Kennedy Wilson Reports Third Quarter 2012 Earnings - Kennedy-Wilson Holdings (NYSE:KW)

BEVERLY HILLS, Calif.--(BUSINESS WIRE)--

Kennedy-Wilson Holdings, Inc. KW (“Kennedy Wilson”, "we," "us," "our," or the “Company”), an international real estate investment and services company, today reported a third quarter 2012 net loss attributable to common shareholders of $6.2 million (or $0.11 per basic and diluted share) compared to a net loss attributable to common shareholders of $6.9 million (or $0.16 per basic and diluted share) for the same period in 2011. Net loss attributable to common shareholders, adjusted for stock-based compensation expense, was $3.3 million (or $0.06 per basic share) compared to a net loss of $5.6 million for the same period in 2011 (or $0.13 per basic share).

The Company's earnings before interest, taxes, depreciation and stock-based compensation expense (“Adjusted EBITDA”) for the third quarter of 2012 was $17.5 million, a 94% increase from $9.0 million for the same period in 2011.

“The company had a very active and successful third quarter with more than $650 million of acquisitions in the U.S. and Ireland," said William McMorrow, chairman and CEO of Kennedy Wilson. "Our key operating metrics improve each quarter, and we continue to see significant investment opportunities in our core markets."

Kennedy Wilson Recent Highlights

Operating metrics

During the three months ended September 30, 2012, the Company achieved an adjusted EBITDA of $17.5 million, a 94% increase from $9.0 million for the same period in 2011.
During the nine months ended September 30, 2012, the Company achieved an adjusted EBITDA of $55.5 million, a 33% increase from $41.6 million for the same period in 2011.

Investments business

Investment Account

As of September 30, 2012, our investment account (Kennedy Wilson's equity in real estate, joint ventures, loan investments, and marketable securities) increased by 13% to $658.1 million from $582.8 million at December 31, 2011. This change was comprised of approximately $239.3 million (including $79.4 million during the third quarter) of cash contributed to and income earned on investments and approximately $164.0 million (including $47.4 million during the third quarter) of cash distributed from investments.
As of September 30, 2012, the Company and its equity partners owned 14.6 million rentable square feet of real estate including 13,950 apartment units and 24 commercial properties. Additionally, as of September 30, 2012, the Company and its equity partners owned $2.0 billion in loans secured by real estate.

Operating metrics

During the three months ended September 30, 2012, our investments business achieved an EBITDA of $12.6 million (inclusive of $0.4 million of acquisition related costs), a 108% increase from $6.0 million for the same period in 2011. There were no material acquisition related costs in the corresponding period in 2011.
During the nine months ended September 30, 2012, our investments business achieved an EBITDA of $47.2 million (inclusive of $1.2 million of acquisition related costs), a 29% increase from $36.6 million (inclusive of $0.3 million of acquisition related costs) for the same period in 2011.

Acquisition/disposition program

From January 1, 2010 through September 30, 2012, the Company and its equity partners, acquired approximately $6.7 billion of real estate related investments.
During the nine months ended September 30, 2012, the Company and its equity partners, acquired approximately $1.5 billion of real estate related investments, including $659.4 million during the third quarter. We invested $175.6 million (including $68.6 million during the third quarter) of our equity in the vehicles that acquired these investments.
The composition of the $1.5 billion of real estate related investments acquired by the Company and its equity partners during the nine months ended September 30, 2012 is as follows:
- During the nine months ended September 30, 2012, we, along with our equity partners, acquired approximately $969.1 million of real estate investments, including $180.8 million during the third quarter. The underlying assets are located primarily in the Western U.S. (68% in terms of our equity invested) and Ireland (32% in terms of our equity invested) and include seven multifamily properties with 1,961 units and 11 commercial properties totaling 2.0 million square feet. We invested $80.4 million of our equity in vehicles that acquired these real estate assets, including $27.6 million during the third quarter.
- During the nine months ended September 30, 2012, we, along with our equity partners, acquired approximately $563.6 million of loans (including $478.6 million during the third quarter) at an average discount of 20% to their principal balance (weighted based on our equity invested). In addition, we and our equity partners originated a loan of $8.6 million at a 10.8% interest rate. These loans are secured by 108 underlying properties located in the Western U.S. and Ireland. We invested approximately $95.2 million of our equity in loans, including $41.0 million during the third quarter.
During the nine months ended September 30, 2012, the Company and its equity partners sold four multifamily properties located in the Western U.S. for a total of $243.0 million, which resulted in a total gain of $32.6 million, of which our share was $7.9 million ($17.5 million of our equity invested). We also sold our interest in a 324-unit apartment building in San Jose, California generating a gain of $2.2 million to the Company ($3.2 million of our equity invested).

Property level debt financing

During the nine months ended September 30, 2012, the Company and its equity partners completed approximately $475.8 million of property financings and re-financings at an average interest rate of 3.3% and a weighted average maturity of 6.6 years. During the nine months ended September 30, 2011, the Company and its equity partners completed approximately $829.7 million of property financings and re-financings at an average interest rate of 3.6% and a weighted average maturity of 4.1 years.

United Kingdom and Ireland

In December 2011, we and our equity partners acquired a loan pool secured by real estate located in the United Kingdom with an unpaid principal balance of $2.1 billion. As of September 30, 2012, the unpaid principal balance was $1.3 billion due to loan resolutions of approximately $756.9 million, representing 36% of the pool. The total debt incurred at the venture level at the time of purchase of these loans was $323.4 million with a maturity date of October 2014. As a result of the loan resolutions, the venture level debt has been paid down by $176.6 million to $146.8 million as of September 30, 2012.
On March 13, 2012, we announced a €250 million (approximately $325 million) capital commitment from Fairfax Financial Holdings ("Fairfax") to acquire real estate and loans secured by real estate in the United Kingdom and Ireland. Investments under this program require Fairfax's agreement to participate on an investment-by-investment basis. As of September 30, 2012, we have purchased two investments within this platform, the historic 210-unit Alliance Building in Dublin, Ireland, located adjacent to Google's European headquarters, for $50.0 million and Brooklawn House, a Dublin office property, for $18.5 million. We invested $25.7 million of our equity in the investment vehicles that acquired these assets.
On May 2, 2012, we entered into a term sheet with a major European financial institution to create a framework to target the acquisition of €2 billion (approximately $2.5 billion) of performing, sub-performing and non-performing loans secured by commercial and residential real estate in Europe, with a focus on the United Kingdom and Ireland. In August 2012, we made our first investment within this platform. We, along with our equity partner acquired a loan pool secured by real estate located in Ireland with an unpaid principal balance of $449.0 million. We invested $7.4 million of our equity in the vehicle that acquired these assets.

Japan

Maintained 97% occupancy in 50 apartment buildings with over 2,400 units.
Since Fairfax became our partner in the Japanese apartment portfolio in September 2010, we have distributed a total of $51.5 million, of which our share was $24.0 million.

Services business

Management and leasing fees and commissions increased by 12% to $12.5 million for the three months ended September 30, 2012 from $11.1 million for the same period in 2011.
During the three months ended September 30, 2012, our services business achieved an EBITDA of $4.8 million, a 50% increase from $3.2 million for the same period in 2011.
Management and leasing fees and commissions increased by 35% to $35.5 million for the nine months ended September 30, 2012 from $26.2 million for the same period in 2011.
During the nine months ended September 30, 2012, our services business achieved an EBITDA of $11.2 million, a 72% increase from $6.5 million for the same period in 2011.

Corporate financing

In July 2012, the Company issued 8.6 million shares of common stock primarily to institutional investors, resulting in gross proceeds of $112.1 million of which $40.0 million was used to pay off the outstanding balance on our line of credit.

Subsequent events

Subsequent to September 30, 2012, we have acquired or have entered into contracts to acquire approximately $391.8 million of real estate related investments which include 1.8 million rentable square feet of real estate comprised of 926 apartment units and 6 commercial properties. We expect the acquisitions to be a combination of wholly owned and joint venture investments.
Subsequent to September 30, 2012, we have resolved an additional $190.5 million of the loan pool secured by real estate located in the United Kingdom which lowered the unpaid principal balance to $1.1 billion. Our venture level debt balance will be reduced by an additional $35.5 million to $111.3 million.

Conference Call and Webcast Details

The company will hold a live conference call and webcast to discuss results at 7:00 a.m. PT/ 10:00 a.m. ET on Tuesday, November 6.

The direct dial-in number for the conference call is (888) 895-5479 for U.S. callers and (847) 619-6250 for international callers. The confirmation number for the live call is 33644846.

A replay of the call will be available for one week beginning two hours after the live call and can be accessed by dialing (888) 843-7419 for U.S. callers and (630) 652-3042 for international callers. The passcode for the replay is 33644846#.

The webcast will be available at: http://edge.media-server.com/m/p/ust52w84/lan/en. A replay of the webcast will be available two hours after the original webcast on the Company's investor relations web site for one year.

About Kennedy Wilson

Founded in 1977, Kennedy Wilson is an international real estate investment and services company headquartered in Beverly Hills, CA with 24 offices in the U.S., U.K., Ireland, Spain and Japan. The company offers a comprehensive array of real estate services including auction, conventional sales, property services, research and investment management. Through its fund management and separate account businesses, Kennedy Wilson is a strategic investor of real estate investments in the U.S., U.K., Ireland and Japan. For further information on Kennedy Wilson, please visit www.kennedywilson.com.

Forward-Looking Statements

Statements made by us in this report and in other reports and statements released by us that are not historical facts constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are necessarily estimates reflecting the judgment of our senior management based on our current estimates, expectations, forecasts and projections and include comments that express our current opinions about trends and factors that may impact future operating results. Disclosures that use words such as “believe,” “anticipate,” “estimate,” “intend,” “could,” “plan,” “expect,” “project” or the negative of these, as well as similar expressions, are intended to identify forward-looking statements. These statements are not guarantees of future performance, rely on a number of assumptions concerning future events, many of which are outside of our control, and involve known and unknown risks and uncertainties that could cause our actual results, performance or achievement, or industry results, to differ materially from any future results, performance or achievements, expressed or implied by such forward-looking statements. These risks and uncertainties may include these factors and the risks and uncertainties described elsewhere in this report and other filings with the Securities and Exchange Commission (the “SEC”), including the Item 1A. “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2011. Any such forward-looking statements, whether made in this report or elsewhere, should be considered in the context of the various disclosures made by us about our businesses including, without limitation, the risk factors discussed in our filings with the SEC. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements, whether as a result of new information, future events, changes in assumptions, or otherwise.

Non-GAAP Financial Information

In addition to the results reported in accordance with U.S. generally accepted accounting principles (GAAP) included within this press release, Kennedy Wilson has provided certain information, which includes non-GAAP financial measures (Pro Forma Statements of Operations, Adjusted Net Loss Attributable to Kennedy Wilson Common Shareholders, Basic Adjusted Net Loss Attributable to Kennedy Wilson Common Shareholders Per Share, EBITDA and Adjusted EBITDA). Additionally, there are certain revenue and expense line items in our pro forma consolidated statements of operations or income that would otherwise be classified as discontinued operations on a GAAP statement. Such information is reconciled to its closest GAAP measure in accordance with the SEC rules and is included in the attached supplemental tables. Management believes that these non-GAAP financial measures are useful to both management and the Company's shareholders in their analysis of the business and operating performance of the Company. Management also uses this information for operational planning and decision-making purposes. Non-GAAP financial measures are not and should not be considered a substitute for any GAAP measures. Additionally, non-GAAP financial measures as presented by Kennedy Wilson may not be comparable to similarly titled measures reported by other companies.



Kennedy-Wilson Holdings, Inc. and Subsidiaries Consolidated Balance Sheets


	September 30, 2012			December 31, 2011

Assets
Cash and cash equivalents	$	126,804,000		$	115,926,000
Accounts receivable	3,378,000			3,114,000
Accounts receivable — related parties	19,504,000			15,612,000
Notes receivable	43,391,000			7,938,000
Notes receivable — related parties	40,101,000			33,269,000
Real estate, net	111,517,000			115,880,000
Investments in joint ventures	380,563,000			343,367,000
Investment in loan pool participations	102,854,000			89,951,000
Marketable securities	10,265,000			23,005,000
Other assets	19,955,000			20,749,000
Goodwill	23,965,000			23,965,000
Total assets	$	882,297,000		$	792,776,000

Liabilities
Accounts payable	$	1,306,000		$	1,798,000
Accrued expenses and other liabilities	29,129,000			24,262,000
Accrued salaries and benefits	5,600,000			14,578,000
Deferred tax liability	19,610,000			18,437,000
Senior notes payable	249,425,000			249,385,000
Mortgage loans payable	30,748,000			30,748,000
Junior subordinated debentures	40,000,000			40,000,000
Total liabilities	375,818,000			379,208,000
Equity
Common stock	6,000			5,000
Additional paid-in capital	514,586,000			407,335,000
(Accumulated deficit) retained earnings	(11,583,000		)	9,708,000
Accumulated other comprehensive income	11,786,000			5,035,000
Shares held in treasury at cost	(9,856,000		)	(11,848,000		)
Total Kennedy-Wilson Holdings, Inc. shareholders' equity	504,939,000			410,235,000
Noncontrolling interests	1,540,000			3,333,000
Total equity	506,479,000			413,568,000
Total liabilities and equity	$	882,297,000		$	792,776,000



Kennedy-Wilson Holdings, Inc. and Subsidiaries Consolidated Statements of Operations


	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Revenue
Management and leasing fees	$	10,335,000		$	7,851,000		$	29,308,000		$	17,808,000
Commissions	2,145,000			3,259,000			6,165,000			8,429,000
Sale of real estate	1,275,000			—			1,275,000			417,000
Rental and other income	1,485,000			1,666,000			4,432,000			3,359,000
Total revenue	15,240,000			12,776,000			41,180,000			30,013,000
Operating expenses
Commission and marketing expenses	1,371,000			1,641,000			3,676,000			3,015,000
Compensation and related expenses	11,364,000			8,473,000			30,658,000			24,562,000
Cost of real estate sold	1,275,000			—			1,275,000			397,000
General and administrative	5,014,000			3,329,000			13,571,000			9,183,000
Depreciation and amortization	989,000			931,000			2,903,000			1,828,000
Rental operating expenses	847,000			1,195,000			2,638,000			2,248,000
Total operating expenses	20,860,000			15,569,000			54,721,000			41,233,000
Equity in joint venture income (loss)	1,848,000			(646,000		)	12,472,000			7,229,000
Interest income from loan pool participations and notes receivable	3,712,000			1,048,000			7,126,000			5,835,000
Operating (loss) income	(60,000		)	(2,391,000		)	6,057,000			1,844,000
Non-operating income (expense)
Interest income	179,000			635,000			2,503,000			1,234,000
Remeasurement gain	—			—			—			6,348,000
Gain on sale of marketable securities	—			—			2,931,000			—
Realized foreign currency exchange loss	(6,000		)	—			(80,000		)	—
Interest expense	(6,755,000		)	(6,117,000		)	(19,979,000		)	(13,874,000		)
Loss from continuing operations before benefit from income taxes	(6,642,000		)	(7,873,000		)	(8,568,000		)	(4,448,000		)
Benefit from income taxes	2,500,000			2,997,000			5,121,000			2,162,000
Loss from continuing operations	(4,142,000		)	(4,876,000		)	(3,447,000		)	(2,286,000		)
Discontinued Operations
Income from discontinued operations, net of income taxes	—			—			2,000			—
Loss from sale of real estate, net of income taxes	—			—			(212,000		)	—
Net loss	(4,142,000		)	(4,876,000		)	(3,657,000		)	(2,286,000		)
Net (loss) income attributable to the noncontrolling interests	(64,000		)	42,000			(2,990,000		)	(1,295,000		)
Net loss attributable to Kennedy-Wilson Holdings, Inc.	(4,206,000		)	(4,834,000		)	(6,647,000		)	(3,581,000		)
Preferred dividends and accretion of preferred stock issuance costs	(2,036,000		)	(2,036,000		)	(6,108,000		)	(6,708,000		)
Net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders	$	(6,242,000	)	$	(6,870,000	)	$	(12,755,000	)	$	(10,289,000	)
Basic and diluted loss per share attributable to Kennedy-Wilson Holdings, Inc. common shareholders
Continuing operations	$	(0.11	)	$	(0.16	)	$	(0.23	)	$	(0.25	)
Discontinued operations, net of income taxes	—			—			—			—
Earning per share - basic and diluted (a)	$	(0.11	)	$	(0.16	)	$	(0.24	)	$	(0.25	)
Weighted average number of common shares outstanding	58,043,357			44,016,880			53,551,708			40,712,496
Dividends declared per common share	$	0.05		$	0.04		$	0.15		$	0.08

_________ ^(a) EPS amounts may not add due to rounding.



Kennedy-Wilson Holdings, Inc. and Subsidiaries Pro Forma Consolidated Statements of Operations (Non-GAAP)


	Three Months Ended September 30,
	2012									2011
				Pro Rata									Pro Rata
				Unconsolidated			Pro Forma						Unconsolidated			Pro Forma
	Consolidated			Investments			Total			Consolidated			Investments			Total
Revenue
Management and leasing fees	$	10,335,000		$	—		$	10,335,000		$	7,851,000		$	—		$	7,851,000
Commissions		2,145,000			—			2,145,000			3,259,000			—			3,259,000
Sale of real estate		1,275,000			—			1,275,000			—			3,029,000			3,029,000
Rental and other income		1,485,000			20,572,000			22,057,000			1,666,000			12,655,000			14,321,000
Interest income		—			4,549,000			4,549,000			—			2,459,000			2,459,000
Total revenue		15,240,000			25,121,000			40,361,000			12,776,000			18,143,000			30,919,000
Operating expenses
Commission and marketing expenses		1,371,000			—			1,371,000			1,641,000			—			1,641,000
Compensation and related expenses		11,364,000			198,000			11,562,000			8,473,000			—			8,473,000
Cost of real estate sold		1,275,000			—			1,275,000			—			2,522,000			2,522,000
General and administrative		5,014,000			229,000			5,243,000			3,329,000			—			3,329,000
Depreciation and amortization		989,000			5,085,000			6,074,000			931,000			3,849,000			4,780,000
Rental operating expenses		847,000			7,055,000			7,902,000			1,195,000			6,063,000			7,258,000
Total operating expenses		20,860,000			12,567,000			33,427,000			15,569,000			12,434,000			28,003,000
Equity in joint venture income (loss)		1,848,000			(1,848,000	)		—			(646,000	)		646,000			—
Interest income from loan pool participations and notes receivable		3,712,000			(3,712,000	)		—			1,048,000			(1,048,000	)		—
Operating (loss) income		(60,000	)		6,994,000			6,934,000			(2,391,000	)		5,307,000			2,916,000
Non-operating income (expense)
Interest income		179,000			(179,000	)		—			635,000			(635,000	)		—
Gain on sale of interest in joint venture investments		—			2,352,000			2,352,000			—			—			—
Realized foreign currency exchange loss		(6,000	)		—			(6,000	)		—			—			—
Interest expense		(6,755,000	)		(8,364,000	)		(15,119,000	)		(6,117,000	)		(4,672,000	)		(10,789,000	)
Other non-operating expenses		—			(803,000	)		(803,000	)		—			—			—
Loss from continuing operations before benefit from income taxes		(6,642,000	)		—			(6,642,000	)		(7,873,000	)		—			(7,873,000	)
Benefit from income taxes		2,500,000			—			2,500,000			2,997,000			—			2,997,000
Loss from continuing operations	$	(4,142,000	)	$	—		$	(4,142,000	)	$	(4,876,000	)	$	—		$	(4,876,000	)



Kennedy-Wilson Holdings, Inc. and Subsidiaries Pro Forma Consolidated Statements of Operations (Non-GAAP)


	Nine Months Ended September 30,
	2012									2011
				Pro Rata									Pro Rata
				Unconsolidated			Pro Forma						Unconsolidated			Pro Forma
	Consolidated			Investments			Total			Consolidated			Investments			Total
Revenue
Management and leasing fees	$	29,308,000		$	—		$	29,308,000		$	17,808,000		$	—		$	17,808,000
Commissions		6,165,000			—			6,165,000			8,429,000			—			8,429,000
Sale of real estate		1,275,000			58,800,000			60,075,000			417,000			34,164,000			34,581,000
Rental and other income		4,432,000			54,496,000			58,928,000			3,359,000			46,077,000			49,436,000
Interest income		—			12,687,000			12,687,000			—			8,838,000			8,838,000
Total revenue		41,180,000			125,983,000			167,163,000			30,013,000			89,079,000			119,092,000
Operating expenses
Commission and marketing expenses		3,676,000			—			3,676,000			3,015,000			—			3,015,000
Compensation and related expenses		30,658,000			698,000			31,356,000			24,562,000			—			24,562,000
Cost of real estate sold		1,275,000			50,100,000			51,375,000			397,000			29,674,000			30,071,000
General and administrative		13,571,000			529,000			14,100,000			9,183,000			—			9,183,000
Depreciation and amortization		2,903,000			12,985,000			15,888,000			1,828,000			11,558,000			13,386,000
Rental operating expenses		2,638,000			18,855,000			21,493,000			2,248,000			18,568,000			20,816,000
Total operating expenses		54,721,000			83,167,000			137,888,000			41,233,000			59,800,000			101,033,000
Equity in joint venture income		12,472,000			(12,472,000	)		—			7,229,000			(7,229,000	)		—
Interest income from loan pool participations and notes receivable		7,126,000			(7,126,000	)		—			5,835,000			(5,835,000	)		—
Operating income		6,057,000			23,218,000			29,275,000			1,844,000			16,215,000			18,059,000
Non-operating income (expense)
Interest income		2,503,000			(2,503,000	)		—			1,234,000			(1,234,000	)		—
Carried interest on realized investment		—			2,400,000			2,400,000			—			—			—
Gain on sale of interest in joint venture investments		—			2,352,000			2,352,000			—			—			—
Remeasurement gain		—			—			—			6,348,000			—			6,348,000
Gain on sale of marketable securities		2,931,000			—			2,931,000			—			—			—
Realized foreign currency exchange loss		(80,000	)		—			(80,000	)		—			—			—
Interest expense		(19,979,000	)		(23,364,000	)		(43,343,000	)		(13,874,000	)		(14,981,000	)		(28,855,000	)
Other non-operating expenses		—			(2,103,000	)		(2,103,000	)		—			—			—
Loss from continuing operations before benefit from income taxes		(8,568,000	)		—			(8,568,000	)		(4,448,000	)		—			(4,448,000	)
Benefit from income taxes		5,121,000			—			5,121,000			2,162,000			—			2,162,000
Loss from continuing operations	$	(3,447,000	)	$	—		$	(3,447,000	)	$	(2,286,000	)	$	—		$	(2,286,000	)



Kennedy-Wilson Holdings, Inc. and Subsidiaries Adjusted Net Loss Attributable to Kennedy Wilson Common Shareholders


	Three months ended						Nine months ended
	September 30,						September 30,
	2012			2011			2012			2011
Net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders	$	(6,242,000	)	$	(6,870,000	)	$	(12,755,000	)	$	(10,289,000	)
Non-GAAP adjustments:
Add back:
Stock based compensation	2,922,000			1,296,000			5,000,000			3,761,000
Adjusted Net Loss Attributable to Kennedy Wilson Holdings, Inc. Common Shareholders	$	(3,320,000	)	$	(5,574,000	)	$	(7,755,000	)	$	(6,528,000	)
Basic weighted average number of common shares outstanding	58,043,357			44,016,880			53,551,708			40,712,496
Basic Adjusted Net Loss Attributable to Kennedy Wilson Holdings, Inc. Common Shareholders Per Share	$	(0.06	)	$	(0.13	)	$	(0.14	)	$	(0.16	)



Kennedy-Wilson Holdings, Inc. and Subsidiaries EBITDA and Adjusted EBITDA


	Three months ended						Nine months ended
	September 30,						September 30,
	2012			2011			2012			2011
Net loss	$	(4,142,000	)	$	(4,876,000	)	$	(3,657,000	)	$	(2,286,000	)
Non-GAAP adjustments:
Add back:
Interest expense	6,755,000			6,117,000			19,979,000			13,874,000
Kennedy Wilson's share of interest expense included in investment in joint ventures and loan pool participations	8,364,000			4,672,000			23,364,000			14,981,000
Depreciation and amortization	989,000			931,000			2,903,000			1,828,000
Kennedy Wilson's share of depreciation and amortization included in investment in joint ventures	5,085,000			3,849,000			12,985,000			11,558,000
Benefit from income taxes	(2,500,000		)	(2,997,000		)	(5,121,000		)	(2,162,000		)
EBITDA	14,551,000			7,696,000			50,453,000			37,793,000
Stock-based compensation	2,922,000			1,296,000			5,000,000			3,761,000
Adjusted EBITDA	$	17,473,000		$	8,992,000		$	55,453,000		$	41,554,000

Kennedy Wilson
Christina Cha
Director of Corporate Communication
(310) 887-6294
ccha@kennedywilson.com
www.kennedywilson.com

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