Kennedy-Wilson Holdings Inc.

Good morning and welcome to the Kennedy Wilson Third Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Devin Bobsar, Vice President of Investor Relations. Please go ahead.

Thank you, and good morning. This is Devin Bobsar, and joining us today are Bill McMorrow, Chairman and CEO of Kennedy Wilson, Mary Ricks, President of Kennedy Wilson, Matt Windisch, Executive Vice President of Kennedy Wilson, and Justin Enbody, Chief Financial Officer of Kennedy Wilson. Today's call will be webcast live and will be archived for replay. The replay will be available by phone for one week and by webcast for three months. please see the investor relations website for more information. On this call, we will refer to certain non-GAAP financial measures, including adjusted EBITDA and adjusted net income. You can find a description of these items along with a reconciliation of the most directly comparable GAAP financial measure and our third quarter 2020 earnings release, which is posted on the investor relations section of our website. Statements made during this call may include forward-looking statements. Actual results may materially differ from forward-looking information discussed on this call. due to a number of risks, uncertainties, and other factors indicated in reports and filings with the Securities and Exchange Commission. I would now like to turn the call over to our Chairman and CEO, Bill McMorrow.

Bill McMorrow Devin, thanks very much, and good morning, everybody, and thank you for joining us today. We hope everybody that's on this call, that you and your families are healthy and you continue to do well in this period of time we're in. I'd like to start by touching on the key highlights for the quarter. In Q3, we continued to successfully grow our investment management business by deploying capital in our debt platform, and we made great progress in our development and lease-up portfolio, positively growing our NOI. We also saw continued high occupancy and strong rent collection across our largely suburban multifamily and office assets, which together comprise 81% of our stabilized portfolio. Across our investment markets, real estate volumes remained low in the third quarter, similar to what we saw in Q2. Q3 sales transactions in our markets fell between 40 to 60%. As a result of these changing market dynamics, we temporarily paused our asset sale program in Q2 and Q3. However, as seen by the disposition of Bagot Plaza, generated cash of $165 million and a gain of $85 million to Kennedy Wilson, and the $198 million acquisition of an 888-unit Mountain State portfolio, both of which were announced last Friday, we will have higher levels of transactions in the fourth quarter, where we expect to complete the majority of our 2020 asset sales. I'll discuss both of these transactions in greater detail in just a moment. So looking at our financial results in Q3, we produced adjusted EBITDA of $76 million and adjusted net income of $27 million. For the year, we produced adjusted EBITDA of $261 million and adjusted net income of $84 million. The slower transaction market, of course, impacted our results with lower gains on the sale in the quarter, which we expect to make up in the fourth quarter. Now, I'd like to update you on our balance sheet and liquidity. We continue to maintain a strong liquidity position with $793 million in cash and $300 million of availability on our line of credit at quarter ends. We currently have a total of $4 billion in discretionary purchasing power across Kennedy Wilson and our discretionary funds. We also have various strategic partners that remain well positioned with ample liquidity and a strong interest in partnering with Kennedy Wilson. Our debt maturity profile remains very favorable. It's only $22 million maturing in Q4, and $158 million maturing next year. All of these maturities through 2021 are non-recourse property level financings, which we anticipate refinancing. Post quarter end via tender offer, we successfully retired $168 million of the KWE unsecured bonds maturing in 2022, carrying a coupon of 3.95%. We utilized existing cash and $129 million from two new property-level secured financings, each with a rate of 3% and a final maturity date of 2025. This tender helped improve our maturity schedule and reduce our cost of debt. And so, With the liquidity on hand and the limited debt maturities through next year, that keeps us in a very strong financial position. As a result, our board of directors approved yesterday expanding our existing $250 million share repurchase plan to $500 million. Since the $250 million share repurchase plan was authorized on March 20th, 2018, The company has repurchased 12.9 million shares at a weighted average price of $18.04, with only $18 million remaining under the initial plan as of 9-30. Our track record of investing in debt, coupled with the strong institutional demand for yield, resulted in the launch of our $2 billion debt platform in May. Platform is targeting first mortgage loans secured by high quality real estate in the Western United States, Ireland and the United Kingdom. The quarter we completed loan investments of 335 million, which brings our total loan platform to $750 million in investments. Kennedy Wilson has a 12% ownership interest in this portfolio. Our pipeline for future debt investment opportunities is extremely robust with $180 million in origination opportunities that we have signed term sheets on and many more deals that we're currently evaluating. Thus, our loan platform in a very short period of time is on track to hit approximately $1 billion in the near term. As a result, we added $300 million to our fee-bearing capital representing a growth of 9% from Q2 and 27% thus far in 2020. This is now up 111% since the beginning of 2018. Given the additional capacity, our debt platform with Fairfax, our real estate and debt platforms with security benefit, our multifamily joint venture in Ireland with AXA, and our ongoing fundraising efforts in Europe, we have approximately $2 billion of fee-bearing capital in our pipeline to add to our existing $3.9 billion in fee-bearing capital over the next two years. Now I'd like to turn the call over to our president, Mary Ricks, to discuss our rent collections and our multifamily and office portfolio. Mary?