Kennedy Wilson(US:KW)2021-11-04 20:17Financial Performance - Total revenue for the three months ended September 30, 2021, was $114.4 million, a decrease of 0.9% compared to $115.5 million for the same period in 2020[283] - Adjusted EBITDA for the three months ended September 30, 2021, was $202.7 million, compared to $76.3 million for the same period in 2020, representing a significant increase[284] - Net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders for Q3 2021 was $65.9 million, compared to a net loss of $25.1 million in Q3 2020[284] - The company reported a net loss of $15.5 million for Q3 2021, compared to a net loss of $19.7 million in Q3 2020, indicating an improvement in financial performance[284] - Total expenses for Q3 2021 were $124.5 million, compared to $116.3 million in Q3 2020, an increase of 7.5%[284] - GAAP net income to common shareholders was $65.9 million for the three months ended September 30, 2021, compared to a net loss of $25.1 million for the same period in 2020[285] - Adjusted EBITDA increased to $202.7 million for the three months ended September 30, 2021, up from $76.3 million in the prior year[285] - The company recorded a gain on sale of real estate of $15.0 million for the three months ended September 30, 2021, compared to a loss of $4.0 million in the same period in 2020[296] - Comprehensive income attributable to Kennedy-Wilson Holdings, Inc. common shareholders for the three months ended September 30, 2021 was $55.2 million, compared to a loss of $15.3 million in 2020[308] - For the nine months ended September 30, 2021, net income was $292.1 million, recovering from a net loss of $64.7 million in the same period of 2020[384] - Adjusted Net Income for the nine months ended September 30, 2021, was $423.5 million, up from $84.1 million in 2020, indicating a growth of 404%[384] Revenue and Income Sources - Rental revenue for Q3 2021 was $96.1 million, down from $102.2 million in Q3 2020, reflecting a decrease of 3.0%[283] - The company generated $143.1 million from unconsolidated investments in Q3 2021, compared to $14.9 million in Q3 2020, showing a substantial increase[284] - Hotel income increased to $6.2 million for the three months ended September 30, 2021, compared to $3.1 million for the same period in 2020, due to the reopening of operations at the Shelbourne Hotel[291] - Rental income decreased to $96.1 million for the three months ended September 30, 2021, down from $102.2 million in the same period in 2020, primarily due to the deconsolidation of the MF seed portfolio[290] - Rental revenue for the nine months ended September 30, 2021 was $279.7 million, down from $308.8 million in the same period of 2020, indicating a decrease of approximately 9.5%[310][311] - The company reported a gain on the sale of real estate of $417.0 million for the nine months ended September 30, 2021[310] Expenses and Costs - Interest expense for Q3 2021 was $45.3 million, compared to $50.8 million in Q3 2020, indicating a reduction in financing costs[284] - Interest expense decreased to $27.8 million for the three months ended September 30, 2021, down from $32.8 million in the prior year, attributed to reduced consolidated property level debt[297] - Interest expense for the nine months ended September 30, 2021 was $141.4 million, compared to $150.0 million in the same period of 2020, showing a reduction of approximately 5.7%[310][311] - The company incurred $31.0 million in debt issuance costs associated with the issuance of new senior notes during the nine months ended September 30, 2021[359] - The company incurred transaction-related expenses of $4.0 million in Q3 2019, compared to $0.4 million in Q3 2018, indicating a significant rise[389] Operational Performance - The company’s same property NOI analysis excludes properties under development, providing a clearer view of operational performance[24] - Same property multifamily units saw occupancy increase to 95.5% from 94.9%, with net operating income rising by 10.4% and total revenues increasing by 7.1%[288] - Same property multifamily units occupancy increased to 95.5% from 94.8%, with net operating income up by 1.6% and total revenues increasing by 2.0% for the nine months ended September 30, 2021[314] - Same property office real estate occupancy decreased to 95.8% from 97.1%, while net operating income increased by 6.3% and total revenues rose by 5.1% for the same period[314] - The total interest expense for the nine months ended September 30, 2021, was $141.4 million, down from $150.0 million in the same period of 2020[384] Strategic Initiatives and Growth - The company continues to focus on expanding its real estate assets under management, which reflects its strategic growth initiatives in the market[20] - The company plans to continue focusing on market expansion and new product development to drive future growth[387] - The company acquired $789.3 million in real estate assets and $439.9 million in loans during the reporting period[288] - The company acquired $1.9 billion in real estate assets and $843.2 million in loans, while selling $1.4 billion in assets during the nine months ended September 30, 2021[314] Cash and Financing - As of September 30, 2021, the company had $840.8 million in consolidated cash, with $500.0 million available under its revolving credit facility[341] - The company has $500 million revolving line of credit available as of September 30, 2021, with no outstanding balance[370] - Net cash provided by financing activities was $644.8 million for the nine months ended September 30, 2021, including proceeds of $1.8 billion from the issuance of new notes[359] - The company received $838.7 million from mortgage loans to finance and refinance consolidated property acquisitions during the nine months ended September 30, 2021[359] Tax and Compliance - Income tax expense was $30.6 million for the three months ended September 30, 2021, compared to an income tax benefit of $12.8 million in 2020, driven by a $135.6 million increase in pre-tax book income[306] - The effective tax rate for the nine months ended September 30, 2021, was 25.2%, up from 13.8% in 2020, primarily due to a $465.3 million increase in worldwide pre-tax book income[336] - The company was in compliance with all debt covenants, including a maximum consolidated leverage ratio of 65%[372] - The company expects to remain compliant with its debt covenants and is confident in securing additional waivers if needed[376] Development Projects - The company incurred $488.0 million in costs to date for its development projects and expects to spend an additional $694.0 million to complete them[344] - The company is actively developing 2,069 multifamily units, 0.6 million commercial rentable square feet, and 150 hotel rooms, with an estimated total cost of $1.2 billion[344] - The company has 10 unstabilized assets comprising 1.0 million commercial square feet and 190 multifamily units, with projected costs to complete of $35.3 million[351]