ANNUAL REPORT 2023 KENNEDY WILSON
ANNUAL REPORT 2023 / 2
Kennedy Wilson grew out of a small office in Santa Monica, California
built on trust and a people-first attitude. Relationships are still at
the heart of our global real estate investment company as we have
grown to $25B of real estate assets under management (AUM). It is
those relationships and mutual trust that enable us to empower the
communities we activate and to design high-quality places for people
to live, create, and flourish.
Today, we are a leading global real estate investment company. We
own, operate, and invest in real estate through our balance sheet
and through our investment management platform across the
United States, United Kingdom, and Ireland. We focus on multifamily
and office properties as well as industrial and debt investments in
our investment management business.
450
Global Real Estate
Investments
38,000
Multifamily
Units
25M
Industrial, Retail,
and Office
Square Feet
$25B
Assets Under
Management
See page 70 for certain definitions and reconciliations of non-GAAP measures to the most directly comparable
GAAP measures. Information shown as of December 31, 2023, except where indicated.
The Oxbow
Bozeman, Montana
On the cover:
Anacapa Canyon,
The Grange
Camarillo, California
Dublin, Ireland
3 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 4
William J. McMorrow
Chairman and Chief Executive Officer
Dear Fellow Shareholders,
One of Kennedy Wilson’s strengths over the past three decades has been our
ability to successfully navigate and adapt to changing economic cycles, enabling
us to thrive during periods of market dislocation. Beginning with the global
shutdown in March 2020, these past four years have come with many challenges
including a health crisis, remote working, the shutdown of economies, supply
chain issues, significant increases in the money supply by global governments
resulting in inflation hitting a 40-year high, and interest rates reaching their highest
level in 22 years as world leaders attempt to slow inflation. In the face of these
headwinds, the talented Kennedy Wilson team adapted and I am incredibly proud
of all that we have accomplished. The challenges we have overcome have made
us better real estate investors as we look to optimize our property operations
and grow our investment management business, which will allow us to sponsor
projects that require minimal capital from Kennedy Wilson.
2023 was another strong year of progress for Kennedy Wilson as we emphasized
rigorous asset management at our owned assets, tight capital allocation at our
properties, and implemented expense reduction initiatives at both the corporate
and property level while continuing to position ourselves towards future growth.
In the year, we grew our investment management platform and fee-bearing
capital by 42% to a record $8.4 billion and grew Baseline EBITDA by 8%. We also
hit a record $25 billion in AUM, which has grown by $7 billion since 2019, and
completed the largest transaction in our history with the discounted, off-market
acquisition of a $4.1 billion construction loan portfolio, in which Kennedy Wilson
had a 5% ownership. This is a great example of how we are fueling the growth of
our investment management platform in a capital-light manner. With the current
banking environment in the U.S., there are very few active construction lending
platforms, so we are excited about the growth prospects within this business line.
2023
PERFORMANCE
HIGHLIGHTS
$25B
RECORD LEVEL
OF ASSETS UNDER
MANAGEMENT
94.1%
MULTIFAMILY
OCCUPANCY
(STABILIZED)
8%1
YOY BASELINE
EBITDA GROWTH
TO $393M
+42%
2023 FEE-
BEARING CAPITAL
GROWTH
$7B
LOAN
COMMITMENTS
$4.1B
OFF-MARKET
LOAN PORTFOLIO
ACQUISITION
RESULTING IN THE
LARGEST SINGLE
TRANSACTION
IN KENNEDY
WILSON’S HISTORY
1 See reconciliation of Baseline EBITDA on page 138.
The Clara
Boise, Idaho
5 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 6
The recently
completed residential
phase at Coopers
Cross includes 471
apartments as well as
resident amenity and
retail space anchored
by a new public park
in the North Docks.
Coopers Cross
Dublin, Ireland
Our global multifamily portfolio of over 38,000 units also continued to expand
through 2023, with revenue at the 100% level reaching nearly $700 million and
net operating income of $450 million. Kennedy Wilson’s share of that revenue and
income is approximately 60%. During the last five years, we have grown our portfolio
by 10,000 units, including the delivery of 4,500 newly built multifamily units, while
also realizing gains through the disposition of 5,700 units. Today, we are ideally
positioned in our favored fundamentally strong markets including the Mountain
West, the Pacific Northwest, and Dublin, Ireland.
Our People and Our Relationships
The driving force behind our company’s success lies in
our exceptionally skilled team, who work hard to enhance
cash flow across our properties and bolster our investment
management fees. Their talent is the cornerstone of
our long-standing achievements. In 2023, we realigned
our management team to help improve our operations
and communications, enhance our ability to share new
information, and react to new opportunities. Matt Windisch,
who has been with me at Kennedy Wilson for the past 18
years, was promoted to President in 2023 and Mike Pegler,
former Head of UK, stepped into the role of President of
Kennedy Wilson Europe after 10 years with the company.
They are both doing a tremendous job in their new roles
and the flow of information internally has never been better.
Matt Windisch
President
Matt Windisch, who has been with me at Kennedy Wilson for the past
18 years, was promoted to President in 2023 and Mike Pegler, former
Head of UK, stepped into the role of President of Kennedy Wilson
Europe after 10 years with the company.
We are focused on building relationships both inside and outside the company
that support sharing ideas and information, which in the end allow for better
management of our existing assets while creating new opportunities. Within Kennedy
Wilson, Regina Finnegan has played an important role developing the team, fostering
the growth of younger employees, and strengthening networks in the company to
support our initiatives and goals. Looking externally, our deep relationships with
property owners, investors, brokers, and lenders are also key to our growth, as are
the long-term partnerships we have created with institutional global investors,
including the world’s largest sovereign wealth funds and insurance companies. These
partnerships have supported our investment management business and enabled us
to transact on $34 billion in acquisitions and $19 billion in dispositions since going
public in 2009. The majority of these acquisitions were sourced off-market. Kennedy
Wilson is viewed as a very reliable counterpart by sellers, which has been a major
factor in our growth from $57,000 of capital in 1988 to where we are today.
30
25
20
15
10
5
0
10
8
6
4
2
0
30
25
20
15
10
5
0
10
8
6
4
2
0
7 / KENNEDY WILSON
ANNUAL REPORT 2023
Geo
Shoreline, Washington
Solace at Rainier Ridge
Suburban Seattle, Washington
Total Assets Since Going Public
dollars in billions
AUM Since Going Public
dollars in billions
$10
$8
$6
$4
$2
$0
$10
$8
$6
$4
$2
$0
$0.3
2009
$7.7
$7.7
25x
$0.3
2009
2023
2023
$30
$25
$20
$15
$10
$5
$0
$30
$25
$20
$15
$10
$6
$5
$0
2009
$25
$25
4x
$6
2009
2023
2023
2024 and Beyond – A Simpler Kennedy Wilson
Our strategy going forward is centered around creating a much simpler Kennedy
Wilson business model, achieved in-part through the execution of the following
initiatives:
First, we look to focus on growing our “capital-light” investment management
platforms, which offer very attractive returns to Kennedy Wilson. In 2023, we
generated $62 million in total investment management fees, versus $27 million in
2019, representing an annual growth rate of 23%. Our goal is to continue growing
our fees at a similar rate going forward, with our ownership expected to be
between 5%-10% with a focus on credit, multifamily properties, and logistics assets.
$10
Second, as we previously announced in December 2023,
we have a target of generating up to $750 million of cash
through the sale of non-core assets, with proceeds being
used to repay unsecured debt and fund co-investment
opportunities in our investment management business.
$10
Through the first quarter of 2024, we completed
approximately half of our planned asset sales and
anticipate completing the remainder over the next year.
$8
Third, we will aim to deploy significant new third-
party capital primarily into multifamily equity and debt
opportunities and logistics acquisitions as we believe
$6
there are attractive opportunities in these sectors on
the horizon.
$5.0
$8
$6
$5.9
$5.0
$8.4
$8.4
$5.9
Kurt Zech
President of Multifamily
Group
10
10
8
6
4
2
0
8
6
4
2
0
The Cornerstone
Dublin, Ireland
The Grange
Dublin, Ireland
$4
$3.9
$4
Our AUM growth will be driven by our core business
focused on three key main areas:
$2.2
$3.9
$3.0
$3.0
$2.2
$0
$2
$2
• Multifamily – Under the leadership of Kurt Zech in
the U.S. and Jason Byers in Ireland, our multifamily
portfolio produces $270 million in estimated annual
NOI to Kennedy Wilson, representing 55% of our
2019
2021
stabilized portfolio. Our multifamily portfolio has
grown to approximately 38,000 units largely located in
suburban markets across the Western U.S. and Dublin.
2020
2020
2019
2018
2018
$0
2022
2021
2023
2022
2023
Mike Pegler
President, Kennedy Wilson
Europe
10
10
8
6
4
2
0
8
6
4
2
0
Construction Loan Projects
Aspire A&M
College Station, Texas
The Accolade
Seattle, Washington
Our real estate debt platform
has become our fastest growing
business unit, contributing to a
record level of fee-bearing capital
for Kennedy Wilson.
Kennedy Wilson’s Current Construction Loan Portfolio Totals $4 Billion
Bozeman, MT
One Investment
Salt Lake City, UT
One Investment
Colorado Springs, CO
One Investment
Denver, CO
One Investment
Bloomington, IN
One Investment
Chicago, IL
Three Investments
Old Tappan / Hackensack, NJ
Two Investments
New York, NY
Three Investments
Seattle, WA
Two Investments
Sacramento, CA
One Investment
Lathrop, CA
One Investment
San Francisco, CA
Three Investments
San Jose, CA
Two Investments
Santa Cruz, CA
One Investment
Los Angeles, CA
Six Investments
Orange County, CA
Two Investments
Las Vegas, NV
Two Investments
San Diego, CA
Four Investments
Phoenix, AZ
Five Investments
Austin, TX
One Investment
Tampa/Sarasota, FL
Two Investments
San Marcos, TX
One Investment
Dallas, TX
Five Investments
Philadelphia, PA
Two Investments
Washington, D.C.
Six Investments
Charlotte, NC
One Investment
Atlanta, GA
One Investment
Statesboro, GA
One Investment
Gainesville, FL
Two Investments
Orlando, FL
Two Investments
Boca Raton, FL
One Investment
Fort Lauderdale, FL
Two Investments
Miami, FL
Three Investments
KENNEDY WILSON
ANNUAL REPORT 2023 / 10
Average monthly rents are approximately $1,900, which is part of the reason we
are achieving 94% occupancy globally. Our multifamily development pipeline of
4,000 units is nearing completion with many properties currently in lease-up. Once
stabilized, these units are expected to add $43 million to estimated annual NOI by
the end of 2025. Kennedy Wilson has become a major player in the rental housing
business through our equity and debt investments.
• Construction Lending for Multifamily and Student Housing – Our real estate
debt platform has become our fastest growing business unit, contributing to
a record level of fee-bearing capital for Kennedy Wilson. Following the off-
market, $4.1 billion acquisition of our new construction loan portfolio from a
regional bank in 2023, our credit business is currently focused on originating
loans secured by high-quality multifamily and student housing properties
across Kennedy Wilson’s key Western U.S. markets as well as new regions
across the southern and eastern United States. We started our debt business
in May 2020 as a bridge lending platform, and over these few short years we
have grown it to a total of $7 billion in loan commitments.
• Industrial – We are excited about the opportunity for growth in our industrial
portfolio, which today totals over 11 million square feet across 115 properties. Our
industrial portfolio is 99% occupied. We have seen strong demand from our existing
tenants to remain at our properties, with many engaging in early discussions to
extend their leases ahead of expiration due to limited space availability. In-place
rents are approximately 25% below market, providing an opportunity to grow the
income this year and beyond. In 2023, we achieved rent increases in excess of 50%
on our renewals, well ahead of business plan.
Underpinning our global portfolio strategy is our capital recycling program where
we are looking to generate up to $750 million in cash to Kennedy Wilson through
the sale of non-core assets and assets where we can harvest significant value
following the completion of our business plans. Recently, we completed the sales
of three wholly owned properties: The Shelbourne hotel in Dublin, Ireland; a 177,000
square-foot building within the three-building 90 East office campus in Issaquah,
Washington; and a retail asset in the United Kingdom. These three properties sold
for $335 million, generating net cash to Kennedy Wilson of $238 million after the
repayment of property debt totaling $89 million, and generated GAAP gains on sale
of approximately $120 million.
The completion of these dispositions has strengthened our liquidity and will
enable us to recycle capital into new joint venture multifamily opportunities, repay
unsecured debt, fund stock repurchases, and provide capital to complete our
multifamily developments.
Multifamily Snapshot
We believe renter fundamentals remain healthy in our largest sector, multifamily.
The high cost of homeownership coupled with continued household formation
will drive further demand for rental housing, while a noticeable decline in
construction starts should moderate the supply side. In early 2024, we have seen
11 / KENNEDY WILSON
ANNUAL REPORT 2023
Clancy Quay
Dublin, Ireland
renewal leasing spreads and asking rents continuing to improve from year-end.
The growing markets where we invest will continue to draw an influx of residents
seeking a more affordable, higher quality of life. As an example, our Mountain West
multifamily portfolio’s average rents are priced at an attractive $1,600.
In Dublin, our portfolio remains close to full at 97% occupancy at year-end. Our
leasing at new developments continues to perform ahead of our business plans
because of the significant structural undersupply of rental housing in Dublin and
the growth of the Irish economy. Our multifamily portfolio – particularly our newly
developed Coopers Cross, The Grange, and The Cornerstone projects – are also
distinguished as some of the most tech-forward, highly amenitized offerings in the
market with impressive ESG credentials.
A Year of Growth for the Investment Management Platform
Our investment management platform exceeded expectations in 2023 as fee-
bearing capital grew to a record $8.4 billion, driven by a $2.4 billion increase
in our credit platform as well as growth in our logistics strategies. Investment
management fees totaled $62 million for the year, an increase of 38% from
2022 and up 75% from 2021.
$8.4B
RECORD LEVEL OF
FEE-BEARING CAPITAL
+42%
2023 FEE-BEARING
CAPITAL GROWTH
$10
Fee-Bearing Capital
dollars in billions
31%
CAGR
$8.4
$8
$6
$4
$2
$0
$5.9
$5.0
$3.9
$3.0
$2.2
2018
2019
2020
2021
2022
2023
10
8
6
4
2
0
We have an established group of well-capitalized, institutional partners, including
large global investors, insurance companies, and sovereign wealth funds, who have
a long track record of successfully investing with Kennedy Wilson. Our $5.2 billion
in incremental, non-discretionary fee-bearing capital from announced platforms is
available for investment and provides a solid runway of sustained growth for our
investment management platform.
Credit
Today, our credit platform represents 56% of our total fee-bearing capital and is a
perfect example of Kennedy Wilson’s ability to target opportunity through market
dislocation. At this time last year, U.S. regional banks were facing a crisis due to bank
withdrawals fueled mainly by the ability to move money instantaneously to high-
rate treasury bills and to the major banks. These 4,000+ regional banks were forced
to scramble for liquidity and either sell assets as soon as possible or borrow from
the Federal Reserve’s discount window.
That market dynamic, coupled with Kennedy Wilson’s
deep industry relationships, led to our ability to buy
a very high-quality construction loan portfolio at a
meaningful discount through an off-market transaction
in 2023. In addition to the $4.1 billion of loans that are
weighted heavily to multifamily and student housing,
the most significant aspect of the transaction was
the group of 38 very experienced people who joined
Kennedy Wilson from the bank under the leadership
of Tom Whitesell. The group integrated seamlessly last
summer and has proven to be a perfect cultural fit with
the Kennedy Wilson team. They hit the ground running.
Tom Whitesell
Head of Debt Investment
10
8
6
4
2
0
13 / KENNEDY WILSON
ANNUAL REPORT 2023
Royal Mail
Peterborough, UK
Mosaic
North Las Vegas, Nevada
Since the purchase of the portfolio in July 2023, the group has closed $1
billion in new construction loans, with an additional $1 billion in closing,
with extremely high-quality borrowers at an average size of $80 million and
a loan to cost of 55%. The total debt platform now has $11 billion in capital
commitments, compared with the $2 billion in commitments we had in
2020, and approximately $4 billion of dry powder.
We have two million square feet of industrial in the U.S., where our
focus has been on small and mid-bay properties with a significant
embedded loss-to-lease.
Industrial
Our global logistics portfolio is another important platform within our
investment management business, and growing our industrial platform with
our strategic partners continues to be a major focus for us in 2024. In 2023, our
portfolio totaled 115 assets with a total AUM of $2 billion. We have two million
square feet of industrial in the U.S., where our focus has been on small and
mid-bay properties with a significant embedded loss-to-lease. Fundamentals
for our European industrial portfolio, totaling over nine million square feet,
remain healthy with undersupply in certain markets and continued strength
in demand for well-located properties. Our European joint venture had a
particularly strong year, growing by 10% in 2023 to $1.3 billion in AUM. We
expect to add to this platform in 2024.
Vaughan Park
Tipton, UK
2023 Global
Logistics Portfolio
115
Assets
$2B
AUM
11M+
Square feet
DHL
Telford, UK
15 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 16
Development Pipeline Comes to Completion
We continue to make great progress in completing and stabilizing newly
developed multifamily assets and following through on the long-term strategy
we launched over a decade ago that focuses on developing land adjacent to
properties we already own that have proven income streams. Over that time, we
have built talented in-house development teams led by Mike Eadie in the U.S.
and Peter McKenna in Europe, who oversee incredibly talented teams that are
delivering best-in-class, tech-forward, sustainable developments where people
want to reside. Our developments play a key role in driving Kennedy Wilson’s NOI
growth, and in the future will play an important role in growing our fee income
through construction management of new projects where we have contributed
limited capital.
In 2023, we completed three residential developments in Dublin, Ireland totaling
approximately 800 units – Coopers Cross, The Grange, and Sandford Lodge –
that build on our history as one of Ireland’s most active real estate developers.
We started from scratch in 2011. Since the inception of our business in Europe,
we have completed $2.5 billion of ground-up construction, delivering much-
needed residential space, Grade-A office buildings with market-leading ESG
credentials, and public amenities to the Irish market. All of our developments
have a strong focus on placemaking and are thoughtfully designed to create
connections and improve the well-being of residents and office occupiers.
Encompassing nearly an entire city block in Dublin’s North Docks, the six-
acre Coopers Cross mixed-use development is revitalizing one of the largest
undeveloped sites in Dublin’s Docklands, forming part of the Strategic
Development Zone designed to facilitate the regeneration of the area. The recently
completed residential phase at Coopers Cross includes 471 apartments as well
as resident amenity and retail space anchored by a new public park in the North
Docks. At The Grange, we delivered 287 new apartments, resident amenity space,
and a dedicated day care center, bringing our total holding at the Stillorgan project
to 535 units. 2023 also marked the finish line for an expansion for Sandford Lodge
Apartments, where 36 new apartment and duplex units with large private open
space were completed just 2.5 kilometers from St Stephen’s Green.
Our U.S. development team reached the finish line on the redevelopment of Kona
Village on the Big Island of Hawaii, which concluded a seven-year effort to bring
the beloved resort back to life and set a new bar for sustainability across the
hospitality sector. The historic retreat focuses heavily on the cultural influences of
the area, with state-of-the-art technology to reduce our environmental footprint,
including the use of sustainably derived materials for construction, energy efficient
technology, and on-site reverse osmosis and wastewater treatment plants. Kona
Village is also entirely solar powered with battery storage, making it one of the
largest privately owned microgrids in Hawaii.
Sandford Lodge
Dublin, Ireland
100%
SOLAR POWERED
Kona Village set a new
bar for sustainability
across the hospitality
sector. The resort is
entirely solar powered
with battery storage,
making it one of
the largest privately
owned microgrids
in Hawaii.
Kona Village
Kona Coast, Hawaii Island
17 / KENNEDY WILSON
ANNUAL REPORT 2023
Vintage at Sanctuary
Reno, Nevada
The U.S. development team is also in the final phases of completing several
new multifamily projects throughout California and the Mountain West. The
first residents recently began moving into their homes at Anacapa Canyon, a
new master-planned community in Camarillo, California with 310 market rate
apartments, 109 for-sale homes, 170 income-restricted apartments for seniors,
and community serving amenities at the western edge of the Santa Monica
Mountains. The newly constructed community builds on the unique public-
private partnership we created with California State University Channel Islands
(CSUCI) that began with our acquisition of the adjacent 386-unit University Glen
neighborhood a decade ago. When fully leased, these two phases will be our
largest NOI producer in the U.S. with an estimated annual NOI in excess of $15
million from both the 700 market rate units and the 170 senior affordable units.
Our newly developed communities routinely have long wait lists of
potential renters attracted to the high-quality facilities coupled with
the unique community services Vintage Housing provides, and these
projects lease up almost immediately.
Including Anacapa Canyon, we are in the final stages of developing over 2,800
units in the Western U.S. An additional 1,600 units are under construction across
the Western U.S. through Vintage Housing, our growing affordable and senior-
housing joint venture led by our partners Mike Gancar and Ryan Patterson.
The Vintage Housing partnership is a critical component of our social impact
investment strategy and a proven method for us to generate returns while
adding to the available stock of homes for lower-income families and seniors.
We have grown the platform from 5,500 units at acquisition to 12,000 units
(primarily through new construction) in just eight years since we first joined up
with the talented Vintage Housing team. The demand for affordable housing
remains extraordinary. Our newly developed communities routinely have long
wait lists of potential renters attracted to the high-quality facilities coupled
with the unique community services Vintage Housing provides, and these
projects lease up almost immediately. As we continue to see a significant lack of
affordable housing across the country, we are actively discussing opportunities
to continue growing our Vintage Housing portfolio.
Anacapa Canyon
Camarillo, California
The Oxbow
Bozeman, Montana
38° North
Santa Rosa, California
Dovetail
Meridian, Idaho
19 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 20
ESG Update
Managing our environmental impact and giving back to the communities where
we do business is a central tenet of our operations, and we do so through the
framework of our ESG program that is tailored to Kennedy Wilson’s unique business
model. Our developing ESG program, under the leadership of Peter Collins,
continues to be a driving force as we explore ways to reduce operational costs,
manage climate risk, reduce our carbon footprint, and add value to our properties
and to our corporate structure.
We continue to focus our philanthropic and volunteering efforts on tackling housing
affordability, supporting education and health initiatives through highly effective
non-profit organizations, and providing support to our country’s veterans, who
have sacrificed so much for us. This year, we donated approximately $2.4 million to
charitable causes and our employees contributed 611 hours of company sponsored
time volunteering across our offices globally.
Kona Village receives LEED Gold Certification
$2.4M
2023 DONATIONS
TO CHARITABLE
CAUSES
611
2023 COMPANY
SPONSORED
VOLUNTEER
HOURS
For more details on our
ESG initiatives, visit
esg.kennedywilson.com
Kennedy Wilson is the Main Sponsor of the Social
Entrepreneurs Ireland Impact Programme
Volunteer Day at the Los Angeles
Regional Food Bank
We are pleased that our efforts were recognized in a
2023 ranking released by Newsweek, the “Excellence
1000 Index”, which lists Kennedy Wilson among a
select group of companies that are at the forefront
of corporate social responsibility, upholding ethical
standards, and best business practices. The ranking
recognizes companies that display a commitment
to business and financial growth as well as broader
contributions to social responsibility and sustainability.
Newsweek’s “Excellence 1000 Index” lists Kennedy Wilson among a
select group of companies that are at the forefront of corporate social
responsibility, upholding ethical standards, and best business practices.
Thank You
Set against a backdrop of geopolitical and economic uncertainty, we are now
entering a period where we anticipate higher levels of real estate equity and debt
transactions that should bring new opportunities. In addition to our own balance
sheet, we are fortunate to have very well-capitalized strategic partners who can
move quickly as opportunities emerge. The current environment is a perfect match
for our successful 35-year track record of growth in periods of dislocation, as well
as our operational and underwriting expertise, and the ability to source transactions
off-market from our well-established global network. Our investment teams in
the U.S. and Europe are the best we have had at Kennedy Wilson and they are all
working together to find the next opportunities.
Our accomplishments over the last three decades are the result of the collective
efforts, vision, and support of so many. I want to express my sincere gratitude to
our employees for their commitment to our success and to our board members for
their leadership. I also want to thank our shareholders, lenders, and our partners
for their continued support in growing our business from a small company with
one office and 11 employees into a thriving global business with tremendous growth
prospects in the years ahead.
William J. McMorrow
Chairman and Chief Executive Officer
21 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 22
FINANCIAL REPORT 2023
The Elysian
Cork, Ireland
22 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 23
Financial Report
Table of Contents
23 Business
42 Management’s Discussion and Analysis of Financial Condition and Results of Operations
80 Report of Independent Registered Public Accounting Firm
84 Consolidated Balance Sheets
85 Consolidated Statements of Operations
86 Consolidated Statements of Comprehensive (Loss) Income
87 Consolidated Statements of Equity
90 Consolidated Statements of Cash Flows
92 Notes to Consolidated Financial Statements
141 Performance Graph
142 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
144 Forward-Looking Statements
Business
Company Overview
Kennedy Wilson is a global real estate investment company. We own, operate and develop high-
quality real estate across markets in the Western United States, the United Kingdom and
Ireland with the objective of generating long-term risk-adjusted returns for our shareholders and
partners. In addition to owning and managing real estate assets, we have a growing global debt
platform primarily focused on construction lending secured by high-quality multifamily and student
housing properties throughout the United States. As of December 31, 2023, our 259 employees,
managed a total of $24.5 billion of Real Estate Assets Under Management (“AUM”), which includes
37,644 multifamily units (including 3,824 units under lease up or in process of being developed),
10.9 million office square feet, 11.4 million industrial square feet and 3.0 million retail square feet
(including 2.3 million square feet under lease up or in process of being developed), and $1.8 billion
of development, residential and other. For the year ended December 31, 2023, the $22.8 billion
of operating properties within our AUM as of December 31, 2023 produced total revenue of
$1.8 billion (KW’s share of which was $736.0 million) compared to $20.5 billion of operating
properties as of December 31, 2022 with total revenue of $1.4 billion (KW’s share of which was
$706.0 million) during the same period in 2022. In addition, as of December 31, 2023, we held
interests in 101 real estate loans in our global debt platform, 85% of which have floating interest
rates (average interest rate of 9.4% per annum) and an unpaid principal balance of $4.9 billion (of
which our share was $263.0 million). Our global team, located primarily in offices throughout the
United States, the United Kingdom and Ireland, also managed the consummation of $283.2 million
of gross acquisitions and $2.3 billion of loan investments, which includes $2.1 billion relating to loans
acquired in our newly formed Construction Loan Portfolio, (KW’s ownership interest of 18% and 5%,
respectively) and $823.1 million of gross dispositions and $614.8 million of loan repayments (KW’s
ownership interest of 69% and 6%, respectively) during the year ended December 31, 2023.
Our global real estate portfolio is primarily comprised of multifamily communities (57%), commercial
properties (35%), loans (6%) and hotel and other properties (2%) based on our share of net operating
income (“NOI”). Geographically, we focus on the Western United States (62%), the United Kingdom
(13%) and Ireland (24%). The Mountain West region is our largest global region and includes
our investments in Idaho, Utah, Nevada, Arizona, and New Mexico. We also invest in the Pacific
Northwest, including the state of Washington, and Northern and Southern California.
Our investment activities in our Consolidated Portfolio (as defined below) involve ownership of
multifamily units and other real estate asset types in the markets described above. Our ownership
interests in such consolidated properties make up our Consolidated Portfolio (“Consolidated
Portfolio”) business segment as discussed in detail throughout this report.
In addition to investing our shareholder’s capital, we invest capital on behalf of our partners in real
estate and real estate related loans through our Co-Investment Portfolio (“Co-Investment Portfolio”).
This fee-bearing capital represents total third-party committed or invested capital that we manage
in our joint ventures and commingled funds that entitle us to earn fees, including, without limitation,
asset management fees, construction management fees, and/or acquisition and disposition fees.
As of December 31, 2023, our fee-bearing capital was $8.4 billion, which increased $2.5 billion,
or 42.4%, in 2023. During the year ended December 31, 2023, fees recorded through revenues
were $61.9 million. In our Co-Investment Portfolio, we are also eligible to earn performance
allocations (amounts that are allocated to us on co-investments we manage based on the cumulative
24 / KENNEDY WILSON
Business (continued)
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 25
performance of the underlying investment). During the year ended December 31, 2023, we recorded
a $64.3 million decrease in the accrual (non-cash) for performance allocations primarily related to
the fair value decreases. Please see “Fair Value Investments” below for a discussion of our assets held
at estimated fair value and our methodology with respect to the same. We generally invest our own
capital alongside our equity partners in these joint ventures and commingled funds that we manage.
As of December 31, 2023, the following key metrics of our Consolidated and Co-Investment
Portfolio are as follows:
AUM (billions)
Multifamily units–market rate
Multifamily units–affordable
Office square feet (millions)
Industrial square feet (millions)
Retail square feet (millions)
Hotels
Real estate debt investments–100% (billions)
Real estate debt investments–KW Share (millions)
Consolidated
Co-Investments
$
$
$
10.7
10,192
—
4.4
—
1.5
1
—
—
$
$
$
13.9
15,481
11,971
6.5
11.4
1.5
1
4.9
263.0
In our Co-Investment Portfolio, 93% of our carrying value is accounted for at fair value. Our interests
in such joint ventures and commingled funds and the fees that we earn from such vehicles make up
our Co-Investment Portfolio segment as discussed in detail throughout this report.
In addition to our income-producing real estate, we also engage in development, redevelopment and
value add initiatives through which we enhance cash flows or reposition assets to increase value.
Our total share of development project costs with respect to these investments are estimated at
$95.0 million over the next two years. These costs are generally financed by cash from our balance
sheet, capital provided by partners (if applicable), cash flows from investment and construction
loans. Cost overrun risks are reduced by detailed architectural plans, guaranteed price contracts and
supervision by expert Company executives and personnel. When completed, the construction loans
are generally replaced by long-term mortgage financing. See additional detail in the section titled
Development and Redevelopment below.
Investment Approach
The following is our investment approach:
• Identify countries and markets with an attractive investment landscape
• Establish operating platforms in our target markets
• Develop local intelligence and create long-lasting relationships, primarily with financial institutions
• Leverage relationships and local knowledge to drive proprietary investment opportunities with
a focus on off-market transactions that we expect will result in above average cash flows and
returns over the long term
• Acquire high quality assets, either on our own or with strategic partners
• Reposition assets to enhance cash flows post-acquisition
• Explore development opportunities on underutilized portions of assets, or acquire development
assets that fit within our overall investment strategy
• Continuously evaluate and selectively harvest asset and entity value through strategic
realizations using both the public and private markets
The table below highlights some of the Company’s key metrics over the past five years:
Year Ended December 31,
($ in millions, except fee bearing capital which $ in billions)
2023
2022
2021
2020
2019
Revenue
Net (loss) income to Kennedy-Wilson Holdings Inc.
common shareholders
Basic (loss) income per share
Adjusted EBITDA(1)
% change
Adjusted Net (Loss) Income(1)
Adjusted Net (Loss) Income annual increase (decrease)
Non-cash fair value (losses) gains
Non-cash performance allocations
Consolidated NOI(1)
% change
JV NOI(1)
% change
Fee-bearing capital
% change
AUM
% change
$ 562.6
$ 540.0
$ 453.6
$ 454.0
$ 569.7
(341.8)
(2.46)
189.8
(67.9)%
(151.3)
(157.1)%
(229.3)
(64.3)
274.3
(6.8)%
168.3
6.8 %
8.4
42.4 %
24.5
6.5 %
64.8
0.47
591.5
(36.3)%
264.9
(48.0)%
114.6
(21.1)
294.2
15.0 %
157.6
26.7 %
5.9
18.0 %
23.0
6.5 %
313.2
2.26
927.9
52.6 %
509.0
65.9 %
213.5
117.9
255.8
(2.5)%
124.4
21.4 %
5.0
28.2 %
21.6
22.7 %
92.9
0.66
608.0
(16.5)%
306.9
(30.6)%
47.2
2.7
262.3
(14.1)%
102.5
31.7 %
3.9
30.0 %
17.6
(2.8)%
224.1
1.60
728.1
— %
442.5
— %
64.7
36.3
305.2
— %
77.8
— %
3.0
— %
18.1
— %
(1) Please refer to “Certain Non-GAAP Measures and Reconciliations” for a reconciliation of certain non-GAAP items to U.S. GAAP.
The table below highlights some of the Company’s balance sheet metrics over the past five years:
(In millions)
Balance sheet data:
Cash and cash equivalents
Total assets
Mortgage debt
KW unsecured debt
KWE unsecured bonds
Kennedy Wilson equity
Noncontrolling interests
Total equity
Common shares outstanding
2023
2022
2021
2020
2019
As of December 31,
$ 313.7
7,712.1
2,840.9
1,934.3
522.8
1,755.1
43.3
1,798.4
138.7
$ 439.3
8,271.8
3,018.0
2,062.6
506.4
1,964.0
46.4
2,010.4
137.8
$ 524.8
7,876.5
2,959.8
1,852.3
622.8
1,777.6
26.3
1,803.9
138.0
$ 965.1
7,329.0
2,589.8
1,332.2
1,172.5
1,644.5
28.2
1,672.7
141.4
$ 573.9
7,304.5
2,641.0
1,131.7
1,274.2
1,678.7
40.5
1,719.2
151.6
The following table shows the historical U.S. federal income tax treatment of the Company’s
common stock dividend for the years ended December 31, 2023 through 2019:
Taxable Dividend
Non-Taxable Return of Capital
Total
December 31,
2023
2022
2021
2020
2019
— %
100.00 %
100.00 %
37.81 %
62.19 %
100.00 %
— %
100.00 %
100.00 %
27.14 %
72.86 %
100.00 %
10.53 %
89.47 %
100.00 %
26 / KENNEDY WILSON
Business (continued)
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 27
Business Segments
Our operations are defined by two primary business segments: our consolidated investment portfolio
(the “Consolidated Portfolio”) and our co-investment portfolio (the “Co-Investment Portfolio”)
• Our Consolidated Portfolio consists of the investments in real estate and real estate-related
assets that we have made and consolidate on our balance sheet. We typically wholly-own the
assets in our Consolidated Portfolio.
• Our Co-Investment Portfolio consists of (i) the co-investments in real estate and real estate-
related assets, including loans secured by real estate, that we have made through the
commingled funds and joint ventures that we manage; (ii) fees (including, without limitation,
asset management fees, construction management fees, and/or acquisition and disposition
fees); and (iii) performance allocations that we earn on our fee bearing capital. We typically
have a 5% to 50% ownership interest in the assets in our Co-Investment Portfolio. We have a
weighted average ownership of 40% as of December 31, 2023.
In addition to our two primary business segments, our Corporate segment includes, among other
things, our corporate overhead and our auction group.
Consolidated Portfolio
Our Consolidated Portfolio is a permanent capital vehicle focused on maximizing property cash
flow. These assets are primarily wholly-owned and tend to have longer hold periods and we target
investments with accretive asset management opportunities.
The non-GAAP table below represents a summarized balance sheet of our Consolidated Portfolio,
which is held at historical depreciated cost as of December 31, 2023 and 2022. This table does not
include amounts from our corporate segment such as corporate cash and the KWI Notes.
($ in millions)
Cash and cash equivalents(1)
Real estate and acquired in place lease values
Accounts receivable and other assets, net
Total Assets
Accounts payable, accrued expenses and other liabilities
Mortgage debt
KWE unsecured bonds
Total Liabilities
Equity
December 31,
2023
December 31,
2022
$
$
$
184.2
4,837.3
146.1
5,167.6
$
154.3
2,840.9
522.8
3,518.0
$
1,649.6
$
316.7
5,188.1
135.1
5,639.9
156.6
3,018.0
506.4
3,681.0
1,958.9
(1) Excludes $129.5 million and $122.5 million as of December 31, 2023 and 2022, respectively, of corporate non-property level cash.
Co-Investment Portfolio
Our Co-Investment Portfolio consists of (i) the co-investments in real estate and real estate-
related assets, including loans secured by real estate, that we have made through the commingled
funds, joint ventures and platforms that we manage; (ii) fees (including, without limitation, asset
management fees, construction management fees, and/or acquisition and disposition fees); and
(iii) performance allocations that we earn on our fee bearing capital. We utilize different platforms in
the Co-Investment Portfolio segment depending on the asset and risk return profiles.
The table below represents the carrying value of our Co-Investment Portfolio balance sheet which
is primarily at fair value (approximately 93% and 88%), at our share of the underlying investments
as of December 31, 2023 and 2022. The Co-Investment Portfolio consists of our unconsolidated
investments as well as our loan purchases and originations.
($ in millions)
Cash and cash equivalents
Real estate and acquired in place lease values
Loan purchases and originations
Accounts receivable and other assets, net
Total Assets
Accounts payable, accrued expenses and other liabilities
Mortgage debt
Total Liabilities
Equity
December 31,
2023
December 31,
2022
$
$
94.8
4,619.7
259.3
227.3
86.9
4,319.1
158.7
298.0
$
5,201.1
$
4,862.7
125.0
2,759.8
2,884.8
88.0
2,387.2
2,475.2
$
2,316.3
$
2,387.5
Separate accounts
We have several equity partners whereby we act as the general partner and receive investment
management fees including acquisition, disposition, financing, construction management and other
fees. We also can earn performance allocations if investments exceed certain return hurdles. In
addition to acting as the asset manager and general partner of those joint ventures, we are also a co-
investor in these investments. Our separate account platforms have defined investment parameters
such as asset types, leverage and return profiles and expected hold periods. As of December 31, 2023,
our weighted average ownership interest in the various joint ventures that we manage was 45%.
Commingled funds
We currently have four closed-end funds that we manage and through which we receive investment
management fees and potentially performance allocations. We focus on sourcing investors in the
U.S., Europe, Japan and Middle East and target investments in the U.S. and Europe with respect to
our commingled funds. Each of our funds have, among other things, defined investment guidelines,
investment hold periods and target returns. Currently our U.S.-based funds focus on value-add
properties that have an expected hold period of 5 to 7 years. Our European fund focuses on value
add commercial properties in the United Kingdom, Ireland and Spain that also have expected hold
periods of 5 to 7 years. As of December 31, 2023, our weighted average ownership interest in the
commingled funds that we manage was 13%.
Vintage Housing Holdings (“VHH”)
Through our VHH partnership, we acquire and develop income and age restricted properties. See a
detailed discussion of this business in the Multifamily section below.
28 / KENNEDY WILSON
Business (continued)
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 29
Investment Types
The following are the product types we invest in through our Consolidated Portfolio and Co-
Investment Portfolio segments:
Multifamily
We pursue multifamily acquisition opportunities where we can unlock value through a myriad
of strategies, including institutional management, asset rehabilitation, repositioning and
recapitalization. We focus primarily on apartments in supply-constrained, infill markets.
As of December 31, 2023, we held investments in 149 multifamily assets that include 10,192
consolidated market rate multifamily apartment units, 15,481 market rate units within our Co-
Investment Portfolio and 11,971 affordable units in our VHH platform. The unit counts above
include units that are unstabilized and undergoing development. Our largest Western United States
multifamily regions are the Mountain West region (which includes our investments in Idaho, Utah,
Nevada, Arizona and New Mexico) and the Pacific Northwest (primarily the state of Washington).
The remainder of the Western United States portfolio is located in Northern and Southern California.
In Ireland we focus on Dublin city center and the suburbs of the city.
Our asset management strategy entails installing strong property management teams to drive
leasing activity and upkeep of the properties. We also seek to add amenities designed to promote
health and wellness, celebrate local and cultural events and enhance the lives of residents living
in our communities. We also incorporate spaces for rest and socialization across our global
multifamily portfolio, including clubhouses, fitness centers, business suites, outdoor play areas,
pools and dog parks.
Lastly, we utilize real-time market data and artificial intelligence-based applications to ensure we are
attaining current market rents.
Multifamily—Affordable Housing
Through our VHH platform we focus on affordable units based on income and in some cases age
restrictions. With homes reserved for residents that make 50% to 60% of the area’s median income,
VHH provides an affordable long-term solution for qualifying working families and active senior
citizens, coupled with modern amenities that are a hallmark of our traditional multifamily portfolio.
Fundamental to VHH’s success is a shared commitment to delivering quality affordable homes and
building communities that enrich residents’ lives, including providing programs such as social support
groups, after-school programs, transportation assistance, computer training, and wellness classes.
Our ownership interest in VHH is approximately 50%, and VHH acts as the general partner
(developer/asset manager) of 57 affordable housing projects totaling 11,971 units (including
11 investments held without a tax credit investor (“tax credit LPs”), and 46 investments held with a
tax credit limited partner) as of December 31, 2023. The VHH portfolio includes 10,367 operating
units and 1,604 units that are under development or lease up, as of December 31, 2023. When we
acquired our interest in VHH in 2015, the portfolio consisted of a total of 5,485 units. All of the VHH
platform’s units are included in our multifamily unit count discussed throughout this report.
With respect to the assets that are held with tax credit LPs, VHH generally sells 99.9% of the legal
ownership interest in the applicable asset to the tax credit LPs, in exchange for cash that is used to
build and/or rehabilitate the property. Although legal ownership interests in these assets are sold to
the tax credit LPs, VHH continues to receive a majority of the cash flow generated from these assets
through deferred developer fees and other fee arrangements and profit splits agreed to between
VHH and the tax credit LPs (a commonly used structure by peer companies with similar businesses).
This structure results in VHH maintaining on average 75% of the economic ownership interests in
the assets across the portfolio.
During the year ended December 31, 2023, we received $59.1 million of proceeds from VHH,
including $9.7 million from recurring monthly distributions, $3.2 million from paid developer fees at
conversion and $46.2 million from sales and refinancings.
Further, for properties where tax credits are sold to a third party, VHH typically utilizes tax-exempt
bond financing to help finance its partnership investments. Typically, VHH will seek a bridge to long-
term financing solution, whereby a floating interest rate loan is utilized during the construction and
lease-up period and then replaced substantially concurrently upon conversion or stabilization by a
long-term, fixed interest rate loan. The typical term for these loan facilities is 17 years.
We acquired our ownership interest in VHH in 2015 for approximately $80.0 million. As of
December 31, 2023, we have contributed an additional $157.9 million into VHH and have received
$353.5 million in cash distributions. VHH is an unconsolidated investment that we account for using
the fair value option which had a carrying value of $285.9 million as of December 31, 2023. Since we
acquired our ownership interests in VHH, we have recorded $320.0 million worth of fair value gains
on our investment in VHH, including $51.5 million during the year ended December 31, 2023.
The value of our investment in VHH is determined through several approaches including a discounted
cash flow analysis on a partnership-by-partnership basis that factors in the distinct economic
splits between VHH and its tax credit LPs (where applicable). This methodology assumes ordinary
distributions and future sale of the underlying property after the tax credit period has expired,
assuming, among other factors, an estimated average cap rate at sale from 5.65% to 7.50% with
discount rates ranging from 8.10% to 11.00%. Additionally, the value of our investment in VHH is
further supported through the application of multiples to VHH’s various streams of annual cash flows
using multiples for recurring free cash flow (ordinary distributions) and promote (paid developer fees)
and total cash flow from public company peers. During the year ended December 31, 2023, the
various valuation methodologies produced results that are were within 5% from each other.
Commercial
Our investment approach for office acquisitions differs across our various investment platforms.
For our Consolidated Portfolio, we have historically looked to invest in large high quality properties
with high replacement costs. In our separate account portfolios, our partners have certain
characteristics that factor into our investment decision, including, without limitation, location,
financing (unencumbered properties) or hold periods. In our commingled funds that we manage, we
typically look for opportunities that have a value-add component that can benefit from our asset
management expertise. We do not typically own high-rise buildings in city centers and instead look
to invest in mid-to-low rise buildings in areas adjacent to city centers and suburban markets. After
acquisition, the properties are generally repositioned to enhance market value.
Our industrial portfolio consists mainly of distribution centers located in the United Kingdom,
Ireland, Spain and Mountain West regions.
Our retail portfolio has different characteristics based on the geographic markets where the
properties are located. In Europe, we have a mixture of high street retail, suburban shopping centers
30 / KENNEDY WILSON
Business (continued)
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 31
and leisure assets which are mainly located in the United Kingdom, as well as in Dublin and Madrid.
In our Western United States retail portfolio, we have investments in shopping centers that are
generally grocery anchored.
As of December 31, 2023, we hold investments in 55 office properties totaling over 10.9 million
square feet, 115 industrial properties totaling 11.4 million square feet and 13 retail properties
totaling 3.0 million square feet, predominately in the United Kingdom and Ireland with additional
investments in the Pacific Northwest, Southern California, Spain and Italy. Our Consolidated
Portfolio held over 4.4 million square feet of office space and 1.5 million square feet of retail space.
Our Co-Investment Portfolio held 6.5 million square feet of office space, 11.4 million square feet of
industrial space and 1.5 million square feet of retail space.
Development and redevelopment
We have a number of development, redevelopment and entitlement projects that are underway
or in the planning stages. Unlike the residential projects that are held for sale and described in the
Residential and Other section below, these initiatives may ultimately result in income-producing
assets. As of December 31, 2023, we are actively developing 1,462 multifamily units and 415,000
commercial rentable square feet. If these projects are brought to completion, the Company’s
estimated share of the total capitalization of these projects would be approximately $613.0
million (approximately 91% of which has already been funded), which we expect would be funded
through our existing equity, third-party equity, project sales, tax credit financing and secured debt
financing. This represents total capital over the life of the projects and is not a representation of
peak capital and does not take into account any distributions over the course of the investment.
We and our equity partners are under no obligation to complete these projects and may dispose
of any such assets after adding value through the entitlement process. Over the last five years,
we and our partners have completed the development of 4,535 multifamily units (market rate and
affordable), 0.2 million square feet of office space (primarily in Dublin, Ireland) and the Kona Village
Resort located in Kona, Hawaii. Please also see the section titled “Liquidity and Capital Resources—
Development and redevelopment” in Management’s Discussion and Analysis of Financial Condition and
Results of Operations included in this report for additional detail on these investments.
Real Estate Debt Investment
We have a global debt platform with multiple partners that has a total current capacity of $10.8
billion with $6.7 billion currently invested or committed to future fundings as of December 31, 2023.
Our global debt platform, which includes partners across insurance and sovereign wealth funds,
invests across the entire real estate debt capital structure in the United States, United Kingdom and
Europe and targets loans secured by high-quality real estate located in such jurisdictions. In our role
as asset manager, we earn customary fees for managing the platform. Currently, our global debt
platform investments have been made without the use of any leverage and are invested through our
Co-Investment Portfolio.
The Construction Loan Portfolio, the largest portfolio in our global debt platform, consists of variable
rate loans that are predominantly secured by high-quality multifamily and student housing properties
with the remainder consisting of industrial, hotel, and life science assets throughout the United
States. Construction loans typically finance from 50% to 60% of the cost to construct the underlying
projects. The terms are generally three years with short-term, performance-based extension options.
Interest typically accrues into principal balance during the construction period, with principal and
interest being paid at maturity. The Bridge Loan Portfolio consists of predominantly variable rate
loans, with terms that are generally three-years with one or two 12 month extension options. Such
bridge loans are secured by multifamily, office, retail, industrial and hotel assets in the Western
United States or United Kingdom. We also invest in certain mezzanine loans that are fixed rate and
tend to have maturities of 5 to 10 years and are secured by multifamily or office properties in the
Western United States.
As of December 31, 2023, we held interests in 101 loans in our global debt platform, 85% of which
have floating interest rates, with collateral located in the Western United States and the United
Kingdom, with an average interest rate of 9.4% per annum and an unpaid principal balance (“UPB”)
of $4.9 billion (of which our share was a UPB of $263.0 million). Some of our loans contain additional
funding commitments that will increase our loan balances if they are utilized. As of December 31,
2023, our loans had unfulfilled capital commitments totaling $1.8 billion (our share of which was
$87.7 million). In addition to interest income (which includes origination, exit and extension fees), we
also earn customary asset management fees from our partners for managing these loan investments.
As a result of market conditions, we expect more opportunities to arise in acquiring loan portfolios
at a discount from their contractual balance due. We underwrite such loan portfolios based on
the value of the underlying real estate collateral. Due to the discounted purchase price for such
loans, we seek, and are generally able to, accomplish near term realization of the loan in a cash
settlement or by obtaining title to the property. Due to certain prevailing market conditions or
other circumstance on a case by case basis, we have and may stop accruing for interest income if
loans become non-performing and account for loans on a cash basis. In the event of a borrower
defaulting on its obligations under any loan agreement, we will explore all options of recouping our
loan investments including, without limitation, pursuing a foreclosure action to take control of the
underlying collateral securing the loans, although there is no guarantee or assurance that we will be
able to do so successfully. We have three loans out of the 101 loans in our global debt platform with
a $8.7 million carrying value at our share and net of any loan reserves that are not paying interest
current on a contractual basis. Per the terms of the applicable loan agreements, however, we have
implemented a full cash sweep of any cash flow that is generated from the collateral. We are no
longer accruing interest under these loans and accounting for them on a cash basis going forward.
Hotel
We originally acquired debt interests in each of the hotels in our Consolidated and Co-Investment
portfolios and were able to utilize these debt positions to take ownership of the real estate. These
properties are examples of how we are able to leverage different platforms within the Company to
add value to properties and shareholders.
As of December 31, 2023, we owned one consolidated operating hotel, The Shelbourne Hotel, with
265 hotel rooms located in Dublin, Ireland. In February 2024, we entered into an agreement to sell
The Shelbourne Hotel and expect the sale to be completed during the first quarter of 2024, however
there can be no assurance that the Company will be able to complete the transaction in part or at all.
Additionally, in our Co-Investment Portfolio, we have the five-star Rosewood flagged Kona Village
Resort that consists of 150 rooms in Kona, Hawaii, which opened in July 2023.
32 / KENNEDY WILSON
Business (continued)
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 33
Residential and Other
In certain cases, we may pursue for-sale housing acquisition opportunities, including land for
entitlements, finished lots, urban infill housing sites and partially finished and finished housing
projects. On certain income-producing acquisitions, there are adjacent land parcels for which we may
pursue entitlement activities or, in some cases, development or re-development opportunities.
This group also includes our investment in liquid non-real estate investments which include
investment funds that hold marketable securities and private equity investments.
As of December 31, 2023, we held 12 investments primarily comprised of 1,070 acres of land
located in Hawaii and the Western United States and are primarily invested through our Co-
Investment Portfolio. As of December 31, 2023, these investments had a Gross Asset Value of
$211.9 million. These investments are in various stages of completion, ranging from securing
the proper entitlements on land positions to sales of units/lots.
Fair Value Investments
The Company accounts for a number of unconsolidated investments under fair value accounting. The
accuracy of estimating fair value cannot be determined with precision and cannot be substantiated
by comparison to quoted prices in active markets and may not be realized in a current sale or
immediate settlement of the asset or liability. Recently, there has also been a lack of liquidity in the
capital markets as well as limited transactions which has had impact on the inputs associated with
fair values. Additionally, there are inherent uncertainties in any fair value measurement technique,
and changes in the underlying assumptions used, including market-derived estimated capitalization
rates, discount rates, liquidity risks, and estimates of future cash flows could significantly affect the
fair value measurement amounts. All valuations of real estate involve subjective judgments.
As of December 31, 2023, $1.9 billion, or 93%, of our investments in unconsolidated investments
(25% of total assets) were held at estimated fair value. As of December 31, 2023, there were
cumulative fair value gains of $322.1 million which comprises 17% of the $1.9 billion carrying
value of fair value unconsolidated investments that are currently held. Our investment in VHH is
our largest unconsolidated investment held at estimated fair value and was held at $285.9 million
and $272.3 million as of December 31, 2023 and 2022, respectively. Fair value changes consist
of changes in the underlying value of properties and associated mortgage debt as well as foreign
currency fluctuations (net of any hedges) for non-dollar denominated investments. During the year
ended December 31, 2023, we recognized $229.3 million and $64.3 million, respectively, of net fair
value losses and write downs of performance allocations on Co-Investment portfolio investments.
During the year ended December 31, 2022, we recognized $114.6 million and $21.1 million,
respectively, of net fair value gains and write downs of performance allocations on Co-Investment
portfolio investments.
In determining estimated fair market values, the Company utilizes two approaches to value real
estate, a discounted cash flow analysis and direct capitalization approach.
Discounted cash flow models estimate future cash flows from a buyer’s perspective (including
terminal values) and compute a present value using a market discount rate. The holding period in the
analysis is typically ten years. This is consistent with how market participants often estimate values
in connection with buying real estate but these holding periods can be shorter depending on the life
of the structure an investment is held within. The cash flows include a projection of the net sales
proceeds at the end of the holding period, computed using a market reversionary capitalization rate.
Under the direct capitalization approach, the Company applies a market derived estimated
capitalization rate to current and future income streams with appropriate adjustments for tenant
vacancies or rent-free periods. These estimated capitalization rates and future income streams are
derived from comparable property and leasing transactions and are considered to be key inputs
in the valuation. Other factors that are taken into consideration include tenancy details, planning,
building and environmental factors that might affect the property.
The Company also utilizes valuations from independent real estate appraisal firms on some of
its investments (“appraised valuations”), with certain investment structures periodically (typically
annually) requiring appraised valuations. All appraised valuations are reviewed and approved by
the Company.
The value of our investment in VHH is determined through several approaches including a
discounted cash flow analysis on a partnership-by-partnership basis that factors in the distinct
economic splits between VHH and its tax credit LPs (where applicable). This methodology assumes
ordinary distributions and future sale of the underlying property after the tax credit period has
expired, assuming, among other factors, an average estimated cap rate at sale from 5.65% to
7.50% with discount rates ranging from 8.10% to 11.00%. Additionally, the value of our investment
in VHH is further supported through the application of multiples to VHH’s various streams of
annual cash flows using multiples for recurring free cash flow (ordinary distributions) and promote
(paid developer fees) and total cash flow from public company peers. During the year ended
December 31, 2023, the various valuation methodologies produced results that are were within 5%
from each other.
The table below describes the range of inputs used as of December 31, 2023 for real estate assets:
Multifamily
Office
Industrial
Retail
Hotel
Income approach—discounted cash flow
Income approach—direct capitalization
Income approach—discounted cash flow
Income approach—direct capitalization
Income approach—discounted cash flow
Income approach—direct capitalization
Income approach—discounted cash flow
Income approach—discounted cash flow
Estimated Rates Used For
Capitalization Rates
Discount Rates
5.70%—7.50%
4.30%—5.80%
5.20%—7.50%
4.50%—9.30%
5.00% —6.30%
4.10%—9.00%
6.50%
6.00%
7.30%—11.00%
N/A
7.50%—9.30%
N/A
6.30%—7.80%
N/A
8.30%
8.30%
In valuing indebtedness, the Company considers significant inputs to be the term of the debt, value
of collateral, market loan-to-value ratios, market interest rates and spreads, and credit quality of
investment entities. The credit spreads used by the Company to value floating rate indebtedness
range from 2.00% to 4.60%, while the market rates used to value fixed rate indebtedness range from
4.90% to 9.30%.
There is no active secondary market for our development projects and no readily available market
value given the uncertainty of the amount and timing of future cash flows. Accordingly, our
determination of fair value of our development projects requires judgment and extensive use of
estimates. Therefore, we typically use investment cost as the estimated fair value until future
cash flows become more predictable. Additionally, the fair value of our development projects may
differ significantly from the values that would have been used had a ready market existed for such
34 / KENNEDY WILSON
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investments and may differ materially from the values that we may ultimately realize. If we were
required to liquidate an investment in a forced or liquidation sale, we could realize significantly less
than the value at which we have recorded it. In addition, changes in the market environment and
other events that may occur over the life of the investments may cause the gains or losses ultimately
realized or incurred on these investments to be different than the unrealized gains or losses reflected
in the currently assigned valuations.
Ongoing macroeconomic conditions, such as, but not limited to, elevated levels of inflation and
interest rates, banks’ ability and willingness to lend, recent adverse developments affecting regional
banks and other financial institutions, currency fluctuations and ongoing military conflicts around
the world, continue to fuel recessionary fears and create volatility in our business results and
operations. Any prolonged downturn in the financial markets or a recession, either globally or locally
in the United States or in other countries in which we conduct business, could impact the fair value
of investments held by the Company. As a result of the rapid development, fluidity and uncertainty
surrounding these situations, the Company expects that information with respect to fair value
measurement may change, potentially significantly, going forward and may not be indicative of the
actual impact on our business, operations, cash flows and financial condition for the year ended
December 31, 2023 and future periods.
Value Creation
Our differentiated and unique approach to investing is the cornerstone of how we create value for
our shareholders. Our investment philosophy is based on three core fundamentals:
• Leverage our global footprint and complementary investment and investment management
• Our long-lasting and deep relationships with financial institutions allow us to refinance
loans (generally after we implement our value-add initiatives) to reduce interest rates and/or
increase borrowings due to property appreciation and thereby obtain cash flow to use for new
investments.
• We have been able to attract third party capital due to our ability to generate above-market
returns for our partners, diversity of geographic markets and investment product types as
well as our flexibility in structuring deals through funds, separate accounts and equity partner
arrangements.
• We understand that real estate is cyclical. Our management team employs a multi-cyclical
approach that has resulted in our AUM being globally diversified across many sectors of real
estate while maintaining a healthy liquidity position and adequate access to capital.
Competitive Strengths
We have a unique platform from which to execute our investment and investment management
strategy. The combination of an investment and investment management platform provides several
competitive strengths when compared to other real estate buyers and asset managers operating
stand-alone or investment-focused firms and may allow us to generate superior risk-adjusted
returns. Our investment strategy focuses on investments that offer significant appreciation potential
through intensive asset management, leasing, repositioning, redevelopment and the opportunistic
use of capital. We differentiate ourselves from other firms in the industry with our full service,
investment-oriented structure.
Our competitive strengths include:
businesses to identify attractive investment markets across the world.
• Transaction experience: Our senior management team has an average of over 25 years of real
• Selectively invest in opportunities across many real estate product types with a goal of
maximizing cash flow and risk-adjusted return on capital.
• Actively manage assets and finance our assets in a manner designed to generate stable,
predictable and growing cash flows for shareholders and clients.
Kennedy Wilson is able to create value for its shareholders in the following ways:
• We are able to identify and acquire attractive real estate assets across many markets, in part due
to the significant proprietary deal flow driven from an established global network of industry
relationships, particularly with financial institutions. This can create value by allowing us to
maintain and develop a large pipeline of attractive opportunities.
• Our operating expertise allows us to focus on opportunistic investments where we believe we
can increase the value of assets and cash flows and include transactions with distressed real
estate owners or lenders seeking liquidity, or purchases of under-managed or under-leased
assets, and repositioning opportunities.
• We have been able to create place-making areas in our investment locations where we are
able to make multiple investments in a particular city either through direct investments or
development initiatives that further drives interest in the area.
• Many times, these investments are acquired at a discount to replacement cost or recent
comparative sales, thereby offering opportunities to achieve above average total returns. In
many cases, this may lead to significant additional returns, such as a performance allocation
(where we have partners), based on the performance of the assets.
estate experience and has been working and investing together on average for almost 18 years.
Members of the senior management team have collectively acquired, developed and managed
in excess of $30 billion of real estate investments in the United States, the United Kingdom,
Ireland, Spain, Italy and Japan throughout various economic cycles, both at our Company and
throughout their careers.
• Extensive relationship and sourcing network: We leverage our relationships in order to source
attractive on and off-market deals. In addition, the senior management team and our acquisition
team have transacted deals in nearly every major metropolitan market on the West Coast of
the United States, as well as in the United Kingdom, Ireland, Spain, Italy and Japan. Their local
presence and reputation in these markets have enabled them to cultivate key relationships with
major holders of property inventory, in particularly financial institutions, throughout the real
estate community.
• Structuring expertise and speed of execution: Prior acquisitions completed by us have taken a
variety of forms, including direct property investments, joint ventures, exchanges involving
stock or operating partnership units, participating loans and investments in performing and
non-performing mortgages at various capital stack positions with the objective of long-term
ownership. We believe we have developed a reputation of being able to quickly execute, as well
as originate and creatively structure acquisitions, dispositions and financing transactions.
• Strategic partnerships: Through our relationships and transaction experience we have been able
to establish various strategic partnerships with a variety of different companies and institutions
in which we are highly collaborative and aligned with our partners in the deals. Coupled with our
36 / KENNEDY WILSON
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ability to structure acquisitions in a variety of ways that fit the needs of our strategic partners,
we have been able to access various forms of capital due to our experience and versatility.
• Vertically integrated platform for operational enhancement: We have 259 employees in 13 offices
throughout the United States, the United Kingdom, Ireland, Spain and Jersey. We have a hands-
on approach to real estate investing and possess the local expertise in property and asset
management, leasing, construction management, development and investment sales, which we
believe enable us to invest successfully in selected submarkets.
• Calculated risk taking: We underwrite our investments based upon a thorough examination of
property economics and a critical understanding of market dynamics and risk management
strategies. We conduct an in-depth sensitivity analysis on each of our acquisitions. This analysis
applies various economic scenarios that include changes to rental rates, absorption periods,
operating expenses, interest rates, exit values and holding periods. We use this analysis to
develop our disciplined acquisition strategies.
• Management’s alignment with shareholders: As of December 31, 2023, our directors and executive
officers and their respective affiliates owned an aggregate of approximately 13% of the
outstanding shares of our common stock. Due to our management team’s ownership interest in
the Company its interests are in alignment with common shareholders of the Company and gives
us an owner’s mentality on the investments we own and manage.
The real estate business is cyclical. Real estate cycles are generally impacted by many factors,
including availability of equity and debt capital, borrowing cost, rent levels, and asset values. Our
strategy has resulted in a strong track record of creating both asset and entity value for the benefit
of our shareholders and partners over these various real estate cycles.
Industry Overview
Key Investment Markets
Western United States
During the first half of 2023, interest rates continued to incrementally climb until July 2023, when
the Federal Reserve’s interest policy brought the key federal funds rate target to 5.25% to 5.50%.
Although rates have remained unchanged since July 2023, and unemployment rates remained low at
3.7% in December 2023, the elevated interest rates, coupled with other macroeconomic conditions,
resulted in transaction activity across all sectors significantly slowing, with total commercial real
estate transactions dropping by an estimated 59% for the year ended December 31, 2023 according
to MSCI.
The multifamily sector continued to see strong rental growth in 2023 as overall demand for rental
housing remained strong due to high mortgage rates, that further drove demand due to the high
cost of home ownership, and domestic migration patterns that demonstrated that renters continued
to move out of high cost cities and into more affordable markets. This sustained demand helped
counterbalance the overall 61% year-over-year decline in transaction volume.
The persistent undersupply of housing units underscored the sector’s long-term investment
appeal, despite short-term challenges. Investors showed a preference for well-located, amenity-
rich properties in suburban and Mountain West markets, aligning with tenant preferences and
demographic trends. Despite the uptick in new supply deliveries in 2023, many markets experienced
record absorption levels, pointing towards looming supply shortages. Estimates from CBRE suggest
that the U.S. will need approximately 3.5 million new rental units by 2035 to meet demand,
indicating a long-term undersupply in the rental housing market.
The office sector in 2023 saw varying demand as hybrid working arrangements continued to impact
demand. The market favored high-quality, flexible, and technologically advanced spaces, as tenants
opted to reduce their overall footprint and relocate to better-equipped buildings, highlighting a
market trend towards quality over secondary options (similar to the Company’s assets in office
portfolio).
The U.S. industrial market is expected to stabilize in 2024, with net absorption on par with 2023
levels and taking rent growth moderating to 8%. Construction deliveries will taper off by midyear
and finish at half of 2023’s total.
Hawaii
The Hawaiian real estate market experienced a recovery in 2023, with visitor numbers surpassing
pre-pandemic levels and revitalizing the island’s economy. Despite downward pressure caused by
the wildfire on Maui in 2023, in December 2023, the State of Hawaii’s Department of Business,
Economic Development & Tourism projected visitor spending to be $20.9 billion in 2023 and expects
it to increase to $23.5 billion by 2026. The luxury real estate segment, in particular, witnessed a
rebound as median sales prices hit record levels of $510,000 for the year. The Big Island continues
to host some of the state’s most expensive residential property sales. Property values across all
segments continued to rise, reflecting the enduring appeal of Hawaii’s real estate market despite the
broader challenges posed by rising interest rates.
Ireland
Ireland’s economy is estimated to have had nominal GDP growth of 2.9% in 2023, and the
Organisation for Economic Co-operation and Development is forecasting Ireland to have
progressively higher GDP growth over the next two years to reach 5.4% by year-end 2025.
As of December 31, 2023, Industrial Development Agency total Foreign Direct Investment
employment stood at over 300,000, with the 248 new investments made in the year (83 first-
time investments) expected to deliver almost 19,000 jobs to the economy. Real estate investment
volumes were below historical averages at approximately €1.9 billion traded in 2023. Dublin office
absorption was more than 2.4 million square feet in 2023. Prime headline city center rents declined
marginally to €62.50 per square foot but are expected to remain stable over 2024 and trend
upwards again in 2025.
The Irish Private Rented Sector (“PRS”) market has been very quiet with no new PRS deals of note
agreed to in the fourth quarter 2024. The state and Approved Housing Bodies (“AHB”) continue to
be very active in the market through forward funding, forward purchase, development of their own
and purchase of existing social/affordable housing schemes. The rental market remains strong with a
huge structural undersupply of rental accommodation and continued growing employment and
wage inflation.
The Irish industrial sector led investment volume for the year, accounting for 28% of all transactions
in 2023, while residential multifamily asset transactions comprised the second largest component
at 23%.
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United Kingdom
Real gross domestic product (GDP) is estimated to have fallen by 0.3% in the three months ended
December 31, 2023, compared with the three months ended September 30, 2023.
In the fourth quarter 2023, office leasing totaled 3.4 million square feet, increasing for the second
consecutive quarter by 29%, and rising 13% above the 10-year quarterly average of 3.0 million
square feet. The fourth quarter total brought the full year leasing figure to 10.5 million square feet,
down 16% on the previous year, and 14% down on the long-term annual average.
Fourth quarter 2023 investment volumes totaled £2.23 billion (up 11% when compared to last
quarter), with multi-lets capturing 24% of investment, down from 52.3% the previous quarter. Total
demand in 2023 was the lowest since 2017 and 16% below the 10-year average, reflecting the
general pause in expansionary activity and the more challenging and uncertain economic backdrop.
The overall rate of availability increased again from 5.8% in the third quarter 2023 to 6.0% in the
fourth quarter 2023. This reflects a total of around 58m square feet of marketed space - three
million square feet more than in the third quarter 2023 and 25 million square feet more than was on
the market in the fourth quarter 2022. The increase in fourth quarter 2023 was due to the addition
of both second-hand and newly completed speculatively built stock, although the overall quality of
available space continues to be high, and new/modern buildings make up 61% of the total.
Environmental, Social and Governance (ESG)
Kennedy Wilson’s approach to ESG aligns with its business strategy to maximize the inherent
value of our assets and by striving to deliver long-term social, environmental, and economic value
across our portfolio and to our key stakeholders. We aim to integrate ESG factors into key business
processes, underpinned by a measure, manage, and monitor approach framed by our four ESG pillars
most relevant to our business: Optimizing Resources, Creating Great Places, Building Communities
and Operating Responsibly. Details of this framework can be found on our ESG website
(esg.kennedywilson.com) (this website address is not intended to function as a hyperlink, and the
information contained in, or accessible from, our website is not intended to be a part of this filing).
The ESG Committee of the Board of Directors (the “ESG Committee”) oversees the Company’s ESG
program, including opportunities and risk management strategies. The ESG Committee’s main areas
of focus include:
• Overseeing and reviewing the Company’s ESG strategies, initiatives, and policies, including the
Company’s ESG-related reporting and disclosures.
• In conjunction with the Compensation Committee, overseeing and reviewing the Company’s
culture and human capital management strategy, initiatives, and policies, including our inclusion,
diversity, and equity efforts; and
• In conjunction with the Audit Committee, overseeing risk management and oversight programs
and performance-related material to ESG matters affecting Kennedy Wilson.
The ESG Committee is also responsible for overseeing Kennedy Wilson’s management-level Global
ESG Committee. The Global ESG Committee, chaired by our President, Matt Windisch, manages
the Company’s ESG responsibilities and commitments and is responsible for formulating and
implementing procedures and priorities to deliver the Company’s ESG strategy.
The Global ESG Committee focuses on the following: monitoring compliance with existing and
future material ESG-related laws and regulations applicable to the Company and its investments that
would have a material impact on business operations; setting appropriate global ESG priorities aim
to align across target markets; monitoring delivery progress; and supporting ESG communication to
investors and other stakeholders. The Global ESG Committee is supported by two executive level
ESG committees in the US and Europe, each of which focus on the implementation of ESG policies
and strategies in their respective regions.
It is Kennedy Wilson’s intention to manage ESG factors, both opportunities and risks, at the
corporate, fund and individual assets level, with the goal of integrating robust procedures across all
stages of its investment process. The Company’s policies can be reviewed on its corporate website
(https://www.kennedywilson.com/corporate-responsibility) (this website address is not intended
to function as a hyperlink, and the information contained in, or accessible from, the Company’s
website is not intended to be a part of this filing) and cover guidelines and rules regarding ESG, anti-
discrimination, anti-harassment, non-retaliation, human trafficking and slavery, fraud prevention,
data security and data privacy.
Human Capital Management
Company Overview and Values
We operate as a non-bureaucratic, teamwork-oriented, and nimble organization. We promote an
entrepreneurial culture, and at our core, we are powered by a team of focused, high-performance
people who thrive on excellence in the workplace and a shared desire to make an impact.
Workplace Diversity
We strive to maintain a diverse corporate culture, celebrating and promoting equality across gender,
socio-economic backgrounds, education, and ethnicity. This allows for better representation of
different viewpoints, historical perspective and can bring fresh ideas to all levels of the Company.
Within Kennedy Wilson’s total workforce of approximately 259 employees, 40% are women, with
many serving in leadership positions throughout the company.
Training and Development
Kennedy Wilson would not exist without our most important asset: our people. We strive to
maintain a culture that fosters collaboration and innovation, and we take great pride in building and
maintaining a driven, results-oriented workforce. Our talent development program includes access to
formal and informal mentorships, tuition reimbursement, where we are supporting employees who
are seeking advanced certificates in areas of specialty that pertain to their role at Kennedy Wilson,
and “Lunch and Learn” sessions. These alongside our regular global senior management calls continue
to develop our managers to become more effective leaders. A dynamic internship and internal
transfer program also helps promote personal development and improves leadership skills across all
departments.
Through our annual summer internship program, we continue to find ways to better support our
equality, diversity, and inclusion aspirations by building a diverse pipeline of talented individuals
in the real estate industry with the intention to introduce our business to those who may not have
considered a career in real estate.
40 / KENNEDY WILSON
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Employees
As of December 31, 2023, we have 259 employees in 13 offices throughout the United States,
the United Kingdom, Ireland, Spain and Jersey. We believe that we have been able to attract
and maintain high quality employees. There are no employees subject to collective bargaining
agreements. In addition, we believe we have a strong relationship with our employees.
Available Information
Information about us is available on our website (http://www.kennedywilson.com) (this website
address is not intended to function as a hyperlink, and the information contained in, or accessible
from, our website is not intended to be a part of this filing). We make available on our website, free
of charge, copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K, Proxy Statements on Schedule 14A and amendments to those reports
and other statements filed or furnished pursuant to Section 13(a), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, as soon as reasonably practicable after filing or submitting such
material electronically or otherwise furnishing it to the SEC. In addition, we have previously filed
registration statements and other documents with the SEC. Any document we file is available at the
SEC’s internet address at http://www.sec.gov (this website address is not intended to function as a
hyperlink, and the information contained in, or accessible from, the SEC’s website is not intended to
be a part of this filing).
Competition
We compete with a range of global, national and local real estate firms, individual investors and
other corporations, both private and public. Our investment business competes with real estate
investment partnerships, real estate investments trusts, private equity firms and other investment
companies and regional investors and developers. We believe that our relationships with the sellers
and our ability to close an investment transaction in a short time period at competitive pricing
provides us a competitive advantage.
Foreign Currency
Approximately 36% of our investment account is invested through our foreign platforms in their
local currencies. Investment level debt is generally incurred in local currencies and we consider our
equity investment as the appropriate exposure to evaluate for balance sheet hedging purposes. We
typically do not hedge foreign exchange rates for future operations or cash flows of operations,
which may have a significant impact on the results of our operations. In order to manage the effect
of fluctuations in foreign exchange rates, we generally hedge our book equity exposure to foreign
currencies through currency forward contracts and options.
We wholly-own Kennedy Wilson Europe Real Estate Limited (“KWE”), which is domiciled in the
United Kingdom and has GBP as its functional currency. KWE has investments in assets that have
functional currencies of GBP and euros. Kennedy-Wilson Holdings, Inc. does not have a direct
interest in the euro-denominated investments but has indirect ownership through its interest in
KWE. We cannot directly hedge the foreign currency movements in these euro-denominated assets
but we do hedge foreign currency movements in euro assets at the KWE level through GBP/EUR
hedging instruments. We then are able to hedge the USD/GBP foreign currency exposure through
our direct interest in KWE.
Within KWE we have historically utilized two types of contracts to hedge our GBP/EUR exposure:
foreign forward and option currency contracts and the KWE Euro Medium Term Notes (“KWE
Notes”). The KWE Notes were issued in euros and held by KWE but we have elected to treat the
foreign currency movements as a net investment hedge on our euro-denominated investments in
KWE. The foreign currency movements on these hedge items above are recorded to unrealized
foreign currency derivative contract gains/losses within other comprehensive income for GBP/
EUR movements. However, when we translate our investment in KWE from USD/GBP, the foreign
currency movements on these items go through unrealized foreign currency translation gains/losses
within other comprehensive income.
Please refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operation for a discussion regarding foreign currency and currency derivative instruments.
Transaction-Based Results
A significant portion of our cash flow is tied to transaction activity which can affect an investor’s
ability to compare our financial condition and results of operations on a quarter-by-quarter or
year-over-year basis or to easily evaluate the breadth of our operation. Historically, this variability
has caused our revenue, net income and cash flows to be tied to transaction activity, which is not
necessarily concentrated in any one quarter.
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Management’s Discussion and Analysis of Financial Condition and Results of
Operations
The following discussion and analysis should be read in conjunction with the financial statements and
related notes and the other financial information appearing elsewhere in this report. This discussion and
analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See the
section titled “Forward-Looking Statements” for more information. Actual results could differ materially
from those anticipated in the forward-looking statements as a result of many factors, including those
discussed in the section titled “Risk Factors” and elsewhere in this report.
Unless specifically noted otherwise, as used throughout this Management’s Discussion and Analysis
section, “we,” “our,” “us,” “the Company” or “Kennedy Wilson” refers to Kennedy-Wilson Holdings, Inc.
and its wholly-owned subsidiaries. “Equity partners” refers to the subsidiaries that we consolidate in our
financial statements under U.S. GAAP (other than wholly-owned subsidiaries) and third-party equity
providers. Please refer to “Non-GAAP Measures and Certain Definitions” for definitions of certain terms
used throughout this report.
Overview
Kennedy Wilson is a global real estate investment company. We own, operate and develop high-
quality real estate across markets in the Western United States, the United Kingdom and Ireland
with the objective of generating long-term risk adjusted returns for our shareholders and partners.
In addition to owning and managing real estate assets, we also have a growing global debt platform
primarily focused on construction lending secured by high-quality multifamily and student housing
properties throughout the United States. As of December 31, 2023, our 259 employees, managed a
total of $24.5 billion of AUM, which includes 37,644 multifamily units (including 3,824 units under
lease up or in process of being developed), 10.9 million office square feet, 11.4 million industrial
square feet and 3.0 million retail square feet (including 2.3 million square feet under lease up or in
process of being developed), and $1.8 billion of development, residential and other. In addition, as
of December 31, 2023, we held interests in 101 real estate loans in our global debt platform, 85% of
which have floating interest rates (average interest rate of 9.4% per annum) and an unpaid principal
balance of $4.9 billion (of which our share was $263.0 million). Our global real estate portfolio is
primarily comprised of multifamily communities (57%), commercial properties (35%), loans (6%) and
hotel and other properties (2%) based on our share of net operating income (“NOI”). Geographically,
we focus on the Western United States (62%), the United Kingdom (13%) and Ireland (24%).
2023 Highlights
• For the year ended December 31, 2023, we had net loss attributable to Kennedy-Wilson
Holdings, Inc. common shareholders of $341.8 million as compared to net income attributable
to Kennedy-Wilson Holdings, Inc. common shareholders of $64.8 million for the same period
in 2022. For the year ended December 31, 2023 we had Adjusted EBITDA of $189.8 million
as compared to $591.5 million for the same period in 2022. The decrease in net income
attributable to Kennedy-Wilson Holdings, Inc. common shareholders is primarily due to
(i) decreases in non-cash fair values and non-cash accrued performance allocations (as discussed
below) of $293.6 million and (ii) and an increase in additional preferred dividends due to the
issuance of preferred stock in the second quarter of 2023 as described below. These items
were partially offset by (i) increases in interest income and fees earned on our debt platform,
as detailed below, (ii) increase in NOI generated from the Shelbourne Hotel as compared to
the same period in 2022 (given the increased activity at The Shelbourne Hotel due to higher
volume of travel post-pandemic), and (iii) higher gains on sale of real estate, net during the
reporting period. Additionally, during the period, the Company’s share of interest expense was
higher primarily due to changes in the contractual interest rates of its indebtedness. This change
in contractual interest rates was partially offset by increases in the fair value and receipt of
cash of the Company’s interest rate derivatives (which are recognized in other income) put in
place pursuant to the Company’s interest rate management policy to hedge against the risks
associated with increases in interest rates. The effective interest rate of the Company’s share
of indebtedness is 4.4%, which reflects an approximate 60 basis point savings over contractual
interest rates.
• During the year ended December 31, 2023, real estate valuations continued to pull back due to
continued expansion of estimated capitalization rates and significant reductions in transaction
volumes and liquidity, primarily as a result of increased borrowing rates as the Federal Reserve
increased the federal funds rate by 100 basis points during 2023. As such, we recorded a total
of $293.6 million of non-cash fair value losses and accrued performance allocation decreases
as compared to $93.5 million of non-cash fair value gains and accrued performance allocation
increases during the same period in 2022. The non-cash losses recorded during the reporting
period was primarily attributable to estimated cap rate expansion with respect to certain office
properties and market-rate multifamily properties located in the Western United States and
Ireland. These non-cash losses were offset by $51.5 million of fair value gains that we recorded
during the year-ended December 31, 2023 in our VHH platform.
• During the year-ended December 31, 2023, the Company and affiliates of Fairfax Financial
Holdings Limited (collectively, “Fairfax”), its equity partner, acquired a $4.1 billion construction
loan portfolio from Pacific Western Bank (the “Construction Loan Portfolio”). The Company’s
investment in the Construction Loan Portfolio was 5% of the purchase price and the future
funding obligations. The $4.1 billion represented the gross commitment amount for the
Construction Loan Portfolio, which has been deducted to $3.7 billion as of December 31,
2023 due to loan repayments. The Construction Loan Portfolio has a current outstanding
balance of $2.4 billion (KW share of $118.9 million), not including the 4.5% discount on gross
commitment amounts from the time of purchase. As of December 31, 2023, we had unfulfilled
capital commitments totaling $87.7 million to our loan portfolio. As part of the acquisition of
the Construction Loan Portfolio, approximately 40 employees from Pacific Western Bank that
originated and managed the loans in the Construction Loan Portfolio became Kennedy Wilson
employees during the third quarter of 2023. The Company earns customary asset management
fees from its equity partner for loans originated and acquired under its global debt platform.
• During the second quarter of 2023, the Company issued $200 million aggregate liquidation
preference of perpetual preferred equity of the Company’s preferred stock (the “Series C
Preferred Stock”) to Fairfax. Under the terms of the agreement, Fairfax purchased $200 million
aggregate liquidation preference of cumulative perpetual preferred stock, which accrues
cumulative cash dividends at a rate of 6.00% per annum, and 7-year warrants for approximately
12.3 million common shares with an initial exercise price of $16.21 per share. The Series C
Preferred Stock is callable by the Company at any time. The convertible perpetual preferred
stock is presented as permanent equity.
44 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 45
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
Results of Operations
The following tables summarize our results of operations by segment for the years ended
December 31, 2023 and 2022 and is intended to be helpful in understanding the year over year
explanations following the tables.
Our results of operations for 2022 and 2021 can be found under Item 7. Management’s Discussion
and Analysis of Financial Condition and Results of Operations, which is incorporated by reference
herein to our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed
with the SEC on February 22, 2023, and is available on the SEC’s website at www.sec.gov and our
Investor Relations website at www.ir.kennedywilson.com.
(Dollars in millions)
Revenue
Rental
Hotel
Investment management fees
Loan
Other
Total revenue
Loss from unconsolidated investments
Principal co-investments
Performance allocations
Loss from unconsolidated investments
Gain on sale of real estate, net
Expenses
Rental
Hotel
Compensation and related
Performance allocation compensation
General and administrative
Depreciation and amortization
Total expenses
Interest expense
Loss on early extinguishment of debt
Other income (loss)
(Provision for) benefit from income taxes
Net income (loss)
Net income attributable to the noncontrolling interests
Preferred dividends
Net income (loss) attributable to Kennedy-Wilson
Holdings, Inc. common shareholders
Add back (less):
Interest expense
Loss on early extinguishment of debt
Kennedy Wilson’s share of interest expense included in
unconsolidated investments
Depreciation and amortization
Kennedy Wilson’s share of depreciation and amortization
included in unconsolidated investments
Provision for (benefit from) income taxes
Kennedy Wilson’s share of taxes included in unconsolidated
investments
Fees eliminated in consolidation
Share-based compensation
Preferred dividends
EBITDA adjustments attributable to noncontrolling
interests(1)
Consolidated
Co-Investments
Corporate
Total
Year Ended December 31, 2023
$
415.3 $
57.1
—
—
—
472.4
—
—
—
127.6
152.6
37.9
42.7
—
15.5
157.8
406.5
(162.0)
(1.6)
2.3
(9.6)
22.6
(22.4)
—
0.2
162.0
1.6
—
157.8
—
9.6
—
(0.3)
—
—
(6.6)
— $
—
61.9
26.1
—
88.0
— $
—
—
—
2.2
2.2
(188.5)
(64.3)
(252.8)
—
—
—
39.0
(15.1)
12.7
—
36.6
—
—
(7.0)
—
(208.4)
—
—
—
—
—
—
—
—
57.7
—
7.5
—
65.2
(97.2)
—
(0.3)
64.9
(95.6)
—
(38.0)
415.3
57.1
61.9
26.1
2.2
562.6
(188.5)
(64.3)
(252.8)
127.6
152.6
37.9
139.4
(15.1)
35.7
157.8
508.3
(259.2)
(1.6)
(5.0)
55.3
(281.4)
(22.4)
(38.0)
(208.4)
(133.6)
(341.8)
—
—
99.1
—
3.2
—
0.1
0.3
—
—
—
97.2
—
—
—
—
(64.9)
—
—
34.5
38.0
—
259.2
1.6
99.1
157.8
3.2
(55.3)
0.1
—
34.5
38.0
(6.6)
Adjusted EBITDA(1)
$
324.3 $
(105.7) $
(28.8) $
189.8
(1) See “Non-GAAP Measures and Certain Definitions” for definitions and discussion of Adjusted EBITDA.
(Dollars in millions)
Revenue
Rental
Hotel
Investment management fees
Loan
Other
Total revenue
Income from unconsolidated investments
Principal co-investments
Performance allocations
Income from unconsolidated investments
Gain on sale of real estate, net
Expenses
Rental
Hotel
Compensation and related
Performance allocation compensation
General and administrative
Depreciation and amortization
Total expenses
Interest expense
Gain on early extinguishment of debt
Other income
Provision for income taxes
Net income (loss)
Net income attributable to the noncontrolling interests
Preferred dividends
Net income (loss) attributable to Kennedy-Wilson
Holdings, Inc. common shareholders
Add back (less):
Interest expense
Gain on early extinguishment of debt
Kennedy Wilson’s share of interest expense included in
unconsolidated investments
Depreciation and amortization
Kennedy Wilson’s share of depreciation and amortization
included in unconsolidated investments
Provision for income taxes
Kennedy Wilson’s share of taxes included in unconsolidated
investments
Fees eliminated in consolidation
Share-based compensation
Preferred dividends
EBITDA adjustments attributable to noncontrolling
interests(1)
Consolidated
Co-Investments
Corporate
Total
Year Ended December 31, 2022
$
434.9 $
46.9
—
—
—
481.8
—
—
—
103.7
151.2
29.5
41.5
—
14.7
172.9
409.8
(128.2)
27.5
20.8
(21.0)
74.8
(8.2)
—
66.6
128.2
(27.5)
—
172.9
—
21.0
—
(0.4)
—
—
—
— $
—
44.8
11.7
—
56.5
— $
—
—
—
1.7
1.7
199.5
(21.1)
178.4
—
—
—
44.6
(4.3)
14.8
—
55.1
—
—
—
—
—
—
—
—
—
—
54.2
—
7.7
—
61.9
(92.6)
—
15.3
(15.2)
179.8
—
—
(152.7)
—
(28.9)
434.9
46.9
44.8
11.7
1.7
540.0
199.5
(21.1)
178.4
103.7
151.2
29.5
140.3
(4.3)
37.2
172.9
526.8
(220.8)
27.5
36.1
(36.2)
101.9
(8.2)
(28.9)
179.8
(181.6)
64.8
—
—
60.2
—
3.5
—
2.7
0.4
—
—
—
92.6
—
—
—
—
15.2
—
—
29.0
28.9
—
220.8
(27.5)
60.2
172.9
3.5
36.2
2.7
—
29.0
28.9
—
Adjusted EBITDA(1)
$
360.8 $
246.6 $
(15.9) $
591.5
(1) See “Non-GAAP Measures and Certain Definitions” for definitions and discussion of Adjusted EBITDA.
46 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 47
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
Kennedy Wilson Consolidated Financial Results: Year Ended December 31, 2023 Compared to the Year
Ended December 31, 2022
Financial Highlights
GAAP net loss to common shareholders was $341.8 million for the year ended December 31,
2023 and GAAP net income to common shareholders was $64.8 million for the year
ended December 31, 2022.
Adjusted EBITDA was $189.8 million for the year ended December 31, 2023, a 68% decrease from
$591.5 million for 2022. The decrease in GAAP net income to common shareholders and Adjusted
EBITDA is primarily due to (i) higher levels of non-cash fair value losses on Co-Investment Portfolio
investments and (ii) lower non-cash fair value gains on interest rate derivative contracts as compared
to the year ended December 31, 2022. Please see “Co-Investment Portfolio Segment” below for a
discussion of the fair value movements during the current and prior periods.
Operational Highlights
Same property highlights for the year ended December 31, 2023 include:
• For our 15,641 same property market rate multifamily units for the year ended December 31,
2023 as compared to the prior period:
• occupancy was relatively flat at 94%
• net operating income (net effective) increased 3%
• total revenues increased 4%
• For our 8,595 same property affordable rate multifamily units for the year ended December 31,
2023 as compared to the prior period:
• occupancy decreased 1.2% to 96%
• net operating income (net effective) increased 5%
• total revenues increased 9%
• For our 3.7 million square feet of same property office real estate for the year ended
December 31, 2023 as compared to the prior period:
• occupancy increased 1% to 94%
• net operating income (net effective) increased 1%
• total revenues increased 1%
• Investment Transactions for the year ended December 31, 2023 include:
• Consolidated Portfolio:
• sold (i) a 49% equity interest in two previously wholly-owned market-rate multifamily
properties totaling 790 units for proceeds of $228 million ($112 million at the Company’s
share) into an existing joint venture platform managed by the Company and retained a
noncontrolling 51% interest in such properties, which resulted in a gain on sale of real estate
of $79.5 million; (ii) a previously wholly-owned 293-unit multifamily asset to VHH, pursuant
to which the Company retains an interest in the asset through its ownership interest in
VHH, which resulted in a gain of $15.1 million for a gross valuation of $49 million; and (iii) a
consolidated multifamily property owned with a partner for proceeds of $62.1 million ($49.7
million at the Company’s share) which resulted in a gain of $37.6 million (Company’s share
of which was $20.1 million). These sales generated net gains of approximately $115 million
to the Company. The Company also made progress on its non-core asset sale program by
selling 19 United Kingdom retail assets, four retail assets in Western United States, one retail
asset in Ireland, one retail asset in Spain, one office asset in each of Italy, Ireland and United
Kingdom, and one residential and other asset in Hawaii for a total sales price of $313 million
which resulted in proceeds of $311 million and net gain of approximately $24.6 million for
the Company.
• Co-Investment Portfolio
• acquired the Construction Loan Portfolio as described in this report.
• (i) sold $251.9 million in industrial and other assets held by funds and joint ventures (the
Company’s share of which was 10%); and (ii) received a total of $39.5 million in loan
repayments on our global debt platform.
Foreign Exchange—Results of Operations
A significant portion of our investments are in foreign currencies. We typically do not hedge future
operations or cash flows so changes in foreign currency rates will have an impact on our results of
operations. We have included the table below to illustrate the impact these fluctuations have had on
our revenues, net income and Adjusted EBITDA by applying the relevant exchange rates for the prior
period. Please refer to the section titled “Currency Risk - Foreign Currencies” in Item 3 for a discussion
of risks relating to foreign currency and our hedging strategy and the “Other Comprehensive Income”
section below for a discussion of the balance sheet impact of foreign currency movements on our
results of operations.
Revenues
Net Income
Adjusted EBITDA
Revenues
Net Income
Adjusted EBITDA
Year Ended December 31, 2023
Consolidated
Co-Investment
$
5.9
(5.2)
(1.3)
1 % $
(2)%
(1)%
0.1
—
0.6
—%
—%
1%
$
6.0
(5.2)
(0.7)
Total
1 %
(2)%
— %
Year Ended December 31, 2022
Consolidated
Co-Investment
$ (20.6)
(7.8)
(21.9)
(4)% $
(12)%
(4)%
(1.1)
(6.0)
(8.2)
— %
(9)%
(1)%
$ (21.7)
(13.8)
(30.1)
Total
(4)%
(21)%
(5)%
Consolidated Portfolio Segment
Rental income was $415.3 million for the year ended December 31, 2023 as compared to $434.9
million for the same period in 2022. The $19.6 million decrease is primarily due to asset sales of non-
core assets in Europe and Western United States, the deconsolidation of three multifamily assets in
2023 and one multifamily asset in 2022 and the lack of consolidated asset acquisitions during 2023.
Hotel income was $57.1 million for the year ended December 31, 2023 as compared to $46.9 million
for 2022. The $10.2 million increase is primarily due to increased activity at The Shelbourne Hotel
due to higher volume of travel post-pandemic, which lead to higher occupancy and Average Daily
Rates (“ADRs”) at The Shelbourne Hotel during the year ended December 31, 2023.
Gain on sale of real estate, net was $127.6 million for the year ended December 31, 2023
as compared to $103.7 million in the prior period. The gains recognized during the year
ended December 31, 2023 are primarily due to (i) the Company’s sale of 49% of its equity interest
48 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 49
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
in two previously wholly-owned market-rate multifamily properties into an existing joint venture
platform managed by the Company and retained a noncontrolling 51% interest in such properties,
which resulted in a gain on sale of real estate of $79.5 million; (ii) the sale of a Western United
States property to VHH, pursuant to which the Company retains an interest in the asset through its
ownership interest in VHH, which resulted in a gain of $15.1 million; (iii) the sale of a consolidated
multifamily property owned with a noncontrolling interest partner which resulted in a gain of $37.6
million ($20.1 million of which was at the Company’s share) and (iv) the remainder of gain on sale
of real estate relates to the sale of non-core retail and residential properties in the Western United
States, United Kingdom, Ireland, and Spain These gains are net of $28.6 million of impairments
relating to retail assets in the United Kingdom, Ireland and the Western United States that have
been identified for sale. The gains recognized during the year ended December 31, 2022 related
to the sale of non-core retail assets in the United Kingdom and the Western United States and a
multifamily property in the Western United States. During the year ended December 31, 2022, we
also recorded a gain of $56.7 million in connection with the sale of a 49% interest in a previously
wholly-owned multifamily asset to a strategic partner and the resulting deconsolidation of the
investment from the Company’s financial statements.
Rental expenses increased to $152.6 million for the year ended December 31, 2023 as compared to
$151.2 million for the year ended December 31, 2022. The increase was primarily due to inflation-
driven increases on certain general and administrative expenses, such as payroll, utilities and
insurance at our consolidated properties.
Hotel expenses increased to $37.9 million for the year ended December 31, 2023 as compared
to $29.5 million for the year ended December 31, 2022, primarily due to increased activity at The
Shelbourne Hotel due to higher volume of travel post-pandemic during 2023 as described above.
Compensation and related expenses increased to $42.7 million for the year ended December 31,
2023 as compared to $41.5 million for the year ended December 31, 2022. While compensation and
related expenses were down overall for the year, the consolidated segment increased as a result of
higher gains on sale of real estate, net for the year ended December 31, 2023 compared to the prior
period, in addition the assets in our Co-Investment segment being attributed a lower level of fair
values which led to the allocation of more costs to the Consolidated segment.
General and administrative expenses increased to $15.5 million for year the ended December 31,
2023 as compared to $14.7 million for the year ended December 31, 2022. While general and
administrative expenses were down overall for the year, the consolidated segment increased, similar
to compensation expense discussed above as there was a higher allocation of corporate expenses
to the Consolidated segment in the current period due to higher gains on sale in our consolidated
segment and the assets in our Co-Investment segment recognizing non-cash decreases in fair value.
Depreciation and amortization decreased to $157.8 million for year ended December 31, 2023 the
as compared to $172.9 million for the year ended December 31, 2022 as a result of full amortization
of lease intangible assets relating to office acquisitions in prior years and being a net seller of
consolidated assets which has led to lower depreciation expense.
Interest expense was $162.0 million for the year ended December 31, 2023 as compared to
$128.2 million for the year ended December 31, 2022. The increase is primarily due to changes
in the contractual interest rates of certain of its indebtedness during the period. The increase was
offset by $16.7 million that we received on interest rate derivative contracts that paid out during the
year ended December 31, 2023 recorded to other income which is discussed below.
(Loss) gain on early extinguishment of debt was a loss of $1.6 million for the year ended
December 31, 2023 as compared to a gain on early extinguishment of debt of $27.5 million in the
same period in 2022. During the year ended December 31, 2023, the loss on extinguishment of debt
relates to prepayment penalties on loans that were refinanced. During the year ended December 31,
2022 we had gains associated with KWE’s cash tender offer for up to €150 million in aggregate
nominal amount of the KWE Notes, which resulted in acceptance of all of the €75.0 million
(approximately $80.3 million based on December 31, 2022 rates) in aggregate nominal amount of
KWE Notes validly tendered pursuant to the tender offer for a purchase price equal to 82% of the
nominal amount of the KWE Notes, and a mortgage on a retail property in the United Kingdom.
With respect to these instruments, we extinguished certain amounts at discounts to their carrying
value resulting in gains on extinguishment. These gains were offset by prepayment penalties on
mortgage loans that were refinanced during 2022.
Other income was $2.3 million for the year ended December 31, 2023 as compared to other
income of $20.8 million for the year ended December 31, 2022. We had mark to market fair value
gains of $1.6 million on the Company’s undesignated interest rate caps and swap contracts for the
year ended December 31, 2023 as compared to $24.0 million in the prior period. The prior period
had higher fair value gains due to an expectation of higher future interest rates and a longer term
associated with the derivative contracts. For the current period the gains are lower due to limited (if
any) anticipated future rate hikes and the contracts being closer to maturity. We have entered into
these undesignated contracts to hedge against rising interest rates.
Net income attributable to noncontrolling interests was $22.4 million for the year ended
December 31, 2023 as compared to $8.2 million for the year ended December 31, 2022. The
increase is due to allocation of gains from the sale of real estate, net on a consolidated multifamily
property and a non-core retail asset both in the Western United States. The prior period net income
attributable to noncontrolling interest related to the gain on extinguishment on mortgage on a retail
property in the United Kingdom that we own with an equity partner as detailed above.
Co-Investment Portfolio Segment
Investment Management
We receive fees, including asset management fees, construction management fees, and/or
acquisition and disposition fees, for managing assets in our Co-Investment Portfolio on behalf of our
partners. During the year ended December 31, 2023, fees recorded through revenues were $61.9
million as compared to $44.8 million for the same period in 2022. The increase in recorded fees for
the year ended December 31, 2023 as compared to the same period in 2022 was due to higher base
management fees for the year ended December 31, 2023 as a result of having more AUM in our
Co-Investment Portfolio mainly due to the growth of our global debt platform and Western United
Sates multifamily separate accounts as well as a $7.9 million arrangement fee that we earned from
Pacific Western Bank for facilitating the Construction Loan Portfolio closing and fair value gains on
our investment in VHH.
Co-Investment Operations—Loans
Loans income from loan investments increased to $26.1 million for the year ended December 31,
2023 as compared to $11.7 million for the same period in 2022. These amounts represent interest
income on our share of loan investments within our global debt platform. The increase is primarily
due to the growth of the global debt platform and rising interest rates as the majority of our loans in
our global debt platform are floating rate loans.
50 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 51
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
We recognized $7.0 million of reserves against our loan portfolio in other loss during the year ended
December 31, 2023 with no comparable activity in the prior period. The reserve consists of (i) $4.5
million in specific reserves on certain loans secured by an office asset and three multifamily properties
in our bridge loan portfolio and (ii) a $2.5 million general reserve that we recorded on our entire
loan portfolio due to uncertain market conditions coupled with high interest rates that could lead
to potential credit losses. We have three loans out of the 101 loans in our global debt platform with
a $8.7 million carrying value at our share and net of any loan reserves that are not paying interest
current on a contractual basis. Per the terms of the applicable loan agreements, however, we have
implemented a full cash sweep of any cash flow that is generated from the collateral. We are no longer
accruing interest under these loans and accounting for them on a cash basis going forward. We are
currently working with borrowers and guarantors to resolve these loans. We have made, and may
continue to make, modifications to loans, including loans that are in default. Loan terms that may be
modified include interest rates, required prepayments, asset release prices, maturity dates, covenants,
principal amounts and other loan terms. The terms and conditions of each modification vary based on
individual circumstances and will be determined on a case by case basis. We monitor and evaluate each
of our loans held for investment and maintain regular communications with borrowers, guarantors and
sponsors regarding the potential impacts of current macroeconomic conditions on our loans.
Co-Investment Operations—Real Estate
In addition to our management of investments in the Co-Investment Portfolio, we generally have
ownership interests in the properties. The table below represents a breakout of the amounts
within income from unconsolidated investments which represents our share of underlying property
investments in the Co-Investment Portfolio assets and any performance allocations relating
to our management of these properties for the year ended December 31, 2023 and the year
ended December 31, 2022:
Revenue
Rental
Hotel
Sale of real estate
Total revenue
Fair value/other adjustments
Gain on sale of real estate, net
Performance allocations
Expenses
Rental
Hotel
Cost of real estate sold
Depreciation and amortization
Total expenses
Interest expense
Other loss
Provision for income taxes
Year Ended December 31,
2023
2022
$
$
256.3
11.1
19.5
286.9
(233.7)
—
(64.3)
82.8
16.3
13.6
3.2
115.9
(99.0)
(26.6)
(0.2)
224.0
—
52.0
276.0
110.2
4.9
(21.1)
66.4
—
40.7
3.8
110.9
(60.1)
(17.9)
(2.7)
(Loss) income from unconsolidated investments
$
(252.8)
$
178.4
The decrease in income from unconsolidated investments is primarily due to the following:
Operating performance
During the year ended December 31, 2023, we had lower operating performance from our
unconsolidated investments due to the following factors: (i) higher interest expense due to changes
in the contractual interest rates of our indebtedness (ii) pre-opening and one-time start up costs
associated with the opening of Kona Village Resort and (iii) lower income from sales of residential
units at our Kohanaiki development in Hawaii. The increase in rental income is primarily due to the
three multifamily assets that were deconsolidated as discussed above in the Consolidated section.
Fair Value
During the year ended December 31, 2023, valuations continued to pull back primarily as a result
of continued expansion of estimated capitalization rates and significant reductions in transaction
volumes and liquidity, primarily as a result of increased borrowing rates as the Federal Reserve
continued its interest rate hikes and increased the federal funds rate by 100 basis points during
2023. As such, during the year ended December 31, 2023 the Company recorded fair value
decreases with respect to: (i) certain office properties in the Western United States, Ireland and
United Kingdom primarily due to expansion in estimated capitalization rates, primarily as a result
of increased interest rates, which also led to us recording a decrease of the accrued performance
allocations with respect to funds that held these investments as discussed below; (ii) certain market
rate multifamily properties in the Western United States and Ireland primarily due to expansion
in estimated capitalization rates; (iii) the write off of a $5 million investment in a social impact real
estate fund manager; and (iv) a decrease in the fair value of a building that we hold a 10% ownership
interest in due to a national co-working office tenant no longer paying rent at such property. These
fair value decreases were offset by (i) a fair value increase of $51.5 million with respect to our
investment in VHH (our affordable rate multifamily platform) due to gains on the conversion of the
status of one of VHH’s largest properties from development to operating, gains associated with the
conversion of the loan secured by such property from a floating rate construction loan to a long-
term fixed rate mortgage (the rate of which was set in 2019), the resyndication of properties and
(ii) fair value increases recognized by the Company on fixed rate mortgages due to increases in
market interest rates.
During the year ended December 31, 2023, we recorded a $64.3 million decrease in the accrual
(non-cash) for performance allocations primarily related to the fair value decreases noted above.
VHH does not have a performance allocation arrangement associated with the investment, and
therefore, such increases in non-cash fair value noted above did not contribute to the performance
allocation results.
Valuations of our market rate multifamily assets globally and industrial assets in the United Kingdom
were at historically high levels at the end of 2021 and into the first quarter of 2022. We started to
see valuations pull back slightly in 2022 with cap rate expansion, primarily as a result of increased
borrowing rates, which led to fair value losses on real estate during the year ended December 31,
2022. In 2022, we also had fair value foreign exchange losses, net of any hedges on our foreign fair
value investments as the euro and the GBP were at historically low levels against the U.S. Dollar.
These fair value losses were offset by fair value increases on our affordable multifamily properties
in our VHH platform due to increased NOI at the properties driven by rental increases and the
stabilization of assets that recently completed development. Fair value losses on real estate were
52 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 53
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
also offset by fair value gains on our fixed rate mortgages that are secured by certain properties. This
was primarily related to our long term fixed rate debt having lower rates than the current market
rates as a result of higher base rates and spreads in today’s financing market driven by recent rate
increases implemented by the Federal Reserve and the European Central Bank (“ECB”). We also
had fair value gains associated with interest rate derivatives held by properties on variable rate
mortgages which have increased in value with rising interest rates. Our investment in VHH also
had significant fair value gains for the year ended December 31, 2022 due to gains on its fixed rate
property loans and increases in NOI at the properties due to rental increases.
During the year ended December 31, 2022, we recorded a $21.1 million decrease in the accrual
for performance allocations relating to our commingled funds and certain separate account
investments due to declines in fair value of the applicable investments. During the year ended
December 31, 2022, we had realized performance fees of $6.8 million relating to the sale of two
multifamily properties in the Western United States, of which the Company paid $1.2 million of
performance allocation compensation to employees for performance allocations that were realized
during the period.
Please also see Part I. Item 1. “Fair Value Investments” for additional details.
Expenses
Expenses decreased to $36.6 million for the year ended December 31, 2023 as compared to
$55.1 million for the same period in 2022, primarily due to a $10.8 million decrease to performance
allocation expense. Performance allocation expense is as a percentage of accrued performance
allocations, declined over the year ended December 31, 2023 due to decreases in fair values on
separate accounts and commingled funds that have performance allocation sharing programs. The
consolidated segment had higher gains on sale of real estate, net for the year ended December 31,
2023 compared to the prior period while the Co-Investment segment had lower level of fair values
which led to the allocation of less costs in compensation and general and administrative expenses to
the Co-Investments segment.
Corporate
Expenses for the year ended December 31, 2023 were $65.2 million as compared to $61.9 million
for the year ended December 31, 2022. The increase in expenses is primarily due to higher share-
based compensation in connection with the retirement of the Company’s former President (the
“former executive”) from the Company. Pursuant to the terms of the former executive’s separation
and consulting agreement with the Company (the “Agreement”), the former executive’s outstanding
restricted shares, held as of her separation date, will continue to vest in future periods in accordance
with the terms of the applicable restricted stock unit grants agreements. However, the arrangement
per the Agreement is considered a modification of her awards and the Company has revalued her
share awards over the remaining periods, resulting in a one-time $5.5 million of additional expense
year ended December 31, 2023. We will not have any future expense for any shares remaining to
vest for the former executive.
Interest expense was $97.2 million for the year ended December 31, 2023 as compared to $92.6
million for the same period in 2022. For the year ended December 31, 2023 we had higher interest
rate on our line of credit as compared to the same period in 2022 as a result changes in the
contractual interest rate of our indebtedness as described above. The increase in interest expense
was offset by $7.4 million that we received on interest rate derivative contracts that paid cash out
during the year ended December 31, 2023 recorded to other income which is discussed below.
Other (loss) income decreased to a loss of $0.3 million for the year ended December 31, 2023 as
compared to other income of $15.3 million for the same period in 2022. We recorded $5.9 million
in expenses associated with future compensation and consulting fees in connection with the former
executive’s Agreement, as discussed above. During the year ended December 31, 2023, we recorded
$4.3 million of mark to market fair value gains on interest rate caps and swaps that the Company
bought to hedge its variable rate interest rate exposure as compared to $18.4 million in year ended
December 31, 2022. For the year ended December 31, 2023 we received $4.3 million of interest
income on bank deposits due to rising interest rates as compared to $1.1 million in the prior period.
The Company also recorded realized foreign exchange losses of $3.3 million for the year ended
December 31, 2023 as compared to realized losses of $3.6 million in the prior period primarily due
to increases in the euro exchange rate on portion of its line of credit that was drawn in euros.
Benefit from income taxes was $55.3 million for the year ended December 31, 2023 as compared
to a tax provision of $36.2 million for the year ended December 31, 2022. The decrease in income
tax expense was primarily attributable to a $474.8 million decrease in worldwide pre-tax book
income in 2023 as compared to 2022, primarily as a result of the significant non-cash fair value
decrease during the year. Our effective tax rate for the year ended December 31, 2023 was 16.4%
as compared to an effective tax rate of 26.2% in 2022. Significant items impacting the tax provision
include: tax charges associated with non-deductible executive compensation under Code Section
162(m) and changes in our estimated state effective tax rate. During the year ended December 31,
2023, our net deferred tax asset (and associated valuation allowance) related to our excess tax basis
in the legacy UK real estate assets increased due to book depreciation taken on UK real estate
buildings, which is not subjected to depreciation for UK tax purposes. In addition, the deferred
tax asset (and associated valuation allowance) related to our investment in KWE decreased due to
unrealized foreign currency gains that has no tax basis.
Preferred dividends were $38.0 million for the year ended December 31, 2023 as compared to
$28.9 million for the year ended December 31, 2022. The increase was due to the issuance of $200
million of our Series C cumulative perpetual preferred stock to affiliates of Fairfax Financial Holdings
Limited (collectively, “Fairfax”) during 2023.
Comprehensive Income
The two major components that drive the change in other comprehensive income are the changes in
foreign currency rates and the gains or loss of any associated foreign currency hedges. Please refer
to the section titled “Currency Risk - Foreign Currencies” in Item 3 for a discussion of our risks relating
to foreign currency and our hedging strategy. Below is a table that details the activity for the years
ended December 31, 2023 and 2022.
54 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 55
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
(Dollars in millions)
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders
Unrealized foreign currency translation gain (loss), net of noncontrolling interests and tax
Amounts reclassified out of accumulated other comprehensive loss during the period
Unrealized foreign currency derivative contract (loss) gain, net of noncontrolling
$
interests and tax
Unrealized gain on interest rate swaps, net of tax
Year Ended December 31,
2023
(341.8)
31.3
—
(5.5)
—
$
2022
64.8
(68.7)
(0.8)
23.4
5.6
Comprehensive (loss) income attributable to Kennedy-Wilson Holdings, Inc.
common shareholders
$
(316.0)
$
24.3
The main currencies that the Company has exposure to are the euro and pound sterling. The
table below represents the change in rates over the years ended December 31, 2023 and 2022 as
compared to the U.S. Dollar:
Euro
GBP
Year Ended December 31,
2023
3.1 %
5.2 %
2022
(5.9)%
(10.6)%
Comprehensive (loss) income, net of taxes and noncontrolling interests, for the year ended
December 31, 2023 and 2022 was a loss of $316.0 million and income of $24.3 million, respectively.
The Company experienced net unrealized gains on foreign currency through other comprehensive
income for the period due to the EUR and GBP strengthening against the U.S. Dollar. Unrealized
hedge losses were driven by hedges that the Company has on its GBP-denominated investments.
Liquidity and Capital Resources
Our liquidity and capital resources requirements include acquisitions of real estate and real estate
related assets, funding development projects, capital expenditures for consolidated real estate
and unconsolidated investments, working capital needs, interest and principal payments on our
debt and dividends to our common and preferred shareholders. We finance these activities with
internally generated funds through general operations including rental income, interest income,
asset management fees, asset sales, borrowings under our revolving line of credit, sales of equity
(common and preferred) and debt securities and cash out refinancings to the extent they are
available and fit within our overall portfolio leverage strategy. Our investments in real estate are
typically financed with equity from our balance sheet, third party equity and mortgage loans secured
by that real estate. These mortgage loans are generally nonrecourse in that, in the event of default,
recourse will be limited to the mortgaged property serving as collateral, subject to limited customary
exceptions. In some cases, we guarantee a portion of the loan related to a consolidated property or
an unconsolidated investment, usually until some condition, such as completion of construction or
leasing or certain net operating income criteria, has been met. We do not expect these guarantees
to materially affect liquidity or capital resources. Please refer to the section titled “Off Balance Sheet
Arrangements” for further information.
Our short-term liquidity requirements primarily consist of operating expenses and other
expenditures associated with our properties and loan investments, dividend payments to our
common and preferred shareholders, interest on our unsecured corporate debt, development,
redevelopment and capital expenditures and, potentially, share repurchases and acquisitions. We
currently expect to meet our short-term liquidity requirements through our existing cash and
cash equivalents plus capital generated from our investments, and sales of real estate as well as
availability on our current revolving lines of credit. Our need to raise funds from time to time to
meet our capital requirements will depend on many factors, including the success and pace of the
implementation of our strategy for strategic and accretive growth where appropriate. Additionally,
we may opportunistically seek to raise capital (equity or debt) when we believe market conditions
are favorable and when consistent with our growth and financing strategies. We may also seek third
party financing to the extent that we engage in additional strategic investments, including in order
to raise capital necessary to execute potential development or redevelopment strategies or acquire
real estate, note portfolios, or other real estate related companies or real estate related securities.
Similarly, we may from time to time seek to refinance our existing indebtedness opportunistically in
order to reduce our overall cost of debt capital or optimize the maturity schedule of our outstanding
indebtedness, or for other strategic reasons. Also, in May 2022, we established an at-the-market
(“ATM Program”) pursuant to which we may issue and sell shares of the Company’s common
stock having an aggregate gross sales price of up to $200.0 million in amounts and at times as the
Company determines from time to time. During the year ended December 31, 2023, the Company
issued 1.7 million shares at a weighted average price of $18.07 per share for net proceeds of $29.8
million under our ATM Program. The Company has no obligation to sell any of such shares under its
ATM Program. Actual sales will depend on a variety of factors to be determined by the Company
from time to time, including, among others, market conditions, the trading price of its common stock,
the Company’s determination of the appropriate sources of funding for the Company, and potential
uses of funding available.
As of December 31, 2023, we and our consolidated subsidiaries had approximately $313.7 million
($126.1 million of which is in foreign currencies of GBP or EUR) of consolidated cash (as shown
on our consolidated balance sheet), our share of cash held at unconsolidated Co-Investment
Portfolio assets was $94.8 million and we had $349.6 million of availability under lines of credit. As
of December 31, 2023, we have $69.6 million of restricted cash, which is included in cash and cash
equivalents, that primarily relates to lender reserves associated with consolidated mortgages that
we hold on properties and reserves held on loans in the newly acquired Construction Loan Portfolio
(as defined herein) on behalf of the borrowers under such loans. These reserves typically relate to
interest, taxes, insurance and future capital expenditures at the properties as well as reserves held
on our loan investments.
Additionally, we are subject to withholding taxes to the extent we repatriate cash from certain of
our foreign subsidiaries. Under the KWE Notes covenants, we have to maintain certain interest
coverage and leverage ratios to remain in compliance (see “Indebtedness and Related Covenants” for
more detail on KWE Notes). Due to these covenants, we evaluate the tax and covenant implications
before we distribute cash, which could impact the availability of funds at the corporate level.
As discussed throughout this report, ongoing macroeconomic conditions, such as, but not limited to,
elevated levels of inflation and interest rates, banks’ ability and willingness to lend, recent adverse
developments affecting regional banks and other financial institutions, currency fluctuations and the
ongoing military conflicts around the world, continue to fuel recessionary fears and create volatility
in our business results and operations, including our ability to access the capital markets at desired
terms or at all. In addition to such market conditions, Moody’s Investors Service, Inc. (“Moody’s”) and
Standard & Poor’s Ratings Services (“S&P”), a division of The McGraw-Hill Companies, Inc., rate our
56 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 57
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
outstanding debt. These ratings are based on a variety of factors, including our current leverage and
transactional activity. In February 2023, S&P downgraded us to ‘BB’ from ‘BB+’ and in December
2023 S&P downgraded us to “BB-” and maintained their negative CreditWatch. Additionally, S&P
downgraded the KWE Notes to ‘BB+’ from ‘BBB-’ in February 2023 and to “BB” and the KWI Notes
to ‘BB-’ from ‘BB’ in February 2023 and to “B+” in December 2023. These ratings and downgrades
thereof may impact our ability to access the debt market in the future at desired terms or at all.
S&P also lowered their issue-level rating on Kennedy Wilson’s preferred stock to “B-” in December
2023. On June 5, 2023 Moody’s downgraded the Company’s rating from “B1” to “B2” with a stable
outlook. Please also see Part I. Item 1A. Risk Factors.
Development and Redevelopment
Kennedy Wilson has a number of market rate development, redevelopment and entitlement projects
that are underway or are in the planning stages. These initiatives, if completed, will result in market-
rate income producing assets. As of December 31, 2023, we have 1,462 multifamily units and
415,000 commercial rentable square feet we are actively developing. If these projects were brought
to completion, the estimated share of the Company’s total cost would be approximately $613.0
million, which we expect would be funded through our existing equity, third-party equity, project
sales and secured debt financing. As of December 31, 2023, we have incurred $550.0 million of
costs to date and expect to spend an additional $95.0 million to develop to completion or complete
the entitlement process on these projects. Of the $95.0 million of remaining costs to complete,
we currently expect $24.0 million of it to be funded through cash from us over the life of the
projects. This represents total capital over the life of the projects and is not a representation of peak
equity and does not take into account any distributions over the course of the investment. When
development projects are completed, they typically move into our unstabilized category as they
undergo lease up post-completion.
In addition to the market rate development and redevelopment projects described above, we
have 1,604 affordable and/or age-restricted multifamily units within our VHH platform that we
are currently developing or in the process of stabilizing. We expect to have no cash equity basis in
these projects at completion due to the use of property level debt and proceeds from the sale of tax
credits. If these projects are brought to completion, we expect to receive $11.0 million in cash from
paid developer fees and proceeds from the sale of tax credits.
The figures described in the two preceding paragraphs and in the table below are budgeted costs
and are subject to change. There is no certainty that the Company will develop or redevelop any
or all of these potential projects and the Company and its equity partners are under no obligation
to complete these projects and may dispose of any such assets after adding value through the
entitlement process. These are budgeted figures and are subject to change (increase or decrease)
due to a number of factors (some of which are beyond our control), including, that these projects
are being developed under construction management contracts with the general contractors and
therefore we and our equity partners could be called upon to contribute additional capital in the
event that actual costs exceed budgeted costs. The scope of these projects may also change. The
estimated costs and amounts of cash to complete projects reflected in the table below represent
management’s current expectations and the total costs incurred to date include the land costs of
these projects.
The table below describes the market rate development or redevelopment projects that the
Company is undergoing or considering, and excludes the affordable and/or age-restricted multifamily
units that it is developing in its VHH platform and its residential investments ($ in millions).
If Completed
Current
Est.
Completion
Date(1)
Commercial
Sq. Ft.
MF
Units
KW Est.
Total
Cost(4)
KW
Costs
Incurred(4)
KW Est.
Costs to
Complete(2)
—
172 $
73 $
63 $
10
3
3
15
5
12
15
32
TBD
TBD
Location
Type
Investment
Status
Nor.
California
Mountain
West
Mountain
West
Pacific
Northwest
Nor.
California
Multifamily 38° North
Phase II
Multifamily Dovetail(5)
Multifamily Oxbow
Multifamily Two10
Multifamily 38o North
Phase III(5)
Under
Construction
Under
Construction
Under
Construction
Under
Construction
Under
Construction
2024
2024
2024
2024
2024
—
240
56
—
268
42
—
210
63
—
30
13
53
39
48
8
59
Ireland(3)
Mixed-Use
The
Cornerstone(5)
Under
Construction
2024
20,000
232
71
Ireland(3)
Office
Coopers Cross Under
2024
395,000
—
175
160
So. California Multifamily University Glen
Phase II(5)
Construction
Under
Construction
So. California Multifamily Gateway @ The
In Planning
Oaks
Pacific
Northwest
Multifamily Bend
In Planning
2024
—
310
120
TBD
TBD
—
TBD
TBD
—
TBD
TBD
88
12
20
Total
415,000
1,462 $ 613 $
550 $
95
(1) The actual completion date for projects is subject to several factors, many of which are not within our control. Accordingly, the
projects identified may not be completed when expected, or at all.
(2) Figures shown in this column are an estimate of our remaining costs to develop to completion or to complete the entitlement
process, as applicable, as of December 31, 2023. Total remaining costs may be financed with third-party cash contributions,
proceeds from projected sales, and/or debt financing. We expect to fund $24 million of our share of remaining costs to complete
with cash over the life of these projects. These figures are budgeted costs and are subject to change. There is no guarantee that
we will be able to secure the project-level debt financing that is assumed in the figures above. If we are unable to secure such
financing, the amount of capital we will have to invest to complete the projects above may significantly increase. Our cost to
complete differs from our share total capitalization as the latter includes costs that have already been incurred to date while the
former relates to future estimated costs
(3) Estimated foreign exchange rates are €1.00 = $1 USD and £1.00 = $1 USD, related to NOI.
(4) Includes land costs.
(5) Included in Consolidated Portfolio Segment
(6) Included in Co-Investment Portfolio Segment
Unstabilized and Value Add Capital Expenditure Programs
We currently have seven assets that comprise 0.7 million commercial square feet that are currently
unstabilized and are undergoing various stages of lease-up, value-add or development. In order to
stabilize these assets we project our share of costs to complete to be $30.9 million. The cost to
complete this work and the time frame described is subject to many uncertainties that are beyond
our control, and the actual costs may be significantly higher than the estimates shown below.
58 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 59
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
The table below describes assets that are currently unstabilized ($ in millions):
Property
Kona Village
Coopers Cross
Grange
The Heights
Building 4
Stockley Park
Location
Hawaii
Ireland(2)
Ireland(2)
Type
Hotel
Multifamily
Multifamily
United Kingdom(2) Office
United Kingdom(2) Office
Hamilton Landing
H4 & H7
Northern
California
Office
90 East Buildings
C and D
Pacific Northwest Office
Total Lease-Up
KW
Ownership %
# of
Assets
Commercial
Sq. Ft.
Hotel Rooms/
MF Units Leased %
KW Est.
Costs to
Complete(1)
50%
50%
50%
51%
100%
100%
50%
1
1
1
1
1
1
1
7
—
—
—
80,000
54,000
118,000
410,000
662,000
150
471
287
—
—
—
—
— % $
33
54
43
—
34
—
908
24 % $
2.1
1.3
1.4
—
—
6.7
19.4
30.9
Note: The table above excludes minority-held investments and two wholly-owned assets expected to sell, 1.1 million commercial
sq. ft.
(1) Figures shown in this column are an estimate of KW’s remaining costs to develop to completion or to complete the entitlement
process, as applicable, as of December 31, 2023. Total remaining costs may be financed with third-party cash contributions,
proceeds from projected sales, and/or debt financing. These figures are budgeted costs and are subject to change. There is no
guarantee that the Company will be able to secure the project-level debt financing that is assumed in the figures above. If the
Company is unable to secure such financing, the amount of capital that the Company will have to invest to complete the projects
above may significantly increase.
(2) Estimated foreign exchange rates are €1.00 = $1.10 and £1.00 = $1.27, related to NOI.
In addition to our development, redevelopment and stabilization initiatives, we regularly implement a
value-add approach to our consolidated and unconsolidated investments, which includes rehabbing
properties and adding or updating property amenities. The capital required to implement these
value-add initiatives is typically funded with capital calls, refinancing or supplemental financings at
the property level. We are not required to make these investments, but they are a key driver in our
ability to increase net operating income at our properties post acquisition.
Other Items
On November 3, 2020, the Company’s board of directors authorized an expansion of its existing
$250 million share repurchase plan to $500 million. 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. The program does not obligate the
Company to repurchase any specific number of shares and, subject to compliance with applicable
laws, may be suspended or terminated at any time without prior notice. As of December 31, 2023,
we had $124.5 million remaining under the plan for stock repurchases. Please see the section titled
“Purchases of Equity Securities by the Company” in Part II of this annual report on Form 10-K for
additional information.
The Company maintains a deferred compensation program for certain employees of the Company
(the “Deferred Compensation Program”). The named executive officers of the Company are
not participants of the Deferred Compensation Program. The compensation committee of the
Company’s board of directors approves an amount annually to be allocated to certain employees
of the Company in the United States and in Europe. The amount allocated to each employee vests
ratably over a three-year vesting period, subject to continued employment with the Company. Prior
to 2022, half of the allocated amount was tied specifically to the performance and value of the
Company’s common stock at the time of each vesting (“Bonus Units”). Beginning in 2022, the entire
amount allocated to each employee consisted of Bonus Units. Under the Deferred Compensation
Program, at the time of each vesting, the employees receive an amount equal to either the dividend
yield of the Company’s common stock or the actual amount of dividends paid on the Company
common stock (in the case of Bonus Units) during the immediately preceding year on the amount
that is subject to such vesting. During the years ended December 31, 2023, 2022 and 2021 the
Company recognized $8.2 million, $9.2 million and $11.7 million, respectively, under the Deferred
Cash Bonus Program.
The Company also maintains a performance allocation sharing program for certain employees of
the Company (the “Performance Allocation Sharing Program”). The named executive officers of the
Company are not participants of the Performance Allocation Sharing Program. The compensation
committee of the Company’s board of directors approved, reserved and authorized executive
management to issue up to thirty-five percent (35%) of any performance allocations earned by
certain commingled funds and separate account investments to be allocated to certain non-NEO
employees of the Company. Currently structures participating in the Performance Allocation Sharing
Program have allocated a range of 20% to 35% of performance allocations to employees. Sixty
percent of the award to each employee vests ratably over four years and the remaining forty percent
vest upon the consummation of a liquidity event of the investment whereby the Company actually
receives cash performance allocations from its partner. The full performance allocation earned
by the Company will be recorded to income from unconsolidated investments and the amount
allocated to employees is recorded as performance allocation compensation. During the years ended
December 31, 2023, 2022 and 2021, the Company recognized $(15.1) million, $(4.3) million and
$42.0 million respectively, related to this program.
The Company also recently implemented a global employee co-investment program (the “Co-
Investment Program”). The named executive officers are not participants of the Co-Investment
Program. Under the Co-Investment Program, certain employees are provided the opportunity to
invest alongside the Company in its investments (in all future investments and certain recently
acquired transactions). The amount of funds that the employees, as a group, can invest in the
Company’s investments is capped at 1.5% of the Company’s equity. Participants in the Co-
Investment Program will make commitments to the program every year. Generally (with limited
exceptions), participants in the Co-Investment Program will invest in every investment made by
the Company (investments that such employee has an active role in acquiring and managing) in the
applicable year.
One of our office properties in our Consolidated Portfolio located in Bellevue, Washington (the
third largest asset by our share of net operating income), is made up of two tenants. One tenant
vacated its space upon the expiration of its lease (October 2023). The other tenant still occupies
its space and is current on all obligations under its lease (lease termination option in January 2025).
We are working on securing new leases at the property, however, there is no assurance that we
will be able to do so at favorable terms or at all. In addition, we and our partner recently brought a
lawsuit against a national co-working office tenant that recently stopped paying rent with respect
to its tenancy at one of our office properties that we manage and hold a 10% ownership interest
in. Amongst other claims, we and our partner are pursuing the collection of all rent, expenses and
charges under the lease that runs through 2036 and the guarantee that was executed by such
tenant’s parent company. The legal proceeding is still pending and there can be no assurance that we
60 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 61
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
will be able to secure a favorable outcome. The office property sits in our Co-Investment Portfolio
and our investment in the property is accounted for under fair value method accounting. Please
also see our discussion of the results of the year ended December 31, 2023 below for additional
information with respect to our investment in this property as it relates to the changes in fair value
during such periods.
Cash Flows
The following table summarizes the cash provided by or used in our operating, investing and
financing activities for the years ended December 31, 2023 and 2022:
(Dollars in millions)
Net cash provided by operating activities
Net cash used in investing activities
Net cash (used in) provided by financing activities
$
Year ended December 31,
2023
48.9
(11.7)
(164.8)
$
2022
32.9
(361.6)
264.2
Operating
Our cash flows from operating activities are primarily dependent upon operations from
consolidated properties, the operating distributions and fees from our Co-Investment Platform,
general and administrative costs, compensation and interest expense payments. For the years
ended December 31, 2023 and 2022, cash flows provided by operations were $48.9 million and
$32.9 million, respectively.
The increase in cash provided by operations was primarily due to higher asset management fees
earned during the year ended December 31, 2023 including the $7.9 million arrangement fee as
part of the Construction Loan Portfolio transaction. We also had increased interest income, cash
receipts on interest rate derivatives and lower discretionary compensation payments made in the
current period. These offset were offset by lower operating distributions from our unconsolidated
investments due to higher interest rates and higher interest costs on our consolidated debt.
Investing
Our cash flows from investing activities are generally comprised of cash used to fund property
acquisitions, investments in unconsolidated investments, capital expenditures, purchases of loans
secured by real estate, as well as cash received from property sales and return of capital from our co-
investments.
Year Ended December 31, 2023
Net cash used in investing activities totaled $11.7 million for the year ended December 31, 2023.
During the year ended December 31, 2023, we received $383.9 million primarily from sale of equity
interests in three Western United States multifamily properties into existing co-investment platforms
which triggered deconsolidation and the recognition of capital gains, the sale of a multifamily
property in Western United States to a third party, the sale of non-core retail assets in the United
Kingdom, Ireland, Spain and Western United States and a residential investment in the Western
United States. We received $92.4 million in investing distributions from our co-investments primarily
from the sale of assets within our comingled funds and financing distributions from multifamily
properties in Ireland. Our share of new loans issued acquired as part of our global debt platform
were $150.2 million (including $106.4 million relating to the Construction Loan Portfolio acquisition),
and we received $48.9 million of proceeds from repayments on loans previously issued. We spent
$217.2 million on capital expenditures on consolidated assets, as well as continued investments in
our development properties and value add on our operating properties. We also contributed $167.4
million to unconsolidated investments that were primarily used to fund our share of construction
for the completion of Kona Village as well as European development projects and new acquisitions
made within our European Industrial JV platform and commingled funds. We spent $2.1 million in
premiums on new derivative contracts entered into during the year ended December 31, 2023.
Year Ended December 31, 2022
Net cash used in investing activities totaled $361.6 million for the year ended December 31,
2022. During the year ended December 31, 2022, we received $325.9 million primarily from the
sale of non-core retail assets in the United Kingdom and Western United States and a multifamily
property in the Western United States. We received $157.1 million in investing distributions from
our co-investments primarily from the sale of assets within our comingled funds and financing
distributions from multifamily properties in Ireland. Our share of new loans issued as part of our
global debt platform was $50.9 million, and we received $34.5 million of proceeds from repayments
on loans previously issued. Additionally, we acquired $408.2 million of consolidated real estate
assets, including an office building in Scotland and four multifamily properties in the Mountain
West. We spent $160.9 million on capital expenditures on consolidated assets, as well as continued
investments in our development properties and value add on our operating properties. We also
contributed $361.3 million to unconsolidated investments that were primarily used to fund our share
of capital calls on Kona Village Resort and new acquisitions made within our European Industrial JV
platform and commingled funds. The settlement of foreign currency derivatives generated $112.6
million of cash during the year ended December 31, 2022, primarily due to settlement of interest
rate and foreign currency derivatives that had appreciated in value. We spent $10.4 million in
premiums on new derivative contracts entered into during the year ended December 31, 2022.
Financing
Our net cash related to financing activities is generally impacted by capital-raising activities net of
dividends and distributions paid to common and preferred shareholders and noncontrolling interests
as well as financing activities for consolidated real estate investments.
Year Ended December 31, 2023
Net cash used in financing activities totaled $164.8 million for the year ended December 31, 2023.
During the year ended December 31, 2023, the Company received proceeds of $197.4 million
from the issuance of its Series C perpetual preferred stock and warrants to Fairfax. We drew $50.0
million on our revolving line of credit and repaid $185.0 million on our revolving line of credit
during the year ended December 31, 2023. Kennedy Wilson received proceeds of $408.9 million
from mortgage loans to finance and refinance consolidated property acquisitions. These proceeds
were offset by the repayment of $446.4 million of mortgage debt. Additionally, we paid common
dividends of $136.0 million and preferred dividends of $35.5 million, and we repurchased $20.9
million of our common stock under our share repurchase plan.
Year Ended December 31, 2022
Net cash provided by financing activities totaled $264.2 million for the year ended December 31,
2022. During the year ended December 31, 2022, the Company received proceeds of $297.3 million
from the issuance of its Series B perpetual preferred stock and warrants to Fairfax. We drew $528.4
million on our revolving line of credit and repaid $325.0 million on our revolving line of credit during
the year ended December 31, 2022. Kennedy Wilson received proceeds of $401.3 million from
62 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 63
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
mortgage loans to finance and refinance consolidated property acquisitions. These proceeds were
offset by the repayment of $389.6 million of mortgage debt and $65.8 million on our KWE Notes.
Additionally, we paid common dividends of $134.6 million and preferred dividends of $25.9 million,
and we repurchased $31.2 million of our common stock under our share repurchase plan.
Contractual Obligations and Commercial Commitments
At December 31, 2023, Kennedy Wilson’s consolidated contractual cash obligations, including debt,
lines of credit, operating leases and ground leases included the following:
(Dollars in millions)
Contractual obligations
Borrowings:(1)(4)
Mortgage debt(2)
Senior notes(3)
Credit facility
KWE unsecured bonds(5)
Total borrowings(4)
Operating leases
Ground leases(8)
Payments due by period(9)
Total
Less than
1 year
1–3 years
4–5 years
$
$ 2,849.7
1,800.0
150.4
524.3
5,324.4
10.1
27.4
$
150.0
—
—
—
150.0
1.0
0.2
$ 1,229.6
—
150.4
524.3
1,904.3
2.1
0.4
$
548.8
600.0
—
—
1,148.8
2.3
0.4
After
5 years
921.3
1,200.0
—
—
2,121.3
4.7
26.4
Total contractual cash obligations(6)(7)
$ 5,361.9
$
151.2
$ 1,906.8
$ 1,151.5
$ 2,152.4
(1) See Notes 8-10 of our Notes to Consolidated Financial Statements. Figures do not include scheduled interest payments.
Assuming each debt obligation is held until maturity, we estimate that we will make the following interest payments: Less than
1 year—$163.6 million; 1-3 years—$368.1 million; 4-5 years—$106.8 million; After 5 years—$90.9 million. The interest payments
on variable rate debt have been calculated at the interest rate in effect as of December 31, 2023.
(2) Excludes $1.0 million net unamortized debt discount on mortgage debt.
(3) Excludes $3.1 million unamortized debt premium on senior notes.
(4) Excludes $33.4 million of unamortized loan fees.
(5) Excludes $1.0 million net unamortized discount on KWE unsecured bonds.
(6) Kennedy Wilson’s share of contractual obligations, (excluding amounts that are attributable to noncontrolling interests), including
debt, lines of credit, operating leases and ground leases, consisted of the following: Less than 1 year—$151.2 million;
1-3 years—$1,902.6 million; 4-5 years—$1,128.7 million; After 5 years—$2,102.8 million.
(7) Table above excludes $187.7 million unfulfilled capital commitments to our unconsolidated investments and $87.7 million on loan
investments.
(8) Ground leases on consolidated assets. Amounts are undiscounted and have leases that expire as far out as 2258.
(9) Principal debt payments include the effect of extension options.
Indebtedness and Related Covenants
The following describes certain indebtedness and related covenants.
KWI Notes
On February 11, 2021, Kennedy-Wilson, Inc., issued $500.0 million aggregate principal amount of
2029 Notes and $500.0 million aggregate principal amount of 2031 Notes (together with the 2029
Notes, the “initial notes”). On March 15, 2021, Kennedy-Wilson, Inc. issued an additional $100
million aggregate principal of the 2029 Notes and an additional $100 million of the 2031 Notes.
These additional notes were issued as “additional notes” under the indentures pursuant to which
Kennedy Wilson previously issued 2029 Notes and the 2031 Notes. On August 23, 2021, Kennedy-
Wilson, Inc. issued $600.0 million aggregate principal amount of 2030 Notes (together with the
2029 Notes, the 2031 Notes and the additional notes, the “notes”). The notes are senior, unsecured
obligations of Kennedy Wilson and are guaranteed by Kennedy-Wilson Holdings, Inc. and certain
subsidiaries of Kennedy Wilson.
The notes accrue interest at a rate of 4.750% (in the case of the 2029 Notes), 4.750% (in the case
of the 2030 Notes) and 5.000% (in the case of the 2031 Notes) per annum, payable semi-annually
in arrears on March 1 and September 1 of each year, beginning on September 1, 2021 for the 2029
Notes and 2031 Notes and March 1, 2022 for the 2030 Notes. The notes will mature on March 1,
2029 (in the case of the 2029 Notes), February 1, 2030 (in case of 2030 Notes) and March 1, 2031
(in the case of the 2031 Notes), in each case unless earlier repurchased or redeemed. At any time
prior to March 1, 2024 (in the case of the 2029 Notes), September 1, 2024 (in the case of the 2030
Notes) or March 1, 2026 (in the case of the 2031 notes), Kennedy Wilson may redeem the notes
of the applicable series, in whole or in part, at a redemption price equal to 100% of their principal
amount, plus an applicable “make-whole” premium and accrued and unpaid interest, if any, to the
redemption date. At any time and from time to time on or after March 1, 2024 (in the case of the
2029 Notes), September 1, 2024 (in the case of the 2030 Notes) or March 1, 2026 (in the case of
the 2031 Notes), Kennedy Wilson may redeem the notes of the applicable series, in whole or in
part, at specified redemption prices set forth in the indenture governing the notes of the applicable
series, plus accrued and unpaid interest, if any, to the redemption date. In addition, prior to March 1,
2024 (for 2029 Notes and 2031 Notes) and September 1, 2024 (for 2030 Notes), Kennedy Wilson
may redeem up to 40% of the notes of either series from the proceeds of certain equity offerings.
No sinking fund will be provided for the notes. Upon the occurrence of certain change of control or
termination of trading events, holders of the notes may require Kennedy Wilson to repurchase their
notes for cash equal to 101% of the principal amount of the notes to be repurchased, plus accrued
and unpaid interest, if any, to, but excluding, the applicable repurchase date. The total amount of the
2029 Notes, 2030 Notes and 2031 Notes included in the Company’s consolidated balance sheets
was $1.8 billion at December 31, 2023.
KWE Notes
As of December 31, 2023, KWE has notes outstanding (“KWE Notes”) of $523.3 million (based on
December 31, 2023 rates), have an annual fixed coupon of 3.25% and mature in 2025. The KWE
Notes are subject to the restrictive covenants discussed below.
Borrowings Under Line of Credit
On March 25, 2020, Kennedy-Wilson, Inc. (the “Borrower”), a wholly-owned subsidiary of Kennedy-
Wilson Holdings, Inc. (the “Company”), the Company, as a guarantor and certain subsidiaries of the
Company (such subsidiaries, the “Subsidiary Guarantors”) on March 25, 2020 entered into a $500
million revolving line of credit (“Second A&R Facility”). Loans under the Second A&R Facility bear
interest at a rate equal to SOFR plus 1.00% plus between 1.75% and 2.50%, depending on the
consolidated leverage ratio as of the applicable measurement date. The Second A&R Facility has a
maturity date of September 25, 2024. Subject to certain conditions precedent and at the Borrower’s
option, the maturity date of the Second A&R Facility may be extended by an additional six months.
The Company has $150.4 million outstanding on the A&R Facility as of December 31, 2023 with
$349.6 million available to be drawn under the revolving credit facility.
Debt Covenants
The Second A&R Facility and the indentures governing the notes contain numerous restrictive
covenants that, among other things, limit the Company and certain of its subsidiaries’ ability to incur
additional indebtedness, pay dividends or make distributions to stockholders, repurchase capital
64 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 65
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
stock or debt, make investments, sell assets or subsidiary stock, create or permit liens, engage in
transactions with affiliates, enter into sale/leaseback transactions, issue subsidiary equity and enter
into consolidations or mergers.
The Second A&R Facility has certain covenants as set forth in that certain Second Amended and
Restated Credit Agreement, dated as of March 25, 2020 (the “Credit Agreement”), that, among
other things (including the limitations set forth in the preceding paragraph), requires the Company
to maintain (i) a maximum consolidated leverage ratio (as defined in the Credit Agreement) of not
greater than 65%, measured as of the last day of each fiscal quarter, (ii) a minimum fixed charge
coverage ratio (as defined in the Credit Agreement) of not less than 1.70 to 1.00, measured as of the
last day of each fiscal quarter for the period of four full fiscal quarters then ended, (iii) a minimum
consolidated tangible net worth equal to or greater than the sum of $1,700,000,000 plus an amount
equal to fifty percent (50%) of net equity proceeds received by the Company after the date of the
most recent financial statements that are available as of March 25, 2020, measured as of the last day
of each fiscal quarter, (iv) a maximum recourse leverage ratio (as defined in the Credit Agreement)
of not greater than an amount equal to consolidated tangible net worth as of the measurement
date multiplied by 1.5, measured as of the last day of each fiscal quarter, (v) a maximum secured
recourse leverage ratio (as defined in the Credit Agreement) of not greater than an amount equal to
3.5% of consolidated total asset value (as defined in the Credit Agreement) and $299,000,000, (vi) a
maximum adjusted secured leverage ratio (as defined in the Credit Agreement) of not greater than
55%, measured as of the last day of each fiscal quarter, and (vii) liquidity (as defined in the Credit
Agreement) of at least $75.0 million. As of December 31, 2023, the Company was in compliance
with the foregoing financial covenants. The obligations of the Borrower pursuant to the Credit
Agreement are guaranteed by the Company and certain wholly-owned subsidiaries of the Company.
The indentures governing the notes limit Kennedy-Wilson, Inc.’s ability to incur additional
indebtedness if, on the date of such incurrence and after giving effect to the new indebtedness,
Kennedy-Wilson, Inc.’s maximum balance sheet leverage ratio (as defined in the indenture) is greater
than 1.50 to 1.00. This ratio is measured at the time of incurrence of additional indebtedness.
The KWE Notes require KWE to maintain (i) consolidated net indebtedness (as defined in the
trust deed for the notes) of no more than 60% of the total asset value; (ii) consolidated secured
indebtedness (less cash and cash equivalents) of no more than 50% of total asset value; (iii) an
interest coverage ratio of at least 1.5 to 1.0, and (iv) unencumbered assets of no less than 125% of
the unsecured indebtedness (less cash & cash equivalents). The covenants associated with KWE
Notes are not an obligation of KWH and these amounts are presented as a component of our
investment debt as it is an unsecured obligation relating to an underlying investment of ours. As of
December 31, 2023, the Company was in compliance with these covenants.
In addition, loan agreements that govern the Company’s property-level non-recourse financings
that are secured by its properties may contain operational and financial covenants, including but not
limited to, debt yield related covenants and debt service coverage ratio covenants and, with respect
to mortgages secured by certain properties in Europe, loan-to-value ratio covenants. Property-level
non-recourse financings with such loan-to-value covenants require that the underlying properties
are valued on a periodic basis (at least annually). As of December 31, 2023, the Company was in
compliance with all property-level mortgages and was current on all payments (principal and interest)
with respect to the same. The failure by the Company to comply with such covenants and/or secure
waivers from lenders could result in defaults under these instruments. In addition, if the Company
defaults under a mortgage loan and/or such loan is accelerated by the lender, it may automatically be
in default under any of its property and corporate unsecured loans that contain cross-default and/or
cross-acceleration provisions. Please also see Part I. Item 1A Risk Factors.
Off-Balance Sheet Arrangements
Guarantees
We have provided guarantees associated with loans secured by consolidated assets. At
December 31, 2023, the maximum potential amount of future payments (undiscounted) we could
be required to make under the guarantees was approximately $151.1 million at December 31, 2023.
The guarantees expire through 2031 and our performance under the guarantees would be required
to the extent there is a shortfall in liquidation between the principal amount of the loan and the
net sale proceeds of the applicable properties. If we were to become obligated to perform on these
guarantees, it could have an adverse effect on our financial condition.
As of December 31, 2023, we have unfulfilled capital commitments totaling $187.7 million to our
unconsolidated investments and $87.7 million to our loan portfolio. In addition to the unfunded
capital commitments on its joint venture investments, the Company has $68.7 million of equity
commitments relating on consolidated and unconsolidated development projects. As we identify
investment opportunities in the future, we may be called upon to contribute additional capital to
unconsolidated investments in satisfaction of our capital commitment obligations.
Non-Recourse Carve Out Guarantees
Most of our real estate properties within our equity partnerships are encumbered by traditional
non-recourse debt obligations. In connection with most of these loans, however, we entered into
certain “non-recourse carve out” guarantees, which provide for the loans to become partially or fully
recourse against us if certain triggering events occur. Although these events are different for each
guarantee, some of the common events include:
• the special purpose property-owning subsidiary’s filing a voluntary petition for bankruptcy;
• the special purpose property-owning subsidiary’s failure to maintain its status as a special
purpose entity; and
• subject to certain conditions, the special purpose property-owning subsidiary’s failure to obtain
lender’s written consent prior to any subordinate financing or other voluntary lien encumbering
the associated property.
In the event that any of these triggering events occur and the loans become partially or fully
recourse against us, our business, financial condition, results of operations and common stock price
could be materially adversely affected.
In addition, other items that are customarily recourse to a non-recourse carve out guarantor include,
but are not limited to, the payment of real property taxes, liens which are senior to the mortgage
loan and outstanding security deposits.
66 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 67
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
Impact of Inflation and Changing Prices
As discussed throughout this report, high inflation impacted the global economy during the year
ended December 31, 2023 and continues to impact the global economy. Our exposure to market
risk from changing prices consists primarily of fluctuations in rental rates of commercial and
multifamily properties, market interest rates on investment mortgages and debt obligations and
real estate property values. Rental rate increases are dependent upon market conditions and the
competitive environments in the respective locations of the properties. To the extent that we engage
in development activities, we may have exposure to changing prices in materials or cost of labor.
The revenues of the investment management operations with respect to rental properties are highly
dependent upon the aggregate rents of the properties managed, which are affected by rental rates
and building occupancy rates. Employee compensation is the principal cost element of investment
management.
We may be able to recoup all or a significant portion of any impact that we may suffer from rising
costs through rental increases. To the extent that the rate of increase in expenses is greater than
the rate of increase in rental rates, changing price will have an adverse impact on the Company. See
also Inflation may adversely affect our financial condition and results of operations in Item 1A. Risk
Factors for more detailed discussion on the impact of inflation on the Company.
Qualitative and Quantitative Disclosures about Market Risk
Our primary market risk exposure relates to changes in interest rates in connection with our short-
term borrowings and fluctuations in foreign currency exchange rates in connection with our foreign
operations.
Interest Rate Risk
We have established an interest rate management policy, which attempts to minimize our overall
cost of debt while taking into consideration the earnings implications associated with the volatility
of short-term interest rates. As part of this policy, we have elected to maintain a combination of
variable and fixed rate debt. As of December 31, 2023, 78% of our consolidated debt is fixed rate,
22% is floating rate with interest caps. As such, fluctuations in interest rates may impact our floating
rate debt (and floating rate debt with interest caps to a lesser extent) and cause our consolidated
interest expense and income from unconsolidated investments to fluctuate. Typically, these
fluctuations do not give rise to a significant long-term interest rate risk because they generally have
short maturities.
We hold variable rate debt on some of our consolidated and unconsolidated properties that is
subject to interest rate fluctuations. These variable rates generally are based on the lender’s base
rate, prime rate, EURIBOR, GBP LIBOR, LIBOR, SOFR, SONIA plus an applicable borrowing margin.
Additionally, in order to mitigate some of the risk associated with increasing interest rates, we have
purchased interest rate caps that limit the amount that interest expense can increase with rate
increases. However, some of our debt is uncapped and the mortgages that do have interest caps are
subject to increased interest expense until rates hit the level of caps that have been purchased. If
there was a 100-basis point increase or decrease, we would have a $1.0 million increase in interest
expense or $2.2 million decrease in interest expense savings during 2024 on our current share of
indebtedness. The weighted average strike price on caps and maturity of Kennedy Wilson’s variable
rate mortgages are 2.53% and approximately 1.6 years, respectively, as of December 31, 2023.
The table below represents contractual balances of our financial instruments at the expected
maturity dates as well as the fair value as of December 31, 2023. The weighted average interest
rate for the various assets and liabilities presented are actual as of December 31, 2023. We closely
monitor the fluctuation in interest rates, and if rates were to increase significantly, we believe that
we would be able to either hedge the change in the interest rate or refinance the loans with fixed
interest rate debt. All instruments included in this analysis are non-trading.
Principal Maturing in:
2024
2025
2026
2027
2028
Thereafter
Total
Fair Value
December 31,
2023
(Dollars in millions)
Interest rate
sensitive assets
Cash
equivalents
$ 313.7
$
—
$
—
$
—
$
—
$
—
$ 313.7
$
313.7
Average
interest rate
2.44 %
— %
— %
— %
Fixed rate
receivables
Average
16.7
12.2
14.8
10.0
interest rate(1)
4.76 %
6.51 %
4.15 %
6.80 %
Variable rate
receivables
Average
81.0
87.9
17.8
0.6
interest rate
11.00 %
10.19 %
10.73 %
7.36 %
Total
Weighted
average
$ 411.4
$100.1
$ 32.6
$ 10.6
$
— %
—
— %
—
— %
—
— %
2.44 %
6.1
59.8
6.49 %
5.49 %
—
56.1
—
—
— %
187.3
184.5
10.58 %
—
$
6.1
$ 560.8
$
554.3
interest rate(1)
4.22 %
9.74 %
7.75 %
6.83 %
— %
6.49 %
5.49 %
Interest rate
sensitive
liabilities
Variable rate
borrowings
Average
$ 57.3
$230.7
$368.3
$245.8
$
8.6
$ 241.5
$1,152.2
$
1,130.8
interest rate
6.31 %
6.59 %
7.20 %
7.56 %
7.08 %
6.88 %
7.04 %
—
Fixed rate
borrowings
Average
86.7
641.0
240.5
161.0
329.9
2,718.9
4,178.0
3,645.2
interest rate
3.39 %
3.40 %
4.13 %
3.86 %
4.65 %
4.45 %
4.24 %
—
Total
Weighted
average
$ 144.0
$871.7
$608.8
$406.8
$338.5
$ 2,960.4
$5,330.2
$
4,776.0
interest rate
4.55 %
4.25 %
5.99 %
6.09 %
4.71 %
4.65 %
4.85 %
(1) Interest rate sensitive assets’ weighted average interest rates are exclusive of non-performing receivables.
Currency Risk—Foreign Currencies
A significant portion of our business is located outside the United States. As such, we have foreign
currency fluctuation risk with respect to those investments and business units. In certain instances,
we utilize foreign currency hedging derivatives to mitigate the impact of this risk on our equity.
The financial statements of Kennedy Wilson’s subsidiaries located outside the United States are
measured using the local currency, as this is their functional currency. The assets and liabilities of
these subsidiaries are translated at the rates of exchange at the balance sheet date and income and
expenses are translated at the average monthly rate. The foreign currencies include the euro and the
68 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 69
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
British pound sterling. Cumulative translation adjustments, to the extent not included in cumulative
net income, are included in the consolidated statement of equity as a component of accumulated
other comprehensive income. Currency translation gains and losses and currency derivative gains
and losses will remain in other comprehensive income unless and until the Company substantially
liquidates underlying investments.
Approximately 36% of our investment account is invested through our foreign platforms in their
local currencies. Investment level debt is generally incurred in local currencies and therefore we
consider our equity investment as the appropriate exposure to evaluate for hedging purposes.
Additionally, the costs to operate these businesses, such as compensation, overhead and interest
expense are incurred in local currencies. We typically do not hedge future operations or cash flows
of operations denominated in foreign currencies, which may have a significant impact on the results
of our operations for both the Consolidated and Co-Invest segments. In order to manage the effect
of these fluctuations, we generally hedge our book equity exposure to foreign currencies through
currency forward contracts and options. As of December 31, 2023, we have hedged 97% of the
gross asset carrying value of our euro-denominated investments and 95% of the gross asset carrying
value of our GBP-denominated investments.
Our investment management businesses typically do not require much capital, so foreign currency
translation and derivative activity primarily relates to the investments segment as that has greater
balance sheet exposure to foreign currency fluctuations.
If there was a 5% increase or decrease in foreign exchange rates on the currencies we invest to the
U.S. Dollar our net asset value would increase by $11.7 million or decrease by $13.1 million. If rates
moved 10%, we would have an increase of $22.5 million and a decrease of $28.1 million.
Financial Measures and Descriptions.
Rental—Rental income is comprised of rental revenue earned by our consolidated real estate
investments.
Hotel—Hotel income is comprised of hotel revenue earned by our consolidated hotels.
Investment Management Fees—Investment management fees are primarily comprised of base asset
management fees and acquisition fees generated by our investment management division. Fees
earned from consolidated investments are eliminated in consolidation with the amount relating to
our equity partners being recognized through income attributable to noncontrolling interests.
Loans—Interest income earned on consolidated loans.
Income from unconsolidated investments—principal co-investments—Income from unconsolidated
investments—principal co-investments consists of the Company’s share of income or loss earned
on investments in which the Company can exercise significant influence but does not have control.
Income from unconsolidated investments includes income or loss from ordinary course operations of
the underlying investment, gains or losses on sale and fair value gains and losses.
Income from unconsolidated investments—performance allocations—Performance allocations relate
to allocations to the general partner, special limited partner or asset manager of Kennedy Wilson’s
co-investments it manages based on the cumulative performance of the fund and are subject to
preferred return thresholds of the limited partners.
Gain on sale of real estate, net—Gain on sale of real estate, net relates to the amount received over the
carrying value of assets sold. Impairments on consolidated real estate assets are also recorded to this
line to the extent that do not require separate presentation.
Rental—Rental expenses consist of the expenses of our consolidated real estate investments,
including items such as property taxes, insurance, maintenance and repairs, utilities, supplies, salaries
and management fees.
Hotel—Hotel expenses consist of expenses of our consolidated hotel investments, including
items such as property taxes, insurance, maintenance and repairs, utilities, supplies, salaries and
management fees.
Compensation and related—Employee compensation, comprising of salary, bonus, employer payroll
taxes and benefits paid on behalf of employees.
Performance allocation compensation—Compensation associated with up to thirty-five percent
(35%) of any performance allocation earned by certain commingled funds and separate account
investments to be allocated to certain non-NEO employees of the Company.
General and administrative—General and administrative expenses represent administrative costs
necessary to run Kennedy Wilson’s businesses and include items such as occupancy and equipment
expenses, professional fees, public company costs, travel and related expenses, and communications
and information services.
Depreciation and amortization—Depreciation and amortization is comprised of depreciation expense
which is recognized ratably over the useful life of an asset and amortization expense which primarily
consist of the amortization of assets allocated to the value of in-place leases upon acquisition of a
consolidated real estate asset.
Interest expense—Interest expense represents interest costs associated with our senior notes payable,
revolving credit facility, mortgages on our consolidated real estate, and unsecured debt held by
KWE.
Other income (loss)—Other income (loss) includes the realized foreign currency exchange income or
loss relating to the settlement of foreign transactions during the year which arise due to changes
in currency exchange rates, realized gains or losses related to undesignated derivative instruments,
interest income on bank deposits, commission expenses on property services and transaction related
expenses related to unsuccessful deals.
Income taxes—The Company’s services business operates globally as corporate entities subject
to federal, state, and local income taxes and the investment business operates through various
partnership structures to acquire wholly-owned or jointly-owned investments in multifamily,
commercial, residential and development properties. The Company’s distributive share of income
from its partnership investments will be subject to federal, state, and local taxes and the related
tax provision attributable to the Company’s share of the income tax is reflected in the consolidated
financial statements.
70 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 71
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
Accumulated other comprehensive income (loss)—Accumulated other comprehensive income (loss)
represents the Company’s share of foreign currency movement on translating Kennedy Wilson’s
foreign subsidiaries from their functional currency into the Company’s reporting currency. These
amounts are offset by Kennedy Wilson’s effective portion of currency related hedge instruments that
have been designated.
Non-GAAP Measures and Certain Definitions
“KWH,” “KW,” “Kennedy Wilson,” the “Company,” “we,” “our,” or “us” refers to Kennedy-Wilson
Holdings, Inc. and its wholly-owned subsidiaries. The consolidated financial statements of the
Company include the results of the Company’s consolidated subsidiaries.
“KWE” refers to Kennedy Wilson Europe Real Estate Limited.
“Adjusted EBITDA” represents net income before interest expense, loss (gain) on early
extinguishment of debt, the Company’s share of interest expense included in unconsolidated
investments, depreciation and amortization, the Company’s share of depreciation and amortization
included in unconsolidated investments, provision for (benefit from) income taxes, the Company’s
share of taxes included in unconsolidated investments, share-based compensation expense for the
Company and EBITDA attributable to noncontrolling interests. Please see “Management’s Discussion
and Analysis of Financial Condition and Results of Operations—Non-GAAP measures” for a reconciliation
of Adjusted EBITDA to net income as reported under GAAP. The Company’s management uses
Adjusted EBITDA to analyze its business because it adjusts net income for items the Company
believes do not accurately reflect the nature of its business going forward or that relate to non-cash
compensation expense or noncontrolling interests. Such items may vary for different companies for
reasons unrelated to overall operating performance. Additionally, the Company believes Adjusted
EBITDA is useful to investors to assist them in getting a more accurate picture of the Company’s
results from operations. However, Adjusted EBITDA is not a recognized measurement under GAAP
and when analyzing its operating performance, readers should use Adjusted EBITDA in addition
to, and not as an alternative for, net income as determined in accordance with GAAP. Because not
all companies use identical calculations, the Company’s presentation of Adjusted EBITDA may not
be comparable to similarly titled measures of other companies. Furthermore, Adjusted EBITDA
is not intended to be a measure of free cash flow for management’s discretionary use, as it does
not remove all non-cash items or consider certain cash requirements such as tax and debt service
payments. The amount shown for Adjusted EBITDA also differs from the amount calculated under
similarly titled definitions in the Company’s debt instruments, which are further adjusted to reflect
certain other cash and non-cash charges and are used to determine compliance with financial
covenants and the Company’s ability to engage in certain activities, such as incurring additional debt
and making certain restricted payments.
“Adjusted Net Income (Loss)” represents net income (loss) before depreciation and amortization,
the Company’s share of depreciation and amortization included in unconsolidated investments,
share-based compensation, and excluding net income attributable to noncontrolling interests, before
depreciation and amortization and preferred dividends. Please also see “Management’s Discussion
and Analysis of Financial Condition and Results of Operations—Certain Non-GAAP Measures and
Reconciliations” for a reconciliation of Adjusted Net Income to net income as reported under GAAP.
The Company’s management uses Adjusted Net Income to analyze its business because it adjusts
net income for items the Company believes do not accurately reflect the nature of its business
going forward or that relate to non-cash compensation expense or noncontrolling interests. Such
items may vary for different companies for reasons unrelated to overall operating performance.
Additionally, the Company believes Adjusted Net Income is useful to investors to assist them in
getting a more accurate picture of the Company’s results from operations. However, Adjusted
Net Income is not a recognized measurement under GAAP and when analyzing its operating
performance, readers should use Adjusted Net Income in addition to, and not as an alternative
for, net income as determined in accordance with GAAP. Because not all companies use identical
calculations, the Company’s presentation of Adjusted Net Income may not be comparable to similarly
titled measures of other companies. Furthermore, Adjusted Net Income is not intended to be a
measure of free cash flow for management’s discretionary use, as it does not remove all non-cash
items or consider certain cash requirements such as tax and debt service payments.
“Baseline EBITDA” represents total consolidated revenues, total consolidated rental and hotel
expenses, and KW’s share of net operating income from its unconsolidated investments, excluding
share-based compensation and net of non-controlling interest.
“Cap rate” represents the net operating income of an investment for the year preceding its
acquisition or disposition, as applicable, divided by the purchase or sale price, as applicable.
Capitalization (“Cap”) rates discussed in this report only include data from income-producing
properties. The Company calculates cap rates based on information that is supplied to it during
the acquisition diligence process. This information is not audited or reviewed by independent
accountants and may be presented in a manner that is different from similar information included
in the Company’s financial statements prepared in accordance with GAAP. In addition, cap rates
represent historical performance and are not a guarantee of future net operating income (“NOI”).
Properties for which a cap rate is discussed may not continue to perform at that cap rate.
“Co-Investment Portfolio NOI” refers to the Company’s share of NOI that is generated from the
properties in which the Company has an ownership interest and that are held in the Company’s Co-
Investment Portfolio business segment. Please also see “Management’s Discussion and Analysis of
Financial Condition and Results of Operations—Certain Non-GAAP Measures and Reconciliations”
for a reconciliation of Co-Investment Portfolio NOI to net income as reported under GAAP.
“Consolidated Portfolio NOI” refers to the NOI that is generated from the properties that the
Company has an ownership interest in and are held in the Company’s Consolidated Portfolio
business segment. Please also see “Management’s Discussion and Analysis of Financial Condition
and Results of Operations—Certain Non-GAAP Measures and Reconciliations” for a reconciliation of
Consolidated Portfolio NOI to net income as reported under GAAP.
“Equity partners” refers to non-wholly-owned subsidiaries that we consolidate in our financial
statements under U.S. GAAP and third-party equity providers.
“Fee Bearing Capital” represents total third-party committed or invested capital that we manage in
our joint-ventures and commingled funds that entitle us to earn fees, including without limitation,
asset management fees, construction management fees, acquisition and disposition fees and/or
performance allocations, if applicable.
“Gross Asset Value” refers to the gross carrying value of assets, before debt, depreciation and
amortization, and net of noncontrolling interests.
72 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 73
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
“Net operating income” or “NOI” is a non-GAAP measure representing the income produced
by a property calculated by deducting certain property expenses from property revenues. The
Company’s management uses net operating income to assess and compare the performance of its
properties and to estimate their fair value. Net operating income does not include the effects of
depreciation or amortization or gains or losses from the sale of properties because the effects of
those items do not necessarily represent the actual change in the value of the Company’s properties
resulting from its value-add initiatives or changing market conditions. Management believes that
net operating income reflects the core revenues and costs of operating its properties and is better
suited to evaluate trends in occupancy and lease rates. Please also see “Management’s Discussion
and Analysis of Financial Condition and Results of Operations—Certain Non-GAAP Measures and
Reconciliations” for a reconciliation of Net Operating Income to net income as reported under GAAP
and a reconciliation of Net Operating Income (Net Effective) (with respect to same property) to net
income as reported under GAAP.
“Noncontrolling interests” represents the portion of equity ownership in a consolidated subsidiary
not attributable to Kennedy Wilson.
“Performance allocations” relates to allocations to the Company of Kennedy Wilson’s co-investments
it invests in and manages based on the cumulative performance of the fund or investment vehicle, as
applicable, and are subject to preferred return thresholds of the limited partners.
“Performance allocation compensation”—the compensation committee of the Company’s board of
directors approved and reserved between twenty percent (20%) and thirty-five percent (35%) of any
performance allocation earned by certain commingled funds and separate account investments to be
allocated to certain non-NEO employees of the Company.
“Principal co-investments” consists of the Company’s share of income or loss earned on investments
in which the Company can exercise significant influence but does not have control. Income from
unconsolidated investments includes income from ordinary course operations of the underlying
investment, gains on sale, fair value gains and losses.
“Real Estate Assets under Management” (“AUM”) generally refers to the properties and other assets
with respect to which the Company provides (or participates in) oversight, investment management
services and other advice, and which generally consist of real estate properties or loans, and
investments in joint ventures. AUM is principally intended to reflect the extent of the Company’s
presence in the real estate market, not the basis for determining management fees. AUM consists of
the total estimated fair value of the real estate properties and other real estate related assets either
owned by third parties, wholly-owned by the Company or held by joint ventures and other entities in
which its sponsored funds or investment vehicles and client accounts have invested. The estimated
value of development properties is included at estimated completion cost. The accuracy of estimating
fair value for investments cannot be determined with precision and cannot be substantiated by
comparison to quoted prices in active markets and may not be realized in a current sale or immediate
settlement of the asset or liability (particularly given the ongoing macroeconomic conditions such
as, but not limited to, elevated levels of inflation and interest rates, banks’ ability and willingness to
lend, recent adverse developments affecting regional banks and other financial institutions, currency
fluctuations and the ongoing military conflicts around the world, continue to fuel recessionary fears
and create volatility in Kennedy Wilson’s business results and operations). Recently, there has also
been a lack of liquidity in the capital markets as well as limited transactions which has had an impact
on the inputs associated with fair values. Additionally, there are inherent uncertainties in any fair value
measurement technique, and changes in the underlying assumptions used, including capitalization
rates, discount rates, liquidity risks, and estimates of future cash flows could significantly affect the fair
value measurement amounts. All valuations of real estate involve subjective judgments.
“Same property” refers to stabilized consolidated and unconsolidated properties in which
Kennedy Wilson has an ownership interest during the entire span of both periods being
compared. This analysis excludes properties that during the comparable periods (i) were acquired,
(ii) were sold, (iii) are either under development or undergoing lease up or major repositioning as
part of the Company’s asset management strategy, (iv) were investments in which the Company
holds a minority ownership position, and (v) certain non-recurring income and expenses. The
analysis only includes Office, Multifamily and Hotel properties, where applicable. To derive an
appropriate measure of operating performance across the comparable periods, the Company
removes the effects of foreign currency exchange rate movements by using the reported period-
end exchange rate to translate from local currency into the U.S. dollar, for both periods. Amounts
are calculated using Kennedy Wilson’s ownership share in the Company’s consolidated and
unconsolidated properties. Management evaluates the performance of the operating properties
the Company owns and manages using a “same property” analysis because the population of
properties in this analysis is consistent from period to period, which allows management and
investors to analyze (i) the Company’s ongoing business operations and (ii) the revenues and
expenses directly associated with owning and operating the Company’s properties and the impact
to operations from trends in occupancy rates, rental rates and operating costs. Same property
metrics are widely recognized measures in the real estate industry, however, other publicly-
traded real estate companies may not calculate and report same property results in the same
manner as the Company. Please also see “Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Certain Non-GAAP Measures and Reconciliations” for a
reconciliation of “same property” results to the most comparable measure reported under GAAP.
We use certain non-GAAP measures to analyze our business, including Adjusted EBITDA and
Adjusted Net Income. We use these metrics for evaluating the success of our company and believe
that they enhance the understanding of our operating results. A reconciliation of net income to
Adjusted EBITDA and Adjusted Net Income is presented below:
(Dollars in millions)
Net (loss) income
Non-GAAP adjustments:
Add back (less):
Interest expense
Loss (gain) on early extinguishment of debt
Kennedy Wilson’s share of interest expense included
in unconsolidated investments
Depreciation and amortization
Kennedy Wilson’s share of depreciation and amortization
included in unconsolidated investments
(Benefit from) provision for income taxes
Kennedy Wilson’s share of taxes included in unconsolidated
investments
Share-based compensation
EBITDA attributable to noncontrolling interests(1)
Years Ended December 31,
2023
2022
2021
2020
2019
$ (281.4) $ 101.9 $ 336.4 $ 107.8 $ 321.1
259.2
1.6
99.1
157.8
3.2
(55.3)
0.1
34.5
(29.0)
220.8
(27.5)
60.2
172.9
3.5
36.2
2.7
29.0
(8.2)
192.4
45.7
40.2
166.3
5.3
126.2
—
28.7
(13.3)
201.9
9.3
33.0
179.6
6.9
43.6
1.1
32.3
(7.5)
214.2
0.9
32.1
187.6
8.2
41.4
—
30.2
(107.6)
Adjusted EBITDA(2)
$ 189.8 $ 591.5 $ 927.9 $ 608.0 $ 728.1
(1) (2) See “Non-GAAP Measures and Certain Definitions” for definitions and discussion of Adjusted EBITDA.
74 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 75
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
(Dollars in millions)
Net (loss) income
Non-GAAP adjustments:
Add back (less):
Depreciation and amortization
Kennedy Wilson’s share of depreciation and amortization
included in unconsolidated investments
Share-based compensation
Net income attributable to the noncontrolling interests,
before depreciation and amortization(1)
Preferred dividends
Adjusted Net (Loss) Income(2)
Years Ended December 31,
2023
2022
2021
2020
2019
$ (281.4) $ 101.9 $ 336.4 $ 107.8 $ 321.1
157.8
172.9
166.3
179.6
187.6
3.2
34.5
(27.4)
(38.0)
3.5
29.0
(13.5)
(28.9)
5.3
28.7
(10.5)
(17.2)
6.9
32.3
(2.5)
(17.2)
8.2
30.2
(102.0)
(2.6)
$ (151.3) $ 264.9 $ 509.0 $ 306.9 $ 442.5
(1) (2) See “Non-GAAP Measures and Certain Definitions” for definitions and discussion of Adjusted Net Income.
Net Operating Income
Net (loss) income
Less: (Benefit from) provision for
income taxes
Less: Loss (income) from
unconsolidated investments
Less: (Gain) loss on sale of real
estate, net(1)
Add: Interest expense
Less: Loss (gain) on early
extinguishment of debt
Less: Other loss (income)
Less: Sale of real estate(1)
Less: Interest income
Less: Investment management and
property services
Add: Cost of real estate sold(1)
Add: Compensation and related
Add: Performance allocation expense
Add: General and administrative
Add: Depreciation
Less: Fair value adjustments
Less: NCI adjustments
2023
Co-
Investment
Portfolio
Consolidated
Portfolio
Consolidated
Portfolio
Years Ended December 31,
2022
Co-
Investment
Portfolio
2021
Co-
Investment
Portfolio
Consolidated
Portfolio
$
(281.4) $
(252.8) $
101.9 $
178.4 $
336.4 $
389.0
(55.3)
252.8
(127.6)
259.2
1.6
5.0
—
(26.1)
(64.1)
—
139.4
(15.1)
35.7
157.8
—
(7.6)
0.2
—
—
99.0
—
26.6
(19.5)
—
64.3
13.6
—
—
—
3.2
233.7
—
36.2
(178.4 )
(103.7 )
220.8
(27.5)
(36.1)
—
(11.7)
(46.5)
—
140.3
(4.3)
37.2
172.9
—
(6.9)
2.7
—
(4.9)
60.1
—
17.9
(52.0)
—
21.1
40.7
—
—
—
3.8
(110.2)
—
126.2
(389.0)
(412.7)
192.4
45.7
5.0
—
(8.6)
(37.4)
—
162.6
42.0
33.3
166.3
—
(6.4)
—
—
3.1
40.0
—
17.9
(39.5)
—
(117.9)
36.8
—
—
—
5.6
(210.6)
—
Net Operating Income
$
274.3 $
168.3 $
294.2 $
157.6 $
255.8 $
124.4
(1) The Company’s joint ventures in its Co-Investment business segment predominantly acquire and hold and may ultimately dispose of
operating properties which are presented by the Company as net gain or loss on disposition under ASC Topic 606, Revenue from Contracts with
Customers (“Topic 606”) because the disposition is not considered an “output of the entity’s ordinary activities.” Certain joint ventures in the
same business segment, however, dispose of non-operating properties (such as land and condominiums) from time-to-time, and such sales
are an “output of the entity’s ordinary activities” under Topic 606. Accordingly the sale of such real estate is presented by the Company on a
gross basis (sale of real estate and cost of real estate sold), and, therefore, the portion of the same that is not attributable to the Company’s
ownership share is excluded from Co-Investment NOI.
Net income
Add: Provision for income taxes
Less: Income from unconsolidated investments
Less: (Gain) loss on sale of real estate, net(1)
Add: Interest expense
Add: Loss on extinguishment of debt
Add: Other loss
Less: Sale of real estate(1)
Less: Interest income
Less: Investment management and property services
Add: Cost of real estate sold(1)
Add: Compensation and related
Add: Performance allocation expense
Add: General and administrative
Add: Depreciation
Less: Fair value adjustments
Less: NCI adjustments
2020
Co-
Investment
Portfolio
Consolidated
Portfolio
Years Ended December 31,
2019
Co-
Investment
Portfolio
Consolidated
Portfolio
$
$
107.8
43.6
(81.0)
(338.0)
201.9
9.3
2.3
—
(3.1)
(33.1)
—
144.2
0.2
34.6
179.6
—
(6.0)
81.0
1.0
—
11.5
33.1
—
13.7
(11.5)
—
(2.6)
13.3
—
—
—
6.9
(43.9)
—
$
321.1 $
41.4
(179.7)
(434.4)
214.2
0.9
10.6
—
(0.3)
(40.6)
—
151.6
0.1
42.4
187.6
—
(9.7)
179.7
—
—
(53.5)
32.1
—
8.0
(26.7)
—
(36.2)
23.9
—
—
—
8.2
(57.7)
—
Net Operating Income
$
262.3
$
102.5
$
305.2 $
77.8
(1) The Company’s joint ventures in its Co-Investment business segment predominantly acquire and hold and may ultimately dispose of operating
properties which are presented by the Company as net gain or loss on disposition under ASC Topic 606, Revenue from Contracts with Customers
(“Topic 606”) because the disposition is not considered an “output of the entity’s ordinary activities.” Certain joint ventures in the same business
segment, however, dispose of non-operating properties (such as land and condominiums) from time-to-time, and such sales are an “output
of the entity’s ordinary activities” under Topic 606. Accordingly the sale of such real estate is presented by the Company on a gross basis (sale
of real estate and cost of real estate sold), and, therefore, the portion of the same that is not attributable to the Company’s ownership share is
excluded from Co-Investment NOI.
($ in millions)
Cash(1)
Real estate
Unconsolidated Investments
Loan purchases and originations
Accounts receivable and other assets
Total Assets
Accounts payable and accrued expenses
Mortgage debt
KW unsecured debt
KWE bonds
Total Liabilities
Equity
Total liabilities and equity
December 31, 2023
Consolidated Co-Investment Corporate
$
184.2 $
$
4,837.3
—
—
146.1
5,167.6 $
154.3
2,840.9
—
522.8
3,518.0
1,649.6
— $
—
2,069.1
247.2
—
129.5 $
—
—
—
98.7
2,316.3 $
—
—
—
—
228.2 $
461.4
—
1,934.3
—
—
2,316.3
2,395.7
(2,167.5)
Total
313.7
4,837.3
2,069.1
247.2
244.8
7,712.1
615.7
2,840.9
1,934.3
522.8
5,913.7
1,798.4
$
5,167.6 $
2,316.3 $
228.2 $
7,712.1
76 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 77
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
December 31, 2022
($ in millions)
Cash(1)
Real estate
Unconsolidated Investments
Loan purchases and originations
Accounts receivable and other assets
Total Assets
Accounts payable and accrued expenses
Mortgage debt
KW unsecured debt
KWE bonds
Total Liabilities
Equity
Total liabilities and equity
Consolidated Co-Investment Corporate
$
316.7 $
— $
—
2,238.1
149.4
—
122.6 $
—
—
—
121.8
Total
439.3
5,188.1
2,238.1
149.4
256.9
5,188.1
—
—
135.1
$
5,639.9 $
2,387.5 $
244.4 $
8,271.8
156.6
3,018.0
—
506.4
3,681.0
1,958.9
—
—
—
—
517.8
—
2,062.6
—
—
2,387.5
2,580.4
(2,336.0)
674.4
3,018.0
2,062.6
506.4
6,261.4
2,010.4
$
5,639.9 $
2,387.5 $
244.4 $
8,271.8
Same property analysis
The tables below are reconciliations of non-GAAP measures included in the Company’s same
property analysis to their most comparable GAAP measures.
Same Property—Revenue(6)*
For the Year Ended December 31,
Total Revenue
Less: Investment management fees
Less: Other
Less: Loans and other
Less: NCI adjustments(1)
Add: Unconsolidated investment adjustments(2)
Add: Above/below market rents(6)
Less: Reimbursement of recoverable operating expenses
Less: Properties bought and sold(3)
Less: Other properties excluded(4)
Other Reconciling Items(5)
$
2023
562.6 $
(61.9)
(2.2)
(26.1)
(12.2)
182.3
(1.8)
(33.2)
(56.1)
(110.9)
(1.1)
Same Property
$
439.4 $
2022
540.0
(44.8)
(1.7)
(11.7)
(11.8)
173.3
(3.6)
(28.3)
(82.1)
(103.3)
(2.3)
423.7
Same Property (Reported)
Office—Same Property
Multifamily Market Rate Portfolio—Same Property
Multifamily Affordable Portfolio—Same Property
Same Property
Same Property—Revenue(6)*
For the Year Ended December 31,
2023
108.4 $
272.2
58.8
439.4 $
2022
107.3
262.2
54.2
423.7
$
$
(*) This is a Non-GAAP financial measure. Please see our “Common Definitions” for a further explanation and discussion .
(1) Represents rental revenue and hotel revenue attributable to non-controlling interests.
(2) Represents the Company’s share of unconsolidated investment rental revenues, as applicable, which are within the applicable
same property population.
(3) Represents properties excluded from the same property population that were purchased or sold during the applicable period.
(4) Represents properties excluded from the same property population that were not stabilized during the applicable period, or retail
or industrial properties.
(5) Represents other properties excluded from the same property population that were not classified as a commercial or multifamily
property within the Company’s portfolio. Also includes immaterial adjustments for foreign exchange rates, changes in ownership
percentages, and certain non-recurring income and expenses.
(6) Excludes above/below market rents from the same property population, as they are representative of non-cash purchase price
accounting income.
Net Income
Less: Investment management fees
Less: Property services fees
Less: Loans and other
Less: Total Income from unconsolidated investments
Less: Gain on sale of real estate, net
Add: Compensation and related
Add: Performance allocation compensation
Add: General and administrative
Add: Depreciation and amortization
Add: Interest Expense
Add: Gain (loss) on early extinguishment of debt
Less: Other income (loss)
Add: Provision for income taxes
Less: NCI adjustments(1)
Add: Unconsolidated investment adjustments(2)
Add: Straight-line and above/below market rents(6)
Less: Properties bought and sold(3)
Less: Other properties excluded(4)
Other Reconciling Items(5)
Same Property NOI (Net Effective)*
Same Property (Reported)
Office—Same Property
Multifamily Market Rate Portfolio—Same Property
Multifamily Affordable Portfolio—Same Property
Same Property NOI (Net Effective)* (Reported)
Same Property—NOI (Net Effective)(6)*
For the Year Ended December 31,
2023
$
(281.4) $
(61.9)
(2.2)
(26.1)
252.8
(127.6)
139.4
(15.1)
35.7
157.8
259.2
1.6
5.0
(55.3)
(7.4)
128.7
(1.8)
(38.6)
(53.0)
3.4
$
313.2
$
2022
101.9
(44.8)
(1.7)
(11.7)
(178.4)
(103.7)
140.3
(4.3)
37.2
172.9
220.8
(27.5)
(36.1)
36.2
(7.1)
124.7
(3.6)
(59.3)
(54.8)
4.2
305.2
Same Property—NOI (Net Effective)(6)*
For the Year Ended December 31,
$
$
2023
93.4
180.9
38.9
$
313.2
$
2022
92.6
175.8
36.8
305.2
(*) This is a Non-GAAP financial measure. Please see our “Common Definitions” for a further explanation and discussion.
(1) Represents rental revenue and operating expenses and hotel revenue and operating expenses attributable to non-controlling
interests.
(2) Represents the Company’s share of unconsolidated investment rental revenues and net operating income, as applicable, which
are within the applicable same property population.
(3) Represents properties excluded from the same property population that were purchased or sold during the applicable period.
(4) Represents properties excluded from the same property population that were not stabilized during the applicable period, or retail
or industrial properties.
(5) Represents other properties excluded from the same property population that were not classified as a commercial or multifamily
property within the Company’s portfolio. Also includes immaterial adjustments for foreign exchange rates, changes in ownership
percentages, and certain non-recurring income and expenses.
(6) Excludes above/below market rents from the same property population, as they are representative of non-cash purchase price
accounting income.
78 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 79
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (continued)
A reconciliation of Baseline EBITDA to Net Income as of December 31, 2023 and December 31,
2022 ($ in millions) is presented below:
The use of different assumptions to fair value these investments could have material impact on the
consolidated statements of income.
Baseline EBITDA
For the Year Ended December 31,
2023
2022
Net (loss) income
$
(281.4)
$
Less: Total Income from unconsolidated investments
Less: Gain (loss) on sale of real estate, net
Add: Share-based compensation
Add: Performance allocation compensation
Add: Depreciation and amortization
Add: Interest expense
Add: Gain (loss) on early extinguishment of debt
Less: Other income (loss)
Add: Benefit from (provision for) income taxes
Less: Non-controlling interest(1)
Add: NOI from unconsolidated investments (KW Share)(2)
Add: Fees eliminated in consolidation(3)
252.8
(127.6)
34.5
(15.1)
157.8
259.2
1.6
5.0
(55.3)
(7.6)
168.3
0.3
Baseline EBTIDA
$
392.5
$
(1) Represents the portion of equity ownership in a consolidated subsidiary not attributable to Kennedy Wilson.
(2) Represents Kennedy Wilson’s pro-rata share of unconsolidated joint-ventures.
(3) Represents fees recognized in net (income) loss attributable to noncontrolling interests relating to portion of fees paid by
noncontrolling interest holders.
(101.9)
(178.4)
(103.7)
29.0
(4.3)
172.9
220.8
(27.5)
(36.1)
36.2
(6.9)
157.6
0.4
361.9
Critical Accounting Policies
A critical accounting policy is one that involves an estimate or assumption that is subjective and
requires judgment on the part of management about the effect of a matter that is inherently
uncertain and is material to an entity’s financial condition and results of operations. Estimates
are prepared using management’s best judgment, after considering past and current economic
conditions and expectations for the future. Changes in estimates could affect our financial position
and specific items in our results of operations that are used by stockholders, potential investors,
industry analysts and lenders in their evaluation of our performance. Of the significant accounting
policies discussed in Note 2 to the Consolidated Financial Statements, those presented below have
been identified by us as meeting the criteria to be considered critical accounting policies. Refer to
Note 2 for more information on these critical accounting policies.
Fair Value Investments
Kennedy Wilson records its investments in certain commingled funds it manages and sponsors (the
“Funds”) that are investment companies under the Accounting Standards Codification (“ASC”) Topic
946, Financial Services—Investment Companies, based upon the net assets that would be allocated to
its interests in the Funds assuming the Funds were to liquidate their investments at fair value as of
the reporting date. Thus, the Funds reflect their investments at fair value, with unrealized gains and
losses resulting from changes in fair value reflected in their earnings. Kennedy Wilson has retained
the specialized accounting for the Funds as discussed in ASC Topic 323, Investments—Equity Method
and Joint Ventures in recording its equity in joint venture income from the Funds.
Additionally, Kennedy Wilson elected the fair value option for 72 investments in unconsolidated
investment entities. Due to the nature of these investments, Kennedy Wilson elected to record
these investments at fair value in order to report the value in the underlying investments in the
results of our current operations.
See Item 1. Business “Fair Value Investments” for detail on fair value methods and range of inputs
that are used as part of valuations.
Performance Allocations
Performance allocations or carried interest are allocated to the general partner, special limited
partner or asset manager of Kennedy Wilson’s real estate funds and fair value option unconsolidated
investments based on the cumulative performance of the fund or underlying investments and are
subject to preferred return thresholds of the limited partners and participants. At the end of each
reporting period, Kennedy Wilson calculates the performance allocation that would be due as if the
fair value of the underlying investments were realized as of such date, irrespective of whether such
amounts have been realized. As the fair value of underlying investments varies between reporting
periods, it is necessary to make adjustments to amounts recorded as performance allocations to
reflect either (a) positive performance resulting in an increase in the performance allocations to
the general partner or asset manager or (b) negative performance that would cause the amount
due to Kennedy Wilson to be less than the amount previously recognized, resulting in a negative
adjustment to performance allocations to the general partner or asset manager. To the extent that
a fund or investment has a performance allocation sharing program, a portion of performance
allocations will be recorded to performance allocation compensation.
The Company has concluded that performance allocations to the Company from equity method
investments, based on cumulative performance to-date, represent carried interests. Consequently, in
following the guidance set forth in ASC Topic 606, Revenue from Contracts with Customers and Topic 323,
Investments—Equity Method and Joint Ventures, these allocations are included as a component of the total
income from unconsolidated investments in the accompanying consolidated statements of income.”
Real Estate Acquisitions
The purchase price of acquired properties is recorded to land, buildings and building improvements
and intangible lease value (value of above-market and below-market leases, acquired in-place lease
values, and tenant relationships, if any). The ownership of the other interest holders in consolidated
subsidiaries is reflected as noncontrolling interests. Real estate is recorded based on cumulative
costs incurred and allocated based on relative fair value.
The valuations of real estate are based on management estimates of the real estate assets using
income and market approaches. The indebtedness securing the real estate is valued, in part, based
on third party valuations and management estimates also using an income approach.
The use of different assumptions to value the acquired properties and intangible assets and assumed
liabilities could affect the future revenues and expenses we recognize over the estimated remaining
useful life or lease term.
Recently Issued Accounting Pronouncements
See Note 2 to the Consolidated Financial Statements.
80 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 81
Evaluation of the fair value of certain unconsolidated investments and commingled funds
As discussed in Notes 2 and 5 to the consolidated financial statements, the Company elected to
record certain unconsolidated investments using the fair value option to more accurately reflect
the timing of the value created in the underlying investments and report those changes in current
operations. Additionally, the Company records its investments in its managed commingled funds (the
Funds) based upon the net assets that would be allocated to its interests in the Funds, assuming the
Funds were to liquidate their investments at fair value as of the reporting date. As of December 31,
2023, these investments had a fair value of $1,927.0 million.
We identified the evaluation of the fair value of certain unconsolidated investments and commingled
funds as a critical audit matter. A high degree of subjectivity was required in applying and evaluating
results from procedures over the respective discounted cash flow models used to calculate the fair value
of the underlying real estate investments. Specifically, the respective cash flow models were sensitive to
changes in certain key assumptions, including discount, terminal capitalization, and overall capitalization
rates, which have a significant effect on the determination of fair value of these investments.
The following are the primary procedures we performed to address this critical audit matter. We
evaluated the design and tested the operating effectiveness of certain internal controls over the
Company’s fair value process for unconsolidated investments and commingled funds, including
controls related to the development of the overall capitalization rate, discount rate and terminal
capitalization rate assumptions. For a selection of the Company’s investments, we involved valuation
professionals with specialized skills and knowledge who assisted in comparing the discount rate
and terminal capitalization rate used by the Company to independently developed ranges using
market information obtained from third-party real estate publications or to rates observed in similar
investments in the current period.
/s/ KPMG LLP
We have served as the Company’s auditor since 2002.
Los Angeles, California
February 22, 2024
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Kennedy-Wilson Holdings, Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Kennedy-Wilson Holdings,
Inc. and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated
statements of operations, comprehensive (loss) income, equity, and cash flows for each of the
years in the three-year period ended December 31, 2023, and the related notes and financial
statement schedules III and IV (collectively, the consolidated financial statements). In our opinion,
the consolidated financial statements present fairly, in all material respects, the financial position of
the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows
for each of the years in the three-year period ended December 31, 2023, in conformity with U.S.
generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as
of December 31, 2023, based on criteria established in Internal Control—Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report
dated February 22, 2024 expressed an unqualified opinion on the effectiveness of the Company’s
internal control over financial reporting.
Basis for Opinion
We also have audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as
of December 31, 2023, based on criteria established in Internal Control—Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report
dated February 22, 2024 expressed an unqualified opinion on the effectiveness of the Company’s
internal control over financial reporting.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement, whether due to error or fraud. Our audits included
performing procedures to assess the risks of material misstatement of the consolidated financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of
the consolidated financial statements that was communicated or required to be communicated
to the audit committee and that: (1) relates to accounts or disclosures that are material to the
consolidated financial statements and (2) involved our especially challenging, subjective, or complex
judgments. The communication of a critical audit matter does not alter in any way our opinion on the
consolidated financial statements, taken as a whole, and we are not, by communicating the critical
audit matter below, providing a separate opinion on the critical audit matter or on the accounts or
disclosures to which it relates.
82 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 83
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
/s/ KPMG LLP
Los Angeles, California
February 22, 2024
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Kennedy-Wilson Holdings, Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited Kennedy-Wilson Holdings, Inc. and subsidiaries’ (the Company) internal control over
financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December
31, 2023 and 2022, the related consolidated statements of operations, comprehensive (loss) income,
equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and
the related notes and financial statement schedules III and IV (collectively, the consolidated financial
statements), and our report dated February 22, 2024 expressed an unqualified opinion on those
consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting,
included in the accompanying Management’s Report on Internal Control over Financial Reporting.
Our responsibility is to express an opinion on the Company’s internal control over financial reporting
based on our audit. We are a public accounting firm registered with the PCAOB and are required to
be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether effective internal
control over financial reporting was maintained in all material respects. Our audit of internal control
over financial reporting included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. Our audit also included
performing such other procedures as we considered necessary in the circumstances. We believe that
our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles. A company’s
internal control over financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide
84 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 85
Kennedy-Wilson Holdings, Inc.
Consolidated Balance Sheets
(Dollars in millions)
Assets
Cash and cash equivalents
Accounts receivable, net (including $13.8 and $13.9 of related party)
Real estate and acquired in place lease values (net of accumulated depreciation and
amortization of $957.8 and $882.2)
Unconsolidated investments (including $1,927.0 and $2,093.7 at fair value)
Other assets
Loan purchases and originations, net
Total assets(1)
Liabilities
Accounts payable
Accrued expenses and other liabilities
Mortgage debt
KW unsecured debt
KWE unsecured bonds
Total liabilities(1)
Equity
Series A cumulative preferred stock, $0.0001 par value, $1,000 per share liquidation
preference, 1,000,000 shares authorized, 300,000 shares outstanding as of December 31,
2023 and December 31, 2022 and Series B cumulative preferred Stock, $0.0001 par value,
$1,000 per share liquidation preference, 1,000,000 shares authorized and 300,000 shares
outstanding as of December 31, 2023 and December 31, 2022 and Series C cumulative
preferred Stock, $0.0001 par value, $1,000 per share liquidation preference, 1,000,000
shares authorized, 200,000 shares outstanding as of December 31, 2023.
Common Stock, $0.0001 par value, 200,000,000 authorized, 138,727,521 and 137,790,768
shares issued outstanding as of December 31, 2023 and December 31, 2022, respectively
Additional paid-in capital
Retained (deficit) earnings
Accumulated other comprehensive loss
Total Kennedy-Wilson Holdings, Inc. shareholders’ equity
Noncontrolling interests
Total equity
Total liabilities and equity
$
$
$
December 31,
2023
2022
313.7 $
57.3
439.3
40.8
4,837.3
2,069.1
187.5
247.2
5,188.1
2,238.1
216.1
149.4
7,712.1 $
8,271.8
17.9 $
597.8
2,840.9
1,934.3
522.8
5,913.7
16.2
658.2
3,018.0
2,062.6
506.4
6,261.4
789.9
592.5
—
1,718.6
(349.0)
(404.4)
1,755.1
43.3
1,798.4
—
1,679.5
122.1
(430.1)
1,964.0
46.4
2,010.4
$
7,712.1 $
8,271.8
(1) The assets and liabilities as of December 31, 2023 include $154.9 million (including cash held by consolidated investments
of $3.6 million and real estate and acquired in place lease values, net of accumulated depreciation and amortization of
$121.8 million) and $101.4 million (including investment debt of $54.9 million), respectively, from consolidated variable interest
entities (“VIEs”). The assets and liabilities as of December 31, 2022 include $169.8 million (including cash held by consolidated
investments of $6.1 million and real estate and acquired in place lease values, net of accumulated depreciation and amortization
of $137.8 million) and $82.4 million (including investment debt of $51.2 million), respectively, from VIEs. These assets can only
be used to settle obligations of the consolidated VIEs, and the liabilities do not have recourse to the Company.
See accompanying notes to consolidated financial statements.
Kennedy-Wilson Holdings, Inc.
Consolidated Statements of Operations
Year ended December 31,
(Dollars in millions, except per share data)
2023
2022
Revenue
Rental
Hotel
Investment management fees (includes $51.9, $44.8, and $35.3 of
related party fees, respectively)
Loans
Other
Total revenue
(Loss) income from unconsolidated investments
Principal co-investments
Performance allocations
Total (loss) income from unconsolidated investments
Gain on sale of real estate, net
Expenses
Rental
Hotel
Compensation and related (including $34.5, $29.0 and $28.7 of
share-based compensation)
Performance allocation compensation
General and administrative
Depreciation and amortization
Total expenses
Interest expense
(Loss) gain on early extinguishment of debt
Other (loss) income
(Loss) income before benefit from (provision for) income taxes
Benefit from (provision for) income taxes
Net (loss) income
Net income attributable to the noncontrolling interests
Preferred dividends
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc.
common shareholders
Basic (loss) earnings per share
(Loss) income per basic
Weighted average shares outstanding for basic
Diluted (loss) earnings per share
(Loss) income per diluted
Weighted average shares outstanding for diluted
Dividends declared per common share
$
415.3 $
434.9 $
57.1
61.9
26.1
2.2
562.6
(188.5)
(64.3)
(252.8)
127.6
152.6
37.9
139.4
(15.1)
35.7
157.8
508.3
(259.2)
(1.6)
(5.0)
(336.7)
55.3
(281.4)
(22.4)
(38.0)
46.9
44.8
11.7
1.7
540.0
199.5
(21.1)
178.4
103.7
151.2
29.5
140.3
(4.3)
37.2
172.9
526.8
(220.8)
27.5
36.1
138.1
(36.2)
101.9
(8.2)
(28.9)
2021
390.5
17.1
35.3
8.6
2.1
453.6
271.1
117.9
389.0
412.7
132.7
12.7
162.6
42.0
33.3
166.3
549.6
(192.4)
(45.7)
(5.0)
462.6
(126.2)
336.4
(6.0)
(17.2)
$
$
$
$
(341.8) $
64.8 $
313.2
(2.46) $
0.47 $
138,930,517
136,900,875
2.26
138,552,058
(2.46) $
138,930,517
0.47
138,567,534
$
0.96 $
0.96 $
2.24
140,132,435
0.90
See accompanying notes to consolidated financial statements.
86 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 87
Kennedy-Wilson Holdings, Inc.
Consolidated Statements of Comprehensive (Loss) Income
Kennedy-Wilson Holdings, Inc.
Consolidated Statements of Equity
(Dollars in millions)
Net (loss) income
Other comprehensive income (loss), net of tax:
Unrealized foreign currency translation gain (loss)
Amounts reclassified out of AOCI during the year
Unrealized currency derivative contracts (loss) gain
Unrealized gain on interest rate swaps
Total other comprehensive income (loss) for the year
Comprehensive (loss) income
Comprehensive income attributable to noncontrolling interests
Comprehensive (loss) income attributable to Kennedy-Wilson Holdings, Inc. $
See accompanying notes to consolidated financial statements.
Year ended December 31,
2023
2022
2021
$
(281.4) $
101.9 $
336.4
32.1
—
(5.5)
—
26.6
(254.8)
(23.3)
(278.1) $
(71.7)
(0.8)
23.4
5.6
(43.5)
58.4
(5.2)
53.2 $
(58.3)
2.2
56.2
3.2
3.3
339.7
(5.2)
334.5
(Dollars in millions, except share
amounts)
Balance, December 31, 2022
Preferred stock issuance, net of
issuance costs
Issuance of common stock, net
of issuance costs
Restricted stock grants (RSG)
Shares retired due to RSG vesting
Shares retired due to common
stock repurchase program
Shares forfeited
Stock based compensation
Other comprehensive income
(loss):
Unrealized foreign currency
translation gain, net of tax
Unrealized foreign currency
derivative contract loss,
net of tax
Common stock dividends
Preferred stock dividends
Net (loss) income
Contributions from
noncontrolling interests
Distributions to noncontrolling
interests
Preferred Stock
Common Stock
Shares Amount
Shares Amount
Year Ended December 31, 2023
Additional
Paid-in
Capital
Retained
Earnings
(Accumulated
Deficit)
Accumulated
Other
Comprehensive
Loss
Non
controlling
Interests
Total
600,000 $ 592.5 137,790,768 $
— $ 1,679.5 $
122.1 $
(430.1) $
46.4 $ 2,010.4
200,000
197.4
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,690,743
961,045
(781,303)
(666,701)
(267,031)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
29.8
—
(13.4)
(11.8)
—
34.5
—
—
—
—
—
—
—
—
—
—
—
4.3
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
197.4
29.8
—
(13.4)
(7.5)
—
34.5
—
31.2
0.9
32.1
—
(133.6)
(38.0)
(303.8)
—
—
(5.5)
—
—
—
—
—
—
—
—
22.4
(5.5)
(133.6)
(38.0)
(281.4)
1.3
1.3
(27.7)
(27.7)
Balance, December 31, 2023
800,000 $ 789.9 138,727,521 $
— $ 1,718.6 $
(349.0) $
(404.4) $
43.3 $ 1,798.4
See accompanying notes to consolidated financial statements.
88 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 89
Kennedy-Wilson Holdings, Inc.
Consolidated Statements of Equity
Kennedy-Wilson Holdings, Inc.
Consolidated Statements of Equity
(Dollars in millions, except
share amounts)
Balance, December 31, 2021
Preferred stock issuance,
net of issuance costs
At-the-market equity offering
program costs
Restricted stock grants
Shares retired due to RSG
vesting
Shares retired due to
common stock repurchase
program
Stock based compensation
Other comprehensive (loss)
income:
Unrealized foreign currency
translation loss, net of tax
Unrealized foreign currency
derivative contract gain,
net of tax
Unrealized gain on interest
rate swaps, net of tax
Common stock dividends
Preferred stock dividends
Net income
Contributions from
noncontrolling interests
Distributions to
noncontrolling interests
Preferred Stock
Shares Amount
Common Stock
Shares Amount
Year Ended December 31, 2022
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Non
controlling
Interests
Total
300,000 $ 295.2 137,955,479 $
— $ 1,679.6 $ 192.4
$
(389.6) $
26.3 $ 1,803.9
300,000
297.3
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,221,362
(834,911)
(551,162)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(0.7)
—
(18.6 )
—
—
—
—
(9.8)
29.0
(2.8)
—
—
—
—
—
—
—
—
—
—
—
—
(132.3)
(28.9)
93.7
—
—
—
—
—
—
—
—
—
—
—
—
—
—
297.3
(0.7)
—
(18.6)
(12.6)
29.0
(68.7)
(3.0)
(71.7)
23.4
—
23.4
4.8
—
—
—
—
—
—
—
—
8.2
4.8
(132.3)
(28.9)
101.9
25.7
25.7
(10.8)
(10.8)
Balance, December 31, 2022
600,000 $ 592.5 137,790,768 $
— $ 1,679.5 $ 122.1
$
(430.1) $
46.4 $ 2,010.4
See accompanying notes to consolidated financial statements.
(Dollars in millions, except
Preferred Stock
Common Stock
share amounts)
Shares Amount
Shares Amount
Year Ended December 31, 2021
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Non
controlling
Interests
Total
Balance, December 31, 2020
Shares forfeited
Restricted stock grants
Shares retired due to RSG
vesting
Shares retired due to
common stock repurchase
program
Stock based compensation
Other comprehensive income
(loss):
Unrealized foreign currency
translation loss, net of tax
Unrealized foreign currency
derivative contract gain,
net of tax
Unrealized gain on interest
rate swaps, net of tax
Common stock dividends
Preferred stock dividends
Net income
Contributions from
noncontrolling interests
Distributions to
noncontrolling interests
Incentive allocations to
noncontrolling interests
300,000 $ 295.2 141,365,323 $
—
—
(237,588)
619,945
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(967,536)
—
—
(2,824,665)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— $ 1,725.2
—
—
—
—
$
—
—
—
—
—
—
—
—
—
—
—
—
(20.5)
(50.0)
28.7
—
—
—
—
—
—
—
—
(3.8)
17.7
—
—
—
(12.7)
—
—
—
—
(125.8)
(17.2)
330.4
—
—
—
$
(393.6) $
—
—
28.2 $ 1,672.7
—
—
—
—
—
—
—
—
—
—
(20.5)
(62.7)
28.7
—
(55.8)
(0.8)
(56.6)
56.1
3.7
—
—
—
—
—
—
—
—
—
—
6.0
7.8
56.1
3.7
(125.8)
(17.2)
336.4
7.8
(18.7)
(18.7)
3.8
—
Balance, December 31, 2021
300,000 $ 295.2 137,955,479 $
— $ 1,679.6
$ 192.4
$
(389.6) $
26.3 $ 1,803.9
See accompanying notes to consolidated financial statements.
90 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 91
Kennedy-Wilson Holdings, Inc.
Consolidated Statements of Cash Flows
(Dollars in millions)
Cash flows from operating activities:
Net (loss) income
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Gain on sale of real estate, net
Depreciation and amortization
Above/below market and straight-line rent amortization
Uncollectible lease income
(Benefit from) provision for deferred income taxes
Amortization of loan fees
Amortization of discount and accretion of premium and transactional
foreign exchange
Unrealized net loss (gain) on derivatives
Loss (gain) on extinguishment of debt
Loss (income) from unconsolidated investments
Provision for loan loss reserves
Accretion of interest income on loans
Share-based compensation expense
Deferred compensation
Operating distributions from unconsolidated investments
Change in assets and liabilities:
Accounts receivable
Other assets
Accrued expenses and other liabilities
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Issuance of loans
Proceeds from collection of loans
Net proceeds from sale of consolidated real estate
Purchases of consolidated real estate
Capital expenditures to real estate
Investing distributions from unconsolidated investments
Contributions to unconsolidated investments
Proceeds from settlement of derivative contracts
Premiums paid for settlement of derivative contracts
Net cash used in investing activities
Cash flow from financing activities:
Borrowings under senior notes payable
Repayment of senior notes payable
Borrowings under line of credit/term loan
Repayment of line of credit/term loan
Borrowings under mortgage debt
Repayment of mortgage debt
Repayment of KWE Bonds
Payment of loan fees
Issuance of common stock, net of issuance costs
Repurchase of common stock
Preferred stock issuance, net of issuance costs
Common stock dividends paid
Preferred stock dividends paid
Contributions from noncontrolling interests
Distributions to noncontrolling interests
Net cash (used in) provided by financing activities
Effect of currency exchange rate changes on cash and cash equivalents
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
See accompanying notes to consolidated financial statements.
Year ended December 31,
2023
2022
2021
Supplemental cash flow information:
$
(281.4) $
101.9 $
336.4
(Dollars in millions)
Year ended December 31,
2023
2022
2021
(127.6)
157.8
(5.5)
5.4
(65.9)
9.2
2.9
16.4
1.6
252.8
7.0
(3.5)
34.5
(3.8)
69.2
(23.8)
(1.3)
4.9
48.9
(150.2)
48.9
383.9
—
(217.2)
92.4
(167.4)
—
(2.1)
(11.7)
—
—
50.0
(185.0)
408.9
(446.4)
—
(0.7)
29.8
(20.9)
197.4
(136.0)
(35.5)
1.3
(27.7)
(164.8)
2.0
(125.6)
439.3
(103.7)
172.9
(8.0)
8.0
18.3
9.1
2.6
(45.9)
(27.5)
(178.4)
—
—
29.0
7.6
78.1
(13.4)
(9.7)
(8.0)
32.9
(50.9)
34.5
325.9
(408.2)
(160.9)
157.1
(361.3)
112.6
(10.4)
(361.6)
—
—
528.4
(325.0)
401.3
(389.6)
(65.8)
(5.0)
(0.7)
(31.2)
297.3
(134.6)
(25.9)
25.8
(10.8)
264.2
(21.0)
(85.5)
524.8
$
313.7 $
439.3 $
(412.7)
166.3
6.8
12.9
112.2
16.2
2.4
(4.6)
—
(389.0)
—
(0.5)
28.7
56.3
82.2
(0.5)
(18.8)
(24.6)
(30.3)
(83.4)
58.1
486.4
(1,131.8)
(139.2)
82.8
(280.8)
—
(30.1)
(1,038.0)
1,804.3
(1,150.0)
314.3
(438.5)
1,144.9
(268.2)
(504.4)
(35.6)
—
(83.2)
—
(123.5)
(17.2)
7.8
(18.7)
632.0
(4.0)
(440.3)
965.1
524.8
Cash paid for:
Interest(1)(2)
Income taxes
Cash received from consolidated and unconsolidated asset sales and loan
repayments, net
Cash received on interest rate hedges
$
252.0 $
214.4 $
21.8
19.9
376.1
24.0
369.8
0.9
183.7
16.5
481.1
(1.2)
(1) $1.4 million, $4.0 million, and $4.1 million attributable to non-controlling interests for the years ended December 31, 2023,
2022, and 2021, respectively.
(2) Excludes $5.0 million, $3.3 million, and $3.2 million of capitalized interest during the for the years ended December 31, 2023,
2022 and 2021, respectively.
As of December 31, 2023, 2022, and 2021, we have $69.6 million, $21.4 million, and $24.2 million,
respectively, of restricted cash, which is included in cash and cash equivalents, that primarily relates
to lender reserves associated with consolidated mortgages that we hold on properties and reserves
held on loans in the newly acquired Construction Loan Portfolio (as defined herein) on behalf of the
borrowers under such loans. These reserves typically relate to interest, tax, insurance and future
capital expenditures at the properties and on our loan investments.
Supplemental disclosure of non-cash investing and financing activities:
During the year ended December 31, 2023, the Company sold a 49% equity interest in two
previously wholly-owned market-rate multifamily properties into an existing joint venture platform
managed by the Company (see gain on sale of real estate in Note 3 for further description of the
transaction) and retained a noncontrolling 51% interest in such properties, which was treated as a
non-cash activity with the remaining share of real estate, mortgage loan and other balance sheet
items being removed from the consolidated balance sheet with an increase of $33.4 million to
unconsolidated investments.
During the year ended December 31, 2023, the Company also sold a previously wholly-owned
multifamily property into its Vintage Housing Holdings (“VHH”) platform, with the Company retaining
an interest in the property through its investment in VHH. The transaction was treated as a non-cash
activity with the remaining share of real estate, mortgage loan and other balance sheet items being
removed from the consolidated balance sheet with an increase of $16.8 million to unconsolidated
investments.
During the year ended December 31, 2022, the noncontrolling 51% interest that the Company
retained as part of the sale of a 49% ownership interest in the Montiavo multifamily asset in the
Western United States (“Montiavo”) (see gain on sale of real estate in Note 3 for further description
of the transaction) was treated as a non-cash activity with the remaining share of real estate,
mortgage loan and other balance sheet items being removed from the consolidated balance sheet
resulting in an increase of $31.9 million to unconsolidated investments.
During the year ended December 31, 2021, the noncontrolling 51% interest that the Company
retained in the MF seed portfolio (see gain on sale of real estate in Note 3 for further description of
the transaction) was treated as a non-cash activity with the remaining share of real estate, mortgage
loan and other balance sheet items being removed from the consolidated balance sheet resulting in
an increase of $178.8 million to unconsolidated investments.
92 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 93
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021
NOTE 1—ORGANIZATION
Kennedy-Wilson Holdings, Inc. (“KWH,” NYSE: KW), a Delaware corporation and its wholly owned
and consolidated subsidiaries (collectively the “Company” or “Kennedy Wilson”), is a global real
estate investment company. The Company owns, operates, and invests in real estate both on its own
and through its investment management platform. The Company also has a global debt platform
primarily focused on construction lending secured by high-quality multifamily and student housing
properties throughout the United States. The Company primarily focuses on multifamily and office
properties, as well as industrial and debt investments in its Investment Management business in the
Western United States, United Kingdom and Ireland. The Company’s operations are defined by two
business segments; its Consolidated Portfolio and Co-Investment Portfolio. Investment activities in
the Consolidated Portfolio involve ownership of multifamily units, office, and retail space and one
hotel. The Co-Investment Portfolio consists of (i) the co-investments in real estate and real estate-
related assets, including loans secured by real estate, that we have made through the commingled
funds and joint ventures that we manage; (ii) fees (including, without limitation, asset management
fees, construction management fees, and/or acquisition and disposition fees); and (iii) performance
allocations that we earn on our fee bearing capital
NOTE 2—BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
BASIS OF PRESENTATION—The consolidated financial statements include the accounts of
Kennedy Wilson and voting interest entities which it controls. All intercompany balances and
transactions have been eliminated in consolidation. In addition, Kennedy Wilson evaluates its
relationships with other entities to identify whether they are variable interest entities (“VIE”) as
defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
Subtopic 810, Consolidation, and to assess whether it is the primary beneficiary of such entities. In
determining whether Kennedy Wilson is the primary beneficiary of a VIE, qualitative and quantitative
factors are considered, including, but not limited to: the amount and characteristics of Kennedy
Wilson’s investment; the obligation or likelihood for Kennedy Wilson to provide financial support;
Kennedy Wilson’s ability to control or significantly influence key decisions for the VIE; and the
similarity with and significance to the business activities of Kennedy Wilson.
The Company determines the appropriate accounting method with respect to all investments that
are not VIEs based on the control-based framework (controlled entities are consolidated) provided
by the consolidation guidance in ASC Subtopic 810. The Company accounts for joint ventures where
it is deemed that the Company does not have control through the equity method of accounting while
joint ventures that the Company controls are consolidated in Kennedy Wilson’s financial statements.
USE OF ESTIMATES—The preparation of the accompanying consolidated financial statements in
conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make
estimates and assumptions about future events. These estimates and the underlying assumptions affect
the amounts of assets and liabilities reported, disclosure about contingent assets and liabilities, and
reported amounts of revenues and expenses. Management evaluates its estimates and assumptions
on an ongoing basis using historical experience and other factors, including the current economic
environment, which management believes to be reasonable under the circumstances. Management
adjusts such estimates and assumptions when facts and circumstances dictate. As future events and
their effects cannot be determined with precision, actual results could differ significantly from these
estimates. Changes in those estimates will be reflected in the financial statements in future periods.
REVENUE RECOGNITION — Revenue consists of rental and hotel income, management fees, leasing
and commission fees, loan interest income and sales of real estate. ASC Topic 606, Revenue from
Contracts with Customers, is a five-step model to recognize revenue from customer contracts. The
model identifies the contract, any separate performance obligations in the contract, determines the
transaction price, allocates the transaction price and recognizes revenue when the performance
obligations are satisfied. Management has concluded that, with the exception of performance
allocations, the nature of the Company’s revenue streams is such that the requirements are generally
satisfied at the time that the fee becomes receivable.
Rental income from operating leases is generally recognized on a straight-line basis over the terms of
the leases in accordance with ASC Topic 842, Leases.
Hotel income is earned when rooms are occupied or goods and services have been delivered or
rendered.
Management fees are primarily comprised of investment management fees. Investment management
fees are earned from limited partners of funds, co-investments, or separate accounts and are
generally based on a fixed percentage of committed capital or net asset value. The Company
provides investment management on investments it also has an ownership interest in. Fees earned
on consolidated properties are eliminated in consolidation and fees on unconsolidated investments
are eliminated for the portion that relate to the Company’s ownership interest.
Investment management fees include acquisition, arrangement and disposition fees. Acquisition,
arrangement and disposition fees are earned for identifying and closing investments on behalf of
investors and are based on a fixed percentage of the acquisition or disposition price, as applicable.
Acquisition and disposition fees are recognized upon the successful completion of an acquisition or
disposition after all required services have been performed.
Loan income from investments in performing loans which Kennedy Wilson originates or acquires
are recognized at the stated interest rate plus any amortization of premiums/discounts or fees
earned on the loans. Loan income from investments in loans acquired at a discount are recognized
using the effective interest method. When a loan or loans are acquired with deteriorated credit
quality primarily for the rewards of collateral ownership, such loans are accounted for as loans
until Kennedy Wilson is in possession of the collateral. However, accrual of income is not recorded
during the conversion period under ASC Subtopic 310-30-25, Receivables—Loans and Debt Securities
Acquired with Deteriorated Credit Quality. Income is recognized to the extent that cash is received
from the loan. The Company has evaluated its loan portfolio under ASC Subtopic 326, Financial
Instruments—Credit Losses, for current expected credit losses (“CECL”) reserves. CECL reserves
reflect the Company’s current estimate of potential credit losses related to loans included in the
Company’s consolidated balance sheets. Changes to the CECL reserve are recognized through the
Company’s consolidated statements of operations. While ASC Subtopic 326 does not require any
particular method for determining the CECL reserve, it does specify the reserve should be based on
relevant information about past events, including historical loss experience, current portfolio and
market conditions.
94 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 95
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
Sales of real estate are recognized when title to the real property passes to the buyer and there is
no continuing involvement in the real property. Under ASC Subtopic 610-20, Other Income—Gains
and Losses from the Derecognition of Nonfinancial Assets, the Company recognizes the entire gain
attributed to contributions of real estate properties to unconsolidated entities.
Property services fees are earned from the Company’s auction sales and marketing business. In
the case of auction and real estate sales commissions, the revenue is generally recognized when
escrow closes. In accordance with the guidelines established for Reporting Revenue Gross as a
Principal versus Net as an Agent in ASC Topic 606, Kennedy Wilson records commission revenues
and expenses on a gross basis. Of the criteria listed in ASC Topic 606, Kennedy Wilson is the primary
obligor in the transaction, does not have inventory risk, performs all or part of the service and has
wide latitude in establishing the price of services rendered and discretion in selection of agents and
determination of service specifications.
REAL ESTATE ACQUISITIONS—The purchase price of acquired properties is recorded to land,
buildings and building improvements and intangible lease value (value of above-market and below-
market leases, acquired in-place lease values, and tenant relationships, if any). The ownership of the
other interest holders in consolidated subsidiaries is reflected as noncontrolling interests (“NCI”).
Real estate is recorded based on cumulative costs incurred and allocated based on relative fair
value. Acquisition fees and expenses associated with the acquisition of properties determined to
be business combinations are expensed as incurred. Acquisition fees and expenses associated with
transactions determined to be asset acquisitions are capitalized as part of the real estate acquired.
The valuations of real estate are based on management estimates of the real estate assets using
income and market approaches. The indebtedness securing the real estate is valued, in part, based
on third party valuations and management estimates also using an income approach.
The Company is involved in all stages of real estate ownership, including development. Once a
project is in development, consistent with ASC Topic 360 Property Plant, and Equipment, costs
including interest and real estate taxes and associated costs directly related to the project under
development, are capitalized. During the predevelopment period of a probable project and the
period in which a project is under construction, the Company capitalizes all direct and indirect costs
associated with planning, developing, and constructing the project. Once a project is constructed
and deemed substantially complete and ready for occupancy, carrying costs, such as real estate
taxes, interest and associated costs, are expensed as incurred.
UNCONSOLIDATED INVESTMENTS—Kennedy Wilson has a number of joint venture interests that
were formed to acquire, manage, and/or sell real estate. Investments in unconsolidated investments
are accounted for under the equity method of accounting as Kennedy Wilson can exercise significant
influence, but does not have the ability to control the unconsolidated investment. An investment
in an unconsolidated investment is recorded at its initial investment and is increased or decreased
by Kennedy Wilson’s share of income or loss, plus additional contributions and less distributions.
A decline in the value of an unconsolidated investment that is other than temporary is recognized
when evidence indicates that such a decline has occurred in accordance with ASC Topic 323,
Investments—Equity Method and Joint Ventures.
Kennedy Wilson elected the fair value option for 72 investments in unconsolidated investment
entities (“FV Option” investments). Due to the nature of these investments, Kennedy Wilson elected
to record these investments at fair value in order to report the change in value in the underlying
investments in the results of its current operations.
Additionally, Kennedy Wilson records its investments in certain commingled funds it manages and
sponsors (the “Funds”) that are investment companies under the ASC Topic 946, Financial Services—
Investment Companies, based upon the net assets that would be allocated to its interests in the Funds
assuming the Funds were to liquidate their investments at fair value as of the reporting date. Thus,
the Funds reflect their investments at fair value, with unrealized gains and losses resulting from
changes in fair value reflected in their earnings.
Performance allocations or carried interest are allocated to the general partner, special limited
partner or asset manager of Kennedy Wilson’s real estate funds based on the cumulative
performance of the fund and are subject to preferred return thresholds of the limited partners. At
the end of each reporting period, Kennedy Wilson calculates the performance allocation that would
be due as if the fair value of the underlying investments were realized as of such date, irrespective
of whether such amounts have been realized. As the fair value of underlying investments varies
between reporting periods, it is necessary to make adjustments to amounts recorded as performance
allocation to reflect either (a) positive performance resulting in an increase in the performance
allocation to the general partner or asset manager or (b) negative performance that would cause
the amount due to Kennedy Wilson to be less than the amount previously recognized as income
from unconsolidated investments, resulting in a negative adjustment to performance allocations to
the general partner or asset manager. As of December 31, 2023, the Company has $77.3 million
of accrued performance allocations recorded to unconsolidated investments that are subject to
future adjustments based on the underlying performance of investments. During the year ended
December 31, 2023, the Company did not collect any performance allocations. During the years
ended December 31, 2022 and 2021, the Company collected $6.8 million and $9.6 million of
performance allocations.
The Company has concluded that performance allocations to the Company from equity method
investments, based on cumulative performance to-date, represent carried interests. Consequently,
in following the guidance set forth in ASC Topic 606 and ASC Topic 323, these allocations are
included as a component of the total income from unconsolidated investments in the accompanying
consolidated statements of income.
Performance allocation compensation is recognized in the same period that the related performance
allocations are recognized and can be reversed during periods when there is a reversal of
performance allocations that were previously recognized. As of December 31, 2023, the Company
has $22.8 million of accrued performance allocation compensation recorded to accrued expenses
and other liabilities that are subject to future adjustments based on the underlying performance
of investments. During the year ended December 31, 2023, the Company did not pay out any
performance allocation compensation. During the year ended December 31, 2022, the Company
paid $1.2 million of performance allocation compensation to employees for performance allocations
that were realized during the period.
96 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 97
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
FAIR VALUE MEASUREMENTS—Kennedy Wilson accounts for fair value measurements of financial
assets and financial liabilities and for fair value measurements of non-financial items that are recognized
or disclosed at fair value in the financial statements on a recurring basis under the provisions of ASC
Topic 820, Fair Value Measurement. ASC Topic 820 defines fair value as the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. When estimating fair value in the absence of an orderly transaction between market
participants, valuations of real estate are based on management estimates of the real estate assets using
income and market approaches. The indebtedness securing the real estate and the investments in debt
securities are valued, in part, based on third party valuations and management estimates also using an
income approach. The use of different market assumptions or estimation methodologies may have a
material impact on the estimated fair value amounts.
FAIR VALUE OF FINANCIAL INSTRUMENTS—The estimated fair value of financial instruments
is determined using available market information and appropriate valuation methodologies.
Considerable judgment, is necessary, however, to interpret market data and develop the related
estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of
the amounts that could be realized upon disposition of the financial instruments. The use of different
market assumptions or estimation methodologies may have a material impact on the estimated fair
value amounts.
DISTRIBUTIONS FROM UNCONSOLIDATED INVESTMENTS—The Company utilizes the nature of
distributions approach and distributions are reported under operating cash flow unless the facts and
circumstances of a specific distribution clearly indicate that it is a return of capital (e.g., a liquidating
dividend or distribution of the proceeds from unconsolidated investments’ sale of assets), in which
case it is reported as an investing activity. This enables Kennedy Wilson to look to the nature and
source of the distribution received and classify it appropriately between operating and investing
activities on the statement of cash flows based upon the source.
FOREIGN CURRENCIES—The financial statements of Kennedy Wilson’s subsidiaries located outside
the United States are measured using the local currency as this is their functional currency. The
assets and liabilities of these subsidiaries are translated at the rates of exchange at the balance sheet
date, and income and expenses are translated at the average monthly rate. The foreign currencies
include the euro and the British pound sterling. Cumulative translation adjustments, to the extent
not included in cumulative net income, are included in the consolidated statement of equity as a
component of accumulated other comprehensive income.
Investment level debt is generally incurred in local currencies. Fluctuations in foreign exchanges
rates may have a significant impact on the results of the Company’s operations. In order to manage
the effect of these fluctuations, the Company enters into hedging transactions, in the form of
currency derivative contracts, that are designed to reduce its book equity exposure to foreign
currencies. KWE has also entered into currency derivative contracts to manage its exposure to euro
to British pound currency fluctuations. See Note 5 for a complete discussion on currency derivative
contracts.
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES—Kennedy Wilson has derivatives to
reduce its exposure to foreign currencies. All derivative instruments are recognized as either assets
or liabilities in the balance sheet at their respective fair values. For derivatives designated in hedging
relationships, changes in fair value of cash flow hedges or net investment hedges are recognized in
accumulated other comprehensive income, to the extent the derivative is effective at offsetting the
changes in the item being hedged until the hedged item affects earnings.
Fluctuations in foreign exchanges rates may have a significant impact on the Company’s results of
operations. In order to manage the potential exposure from adverse changes in foreign exchange
rates arising from the Company’s net investments in foreign operations, the Company may enter into
currency derivative contracts to hedge all or portions of the net investments in the Company’s non-
U.S. dollar denominated foreign operations.
GOODWILL—Goodwill results from the difference between the purchase price and the fair value
of net assets acquired based upon the purchase method of accounting for business combinations.
In accordance with ASC Subtopic 350-20, Accounting for Intangibles—Goodwill and Other, goodwill is
reviewed for impairment on an annual basis. The Company performs its annual review of impairment
at year end and when a triggering event occurs between annual year end reviews. As a result of
the evaluation performed as described above, Kennedy Wilson has determined that there was no
impairment of goodwill as of December 31, 2023, 2022 and 2021.
CASH AND CASH EQUIVALENTS—Cash and cash equivalents consist of cash and all highly liquid
investments purchased with maturities of three months or less. Cash and cash equivalents are
invested in institutions insured by government agencies. Certain accounts contain balances in excess
of the insured limits. Kennedy Wilson’s operations and financial position are affected by fluctuations
in currency exchange rates between the euro and British pound sterling against the U.S. Dollar. As
of December 31, 2023, 2022, and 2021 we have $69.6 million, $21.4 million, and $24.2 million,
respectively, of restricted cash, which is included in cash and cash equivalents, that primarily relates
to lender reserves associated with consolidated mortgages that we hold on properties and reserves
held on loans in the newly acquired Construction Loan Portfolio (as defined herein) on behalf of the
borrowers under such loans. These reserves typically relate to interest, tax, insurance and future
capital expenditures at the properties and on our loan investments.
LONG-LIVED ASSETS—Kennedy Wilson reviews its long-lived assets (excluding goodwill) whenever
events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable in accordance with ASC Subtopic 360-10, Property, Plant and Equipment. Recoverability
of assets to be held and used is measured by a comparison of the carrying amount of an asset to
estimated undiscounted future cash flows expected to be generated by the asset. If the carrying
amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge
is recognized in gain on sale of real estate, net in the amount by which the carrying amount of the
asset exceeds the fair value of the asset. Assets to be disposed of are presented separately in the
balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and
are no longer depreciated. The assets and liabilities of the assets to be disposed of are classified as
held for sale and would be presented separately in the appropriate asset and liability sections of the
consolidated balance sheets.
98 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 99
Kennedy-Wilson Holdings, Inc.
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
ACCOUNTS RECEIVABLE—Accounts receivable are recorded at the contractual amount as
determined by the underlying agreements and do not bear interest. The Company recognizes
revenue to the extent that amounts are probable that substantially all rental income will be collected.
CONCENTRATION OF CREDIT RISK—Financial instruments that subject Kennedy Wilson to credit risk
consist primarily of accounts and notes receivable, cash equivalents and derivative instruments. Credit
risk is generally diversified due to the large number of entities composing Kennedy Wilson’s customer
base and their geographic dispersion throughout the United States, the United Kingdom, Ireland, Spain
and Italy. Kennedy Wilson performs ongoing credit evaluations of its customers and debtors.
EARNINGS PER SHARE—Basic earnings per share is computed based upon the weighted average
number of shares of common stock outstanding during the periods presented. Diluted earnings
per share is computed based upon the weighted average number of shares of common stock
and potentially dilutive securities outstanding during the periods presented. The dilutive impact
of potentially dilutive securities includes convertible securities, and unvested stock which were
outstanding during the period. Unvested stock are calculated by the “treasury stock” method and the
convertible securities under the “if converted” method.
COMPREHENSIVE INCOME (LOSS)—Comprehensive income (loss) consists of net income (loss) and
other comprehensive income (loss). In the accompanying consolidated balance sheets, accumulated
other comprehensive income consists of foreign currency translation adjustments and unrealized
gains (losses) on derivative instruments.
REPURCHASE OF EQUITY INSTRUMENTS—Upon the decision to retire repurchased equity
instruments, Kennedy Wilson records the retirement as a reduction to additional paid in capital for
the amount that shares were initially issued at with the excess paid recorded to retained earnings.
SHARE-BASED PAYMENT ARRANGEMENTS—Kennedy Wilson accounts for its share-based
payment arrangements under the provisions of ASC Subtopic 718-10, Compensation—Stock
Compensation. Compensation cost for employee service received in exchange for an award of equity
instruments is based on the grant-date fair value of the share-based award that is ultimately settled
in equity of Kennedy Wilson. The cost of employee services is recognized over the period during
which an employee provides service in exchange for the share-based payment award. Share-based
payment arrangements with only services conditions that vest ratably over the requisite service
period are recognized on the straight-line basis and performance awards that vest ratably are
recognized on a tranche by tranche basis over the performance period.
INCOME TAXES—Income taxes are accounted for under the asset and liability method. Deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and liabilities and their
respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes
the enactment date. In accordance with accounting for uncertainty in ASC Subtopic 740-10, Income
Taxes, Kennedy Wilson recognizes the effect of income tax positions only if those positions are more
likely than not of being sustained. Recognized income tax positions are measured at the largest
amount that is greater than 50% likely of being realized. Changes in recognition or measurement are
reflected in the period in which the change in judgment occurs.
Kennedy Wilson records interest related to unrecognized tax benefits in interest expense and
penalties in general and administrative expenses on the consolidated statements of operations.
NONCONTROLLING INTERESTS—Noncontrolling interests are reported within equity as a separate
component of Kennedy Wilson’s equity in accordance with ASC Subtopic 810-10. Revenues,
expenses, gains, losses, net income or loss, and other comprehensive income are reported in
the consolidated statements of operations at the consolidated amounts and net income and
comprehensive income attributable to noncontrolling interests are separately stated.
RECENT ACCOUNTING PRONOUNCEMENTS
In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes
(Topic 740): Improvements to Income Tax Disclosures, which includes amendments that further enhance
income tax disclosures, primarily through standardization and disaggregation of rate reconciliation
categories and income taxes paid by jurisdiction. The amendments are effective for the Company’s
annual periods beginning December 15, 2024, with early adoption permitted, and should be applied
either prospectively or retrospectively. The Company is currently evaluating this guidance and the
impact it may have on the Company’s consolidated financial statements.
On November 27, 2023, the FASB issued an ASU to require the disclosure of segment expenses if
they are (i) significant to the segment, (ii) regularly provided to the chief operating decision maker
(“CODM”), and (iii) included in each reported measure of a segment’s profit or loss. Public entities
will be required to provide this disclosure quarterly. In addition, this ASU requires an annual
disclosure of the CODM’s title and a description of how the CODM uses the segment’s profit/
loss measure to assess segment performance and to allocate resources. Pursuant to this ASU, the
footnotes to the Company’s consolidated financial statements will include incremental disclosures
related to our reportable segments, including the disclosures about the Company’s CODM’s review
of its consolidated net income, the profit/loss measure of the Company’s segments. The new
guidance is effective for annual reporting periods beginning after December 15, 2023, and interim
periods within fiscal years beginning after December 15, 2024. The amendments should be applied
retrospectively to all prior periods presented in the financial statements. We are evaluating the
disclosure requirements related to the new standard.
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments
in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”). ASU 2023-06
was issued in response to the SEC’s final amendments in Release No. 33-10532, Disclosure Update
and Simplification that updated and simplified disclosure requirements that the SEC believed were
duplicative, overlapping, or outdated, and to align the requirements in the Codification with the
SEC’s disclosure requirements. The effective date for each amendment in ASU 2023-06 will be the
date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K
becomes effective, with early adoption prohibited. If by June 30, 2027, the SEC has not removed the
applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related
amendment will be removed from the Codification and will not become effective for any entity.
100 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 101
Kennedy-Wilson Holdings, Inc.
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
The Company does not expect the adoption of ASU 2023-06 to have a material impact on our
consolidated financial statements and related disclosures.
During the year ended December 31, 2022, Kennedy Wilson acquired the following consolidated
properties, which were treated as asset acquisitions:
The FASB did not issue any other ASUs during the year ended December 31, 2023 that the Company
expects to be applicable and have a material impact on the Company’s financial statements.
(Dollars in millions)
RECLASSIFICATIONS—Certain balances included in prior year’s financial statements have been
reclassified to conform to the current year’s presentation.
NOTE 3—REAL ESTATE AND ACQUIRED IN PLACE LEASE VALUE
The following table summarizes the Company’s investment in consolidated real estate properties at
December 31, 2023 and 2022:
(Dollars in millions)
Land
Buildings
Building improvements
Acquired in-place lease values
Less accumulated depreciation and amortization
Real estate and acquired in place lease values, net of accumulated depreciation and
amortization
$
December 31,
2023
1,328.3 $
3,679.1
511.3
276.4
5,795.1
(957.8)
2022
1,319.2
3,961.9
494.2
295.0
6,070.3
(882.2)
$
4,837.3 $
5,188.1
Real property, including land, buildings, and building improvements, are included in real estate and
are generally stated at cost. Buildings and building improvements are depreciated on the straight-
line method over their estimated lives not to exceed 40 years. Acquired in-place lease values are
recorded at their estimated fair value and amortized over their respective weighted-average lease
term which was 5.3 years at December 31, 2023.
Depreciation and amortization expense on buildings, building improvements and acquired in-place
lease values for the years ended December 31, 2023, 2022 and 2021 was $148.9 million, $162.7
million and $151.3 million, respectively.
Consolidated Acquisitions
The purchase of property is recorded to land, buildings, building improvements, and intangible lease
value (including the value of above-market and below-market leases, acquired in-place lease values,
and tenant relationships, if any) based on their respective estimated relative fair values. The purchase
price generally approximates the fair value of the properties as acquisitions are transacted with third-
party willing sellers after arms-length negotiations.
During the year ended December 31, 2023, Kennedy Wilson did not acquire any consolidated
properties.
Purchase Price Allocation at Acquisition(1)
Acquired
in-place lease
values(2)
Investment
debt
KWH
Shareholders’
Equity
Location
Description
Land
Building
Western U.S.
United Kingdom Office building
Four multifamily properties
$
$
99.2 $
25.5
396.6 $
74.1
1.4 $
6.9
203.4 $
—
124.7 $
470.7 $
8.3 $
203.4 $
293.8
106.5
400.3
(1) Excludes net other assets.
(2) Above- and below-market leases are included in other assets and accrued expenses and other liabilities, respectively, on the
accompanying consolidated balance sheets.
Gains on Sale of Real Estate, Net
During the years ended December 31, 2023, 2022 and 2021, Kennedy Wilson recognized the
following net gains on sale of real estate. Included in the net gains for the year ended December
31, 2023, 2022 and 2021 are impairment losses of $28.6 million, $13.3 million and $20.9 million
primarily relating to European non-core retail and office assets.
(Dollars in millions)
Year ended
December 31,
2023
2022
2021
Description
Consolidated
NCI
Net of NCI
Gain on sale of real estate
Primarily due to the sale of a 49% equity interest in two
multifamily properties in the Western United States
that were previously wholly-owned and controlled by
the Company and the sale of a wholly-owned office
property in the United Kingdom.
Primarily due to the sale of a 49% equity interest in a
multifamily property in Western United States that was
previously wholly-owned and controlled by the Company
and the sale of a wholly-owned office property in the
United Kingdom
Primarily due to the sale of a 49% equity interest in nine
multifamily properties in Western United States that were
previously wholly-owned and controlled by the Company
and the sale of 19 office properties in the United
Kingdom, one multifamily property in Western United
States, three retail properties in Western United States
and an office property in Western United States
$
127.6 $
(21.9) $
105.7
103.7
(1.0)
102.7
412.7
(5.4)
407.3
Deconsolidation of Previously Consolidated Real Estate
Under ASC Subtopic 610-20, the Company consummated the following transactions that resulted
in the deconsolidation of the Company’s interests in investments previously consolidated in the
Company’s financial statements:
During the year ended December 31, 2023, Kennedy Wilson recognized gains on sale of real estate,
net of $127.6 million. These gains were primarily due to (i) the Company’s sale of 49% of its equity
interest in two previously wholly-owned market-rate multifamily properties into an existing joint
venture platform managed by the Company and retained a noncontrolling 51% interest in such
properties, which resulted in a gain on sale of real estate of $79.5 million; (ii) the sale of a Western
United States property to VHH, pursuant to which the Company retains an interest in the asset
through its ownership interest in VHH, which resulted in a gain of $15.1 million; (iii) the sale of a
consolidated multifamily property owned with a noncontrolling interest partner which resulted in
102 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 103
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
a gain of $37.6 million ($20.1 million of which was at the Company’s share) and (iv) the remainder
of gain on sale of real estate relates to the sale of non-core retail and residential properties in the
Western United States, United Kingdom, Ireland, and Spain.
During the year ended December 31, 2022, due to the sale and deconsolidation of Montiavo, the
Company recognized a $56.7 million gain on sale of real estate, net and generated $30.2 million of
cash proceeds for the Company. The gain is due to the sale of the 49% interest to the Company’s
partner and the recording of the Company’s retained 51% interest in unconsolidated investments at
the fair value established by the transaction.
During the year ended December 31, 2021, due to the sale and deconsolidation of the assets that
make up the MF seed portfolio, the Company recognized a $332.0 million gain on sale of real estate,
net and generated $166.4 million of cash proceeds for the Company. The gain is due to the sale
of the 49% interest to the Company’s partner and the recording of the Company’s retained 51%
interest in unconsolidated investments at the fair value established by the transaction. The MF seed
portfolio and subsequent investments within the separate account are accounted for at fair value as
the Company elected to account for this investment under the fair value adoption.
The Company leases its operating properties to customers under agreements that are classified as
operating leases. The total minimum lease payments provided for under the leases are recognized
on a straight-line basis over the lease term. The majority of the Company’s rental expenses,
including common area maintenance, real estate taxes and insurance, are recovered from the
Company’s tenants. The Company records amounts reimbursed by customers in the period that the
applicable expenses are incurred, which is generally ratably throughout the term of the lease. The
reimbursements are recognized in rental income in the consolidated statements of operations as the
Company is the primary obligor with respect to purchasing and selecting goods and services from
third-party vendors and bearing the associated credit risk.
The following table summarizes the minimum lease payments due from the Company’s tenants on
leases with lease periods greater than one year at December 31, 2023:
(Dollars in millions)
2024
2025
2026
2027
2028
Thereafter
Total
Minimum
Rental Revenues(1)
$
$
134.1
124.4
104.5
83.1
68.7
181.9
696.7
(1) These amounts do not reflect future rental revenues from the renewal or replacement of existing leases, rental increases that are
not fixed and exclude reimbursements of rental expenses.
NOTE 4—UNCONSOLIDATED INVESTMENTS
Kennedy Wilson has a number of joint venture interests including commingled funds and separate
accounts, generally ranging from 5% to 50%, that were formed to acquire, manage, develop, service
and/or sell real estate. Kennedy Wilson has significant influence over these entities, but not control.
Accordingly, these investments are accounted for under the equity method.
Joint Venture and Fund Holdings
The following table details Kennedy Wilson’s investments in joint ventures by investment type and
geographic location as of December 31, 2023:
(Dollars in millions)
Western U.S.
Ireland
United Kingdom
Total
Multifamily Commercial
Hotel
Funds
Residential and Other
Total
$
820.9 $
313.8
—
71.6 $
158.7
139.8
253.0 $
—
—
96.2 $
5.4
31.5
156.2 $ 1,397.9
477.9
193.3
—
22.0
$ 1,134.7 $
370.1 $
253.0 $
133.1 $
178.2 $ 2,069.1
The following table details the Kennedy Wilson’s investments in joint ventures by investment type
and geographic location as of December 31, 2022:
(Dollars in millions)
Western U.S.
Ireland
United Kingdom
Total
Multifamily Commercial
Hotel
Funds
Residential and Other
Total
$
857.6 $
378.1
—
89.2 $
176.7
138.7
195.9 $
—
—
158.3 $
8.0
36.3
169.1 $ 1,470.1
562.8
205.2
—
30.2
$ 1,235.7 $
404.6 $
195.9 $
202.6 $
199.3 $ 2,238.1
During the year ended December 31, 2023, the change in unconsolidated investments primarily
relates to $167.4 million of cash contributions to unconsolidated investments, $161.6 million of
distributions from unconsolidated investments, $48.4 million associated with the deconsolidations
as discussed in Note 3, $252.8 million of losses from unconsolidated investments (including $229.3
million of fair value losses), and a $24.0 million decrease related to other items, which primarily
related to foreign exchange movements.
As of December 31, 2023 and December 31, 2022, $1,927.0 million and $2,093.7 million, respectively,
of unconsolidated investments were accounted for at fair value. See Note 5 for more detail.
Contributions to Joint Ventures
During the year ended December 31, 2023, Kennedy Wilson contributed $167.4 million to joint
ventures, primarily to capital calls with respect to Kona Village Resort development, European office
and multifamily developments, and fund new acquisitions in the Company’s European Industrial JV
and multifamily properties in Western United States with separate account partners.
Distributions from Joint Ventures
The following table details cash distributions by investment type and geographic location for the
year ended December 31, 2023:
Multifamily
Commercial
Funds
Residential and
Other
Total
(Dollars in millions) Operating Investing Operating Investing Operating Investing Operating Investing Operating Investing
Western U.S.
Ireland
United Kingdom
$
36.1 $
8.3
—
74.2 $
—
—
9.4 $
9.1
—
Total
$
44.4 $
74.2 $
18.5 $
— $
—
—
— $
4.8 $
—
—
4.1 $
—
11.1
0.7 $
—
0.8
3.0 $
—
—
51.0 $
17.4
0.8
81.3
—
11.1
4.8 $
15.2 $
1.5 $
3.0 $
69.2 $
92.4
Investing distributions resulted primarily from the sale of one VHH multifamily property, one multifamily
property in Fund VI and one investment in Europe Fund II as well as refinancing and resyndications
from limited partners in the VHH portfolio. Operating distributions resulted from operating cash flow
generated by the joint venture investments that have been distributed to the Company.
104 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 105
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
Income from Unconsolidated Investments
The following table presents income from unconsolidated investments recognized by
Kennedy Wilson during the years ended December 31, 2023, 2022 and 2021:
(Dollars in millions)
Income from unconsolidated investments—operating performance
Income from unconsolidated investments—realized gains from cost basis investments
(Loss) income from unconsolidated investments—unrealized and realized fair value (losses) gains
Income from unconsolidated investments—realized losses and impairment
Year Ended December 31,
2023
2022
2021
$ 40.8 $ 80.2 $ 60.7
—
213.5
(3.1)
—
(229.3)
—
4.7
114.6
—
Principal co-investments
(Loss) income from unconsolidated investments—performance allocation
(Loss) income from unconsolidated investments
(188.5)
(64.3)
199.5
(21.1)
271.1
117.9
$ (252.8) $ 178.4 $ 389.0
The decrease in income from unconsolidated investments is primarily due to the following:
Operating performance
During the year ended December 31, 2023, the Company had lower operating performance from
its unconsolidated investments due to the following factors: (i) higher interest expense due to
rising interest rates (ii) pre-opening and one-time start up costs associated with the opening of the
Kona Village Resort and (iii) lower income from sales of residential units at Kohaniki development
in Hawaii. The increase in rental income is primarily due to the multifamily assets that were
deconsolidated as discussed above in Note 3.
Fair Value
During the year ended December 31, 2023, valuations continued to pull back primarily as a result
of continued expansion of estimated capitalization rates and significant reductions in transaction
volumes and liquidity, primarily as a result of increased borrowing rates as the Federal Reserve
continued its interest rate hikes and increased the federal funds rate by 100 basis points during
2023. As such, during the year ended December 31, 2023 the Company recorded fair value
decreases with respect to: (i) certain office properties in the Western United States, Ireland and
United Kingdom due to expansion in estimated capitalization rates, primarily as a result of increased
interest rates, which also led to us recording a decrease of the accrued performance allocations with
respect to funds that held these investments as discussed below; (ii) certain market rate multifamily
properties in the Western United States and Ireland due to expansion in estimated capitalization
rates; (iii) the write off of a $5 million investment in a social impact real estate fund manager; and
(iv) a decrease in the fair value of a building that we hold a 10% ownership interest in due to a
national co-working office tenant no longer paying rent at such property. These fair value decreases
were offset by (i) a fair value increase of $51.5 million with respect to our investment in VHH (our
affordable rate multifamily platform) due to gains on the conversion of the status of one of VHH’s
largest properties from development to operating, gains associated with the conversion of the loan
secured by such property from a floating rate construction loan to a long-term fixed rate mortgage
(the rate of which was set in 2019), the resyndication of properties and (ii) fair value increases
recognized by the Company on fixed rate mortgages due to increases in market interest rates.
During the year ended December 31, 2023, we recorded a $64.3 million decrease in the accrual for
performance allocations primarily related to the fair value decreases that we recorded with respect to
two of our Western United States commingled funds as described above. We also had reductions in
performance allocations on market rate multifamily separate account platforms in the Western United
States and Ireland. There is no performance allocation structure relating to our investment in VHH.
During the year ended December 31, 2022, valuations began to pull back slightly with estimated
cap rate expansion, primarily as a result of increased borrowing rates, which led to fair value losses
on real estate during the year ended December 31, 2022. The Company also had fair value foreign
exchange losses, net of any hedges on our foreign fair value investments as the euro and the
GBP were at historically low levels against the U.S. Dollar. These fair value losses were offset by
fair value increases on the Company’s affordable multifamily properties in our VHH platform due
to increased NOI at the properties driven by rental increases and the stabilization of assets that
recently completed development. Fair value losses on real estate were also offset by fair value gains
on our fixed rate mortgages that are secured by certain properties. This was primarily related to the
Company’s long-term fixed rate debt having lower rates than the current market rates as a result of
higher base rates and spreads in today’s financing market driven by rate increases implemented by
the Federal Reserve and the European Central Bank (“ECB”) during the prior period. The Company
also had fair value gains associated with interest rate derivatives held by properties on variable rate
mortgages which have increased in value with rising interest rates. The Company’s investment in
VHH also had significant fair value gains for the year ended December 31, 2022 due to gains on its
fixed rate property loans and increases in NOI at the properties due to rental increases.
During the year ended December 31, 2022, the Company recorded a $21.1 million decrease in the
accrual for performance allocations relating to our commingled funds and certain separate account
investments due to declines in fair value of the applicable investments. During the year ended
December 31, 2022, the Company had realized performance fees of $6.8 million relating to the sale
of two multifamily properties in the Western United States, of which the Company paid $1.2 million
of performance allocation compensation to employees for performance allocations that were
realized during the period.
Vintage Housing Holdings (“VHH”)
As of December 31, 2023 and 2022, the carrying value of the Company’s investment in VHH
was $285.9 million and $272.3 million, respectively. The total equity income recognized from the
Company’s investment in VHH was $63.0 million, $119.8 million and $41.4 million for the years
ended December 31, 2023, 2022 and 2021, respectively. Distributions in the current period
primarily relate to resyndications and refinancing distributions. Prior period fair value gains primarily
relate to resyndications in which VHH dissolves an existing partnership and recapitalizes into a
new partnership with tax exempt bonds and tax credits that are sold to a new tax credit partner
and, in many cases, yields cash back to VHH. Upon resyndication, VHH retains a GP interest in the
partnership and receives various future streams of cash flows including: development fees, asset
management fees, other GP management fees and distributions from operations.
During the year ended December 31, 2023, the Company received $59.1 million of proceeds from
VHH, including $9.7 million from recurring monthly distributions, $3.2 million from paid developer
fees at conversion and $46.2 million from sales and refinancings.
During the year ended December 31, 2023, the Company sold a wholly-owned, Western United
States property to VHH, pursuant to which the Company retains an interest in the asset through its
ownership interest in VHH, which resulted in a gain of $15.1 million.
106 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 107
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
Capital Commitments
As of December 31, 2023, Kennedy Wilson had unfulfilled capital commitments totaling
$187.7 million to eight of its unconsolidated joint ventures, including $73.5 million relating to
four closed-end funds managed by Kennedy Wilson, under the respective operating agreements.
In addition to the unfunded capital commitments, the Company has $68.7 million of equity
commitments on various development projects. The Company may be called upon to contribute
additional capital to joint ventures in satisfaction of such capital commitment obligations.
Summarized Financial Data
VHH
The income from VHH was a significant component of the Company’s operations for the year ended
December 31, 2022.
MF Seed Portfolio
The income from the MF seed portfolio was a significant component of the Company’s operations
for the year ended December 31, 2021. Financial information is provided for December 31, 2023
and December 31, 2022 for comparative purposes.
Summarized financial information is provided below:
(Dollars in millions)
Cash and cash equivalents
Accounts receivable
Real estate
Other
Total assets
Liabilities
Accounts payable and accrued expenses
Mortgage debt
Total liabilities
Equity
Kennedy Wilson—investment in unconsolidated investment
Partners
Total equity
Total liabilities and equity
VHH
MF Seed Portfolio
December 31,
December 31,
2023
2022
2023
$
44.0 $
37.0 $
10.0 $
3.7
2,054.9
0.3
4.4
1,802.7
2.0
1.2
898.6
1.8
2022
12.4
2.0
970.5
1.1
$
2,102.9 $
1,846.1 $
911.6 $
986.0
$
21.1 $
17.6 $
6.8 $
1,417.4
1,438.5
1,180.6
1,198.2
285.9
378.5
664.4
271.8
376.1
647.9
439.7
446.5
246.6
218.5
465.1
5.4
448.7
454.1
291.9
240.0
531.9
$
2,102.9 $
1,846.1 $
911.6 $
986.0
VHH
MF Seed Portfolio
Year Ended December 31,
Year Ended December 31,
(Dollars in millions)
2023
2022
2021
2023
Rental income
Unrealized fair value gains (losses)
Rental expenses
Interest expense
Other expense
Net income (loss)
(Income) loss attributable to partner
Income (loss) from unconsolidated
investment
$
154.6 $
114.4
(52.1)
(52.0)
(8.2)
156.7
(93.7)
131.0 $
270.7
(41.0)
(45.6)
—
315.1
(195.3)
114.7 $
77.4
(34.8)
(37.5)
(0.1)
119.7
(78.3)
68.4 $
(80.7)
(26.9)
(18.0)
(2.2)
(59.4)
30.4
2022
64.8 $
56.1
(21.1)
(17.6)
(4.1)
78.1
(33.0)
2021
31.6
140.6
(8.5)
(8.2)
(11.8)
143.7
(54.8)
$
63.0 $
119.8 $
41.4 $
(29.0) $
45.1 $
88.9
NOTE 5—FAIR VALUE MEASUREMENTS AND THE FAIR VALUE OPTION
The following table presents fair value measurements (including items that are required to be measured
at fair value and items for which the fair value option has been elected) as of December 31, 2023:
(Dollars in millions)
Unconsolidated investments
Net currency derivative contracts
Total
Level 1
Level 2
Level 3
Total
$
$
— $
—
— $ 1,927.0 $ 1,927.0
(23.7)
—
(23.7)
— $
(23.7) $ 1,927.0 $ 1,903.3
The following table presents fair value measurements (including items that are required to be measured
at fair value and items for which the fair value option has been elected) as of December 31, 2022:
(Dollars in millions)
Unconsolidated investments
Net currency derivative contracts
Total
Level 1
Level 2
Level 3
Total
$
$
— $
—
— $
— $ 2,093.7 $ 2,093.7
7.0
—
7.0
7.0 $ 2,093.7 $ 2,100.7
Unconsolidated Investments
Kennedy Wilson elected to use the FV Option for 72 unconsolidated investments to more accurately
reflect the timing of the value created in the underlying investments and report those changes
in current operations. Kennedy Wilson’s investment balance in the FV Option investments was
$1,793.9 million and $1,891.1 million at December 31, 2023 and 2022, respectively, which are
included in unconsolidated investments in the accompanying balance sheets.
Additionally, Kennedy Wilson records its investments in its managed commingled funds (the “Funds”)
based upon the net assets that would be allocated to its interests in the Funds, assuming the Funds were
to liquidate their investments at fair value as of the reporting date. The Company’s investment balance in
the Funds was $133.1 million and $202.6 million at December 31, 2023 and 2022, respectively, which is
included in unconsolidated investments in the accompanying consolidated balance sheets.
In estimating fair value of real estate held by the Funds and the 72 FV Option investments, the
Company considers significant unobservable inputs to be the capitalization and discount rates.
The following table summarizes the Company’s investments in unconsolidated investments held at
fair value by type:
(Dollars in millions)
FV Option
Funds
Total
December 31, 2023
December 31, 2022
$
$
1,793.9
133.1
$
1,927.0
$
1,891.1
202.6
2,093.7
The following table presents changes in Level 3 investments, investments in investment companies
and investments in joint ventures that elected the fair value option, for the years ended December 31:
(Dollars in millions)
Beginning balance
Unrealized and realized gains, including performance allocations
Unrealized and realized losses
Contributions
Distributions
Foreign exchange
Other
Ending balance
$
2023
2022
2021
2,093.7 $
111.5
(377.4)
168.8
(143.9)
25.0
49.3
1,794.8 $
274.4
(114.1)
348.1
(188.9)
(55.8)
35.2
1,136.5
390.0
(5.0)
273.8
(144.3)
(28.4)
172.2
$
1,927.0 $
2,093.7 $
1,794.8
108 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 109
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
The Other balance for the year ended December 31, 2023 primarily consists of non-cash contributions
relating to two recapitalized multifamily investments into a separate account platform and one
multifamily property into VHH. The Other balance for the year ended December 31, 2022 includes
$31.9 million related to the sale of a 49% ownership interest in Montiavo. The Other balance for
the year ended December 31, 2021 above includes $178.8 million related to the deconsolidation of
nine multifamily assets in the MF seed portfolio during the period. As the increase in unconsolidated
investments was due to a non-cash movement the amounts are reflected in Other above. See notes to
cash flow statement and Note 3 for further discussion regarding the sale.
The change in unrealized gains and losses on Level 3 investments during 2023 and 2022 for
investments still held as of December 31, 2023 and 2022 were losses of $178.2 million and gains
of $120.8 million, respectively. The change in unrealized and realized gains and losses are included
in principal co-investments within income from unconsolidated investments in the accompanying
consolidated statements of income.
Unobservable Inputs for Real Estate
The Company accounts for a number of unconsolidated investments under fair value, the accuracy
of estimating fair value cannot be determined with precision and cannot be substantiated by
comparison to quoted prices in active markets and may not be realized in a current sale or immediate
settlement of the asset or liability. Recently, there has also been a lack of liquidity in the capital
markets as well as limited transactions which has had impact on the inputs associated with fair
values. Additionally, there are inherent uncertainties in any fair value measurement technique, and
changes in the underlying assumptions used, including market-derived estimated capitalization rates,
discount rates, liquidity risks, and estimates of future cash flows could significantly affect the fair
value measurement amounts. All valuations of real estate involve subjective judgments.
In determining estimated fair market values, the Company utilizes two approaches to value real
estate, a discounted cash flow analysis and direct capitalization approach.
Discounted cash flow models estimate future cash flows from a buyer’s perspective (including
terminal values) and compute a present value using a market discount rate. The holding period in the
analysis is typically ten years. This is consistent with how market participants often estimate values
in connection with buying real estate but these holding periods can be shorter depending on the life
of the structure an investment is held within. The cash flows include a projection of the net sales
proceeds at the end of the holding period, computed using a market reversionary capitalization rate.
Under the direct capitalization approach, the Company applies a market derived estimated
capitalization rate to current and future income streams with appropriate adjustments for tenant
vacancies or rent-free periods. These estimated capitalization rates and future income streams are
derived from comparable property and leasing transactions and are considered to be key inputs
in the valuation. Other factors that are taken into consideration include tenancy details, planning,
building and environmental factors that might affect the property.
The Company also utilizes valuations from independent real estate appraisal firms on some of its
investments (“appraised valuations”), with certain investment structures requiring appraised valuations
periodically (typically annually). All appraised valuations are reviewed and approved by the Company.
The table below describes the range of inputs used as of December 31, 2023 for real estate assets:
Multifamily
Income approach—discounted cash flow
Income approach—direct capitalization
Office
Industrial
Retail
Hotel
Income approach—discounted cash flow
Income approach—direct capitalization
Income approach—discounted cash flow
Income approach—direct capitalization
Income approach—discounted cash flow
Income approach—discounted cash flow
Estimated Rates Used For
Capitalization Rates
Discount Rates
5.70%—7.50%
4.30%—5.80%
5.20%—7.50%
4.50%—9.30%
5.00%—6.30%
4.10%—9.00%
6.50%
6.00%
7.30%—11.00%
N/A
7.50%—9.30%
N/A
6.30%—7.80%
N/A
8.30%
8.30%
In valuing indebtedness, Kennedy Wilson considers significant inputs to be the term of the debt,
value of collateral, market loan-to-value ratios, market interest rates and spreads, and credit
quality of investment entities. The credit spreads used by Kennedy Wilson to value floating
rate indebtedness range from 2.00% to 4.60%, while the market rates used to value fixed rate
indebtedness range from 4.90% to 9.30%.
There is no active secondary market for the Company’s development projects and no readily
available market value given the uncertainty of the amount and timing of future cash flows.
Accordingly, determination of fair value of its development projects requires judgment and extensive
use of estimates. Therefore, the Company typically uses investment cost as the estimated fair value
until future cash flows become more predictable. Additionally, the fair value of its development
projects may differ significantly from the values that would have been used had a ready market
existed for such investments and may differ materially from the values that the Company may
ultimately realize. If the Company were required to liquidate an investment in a forced or liquidation
sale, it could realize significantly less than the value at which the Company has recorded it. In
addition, changes in the market environment and other events that may occur over the life of the
investments may cause the gains or losses ultimately realized on these investments to be different
than the unrealized gains or losses reflected in the currently assigned valuations.
Ongoing macroeconomic conditions, such as, but not limited to, elevated levels of inflation and
interest rates, banks’ ability and willingness to lend, recent adverse developments affecting regional
banks and other financial institutions, currency fluctuations the ongoing military conflicts around
the world, continue to fuel recessionary fears and create volatility in our business results and
operations. Any prolonged downturn in the financial markets or a recession, either globally or locally
in the United States or in other countries in which we conduct business, could impact the fair value
of investments held by the Company. As a result of the rapid development, fluidity and uncertainty
surrounding these situations, the Company expects that information with respect to fair value
measurement may change, potentially significantly, going forward and may not be indicative of the
actual impact on our business, operations, cash flows and financial condition for the year ended
December 31, 2023 and future periods.
Currency Derivative Contracts
Kennedy Wilson uses foreign currency derivative contracts such as forward contracts and options to
manage its foreign currency risk exposure against a portion of certain non-U.S. dollar denominated
currency net investments. Foreign currency options are valued using a variant of the Black-Scholes
model tailored for currency derivatives and the foreign currency forward contracts are valued based
110 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 111
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
on the difference between the contract rate and the forward rate at maturity of the underlying
currency applied to the notional value in the underlying currency discounted at a market rate for
similar risks. Although the Company has determined that the majority of the inputs used to value
its currency derivative contracts fall within Level 2 of the fair value hierarchy, the counterparty
risk adjustments associated with the currency derivative contracts utilize Level 3 inputs. However,
as of December 31, 2023 and 2022, Kennedy Wilson assessed the significance of the impact of
the counterparty valuation adjustments on the overall valuation of its derivative positions and
determined that the counterparty valuation adjustments are not significant to the overall valuation
of its derivative. As a result, the Company has determined that our derivative valuation in its entirety
be classified in Level 2 of the fair value hierarchy.
Changes in fair value are recorded in other comprehensive income (loss) in the accompanying
consolidated statements of comprehensive income as the portion of the currency forward and option
contracts used to hedge currency exposure of its certain consolidated subsidiaries qualifies as a net
investment hedge under ASC Topic 815, Derivatives and Hedging. Changes in fair value on hedges
associated with investments that are held at fair value are recorded through principal co-investments
within income from unconsolidated investments. The Company has elected to amortize the spot to
forward difference (“forward points”) to interest expense over the contractual life of the hedges. On
hedges associated with fair value investments the forward point amortization to interest expense is
recorded as a component of principal co-investments.
The fair value of the currency derivative contracts held as of December 31, 2023 and 2022 are reported
in other assets for hedge assets and included in accrued expenses and other liabilities for hedge liabilities
on the accompanying balance sheet. See Note 15 for a complete discussion on other comprehensive
income including currency forward and option contracts and foreign currency translations.
The table below details the currency forward contracts and currency option contracts
Kennedy Wilson had as of December 31, 2023:
(Dollars in millions)
December 31, 2023
Year Ended December 31, 2023
Currency Hedged
Currency Notional
Underlying
Hedge
Asset
Hedge
Liability
Change in
Unrealized
(Losses)
Gains
Recognized
Losses
Interest
Expense Cash Paid
Outstanding
EUR
EUR(1)
EUR(1)(2)
GBP
Total Outstanding
Settled
GBP
Total Settled
Total
€ 287.5 $
€
40.0
€ 475.0
£ 475.0
USD
GBP
GBP
USD
USD
2.5 $
—
—
10.8
13.3
—
—
(18.1) $
(0.4)
—
(18.5)
(37.0)
—
—
(0.4) $
(1.3)
11.6
(22.0)
(12.1) $
—
—
(5.4)
4.3 $
—
—
1.9
(12.1)
(17.5)
1.9
1.9
—
—
6.2
0.1
0.1
$
13.3 $
(37.0) $
(10.2)(3)$
(17.5) $
6.3 $
—
—
—
—
—
(2.1)
(2.1)
(2.1)
(1) Hedge is held by KWE on its wholly-owned subsidiaries.
(2) Relates to KWE’s Euro Medium Term Note. See discussion in Note 10.
(3) Excludes deferred tax expense of $4.7 million.
The gains and losses recognized through other comprehensive income (loss) will remain in
accumulated other comprehensive income (loss) until the underlying investments they were hedging
are substantially liquidated by Kennedy Wilson.
The currency derivative contracts discussed above are offset by foreign currency translation of
the Company’s foreign net assets. For the year ended December 31, 2023, Kennedy Wilson had a
gross foreign currency translation gain on its net assets of $32.3 million. As of December 31, 2023,
the Company has hedged 97% of the net asset carrying value of its euro denominated investments
and 95% of the net asset carrying value of its GBP denominated investments. See Note 15 for a
complete discussion on other comprehensive income including currency derivative contracts and
foreign currency translations.
Interest Rate Derivatives
The Company has interest rate swaps and caps to hedge its exposure to rising interest rates.
Changes in the value of interest rate swaps that are designated to specific investments have fair
value movements recorded to other comprehensive income (loss) and had fair value gains of
$7.4 million for the year ended December 31, 2022. There were no investments that had interest
rate derivatives designated to specific investments during the year ended December 31, 2023.
Changes in the value of interest rate swaps and caps that are undesignated are recorded to other
income and had fair value gains of $5.9 million and $42.4 million for the years ended December 31,
2023 and 2022. Some of the Company’s unconsolidated investments have interest rate caps which
resulted in a loss of $5.2 million and a gain of $16.9 million recorded in principal co-investments
for the years ended December 31, 2023 and 2022. During the year end December 31, 2022 the
Company refinanced a mortgage with interest rate swaps. Due to the refinancing, the Company
recognized $1.1 million to other income for amounts that had previously been recognized to other
comprehensive income.
Fair Value of Financial Instruments
The carrying amounts of cash and cash equivalents, accounts receivable including related party
receivables, accounts payable, accrued expenses and other liabilities approximate fair value due to
their short-term maturities. The carrying value of loans (excluding related party loans as they are
presumed not to be an arm’s length transaction) approximates fair value as the terms are similar to
loans with similar characteristics available in the market.
Debt liabilities are accounted for at face value plus net unamortized debt premiums. Debt assumed
in an asset acquisition, or business combination, is recorded at fair value on the date of acquisition.
The aggregate fair value as of December 31, 2023 and 2022 for mortgages, KW unsecured debt, and
KWE unsecured bonds were estimated to be approximately $4.8 billion and $5.0 billion, respectively,
based on a comparison of the yield that would be required in a current transaction, taking into
consideration the risk of the underlying collateral and the Company’s credit risk to the current yield
of a similar security, compared to their aggregate carrying value of $5.3 billion and $5.6 billion as
of December 31, 2023 and 2022, respectively. The inputs used to value mortgages, KW unsecured
debt, and KWE unsecured bonds are based on observable inputs for similar assets and quoted prices
in markets that are not active and are therefore determined to be level 2 inputs.
NOTE 6—LOANS
The global debt platform consists of two groups: the Company’s construction lending portfolio,
which was established with the acquisition of the Construction Loan Portfolio from Pacific Western
Bank in the second quarter of 2023 (as detailed below) and the Company’s bridge loan portfolio.
112 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 113
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
During the year ended December 31, 2023, the Company and affiliates of Fairfax Financial Holdings
Limited (collectively, “Fairfax”), its equity partner, acquired a $4.1 billion construction loan portfolio from
Pacific Western Bank (the “Construction Loan Portfolio”). The Company’s investment in the Construction
Loan Portfolio was 5% of the purchase price and the future funding obligations. The $4.1 billion
represented the gross commitment amount for the Construction Loan Portfolio, which has been reduced
to $3.7 billion as of December 31, 2023 due to loan repayments. The Construction Loan Portfolio has a
current outstanding balance of $2.4 billion (Kennedy Wilson share of $118.9 million), not including the
4.5% discount on gross commitment amounts from the time of purchase. As of December 31, 2023, the
Company had unfulfilled capital commitments totaling $87.7 million to our loan portfolio.
The Company had loan purchases and originations of $247.2 million and $149.4 million at
December 31, 2023 and December 31, 2022, respectively. During the year ended December 31,
2023 and December 31, 2022, the Company had loan income of $26.1 million and $11.7 million,
respectively. During the year ended December 31, 2023, the Company recorded a $7.0 million credit
loss reserve through other (loss) income. See Note 2 for more detail on CECL reserves.
NOTE 7—OTHER ASSETS
Other assets consist of the following:
$
(Dollars in millions)
Straight line rent receivable
Interest rate caps and swaps
Goodwill
Hedge assets
Prepaid expenses
Deferred taxes, net
Leasing commissions, net of accumulated amortization of $13.4 and $11.1 at December 31, 2023
and 2022, respectively
Right of use asset, net
Furniture and equipment net of accumulated depreciation of $30.8 and $29.4 at December 31,
2023 and 2022, respectively
Above-market leases, net of accumulated amortization of $42.4 and $53.0 at December 31, 2023
and 2022, respectively
Other
December 31,
2023
45.8 $
29.0
23.9
13.3
13.1
10.0
9.0
8.9
7.0
2.5
25.0
2022
42.2
41.0
23.9
34.3
12.7
9.4
9.4
12.2
13.4
3.9
13.7
Other Assets
$
187.5 $
216.1
Depreciation and amortization expense related to the above depreciable assets were $8.8 million,
$10.2 million, and $14.5 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Right of use asset, net
The Company, as a lessee, has three office leases and two ground leases, which qualify as operating
leases, with remaining lease terms of two to 235 years. The payments associated with office space
leases have been discounted using the Company’s incremental borrowing rate which is based on
collateralized interest rates in the market and risk profile of the associated lease. For ground leases
the rate implicit in the lease was used to determine the right of use asset.
The following table summarizes the fixed, future minimum rental payments, excluding variable costs,
which are discounted to calculate the right of use asset and related lease liability for its operating
leases in which we are the lessee:
(Dollars in millions)
2024
2025
2026
2027
2028
Thereafter
Total undiscounted rental payments
Less imputed interest
Right of Use Asset
Minimum
Rental Payments
$
$
1.1
1.0
1.3
1.4
1.3
31.1
37.2
(28.3)
8.9
Rental expense was $0.7 million, $0.6 million, and $0.7 million for the years ended December 31,
2023, 2022 and 2021, respectively, and is included in general and administrative expense on the
accompanying consolidated statements of operations.
NOTE 8—MORTGAGE DEBT
The following table details mortgage debt secured by Kennedy Wilson’s consolidated properties as
of December 31, 2023 and 2022:
(Dollars in millions)
Mortgage Debt by Product Type
Multifamily(1)
Commercial(1)
Commercial
Commercial(1)
Commercial
Mortgage debt (excluding loan fees)(1)
Unamortized loan fees
Total Mortgage Debt
Region
Western U.S.
United Kingdom
Western U.S.
Ireland
Spain
Carrying amount of mortgage debt as of
December 31,(1)
$
$
2023
1,711.0
509.9
258.2
337.8
37.7
2,854.6
(13.7)
$
2,840.9
$
2022
1,692.9
637.4
296.6
370.7
36.9
3,034.5
(16.5)
3,018.0
(1) The mortgage debt payable balances include unamortized debt discount. Debt discount represent the difference between the
fair value of debt and the principal value of debt assumed in various acquisitions and are amortized into interest expense over
the remaining term of the related debt in a manner that approximates the effective interest method. The net unamortized loan
discount as of December 31, 2023 and 2022 was $1.0 million and $0.6 million, respectively.
The mortgage debt had a weighted average interest rate of 5.10% and 4.12% per annum as of
December 31, 2023 and 2022, respectively. As of December 31, 2023, 65% of Kennedy Wilson’s
property level debt was fixed rate, 35% was floating rate with interest caps and 0% was floating
rate without interest caps, compared to 65% fixed rate, 27% floating rate with interest caps
and 8% floating rate without interest caps, as of December 31, 2022.
Mortgage Debt Transactions and Maturities
During the year ended December 31, 2023, five existing mortgages were refinanced and three loans
were deconsolidated.
114 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 115
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
The aggregate maturities of mortgage loans including amortization and effects of any extension
options as of December 31, 2023 are as follows:
(Dollars in millions)
2024(1)
2025
2026
2027
2028
Thereafter
Unamortized debt discount
Unamortized loan fees
Total Mortgage Debt
$
Aggregate
Maturities
150.0
201.6
616.7
411.3
342.4
1,133.6
2,855.6
(1.0)
(13.7)
$
2,840.9
(1) The Company expects to repay the amounts maturing in the next twelve months with new mortgage loans, cash generated from
operations, existing cash balances, proceeds from dispositions of real estate investments, or as necessary, with borrowings on the
Company’s Second A&R Facility.
As of December 31, 2023, the Company was in compliance with all property-level mortgages and
was current on all payments (principal and interest) with respect to the same.
NOTE 9—KW UNSECURED DEBT
The following table details KW unsecured debt as of December 31, 2023 and 2022:
(Dollars in millions)
Credit Facility
Senior Notes(1)
KW Unsecured Debt
Unamortized loan fees
Total KW Unsecured Debt
December 31,
$
2023
150.4
1,803.1
1,953.5
(19.2)
$
2022
282.0
1,803.5
2,085.5
(22.9)
$ 1,934.3 $ 2,062.6
(1) The senior notes balances include unamortized debt premiums. Debt premiums represent the difference between the fair value of
debt and the principal value of debt assumed in various acquisitions and are amortized into interest expense over the remaining
term of the related debt in a manner that approximates the effective interest method. The unamortized debt premium as of
December 31, 2023 and December 31, 2022 was $3.1 million and $3.5 million, respectively.
Borrowings Under Credit Facilities
The Company, through its wholly-owned subsidiary, Kennedy-Wilson, Inc. (the “Borrower”), has a
$500 million unsecured revolving credit facility (the “Second A&R Facility”). Loans under the Second
A&R Facility bear interest at a rate equal to Secured Overnight Financing Rate (“SOFR”) plus 1%
plus between 1.75% and 2.50%, depending on the consolidated leverage ratio as of the applicable
measurement date. The Second A&R Facility has a maturity date of September 25, 2024. Subject
to certain conditions precedent and at the Borrower’s option, the maturity date of the Second A&R
Facility may be extended by six months. The Company intends to refinance or extend the Second
A&R Facility before its maturity.
The Second A&R Facility has certain covenants as set forth in that certain Second Amended and
Restated Credit Agreement, dated as of March 25, 2020 (the “Credit Agreement”) that, among other
things, limit the Company and certain of its subsidiaries’ ability to incur additional indebtedness, pay
dividends or make distributions to stockholders, repurchase capital stock or debt, make investments,
sell assets or subsidiary stock, create or permit liens, engage in transactions with affiliates, enter into
sale/leaseback transactions, issue subsidiary equity and enter into consolidations or mergers. The
Credit Agreement requires the Company to maintain (i) a maximum consolidated leverage ratio (as
defined in the Credit Agreement) of not greater than 65%, measured as of the last day of each fiscal
quarter, (ii) a minimum fixed charge coverage ratio (as defined in the Credit Agreement) of not less
than 1.70 to 1.00, measured as of the last day of each fiscal quarter for the period of four full fiscal
quarters then ended, (iii) a minimum consolidated tangible net worth equal to or greater than the
sum of $1,700,000,000 plus an amount equal to fifty percent (50%) of net equity proceeds received
by the Company after the date of the most recent financial statements that are available as of March
25, 2020, measured as of the last day of each fiscal quarter, (iv) a maximum recourse leverage ratio
(as defined in the Credit Agreement) of not greater than an amount equal to consolidated tangible
net worth as of the measurement date multiplied by 1.5, measured as of the last day of each fiscal
quarter, (v) a maximum secured recourse leverage ratio (as defined in the Credit Agreement) of not
greater than an amount equal to 3.5% of consolidated total asset value (as defined in the Credit
Agreement) and $299,000,000, (vi) a maximum adjusted secured leverage ratio (as defined in the
Credit Agreement) of not greater than 55%, measured as of the last day of each fiscal quarter, and
(vii) liquidity (as defined in the Credit Agreement) of at least $75.0 million.
As of December 31, 2023, the Company was in compliance with all financial covenant calculations.
The obligations of the Borrower pursuant to the Credit Agreement are guaranteed by the Company
and certain wholly-owned subsidiaries of the Company.
As of December 31, 2023, the Company had $150.4 million outstanding on the Second A&R Facility
with $349.6 million available to be drawn.
The average outstanding borrowings under credit facilities was $204.7 million during the year ended
December 31, 2023.
Senior Notes
On February 11, 2021, Kennedy-Wilson, Inc., as issuer, issued $500.0 million aggregate principal
amount of 4.750% senior notes due 2029 (the “2029 notes”) and $500.0 million aggregate principal
amount of 5.000% senior notes due 2031 (the “2031 notes” and, together with the 2029 notes, the
“initial notes”). On March 15, 2021, Kennedy-Wilson, Inc. issued an additional $100 million aggregate
principal of the 2029 notes and an additional $100 million of the 2031 notes. These additional
notes were issued as “additional notes” under the indentures pursuant to which Kennedy Wilson
previously issued 2029 notes and the 2031 notes. On August 23, 2021, Kennedy-Wilson, Inc. issued
$600.0 million aggregate principal amount of 4.750% senior notes due 2030 (the “2030 notes” and,
together with the 2029 notes and the 2031 notes, the “notes”). The notes are senior, unsecured
obligations of Kennedy Wilson and are guaranteed by Kennedy-Wilson Holdings, Inc. and certain
subsidiaries of Kennedy Wilson.
The notes accrue interest at a rate of 4.750% (in the case of the 2029 notes), 4.750% (in the case
of the 2030 notes) and 5.000% (in the case of the 2031 notes) per annum, payable semi-annually
in arrears on March 1 and September 1 of each year, beginning on September 1, 2021 for the 2029
notes and 2031 notes and March 1, 2022 for the 2030 notes. The notes will mature on March 1,
2029 (in the case of the 2029 notes), February 1, 2030 (in case of 2030 notes) and March 1, 2031 (in
the case of the 2031 notes), in each case unless earlier repurchased or redeemed. At any time prior
116 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 117
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
to March 1, 2024 (in the case of the 2029 notes), September 1, 2024 (in the case of the 2030 notes)
or March 1, 2026 (in the case of the 2031 notes), Kennedy Wilson may redeem the notes of the
applicable series, in whole or in part, at a redemption price equal to 100% of their principal amount,
plus an applicable “make-whole” premium and accrued and unpaid interest, if any, to the redemption
date. At any time and from time to time on or after March 1, 2024 (in the case of the 2029 notes),
September 1, 2024 (in the case of the 2030 notes) or March 1, 2026 (in the case of the 2031 notes),
Kennedy Wilson may redeem the notes of the applicable series, in whole or in part, at specified
redemption prices set forth in the indenture governing the notes of the applicable series, plus
accrued and unpaid interest, if any, to the redemption date. In addition, prior to March 1, 2024 (for
2029 notes and 2031 notes) and September 1, 2024 (for 2030 notes), Kennedy Wilson may redeem
up to 40% of the notes of either series from the proceeds of certain equity offerings. No sinking fund
will be provided for the notes. Upon the occurrence of certain change of control or termination of
trading events, holders of the notes may require Kennedy Wilson to repurchase their notes for cash
equal to 101% of the principal amount of the notes to be repurchased, plus accrued and unpaid
interest, if any, to, but excluding, the applicable repurchase date.
As of December 31, 2020, Kennedy Wilson, Inc. had $1.2 billion of 5.875% Senior Notes due 2024
(the «2024 notes»). On January 27, 2021 the Company announced a tender offer for up to $1.0 billion
aggregate principal amount of outstanding 2024 notes. On February 9, 2021, $576.9 million
aggregate principal amount of the 2024 notes were tendered. As a result of the tender offer the
Company recognized $14.8 million of loss on early extinguishment of debt due to the tender premium
and the proportionate write off of capitalized loan fees and debt discount associated with the
bonds retired as part of the tender offer. On April 1, 2021 the Company redeemed the remaining
$573.1 million of the 2024 notes using cash on hand from the proceeds of the 2029 notes and 2031
notes. As a result of the redemption the Company recognized an additional $11.7 million of loss on
early extinguishment of debt during the year ended December 31, 2021.
The indentures governing the notes contain various restrictive covenants, including, among others,
limitations on the Company’s ability and the ability of certain of the Company’s subsidiaries to incur
or guarantee additional indebtedness, make restricted payments, pay dividends or make any other
distributions from restricted subsidiaries, redeem or repurchase capital stock, sell assets or subsidiary
stocks, engage in transactions with affiliates, create or permit liens, enter into sale/leaseback
transactions, and enter into consolidations or mergers. The indentures governing the notes limit the
ability of Kennedy Wilson and its restricted subsidiaries to incur additional indebtedness if, on the
date of such incurrence and after giving effect to the new indebtedness, the maximum balance sheet
leverage ratio (as defined in the indenture) is greater than 1.50 to 1.00, subject to certain exceptions.
As of December 31, 2023, the maximum balance sheet leverage ratio was 1.22 to 1.00. See Note 18
for the guarantor and non-guarantor financial statements.
As of December 31, 2023, the Company was in compliance with all financial covenants.
NOTE 10—KWE UNSECURED BONDS
The following table details the KWE unsecured bonds as of December 31, 2023 and 2022:
(Dollars in millions)
KWE Euro Medium Term Note Programme(1)
Unamortized loan fees
Total KWE Unsecured Bonds
December 31,
2023
523.3
(0.5)
522.8
$
$
2022
507.1
(0.7)
506.4
$
$
(1) The KWE unsecured bonds balances include unamortized debt discounts. Debt discounts represent the difference between the
fair value of debt at issuance and the principal value of debt and are amortized into interest expense over the remaining term of
the related debt in a manner that approximates the effective interest method. The net unamortized loan discount as of December
31, 2023 and 2022 was $1.0 million and $1.5 million, respectively.
KWE issued senior unsecured notes for an aggregate principal amount of (€550 million) (the
“KWE Notes”). The KWE Notes were issued at a discount with an annual fixed coupon of 3.25%,
and mature in November 2025. KWE invested proceeds from the KWE Notes to fund equity
investments in euro denominated assets and has designated the KWE Notes as a net investment
hedge under ASC Topic 815. Subsequent fluctuations in foreign currency rates that impact the
carrying value of the KWE Notes are recorded to accumulated other comprehensive income.
During the year ended December 31, 2023, Kennedy Wilson recognized a gain of $11.6 million in
accumulated other comprehensive income due to the weakening of the euro against the GBP during
the period. During the year ended December 31, 2022, KWE launched a cash tender offer for up to
€150.0 million in aggregate nominal amount of the KWE Notes and accepted all of the €75.0 million
(approximately $80.3 million, based on December 31, 2022 rates) in aggregate nominal amount
of KWE Notes validly tendered pursuant to the tender offer for a purchase price equal to 82%
of the nominal amount of the KWE Notes, which resulted in a gain on extinguishment of debt of
$13.9 million.
The trust deed that governs the bonds contain various restrictive covenants for KWE, including,
among others, limitations on KWE’s and its material subsidiaries’ ability to provide certain negative
pledges. The trust deed limits the ability of KWE and its subsidiaries to incur additional indebtedness
if, on the date of such incurrence and after giving effect to the incurrence of the new indebtedness,
(1) KWE’s consolidated net indebtedness (as defined in the trust deed) would exceed 60% of KWE’s
total assets (as calculated pursuant to the terms of the trust deed); and (2) KWE’s consolidated
secured indebtedness (as defined in the trust deed) would exceed 50% of KWE’s total assets (as
calculated pursuant to the terms of the trust deed). The trust deed also requires KWE, as of each
reporting date, to maintain an interest coverage ratio (as defined in the trust deed) of at least 1.50 to
1.00 and have unencumbered assets of no less than 125% of its unsecured indebtedness (as defined
in the trust deed).
As of December 31, 2023, KWE was in compliance with these financial covenants.
NOTE 11—RELATED PARTY TRANSACTIONS
Related party revenue is fees and other income received from investments in which the Company
has an ownership interest, excluding amounts eliminated in consolidation discussed below.
Kennedy Wilson earned related party fees of $61.9 million, $45.2 million and $35.3 million for the
periods ended December 31, 2023, 2022 and 2021, respectively.
118 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 119
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
The Company provides investment and property management and other property related services
on properties in which it also has an ownership interest. Fees earned on consolidated properties are
eliminated in consolidation and fees on unconsolidated investments are eliminated for the portion
that relate to the Company’s ownership interest. During the years ended December 31, 2023,
2022 and 2021 fees of $0.3 million, $0.4 million and $0.8 million, respectively, were eliminated in
consolidation.
NOTE 12—INCOME TAXES
The table below represents a geographical breakdown of book (loss) income before the (benefit
from) provision for income taxes:
(Dollars in millions)
Domestic
Foreign
Total
Year ended December 31,
2023
(238.8) $
(97.9)
2022
88.5
49.6
(336.7) $
138.1
$
$
$
$
2021
447.6
14.9
462.5
The U.S. and foreign components of provision for income taxes consisted of the following
components. However, it is not reflective of the cash tax results of the Company.
(Dollars in millions)
Federal
Current
Deferred
State
Current
Deferred
Foreign
Current
Deferred
Total
Year ended December 31,
2023
2022
2021
$
—
(66.0)
(66.0)
0.7
0.8
1.5
9.9
(0.7)
9.2
$
— $
3.6
3.6
0.3
11.3
11.6
17.6
3.4
21.0
—
94.4
94.4
(0.2)
9.1
8.9
14.2
8.7
22.9
$
(55.3) $
36.2
$
126.2
A reconciliation of the statutory federal income tax rate of 21% with Kennedy Wilson’s effective
income tax rate is as follows:
(Dollars in millions)
Tax computed at the statutory rate
Domestic permanent differences, primarily disallowed executive compensation
Foreign permanent differences, primarily non-deductible depreciation,
amortization and interest expenses in the United Kingdom
Effect of foreign operations, net of foreign tax credit
Noncontrolling interests
State income taxes, net of federal benefit
Other
Year ended December 31,
$
2023
(70.7) $
8.7
2022
29.0
7.8
$
2021
97.1
8.1
1.9
11.2
(5.1)
(7.8)
6.5
1.7
(8.8)
(1.1)
2.8
4.8
8.2
7.4
(2.6)
7.0
1.0
(Benefit from) provision for income taxes
$
(55.3) $
36.2
$
126.2
Cumulative tax effects of temporary differences are shown below at December 31, 2023 and 2022:
(Dollars in millions)
Deferred tax assets:
Foreign currency translation
Net operating loss carryforward and credits
Depreciation and amortization
Investment basis difference
Stock option expense
Hedging transactions
Lease liability
Accrued reserves
Total deferred tax assets
Valuation allowance
Net deferred tax assets
Deferred tax liabilities:
Investment basis and reserve differences
Right of use asset
Prepaid expenses and other
Capitalized interest
Total deferred tax liabilities
Deferred tax liability, net
$
Year ended December 31,
2023
2022
$
4.8
178.0
69.4
89.6
1.7
15.5
0.1
7.9
367.0
(283.3)
83.7
304.1
—
3.7
0.1
307.9
5.0
152.0
51.5
90.7
2.0
10.0
0.1
9.5
320.8
(265.9)
54.9
344.9
0.1
3.7
1.0
349.7
$
(224.2) $
(294.8)
During 2019, the United Kingdom enacted a Finance Act, which introduced a new capital gain tax
for non-UK resident investors who dispose of UK real estate. The new capital gain tax law became
effective on April 6, 2019. Beginning on this date, non-UK resident investors are subject to UK
tax on gains arising from the direct and indirect dispositions of UK real estate held for investment
purposes. Transitional provisions allowed for rebasing of UK real estate values to fair market
value as of April 5, 2019 (“UK Basis Step-Up”). Accordingly, only gains arising from property value
increases after April 5, 2019 are subject to tax. The step-up led to a higher tax basis relative to the
carrying value of the UK real estate, thus resulting in a UK deferred tax asset of $107.0 million.
The realizability of this deferred tax asset is dependent on future disposition of real estate at a fair
market value in excess of appraised value as of April 5, 2019. Given uncertainties surrounding Brexit
and its potential impact on future real estate values, the Company concluded that the U.K. deferred
tax asset did not meet the more likely than not threshold of being realizable. Therefore, a full
valuation allowance was recorded against the UK deferred tax asset. As the economic environment
in the UK real estate market is still uncertain and highly depended on numerous general economic
factors, including but not limited to rising interest rates, foreign currency fluctuations, inflation,
etc, the Company has maintained a full valuation allowance against its UK Basis Step-Up deferred
tax asset. During fiscal year 2023, the valuation allowance on the UK Basis Step-Up increased to
$156.2 million, primarily due to current year depreciation expense.
During March 2018, Kennedy Wilson elected to treat KWE as a partnership for U.S. tax purposes
retroactive to December 29, 2017. Due to unrealized foreign exchange losses not yet deductible for
tax purposes and the consideration paid to acquire the non-controlling interests in KWE exceeding
the book carrying value of the non-controlling interests in KWE, the Company’s tax basis in KWE
exceeded its book carrying value at December 29, 2017, and every period thereafter. Prior to the
election to treat KWE as a partnership, KWE was taxed as a controlled foreign corporation. As a
120 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 121
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
controlled foreign corporation, the Company was precluded from recognizing a deferred tax asset
for its tax basis in excess of book carrying value for its investment in KWE as the excess tax basis
from the investment was not expected to reverse in the foreseeable future. However, as a result
of the conversion of KWE to a partnership for U.S. tax purposes, the Company was required to
record a deferred tax asset for its investment in KWE. As of December 31, 2018, the Company
recorded a $98.3 million deferred tax asset related to its excess tax basis over book carrying value
for its investment in KWE. As a significant portion of the excess tax basis would only reverse upon
a strengthening of foreign currencies or upon a disposition of KWE, the Company determined
that a valuation allowance of $98.3 million was required for the tax basis that was in excess of the
Company’s carrying value for its investment in KWE as it did not meet the more likely than not
recognition threshold. During the years ended December 31, 2021, 2020 and 2019, a portion of
the excess tax basis over book basis in KWE reversed as a result of lower tax gains on sales of real
estate. During the year ended December 31, 2023, the Company’s excess tax basis over book
basis in KWE decreased due to unrealized foreign currency gains that has no tax basis. During
the year ended December 31, 2022, the Company’s excess tax basis over book basis in KWE
increased due to unrealized foreign currency losses that are not currently deductible for tax. As of
December 31, 2023, Kennedy Wilson’s excess tax basis in KWE and the related valuation allowance
were $74.6 million and $73.2 million, respectively.
As of December 31, 2023, Kennedy Wilson had federal, California and other state net operating
losses of $47.5 million, $100.8 million, and $19.8 million, respectively. The entirety of the $47.5
million federal net operating loss carryforwards were generated after December 31, 2017 and do
not expire. However, such losses are only eligible to offset 80% of taxable income in a given year.
California net operating losses begin to expire in 2034. As of December 31, 2023, Kennedy Wilson
had $197.4 million of foreign net operating loss carryforwards, which have no expiration date. The
Company has foreign tax credit carryforwards of $100.5 million, of which $0.1 million begin to
expire in December 2024.
The Company’s valuation allowance on deferred tax assets increased by $17.4 million in 2023 and
increased by $8.8 million in 2022. The increase in the valuation allowance during 2023 primarily
relates to additional valuation allowance recorded on the Company’s UK Basis Step-Up deferred tax
asset as a result of depreciation. The increase in the 2022 valuation allowance principally relates to
remeasuring the UK Basis Step Up deferred tax asset from 19% to 25%.
In June 2021, the Company received a notification of a general tax inquiry being conducted by the
Spanish tax authorities for several of its Spanish entities for tax years 2016 and 2017. As a result of
the Spanish tax inquiry, management has reassessed the Company’s prior Spanish tax filing positions
and the need to accrue additional taxes. Based on this reassessment, the Company believes that no
additional Spanish tax accruals are required.
Kennedy Wilson’s federal and state income tax returns remain open to examination for the years
2020 through 2022 and 2019 through 2022, respectively. However, due to the existence of prior
year loss carryovers, the IRS may examine any tax years for which the carryovers are used to offset
future taxable income. Our foreign subsidiaries’ tax returns remain open to examination for the years
2019 through 2022. The Spanish loss carryovers may be subject to tax examination for a period of
10 years from the period in which such losses were generated.
NOTE 13—COMMITMENTS AND CONTINGENCIES
CAPITAL COMMITMENTS—As of December 31, 2023 and 2022, the Company has unfunded
capital commitments of $187.7 million and $246.6 million to its joint ventures under the
respective operating agreements. It also has commitments of $87.7 million and $17.7 million as of
December 31, 2023 and 2022 to its loan platform. In addition to the unfunded capital commitments
on its joint venture investments, the Company has $68.7 million of equity commitments relating on
consolidated and unconsolidated development projects as of December 31, 2023. The Company
may be called upon to contribute additional capital to joint ventures in satisfaction of the Company’s
capital commitment obligations.
LITIGATION—Kennedy Wilson is currently a defendant in certain routine litigation arising in the
ordinary course of business. It is the opinion of management and legal counsel that the outcome of
these actions will not have a material effect on the financial statements taken as a whole.
NOTE 14—STOCK COMPENSATION AND OTHER RELATED PLANS
The Company maintains a shareholder-approved equity participation plan (the “Second Amended
and Restated Plan”) under which shares of common stock are reserved for issuance pursuant to
grants of restricted stock and other awards to officers, employees, non-employee directors and
consultants. The Second Amended and Restated Plan also allows for share recycling on net settled
restricted stock awards, restricted stock unit awards, performance unit awards and performance
share awards. Named Executive Officers (“NEO”) participate in the Second Amended and Restated
Plan. During the years ended December 31, 2023, 2022 and 2021, the compensation committee of
the board of directors approved the total grant of 3.4 million shares of performance-based restricted
stock units, 2.8 million shares of performance-based restricted stock units and 2.4 million shares of
performance-based restricted stock units and 0.1 million shares of performance-based restricted
shares of Company common stock, respectively, subject to vesting based on the Company’s total
shareholder return (the “TSR restricted awards”), performance-based restricted shares of Company
common stock or performance-based restricted stock units covering Company common stock subject
to vesting based on the Company’s return on equity (the “ROE awards”), and time-based restricted
shares of Company common stock or time-based restricted stock units covering Company common
stock (the “time-based awards”) (collectively, the “awards”), under the Second Amended and
Restated Plan. Up to 100% of the TSR awards will be eligible to vest based on the Company’s total
shareholder return relative to the MSCI World Real Estate Index during a three-year performance
period (subject to continued employment through the vesting date), with the actual number of
shares subject to such TSR awards that vest and cease to be subject to restrictions with respect
to the performance period determined by multiplying (i) the total number of shares subject to the
TSR award by (ii) the applicable vesting percentage (which is determined based on the level of
the Company’s relative total shareholder return attained during the performance period). Up to
one-third of the ROE awards will be eligible to vest with respect to each Company fiscal year of the
performance period (each, a “performance year”) to the extent that the Company satisfies the return
on equity goals for such performance year (subject to continued employment through the vesting
date). One-third of the time-based awards will vest on each of the first three anniversaries of the
grant date, subject to continued employment through the vesting date. Stock-based compensation
expense is based on the fair values on the date of grant for the ROE awards and time-based
awards. Certain ROE awards and time-based awards were granted with a three-year sale restriction
122 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 123
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
period upon vesting. Due to the lack of marketability of these shares with the three-year sale
restriction period upon vesting, a 12.5% discount was applied to the grant price of these shares
when computing stock compensation expense. The fair value of the TSR awards are estimated
using a Monte Carlo simulation. As of December 31, 2023, there was $24.6 million of unrecognized
compensation cost for the Second Amended and Restated Plan related to unvested shares which will
vest over the next three years.
Upon vesting, the restricted stock granted to employees discussed directly above is net share-settled
to cover the withholding tax. Shares that vested during the years ended December 31, 2023, 2022
and 2021 were net-share settled such that the Company withheld shares with values equivalent
to the employees’ minimum statutory obligations for the applicable income and other employment
taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld during
the years ended December 31, 2023, 2022 and 2021 were 781,303 shares, 834,911 shares,
and 967,536 shares respectively, and were valued based on the Company’s closing stock price
on the respective vesting dates. During the years ended December 31, 2023, 2022 and 2021,
total payments for the employees’ tax obligations to the taxing authorities were $13.4 million,
$18.6 million, and $20.5 million respectively. These figures are reflected as a financing activity on
the accompanying consolidated statements of cash flows.
During the years ended December 31, 2023, 2022 and 2021, Kennedy Wilson recognized
$34.5 million, $29.0 million, and $28.7 million, respectively, of compensation expense related to
the vesting of restricted common stock and is included in compensation and related expense in the
accompanying consolidated statements of income.
The following table sets forth activity under the Amended and Restated Plan, the First Amended and
Restated Plan, and the Second Amended and Restated Plan for the Company’s fiscal years ending
December 31, 2023, 2022 and 2021:
Nonvested at December 31, 2021
Granted
Vested
Forfeited
Nonvested at December 31, 2022
Granted
Vested
Forfeited
Nonvested at December 31, 2023
Shares
1,314,106
1,221,362
(834,910)
—
1,700,558
961,045
(781,303)
(267,031)
1,613,269
Non-NEO Deferred Compensation Program and Performance Allocation Sharing Program
The Company maintains a deferred compensation program for certain employees of the Company
(the “Deferred Compensation Program”). The named executive officers of the Company are
not participants of the Deferred Compensation Program. The compensation committee of the
Company’s board of directors approves an amount annually to be allocated to certain employees
of the Company in the United States and in Europe. The amount allocated to each employee vests
ratably over a three-year vesting period, subject to continued employment with the Company. Prior
to 2022, half of the allocated amount was tied specifically to the performance and value of the
Company’s common stock at the time of each vesting (“Bonus Units”). Beginning in 2022, the entire
amount allocated to each employee consisted of Bonus Units. Under the Deferred Compensation
Program, at the time of each vesting, the employees receive an amount equal to either the dividend
yield of the Company’s common stock or the actual amount of dividends paid on the Company
common stock (in the case of Bonus Units) during the immediately preceding year on the amount
that is subject to such vesting. During the years ended December 31, 2023, 2022 and 2021
the Company recognized compensation expense of $8.2 million, $9.2 million and $11.8 million,
respectively, under the Deferred Compensation Program.
The Company also maintains a performance allocation sharing program for certain employees of
the Company (the “Performance Allocation Sharing Program”). The named executive officers of the
Company are not participants of the Performance Allocation Sharing Program. The compensation
committee of the Company’s board of directors approved, reserved and authorized executive
management to issue up to thirty-five percent (35%) of any performance allocation earned by certain
commingled funds and separate account investments to be allocated to certain non-NEO employees
of the Company, sixty percent of the award to each employee vests ratably over four years and the
remaining forty percent vests upon the consummation of a liquidity event of the investment whereby
the Company actually receives cash performance allocations from its partner. The full performance
allocation earned by the Company will be recorded to income from unconsolidated investments and
the amount allocated to employees is recorded as performance allocation expense. During the years
ended December 31, 2023, 2022 and 2021 the Company recognized $(15.1) million, $(4.3) million
and $42.0 million, respectively, of performance allocation compensation to employees.
NOTE 15—EQUITY
Preferred Stock
On June 16, 2023, the Company announced the issuance of its $200 million perpetual preferred
stock to Fairfax. Under the terms of the agreement, Fairfax purchased $200 million in cumulative
perpetual preferred stock carrying a 6.00% annual dividend rate and 7-year warrants for
approximately 12.3 million common shares with an initial exercise price of $16.21 per share.
On March 8, 2022, the Company announced the issuance of its $300 million cumulative perpetual
preferred stock, in addition to approximately 13 million of its warrants to affiliates of Fairfax. Under
the terms of the agreements, Fairfax purchased $300 million in cumulative perpetual preferred
stock carrying a 4.75% annual dividend rate and approximately 13 million 7-year warrants, which
are initially convertible to the same number of common shares with and an initial exercise price of
$23.00 per share.
Both perpetual preferred stock issuances are treated as permanent equity.
At-the-Market Equity Offering Program
In May 2022, the Company established an at-the-market equity offering program (the “ATM
Program”) pursuant to which it may issue and sell shares of the Company’s common stock having an
aggregate gross sales price of up to $200.0 million in amounts as the Company may determine from
time to time. During the year ended December 31, 2023, the Company issued 1,690,743 shares for
$29.8 million, net of issuance costs, under its ATM Program.
124 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 125
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
The Company has no obligation to sell any of such shares under its ATM Program. Actual
sales will depend on a variety of factors to be determined by the Company from time to time,
including, among others, market conditions, the trading price of its common stock, the Company’s
determination of the appropriate sources of funding for the Company, and potential uses of funding
available.
Common Stock Repurchase Program
On March 20, 2018, the Company announced that its board of directors authorized a $250.0 million
stock repurchase program. 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. On November 4, 2020, the Company’s board of directors
authorized an expansion of its existing $250 million share repurchase plan to $500 million.
During the year ended December 31, 2023, Kennedy Wilson repurchased and retired 666,701
shares for $7.5 million. During the year ended December 31, 2022, Kennedy Wilson repurchased
and retired 551,162 shares for $12.6 million under the previous stock repurchase program.
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. See Note 14 for more detail.
Dividend Distributions
Kennedy Wilson declared and paid the following cash dividends on its common stock:
(Dollars in millions)
Preferred Stock
Common Stock(1)
Year Ended
December 31, 2023
Year Ended
December 31, 2022
Declared
$ 38.0
133.6
Paid
Declared
Paid
$
35.5
136.0
$
28.9
132.3
$
25.9
134.6
(1) The difference between declared and paid is the amount accrued on the consolidated balance sheets.
Taxability of Dividends
Earnings and profits, which determine the taxability of distributions to stockholders, may differ
from income reported for financial reporting purposes due to the differences for federal income tax
purposes in the treatment of revenue recognition, compensation expense, derivative investments
and the basis of depreciable assets and estimated useful lives used to compute depreciation.
The Company’s dividends related to its common stock will be classified for U.S. federal income tax
purposes as follows:
Record Date
12/30/2022
3/31/2023
6/30/2023
9/29/2023
Payment
Date
1/5/2023
4/6/2023
7/6/2023
10/5/2023
Totals
Distributions
Per Share
$ 0.2400
0.2400
0.2400
0.2400
$ 0.9600
Ordinary
Dividends
—
$
—
—
—
$
—
Return of
Capital
$ 0.2400
0.2400
0.2400
0.2400
$ 0.9600
Accumulated Other Comprehensive Income (Loss)
The following table summarizes the changes in each component of accumulated other
comprehensive loss (“AOCI”), net of taxes:
(Dollars in millions)
Foreign
Currency
Translation
Foreign
Currency
Derivative
Contracts
Interest Rate
Swaps
Total
Accumulated
Other
Comprehensive
Loss(1)
Balance at December 31, 2022
Unrealized gains (losses), arising during the period
Taxes on unrealized (gains) losses, arising during the period
Noncontrolling interest
$
(156.9) $
32.3
(0.2)
(0.9)
82.0
(10.2)
4.7
—
$
Balance at December 31, 2023
$
(125.7) $
76.5
$
3.2
—
—
—
3.2
$
$
(71.7)
22.1
4.5
(0.9)
(46.0)
(1) Excludes $358.4 million of inception to date accumulated other comprehensive losses associated with noncontrolling interest
holders of KWE that the Company was required to record as part of the KWE Transaction in October 2017.
The local currencies for the Company’s interests in foreign operations include the euro and the
British pound sterling. The related amounts on our balance sheets are translated into U.S. dollars at
the exchange rates at the respective financial statement date, while amounts on our statements of
income are translated at the average exchange rates during the respective period. Unrealized gains
on foreign currency translation is a result of the strengthening of the euro and British pound sterling
against the U.S. dollar during the year ended December 31, 2023.
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 GBP) of certain of its wholly-owned and consolidated subsidiaries. See
Note 5 for a more detailed discussion of Kennedy Wilson’s currency derivative contracts.
NOTE 16—EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income (loss) attributable to Kennedy-Wilson
Holdings, Inc. common stockholders by the weighted average number of common shares
outstanding. Diluted earnings per share is computed after adjusting the numerator and denominator
of the basic earnings per share computation for the effects of all potentially dilutive common shares.
The dilutive effect of non-vested stock issued under share-based compensation plans is computed
using the treasury stock method. The dilutive effect of the cumulative preferred stock is computed
using the if-converted method.
The following is a summary of the elements used in calculating basic and diluted income per share
for the years ended December 31, 2023, 2022 and 2021:
(Dollars in millions, except share amounts and per share data)
2023
2022
2021
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc.
common shareholders
Weighted-average shares outstanding for basic
(Loss) income per share - basic
Weighted average shares outstanding for diluted
(Loss) income per share - diluted
$
$
$
(341.8)
138,930,517
(2.46)
138,930,517
(2.46)
$
$
$
64.8
136,900,875
0.47
138,567,534
0.47
$
$
$
313.2
138,552,058
2.26
140,132,435
2.24
Year ended December 31,
126 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 127
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
There was a total of 42,977,012, 26,958,511 and 13,572,590 during the years ended December 31,
2023, 2022 and 2021, respectively, potentially dilutive securities were not included in the diluted
weighted average shares as they were anti-dilutive. Potentially anti-dilutive securities include
preferred stock and unvested restricted stock grants.
NOTE 17—SEGMENT INFORMATION
Segments
The Company’s operations are defined by two business segments: its Consolidated investment
portfolio (the “Consolidated Portfolio”) and its Co-Investment Portfolio:
• Consolidated Portfolio consists of the investments that the Company has made in real estate
and real estate-related assets and consolidates on its balance sheet. The Company typically
wholly-owns the assets in its Consolidated Portfolio.
• Co-Investment Portfolio consists of (i) the co-investments that the Company has made in
real estate and real estate-related assets, including loans secured by real estate, through the
commingled funds and joint ventures that it manages; (ii) the fees (including, without limitation,
asset management fees, construction management fees, and/or acquisition and disposition
fees); and (iii) performance allocations that it earns on its fee bearing capital. The Company
typically owns a 5% to 50% ownership interest in the assets in its Co-Investment Portfolio.
In addition to the Company’s two primary business segments the Company’s Corporate segment
includes, among other things, corporate overhead.
Consolidated Portfolio
Consolidated Portfolio is a permanent capital vehicle focused on maximizing property cash flow.
These assets are primarily wholly-owned and tend to have longer hold periods and the Company
targets investments with accretive asset management opportunities. The Company typically focuses
on multifamily and office assets in the Western United States and commercial assets in the United
Kingdom and Ireland within this segment.
Co-Investment Portfolio
Co-Investment Portfolio consists of (i) the co-investments in real estate and real estate-related
assets, including loans secured by real estate, that we have made through the commingled funds
and joint ventures that we manage; (ii) fees (including, without limitation, asset management fees,
construction management fees, and/or acquisition and disposition fees); and (iii) performance
allocations that we earn on our fee bearing capital The Company utilizes different platforms in the
Co-Investment Portfolio segment depending on the asset and risk return profiles.
No single third-party client accounted for 10% or more of Kennedy Wilson’s revenue during any
period presented in these financial statements.
The following tables summarize the income and expense activity by segment for the years ended
December 31, 2023, 2022 and 2021 and total assets as of December 31, 2023 and 2022.
(Dollars in millions)
Revenue
Rental
Hotel
Investment management fees
Loans
Other
Total revenue
Loss from unconsolidated investments
Principal co-investments
Performance allocations
Loss from unconsolidated investments
Gain on sale of real estate, net
Expenses
Rental
Hotel
Compensation and related
Performance allocation compensation
General and administrative
Depreciation and amortization
Total expenses
Interest expense
Loss on early extinguishment of debt
Other income (loss)
(Provision for) benefit from income taxes
Net income (loss)
Net income attributable to noncontrolling interests
Preferred dividends
Net income (loss) attributable to Kennedy-Wilson
Holdings, Inc. common shareholders
Consolidated
Co-Investments
Corporate
Total
Year Ended December 31, 2023
$ 415.3
57.1
—
—
—
472.4
—
—
—
127.6
152.6
37.9
42.7
—
15.5
157.8
406.5
(162.0)
(1.6)
2.3
(9.6)
22.6
(22.4)
—
$
—
—
61.9
26.1
—
88.0
(188.5)
(64.3)
(252.8)
—
—
—
39.0
(15.1)
12.7
—
36.6
—
—
(7.0)
—
(208.4)
—
—
$
—
—
—
—
2.2
2.2
—
—
—
—
—
—
57.7
—
7.5
—
65.2
(97.2)
—
(0.3)
64.9
(95.6)
—
(38.0)
$ 415.3
57.1
61.9
26.1
2.2
562.6
(188.5)
(64.3)
(252.8)
127.6
152.6
37.9
139.4
(15.1)
35.7
157.8
508.3
(259.2)
(1.6)
(5.0)
55.3
(281.4)
(22.4)
(38.0)
$
0.2
$(208.4)
$ (133.6)
$ (341.8)
128 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 129
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
(Dollars in millions)
Revenue
Rental
Hotel
Investment management fees
Loans
Other
Total revenue
Income from unconsolidated investments
Principal co-investments
Performance allocations
Income from unconsolidated investments
Gain on sale of real estate, net
Expenses
Rental
Hotel
Compensation and related
Performance allocation compensation
General and administrative
Depreciation and amortization
Total expenses
Interest expense
Gain on extinguishment of debt
Other income
Provision for income taxes
Net income (loss)
Net income attributable to noncontrolling interests
Preferred dividends
Net income (loss) attributable to Kennedy-Wilson
Holdings, Inc. common shareholders
Consolidated
Co-Investments
Corporate
Total
(Dollars in millions)
Consolidated
Co-Investments
Corporate
Total
Year Ended December 31, 2022
Year Ended December 31, 2021
$ 434.9
46.9
—
—
—
481.8
—
—
—
103.7
151.2
29.5
41.5
—
14.7
172.9
409.8
(128.2)
27.5
20.8
(21.0)
74.8
(8.2)
—
$
—
—
44.8
11.7
—
56.5
199.5
(21.1)
178.4
—
—
—
44.6
(4.3)
14.8
—
55.1
—
—
—
—
179.8
—
—
$
—
—
—
—
1.7
1.7
—
—
—
—
—
—
54.2
—
7.7
—
61.9
(92.6)
—
15.3
(15.2)
(152.7)
—
(28.9)
$ 434.9
46.9
44.8
11.7
1.7
540.0
199.5
(21.1)
178.4
103.7
151.2
29.5
140.3
(4.3)
37.2
172.9
526.8
(220.8)
27.5
36.1
(36.2)
101.9
(8.2)
(28.9)
$ 66.6
$ 179.8
$ (181.6)
$
64.8
Revenue
Rental
Hotel
Investment management fees
Loans
Other
Total revenue
Income from unconsolidated investments
Principal co-investments
Performance allocations
Income from unconsolidated investments
Gain on sale of real estate, net
Expenses
Rental
Hotel
Compensation and related
Performance allocation compensation
General and administrative
Depreciation and amortization
Total expenses
Interest expense
Loss on extinguishment of debt
Other loss
Provision for income taxes
Net income (loss)
Net income attributable to noncontrolling interests
Preferred dividends
Net income (loss) attributable to Kennedy-Wilson
Holdings, Inc. common shareholders
$ 390.5
17.1
—
—
—
$ —
—
35.3
8.6
—
$ —
—
—
—
2.1
$ 390.5
17.1
35.3
8.6
2.1
407.6
—
—
—
412.7
132.7
12.7
60.4
—
18.5
166.3
390.6
(119.1)
(19.2)
(4.7)
(23.0)
263.7
(6.0)
—
43.9
2.1
453.6
271.1
117.9
389.0
—
—
—
40.4
42.0
8.5
—
90.9
—
—
—
—
342.0
—
—
—
—
—
—
—
—
61.8
—
6.3
—
68.1
(73.3)
(26.5)
(0.3)
(103.2)
(269.3)
—
(17.2)
271.1
117.9
389.0
412.7
132.7
12.7
162.6
42.0
33.3
166.3
549.6
(192.4)
(45.7)
(5.0)
(126.2)
336.4
(6.0)
(17.2)
$ 257.7
$ 342.0
$ (286.5)
$ 313.2
(Dollars in millions)
Assets
Consolidated
Co-investment
Corporate
Total assets
(Dollars in millions)
Expenditures for long lived assets
Investments
December 31,
2023
2022
$
5,196.3
2,316.3
199.5
$
5,684.1
2,387.5
200.2
$
7,712.1
$
8,271.8
2023
2022
2021
December 31,
$
(217.2) $
(569.1)
$ (1,271.0)
Geographic Information
The revenue shown in the table below is allocated based upon the region in which services are performed.
(Dollars in millions)
United States
Europe
Total revenue
2023
334.1
228.5
562.6
$
$
$
$
Year Ended December 31,
2022
317.5
222.5
540.0
$
$
2021
278.1
175.5
453.6
130 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 131
Kennedy-Wilson Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
NOTE 18—GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS
The following consolidating financial information and condensed consolidating financial information
includes:
(1) Condensed consolidating balance sheets as of December 31, 2023 and 2022, respectively;
consolidating statements of income for the years ended December 31, 2023, 2022 and 2021,
respectively; of (a) Kennedy-Wilson Holdings, Inc. on an unconsolidated basis as the parent (and
guarantor), (b) Kennedy-Wilson, Inc., as the subsidiary issuer, (c) the guarantor subsidiaries, (d) the
non-guarantor subsidiaries and (e) Kennedy-Wilson Holdings, Inc. on a consolidated basis; and
(2) Elimination entries necessary to consolidate Kennedy-Wilson Holdings, Inc., as the parent
guarantor, with Kennedy-Wilson, Inc. and its guarantor and non-guarantor subsidiaries
Kennedy Wilson owns 100% of all of the guarantor subsidiaries, and, as a result, in accordance
with Rule 3-10(d) of Regulation S-X promulgated by the SEC, no separate financial statements
are required for these subsidiaries as of December 31, 2023 or 2022 and for the years ended
December 31, 2023, 2022 or 2021.
Parent
Kennedy-
Wilson, Inc.
Guarantor
Subsidiaries
Condensed Consolidating Balance Sheet
As of December 31, 2023
Consolidated
Total
Elimination
Non-guarantor
Subsidiaries
Total assets
$ 1,800.4
$
4,087.1
$
5,073.7
$
5,001.1
$ (8,250.2)
$
7,712.1
(Dollars in millions)
Assets
Cash and cash equivalents
Accounts receivable
Real estate and acquired in place
$
lease values, net of accumulated
depreciation and amortization, net
Unconsolidated investments
Investments in and advances to
consolidated subsidiaries
Other assets
Loan purchases and originations, net
—
—
—
—
1,800.4
—
—
Liabilities
Accounts payable
Accrued expenses and other
liabilities
Mortgage debt
KW unsecured debt
KWE unsecured bonds
Total liabilities
Equity
Kennedy-Wilson Holdings, Inc.
shareholders’ equity
Noncontrolling interests
Total equity
—
45.3
—
—
—
45.3
1,755.1
—
1,755.1
$
$
73.3
0.9
$
99.4
22.0
$
141.0
34.4
—
14.6
3,938.2
59.4
0.7
1,522.3
652.0
2,511.6
51.6
214.8
3,315.0
1,402.5
—
76.5
31.7
(8,250.2)
—
—
0.5
6.0
11.4
351.9
—
1,934.3
—
2,286.7
1,800.4
—
1,800.4
91.5
1,038.0
—
—
1,135.5
3,938.2
—
3,938.2
109.1
1,802.9
—
522.8
2,446.2
2,511.6
43.3
(8,250.2)
—
2,554.9
(8,250.2)
—
—
—
—
—
—
—
—
—
—
$
313.7
57.3
4,837.3
2,069.1
—
187.5
247.2
17.9
597.8
2,840.9
1,934.3
522.8
5,913.7
1,755.1
43.3
1,798.4
Total liabilities and equity
$ 1,800.4
$
4,087.1
$
5,073.7
$
5,001.1
$ (8,250.2)
$
7,712.1
Parent
Kennedy-
Wilson, Inc.
Guarantor
Subsidiaries
Condensed Consolidating Balance Sheet
As of December 31, 2022
Consolidated
Total
Elimination
Non-guarantor
Subsidiaries
(Dollars in millions)
Assets
Cash and cash equivalents
Accounts receivable
Real estate and acquired in place
lease values, net of accumulated
$
depreciation and amortization, net
Unconsolidated investments
Investments in and advances to
consolidated subsidiaries
Other assets
Loan purchases and originations
—
—
—
—
2,009.0
—
—
$
$
91.5
0.1
$
59.6
18.2
$
288.2
22.5
—
15.9
4,289.3
85.7
5.8
1,656.8
698.6
2,850.0
50.5
111.6
3,531.3
1,523.6
—
79.9
32.0
(9,148.3)
—
—
—
—
—
—
$
439.3
40.8
5,188.1
2,238.1
—
216.1
149.4
Total assets
$ 2,009.0
$
4,488.3
$
5,445.3
$
5,477.5
$ (9,148.3)
$
8,271.8
Liabilities
Accounts payable
Accrued expenses and other
liabilities
Mortgage debt
KW unsecured debt
KWE unsecured bonds
Total liabilities
Equity
Kennedy-Wilson Holdings, Inc.
shareholders’ equity
Noncontrolling interests
Total equity
$ —
$ 0.5
$ 4.0
$ 11.7
$ —
$ 16.2
45.0
—
—
—
45.0
1,964.0
—
1,964.0
416.2
—
2,062.6
—
2,479.3
2,009.0
—
2,009.0
76.5
1,075.5
—
—
1,156.0
4,289.3
—
4,289.3
120.5
1,942.5
—
506.4
2,581.1
—
—
—
—
2,850.0
46.4
(9,148.3)
—
2,896.4
(9,148.3)
658.2
3,018.0
2,062.6
506.4
6,261.4
1,964.0
46.4
2,010.4
Total liabilities and equity
$ 2,009.0
$
4,488.3
$
5,445.3
$
5,477.5
$ (9,148.3)
$
8,271.8
Condensed Consolidating Statement of Operations
for the Year Ended December 31, 2023
(Dollars in millions)
Total revenue
Total loss from
unconsolidated investments
Gain on sale of real estate, net
Total expenses
Loss from consolidated
subsidiaries
Interest expense
Loss on early extinguishment of
debt
Other income (loss)
Loss before benefit from
(provision for) income taxes
Benefit from (provision for)
income taxes
Net loss
Net income attributable to the
noncontrolling interests
Preferred dividends
Net loss attributable to
Kennedy-Wilson Holdings, Inc.
common shareholders
Parent
Kennedy-
Wilson, Inc.
Guarantor
Subsidiaries
Non-
guarantor
Subsidiaries
Elimination
$
— $
0.2 $
239.6 $
322.8 $
— $
Consolidated
Total
562.6
—
—
35.1
(246.7)
—
—
0.4
—
—
82.1
(131.5)
(97.2)
—
(0.9)
(110.5)
98.8
158.5
(147.5)
(45.0)
(2.0)
(6.4)
(142.3)
28.8
232.6
—
(117.0)
0.4
1.9
—
—
—
525.7
—
—
—
(252.8)
127.6
508.3
—
(259.2)
(1.6)
(5.0)
(281.4)
(311.5)
(131.5)
(138.0)
525.7
(336.7)
—
(281.4)
—
(38.0)
64.8
(246.7)
—
(131.5)
—
—
—
—
(9.5)
(147.5)
(22.4)
—
—
525.7
—
—
55.3
(281.4)
(22.4)
(38.0)
$ (319.4) $
(246.7) $
(131.5) $
(169.9) $
525.7 $
(341.8)
132 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 133
NOTE 19—SUBSEQUENT EVENTS
Subsequent to December 31, 2023, the Company has drawn an additional $75.0 million on its
revolving line of credit. The Company has $274.6 million still available to draw on its revolving line
of credit.
Subsequent to December 31, 2023, the Company sold a wholly-owned retail asset in the UK and
is under separate agreements to sell one wholly-owned Irish hotel asset, one wholly-owned office
asset in the Pacific Northwest and one wholly-owned retail asset in the UK for a total sales price
of approximately $340 million. If completed, these sales will generate cash to the Company of
approximately $240 million (after debt repayments of $90 million) and total expected GAAP gains
on sale in excess of $100 million. There can be no assurance that the Company will close the sales
under contract in part or at all.
Kennedy-Wilson Holdings, Inc.
Notes to Consolidated Financial Statements
December 31, 2023, 2022 and 2021 (continued)
Condensed Consolidating Statement of Income
for the Year Ended December 31, 2022
(Dollars in millions)
Total revenues
Income from unconsolidated
investments
Gain on sale of real estate, net
Total expenses
Income from consolidated
subsidiaries
Interest expense
(Loss) gain on early
extinguishment of debt
Other income (loss)
Income before provision
for income taxes
Provision for income taxes
Net income
Net income attributable to the
noncontrolling interests
Preferred dividends
Net income attributable to
Kennedy-Wilson
Holdings, Inc. common
shareholders
(Dollars in millions)
Total revenue
Income from unconsolidated
investments
Gain on sale of real estate, net
Total expenses
Income from consolidated
subsidiaries
Interest expense
Loss on early extinguishment
of debt
Other income (loss)
Income before provision
for income taxes
Provision for income taxes
Net income
Net loss attributable to the
noncontrolling interests
Preferred dividends
Net income attributable to
Kennedy-Wilson
Holdings, Inc. common
shareholders
Kennedy-
Wilson, Inc.
Guarantor
Subsidiaries
225.1
0.2 $
$
314.7 $
— $
Non-
guarantor
Subsidiaries
Elimination
Consolidated
Total
540.0
1.1
—
92.7
314.4
(92.6)
—
15.6
146.0
(15.2)
130.8
—
—
12.0
68.1
172.5
230.7
(41.8)
(1.6)
(1.3)
318.7
(4.3)
314.4
—
—
165.3
35.6
232.6
—
(86.4)
29.1
21.7
247.4
(16.7)
230.7
(8.2)
—
—
—
—
(675.9)
—
(675.9)
—
(675.9)
—
—
178.4
103.7
526.8
—
(220.8)
27.5
36.1
138.1
(36.2)
101.9
(8.2)
(28.9)
Parent
$
— $
—
—
29.0
130.8
—
—
0.1
101.9
—
101.9
—
(28.9)
$ 73.0 $
130.8 $
314.4 $
222.5 $
(675.9) $
64.8
Condensed Consolidating Statement of Income
for the Year Ended December 31, 2021
Parent
Kennedy-
Wilson, Inc.
Guarantor
Subsidiaries(1)
Non-
guarantor
Subsidiaries
Elimination
$
— $
0.3 $
208.8 $
244.5 $
— $
Consolidated
Total
453.6
—
—
31.8
368.2
—
—
—
336.4
—
336.4
—
(17.2)
3.2
(1.7)
108.1
676.8
(73.3)
(26.5)
0.7
471.4
(103.2)
368.2
—
—
99.0
129.6
214.8
508.7
(43.3)
(0.6)
(1.2)
686.2
(9.4)
676.8
—
—
286.8
284.8
194.9
—
(75.8)
(18.6)
(4.5)
522.3
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508.7
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—
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—
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—
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—
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—
—
389.0
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549.6
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(45.7)
(5.0)
462.6
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336.4
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(17.2)
$ 319.2 $
368.2 $
676.8 $
502.7 $ (1,553.7) $
313.2
134 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 135
,
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N
136 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 137
,
1
3
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138 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 139
Changes in real estate for the years ended December 31, 2023, 2022 and 2021 were as follows:
(Dollars in millions)
Balance at the beginning of period
Additions during the period:
Other acquisitions
Improvements
Foreign currency
Deductions during the period:
Cost of real estate sold
Balance at close of period
For the year ended December 31,
2023
2022
2021
$
5,775.3
$
5,567.3
$
5,207.7
—
218.6
90.9
(566.1)
167.6
604.2
(226.0)
(337.8)
137.3
1,110.4
(91.8)
(796.3)
$
5,518.7
$
5,775.3
$
5,567.3
Changes in accumulated depreciation for the years ended December 31, 2023, 2022 and 2021 were
as follows:
(Dollars in millions)
Balance at the beginning of period
Additions during the period:
Depreciation expense
Deductions during the period:
Dispositions
Foreign currency
Balance at close of period
For the year ended December 31,
2023
2022
$
619.6
$
564.0
$
136.5
(66.5)
12.5
133.8
(50.8)
(27.4)
$
702.1
$
619.6
$
2021
551.8
30.9
(11.1)
(7.6)
564.0
See accompanying report of independent registered public accounting firm.
Baseline EBITDA
A reconciliation of Baseline EBITDA to Net Income as of December 31, 2023 and December 31,
2022 ($ in millions) is presented below:
Baseline EBITDA
For the Year Ended December 31,
2023
2022
Net (loss) income
$
(281.4)
$
Less: Total Income from unconsolidated investments
Less: Gain (loss) on sale of real estate, net
Add: Share-based compensation
Add: Performance allocation compensation
Add: Depreciation and amortization
Add: Interest expense
Add: Gain (loss) on early extinguishment of debt
Less: Other income (loss)
Add: Benefit from (provision for) income taxes
Less: Non-controlling interest(1)
Add: NOI from unconsolidated investments (KW Share)(2)
Add: Fees eliminated in consolidation(3)
252.8
(127.6)
34.5
(15.1)
157.8
259.2
1.6
5.0
(55.3)
(7.6)
168.3
0.3
Baseline EBTIDA
$
392.5
$
(1) Represents the portion of equity ownership in a consolidated subsidiary not attributable to Kennedy Wilson.
(2) Represents Kennedy Wilson’s pro-rata share of unconsolidated joint-ventures.
(3) Represents fees recognized in net (income) loss attributable to noncontrolling interests relating to portion of fees paid by
noncontrolling interest holders.
(101.9)
(178.4)
(103.7)
29.0
(4.3)
172.9
220.8
(27.5)
(36.1)
36.2
(6.9)
157.6
0.4
361.9
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140 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 141
Kennedy-Wilson Holdings, Inc.
Schedule IV - Mortgage Loans on Real Estate
December 31, 2023 (continued)
For the years ended December 31, 2023 and 2022, the loan portfolio activity was as follows:
(Dollars in millions)
Balance at December 31, 2021
Originations and fundings
Proceeds from sales and repayments
Accretion of loan discount and other amortization, net
Foreign exchange movements
Balance at December 31, 2022
Originations and fundings
Construction loan portfolio acquisition
Construction loan portfolio acquisition discount
Proceeds from sales and repayments
Accretion of loan discount and other amortization, net
Provision for credit losses
Balance at December 31, 2023
Amortized Cost
Allowance for
Credit Losses
Carrying Value
$
$
130.3
50.2
(31.1)
0.6
(0.6 )
149.4
43.8
115.6
(9.2 )
(48.9 )
3.5
—
$
254.2
$
$
—
—
—
—
—
—
—
—
—
—
—
(7.0)
(7.0)
$
130.3
50.2
(31.1)
0.6
(0.6)
149.4
43.8
115.6
(9.2)
(48.9)
3.5
(7.0)
247.2
Performance Graph
The graph below compares the cumulative total return of our common stock from December 31,
2018 through December 31, 2023, with the comparable cumulative return of companies comprising
the S&P 500 Index and the MSCI World Real Estate Index. The graph plots the growth in value of
an initial investment of $100 in each of our common stock, the S&P 500 Index, and the MSCI World
Real Estate Index for the five-year period ended December 31, 2023, and assumes reinvestment of
all dividends, if any, paid on the securities. The stock price performance shown on the graph is not
necessarily indicative of future price performance.
$200.00
$150.00
$100.00
$50.00
$-
KW
S&P 500
MSCI World
Real Estate
Index GICS
Level 1
9
1
0
2
/
2
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1
9
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2
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2
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3
9
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5
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1
1
Kennedy Wilson uses the MSCI World Real Estate Index, which includes international real estate
companies as a comparable benchmark. The information under this caption, “Performance Graph,”
is deemed not to be incorporated by reference into any filings under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, except to the extent that such filing
specifically states otherwise.
142 / KENNEDY WILSON
ANNUAL REPORT 2023
KENNEDY WILSON
ANNUAL REPORT 2023 / 143
properties and other real estate related assets either owned by third parties, wholly-owned by us or
held by joint ventures and other entities in which our sponsored funds or investment vehicles and
client accounts have invested. Committed (but unfunded) capital from investors in our sponsored
funds is not included in our AUM. The estimated value of development properties is included at
estimated completion cost.
The table below details the changes in the Company’s AUM for the twelve months ended
December 31, 2023:
(in millions)
AUM
December 31, 2022
Increases
Decreases
December 31, 2023
$
23,028.4 $
4,412.1 $
2,897.6 $
24,542.9
AUM increased 7% to approximately $24.5 billion as of December 31, 2023. The increase is
primarily due to the growth of our global debt platform with the acquisition of the Construction
Loan Portfolio from Pacific Western Bank (as discussed in Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operation below), and Western United States
multifamily separate account, capital expenditures on development projects and fair value gains on
our investment in VHH. These increases were offset by the sale of non-core residential and retail
assets in the Western United States and retail and office assets in the United Kingdom, sales in our
comingled funds after completion of their business plans and had fair value declines primarily on
market rate multifamily apartments, office and retail assets in our global portfolio recorded during
the period.
Please also see “Fair Value Investments” in Item 1. Business for a discussion of our fair value
investments and accounting methodology and any limitations with respect to the same.
Foreign currency and currency derivative instruments
Please refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operation for a discussion regarding foreign currency and currency derivative instruments.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
Stock Price Information
Our common stock trades on the NYSE under the symbol “KW.”
Holders
As of February 21, 2024, we had approximately 73 holders of record of our common stock.
Dividends
We declared and paid quarterly dividends of $0.24 per share each quarter of 2023 and 2022.
Recent Sales of Unregistered Securities
None.
Equity Compensation Plan Information
See Item 12—“Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.”
Purchases of Equity Securities by the Company
Months
October 1–October 31, 2023
November 1–November 30, 2023
December 1–December 31, 2023
Total
Total
Number of
Shares Purchased
Average Price
Paid per Share
Total
Number of
Shares Purchased as
Part of Publicly
Announced Plan(1)
Maximum
Amount that
May Yet be
Purchased Under
the Plan(1)
$
—
666,701
—
666,701
$
—
11.17
—
11.17
$
24,167,472
24,834,173
24,834,173
131,926,229
124,479,179
124,479,179
24,834,173
$
124,479,179
(1) On March 20, 2018, our board of directors authorized us to repurchase up to $250 million of our common shares, from time
to time, subject to market conditions. On November 4, 2020, our board of directors authorized us to repurchase an additional
$250 million of our common shares, from time to time, subject to market conditions.
During the year ended December 31, 2023, the Company repurchased and retired a total of
0.7 million shares of its common stock at a weighted average price of $11.17. During the year
ended December 31, 2022, the Company repurchased and retired a total of 0.6 million shares of its
common stock at a weighted average price of $22.95.
In addition to the repurchases of the Company’s common stock made above, the Company also
withheld shares with respect to the vesting of restricted stock that the Company made to its
employees. Shares that vested during the year ended December 31, 2023 and 2022 were net-share
settled such that the Company withheld shares with value equivalent to the employees’ minimum
statutory obligation for the applicable income and other employment taxes and remitted the cash
to the appropriate taxing authorities. During the year ended December 31, 2023 and 2022, total
payments for the employees’ tax obligations to the taxing authorities were $13.4 million (781,303
shares withheld) and $18.6 million (834,911 shares withheld), respectively.
Real Estate Assets Under Management (AUM)
AUM generally refers to the properties and other assets with respect to which we provide (or
participate in) oversight, investment management services and other advice, and which generally
consist of real estate properties or loans, and investments in joint ventures. Our AUM is principally
intended to reflect the extent of our presence in the real estate market, not the basis for determining
our management fees. Our AUM consists of the total estimated fair value of the real estate
144 / KENNEDY WILSON
ANNUAL REPORT 2023
FORWARD-LOOKING STATEMENTS
Statements made by us in this report and in other reports and statements released by us that are not
historical facts constitute “forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are necessarily
estimates reflecting the judgment of our senior management based on our current estimates,
expectations, forecasts and projections and include comments that express our current opinions
about trends and factors that may impact future results. Disclosures that use words such as “believe,”
“may,” “anticipate,” “estimate,” “intend,” “could,” “plan,” “expect,” “project” or the negative of these, as
well as similar expressions, are intended to identify forward-looking statements.
Forward-looking statements are not guarantees of future performance, rely on a number of
assumptions concerning future events, many of which are outside of our control, and involve
known and unknown risks and uncertainties that could cause our actual results, performance
or achievement, or industry results, to differ materially from any future results, performance or
achievements, expressed or implied by such forward-looking statements. Although we believe
that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by
those forward-looking statements are reasonable, we do not guarantee that the transactions and
events described will happen as described (or that they will happen at all). In addition, this report
contains information and statistics regarding, among other things, the industry, markets, submarkets
and sectors in which we operate. We obtained this information and these statistics from various
third-party sources and our own internal estimates. We believe that these sources and estimates
are reliable but have not independently verified them and cannot guarantee their accuracy or
completeness.
Any such forward-looking statements, whether made in this report or elsewhere, should be
considered in the context of the various disclosures made by us about our businesses including,
without limitation, the risk factors discussed in Part I, Item IA of this Report. Except as required
under the federal securities laws and the rules and regulations of the U.S. Securities and Exchange
Commission (the “SEC”), we do not have any intention or obligation to update publicly any forward-
looking statements, whether as a result of new information, future events, changes in assumptions,
or otherwise. Please refer to “Non-GAAP Measures and Certain Definitions” in Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations for definitions of certain
terms used throughout this report.
Corporate Information
Board of Directors
Executive Officers
William J. McMorrow
Chairman and Chief Executive Officer
Kennedy Wilson
Todd Boehly
Co-Founder, Chairman,
Chief Executive Officer and
Controlling Member
Eldridge Industries, LLC
Richard Boucher
Former Group CEO
Bank of Ireland
Kent Y. Mouton
Senior Advisor
Kennedy Wilson
Cathy Hendrickson
Retired President and
Chief Executive Officer
Bay Cities National Bank
(Now Opus Bank)
William J. McMorrow
Chairman and Chief Executive Officer
Matt Windisch
President
David A. Minella
Managing Member
Minella Capital Management LLC
Justin Enbody
Senior Executive Vice President,
Chief Financial Officer
In Ku Lee
Executive Vice President and
General Counsel
Regina Finnegan
Executive Vice President,
Global Director of Risk Management
& Human Resources
Mike Pegler
President, Europe
For more information
For more information on Kennedy
Wilson, please visit our website at
www.kennedywilson.com
Trevor Bowen
Former Director
Principle Management Limited
Sanaz Zaimi
Former Head of Global FICC Sales
Bank of America Merrill Lynch
Wade Burton
President and Chief Investment
Officer of Hamblin Watsa Investment
Counsel Ltd.
Stanley Zax
Retired Chairman
Zenith National Insurance
Corporation
Norman Creighton
Retired President and
Chief Executive Officer
Imperial Bank (Now Comerica)
Corporate Headquarters
151 South El Camino Drive
Beverly Hills, CA 90212
+1 (310) 887-6400
Annual Meeting
Beverly Wilshire
9500 Wilshire Blvd.
Beverly Hills, CA 90212
9 a.m., Thursday, June 6, 2024
Stock Listing
New York Stock Exchange
Symbol “KW”
Transfer Agent
Continental Stock Transfer
1 State Street - SC-1
New York, NY 10004
+1 (212) 509-4000
Independent Auditors
KPMG LLP
Legal Counsel
Latham & Watkins LLP
Investor Information
A copy of our Annual Report on
Form 10-K, as filed with the SEC,
will be furnished to shareholders
and interested investors free of
charge upon written request to us
at 151 South El Camino Drive, Beverly
Hills, CA 90212, Attention: Investor
Relations
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Certain of the matters discussed herein are discussed more fully in our filings with the Securities and Exchange Commission, including our
Annual Report on Form 10-K. We filed our Annual Report on Form 10-K for the year ended December 31, 2023, with the SEC on February 22,
2024, which, in the section titled “Risk Factors,” contains a detailed discussion of risks and uncertainties that could cause actual results and
events to differ materially from any forward-looking statements contained herein.
O U R L O C AT I O N S
U.S.
Bellevue
3055 112th Ave. NE, Suite 125
Bellevue, WA 98004
Beverly Hills
(Global Corporate Headquarters)
151. S. El Camino Drive
Beverly Hills, CA 90212
Boise
365 N. Whitewater Park Blvd.
Boise, ID 83702
Denver
8101 E. Prentice Ave., Suite 275
Greenwood Village, CO 800111
Farmington
20 Waterside Drive
Suite 201
Farmington, CT 06032
Bellevue
Portland
Boise
Salt Lake City
San Francisco
Denver
Beverly Hills
Corporate
Headquarters
Scottsdale
Portland
2270 NW Savier St.
Portland, OR 97210
Salt Lake City
1496 Spring Lane
Holladay, UT 84117
San Francisco
400 California Street
San Francisco, CA 94104
Scottsdale
6900 E. Camelback Road
Suite 880
Scottsdale, AZ 85251
Europe
Dublin
94 St Stephen’s Green
Dublin 2
Ireland
London
50 Grosvenor Hill
London, W1K 3QT
United Kingdom
Madrid
C/ Fernando El Santo
17 3º Izq.
28010 Madrid, Spain
St. Helier
29 Broad Street
St. Helier, Jersey JE2 3RR
Channel Islands
Farmington
Dublin
London
St. Helier
Madrid
151 South El Camino Drive Beverly Hills, CA 90212
Tel: +1 (310) 887-6400
www.kennedywilson.com