaluate segment performance[188] NOTE 14—INCOME TAXES 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][357] - 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][357] - 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] NOTE 15—GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS 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] - Kennedy Wilson owns 100% of all guarantor subsidiaries, thus no separate financial statements are required for them[209] - 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] - 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] NOTE 16 - SUBSEQUENT EVENTS 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][393] - 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] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Kennedy Wilson's financial condition, operational results, liquidity, and capital resources, including investment strategy, segment performance, and market risks Company Overview 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][231] - 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] - 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] - 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] Investment Approach 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] - Key strategies include acquiring high-quality assets through its investment management platform, repositioning them to enhance cash flows, and exploring development opportunities[235] - The company continuously evaluates and selectively harvests asset and entity value through strategic realizations in public and private markets[235] Quarter to Date Highlights 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] - Adjusted EBITDA increased by 85% to $147.1 million in Q2 2025 from $79.3 million in Q2 2024[234][237] - Investment management fees grew by 39% to $36.4 million, including a $7 million development completion fee[239] - Stabilized multifamily portfolio showed strong performance with 2.9% same-property revenue growth and 3.5% same-property NOI growth[239] Year to Date Highlights 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] - Adjusted EBITDA decreased by 13% to $245.3 million in H1 2025 from $282.5 million in H1 2024[236][238] - Investment management fees increased by 29.5% to $61.4 million, driven by higher origination fees and a development completion fee[240] - Stabilized multifamily portfolio achieved 3.0% same-property revenue growth and 3.9% same-property NOI growth, with occupancy increasing to 94.6%[240] Business Segments 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 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][245] | 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] Co-Investment Portfolio 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][248] | 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] Co-Investment Portfolio Investment Platforms 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] - 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] - The Vintage Housing Holdings (VHH) partnership focuses on acquiring and developing income and age-restricted properties[253] Investment Types 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][256][259] - 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][261][266] - 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][273] - 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][275] - 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][279][280] Development and Redevelopment 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] - 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][282][371] - 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] Fair Value Investments 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] - 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][287][288] - Macroeconomic conditions, such as inflation, interest rates, and market liquidity, continue to create volatility and impact fair value measurements, which involve subjective judgments[284][292] | 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) 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] - 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] Foreign Currency and Currency Derivative Instruments 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] Kennedy Wilson Consolidated Financial Results: Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024 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 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] - Segment Adjusted EBITDA increased by 85% to $154.7 million in Q2 2025 from $81.9 million in Q2 2024[299] Operational Highlights 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] - 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] - 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] - 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] Foreign Exchange - Results of Operations 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] - The Euro strengthened by 9.0% and GBP by 6.1% against the U.S. Dollar during Q2 2025, contributing to translation gains[326] Consolidated Portfolio Segment 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] - 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] - 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] - 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] Co-Investment Portfolio Segment 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] - 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] - 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][315][316] - 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] Non-Segment Items 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] - 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] - 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] - 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] Other Comprehensive (Loss) Income 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] - 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] - These gains were partially offset by $37.1 million in unrealized foreign currency derivative contract losses, net[326] Kennedy Wilson Consolidated Financial Results: Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024 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 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] - 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] - Segment Adjusted EBITDA decreased by 13% to $262.0 million in H1 2025 from $281.4 million in H1 2024[330] Operational Highlights 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] - 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] - 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] - 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] Foreign Exchange - Results of Operations 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] - The Euro strengthened by 13.6% and GBP by 9.6% against the U.S. Dollar during H1 2025, contributing to translation gains[359] Consolidated Portfolio Segment 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] - Hotel income was $0 in H1 2025, compared to $9.3 million in H1 2024, due to the sale of the Shelbourne hotel[336] - 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] - 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] - 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] Co-Investment Portfolio Segment 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] - 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] - 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][349][350][351] - 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] Non-Segment Items 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] - 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] - 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] - 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] Other Comprehensive Income (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] - 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] - These gains were partially offset by $49.0 million in unrealized foreign currency derivative contract losses, net[359] Liquidity and Capital Resources 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][362] - 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] - 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] - 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] Unstabilized and Value Add Capital Expenditure Programs 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][374] - The estimated costs and timeframes for these projects are subject to uncertainties and may be significantly higher than current estimates[372][375] - 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] Other Items 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] - The Deferred Compensation Program for certain employees recognized $3.2 million in compensation for the six months ended June 30, 2025[377] - 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] - 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] Cash Flows For H1 2025, Kennedy Wilson used cash in operating activities, provided significant cash from investing activities, and increased cash usage in financing activities Operating Net cash used in operating activities was $