Le Lézard
Classified in: Business
Subjects: EARNINGS, Conference Call, Webcast

Kennedy Wilson Reports First Quarter 2024 Results


Kennedy-Wilson Holdings, Inc. (NYSE: KW), a leading global real estate investment company with $25 billion in AUM across its real estate equity and debt investment portfolio, today reported results for Q1-2024:

Financial Results

(Amounts in millions, except per share data)

Q1

GAAP Results

 

2024

 

 

2023

 

GAAP Net Income (Loss) to Common Shareholders

$

26.9

 

$

(40.8

)

Per Diluted Share

 

0.19

 

 

(0.30

)

(Amounts in millions)

Q1

Non-GAAP Results

 

2024

 

 

 

2023

 

Adjusted EBITDA

$

203.2

 

 

$

90.9

 

Adjusted Net Income

 

70.5

 

 

 

5.3

 

 

 

 

 

Adjusted EBITDA - Key Components (at KW share)

 

 

 

Baseline EBITDA: Property NOI, loan income, and inv. mgt fees

(net of compensation and general and administrative expenses)

$

103.1

 

 

$

95.5

 

Realized gain on the sale of real estate

 

108.3

 

 

 

15.0

 

Change in the fair value of the Co-investment portfolio

 

(10.1

)

 

 

(10.9

)

Other income/(loss)

 

1.9

 

 

 

(8.7

)

Adjusted EBITDA

$

203.2

 

 

$

90.9

 

"We had an excellent quarter as reflected in the significant growth of our adjusted net income and the continued growth of our investment management business, which reported a 94% increase in fee income," said William McMorrow, Chairman and CEO of Kennedy Wilson. "At the same time, we completed several large multifamily construction projects on schedule and on budget, which will contribute in a meaningful way to our future net operating income. We also continued to recycle capital from non-core asset sales that will be used to grow our core businesses and reduce leverage on our balance sheet."

Investment Management Business

Real Estate Investment Activity

Portfolio Update

 

Est. Annual NOI To KW

($ in millions)

 

Fee-Bearing Capital

($ in billions)

As of Q1-23

$

496

 

 

$

6.0

As of Q4-23

$

492

 

 

$

8.4

Gross acquisitions and loan investments

 

1

 

 

 

0.2

Gross dispositions and loan repayments1

 

(28

)

 

 

?

Operations

 

2

 

 

 

?

FX and other

 

(3

)

 

 

?

Total as of Q1-24

$

464

 

 

$

8.6

1Primarily relates to non-core asset sales that produced $236 million in cash to KW and $106 million in net gains

 

 

 

Q1 - 2024 vs. Q1 - 2023

 

Avg Occupancy % Q1-24

 

Occupancy

 

Revenue

 

Expenses

 

NOI (Net Effective)

Multifamily - Market Rate

93.9

%

 

0.1

%

 

3.0

%

 

4.3

%

 

2.4

%

Multifamily - Affordable

94.6

%

 

(2.0

)%

 

4.0

%

 

11.6

%

 

0.2

%

Total

94.1

%

 

(0.4

)%

 

3.2

%

 

5.5

%

 

2.1

%

(1) Excludes minority-held investments and assets under going development or lease-up.

Balance Sheet and Liquidity

Subsequent Events

The Company paid down its line of credit by $60 million in April 2024.

________________________________________________________________________________________

Footnotes

(1)

Represents consolidated cash ($342 million of which is in foreign currencies of the EUR or the GBP) and includes $105 million of restricted cash, which is included in cash and cash equivalents and primarily relates to lender reserves associated with consolidated mortgages that we hold on properties. These reserves typically relate to interest, tax, insurance and future capital expenditures at the properties. Additionally, we are subject to withholding taxes to the extent we repatriate cash from certain of our foreign subsidiaries. Under the KWE Notes covenants we have to maintain certain interest coverage and leverage ratios to remain in compliance (see "Indebtedness and Related Covenants" for more detail on KWE Notes in the Company's quarterly report). Due to these covenants, we evaluate the tax and covenant implications before we distribute cash, which could impact the availability of funds at the corporate level. The Company's share of cash, including unconsolidated joint-ventures, totals $637 million.

Conference Call and Webcast Details

Kennedy Wilson will hold a live conference call and webcast to discuss results at 9:00 a.m. PT/ 12:00 p.m. ET on Thursday, May 9. 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 8726858.

The webcast will be available at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=7dzFxkA0. 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 through our balance sheet and through our investment management platform in the United States, United Kingdom, and Ireland. We primarily focus on multifamily properties as well as industrial and debt investments in our investment management business. For further information on Kennedy Wilson, please visit www.kennedywilson.com.

Kennedy-Wilson Holdings, Inc.

Consolidated Balance Sheets

(Unaudited)

(Dollars in millions)

 

 

 

March 31,
2024

 

December 31,
2023

Assets

 

 

 

 

Cash and cash equivalents

 

$

541.9

 

 

$

313.7

 

Accounts receivable

 

 

42.5

 

 

 

57.3

 

Real estate and acquired in place lease values (net of accumulated depreciation and amortization of $906.0 and $957.8)

 

 

4,603.5

 

 

 

4,837.3

 

Unconsolidated investments (including $1,917.6 and $1,927.0 at fair value)

 

 

2,059.6

 

 

 

2,069.1

 

Other assets

 

 

182.4

 

 

 

187.5

 

Loan purchases and originations

 

 

250.4

 

 

 

247.2

 

Total assets

 

$

7,680.3

 

 

$

7,712.1

 

 

 

 

 

 

Liabilities

 

 

 

 

Accounts payable

 

$

15.5

 

 

$

17.9

 

Accrued expenses and other liabilities (including $252.2 and $234.4 of deferred tax liabilities)

 

 

562.8

 

 

 

597.8

 

Mortgage debt

 

 

2,773.1

 

 

 

2,840.9

 

KW unsecured debt

 

 

2,032.5

 

 

 

1,934.3

 

KWE unsecured bonds

 

 

511.5

 

 

 

522.8

 

Total liabilities

 

 

5,895.4

 

 

 

5,913.7

 

Equity

 

 

 

 

Cumulative perpetual preferred stock

 

 

789.9

 

 

 

789.9

 

Common stock

 

 

?

 

 

 

?

 

Additional paid-in capital

 

 

1,706.5

 

 

 

1,718.6

 

Retained (deficit) earnings

 

 

(347.1

)

 

 

(349.0

)

Accumulated other comprehensive loss

 

 

(406.7

)

 

 

(404.4

)

Total Kennedy-Wilson Holdings, Inc. shareholders' equity

 

 

1,742.6

 

 

 

1,755.1

 

Noncontrolling interests

 

 

42.3

 

 

 

43.3

 

Total equity

 

 

1,784.9

 

 

 

1,798.4

 

Total liabilities and equity

 

$

7,680.3

 

 

$

7,712.1

 

Kennedy-Wilson Holdings, Inc.

Consolidated Statements of Operations

(Unaudited)

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

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

 

2023

 

Revenue

 

 

 

 

Rental

 

$

97.4

 

 

$

106.6

 

Hotel

 

 

9.3

 

 

 

10.6

 

Investment management fees

 

 

21.3

 

 

 

11.0

 

Loans

 

 

8.1

 

 

 

3.7

 

Other

 

 

0.3

 

 

 

0.3

 

Total revenue

 

 

136.4

 

 

 

132.2

 

 

 

 

 

 

(Loss) income from unconsolidated investments

 

 

 

 

Principal co-investments

 

 

9.7

 

 

 

16.4

 

Performance allocations

 

 

(16.4

)

 

 

(10.7

)

Total (loss) income from unconsolidated investments

 

 

(6.7

)

 

 

5.7

 

 

 

 

 

 

Gain on sale of real estate, net

 

 

106.4

 

 

 

19.2

 

 

 

 

 

 

Expenses

 

 

 

 

Rental

 

 

37.2

 

 

 

36.6

 

Hotel

 

 

7.6

 

 

 

7.9

 

Compensation and related (including $5.2 and $7.1 of share-based compensation)

 

 

27.6

 

 

 

30.6

 

Performance allocation compensation

 

 

(5.5

)

 

 

1.6

 

General and administrative

 

 

8.3

 

 

 

8.4

 

Depreciation and amortization

 

 

38.9

 

 

 

39.4

 

Total expenses

 

 

114.1

 

 

 

124.5

 

Interest expense

 

 

(64.7

)

 

 

(62.3

)

Loss on early extinguishment of debt

 

 

0.3

 

 

 

0.1

 

Other income (loss)

 

 

6.8

 

 

 

(3.0

)

Income (loss) before provision for income taxes

 

 

64.4

 

 

 

(32.6

)

(Provision for) benefit from income taxes

 

 

(26.7

)

 

 

3.9

 

Net income (loss)

 

 

37.7

 

 

 

(28.7

)

Net loss (income) attributable to noncontrolling interests

 

 

0.1

 

 

 

(4.2

)

Preferred dividends

 

 

(10.9

)

 

 

(7.9

)

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

 

$

26.9

 

 

$

(40.8

)

Basic earnings (loss) per share

 

 

 

 

Earnings (loss) per share

 

$

0.19

 

 

$

(0.30

)

Weighted average shares outstanding

 

 

138,472,579

 

 

 

137,949,018

 

Diluted earnings (loss) share

 

 

 

 

Earnings (loss) per share

 

$

0.19

 

 

$

(0.30

)

Weighted average shares outstanding

 

 

138,628,139

 

 

 

137,949,018

 

Dividends declared per common share

 

$

0.24

 

 

$

0.24

 

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

 

 

March 31,

 

 

 

2024

 

 

 

2023

 

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

 

$

26.9

 

 

$

(40.8

)

Non-GAAP adjustments:

 

 

 

 

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

 

 

 

 

Interest expense

 

 

95.2

 

 

 

81.5

 

Loss on early extinguishment of debt

 

 

(0.3

)

 

 

(0.1

)

Depreciation and amortization

 

 

38.4

 

 

 

39.0

 

Provision for (benefit from) income taxes

 

 

26.9

 

 

 

(3.7

)

Preferred dividends

 

 

10.9

 

 

 

7.9

 

Share-based compensation

 

 

5.2

 

 

 

7.1

 

Adjusted EBITDA

 

$

203.2

 

 

$

90.9

 

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

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

 

 

March 31,

 

 

 

2024

 

 

2023

 

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

 

$

26.9

 

$

(40.8

)

Non-GAAP adjustments:

 

 

 

 

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

 

 

 

 

Depreciation and amortization

 

 

38.4

 

 

39.0

 

Share-based compensation

 

 

5.2

 

 

7.1

 

Adjusted Net Income

 

$

70.5

 

$

5.3

 

 

 

 

 

 

Weighted average shares outstanding for diluted

 

 

138,628,139

 

 

137,949,018

 

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

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" section of our Annual Report on Form 10-K for the year ended December 31, 2023, 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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