XML 95 R19.htm IDEA: XBRL DOCUMENT v3.19.3
Equity
 9 Months Ended
Sep. 30, 2019
Equity [Abstract]  
EQUITY EQUITY
Common Stock Repurchase Program
On March 20, 2018, the Company announced a $250.0 million stock repurchase plan authorized by its board of directors. Repurchases under the program may be made in the open market, in privately negotiated transactions, through the net settlement of the Company’s restricted stock grants or otherwise, with the amount and timing of repurchases dependent on market conditions and subject to the company’s discretion. Kennedy Wilson also had a $100 million stock repurchase program that expired on February 25, 2018.
During the nine months ended September 30, 2019, Kennedy Wilson repurchased and retired 152,252 shares for $2.8 million under the stock repurchase program. During the nine months ended September 30, 2018, Kennedy Wilson repurchased and retired 8,488,141 shares for $153.2 million under the previous stock repurchase program.
Dividend Distributions    
Kennedy Wilson declared and paid the following cash distributions on its common stock:
 
 
Nine Months Ended September 30, 2019
 
Nine Months Ended September 30, 2018
(Dollars in millions)
 
Declared
 
Paid
 
Declared
 
Paid
Common Stock(1)
 
$
89.8

 
$
88.2

 
$
83.4

 
$
84.2


(1) The difference between declared and paid is the amount accrued on the consolidated balance sheets.
Share-based Compensation    
During the three months ended September 30, 2019 and 2018, Kennedy Wilson recognized $6.3 million and $9.2 million, respectively, of compensation expense related to the vesting of restricted stock grants. During the nine months ended September 30, 2019 and 2018, Kennedy Wilson recognized $23.9 million and $27.9 million, respectively, of compensation expense related to the amortization of grant date fair values of restricted stock grants.
Generally, upon vesting, the restricted stock granted to employees is net share-settled such that the Company will withhold shares with value equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes, and remit the cash to the appropriate taxing authorities. Only a certain amount of the restricted shares that vested during the nine months ended September 30, 2018 were net share settled. The employees' minimum statutory obligation for the restricted shares that were not net share-settled were funded by the employees and remitted to the appropriate taxing authorities. However, all of the restricted shares that vested during nine months ended September 30, 2019 were net-share settled. The total shares withheld during the nine months ended September 30, 2019 and 2018 were 658,885 shares and 380,768 shares, respectively. During the nine months ended September 30, 2019 and 2018, total payments for the employees’ tax obligations to the taxing
authorities for the shares which were net-share settled were $14.0 million and $6.8 million, respectively. These activities are reflected as a financing activity within Kennedy Wilson's consolidated statements of cash flows.
Accumulated Other Comprehensive Income
The following table summarizes the changes in each component of accumulated other comprehensive loss, net of taxes:
(Dollars in millions)
 
Foreign Currency Translation
 
Currency Derivative Contracts
 
Interest Rate Swaps
 
Total Accumulated Other Comprehensive Loss(1)
Balance at December 31, 2018
 
$
(94.1
)
 
$
11.0

 
$
—

 
$
(83.1
)
Unrealized (losses) gains, arising during the period
 
(37.2
)
 
52.6

 
(2.5
)
 
12.9

Amounts reclassified out of AOCI during the period, gross
 
22.5

 
(12.9
)
 
—

 
9.6

Amounts reclassified out of AOCI during the period, tax
 
(3.4
)
 
3.6

 
—

 
0.2

Noncontrolling interests
 
(9.0
)
 
—

 
—

 
(9.0
)
Deferred taxes on unrealized gains (losses), arising during the period
 
0.8

 
(10.2
)
 
0.6

 
(8.8
)
Balance at September 30, 2019
 
$
(120.4
)
 
$
44.1

 
$
(1.9
)
 
$
(78.2
)

(1) As a result of the KWE Transaction the Company was required to record inception to date accumulated other comprehensive losses of $358.4 million associated with noncontrolling interest holders of KWE. This amount has been excluded from the beginning and ending balances of the table to give a more appropriate depiction of the Company's accumulated other comprehensive loss activity. If this amount is included, the accumulated other comprehensive loss would be $436.6 million and $441.5 million as of September 30, 2019 and December 31, 2018, respectively.
The local currencies for the Company's interests in foreign operations include the euro and the British pound sterling. The related amounts on Kennedy Wilson'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. Unrealized hedge gains were driven by hedges that KWE holds on its euro denominated investments which includes the $7.4 million gain on the KWE Notes as discussed in Note 9.
In order to manage currency fluctuations, Kennedy Wilson entered into currency derivative contracts to manage its exposure to currency fluctuations between its functional currency (U.S. dollar) and the functional currency (euro and the British pound) of certain of its wholly-owned and consolidated subsidiaries. KWE has also entered into currency derivative contracts to manage its exposure to euro to British pound currency fluctuations. See Note 5 for a more detailed discussion of Kennedy Wilson's currency derivative contracts.
Noncontrolling Interests
Noncontrolling interests consist of the ownership interests of noncontrolling shareholders in consolidated subsidiaries and are presented separately on Kennedy Wilson's balance sheet. As of September 30, 2019 and December 31, 2018, Kennedy Wilson had noncontrolling interest of $40.6 million and $184.5 million, respectively.   The decrease in noncontrolling interest for the year is primarily due to the sale of the Ritz Carlton hotel in Lake Tahoe, the distribution to noncontrolling interest holders in Capital Dock from the mortgage proceeds from the refinancing completed during the first quarter 2019 and the deconsolidation of State Street and Capital Dock investments in the second quarter 2019.