Kennedy-Wilson Holdings, Inc. (KW)

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations contains forward-looking statements within the meaning of the federal securities laws. See the discussion under the heading “Forward-looking Statements” 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 third-party equity providers and non-wholly-owned subsidiaries that we consolidate in our financial statements under U.S. GAAP. Please refer to “Non-GAAP Measures and Certain Definitions” for definitions of certain terms used throughout this Management’s Discussion and Analysis Section.

Company Overview

We are a real estate investment company as well as an investment manager with over $36.0 billion of Real Estate Assets Under Management (“AUM”) in high growth markets across the United States, the United Kingdom and Ireland. With an objective of generating strong long-term risk-adjusted returns for our shareholders and partners and drawing on over three decades of experience in identifying opportunities and building value through various market cycles, we primarily focus on (i) investing in the rental housing sector (both market rate and affordable units) and industrial properties; and (ii) originating, managing and servicing real estate loans (primarily senior construction loans secured by high quality multifamily and student housing properties that are being developed by institutional sponsors throughout the United States). In addition, as further described in this report, we recently expanded our rental housing platform through the acquisition of Toll Brothers, Inc.'s ("Toll Brothers") multifamily development platform and significantly adding to our nationwide development capabilities. We have recently focused on growing our investment management and co-investment platform whereby we invest a minority position (with the potential for carried interest) and earn our pro-rata share of income as well as asset management fees in our role as asset manager. During the three months ended March 31, 2026, our investment management platform generated a total of $27.8 million of asset management fees representing a growth of 11% over the same period in 2025.

For the three months ended March 31, 2026, our 324 employees managed our $36.0 billion of AUM, which includes a total of 78,778 multifamily units in which we hold ownership interest in (45,555 units and 1,965 single family units) or finance (31,258 units). Over the past several years, in line with our focus on the growth of our investments in housing and the continued execution of our capital recycling plan and our recent non-core asset disposition plan, our global investment portfolio has significantly evolved to be weighted heavily in equity and debt investments in the rental housing sector, specifically multifamily, both market rate and affordable, and student housing. The table below details key metrics and information of our global investment portfolio (in total and in each of our segments):

(1) Weighted-average ownership percentages.

(2) Includes amounts for properties that are stabilized, under development and unstabilized.

As of March 31, 2026, our global team, managed $36.0 billion of AUM (as noted above) of which $32.2 billion is operating properties and real estate loans (excluding development properties) which produced total revenue of $546.7 million ($170.0 million at KW's share) compared to $27.7 billion of operating properties as of March 31, 2025 with total revenue of

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$477.5 million ($185.2 million at KW's share). In addition, as of March 31, 2026, we held interests in 124 real estate loans in our global debt platform, 90% of which have floating interest rates, with an average interest rate of 7.6% per annum, an unpaid principal balance of $5.1 billion ($202.8 million at KW's share) compared to 120 real estate loans, 86% of which had floating interest rates, with an average interest rates of 8.3% per annum, and an unpaid principal balance of $4.6 billion ($228.3 million at KW's share) during the same period in 2025. During the three months ended March 31, 2026, the Company also completed a total of $82.8 million of gross acquisitions and $250.5 million of loan investments (KW's ownership interest of 30.1% and 2.5%, respectively) and $411.4 million of gross dispositions and $268.3 million of loan repayments (KW's ownership interest of 54.4% and 5.0%, respectively).

Investment Approach

The following is our investment approach:

•Identify markets with an attractive investment landscape and the potential for growth

•Establish operating platforms in our target markets

•Develop local intelligence and create and maintain long-lasting relationships, primarily with financial institutions and the brokerage community

•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, primarily through our investment management platform with strategic partners and funds that we manage

•Reposition assets to enhance cash flows post-acquisition

•Explore development opportunities 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

In order to help the user of the financial statements understand our company, we have included certain five-year selected financial data. The following table shows selected financial items for the three months ended March 31, 2026 dating back to 2022.

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(1) Please refer to "Certain Non-GAAP Measures and Reconciliations" for a reconciliation of certain non-GAAP items to U.S. GAAP.

The following tables show selected financial items as of March 31, 2026 and as of December 31, 2025 through 2022:

The following table shows the historical U.S. federal income tax treatment of Company’s common stock dividend for the years ended December 31, 2025 through 2021:

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Proposed Take-Private

On February 16, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Kona Bidco, LLC, a Delaware limited liability company (“Parent”), and Kona Merger Subsidiary, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, subject to the terms and conditions thereof, Merger Sub will be merged with and into the Company (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, collectively, the “Proposed Transactions”), and the separate corporate existence of Merger Sub will cease and the Company will continue as the surviving corporation and a subsidiary of Parent (“Surviving Company”). The Proposed Transactions would result in a take-private pursuant to which, as further detailed below, certain affiliates of Fairfax Financial Holdings Limited, a corporation organized under the laws of Canada (“Fairfax”), and certain s

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Item 7.    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

We are a real estate investment company as well as investment manager with over $36.4 billion of AUM in high growth markets across the United States, the United Kingdom and Ireland. With an objective of generating strong long-term risk-adjusted returns for our shareholders and partners and drawing on over three decades of experience in identifying opportunities and building value through various market cycles, we primarily focus on (i) investing in the rental housing sector (both market rate and affordable units) and industrial properties; and (ii) originating, managing and servicing real estate loans (primarily senior construction loans secured by high quality multifamily and student housing properties that are being developed by institutional sponsors throughout the United States). We also have investments in office assets and other investments which include hotel and retail properties.

2025 Highlights

During the year ended December 31, 2025, we achieved the following:

•Completed the first two phases of its acquisition of the Toll apartment development platform in December 2025, which included the in-house development team and equity interests in a portfolio of completed properties and assets under development. The third and final phase was completed in January 2026. The total purchase price across all three phases was $334 million of which Kennedy Wilson invested $131 million with the remainder funded by third-party fee-bearing equity.

◦The transaction added over $5 billion of AUM to Kennedy Wilson, including $1.9 billion of AUM from an 11% ownership in 18 apartment and student housing properties and $3.4 billion of AUM in 21 apartment and student housing properties that Kennedy Wilson will manage on behalf of Toll Brothers. The transaction also added $1.0 billion to Fee-Bearing Capital.

◦We also acquired a pipeline of 24 development sites which, if completed, would total approximately $2.9 billion in capitalization.

•Originated $3.6 billion of new senior construction loans through our debt investment platform

•Generated total investment management fees of $115.2 million, an increase of 16.5% from the year ended December 31, 2024

•Continued to see strength in our stabilized multifamily portfolio which saw same-store flat at 94.7%, same-property revenue growth of 2.5%, and same-property NOI growth of 2.7%

•Generated $566.5 million of cash from asset sales and $1.6 billion from loan repayments (our share of which was $565.7 million and $75.4 million) and redeployed capital to pay down indebtedness and to consummate new investment opportunities

•Grew Fee-Bearing Capital by 25% to $11.0 billion

•Repaid full balance of $352.0 million on the KWE Notes

•Line of credit balance increased $186.4 million primarily to help fund payoff of KWE Notes

For the year ended December 31, 2025, we had net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders of $38.8 million as compared to $76.5 million for the same period in 2024. For the year ended December 31, 2025 we had Adjusted EBITDA of $549.5 million as compared to $539.7 million for the same period in 2024. These results include $78 million and $214 million of non-cash items for the years ended December 31, 2025 and 2024, respectively, which primarily consist of depreciation and amortization and changes in fair values. For the year ended December 31, 2025, as described above, we recognized higher investment management fees primarily driven from our debt investment platform. These increases were offset by lower levels of NOI from our properties as we have been a net seller of assets.

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In our Co-Investment portfolio, we had $43.3 million of realized operating results, $17.4 million realized gain on sale of an unconsolidated investment that was not accounted for at fair value and recorded non-cash unrealized fair value and carried interests increase of $82.1 million during the year ended December 31, 2025 as compared to $29.9 million of realized operating results, $32.6 million realized gain on sale of an unconsolidated investment that was not accounted for at fair value and $56.0 million of non-cash unrealized fair value and carried interest declines during the same period in 2024. During the year ended December 31, 2025, we had non-cash unrealized fair value gains primarily relating to (i) fair value increases on VHH due to increases in NOI and lower borrowing costs (ii) fair value increase at Zonda due to improvements in the underlying business (iii) non-cash fair value gains on multifamily assets in Western United States and Ireland from increased NOI at the properties and (iv) foreign exchange gains, net of hedges as euro and GBP increased in value in relation to the dollar in the current period. These fair value increases were offset by (i) fair value losses associated with the recapitalization of a multifamily portfolio consisting of nine (9) properties, totaling 2,809 units, reducing the Company's ownership from 51% to 10%, (ii) fair value decreases on U.S. office assets; (iii) fair value decreases associated with mortgages as lower cost mortgages move closer to maturity dates and (iv) costs associated with originating new mortgages.

Proposed Take-Private

On February 16, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Kona Bidco, LLC, a Delaware limited liability company (“Parent”), and Kona Merger Subsidiary, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, subject to the terms and conditions thereof, Merger Sub will be merged with and into the Company (the “Merger” and, together with the other transactions contemplated by this the Merger Agreement, collectively, the “Proposed Transactions”), and the separate corporate existence of Merger Sub will cease and the Company will continue as the surviving corporation and a subsidiary of Parent (“Surviving Company”). The Proposed Transaction would result in a take-private pursuant to which, as further detailed below, certain affiliates of Fairfax Financial Holdings Limited, a corporation organized under the laws of Canada (“Fairfax”), and certain stockholders of the Company, including William McMorrow, Matthew Windisch and In Ku Lee (collectively, the “Rollover Stockholders”) will own 100% of the equity interests of the Company and the Company would no longer be publicly traded.

Pursuant to an equity commitment letter, dated February 16, 2026, Fairfax has, among other things, on the terms and subject to the conditions set forth in the equity commitment letter, committed to an aggregate equity commitment in the amount of $1,650,000,000 to (i) fund the payment of the aggregate Merger Consideration and certain other amounts required to be paid under the Merger Agreement (the “Equity Commitment”), or (ii) in the event Parent or Merger Sub is obligated to pay monetary damages to the Company in respect of a breach of the Merger Agreement by Parent or Merger Sub in accordance with the terms of the Merger Agreement, fund such damages and certain other amounts required to be funded under the equity commitment letter in an aggregate amount up to $400,000,000. The Equity Commitment, when funded in full in accordance with the equity commitment letter, will provide Parent and Merger Sub, prior to or concurrently with the Effective Time, an amount of cash that is sufficient to fund the payment of (i) the aggregate Merger Consideration, (ii) any other amounts required to be paid under Article III of the Merger Agreement (other than the Final Dividend (as defined in the Merger Agreement)) and (iii) the aggregate amount required to redeem or repurchase the 5.75% Series A Cumulative Perpetual Convertible Preferred Stock (the “Company Series A Preferred Stock”).

Subject to the terms and conditions set forth in the Merger Agreement, upon the consummation of the Merger, each share of common stock of the Company, par value $0.0001 per share (the “Company Common Stock”) (other than (i) each share (a) held in the treasury of the Company or owned by any wholly owned subsidiary of the Company or (b) held, directly or indirectly, by Parent or Merger Sub or any of their wholly owned subsidiaries, which shall automatically be cancelled without any conversion thereof and no payment or distribution shall be made with respect thereto; (ii) each Rollover Share (as defined below); and (iii) shares of Company Common Stock owned by stockholders of the Company who have validly demanded and not withdrawn appraisal rights in accordance with Section 262 of the General Corporation Law of the State of Delaware) shall cease to exist and shall be converted automatically into the right to receive $10.90 in cash per share, without interest (the “Merger Consideration”).

In addition, pursuant to the Merger Agreement, upon the consummation of the Merger, each share of 4.75% Series B Cumulative Perpetual Preferred Stock (the “Company Series B Preferred Stock”) and 6.00% Series C Cumulative Perpetual Preferred Stock (the “Company Series C Preferred Stock” and, together with the Company Series B Preferred Stock, the “Company Preferred Stock”) shall remain outstanding in accordance with the terms and conditions of, as applicable, that certain Certificate of Designations Establishing the Company Series B Preferred Stock, dated as of March 8, 2022 (the “Series B Certificate of Designations”) and that certain Certificate of Designations Establishing the Company Series C Preferred Stock, dated as of June 15, 2023 (the “Series C Certificate of Designations”) and shall represent shares of Company Series B Preferred Stock or Company Series C Preferred Stock, as applicable, of the Surviving Company on the terms set forth in the Series B Certificate of Designations or the Series C Certificate of Designations, as applicable, unless Parent and the holders thereof elect to (A) transfer and contribute any such shares of Company Series B Preferred Stock or Company Series C Preferred Stock to

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the Company as a contribution to the capital of the Company (and without the issuance of any additional shares of capital stock of the Company) or (B) cancel any such shares of Company Series B Preferred Stock or Company Series C Preferred Stock, in each case for no consideration prior to the closing of the Merger. In addition, pursuant to the Merger Agreement, upon the consummation of the Merger, each warrant issued in connection with the Company Series B Preferred Stock pursuant to that certain Warrant Agreement, dated as of March 8, 2022 (collectively, the “Company Series B Warrants”) and issued in connection with the Company Series C Preferred Stock pursuant to that

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