Kennedy-Wilson Holdings Inc.

Good day and welcome to the Kennedy-Wilson fourth quarter 2021 earnings call and webcast. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Devin Bobsar, VP of Investor Relations. Please go ahead.

Thank you, and welcome. This is Devin Bobsar, and joining us today from Kennedy Wilson are Bill McMorrow, Chairman and CEO, Mary Ricks, President, Matt Windisch, Executive Vice President, and Justin Enbody, Chief Financial Officer. Today's call will be webcast live and will be archived for replay. The replay will be available by phone for one week and by webcast for three months. please see the investor relations website for more information. On this call, we will refer to certain non-GAAP financial measures, including adjusted EBITDA and adjusted net income. You can find a description of these items along with the reconciliation of the most directly comparable GAAP financial measure and our fourth quarter 2021 earnings release, which is posted on the investor relations section of our website. Statements made during this call may include forward-looking statements. Actual results may materially differ from forward-looking information. discussed on this call due to a number of risks, uncertainties, and other factors indicated in reports and filings with the Securities and Exchange Commission. I would now like to turn the call over to our Chairman and CEO, Bill McMorrow.

Thanks, Devin, and welcome everybody this morning. Thank you for joining us. I'm very pleased with the strong Q4 results that we reported yesterday, which capped off a year that generated record annual results across all our key financial metrics. including a 53% increase in our adjusted EBITDA to a record $928 million. In Q4, we had another active quarter completing $1.5 billion of investment transactions, bringing our 2021 transaction total to a record $5.9 billion, which is greater than both 2019 and 2020 combined. Our assets under management grew by 23% in 2021 to a record $22 billion. We've seen this momentum continue into 2022 with over $800 million of new investments that we have either closed or currently have under contract, the majority of which will close in Q1. I'd like to start by providing some perspective on what we are seeing in the markets. Global real estate transaction volumes remained elevated in Q4 and deal flow should remain robust in 2022. Relative to certain asset classes, we believe institutional demand for certain real estate assets will remain high given the natural inflation hedge provided by the underlying cash flow. In the U.S., we once again saw strong apartment revenue growth in excess of inflation across all our regions, including double-digit NOI growth across every U.S. market rate region. Leases in our multifamily portfolio are short-term in nature, which coupled with an approximate 50% annual turnover is an attractive feature given the current environment. Our global multifamily portfolio grew from 29,840 units at the beginning of 2020 to over 35,000 units at quarter end, including over 5,100 units under development, which we expect to complete at yields well above current market cap rates. We will continue expanding our multifamily portfolio with another 1,500 units that are either closed already this quarter or will close by the end of Q1. In Europe, we saw strong leasing in our UK office portfolio and are starting to see some of our iconic Dublin developments complete, where we are delivering brand new developments with leading ESG credentials. We are currently seeing a significant return to office in both London and Dublin. which will benefit our existing office and apartment assets, as well as our near-term developments, two of which are in Dublin and are nearing completion. We have taken a number of steps to greatly simplify our business over the past few years, including the acquisition of KWE Kennedy Wilson Europe in 2017, and the sale of our non-core research and property management divisions in 2018 and 2020. KW has transformed into a strong global franchise that generates cash flow from our two main businesses. Our consolidated portfolio, which consists of mostly wholly owned assets on our balance sheet, and our co-investment portfolio, which includes investments we make alongside our strategic partners and also earn fees which enhance our returns. Our capital deployment strategy for our consolidated portfolio will be focused primarily on growing our Western U.S. multifamily footprint and our European office portfolio, where we can leverage our track record and sourcing capabilities to find attractive off-market opportunities and implement value-add initiatives which are consistently delivering outsized returns. In our core investment portfolio, we have ambitious plans to continue expanding our various strategies, including our discretionary commingled funds, our global debt platform, and our European logistics platform. Our Q4 acquisitions exemplify this strategy. In our consolidated portfolio, we acquired a 528-unit multifamily property in Las Vegas, and a Class A 254,000 square foot suburban office campus in the UK for a combined purchase price of $243 million. These two wholly owned acquisitions added $10 million of estimated annual net operating income to KW with significant upside of both due to value add initiatives and capturing the embedded loss to lease. In our investment portfolio in Q4, we added over $1 billion in new investments, including the continued expansion from both our global debt business and our European logistics portfolio. These two investments added $6 million of estimated annual NOI and over $400 million to our fee-bearing capital. I'd now like to pass the call to our Chief Financial Officer, Justin Enbody to highlight Q4 and 2021 financial results.