Kennedy-Wilson Holdings, Inc. (NYSE:KW) today reported the following results for the fourth quarter and full year of 2021:

	4Q				Full Year
(Amounts in millions, except per share data)	2021		2020		2021		2020
GAAP Results
GAAP Net Income to Common Shareholders	$	37.5	$	170.0	$	313.2	$	92.9
Per Diluted Share		0.27		1.21		2.24		0.66

Non-GAAP Results
Adjusted EBITDA	$	187.4	$	346.9	$	927.9	$	608.0
Adjusted Net Income		85.5		222.8		509.0		306.9

"Our Q4 results reflected a strong finish to a year of record financial results, including annual Adjusted EBITDA and GAAP EPS, and represented the tremendous progress that Kennedy Wilson made in 2021," said William McMorrow, Chairman and CEO of Kennedy Wilson. "We continued to see values increase across our real estate portfolio as we focused on growing our NOI and investment management business. Kennedy Wilson has emerged from the pandemic a much stronger company, and the $300 million investment from Fairfax positions us well for continued long-term growth."

FY-21 and 4Q-21 Highlights

FY-21 Adjusted EBITDA Increased by 53% to $928 million:
- KW's share of recurring property NOI, loan income and fees totaled $434 million, an increase of $34 million from FY-20.
- KW's share of gains and performance allocations increased by $353 million to $725 million in FY-21, including $324 million in fair-value and accrued performance allocations. In FY-20, KW's share of gains and performance allocations totaled $372 million, including $47 million in fair-value and accrued performance allocations.
4Q-21 Adjusted EBITDA to $187 million (vs. $347 million in 4Q-20):
- KW's share of recurring property NOI, loan income and fees totaled $126 million in 4Q-21, an increase of $31 million from 4Q-20.
- KW's share of gains and performance allocations decreased by $164 million to $151 million in 4Q-21, including $157 million in fair-value and accrued performance allocations. In 4Q-20, KW's share of gains and performance allocations totaled $315 million, including $29 million in fair-value and accrued performance allocations.
14% Growth of Multifamily NOI in 4Q-21 Drives Strong Same Property Performance¹:

	4Q - 2021 vs. 4Q - 2020			FY - 2021 vs. FY- 2020
	Occupancy	Revenue	NOI	Occupancy	Revenue	NOI
Multifamily - Market Rate	0.6%	11.2%	13.7%	0.5%	4.3%	4.5%
Multifamily - Affordable	1.8%	6.2%	7.4%	1.7%	4.0%	3.5%
Office	(2.1)%	5.3%	3.6%	(1.3)%	5.9%	6.2%
Total		8.7%	8.9%		4.8%	5.1%
⁽¹⁾ Excludes minority-held investments

Completed $5.9 billion in Investment Transactions in FY-21 Which Grew Estimated Annual NOI by $40 Million and Fee-Bearing Capital by $1.1 Billion:

FY-21 Summary	Gross Transaction Value ($ in millions)		Est. Annual NOI To KW ($ in millions)			Fee-Bearing Capital ($ in billions)
As of 4Q-20				394			3.9
Gross acquisitions and loan investments	$	4,064		64			1.6
Assets stabilized		—		14			—
Operations		—		7			—
Gross dispositions and loan repayments		1,828		(36	)		(0.4	)
FX and other		—		(9	)		(0.1	)
Total as of 4Q-21	$	5,892	$	434		$	5.0

Completed $1.5 billion in Investment Transactions in 4Q-21 Which Grew Estimated Annual NOI by $21 Million and Fee-Bearing Capital by $200 Million:

4Q-21 Summary	Gross Transaction Value ($ in millions)		Est. Annual NOI To KW ($ in millions)			Fee-Bearing Capital ($ in billions)
As of 3Q-21				413			4.8
Gross acquisitions and loan investments	$	1,321		16			0.4
Assets stabilized		—		4			—
Operations		—		4			—
Gross dispositions and loan repayments		135		(2	)		(0.1	)
FX and other		—		(1	)		(0.1	)
Total as of 4Q-21	$	1,456	$	434		$	5.0

Continued Progress on Development and Lease-up Portfolio:
- In 4Q-21, completed stabilization of Capital Dock in Dublin, Ireland and construction of Hanover Quay in Dublin, Ireland, and The Farm and Sanctuary in the Western U.S.
- Development and lease up portfolio expected to add approximately $105 million in Estimated Annual NOI upon completion of construction by 2024 and stabilization by 2025.
28% Annual Growth in Fee-Bearing Capital: The Company's Fee-Bearing Capital totaled $5.0 billion as of YE-21, a 4% increase from 3Q-21 and a 28% increase from YE-20. In addition, the Company has approximately $1.7 billion in additional non-discretionary capital with certain strategic partners that is available for investment.
- 20% Growth in Debt Platform in 4Q; 119% Growth in 2021: Completed loan investments totaling $344 million while loan repayments totaled $65 million, resulting in 20% growth in 4Q-21. The Company has a 8% ownership in its debt platform, which totals $2.0 billion of outstanding loans (including $279 million of future funding commitments) and $1.6 billion of Fee-Bearing Capital as of 4Q-21.
- 63% Growth in European Logistics Assets in 4Q, 236% Growth in 2021:
  - Acquired $334 million in logistics assets in 4Q-21, including $258 million through its European logistics platform and $76 million through its commingled fund.
  - The Company has a 20% ownership in its European logistics platform, which totals $938 million of assets and $337 million of Fee-Bearing Capital as of 4Q-21.

Investment Activity

Capital Allocation:
- In 4Q-21, the Company invested $333 million of cash with 72% allocated to new investments, 17% to capex, and 11% to its share repurchase program.
- In FY-21, the Company invested $1.1 billion of cash, allocating 74% into new investments, 19% to capex, and 7% to its share repurchase program.
Consolidated Portfolio Adds Two Wholly-owned Properties For $243 million in 4Q-21:
- Western U.S. Multifamily Expansion: Acquired a 528-unit multifamily property located in Henderson, NV for $155 million, which added $6 million to Estimated Annual NOI.
- United Kingdom Office: Acquired a premier office campus located on the South Coast of the U.K. for $88 million, which includes $11 million related to an 11-acre parcel approved for future development. The acquisition added $5 million to Estimated Annual NOI.
Co-investment Portfolio Adds $1.1 billion in Investments in 4Q-21:
- Kennedy Wilson completed $733 million of real estate investments and $344 million of debt investments in its Co-investment portfolio, which added $6 million to Estimated Annual NOI and $420 million in Fee-Bearing Capital.
Strong Investment Performance Drove 4Q-21 Income from Unconsolidated Investments to $175 million (vs. $36 million in 4Q-20):
- Principal co-investment income, which includes the Company's share of earnings, gains on sale, and changes in fair-value from its co-investment portfolio, grew to $119 million in 4Q-21 (vs $31 million in 4Q-20), primarily driven by $102 million in fair-value income related to the Company's unconsolidated investments during 4Q-21.
- Performance allocations, which relates to the co-investments managed by Kennedy Wilson, grew to $56 million in 4Q-21 from $5 million in 4Q-20, due to the increase in the fair value of the Company's unconsolidated investments.
FY-21 Income from Unconsolidated Investments Grows to $389 million (vs. $81 million in FY-20):
- Principal co-investment income grew to $271 million in FY-21 (vs $78 million in FY-20), primarily due to $211 million related to the increase in fair-value of its unconsolidated investments.
- Performance allocations grew to $118 million in FY-21 from $3 million in FY-20, due to the increase in the fair value of the Company's unconsolidated investments.

Balance Sheet

$950 million in Cash and Available Lines of Credit: As of 4Q-21, Kennedy Wilson had cash and cash equivalents of $525 million⁽¹⁾ and $425 million of capacity on its $500 million revolving credit facility.
Debt Profile: As of YE-21, the Company's share of debt had a weighted average annual interest rate of 3.5% and a weighted average maturity of 6.1 years. Approximately 88% of the Company's debt is either fixed or hedged using interest rate derivatives.
Share Repurchase Program⁽²⁾: In 4Q-21, the Company repurchased 1.6 million shares for $37 million. In FY-21, the Company repurchased 3.8 million shares for $81 million. Since the inception of the buyback in March 2018, the Company has repurchased and retired 17.4 million shares at a weighted-average price of $18.64 per share.

Subsequent Events

In 1Q-22, the Company borrowed $175 million on its revolving line of credit and currently has an outstanding balance of $250 million, with $250 million available to draw on its $500 million revolving line of credit.

In 1Q-22, the Company has completed total real estate acquisitions of $292 million and loan originations of $116 million, with another $431 million of investments under contract. The 1Q-22 real estate acquisitions and loan originations closed and under contract are expected to add approximately $14 million in Estimated Annual NOI. The Company's expected ownership interest in its closed and under contract investments is 36%. The Company's cash invested into these transactions is expected to total $215 million. Investments under contract are subject to customary closing conditions.

In 1Q-22, the Company announced that it entered into an agreement for a $300 million preferred investment in Kennedy Wilson by affiliates of Fairfax Financial Holdings (collectively, "Fairfax"). Under the terms of the agreement, Fairfax is purchasing $300 million in perpetual preferred stock carrying a 4.75% annual dividend rate and is callable by Kennedy Wilson at any time. Additionally, Fairfax acquired 7-year warrants for approximately 13.0 million common shares with an initial strike price of $23.00 per share, based on Kennedy Wilson's closing price on February 9, 2022 and representing a premium of 2% to the daily volume weighted average price per share of Kennedy Wilson's common stock over the past 20 trading days. The Company expects to use the proceeds to pay off in full its line of credit balance and to fund its development pipeline. The transaction is subject to customary closing conditions. Along with Fairfax's equity investment, the previously announced joint venture debt platform between Fairfax and Kennedy Wilson increased its investment target from $2 billion to $5 billion.

Financial Statement Presentation Changes

As the Company's Co-Investment segment has grown, the Company has expanded the presentation of related items in the statements of income presented as this presentation reflects the prominence of this core business. The income from unconsolidated investments line caption has been expanded to show principal co-investments and performance allocations:

Principal co-investments consists of the Company's share of net income and losses from Co-Investments and unrealized and realized gains on the Company's Co-Investments including any fair value adjustments
Performance allocations relate to special allocations to co-investments the Company manages based on the cumulative performance of the fund or investment and are subject to preferred return thresholds of its limited partners.
Performance allocations compensation relates to the performance allocation earned by certain commingled funds and separate account investments to be allocated to certain employees of the Company.

Footnotes

⁽¹⁾		Represents consolidated cash and includes $23 million of restricted cash, which is included in cash and cash equivalents. The Company's share of cash, including unconsolidated joint-ventures, totals $618 million.
⁽²⁾		Future purchases 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 the 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.

Conference Call and Webcast Details

Kennedy Wilson will hold a live conference call and webcast to discuss results at 9:00 a.m. PT/ 12:00 p.m. ET on Thursday, February 24. The direct dial-in number for the conference call is (844) 340-4761 for U.S. callers and (412) 717-9616 for international callers.

A replay of the call will be available for one week beginning one hour after the live call and can be accessed by (877) 344-7529 for U.S. callers and (412) 317-0088 for international callers. The passcode for the replay is 6132873.

The webcast will be available at: https://services.choruscall.com/links/kw220224jlferCnT.html. A replay of the webcast will be available one hour after the original webcast on the Company's investor relations web site for three months.

About Kennedy Wilson

Kennedy Wilson (NYSE:KW) is a leading global real estate investment company. We own, operate, and invest in real estate both on our own and through our investment management platform. We focus on multifamily and office properties located in the Western U.S., UK, and Ireland. For further information on Kennedy Wilson, please visit www.kennedywilson.com.

Kennedy-Wilson Holdings, Inc. Consolidated Balance Sheets (Unaudited) (Dollars in millions)

	December 31,
	2021			2020
Assets
Cash and cash equivalents	$	524.8		$	965.1
Accounts receivable		36.1			47.9
Real estate and acquired in place lease values (net of accumulated depreciation and amortization of $838.1 and $815.0)		5,059.8			4,720.5
Unconsolidated investments (including $1,794.8 and $1,136.5 at fair value)		1,947.6			1,289.3
Other assets		177.9			199.1
Loan purchases and originations		130.3			107.1
Total assets	$	7,876.5		$	7,329.0

Liabilities
Accounts payable	$	18.6		$	30.1
Accrued expenses and other liabilities		619.1			531.7
Mortgage debt		2,959.8			2,589.8
KW unsecured debt		1,852.3			1,332.2
KWE unsecured bonds		622.8			1,172.5
Total liabilities		6,072.6			5,656.3
Equity
Cumulative perpetual preferred stock		295.2			295.2
Common stock		—			—
Additional paid-in capital		1,679.6			1,725.2
Retained earnings		192.4			17.7
Accumulated other comprehensive loss		(389.6	)		(393.6	)
Total Kennedy-Wilson Holdings, Inc. shareholders' equity		1,777.6			1,644.5
Noncontrolling interests		26.3			28.2
Total equity		1,803.9			1,672.7
Total liabilities and equity	$	7,876.5		$	7,329.0

Kennedy-Wilson Holdings, Inc. Consolidated Statements of Income (Unaudited) (Dollars in millions, except per share data)

	For the Three Months Ended						For the Year Ended
	December 31,						December 31,
	2021			2020			2021			2020
Revenue
Rental	$	110.8		$	95.1		$	390.5		$	403.9
Hotel		7.9			3.5			17.1			13.9
Investment management fees		9.9			7.3			35.3			22.5
Property services fees		0.4			0.6			2.1			10.6
Loans and other		2.4			1.6			8.6			3.1
Total revenue		131.4			108.1			453.6			454.0

Income from unconsolidated investments
Principal co-investments		119.2			30.8			271.1			78.3
Performance allocations		55.9			5.2			117.9			2.7
Total income from unconsolidated investments		175.1			36.0			389.0			81.0

(Loss) gain on sale of real estate, net		(4.3	)		290.3			412.7			338.0

Expenses
Rental		34.9			33.5			132.7			135.7
Hotel		4.9			2.9			12.7			13.8
Compensation and related		35.5			51.5			133.9			111.9
Share based compensation		6.8			7.8			28.7			32.3
Performance allocation compensation		38.8			—			42.0			0.2
General and administrative		8.6			8.5			33.3			34.6
Depreciation and amortization		41.0			44.5			166.3			179.6
Total expenses		170.5			148.7			549.6			508.1
Interest expense		(51.0	)		(52.0	)		(192.4	)		(201.9	)
Loss on early extinguishment of debt		(7.1	)		(7.9	)		(45.7	)		(9.3	)
Other (loss) income, net		(1.3	)		0.6			(5.0	)		(2.3	)
Income before provision for income taxes		72.3			226.4			462.6			151.4
Provision for income taxes		(28.0	)		(53.9	)		(126.2	)		(43.6	)
Net income		44.3			172.5			336.4			107.8
Net (income) loss attributable to the noncontrolling interests		(2.5	)		1.8			(6.0	)		2.3
Preferred dividends		(4.3	)		(4.3	)		(17.2	)		(17.2	)
Net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders	$	37.5		$	170.0		$	313.2		$	92.9
Basic earnings per share
Income per basic	$	0.27		$	1.23		$	2.26		$	0.66
Weighted average shares outstanding for basic		137,258,502			138,435,722			138,552,058			139,741,411
Diluted earnings per share
Income per diluted	$	0.27		$	1.21		$	2.24		$	0.66
Weighted average shares outstanding for diluted		137,782,173			140,742,482			140,132,435			140,347,365
Dividends declared per common share	$	0.24		$	0.22		$	0.90		$	0.88

Kennedy-Wilson Holdings, Inc. Adjusted EBITDA (Unaudited) (Dollars in millions)

The table below reconciles Adjusted EBITDA to net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders, using Kennedy Wilson's Pro-Rata share amounts for each adjustment item.

	Three Months Ended				Year Ended
	December 31,				December 31,
	2021		2020		2021		2020
Net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders	$	37.5	$	170.0	$	313.2	$	92.9
Non-GAAP adjustments:
Add back (Kennedy Wilson's Share)⁽¹⁾:
Interest expense		62.5		59.6		229.8		231.9
Loss on early extinguishment of debt		7.1		7.9		45.7		9.3
Depreciation and amortization		41.2		45.0		167.1		181.7
Provision for income taxes		28.0		52.3		126.2		42.7
Preferred dividends		4.3		4.3		17.2		17.2
Share-based compensation		6.8		7.8		28.7		32.3
Adjusted EBITDA	$	187.4	$	346.9	$	927.9	$	608.0

⁽¹⁾

See Appendix for reconciliation of Kennedy Wilson's Share amounts.

The table below provides a detailed reconciliation of Adjusted EBITDA to net income.

	Three Months Ended						Year Ended
	December 31,						December 31,
	2021			2020			2021			2020
Net income	$	44.3		$	172.5		$	336.4		$	107.8
Non-GAAP adjustments:
Add back:
Interest expense		51.0			52.0			192.4			201.9
Loss on early extinguishment of debt		7.1			7.9			45.7			9.3
Kennedy Wilson's share of interest expense included in unconsolidated investments		12.2			8.3			40.2			33.0
Depreciation and amortization		41.0			44.5			166.3			179.6
Kennedy Wilson's share of depreciation and amortization included in unconsolidated investments		1.1			1.7			5.3			6.9
Provision for income taxes		28.0			53.9			126.2			43.6
Kennedy Wilson's share of taxes included in unconsolidated investments		—			—			—			1.1
Share-based compensation		6.8			7.8			28.7			32.3
EBITDA attributable to noncontrolling interests⁽¹⁾		(4.1	)		(1.7	)		(13.3	)		(7.5	)
Adjusted EBITDA	$	187.4		$	346.9		$	927.9		$	608.0

⁽¹⁾

EBITDA attributable to noncontrolling interests includes $0.9 million and $1.2 million of depreciation and amortization, $0.7 million and $0.7 million of interest, and $0.0 million and $1.6 million of taxes, for the three months ended December 31, 2021 and 2020, respectively. EBITDA attributable to noncontrolling interests includes $4.5 million and $4.8 million of depreciation and amortization, $2.8 million and $3.0 million of interest, and $0.0 million and $2.0 million of taxes, for the year ended December 31, 2021 and 2020, respectively.

Kennedy-Wilson Holdings, Inc. Adjusted Net Income (Unaudited) (Dollars in millions, except share data)

The table below reconciles Adjusted Net Income to net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders, using Kennedy Wilson's Pro-Rata share amounts for each adjustment item.

	Three Months Ended				Year Ended
	December 31,				December 31,
	2021		2020		2021		2020
Net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders	$	37.5	$	170.0	$	313.2	$	92.9
Non-GAAP adjustments:
Add back (Kennedy Wilson's Share)⁽¹⁾:
Depreciation and amortization		41.2		45.0		167.1		181.7
Share-based compensation		6.8		7.8		28.7		32.3
Adjusted Net Income	$	85.5	$	222.8	$	509.0	$	306.9

Weighted average shares outstanding for diluted		137,782,173		140,742,482		140,132,435		140,347,365

⁽¹⁾

See Appendix for reconciliation of Kennedy Wilson's Share amounts.

The table below provides a detailed reconciliation of Adjusted Net Income to net income.

	Three Months Ended						Year Ended
	December 31,						December 31,
	2021			2020			2021			2020
Net income	$	44.3		$	172.5		$	336.4		$	107.8
Non-GAAP adjustments:
Add back:
Depreciation and amortization		41.0			44.5			166.3			179.6
Kennedy Wilson's share of depreciation and amortization included in unconsolidated investments		1.1			1.7			5.3			6.9
Share-based compensation		6.8			7.8			28.7			32.3
Preferred dividends		(4.3	)		(4.3	)		(17.2	)		(17.2	)
Net income attributable to the noncontrolling interests, before depreciation and amortization⁽¹⁾		(3.4	)		0.6			(10.5	)		(2.5	)
Adjusted Net Income	$	85.5		$	222.8		$	509.0		$	306.9

Weighted average shares outstanding for diluted		137,782,173			140,742,482			140,132,435			140,347,365

⁽¹⁾

Includes $0.9 million and $1.2 million of depreciation and amortization for the three months ended December 31, 2021 and 2020, respectively, and $4.5 million and $4.8 million for the year ended December 31, 2021 and 2020, respectively.

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, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 operating results. Disclosures that use words such as "believe," "anticipate," "estimate," "intend," "may," "could," "plan," "expect," "project" or the negative of these, as well as similar expressions, are intended to identify forward-looking statements. These 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. These risks and uncertainties may include the factors and the risks and uncertainties described elsewhere in this report and other filings with the Securities and Exchange Commission (the "SEC"), including the Item 1A. "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2020, as amended by our subsequent filings with the SEC. 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 our filings with the SEC. Except as required under the federal securities laws and the rules and regulations of 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.

Common Definitions

"KWH," "KW," "Kennedy Wilson," the "Company," "we," "our," or "us" refers to Kennedy-Wilson Holdings, Inc. and its wholly-owned subsidiaries.
"Adjusted EBITDA" represents net income before interest expense, loss on early extinguishment of debt, our share of interest expense included in unconsolidated investments, depreciation and amortization, our share of depreciation and amortization included in unconsolidated investments, provision for income taxes, our share of taxes included in unconsolidated investments, share-based compensation expense for the Company and EBITDA attributable to noncontrolling interests.

Please also see the reconciliation to GAAP in the Company's supplemental financial information included in this release and also available at www.kennedywilson.com. Our management uses Adjusted EBITDA to analyze our business because it adjusts net income for items we believe do not accurately reflect the nature of our 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, we believe Adjusted EBITDA is useful to investors to assist them in getting a more accurate picture of our results from operations. However, Adjusted EBITDA is not a recognized measurement under GAAP and when analyzing our 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, our 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 our management's discretionary use, as it does not remove all non-cash items (such as acquisition-related gains) 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 our 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 our ability to engage in certain activities, such as incurring additional debt and making certain restricted payments.
"Adjusted Fees'' refers to Kennedy Wilson's gross investment management and property services fees adjusted to include Kennedy Wilson's share of fees eliminated in consolidation, and performance fees included in unconsolidated investments. Our management uses Adjusted fees to analyze our investment management business because the measure removes required eliminations under GAAP for properties in which the Company provides services but also has an ownership interest. These eliminations understate the economic value of the investment management and property services fees and makes the Company comparable to other real estate companies that provide investment management but do not have an ownership interest in the properties they manage. Our management believes that adjusting GAAP fees to reflect these amounts eliminated in consolidation presents a more holistic measure of the scope of our investment management business.
"Adjusted Net Income" represents net income before depreciation and amortization, our share of depreciation and amortization included in unconsolidated investments, share-based compensation, preferred dividends and net income attributable to the noncontrolling interests, before depreciation and amortization. Please also see the reconciliation to GAAP in the Company's supplemental financial information included in this release and also available at www.kennedywilson.com.
"Annual Return on Loans" is a metric that applies to our real estate debt business that represents the sum of annual interest income, transaction fees and the payback of principal for discounted loan purchases, amortized over the life of the loans and divided by the principal balances of the loans.
"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. Cap rates set forth in this presentation only includes data from income-producing properties. We calculate cap rates based on information that is supplied to us 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 our financial statements prepared in accordance with GAAP. In addition, cap rates represent historical performance and are not a guarantee of future NOI. Properties for which a cap rate is provided may not continue to perform at that cap rate.
"Equity partners" refers to non-wholly-owned subsidiaries that we consolidate in our financial statements under U.S. GAAP and third-party equity providers.
"Estimated Annual NOI" is a property-level non-GAAP measure representing the estimated annual net operating income from each property as of the date shown, inclusive of rent abatements (if applicable). The calculation excludes depreciation and amortization expense, and does not capture the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures, tenant improvements, and leasing commissions necessary to maintain the operating performance of our properties. For the Company's hotel portfolio, the Company provides a trailing-12 month NOI of $8.8 million, which excludes the period during which the hotel was fully closed due to restrictions related the COVID-19 pandemic. Additionally, for assets wholly-owned and fully occupied by KW, the Company provides an estimated NOI for valuation purposes of $4.1 million, which includes an assumption for applicable market rents. Any of the enumerated items above could have a material effect on the performance of our properties. Also, where specifically noted, for properties purchased in 2021, the NOI represents estimated Year 1 NOI from our original underwriting. Estimated year 1 NOI for properties purchased in 2021 may not be indicative of the actual results for those properties. Estimated annual NOI is not an indicator of the actual annual net operating income that the Company will or expects to realize in any period. Please also see the definition of "Net operating income" below. The Company does not provide a reconciliation for estimated annual NOI to its most directly comparable forward-looking GAAP financial measure, because it is unable to provide a meaningful or accurate estimation of each of the component reconciling items, and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and/or amount of various items that would impact estimated annual NOI, including, for example, gains on sales of depreciable real estate and other items that have not yet occurred and are out of the Company's control. For the same reasons, the Company is unable to meaningfully address the probable significance of the unavailable information and believes that providing a reconciliation for estimated annual NOI would imply a degree of precision as to its forward-looking net operating income that would be confusing or misleading to investors.
"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 promoted interest, if applicable.
"Gross Asset Value" refers to the gross carrying value of assets, before debt, depreciation and amortization, and net of noncontrolling interests.
"Internal Rate of Return" ("IRR") is based on cumulative contributions and distributions to Kennedy Wilson on each investment that has been sold and is the leveraged internal rate of return on equity invested in the investment. The IRR measures the return to Kennedy Wilson on each investment, expressed as a compound rate of interest over the entire investment period. This return does take into account carried interest, if applicable, but excludes management fees, organizational fees, or other similar expenses.
"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. Our management uses net operating income to assess and compare the performance of our 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 our properties resulting from our value-add initiatives or changing market conditions. Our management believes that net operating income reflects the core revenues and costs of operating our properties and is better suited to evaluate trends in occupancy and lease rates. Please also see the reconciliation to GAAP in the Company's supplemental financial information included in this release and also available at www.kennedywilson.com.
"Noncontrolling interests" represents the portion of equity ownership in a consolidated subsidiary not attributable to Kennedy Wilson.
"Performance allocations" relates 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.
"Performance allocation compensation" - the compensation committee of the Company's board of directors approved and reserved 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.
"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 "Pro-Rata" represents Kennedy Wilson's share calculated by using our proportionate economic ownership of each asset in our portfolio. Please also refer to the pro-rata financial data in our supplemental financial information.
"Property NOI" or "Property-level NOI" is a non-GAAP measure calculated by deducting the Company's Pro-Rata share of rental and hotel property expenses from the Company's Pro-Rata rental and hotel revenues. Please also see the reconciliation to GAAP in the Company's supplemental financial information included in this release and also available at www.kennedywilson.com.
"Real Estate Assets Under Management" ("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 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.
"Return on Equity" is a ratio calculated by dividing the net cash distributions of an investment to Kennedy Wilson, after the cost of leverage, if applicable, by the total cash contributions by Kennedy Wilson over the lifetime of the investment.
"Same property" refers to properties in which Kennedy Wilson has an ownership interest during the entire span of both periods being compared. The same property information presented throughout this report is shown on a cash basis and excludes non-recurring expenses. This analysis excludes properties that are either under development or undergoing lease up as part of our asset management strategy.

Note about Non-GAAP and certain other financial information included in this presentation

In addition to the results reported in accordance with U.S. generally accepted accounting principles ("GAAP") included within this presentation, Kennedy Wilson has provided certain information, which includes non-GAAP financial measures (including Adjusted EBITDA, Adjusted Net Income, Net Operating Income, and Adjusted Fees, as defined above). Such information is reconciled to its closest GAAP measure in accordance with the rules of the SEC, and such reconciliations are included within this presentation. These measures may contain cash and non-cash acquisition-related gains and expenses and gains and losses from the sale of real-estate related investments. Consolidated non-GAAP measures discussed throughout this report contain income or losses attributable to non-controlling interests. Management believes that these non-GAAP financial measures are useful to both management and Kennedy Wilson's shareholders in their analysis of the business and operating performance of the Company. Management also uses this information for operational planning and decision-making purposes. Non-GAAP financial measures are not and should not be considered a substitute for any GAAP measures. Additionally, non-GAAP financial measures as presented by Kennedy Wilson may not be comparable to similarly titled measures reported by other companies. Annualized figures used throughout this release and supplemental financial information, and our estimated annual net operating income metrics, are not an indicator of the actual net operating income that the Company will or expects to realize in any period.

KW-IR

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Kennedy Wilson Reports 4Q and Record Full Year 2021 Results