KW - Earnings call transcript Q4 2017 | Kennedy-Wilson Holdings, Inc.

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Operator

Good morning everyone, and welcome to Kennedy-Wilson’s Fourth Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator instructions] Please note, this event is being recorded. I would now like to turn the conference call over to Daven Bhavsar, Director of Investor Relations. ahead. go Please

Daven Bhavsar

Windisch, Please morning. Today’s today Good phone Kennedy-Wilson; see Daven and and for call, Financial Europe, Bhavsar Ricks, and of Thank Enbody, The will certain is Justin Investor information. for replay for by one Bill income. adjusted This being including replay. available McMorrow, us webcast Chief more week financial Matt Kennedy-Wilson and archived of non-GAAP of be are and three we section of of adjusted Vice Chairman be months. the Relations joining for President to President Kennedy-Wilson's Kennedy-Wilson net by Kennedy-Wilson. you. Officer and CEO is Executive will measures EBITDA call and will Mary website live CEO refer this On webcast

these can the include website. and financial along during may items, forward-looking with description the fourth GAAP this Statements which statements. our posted a quarter and release, You uncertainties may of Bill reports other would from materially discussed comparable of risks, information this factors measures CEO, due to turn call our most Relations Exchange earnings like section is find directly results now of made the Actual to reconciliation to Investor XXXX the of Chairman number McMorrow. indicated over forward-looking call in Securities with our and a I filings on on and differ and Commission. call the

Bill McMorrow

well income of EBITDA, estate per successfully are record execute going thanks the a in acquisition to Kennedy-Wilson compelling all share, most year October, us real on the past adjusted fourth earnings quarter importantly year of off quarter year growth record and many everybody the and position adjusted initiatives net accomplishments of opportunities but tremendous a forward. this a Thanks, The producing past Daven. We XXXX Kennedy-Wilson. Good for and joining Europe, and today. us while morning for capped closed

GAAP of So let $X.XX board. record per income net diluted the financial me year. QX share per we share XXXX. to fourth of across We reported results $X.XX recap the the had in In quarter compared

year, Adjusted Adjusted positively in for I These a $X.XX $XXX benefit recorded like compared through $XXX diluted you by results just would in per compared one-time now $XX income were new of XXXX. EBITDA EBITDA $XXX XXXX. quarter, that million increase to bill. quarter, numbers the $X.XX the million to in GAAP the of also in impacted benefit. XXXX. $XX QX XXXX For tax the share, up of fourth the net US year the related for exclude to to to million take XX% $XXX a million was tax XX% an the was tax million, was to million, compared

in million globally We selling $XXX KWE XX%. throughout years of continue along of property and properties, cash to developments many the roughly layer $XXXmillion with annual that year. focused XXXX. of moderate we XXXX. from close same see dividend a the XXXX, rent XXX% $X.XX our of add worth a high recycling million growth was dividend annually will or capital. dividend share was return million that $XX place to we consider to in over dividend share the income will started to We're our $XXX $X.XX real XXXX in which annual the representing time. component KWE and We that to results to enabled quality our value us portfolio we period, per heading our quarterly $XX would flow to We million noting $XXX has acquisition KW, consistent in assets, per income ago. and compared the Over grown launched dividend net added seven to $X.XX yesterday. momentum has clear additional to NOI also QX dividend to business were paying on by $X.XX growth complete at adjusted add When This increasing XXXX by of capital that Finally, into anticipate an you compares important non-income the the annual compared grow was us at generating estate million attributable yield portfolio, the with million increase non-taxable an in a estimated close the growth for produces path increased at seventh since in $XXX our XXXX shareholders million end we plan, an the $XXX was of increase. equates initiatives NOI and producing be annually, be at, of dividend year our of X.X% strong the our beginning NOI This a key a and year, return of results of twice which to a XXXX. financial This current expect operational or It's over of the our level share, strong year-over-year NOI KW. increase end is of per the beginning diversified dividend in a across primed our These QX, for recurring for the of great gave QX in XXXX. a some to net we adjusted to of acquisition at as

XX in KW million million over cash to return of $XXX our In to stock the approximately the years. total addition past two to dividend, shareholders repurchased we the have past months, bringing $XX KW

market same property and of rate, commercial almost units, This commercial space to for includes hotels. square NOI. growth our Looking almost quarter, have XX,XXX same X% NOI revenue the XXXX. the analysis multifamily compared million for operating multifamily performance we same five property store at as growth feet QX of XX of accounts portion of and and X% XX% The of

look demand closer markets. in a classes. asset strong The take investment let's apartment these at remains for living very So our

and same revenue X%. growth exceptional property of Our market of with portfolio quarter, rate X%, NOI multifamily had growth accelerating almost another

Our largest continued and Revenue that for the exceptionally led NOI in X%, that of was well. the region, to quarter perform Northwest, XX% region. to at outstanding growth Pacific growth

that continue in and to typically markets. drive to well publicly our presence Washington other deduction high of living state of communities. the rate income year. approximately markets Washington low in demand including attribute many key income state, When the We market market as REIT significant outperform own and that drive basis. on or to Average We We local on we growth outperformance traded Ireland, growth a will population plan. QX. companies market same in Portland, a rental value. matter, state such elimination states property case KWs it Washington's multifamily City amenities asset in and interior revenue those in experiencing portfolio the in to including as the state positioning Lake unique basis. no well our offer includes and passed management more all houses, of growth multifamily Dublin, XX% X.X% $X,XXX -- California, markets were of opportunities fitness you looks and in adding over apartment residences We the value XXXX, income affordable further tax, are communities have as largest believe end of CBD The tax our add discounts growth same apartment even federal that State global as we This rents property implement operate fully consider and as a for had then often rent compared NOI summary, garden offer style, low rates, density in renovations, that that of of at to apartments as State next of centers can unit amenitized In decade. our Salt club to XX% completing that Seattle, job community the that the the with

In where well, area our senior most located. result multifamily platform particularly perform bodes population our as aging well also are of growth, particularly in to affordable income for apartment properties. units and the portfolio, continues affordable market addition US to Seattle, around in a our of median An rate our

with are across same fact, NOI property on we up at a running X% XX% affordable rents and property year. same X% portfolio, up occupancy, In our now

will we are addition, In our total units additional which portfolio X,XXX bring developing affordable by to currently almost X,XXX units, affordable or entitling an XXXX.

and Moving high NOI. in one-third consists on to comprises of UK $XX the primarily The this and in concentrated segment Ireland. our our million portfolio, portfolio Ireland produces and office UK quality NOI total assets, Office of

noting worth all income of largest we're to and high base, in are ranging commercial with duration. of tenant terms and quality attractive Ireland. leases owners XX long-term by high in tenant years supported of one XX -- is property assets It markets also from Our quality the these that

by is great $XXmillion office portfolio US Our driven a and in handful to totals of assets. NOI KW

Southern California biggest a $XX foot square million, million additional located this region loan asset of rate. we after lease in the of XXXX, East, Pacific Bellevue. we for XX a is We A Northwest, owned XXX,XXX Greater In this our cap $XXX building in NOI. class acquired with June, rate at years X.X%. We the X.XX% XX% The Costco's through months interest financed an extended property a is fixed closing, with and seven XX Microsoft fully leased Costco. to at years, for Four XXXX. a

cash East cash on to XX XX% As a result, return generates a KW.

now $X.X together partners, have acquisitions we $X.X with and assets real XXXX. we approaching public dispositions. at XXXX, have billion In our our to estate in cost, investment Turning activity our going since partners $XX completed we of acquired of billion billion, and

$X our Despite newer, $XXX assets part our great is complete incremental which opportunities upside non-income was XXXX management $XXX and and $XXX sales. included seller recycling a net being Selling investment added long-term quality Our year, our another NOI, producing share the strategy. of share further initiatives was million growth across value as mature we acquisitions for capital of of of a properties, key we million high annual in new dispositions million, asset into creating million assets with with asset

quarter $XXX in San entire Alameda, a which XXXX. the million, States unit transaction Summer single example, price outside For we in California. the in just House, sold property, largest multifamily XXX United represented asset was during sale the of The multifamily Francisco

We and a multifamily in and hold and in equity the XXX%, multiple on sale the XX to were year Greater sale basis NOI a on increased During Kennedy-Wilson. two in by we deferred than a that newer our period, properties, average a invested years took Seattle, from three and units, totaling times House. into the XXX seven Portland XX% proceeds IRR seven Summer one tax resulted

leading our are almost was raised global no acquired thesis low company successfully We sterling a bought did $X.X of million has majority ownership After purchasing a underlying that dollar. locked through increases and the given seen the our the during strengthen estate in that a purchase the strategy advantage closed well remaining early have billion, now original currencies of of currency since $XXX the October hedging. historically now pound of KWE on XXXX, simplified and acquisition A announced in you We've only different. As strength XX% further we the half net IPO UK of global by now of in and and key our investment KWE was in out the representing today. we structure. we already strengthened XX% real XXX, we asset are and price pound In four same the at assets. on on to euro in at it's The to combined and discount which always in both already we The time a know, XX% a exposure our the interest offering. XX% asset the value. have remaining the equity the sales the of the reversal increase KWE the value us the know from basic euro by to follow part closing, the to at is KWE currency investment have acquisition XXX we out when this a market estate took we portfolio total play while currencies a both at and own, opportunistic started not assets discount The in their been the in XX, for the seen months positive to period. creating KWE significant real Ireland. for strong of Also also in has proven

Mary to Ricks, years. now I fantastic our able know partner turn wholly and We're Board joined think call integration to joined the Kennedy-Wilson portfolio of are European of of time. you Europe been our here of our Board with like same business to on able hit you of going running in as XXXX. experience. CEO who in over public Mary Board at is growth with Taylor recently most the who she great We President at to and own risk. now along with to most potential ground XX a I the John the I'd comes years without think my John XX also the accounting know, and Taylor Directors has

So with that, turn to like our about European talk Mary to over to it portfolio. I'd more

Mary Ricks

European areas estimated Estimated million, annual roughly I'd annual NOI. Europe. for at Kennedy-Wilson portfolio, on or Bill. to thanks XX% $XXX total stood year Great, at for inside NOI the focus four like of end,

the where NOI, assets over First, we to to initiatives two on years. we over management expect from are million add our grow value stabilizing add play next currently $XX asset to

refurbishment an the delivering additional Secondly, million estimated are executing development over we next and future on where of targeting of pipeline program NOI, two opportunities. and our years, exciting and $XX annual development

Thirdly, into selling and capital non-core our initiatives. value asset management assets add recycling

We sectors. to strong generate demand across returns for attractive and assets all continue remains

rent. multifamily, units and particularly to our to where we're achieving this is business, our growing through to across ambition double Lastly, primarily X,XXX our units build

years represents separately office Bank, like example Quay North giving market European sector For term at minimal reviews Europe where the in to rent total acquire largest UK you've acquisitions structurally from of which property level us U.S. Trust very and with with our is European portfolio, Dock to upward-only units tend the our leases are in the Irish UK. leases I'd Leisureplex us an combined XX% Office The us. office different and to North accounting similar the for longer Capital XXX in market and over Block, units the portfolio. net seen every Ireland in in also than expenses. Clancy the and exciting be triple for five to leases UK with leases Liffey highlight come

lease [ph] was one Dock rents transactions and example, For XX% the here with passing. years across Capital XX. active X.X for at signed And recently in really million square is previous in we've this Indeed lease This break the a only in a was above example at past leasing XX the year of UK with alone. with feet XXX

this rent UK is incentives. the the tenant tenants Now equivalent market, of normal UK give leasing in it USPI's to free and periods is

the NOI. has free, So as shows total, in make it and same the these aspects down UK and At Recruit for to multi-billion property opportunities. square world's and weighted if leases our for of call two of lead office the for into subsidiary years Dock to one Over out these our our totaling performance years in just average disposition. our a large space portfolio markets unexpired own friendly. fully buildings, lease say leasing to comp we largest our have point and in The new deploying crystallized feet net was across and full with you compelling or triple our terms recycle a break refurbishment UK and QX particularly remaining six us job acquisition Capital accretive XXXX, net Europe this expiring December, dollar across $XX we and to rent of eight in very to seller quarter. reinvesting value NOI a $XXX we've and office of program Japan. UK six XX% of landlord company and CapEx we million rent over X.X% development XXX,XXX portfolio, free site Irish equivalent, over leased the up a FRIs in compared capital, repairing number negative as And to Indeed are continue the reduction development office normalize In million versus European been disposition in X% insuring

the Indeed Dock sale So between QX. feet we lease in now the Capital to and JPMorgan, announced of square all office is committed fully that of XXX XXX,XXX

high NOI the in this Chase and delivered this Ireland We units $XX this Clancy Phases Capital expect the Ireland. the month, And multifamily have of square now million planning as the hundred amenities. XX% new of a Clancy the apartments. XXX%, in complete will XXXX. quarter at Quay, which finished, the Quay Clancy. Dublin and We unrivaled Dublin Phase apartment XXX this of apartments single generating phase to the a Phase anticipate permission KW, and quality second largest completed was fourth XXX When Quay deliver Blue high foot to lease leased year-end of Dock occupancy with largest quarter development another X to annualized from in target tenant portfolio a another it's X, also which us quality XXX, office X in year on occupancy at development is year, stabilized end and of to we are building's Chip XX,XXX all at the increases to proving for our And lease consist of of this NOI. we as putting X in community XX% XX%. secured in $X of units million will by across and on Clancy track be XXX Earlier phases complete a to

progress back to at as can hand these Bill So making I'll you see with investments. that we're great And it

Bill McMorrow

Thanks, Mary.

will few now about business So initiatives minutes to the we our me near-term time. grow strategic spend, talk let how over and

focused through, more out being initiatives, annual estimated to maximizing NOI another development just higher redeploying $XX we're by million in Within add assets continue into owned many of of our opportunities. wholly XXXX XXXX. cash while portfolio, the that balance we and went on selling unstabilized looking assets, mature the sheet and also end to growth will and cash focus For the our our flow completing opportunistic on of Mary which growth

effort includes our to our initiative yielding bearing XX of record of continuing track management capital raising of advantage sales providers to key value looking And to Another billion for medium our third-party term fund we're XXXX. short ramp to growing lastly, opportunities. fee raise capital investment the business. third-party upwards in Europe. our and X lower both smaller of creation us year is US that enables platform the of Part and take investment capital up non-core us leverage to attracting of third-party enable investment in This assets. We're raising by

XX plan sales, new value we over our and opportunities. from investment add in to these to the XXX months, to for development of look next generate to Over pipeline we million cash investment net invest platform KW core our will that fund

the the options our platform and we quarter, maximize our We're loan services During currently technology Spain. to of and for Austin overhead in we fourth XXXX, in quarter at business earnings. sold looking division, research our strategic as and manage continue servicing

to X.X%. capacity hedged and either million we in Turning our of of the is on with our of share million sheet on had undrawn interest rate liquidity liquidity average of XX/XX, debt average an years line debt caps of and cash fixed an million at of $XXX balance or credit. XXX with the of term as X.X our XXX XX% of rate

maturities with coming our XX% have term due We very short debt XXXX. less of debt before limited than

focused And in markets. summary, one and excited cohesive are growing so we very working very team in as about

working organization assets and the the property increase and XXXX, investor meet months. with now we host Dublin base, decades. executive already careful all our for in we generate to with team roof that to We management would in how you do, coming April and first visited management Also, plan the shareholders the has remain our many our shareholder adjusted major an with days returns and our Irish together for event we a yourself. host We will team Mary year one risk to however, capital see and team cautious have been encourage on and have this the shareholders. we communication to best great for global come our XX, allocate about under created management

to like questions. I'd up it that, open to any with So

Operator

pause Instructions] to momentarily [Operator our roster. time, At will assemble this we

Craig first CJS from The Bibb comes Please ahead. go with question Securities.

Craig Bibb

properties about Talk It's of spread bit. located guys. negative for from little rate newer into cap your Is cap added to properties. Hey a this spread better gain the you're that rate remainder the a going keep cycle? value clear recycling

Bill McMorrow

which year, way that in you up is to it into and sales when to Craig Summer obviously however look from with you I were along Creek at look not gains at and we was last Well, the -- that House. what Woodstone, out, East, you generated you $XX or we roughly we generated three the exchange out between we which called I the years the $XX at properties deferred think million, look, apartment that look and tax exchanged that look free House roughly the gave those that to that and those The and sale $XX the that did a third two the was gained major XX look a basis, that, was of we combined properties tax million XX When the proceeds were those want has look And isolation, property sold we like and earlier, at year as Creek. of Rock to at sold best buildings able $XXX I we they benefits. said of we Summer NOIs last was mentioned that two Rock when The million. sale the NOI bought, to properties on were, real property the newer, some XX we NOI really million. called

we it up an lease into, price, too, Issaquah And had that attractive but we also bought at so it to attached -- the doing what it. we're and remember property like exchanged

it cap at when into around occupancy XX%. exchanged rate. stabilized we was wasn't a right we so The And when bought that Issaquah

to be the we're end by right so And year, around the second going of this quarter XX%. of

Craig Bibb

ahead. Sorry, go

Mary Ricks

rationale. on a acquisition, cap accounting the disposable, not rates strategic In for versus really strict terms I Europe, making it's comparison between the think of

two which just other that rationale For on Dublin Quay XX% our North assets bolt-on the that do in and to that then multi assets is a the project development, capital Hanover sort was three vacant. we Europe, from Bank strategic purposefully her the behind of that bought And a PRS example, left we bought of it one that. receiver was bought, multifamily in occupied,

so sold you acquisitions think is And cost at I when when that's in about when yield spread terms on we the think bought that's the rationale, what it's the dispositions, positive, giving Europe to a and terms us just of the makes almost sense, really X% in on it in assets it, of when and versus yield to sold we spread the strategic look we we

Craig Bibb

exchanges. what In XXXX of percentage actually acquisitions the the US, were

Bill McMorrow

that that Sorry, again. Say again?

Craig Bibb

So all XX% the did ballpark XXXX the you like acquisitions a could year, for you in or full QX there is that? either of

Justin Enbody

in our two-thirds, It our owned, and assets we on was XXXX funds bought XXXX. were obviously And those about what through exchanges. were probably wholly particularly that then XXXX of partnerships, the through the majority were not

Bill McMorrow

we'll stabilize went remember, around somewhere it'll the XX has get like But it's they know, you Salt I to know, ones of City, cap rate. XX a plus know, spend, are probably property bought but that us was know when particularly what's to in there. add think States. me property we're the ended capital. quarter still property, to paying, second X.XX, finance City first announced. would value the United now a million that we've density I little what with level in would you the is about that, the at one sits all at take remain so highly, rate, surprising deals, lenders two two was it rates, can end recently, the a around Kennedy-Wilson. on that bit quality the quite land. but typical months doing that the part which to in properties, a It'll property is X.X%. was that way say And interesting Lake was, interest that roughly there gravitating up, there, to level, the at interest or they're with it here Those compared one I we biggest very Lake I It's same stabilizing And the because acres say X.X% the even happened that a already we higher the in low to interest low up that happened needs we rate rates the around like ago we paying call year are here those that X.XX, thing X.XX other companies Europe, increase in property you like And rates think I fixing up will Salt $X almost

And spreads come even has the though tighter. you rates have tenure gotten know the -- so gone up, have

know, are Craig, in so all we is rate. cases, And for do you what almost interest we obviously looking the competitive most

my where we're we're But say careful is at did good. look, being in prepared the about remarks given what's capital still currently are deploying of that, what end market. on the spreads the so I And going very

Craig Bibb

the back and I'll and in questions Okay, related queue. jump just, two

to holders. kind So, you your of your stock guys price is frustrating, sure been larger frustrating for and I'm it's

management and to seems of convinced part comp issue, If right. the -- you that be were

a enough based So for EBITDA responsible of the convinced you pool was that to if would bonus were of percentage that discount, on that? get be rid

Matt Windisch

Yeah, Greg, Matt. this is

were our I income. adjusted they of for net if is net and So overall and tell of EBITDA backdrop adjusted at levels GAAP with XX%, 'XX that's you levels look record income versus what comp 'XX, the up down, the would you,

update our done in out evaluating we've in be seen, also component I April. are and stock there'll we and comes that TSR our on the introduce think proxy, the what to plan when you've plan, with an cash that bonus

Craig Bibb

is net stock to repurchase? in very it stock of a this you part QX investors. thus this and likely second to continue The still year are lot while, the cheap heartening and of that's then And the net going seller, Okay. to you in be guys is a for I'm sure, bought and still far, you a a is were seller,

Bill McMorrow

year, last that is the interests $XXX I I that this said that this decrease but selling to that bigger we Well, year are probably what our year, in. number million, assets the have actually is what ownership sold roughly we mean that going actual, we

own close amount out mentioned is so million cash going that going the and percentage And very that of aggregate generated United of cash but sales in high down, that's XXX% dollars will XXX% go the sales assets get of so year that, that we're up, of States when up. the of, that are go of these Europe, to the asset we in $XXX I this generating of sales to out to probably here

Craig Bibb

been great. Thanks long. too Okay, guys. I've again

Bill McMorrow

Thank you.

Operator

question with Please next Vincent Chao Deutsche The ahead. Bank. go comes from

Vincent Chao

just Hey want I just guys, good go back the to here. some fundamentals of to morning,

You revenue side on if Yeah. the in store just for And quarter curious that's forward. deceleration specific been quarter a if in this jump. that really nice you same multifamily was guys experiencing couple you anything I then explain And turnaround. would a had some growth quarters that, have now. think there the going sustainable the was

Matt Windisch

it's Yeah, Matt. hey, Vin,

key that store the of makeup So I same one the is think pool. component to

year seen that rent the Northwest Northern more California. Pacific in growth sell redeployed And So Southern 'XX than some been more we've in certainly And assets Northwest. or we to did trends -- what is in so, last the the and California. the of Pacific has we've were primarily terms that California that robust capital

is put California value trades that four assets built, the the those on houses Northwest. shrinking Pacific tenants. for a amenities unit some three seeing you're that So bought The of the the multifamily of a you're really the the we by in that of those club we've made portfolio done, side portfolio years we've we've the growing produced add part seeing then second assets. the And in benefit the we've the and I impact think bit turns, ago, we into that the or of

And as you're so well. that come seeing through

So I driven are that factors two think those have key that increase. the

Bill McMorrow

I good really two say I'd Yeah, is points. think very, very making Matt

deployed income XX% that high ratio some the of remember there's about be rent income As that in, here high we've and XX% before, than difficult these areas. In are areas to in as talked the is I for state no on people. tax. State like to calls as can Washington, -- that's the and we It said, California

these units on the the you've at got XXX, with that salary thing part you're XXX And remember these the that better mid-XXs. improve levels you income garden properties, I takes buy and to the rent when so CapEx buildings same to higher base your would it you And or style time, say some complete apartment in programs you've in a couple tenant years a doing. big the to cases, basically of levels got really of are low-XXs, second there

a here, lower year. in have over here Kingdom the tenant but then base your United turnover the do -- about and generally You Ireland in every turning you're half

like buy that's is got Lake lost Salt when population time And from they've thing positive the Dublin implement greatly I Europe a And just, it the growth. or do or takes the program answer office in Dublin, your Portland, uncertainty your benefiting the communities the We year. to in think, to Seattle, specifically last surrounding economy growing just has City older Ireland it City, Brexit. these value when But add that I Lake Europe talk bought you So improve one fastest spaces, about tenant just too. in these people it's think had client question and Salt base. the

the and of lot housing create no ability So you product. fast you've a have gotten to --

good that all producing growth. very is And sustaining key university I labor job into systems markets, that and really population rent feel very our so for, said, are to outlook forces long the comfortable are that the these younger growth, with like going in people we growth term coupled

Mary Ricks

And see. a for opportunity it's an but haven’t that it's shortage, had problem so just that. really Ireland, we I add housing to a to

to I about per built. And for estimated we XX,XXX need XXXX, would need units say So XX,XXX annum be, only built and to XX,XXX XXXX. units were be in are

only there's of shortage apartment is So And international I major terms the city there's dwellers -- live difference, provided a been Ireland norm. kind the there's versus of XX% which really -- think, what's structural in in in of XX% in then housing. a an in other

see peer we're very there that on Ireland business. in growing effect a really opportunity big in we So and [ph] focused the

Vincent Chao

jump there's the just specific expense what's the last did question. maybe been that? some on That's follow that? updates couple -- maybe I there that. comp or of seem the something wondering, in of bit it's did mean than in the quarter like a year-end But at a stuff quite also Was higher in the sort for quarters. the said driving it it Is true-up a type the just you helpful. was that up you Thank coming I Okay. comp know proxy. I

Matt Windisch

it's we'd largest the particular was It quarter EBITDA income related in had No, perspective. produced and the to income that quarter. from an net ever just

Bill McMorrow

have. occurred it's sold not Austin, that the end has worth we're salaries the important of income looking our is there which the you business corp total of the it. business my that And there. million At primary of of and statement monetizing is at are half about employees. Kennedy-Wilson $X think our out research event. I almost and everybody the But year, most the obviously eliminated as when service I that remarks, thousands the the of of earlier while but service that, -- better Vin, level roughly that trying in level, than of make point XXX, we roughly I are at in was property part think, all we you overhead XXX our in have is thing that, to more And But said or we in to And business. XXX off at that the business we prepared people concern, but

a And attached a payroll year. that, so there's that $XX to roughly is million

what trying I out And remarks. was those situations. we're to my really so at point prepared in And that's looking

Vincent Chao

Thanks. Okay.

I think have. that's I all

Operator

ahead. Germain The go from Please JMP next comes question Mitch with Securities.

Mitch Germain

million should of you the you When non-core the the consider of versus about think Europe? the I to do morning. want $XXX that breakdown How maybe in generating we sales do, U.S. regards you maybe of with kind of And you percentage. think the and of to talked non-core then think of much Good net how cash. portfolio

Bill McMorrow

you Yeah. Europe and Well, in really totality, roughly about you and the the have talk way look Europe. we're it's at set assets United majority Ireland. kind up Kingdom as now, numbers. the to roughly non-core about talk XX of -- again, in our portfolio in these when U.S. But sales, is when we And roughly of XX-XX

We ownership Europe two high and came did have We Gatsby along portfolios portfolio Jupiter. those quality, acquisitions called in some a very bigger in In interests odd large lot roughly assets. properties. XXX of smaller with assets

in numbers. my in have and by properties of also years of how we guess almost are a of $X Europe. in remember unencumbered shrink But unencumbered that And terms number is the the next the we majority ownership of you'll over that so see interests third roughly properties plus properties billion two those

it's I assets like value. before, assets us, to these will said these continue dollar so we the assets year. smaller core the year number of to this greater that smaller cash a be them But sell that's last of than And for and total aren't be as in out going coming terms

Justin Enbody

on XX% consolidated at think it's see our if total information you portfolio, worth Mitch, kind represents give to just NOI, start of it's XXX. the slightly, look that as Hey Justin. I also you'll our level assets, you of top-XX under our we of property noting, more

see you we're are of of, assets XX represent at get the top of. was that the majority you'll know, of you really bottom to more a to better But to too going that there company. of well start the and to information on disclosure XX Bill as in mentioning these kind give as NOI lot rid as, some kind of we're assets going So the

Mitch Germain

you the to merger of time up those the market. assets wrote At

way there So Is gains. that much terms be it? the shouldn't about think in of to

Bill McMorrow

the exactly It’s No. opposite.

Justin Enbody

Yeah.

one's think this interesting. I So

previously As you know, consolidated we KWE. what

what because might depreciation billion, So through $X.X to XX% that the on expect, which cumulative XX% that own financial about we that books take of we had already related statements to didn't and didn't that at currency effects than was our our we own. you was lower

increased a premium, equity million. we million price, as which was $XXX as even though still, result, Bill IPO So only below paid the $XXX our a mentioned, by

mark we to So overtime, able some bigger these gains, fair as going liquidate because you're to assets were value. we see them of to not

Bill McMorrow

They're They're not curated curated depreciated value. costs. fair at

Mitch Germain

Understood.

the on just mean that we may So comp should EBITDA. that just -- stay that means forward? theme more going Does more

Bill McMorrow

That No, the has with It it I wasn't point do do has the gains. nothing with making. to comp. was to

is asked about You’ve come on not depreciated value, And I'm they cost. came did what fair they the telling gains at lowered. that being me at you on

-- gains will because the that of so we the realize And gains that.

Mitch Germain

million the the years? over of of coming development? online I the that should about how few do $XX How we so Right, in think the about cadence next the think course

Bill McMorrow

drivers because and that of Clancy of Capital should coming You that year, most next big two are about online think the Dock.

be the not apartment as out, of until a And rent year. so be finishing They December of finished Indeed pointed units time. And lease, in finishing will we're Dock the up going that far same it, as at building. Mary this XXX we're on top Capital also the phase roughly to as we're

Clancy, starting to the as X course, of up which of out, Dock Capital in related Phase just comes the at And April. income be And on pointed so we're through rent the that and then, up rent number through we most Phase should on X.

take rent Phase years X to will another that X after get to up. two and months And to so XX complete full that to

Mitch Germain

Okay.

Mary. the of go So ahead, Clancy some -- Please

Mary Ricks

Yeah.

now X year-end. Clancy at So I talked is being the it XX% XX% about occupied.

So we're development we that in Clancy occupied done said, starting X. on now XXXX. permission almost be got numbers there. And we're of just X, the the costing planning in XX% terms Clancy And should as I and in out

Mitch Germain

Great.

So I'm X a is or XXXX. of less X some for contribute year. Clancy really this And -- sorry, more will then more Capital Dock Clancy

Bill McMorrow

Correct.

Justin Enbody

more is that Clancy be two Mitch X years not than million. to out. included in That's just clear $XX that And

$XX the of top on that's that's, million. So

Mitch Germain

Yeah.

investment make about million think includes different to and It also includes operating So, Capital the you're or the How just Dock, in making I get this, Vintage it I of pockets? the I some want do include $XX does Clancy. assets?

Bill McMorrow

have two and UK like Clancy would it's in Point bucket. X Vintage the Capital other in the pockets. bucket, which Ireland. also And is assets, Chase Pioneer assets Vintage be be Dock. which the Phase the in Yeah, would We'd the then development It's the assets the unstabilized be also would unstabilized

Mitch Germain

ahead. go please -- we do how And

Bill McMorrow

all we runs or pretty unstabilized some to good assets which in timing and out laid we've them supplement expect finished our detail become the of development So stabilize. that the assets the and through under

Vincent Chao

-- development Seattle, price does well pressure Got the of the does and the activity? like positioned point of on your most terms not is multifamily guys from some any more of in there's kind of know in You. I -- it it are question a of you in I that pickup for style. And given then me, last just on been seeing are side, But curious product you garden that seem

Bill McMorrow

anything in own to going assuming high the my I Dublin have new basically that's being delivered the have that Business for next, Central continue hardly the a In just call the they're most there there's X absorption delivered call Union. District. But very is market I'll and two, are feet the grow, tell on our housing of in Seattle to of X in continue the view, what Lake Equinox. is really square hundred what feet mean, very affect Since we overtime, have look up quality -- there. District. is housing And that's South all. some, own of because lengthening to great called the property one a business side. And in space us development million you when three and office that leased. Seattle district I other periods, lease central you one would much to XXXX, the they be Central already We great million in There's the very But not it's office called the at there's a we majority think, I calling the but it of you another there two properties need I'd percent Business leased. But at I'd may the similar great have years say the basically, in are Seattle. shortage. office won't jobs development square remember not a and the on grow XX% assets the that, is and No, there, that Radius pipeline to beyond of and to companies biggest the

Mitch Germain

Thank you.

Operator

go Please from comes question with Bank next David America Merrill The ahead. of Ridley-Lane Lynch.

David Ridley-Lane

to raising capital actually be this hear party Sure. Glad year. third you'll

terms you so the In that your what the mix vehicle expect billion of co-investment $X fee forth, target? to would and types of relative

Bill McMorrow

platform, the our But U.S. -- shares on call generally fund depend I'll what is in will David. investment business, our roughly XX%. It our management

I capital are at XX% component mentioned, getting And advanced couple really We of between where other the the Mary into where can stages XX% to details not of be into could platforms, a Europe. I'm in yet, point -- a going as get as capitalize to but there we're the the we she double to how mentioned of over own to increase next platform Because PRS over units the forward. several at you, that looking is number to the X,XXX. years goal lot

will over along right now, couple materialize the some discussions months. so we're well that And next in hopefully

David Ridley-Lane

being XXXX capital And total pretty Great. for next XXXX, think rate as in about we should year? for expenditures fair a run your

Matt Windisch

Hey Matt. it's David,

will it I in be again that range XXXX. somewhere around think

up to lot of implement developments as continuing finish we a value As add our discussed well we've programs. these as

for run a So I good think that number is rate pretty 'XX.

David Ridley-Lane

very you Thank right. All much.

Operator

The question Global. go Ranger from Please next Trovato ahead. Colin comes with

Colin Trovato

Hey guys, can me? hear you

Bill McMorrow

Thanks. can. I Yes,

Colin Trovato

I disclosures additional bridge. provided you And appreciate quarter. good the NOI that so Hey, on Okay. the

gains, when that how one, that lot are in ties compensations impacts on know how trying quarterly there's how quick can compensation quarter? a I help the about Just there, I'm recognized large increase comp the you just been think the gains but to a so think when of again, recognized questions in me as and about, the to

Bill McMorrow

not way. tied or the we really in a gains comp and service not shape look to terms that trying mean the tied draw to businesses the our at I I amount really directly form. have roughly And is point we're half that. line in. is was of I'm that to it don't we're of to mean to that any just, at we that very looking But clear handling trying way, in how you, payroll was attached I really to the What gains. it's doesn't. It out of

Colin Trovato

Okay.

way the compensation services call attributed you and potentially maybe be to any future G&A your do little like So, operating businesses? attributable a REIT separate business to say, is clearly think that's more let's that potentially there'd the the out in to that or

Bill McMorrow

absolutely. Yeah,

Colin Trovato

I think that helpful. would be really

Bill McMorrow

obviously margin higher And Sure. the investment way higher, is business. of of our our the business part part

Colin Trovato

you. Thank Okay.

Operator

from Please Ursaner next with question The Bumbershoot comes ahead. Holdings. go Jason

Jason Ursaner

code. Good widening make and with rates. question. if case potentially in is the taking value the can cap gains the might assumptions There and to of pretty It more real slightly bit you maybe But you that the you values, below above fair of portfolio. interest adjusted regards some overall estate fair terms the for mean would the parts have a in embedded uncertainty what to right kind zip morning. value, likely and for certain a of in given impact spread harsh rates Thanks seem probably, my use that stock's amount of

So or But in it my properties construct, I argue not question premium below might work refinance still would book tend that essentially allocators deals, been and is track lease the multiple creating recycled and a not trade getting and franchise out Europe's despite trading even source a really just eventually to especially liquidation all at of giving how to good Craig's value? other to value and what appreciate be people has given frustrating adjusted just credit there little value, bit most answer similar pretty a any you to you for KW do meaningful of record to through case, up, be capital to able value, it. value just the dispositions,

Bill McMorrow

to asking X on of a you scale me XX? Are

Jason Ursaner

No.

there you shares. obviously a Is the understand yield, value community, some investment there the healthy are as pay company been take avenues to is you buying anything help you Just, creating? I And out a stock. know to I because could else, try I you've personally back guess guess you other of any buy franchise

Bill McMorrow

for met question not investors. on or there's a I the think the in with week that XX management went We're remains perspective talking the I time. I Look, the other all January. to road my either don't of hedge people for team trying any merger to no from this. in around trading and so shareholder. make lot any excuses But single I'm on was funds is the there and so There and largest a mind, forth. question

high of to you higher relationship level. obviously the to a in volumes the want And perform our were historical fourth saw lot very in standards. and We stock And at the stock quarter, a so that.

And to and really so And days. shareholder our Seattle. simplifying now do and whether it's one through our think, position properties a people, have think with starting take we larger in story, meeting shareholder days that is that LA I spent to here going I our in holding two stock

what think any or I manage that analysts or the any like difficult to which me very of not can saying does. It'd it's do is properties, I go is that any see the business following doesn't I without properties. shareholder us who the very, be going for Mary

first-hand. come to really And to do year been Dublin and We're last Day encourage going years. the so in you Seattle would all. see this I Shareholder do think to impressed I do we're would later we've able at in to incredibly going be over eight what and And a you one

out interest we the fairly are obviously rates. term. to debt we years keep intend we I to very with So is though next term, level that at tell tried obviously the structures lock of you at several on point I you rate what's we looking debt on. of to that what's That was We're why gone have happened to small. long maturities property mindful fixed continually also really in are over mindful have financings our properties longer would that the

really think that's pretty I summary. So, much the

Jason Ursaner

it. Okay, great. Thanks. Appreciate

Operator

is Bibb CJS Craig The Securities. follow-up a ahead. next Please question from go with

Craig Bibb

tried anyway but ask I myself of the since queue, out Actually it's take quick. I'll it

want are compensation two not basically and And G&A, those XXX. at take together you take of it's fair, there. we If to you out services

just So -- -- what's can you just ballpark like

Bill McMorrow

I it back want don't want ask get correct Craig, you ballpark No, I and to you, to would numbers. go just

Craig Bibb

right, you All thank great. guys. Okay. Well

Bill McMorrow

Thanks Craig.

Operator

Aaron The KBW. Will ahead. go with Please [ph] next question from comes

Unidentified Analyst

morning guys, and thank for very good you time. your much Yeah,

you're not guess other cap the X.X%, over to about I $XXX And a from is of million of doing of the but to question lot buybacks? be set releasing a X.X% about at look seems imply on questions, why As years, following with sort more that the of you're great your results. of talking next valuation, capital my couple rate. Another it going I implied

what So already you buy know. not why

Bill McMorrow

radar Look obviously Yeah, a KWE question. our very, million When it's good $XXX a back something we did that's screen. was buy company, And, very on public there.

And in $XXX As last million two we $XX addition of in the of years, last million probably over a years earlier, I said here. dividends. couple the that, worth in did Europe paid we to

so that that it's a of clearly looking analysis is investment topic And part the at. we're

So XX we're million. in it opportunities. opportunity combine we we've we it's focused companies, did two over the something XXX, when done clearly other between And But investment look $XXX -- obviously you that against the at so that on. investment

Unidentified Analyst

taking your step further, property then So I you guess better anybody. it understand than values one

six the in You've disclosure done a particular. over improving months in great job last

You cost. and I it properties not? what private? carrying before. to well-known this were? think done shareholders, it's complicated, -- have take You've not exactly good still some us, rich hard have for just clear Why work good It's it but out us partners. depreciated there is Why to at very very company

Bill McMorrow

capital clearly company the But back about again I not I as our really of trying use of just, it the think capital, a to radar can that Well, is private probably comment on that's and a call. But relates I'm or can't talk about taking mean, clear buying be I topic conference our screen. to I not. on something that's that's Yeah. allocation the our stock

Operator

Bill for question-and-answer over to the conference remarks. like back I concludes the This session. McMorrow would any closing to turn

Bill McMorrow

All right.

it So up. that wraps

a said you our Shareholder I I to to of would times, couple encourage Days. As come

your As time support I call on and discuss you the to to taking appreciate this we're say, And always anything. available be today. always we

So very much. thanks

Operator

attending concluded. is today's Thank The you conference presentation. now for

disconnect. may You now

Kennedy-Wilson (KW) 24 Feb 182017 Q4 Earnings call transcript