Company: KW
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001408100-25-000084
Chunk: 124

Company: Kennedy-Wilson Holdings, Inc.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 7
Chunk 124
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 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. 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 34% 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, 2024, we have hedged 95% of the gross asset carrying value of our euro-denominated investments and 83% 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 $20.5 million or decrease by $22.4 million.  If rates moved 10%, we would have an increase of $39.5 million and a decrease of $44.7 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 

52

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 un