Company: KW
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001408100-25-000147
Chunk: 121

Company: Kennedy-Wilson Holdings, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 121
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 using a variant of the Black-Scholes model tailored for currency derivatives and the foreign currency forward contracts are valued based 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 June 30, 2025, 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 its 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 June 30, 2025 and December 31, 2024 are included in other assets, net for hedge assets and included in accrued expenses and other liabilities for hedge liabilities on the accompanying consolidated balance sheets. 

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Kennedy-Wilson Holdings, Inc.Notes to Consolidated Financial Statements(Unaudited)

    The table below details the currency derivative contracts Kennedy Wilson held as of June 30, 2025 and the activity during the six months ended June 30, 2025.  (Dollars, Euros and British Pound Sterling in millions)June 30, 2025Six Months Ended June 30, 2025Currency HedgedUnderlying CurrencyNotionalHedge AssetsHedge LiabilitiesOCI (Losses) Gains     Income Statement Losses