EQUITY

Common Stock

During the six months ended June 30, 2015, Kennedy Wilson had completed an offering of 8.6 million shares of its common stock, which raised $215.3 million of net proceeds, excluding issuance costs of $0.3 million. Additionally, in May 2015, 100,000 shares of Series A preferred stock were mandatorily converted into 8,554,948 shares of common stock.

Dividend Distributions

During the following periods, Kennedy Wilson declared and paid the following cash distributions on its common and preferred stock:



	Six Months Ended June 30, 2015				Six Months Ended June 30, 2014
(Dollars in millions)	Declared		Paid		Declared		Paid
Preferred Stock
Series A⁽¹⁾	$	1.5	$	1.5	$	3.0	$	3.0
Series B ⁽²⁾	1.1		1.1		1.1		1.1
Total Preferred Stock	2.6		2.6		4.1		4.1
Common Stock⁽³⁾	25.9		21.0		16.4		14.0
Total ⁽⁴⁾	$	28.5	$	23.6	$	20.5	$	18.1

⁽¹⁾6.00% Series A, 100,000 shares issued and outstanding as of June 30, 2014, mandatorily converted on May 19, 2015 into 8,554,948 shares of the Company’s common stock.

⁽²⁾6.45% Series B, 32,550 shares issued and outstanding as of June 30, 2015 and 2014, mandatorily convertible on November 3, 2018, or earlier at the option of the holders thereof, or, in certain circumstances, at our election on or after May 3, 2017. The conversion price for the Series B mandatory convertible preferred stock was $10.08 and $10.23 per share as of June 30, 2015 and 2014, respectively, and is subject to further adjustment pursuant to customary anti-dilution provisions.

⁽³⁾$0.0001 par value per share, 200,000,000 shares authorized as of June 30, 2015 and 2014, respectively.

⁽⁴⁾Common stock dividends were declared at the end of each quarter and paid in the following quarter. The amount declared and not paid is accrued on the consolidated balance sheet.

Share-based Compensation

During the three months ended June 30, 2015 and 2014, KW Group recognized $6.8 million and $1.7 million of compensation expense related to the vesting of restricted stock grants. During the six months ended June 30, 2015 and 2014, KW Group recognized $14.1 million and $3.4 million of compensation expense related to the vesting of restricted stock grants. The increase for the three and six months ended June 30, 2015 is due to additional shares of restricted stock grants issued in July of 2014 under Kennedy Wilson's Amended and Restated 2014 Equity Participation Plan.

Accumulated Other Comprehensive Income

The following table summarizes the changes in each component of accumulated other comprehensive income (loss), net of taxes:



	Foreign Currency Translation			Currency Derivative Contracts			Marketable Securities			Total Accumulated Other Comprehensive Income
(Dollars in millions)
Balance at December 31, 2014	$	(42.4	)	$	14.4		$	(0.2	)	$	(28.2	)
Unrealized (loss) gains, arising during the period	(62.2		)	25.0			0.1			(37.1		)
Amounts reclassified out of AOCI during the period	19.1			(9.0		)	(0.1		)	10.0
Taxes on unrealized gains (losses), arising during the period	26.0			(10.0		)	—			16.0
Noncontrolling interest	10.7			(5.0		)	—			5.7
Balance at June 30, 2015	$	(48.8	)	$	15.4		$	(0.2	)	$	(33.6	)

The functional currencies for our interests in foreign operations include the euro, the British pound sterling, and the Japanese yen. The related amounts on KW Group's balance sheets are translated into U.S. dollars at the exchange rates at the respective financial statement date, while amounts on its statements of operations are translated at the average exchange rates during the respective period. The increase in the unrealized losses on foreign currency translation is a result of the strengthening of the U.S. dollar against the euro, the British pound and the Japanese yen during the six months ended June 30, 2015.

In order to manage currency fluctuations, KW Group entered into currency derivative contracts to manage its exposure to currency fluctuations between its functional currency (U.S. dollar) and the functional currency (Euro, GBP and Yen) of certain of its wholly-owned and consolidated subsidiaries. See note 6 for a more detailed discussion of KW Group's currency derivative contracts.

As discussed throughout this report, we are required under U.S. GAAP to consolidate certain non-wholly owned subsidiaries or investments that we control. As such, our financial statements reflect currency translation adjustments and related hedging activities on a gross basis. In many instances, these fluctuations are not reflective of the actual foreign currency exposure of the underlying consolidated subsidiary. For example, we are required to translate the activities of KWE into US dollars even though KWE does not invest in US dollar denominated assets. Therefore, it is important to look at the provided currency translation and currency derivative adjustment information net of noncontrolling interests to get a more accurate understanding of the actual currency exposure for the Company.

Noncontrolling Interests

Noncontrolling interests consist of the ownership interests of noncontrolling shareholders in consolidated subsidiaries,

and are presented separately on KW Group's balance sheet. As of June 30, 2015 and December 31, 2014 KW Group had noncontrolling interest of $1.9 billion and $2.1 billion, respectively. The decrease in noncontrolling interest was due to $5.7 million of foreign currency losses, net of hedges allocated to noncontrolling interest holders, and $183.1 million of distributions made to noncontrolling interest holders, offset by $6.4 million of contributions made to noncontrolling interest holders. Additionally, the Company increased its ownership in KWE through the acquisition of $24.4 million worth of KWE shares from noncontrolling interest holders, thus reducing the noncontrolling interest.

Kennedy Wilson currently owns approximately 16.2% of KWE’s total issued share capital as of June 30, 2015. The noncontrolling interest holders in KWE had an equity balance of $1.7 billion as of June 30, 2015. Due to the terms provided in the investment management agreement between KWE and a wholly-owned subsidiary of Kennedy Wilson, the results of KWE are consolidated in KW Group's financial statements.