Kennedy-Wilson Holdings Inc.

Good day, and welcome to the Kennedy Wilson Second Quarter 2022 Earnings Conference Call and Webcast. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone 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 Bovsar, Vice President of Investor Relations. Please go ahead, sir.

Thank you, and good morning, everyone. This is Devin Bovsar, and joining us today from Kennedy Wilson, or Bill McMorrow, Chairman and CEO, Mary Ricks, President, Matt Windisch, Executive Vice President, and Justin Enbody, Chief Financial Officer. 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 the reconciliation of the most directly comparable GAAP financial measure and our second quarter 2022 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 Thanks, and thank you, everybody, for joining us today. Yesterday, we reported our Q2 results and our businesses off to a very strong start for the first half of the year. In Q2, we saw a record same property revenue growth from our U.S. multifamily portfolio, as well as a strong performance from our recent multifamily and industrial investments. We generated adjusted EBITDA of $119 million in the quarter. For the year to date, we have generated $279 million in adjusted EBITDA, compared to $538 million for the first half of 2021. I'd like to point out that in Q2 of 2021, we had a $330 million gain related to selling a 49% interest in a portfolio of wholly owned multifamily assets. This sale served as the foundation of a new $1.5 billion US multifamily platform done in partnership with a global institutional investor. Our estimated annual NOI grew to $479 million, an increase of 10% in the current year, and a 19% increase from Q2 of 2021. Our assets under management total $23 billion and is comprised of over 38,000 multifamily units and 26 million commercial square feet. including $2.6 billion of gross development projects, which 62% is represented by new construction of approximately 4,700 multifamily units. KW has a 54% ownership interest in its development projects, the majority of which will complete construction by the end of 2024 and stabilize in the first half of 2025. In Q2, we completed $1.7 billion of investment transactions, including $1.2 billion in acquisitions and loan investments, bringing our year-to-date total of new investments to approximately $2 billion. Our key acquisitions in the quarter included adding three wholly-owned apartment communities totaling 1,100 units, which we added to our Mountain West portfolio. In the Mountain West, we have doubled our unit count in the last three years and currently own over 12,000 stabilized units with another 1,500 units in development. In our investment management business, we completed $444 million of new investments in our European logistics portfolio, which grew to $1.4 billion in total assets. We also completed approximately $176 million of new originations in our debt platform, which has total loan outstandings at quarter end of 2.2 billion. Both of these platforms continue to perform extremely well since their launch in 2020. I'd like to explain what we're seeing in our markets today. Interest rates globally have changed significantly since the end of Q1. As a company, we have always looked to minimize our interest rate risk and ended the quarter with 94% of our debt either fixed or hedged with an average interest rate of 3.8% and an average maturity of just under six years. Fundamentals across our multifamily debt and logistic portfolios, which are our core asset classes, remain very strong. The U.S. multifamily rents continue to outpace inflation as we look to execute our value-add strategy of amenity and unit interior upgrades. The strong momentum we saw in Q2 has continued into July. As a reminder, we acquired many of our high-quality assets through the execution of our capital recycling strategy. This greatly improved the quality of our overall asset portfolio. In the debt platform, we have a strong pipeline of origination opportunities and have closed $220 million of new loans thus far in Q4, Q3, sorry. The returns of this platform have improved as interest rates have gone up, given that 85% of our loans are floating rate. This platform has an average loan size of $65 million with high-quality institutional sponsors. In Dublin, job growth and the return to office has been positive for both tenant demand for our newly developed offices and renter demand for our best-in-class apartments. And in the U.K., we continue to see attractive opportunities for our rapidly growing logistics platform. Fundamentals remain strong in this sector, with the U.K. reaching a record low in vacancies in Q2, which should have a positive impact on our portfolio, where in-place rents are significantly below market. We'll expand on each of these in a moment, but I'd like to pass the call now over to our CFO, Justin Enbody, to highlight more Q2 financial highlights in more detail. Justin?