Company Provides Update on Strategic Asset Recycling and Cost Reduction Plan

Kennedy-Wilson Holdings, Inc. (NYSE:KW), a leading global real estate investment company with $25 billion in AUM across its real estate equity and debt investment portfolio, today reported the following results for the fourth quarter and full year of 2023:

"The fourth quarter capped off a strong year for our investment management platform which grew by 42% and contributed to 8% growth in Baseline EBITDA for 2023. Our 2023 financial results were impacted by $439 million in non-cash items primarily resulting from an unrealized decline in the real estate values of our co-investment portfolio driven by higher theoretical cap rates on high-quality assets held in long term well-capitalized strategic partnerships," said William McMorrow, Chairman and CEO of Kennedy Wilson. "The near-term completion of development projects coupled with the cost reduction plan announced in December will enhance our recurring cash flow, while our strategic asset sale program will provide additional dry powder as we continue to seek opportunities in the current environment alongside our well-capitalized partners."

Financial Results

	Q4					Full Year
(Amounts in millions, except per share data)	2023			2022		2023			2022
GAAP Results
GAAP (Loss) Net Income to Common Shareholders¹	$	(247.8	)	$	22.6	$	(341.8	)	$	64.8
Per Diluted Share		(1.78	)		0.16		(2.46	)		0.47
¹Includes significant non-cash items, such as depreciation expense, amortization expense, and fair-value adjustments, totaling $214 million or $1.54 per share in Q4-23 (vs $18 million or $0.13 per share in Q4-22), and totaling $439 million or $3.15 per share in FY-23 or $3.16 per share (vs. $78 million or $0.56 per share in FY-22).

	Q4						Full Year
(Amounts in millions, except per share data)	2023			2022			2023			2022
Non-GAAP Results
Adjusted EBITDA	$	(129.4	)	$	147.1		$	189.8		$	591.5
Adjusted Net (Loss) Income		(195.9	)		69.4			(151.3	)		264.9

Adjusted EBITDA - Key Components (at KW share)
Baseline EBITDA: Property NOI, loan income, and inv. mgt fees (net of compensation and general and administrative expenses)	$	95.5		$	87.6		$	392.5		$	361.9
Realized gains/(loss) on the sale of real estate		(10.7	)		53.2			111.6			124.8
Changes in the fair value of the Co-investment portfolio		(175.5	)		21.2			(282.9	)		87.5
Other (loss)/income¹		(38.7	)		(14.9	)		(31.4	)		17.3
Adjusted EBITDA	$	(129.4	)	$	147.1		$	189.8		$	591.5
¹Other loss primarily related to the decrease in value of interest rate hedging derivative contracts during Q4-23 totaling $13.4 million as well as one-time termination related costs totaling $5.9 million.

Multifamily Same Property Performance¹:

	Q4 - 2023 vs. Q4 - 2022								FY - 2023 vs. FY- 2022
Multifamily	Occupancy		Revenue		Expenses		NOI (Net Effective)		Occupancy		Revenue		Expenses		NOI (Net Effective)
Market Rate	0.7	%	3.3	%	5.9	%	2.0	%	(0.4	)%	3.8	%	5.8	%	2.8	%
Affordable	(1.9	)%	9.5	%	14.1	%	7.3	%	(1.2	)%	8.6	%	15.7	%	5.3	%
Total	0.1	%	4.3	%	7.2	%	2.9	%	(0.5	)%	4.6	%	7.4	%	3.3	%
⁽¹⁾ Excludes minority-held investments and assets undergoing development or lease-up.

Office Same Property Performance¹:

	Q4 - 2023 vs. Q4 - 2022								FY - 2023 vs. FY- 2022
	Occupancy		Revenue		Expenses		NOI (Net Effective)		Occupancy		Revenue		Expenses		NOI (Net Effective)
Office	(0.3	)%	(0.1	)%	1.5	%	(0.3	)%	0.6	%	1.1	%	2.4	%	0.8	%
⁽¹⁾ Excludes minority-held investments and assets undergoing development or lease-up.

Update on Strategic Asset Recycling and Cost Reduction Plan

In Q4-23, the Company announced a strategic asset recycling and cost reduction plan over an 18-month period which included non-core asset sales that are expected to generate $550-$750 million of cash and a cost efficiency plan targeting $15-20 million in annual overhead reductions:

Asset sales update: Since Q3-23, the Company has sold or is under contract to sell assets that are expected to generate approximately $320 million in net proceeds.

Cost reduction: Since Q3-23, the Company has either implemented or identified over $12 million of cost reductions.

Portfolio Update

Estimated Annual NOI of $492 million and Fee-Bearing Capital of $8.4 billion:

	Est. Annual NOI To KW ($ in millions)			Fee-Bearing Capital ($ in billions)
As of Q4-22	$	491		$	5.9
As of Q3-23		485			8.2
Gross acquisitions and loan investments		2			0.2
Gross dispositions and loan repayments		(5	)		—
Assets stabilized/unstabilized		(6	)		—
Operations		4			—
FX and other		12			—
Total as of Q4-23	$	492		$	8.4

Development and Lease-up Portfolio To Add $91 million in Estimated Annual NOI:
- Q4 Lease-Up Portfolio Update:
  - Stabilized Pointe by Vintage, a 161-unit multifamily property in the Pacific Northwest, and The Oaks, an office asset in Southern California, which together added $5 million to Estimated Annual NOI.
- Multifamily Development Projects Expected To Add 3,800 Units and Produce $43 million in Est. Annual NOI at Stabilization by YE-25:
  - Dublin To Add 990 Stabilized Multifamily Units: The Company is 54% leased across its two newly completed multifamily communities in Dublin (as of February 20, 2024), totaling 758 units, with lease-up performing ahead of business plan. The Company remains on track to deliver another 232 units in Dublin in Q1-24. In total, the Company's apartment developments in Dublin are expected to produce $13 million of Est. Annual NOI at stabilization.
  - U.S. Portfolio Expected To Add Over 2,800 Stabilized Multifamily Units:
    - Market Rate: The Company has 1,230 units expected to complete construction by YE-24, expected to add approximately $22 million in Est. Annual NOI once stabilized. Leasing has begun at 563 units that have been delivered, of which 55% have been leased.
    - Vintage: The Vintage affordable housing platform has 1,604 multifamily units under development, which upon completion will add $8 million to Estimated Annual NOI and grow the Vintage platform to approximately 12,000 stabilized units.
44% Growth in Investment Management Fees in Q4-23:
- Investment Management fees grew by 44% to $16 million in Q4-23 (vs Q4-22), and by 38% to $62 million in FY-23 (vs. FY-22).
Fee-Bearing Capital Grew to a Record $8.4 billion in Q4-23:
- In addition to the $8.4 billion in Fee-Bearing Capital, the Company has approximately $5.2 billion in incremental non-discretionary capital with certain strategic partners that is currently available for investment.
Debt Investment Platform Grew By 148% to $6.6 Billion in 2023:
- Debt Platform grew to $6.6 billion in loans (including $4.9 billion in outstanding loans and $1.8 billion of future funding commitments) in which the Company has an average ownership interest of 5%. The Debt Platform totals $4.6 billion of Fee-Bearing Capital at quarter-end.
- In Q4-23, originated $220 million in new construction loans, completed $281 million in additional fundings on existing loans, and realized $84 million in repayments, increasing the Debt Platform by 4% in Q4-23.
- Raised $2 billion in new platform capital, increasing capital available for new originations to approximately $4 billion.

Investment Activity

$133 million in Gross New Investments in Q4 ($27 million at share):
- Co-Investment Acquisitions: Completed $133 million in gross real estate acquisitions, including $131 million invested in two industrial assets. In total, the Company had a 20% ownership interest in its Q4-23 acquisitions.
$289 million of Gross Dispositions and Loan Repayments in Q4 ($148 million at share):
- Consolidated Portfolio Completes $125 million of Non-Core Dispositions:
  - Sold one UK office asset and six U.S. and EU retail assets for $125 million. These wholly-owned asset sales generated $83 million of cash to KW.
- Co-Investment Portfolio Completes $156 million of Dispositions and Repayments: Sold $72 million of real estate investments and realized loan repayments of $84 million in its Debt Investment Platform. KW's average ownership interest in these assets was 13%.

Balance Sheet and Liquidity

Cash and Line of Credit Availability: As of December 31, 2023, Kennedy Wilson had cash and cash equivalents of $314 million⁽¹⁾ and $150 million drawn on its $500 million revolving credit facility.
Debt Profile: Kennedy Wilson's share of debt had a weighted average effective interest rate of 4.4% per annum and a weighted-average maturity of 5.3 years as of December 31, 2023. Approximately 99% of the Company's share of debt is either fixed (73%) or hedged with interest rate derivatives (26%).
Interest Rate Hedging Strategy: The Company hedges its floating rate exposure through the use of interest rate caps and swaps. The Company's interest rate hedges have a weighted-average maturity of 1.6 years as of December 31, 2023. The Company received $13 million in Q4-23 and $38 million FY-23 in payments from its interest rate derivative contracts which are not reflected as an off-set to its share of interest expense.
Foreign Currency Hedging Strategy: Kennedy Wilson hedges its exposure to foreign currency fluctuations by borrowing in the currency in which it invests and using foreign currency hedging instruments. As of December 31, 2023, the Company has hedged approximately 96% of the carrying value of its foreign currency investments, using local currency debt as well as hedging instruments with a weighted-average term of 2.0 years.
Share Repurchase Program: In Q4-23, the Company repurchased 0.7 million shares at a weighted- average price of $11.15. The Company has approximately $125 million remaining on its $500 million share repurchase authorization.
2023 Dividend Taxability: The Company's 2023 dividend distributions were characterized as 100.00% non-taxable return of capital. Please refer to kennedywilson.com for further information.

Subsequent Events

The Company sold a wholly-owned retail asset in the UK and is under separate contracts 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 sale price of approximately $340 million. If completed, these sales will generate cash to KW of $240 million (after debt repayments of $90 million) and total expected GAAP gains on sale in excess of $100 million.

The Company's debt investment platform has closed $55 million in new originations and has a pipeline of new transactions under non-binding term sheets totaling $1.3 billion. KW expects to have a 2.5% interest in these debt investments.

There can be no assurance that the Company will close the sales under contract as described above or the described originations under non-binding term sheets in part or at all.

The Company drew an additional $75 million on its revolving credit facility.

Footnotes

⁽¹⁾		Represents consolidated cash and includes $70 million of restricted cash, which is included in cash and cash equivalents and primarily relates to lender reserves associated with consolidated mortgages that we hold on properties. These reserves typically relate to interest, tax, insurance and future capital expenditures at the properties. 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 in the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2023, filed with the Securities and Exchange Commission on November 2, 2023). 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. The Company's share of cash, including unconsolidated joint-ventures, totals $403 million.

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 22. 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 3814270.

The webcast will be available at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=hoiuq1cu. 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 through our balance sheet and through our investment management platform in the United States, United Kingdom, and Ireland. We primarily focus on multifamily and office properties as well as industrial and debt investments in our investment management business. For further information on Kennedy Wilson, please visit www.kennedywilson.com.


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

	December 31,
		2023			2022
Assets
Cash and cash equivalents	$	313.7		$	439.3
Accounts receivable, net		57.3			40.8
Real estate and acquired in place lease values (net of accumulated depreciation and amortization of $957.8 and $882.2)		4,837.3			5,188.1
Unconsolidated investments (including $1,927.0 and $2,093.7 at fair value)		2,069.1			2,238.1
Other assets		187.5			216.1
Loan purchases and originations, net		247.2			149.4
Total assets	$	7,712.1		$	8,271.8

Liabilities
Accounts payable	$	17.9		$	16.2
Accrued expenses and other liabilities (including $234.4 and $303.7 of deferred-tax liabilities)		597.8			658.2
Mortgage debt		2,840.9			3,018.0
KW unsecured debt		1,934.3			2,062.6
KWE unsecured bonds		522.8			506.4
Total liabilities		5,913.7			6,261.4
Equity
Cumulative perpetual preferred stock		789.9			592.5
Common stock		—			—
Additional paid-in capital		1,718.6			1,679.5
Retained (deficit) earnings		(349.0	)		122.1
Accumulated other comprehensive loss		(404.4	)		(430.1	)
Total Kennedy-Wilson Holdings, Inc. shareholders' equity		1,755.1			1,964.0
Noncontrolling interests		43.3			46.4
Total equity		1,798.4			2,010.4
Total liabilities and equity	$	7,712.1		$	8,271.8

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

	For the Three Months Ended						For the Year Ended
	December 31,						December 31,
		2023			2022			2023			2022
Revenue
Rental	$	99.7		$	110.5		$	415.3		$	434.9
Hotel		14.4			13.7			57.1			46.9
Investment management fees		16.3			11.3			61.9			44.8
Property services fees		0.6			0.4			2.2			1.7
Loans and other		9.1			3.7			26.1			11.7
Total revenue		140.1			139.6			562.6			540.0

(Loss) income from unconsolidated investments
Principal co-investments		(155.1	)		51.6			(188.5	)		199.5
Performance allocations		(28.0	)		(21.6	)		(64.3	)		(21.1	)
Total (loss) income from unconsolidated investments		(183.1	)		30.0			(252.8	)		178.4

(Loss) gain on sale of real estate, net		(11.0	)		52.9			127.6			103.7

Expenses
Rental		38.9			40.5			152.6			151.2
Hotel		10.5			9.0			37.9			29.5
Compensation and related (including $12.8, $7.3, $34.5, $29.0 of share-based compensation		40.7			36.6			139.4			140.3
Performance allocation compensation		(9.6	)		(7.5	)		(15.1	)		(4.3	)
General and administrative		10.2			10.7			35.7			37.2
Depreciation and amortization		39.5			40.2			157.8			172.9
Total expenses		130.2			129.5			508.3			526.8
Interest expense		(66.7	)		(60.0	)		(259.2	)		(220.8	)
Gain (loss) on early extinguishment of debt, net		—			29.9			(1.6	)		27.5
Other (loss) income		(27.0	)		(10.0	)		(5.0	)		36.1
(Loss) income before provision for income taxes		(277.9	)		52.9			(336.7	)		138.1
Benefit from (provision for) income taxes		42.0			(13.7	)		55.3			(36.2	)
Net (loss) income		(235.9	)		39.2			(281.4	)		101.9
Net (income) loss attributable to noncontrolling interests		(1.0	)		(8.7	)		(22.4	)		(8.2	)
Preferred dividends		(10.9	)		(7.9	)		(38.0	)		(28.9	)
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders	$	(247.8	)	$	22.6		$	(341.8	)	$	64.8
Basic (loss) earnings per share
(Loss) earnings per share	$	(1.78	)	$	0.17		$	(2.46	)	$	0.47
Weighted average shares outstanding		139,034,415			137,110,908			138,930,517			136,900,875
Diluted (loss) earnings per share
(Loss) earnings per share	$	(1.78	)	$	0.16		$	(2.46	)	$	0.47
Weighted average shares outstanding		139,034,415			137,436,886			138,930,517			138,567,534
Dividends declared per common share	$	0.24		$	0.24		$	0.96		$	0.96

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,
		2023			2022			2023			2022
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders	$	(247.8	)	$	22.6		$	(341.8	)	$	64.8
Non-GAAP adjustments:
Add back (Kennedy Wilson's Share)⁽¹⁾:
Interest expense		96.3			76.2			355.9			278.0
(Gain) loss on early extinguishment of debt		—			(21.8	)		1.6			(19.4	)
Depreciation and amortization		39.1			39.5			156.0			171.1
(Benefit from) provision for income taxes		(40.7	)		15.4			(54.4	)		39.1
Preferred dividends		10.9			7.9			38.0			28.9
Share-based compensation⁽²⁾		12.8			7.3			34.5			29.0
Adjusted EBITDA	$	(129.4	)	$	147.1		$	189.8		$	591.5
⁽¹⁾ See Appendix for reconciliation of Kennedy Wilson's Share amounts.
⁽²⁾ Q4-23 includes $5.5 million related to one-time termination related costs.

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,
		2023			2022		2023		2022
Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders	$	(247.8	)	$	22.6	$	(341.8	)	$	64.8
Non-GAAP adjustments:
Add back (Kennedy Wilson's Share)⁽¹⁾:
Depreciation and amortization		39.1			39.5		156.0			171.1
Share-based compensation⁽²⁾		12.8			7.3		34.5			29.0
Adjusted Net (Loss) Income	$	(195.9	)	$	69.4	$	(151.3	)	$	264.9

Weighted average shares outstanding for diluted		139,034,415			137,436,886		138,930,517			138,567,534
⁽¹⁾ See Appendix for reconciliation of Kennedy Wilson's Share amounts.
⁽²⁾ Q4-23 includes $5.5 million related to one-time termination related costs.

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, 2022, and Item 1A. "Risk Factors" section of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 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 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 and real estate services business.

"Adjusted Net Income (Loss)" represents net income (loss) before depreciation and amortization, our 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 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.

"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. 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 assets wholly-owned and fully occupied by KW, the Company provides an estimated NOI for valuation purposes of $4.3 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 2023, the NOI represents estimated Year 1 NOI from our original underwriting. Estimated year 1 NOI for properties purchased in 2023 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. 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.

"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.

"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 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

"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 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, recent adverse developments affecting regional banks and other financial institutions, high inflation and central banks raising interest rates to curtail high inflation continue to fuel recessionary fears). 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.

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 Q4 and Full Year 2023 Results