Le Lézard
Classified in: Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

Kennedy Wilson Reports Third Quarter 2021 Results


Kennedy-Wilson Holdings, Inc. (NYSE: KW) today reported results for 3Q-2021:

 

3Q

 

YTD

(Amounts in millions, except per share data)

2021

 

2020

 

 

2021

 

2020

 

GAAP Results

 

 

 

 

 

 

 

GAAP Net Income (Loss) to Common Shareholders

$65.9

 

 

($25.1

)

 

 

$275.7

 

 

($77.1

)

 

Per Diluted Share

0.47

 

 

(0.18

)

 

 

1.96

 

 

(0.55

)

 

 

 

 

 

 

 

 

 

Non-GAAP Results

 

 

 

 

 

 

 

Adjusted EBITDA

$202.7

 

 

$76.3

 

 

 

$740.5

 

 

$261.1

 

 

Adjusted Net Income

111.9

 

 

27.3

 

 

 

423.5

 

 

84.1

 

 

"Our strong 3Q and year-to-date results reflect the tremendous progress we have made in growing our business over the last 18 months," said William McMorrow, Chairman and CEO of Kennedy Wilson. "We saw exceptional rent growth across our portfolio in 3Q resulting in continued growth in the value of our real estate portfolio. I am also pleased to report that the Board of Directors increased the quarterly dividend by 9% to $0.24 per share."

3Q Highlights

 

Gross Transaction Value
($ in millions)

 

Est. Annual NOI To KW
($ in millions)

 

Fee-Bearing Capital
($ in billions)

As of 2Q-21

 

 

$

403

 

 

 

$

4.5

 

 

Gross acquisitions and loan investments

$

1,229

 

 

17

 

 

 

0.4

 

 

Gross dispositions and loan repayments

537

 

 

(4

)

 

 

(0.1

)

 

Assets stabilized / (unstabilized)

?

 

 

(2

)

 

 

?

 

 

Operations

?

 

 

3

 

 

 

?

 

 

FX and other

?

 

 

(4

)

 

 

?

 

 

Total as of 3Q-21

$

1,766

 

 

$

413

 

 

 

$

4.8

 

 

 

3Q - 2021 vs. 3Q - 2020

YTD - 2021 vs. YTD - 2020

 

Occupancy

 

Revenue

 

NOI

Occupancy

 

Revenue

 

NOI

Multifamily - Market Rate

0.7%

 

7.1%

 

10.4%

0.6%

 

2.0%

 

1.6%

Multifamily - Affordable

0.5%

 

4.3%

 

3.3%

1.6%

 

3.2%

 

2.0%

Office

(1.3)%

 

2.0%

 

3.6%

(1.3)%

 

5.1%

 

6.3%

Total

 

 

5.1%

 

6.9%

 

 

3.2%

 

3.4%

(1) Excludes minority-held investments

3Q-21 Investment Activity

Capital Allocation:

Balance Sheet and Capital Markets

Footnotes

(1)

Represents consolidated cash and includes $340 million of restricted cash, which is included in cash and cash equivalents. The Company's share of cash, including unconsolidated joint-ventures, totals $955 million.

(2)

Future purchases under the program may be made in the open market, in privately negotiated transactions, through the net settlement of the company's restricted stock grants or otherwise, with the amount and timing of the repurchases dependent on market conditions and subject to the Company's discretion. The program does not obligate the Company to repurchase any specific number of shares and, subject to compliance with applicable laws, may be suspended or terminated at any time without prior notice.

Conference Call and Webcast Details

Kennedy Wilson will hold a live conference call and webcast to discuss results at 7:00 a.m. PT/ 10:00 a.m. ET on Thursday, November 4. The direct dial-in number for the conference call is (844) 340-4761 for U.S. callers and (412) 717-9616 for international callers. A replay of the call will be available for one week beginning one hour after the live call and can be accessed by (877) 344-7529 for U.S. callers and (412) 317-0088 for international callers. The passcode for the replay is 10160706.

The webcast will be available at: https://services.choruscall.com/links/kw211104cCHqAWtJ.html. A replay of the webcast will be available one hour after the original webcast on the Company's investor relations web site for three months.

About Kennedy Wilson

Kennedy Wilson (NYSE:KW) is a leading global real estate investment company. We own, operate, and invest in real estate both on our own and through our investment management platform. We focus on multifamily and office properties located in the Western U.S., UK, and Ireland. For further information on Kennedy Wilson, please visit www.kennedywilson.com.

Kennedy-Wilson Holdings, Inc.

Consolidated Balance Sheets

(Unaudited)

(Dollars in millions)

 

 

 

September 30,
2021

 

December 31,
2020

Assets

 

 

 

 

Cash and cash equivalents

 

$

840.8

 

 

 

$

965.1

 

 

Accounts receivable

 

43.2

 

 

 

47.9

 

 

Real estate and acquired in place lease values (net of accumulated depreciation and amortization of $802.7 and $815.0)

 

4,836.9

 

 

 

4,720.5

 

 

Unconsolidated investments (including $1,583.8 and $1,136.5 at fair value)

 

1,737.9

 

 

 

1,289.3

 

 

Other assets

 

189.4

 

 

 

199.1

 

 

Loan purchases and originations

 

126.4

 

 

 

107.1

 

 

Total assets

 

$

7,774.6

 

 

 

$

7,329.0

 

 

 

 

 

 

 

Liabilities

 

 

 

 

Accounts payable

 

$

13.1

 

 

 

$

30.1

 

 

Accrued expenses and other liabilities

 

549.5

 

 

 

531.7

 

 

Mortgage debt

 

2,674.3

 

 

 

2,589.8

 

 

KW unsecured debt

 

1,775.7

 

 

 

1,332.2

 

 

KWE unsecured bonds

 

929.1

 

 

 

1,172.5

 

 

Total liabilities

 

5,941.7

 

 

 

5,656.3

 

 

Equity

 

 

 

 

Cumulative perpetual preferred stock

 

295.2

 

 

 

295.2

 

 

Common stock

 

?

 

 

 

?

 

 

Additional paid-in capital

 

1,702.0

 

 

 

1,725.2

 

 

Retained earnings

 

196.3

 

 

 

17.7

 

 

Accumulated other comprehensive loss

 

(393.7

)

 

 

(393.6

)

 

Total Kennedy-Wilson Holdings, Inc. shareholders' equity

 

1,799.8

 

 

 

1,644.5

 

 

Noncontrolling interests

 

33.1

 

 

 

28.2

 

 

Total equity

 

1,832.9

 

 

 

1,672.7

 

 

Total liabilities and equity

 

$

7,774.6

 

 

 

$

7,329.0

 

 

 

Kennedy-Wilson Holdings, Inc.

Consolidated Statements of Operations

(Unaudited)

(Dollars in millions, except share amounts and per share data)

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

 

 

 

 

 

 

 

 

Rental

 

$

96.1

 

 

 

$

102.2

 

 

 

$

279.7

 

 

 

$

308.8

 

 

Hotel

 

6.2

 

 

 

3.1

 

 

 

9.2

 

 

 

10.4

 

 

Investment management and property services fees

 

9.7

 

 

 

8.9

 

 

 

27.1

 

 

 

25.2

 

 

Loans and other

 

2.4

 

 

 

1.3

 

 

 

6.2

 

 

 

1.5

 

 

Total revenue

 

114.4

 

 

 

115.5

 

 

 

322.2

 

 

 

345.9

 

 

Expenses

 

 

 

 

 

 

 

 

Rental

 

32.4

 

 

 

33.5

 

 

 

97.8

 

 

 

102.2

 

 

Hotel

 

3.7

 

 

 

2.7

 

 

 

7.8

 

 

 

10.9

 

 

Commission and marketing

 

0.1

 

 

 

0.9

 

 

 

0.7

 

 

 

2.5

 

 

Compensation and related (includes $6.9 and $7.6 and $21.9 and $24.5 of share-based compensation)

 

40.2

 

 

 

26.3

 

 

 

123.5

 

 

 

85.1

 

 

General and administrative

 

8.9

 

 

 

8.6

 

 

 

24.7

 

 

 

26.1

 

 

Depreciation and amortization

 

39.2

 

 

 

44.3

 

 

 

125.3

 

 

 

135.1

 

 

Total expenses

 

124.5

 

 

 

116.3

 

 

 

379.8

 

 

 

361.9

 

 

Income from unconsolidated investments

 

143.1

 

 

 

14.9

 

 

 

213.9

 

 

 

45.0

 

 

Gain on sale of real estate, net

 

15.0

 

 

 

4.0

 

 

 

417.0

 

 

 

47.7

 

 

Transaction-related expenses

 

?

 

 

 

(0.1

)

 

 

(0.4

)

 

 

(0.6

)

 

Interest expense

 

(45.3

)

 

 

(50.8

)

 

 

(141.4

)

 

 

(150.0

)

 

Loss on early extinguishment of debt

 

?

 

 

 

?

 

 

 

(38.6

)

 

 

(1.3

)

 

Other income (loss)

 

0.4

 

 

 

0.3

 

 

 

(2.6

)

 

 

0.2

 

 

Income / (loss) before benefit from (provision for) income taxes

 

103.1

 

 

 

(32.5

)

 

 

390.3

 

 

 

(75.0

)

 

(Provision for) benefit from income taxes

 

(30.6

)

 

 

12.8

 

 

 

(98.2

)

 

 

10.3

 

 

Net income (loss)

 

72.5

 

 

 

(19.7

)

 

 

292.1

 

 

 

(64.7

)

 

Net (income) loss attributable to noncontrolling interests

 

(2.3

)

 

 

(1.1

)

 

 

(3.5

)

 

 

0.5

 

 

Preferred dividends

 

(4.3

)

 

 

(4.3

)

 

 

(12.9

)

 

 

(12.9

)

 

Net income (loss) attributable to Kennedy-Wilson Holdings, Inc. common shareholders

 

$

65.9

 

 

 

$

(25.1

)

 

 

$

275.7

 

 

 

$

(77.1

)

 

Basic earnings (loss) per share

 

 

 

 

 

 

 

 

Earnings (loss) per share

 

$

0.48

 

 

 

$

(0.18

)

 

 

$

1.98

 

 

 

$

(0.55

)

 

Weighted average shares outstanding

 

138,934,754

 

 

 

140,119,442

 

 

 

138,989,733

 

 

 

140,181,438

 

 

Diluted earnings (loss) per share

 

 

 

 

 

 

 

 

Earnings (loss) per share

 

$

0.47

 

 

 

$

(0.18

)

 

 

$

1.96

 

 

 

$

(0.55

)

 

Weighted average shares outstanding

 

139,437,126

 

 

 

140,119,442

 

 

 

140,565,582

 

 

 

140,181,438

 

 

Dividends declared per common share

 

$

0.22

 

 

 

$

0.22

 

 

 

$

0.66

 

 

 

$

0.66

 

 

 

(1) Includes impact of the Company allocating income and dividends per basic and diluted share to participating securities.

Kennedy-Wilson Holdings, Inc.

Adjusted EBITDA

(Unaudited)

(Dollars in millions)

The table below reconciles net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders to Adjusted EBITDA, using Kennedy Wilson's pro-rata share amounts for each adjustment item.

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2021

 

2020

 

 

2021

 

2020

 

Net income (loss) attributable to Kennedy-Wilson Holdings, Inc. common shareholders

 

$

65.9

 

 

$

(25.1

)

 

 

$

275.7

 

 

$

(77.1

)

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Add back (Kennedy Wilson's Share)(1):

 

 

 

 

 

 

 

 

Interest expense

 

55.9

 

 

57.5

 

 

 

167.3

 

 

172.4

 

 

Loss on early extinguishment of debt

 

?

 

 

?

 

 

 

38.6

 

 

1.3

 

 

Depreciation and amortization

 

39.1

 

 

44.8

 

 

 

125.9

 

 

136.7

 

 

Provision for (benefit from) income taxes

 

30.6

 

 

(12.8

)

 

 

98.2

 

 

(9.6

)

 

Preferred dividends

 

4.3

 

 

4.3

 

 

 

12.9

 

 

12.9

 

 

Share-based compensation

 

6.9

 

 

7.6

 

 

 

21.9

 

 

24.5

 

 

Adjusted EBITDA

 

$

202.7

 

 

$

76.3

 

 

 

$

740.5

 

 

$

261.1

 

 

 

(1) See Appendix for reconciliation of Kennedy Wilson's Share amounts.

 

The table below provides a detailed reconciliation of net income to Adjusted EBITDA.

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net income (loss)

 

$

72.5

 

 

 

$

(19.7

)

 

 

$

292.1

 

 

 

$

(64.7

)

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Add back:

 

 

 

 

 

 

 

 

Interest expense

 

45.3

 

 

 

50.8

 

 

 

141.4

 

 

 

150.0

 

 

Loss on early extinguishment of debt

 

?

 

 

 

?

 

 

 

38.6

 

 

 

1.3

 

 

Kennedy Wilson's share of interest expense included in unconsolidated investments

 

11.2

 

 

 

7.5

 

 

 

28.0

 

 

 

24.7

 

 

Depreciation and amortization

 

39.2

 

 

 

44.3

 

 

 

125.3

 

 

 

135.1

 

 

Kennedy Wilson's share of depreciation and amortization included in unconsolidated investments

 

1.1

 

 

 

1.7

 

 

 

4.2

 

 

 

5.2

 

 

Provision for (benefit from) income taxes

 

30.6

 

 

 

(12.8

)

 

 

98.2

 

 

 

(10.3

)

 

Kennedy Wilson's share of taxes included in unconsolidated investments

 

?

 

 

 

?

 

 

 

?

 

 

 

1.1

 

 

Share-based compensation

 

6.9

 

 

 

7.6

 

 

 

21.9

 

 

 

24.5

 

 

EBITDA attributable to noncontrolling interests(1)

 

(4.1

)

 

 

(3.1

)

 

 

(9.2

)

 

 

(5.8

)

 

Adjusted EBITDA

 

$

202.7

 

 

 

$

76.3

 

 

 

$

740.5

 

 

 

$

261.1

 

 

(1)

EBITDA attributable to noncontrolling interest includes $1.2 million and $1.2 million of depreciation and amortization, $0.6 million and $0.8 million of interest, and $0.0 million and $0.0 million of taxes, for the three months ended September 30, 2021 and 2020, respectively. EBITDA attributable to noncontrolling interest includes $3.6 million and $3.6 million of depreciation and amortization, $2.1 million and $2.3 million of interest, and $0.0 million and $0.4 million of taxes, for the nine months ended September 30, 2021 and 2020, respectively.

 

Kennedy-Wilson Holdings, Inc.

Adjusted Net Income

(Unaudited)

(Dollars in millions, except share data)

The table below reconciles net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders to Adjusted Net Income, using Kennedy Wilson's pro-rata share amounts for each adjustment item.

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2021

 

2020

 

 

2021

 

2020

 

Net income (loss) attributable to Kennedy-Wilson Holdings, Inc. common shareholders

 

$

65.9

 

 

$

(25.1

)

 

 

$

275.7

 

 

$

(77.1

)

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Add back (Kennedy Wilson's Share)(1):

 

 

 

 

 

 

 

 

Depreciation and amortization

 

39.1

 

 

44.8

 

 

 

125.9

 

 

136.7

 

 

Share-based compensation

 

6.9

 

 

7.6

 

 

 

21.9

 

 

24.5

 

 

Adjusted Net Income

 

$

111.9

 

 

$

27.3

 

 

 

$

423.5

 

 

$

84.1

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding for diluted

 

139,437,126

 

 

140,119,442

 

 

 

140,565,582

 

 

140,181,438

 

 

 

(1) See Appendix for reconciliation of Kennedy Wilson's Share amounts.

 

The table below provides a detailed reconciliation of net income to Adjusted Net Income.

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2021

 

2020

 

2021

 

2020

Net income (loss)

 

$

72.5

 

 

$

(19.7)

 

 

$

292.1

 

 

$

(64.7)

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Add back (less):

 

 

 

 

 

 

 

 

Depreciation and amortization

 

39.2

 

 

44.3

 

 

125.3

 

 

135.1

 

Kennedy Wilson's share of depreciation and amortization included in unconsolidated investments

 

1.1

 

 

1.7

 

 

4.2

 

 

5.2

 

Share-based compensation

 

6.9

 

 

7.6

 

 

21.9

 

 

24.5

 

Preferred dividends

 

(4.3)

 

 

(4.3)

 

 

(12.9)

 

 

(12.9)

 

Net income attributable to the noncontrolling interests, before depreciation and amortization(1)

 

(3.5)

 

 

(2.3)

 

 

(7.1)

 

 

(3.1)

 

Adjusted Net Income

 

$

111.9

 

 

$

27.3

 

 

$

423.5

 

 

$

84.1

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding for diluted

 

139,437,126

 

 

140,119,442

 

 

140,565,582

 

 

140,181,438

 

(1)

Includes $1.2 million and $1.2 million of depreciation and amortization for the three months ended September 30, 2021 and 2020, respectively, and $3.6 million and $3.6 million of depreciation and amortization for the nine months ended September 30, 2021 and 2020, respectively.

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, and Section 21E of the Securities Exchange Act of 1934, as amended. 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," "may," "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 the 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" sections of each our Annual Report on Form 10-K for the year ended December 31, 2020, as amended by our subsequent filings with the SEC. 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.

Common Definitions

Note about Non-GAAP and certain other financial information included in this presentation

In addition to the results reported in accordance with U.S. generally accepted accounting principles ("GAAP") included within this presentation, Kennedy Wilson has provided certain information, which includes non-GAAP financial measures (including Adjusted EBITDA, Adjusted Net Income, Net Operating Income, and Adjusted Fees, as defined above). Such information is reconciled to its closest GAAP measure in accordance with the rules of the SEC, and such reconciliations are included within this presentation. These measures may contain cash and non-cash acquisition-related gains and expenses and gains and losses from the sale of real-estate related investments. Consolidated non-GAAP measures discussed throughout this report contain income or losses attributable to non-controlling interests. Management believes that these non-GAAP financial measures are useful to both management and Kennedy Wilson'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. Annualized figures used throughout this release and supplemental financial information, and our estimated annual net operating income metrics, are not an indicator of the actual net operating income that the Company will or expects to realize in any period.

KW-IR


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