Financial Performance - Total revenue for the three months ended March 31, 2019, was $140.7 million, compared to $131.9 million for the same period in 2018, representing a year-over-year increase of approximately 5.9%[246] - Adjusted EBITDA for the three months ended March 31, 2019, was $120.2 million, compared to $122.7 million for the same period in 2018, indicating a slight decrease of about 2.0%[246] - Net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders for the three months ended March 31, 2019, was a loss of $5.3 million, compared to a profit of $31.4 million for the same period in 2018[246] - Total revenue for the three months ended March 31, 2019, was $190.1 million, a decrease from $190.1 million in the same period in 2018[247] - Adjusted EBITDA for the three months ended March 31, 2019, was $120.2 million, compared to $122.6 million for the same period in 2018[249] - Comprehensive income attributable to Kennedy-Wilson Holdings, Inc. common shareholders was $11.6 million for the three months ended March 31, 2019, down from $20.4 million in 2018[283] - Adjusted Net Income for the three months ended March 31, 2019, was $53.9 million, down from $63.2 million in 2018[330] - The company reported a net income of $1.6 million for Q1 2019, compared to a net loss of $1.0 million in Q1 2018[333] Revenue Breakdown - Rental revenue for the three months ended March 31, 2019, was $115.8 million, while hotel revenue was $15.0 million, contributing significantly to total revenue[246] - Rental income decreased by $18.5 million to $115.8 million due to the deconsolidation of Irish multifamily assets sold into the AXA Joint Venture[253] - Hotel income fell by $21.3 million to $15.0 million primarily due to the sale of the Ritz Carlton, Lake Tahoe hotel and other properties[254] - Sale of real estate revenue decreased to $1.1 million from $9.4 million, attributed to the completion of the 200 Capital Dock project[255] - Same Property Revenue for Q1 2019 was $119.4 million, an increase from $115.8 million in Q1 2018, representing a growth of 2.8%[335] - Commercial Same Property Revenue increased to $46.0 million in Q1 2019 from $44.1 million in Q1 2018, a growth of 4.3%[335] - Multifamily Market Rate Portfolio Same Property Revenue rose to $54.4 million in Q1 2019, compared to $51.7 million in Q1 2018, marking a 5.2% increase[335] - Hotel Same Property Revenue decreased to $12.8 million in Q1 2019 from $14.1 million in Q1 2018, a decline of 9.2%[335] Expenses and Costs - Total expenses for the three months ended March 31, 2019, were $153.1 million, compared to $128.5 million for the same period in 2018, reflecting an increase of approximately 19.2%[246] - Interest expense for the three months ended March 31, 2019, was $55.3 million, which included $37.1 million in interest expense and $18.2 million from corporate debt[246] - The company incurred acquisition-related expenses of $0.8 million during the three months ended March 31, 2019[246] - The share-based compensation expense for the three months ended March 31, 2019, was $10.4 million, reflecting the company's ongoing commitment to employee incentives[246] - Hotel expenses decreased to $14.6 million for the three months ended March 31, 2019, down from $30.8 million in the same period in 2018, attributed to the sale of Park Inns hotels and the Ritz Carlton, Lake Tahoe hotel[267] - Interest expense decreased to $55.3 million for the three months ended March 31, 2019, from $58.9 million in 2018, due to the deconsolidation of multifamily assets and increased capitalized interest[277] Investments and Development - The company raised an additional $200 million of fee-bearing capital during the first quarter of 2019[249] - The company expects to incur an additional $702.0 million to complete ongoing development and redevelopment projects, with $342 million expected to be funded through cash[288] - The company is developing 2,531 affordable and/or age-restricted multifamily units, expecting to receive $27.9 million in cash from developer fees and tax credit sales upon completion[289] - The company has a total of 817,000 square feet in development projects, with an estimated total cost of $1.557 billion, of which $981 million is expected to be incurred[293] - The company typically invests between $50 million to $100 million annually for capital expenditures in its consolidated and unconsolidated investment portfolio[297] Cash Flow and Liquidity - For the three months ended March 31, 2019, the company reported net cash used in operating activities of $25.1 million, compared to cash provided of $48.8 million in the same period of 2018[300][301] - The company generated net cash provided by investing activities of $100.8 million for the three months ended March 31, 2019, primarily from the sale of Ritz Carlton Lake Tahoe hotel and non-core retail properties[302] - Net cash used in financing activities totaled $122.9 million for the three months ended March 31, 2019, with significant repayments of mortgage debt totaling $251.4 million[304] - The company has unfulfilled capital commitments totaling $97.6 million to its unconsolidated investments as of March 31, 2019[298][309] - The company expects to fund $342 million of its share of remaining costs to complete projects with cash, subject to changes in financing availability[294] - As of March 31, 2019, the company had approximately $943.0 million of potential liquidity, including $500.0 million available under lines of credit and $442.9 million in cash[285] Debt and Financing - As of March 31, 2019, total contractual cash obligations amount to $5.556 billion, including mortgage debt of $3.008 billion[307] - The company has a share repurchase plan approved for up to $250 million, with $76.8 million remaining under the plan as of March 31, 2019[296] - As of March 31, 2019, the total amount of 2024 Notes included in the consolidated balance sheets was $1.1 billion[313] - KWE has approximately $651.5 million in outstanding KWE Bonds with a fixed interest rate of 3.95%, effectively reduced to 3.35% through swap arrangements[314] - KWE established a £2.0 billion (approximately $2.6 billion) Euro Medium Term Note Programme, with $617.0 million drawn down under this programme[315] - The A&R Facility consists of a $500 million revolving line of credit and a $200 million term loan facility, with a maturity date of March 31, 2021[317] - As of March 31, 2019, the Company had an outstanding balance of $75.0 million on the A&R Facility, leaving $500.0 million available to be drawn[318] - The A&R Facility requires a maximum consolidated leverage ratio of not greater than 65% and a minimum fixed charge coverage ratio of at least 1.70 to 1.00[320] - As of March 31, 2019, the Company was in compliance with all covenant calculations[322] Operational Metrics - The company reported net operating income (NOI) of $41.7 million from unconsolidated investments, net of depreciation and amortization, for the three months ended March 31, 2019[246] - On 14,583 same property multifamily units, total revenues increased by 5.5% and net operating income increased by 7.1%[250] - Occupancy for same property commercial real estate increased to 97.1% from 96.8% year-over-year[250] - Income from unconsolidated investments increased to $41.7 million for the three months ended March 31, 2019, compared to $26.0 million in 2018, driven by the deconsolidation of multifamily assets into the AXA Joint Venture[273] - The company experienced a decrease in income from unconsolidated investments, reporting a loss of $41.7 million in Q1 2019 compared to a loss of $26.0 million in Q1 2018[333] - The company’s same property analysis reflects a weighted ownership in each underlying property, indicating a strategic focus on property management and performance metrics[332]

PART I [Business](index=5&type=section&id=Item%201.%20Business) Kennedy Wilson is a global real estate investment company focused on multifamily and office properties, operating through investment and fee-generating segments - The company's primary focus is on owning, operating, and investing in multifamily and office properties located in the Western United States, United Kingdom, and Ireland[13](index=13&type=chunk) - Kennedy Wilson's business is structured into two core, symbiotic units: KW Investments (capital investment) and KW Investment Management and Real Estate Services (IMRES, fee-generating services)[18](index=18&type=chunk)[19](index=19&type=chunk) Company Portfolio Snapshot (as of Dec 31, 2018) | Metric | Value | | :--- | :--- | | Total Portfolio Book Value | ~$11.3 billion | | Global Property Square Footage | ~53 million sq. ft. | | Multifamily Rental Units | 28,613 units | | Commercial Property Square Footage | 18.9 million sq. ft. | | Average Company Ownership Interest | ~63% | Five-Year Financial Performance Highlights (2014-2018) | Metric (in millions, except per share) | 2018 | 2017 | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $773.5 | $801.8 | $690.4 | $583.8 | $384.9 | | **Net Income to Common Shareholders** | $150.0 | $100.5 | $2.8 | $71.1 | $13.8 | | **Adjusted EBITDA** | $712.7 | $455.7 | $349.9 | $371.2 | $317.8 | | **Dividends Declared per Share** | $0.78 | $0.70 | $0.56 | $0.48 | $0.36 | | **Total Assets** | $7,357.1 | $7,724.8 | $7,656.6 | $7,595.6 | $6,297.6 | [Business Segments](index=6&type=section&id=Business%20Segments) The company operates through KW Investments for direct real estate and IMRES for fee-generating investment management and services - The KW Investments segment invests the company's capital in real estate assets, either wholly-owned or with equity partners, with an average ownership interest of approximately **63%** as of December 31, 2018[20](index=20&type=chunk) - The IMRES segment manages approximately **$16 billion** of Assets Under Management (AUM) and includes investment management, property services, brokerage, and auction/sales businesses[37](index=37&type=chunk)[36](index=36&type=chunk) - As of December 31, 2018, the company manages a total of **$2.2 billion** in fee-bearing capital through its investment management platform[40](index=40&type=chunk) - In December 2018, the company sold its research business, Meyers Research LLC, for **$48.0 million**, recognizing a gain of **$40.4 million**, and reinvested **$15.0 million** for an **11%** stake in a new partnership[47](index=47&type=chunk) [Industry Overview and Key Investment Markets](index=10&type=section&id=Industry%20Overview%20and%20Key%20Investment%20Markets) Key real estate markets in the Western U.S., UK, Ireland, and Spain demonstrated strong demand and economic resilience across multifamily and office sectors - **Western U.S.:** The market saw strong demand for multifamily housing, particularly suburban workforce housing, and moderate growth in the office sector fueled by tech companies[54](index=54&type=chunk)[55](index=55&type=chunk) - **United Kingdom:** Despite Brexit uncertainty, the UK economy remained resilient with near-record low unemployment. London's office market fundamentals are strong, though the retail sector is under pressure[59](index=59&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) - **Ireland:** As Europe's best-performing economy for the fifth straight year, Ireland saw significant investment volume in 2018, with office and multifamily transactions representing nearly one-third of the total[64](index=64&type=chunk) - **Spain:** The retail sector continues to improve, driven by economic growth, decreased unemployment, and strong tourism, leading to positive foot traffic and institutional demand[69](index=69&type=chunk)[70](index=70&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces various business, company-specific, and stock ownership risks, including economic sensitivity, foreign operations, and capital market reliance [Risks Related to Our Business](index=15&type=section&id=Risks%20Related%20to%20Our%20Business) Business risks include sensitivity to economic conditions, real estate cyclicality, credit market volatility, and foreign operation risks, especially Brexit - The business is highly sensitive to general economic conditions and real estate market cyclicality, which can harm asset values, sales, and leasing activities[94](index=94&type=chunk) - Significant operations in the UK and Ireland (sourcing **57%** of 2018 revenues) expose the business to foreign market risks, including political instability, currency fluctuations, and regulatory changes[102](index=102&type=chunk) - The UK's withdrawal from the European Union (Brexit) creates significant uncertainty that could negatively affect global economic conditions, financial markets, and the UK real estate market, where **31%** of the company's consolidated investment account is located[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) - The company faces risks from its real estate development and redevelopment strategies, including potential delays, cost overruns, and failure to achieve sufficient occupancy or sales levels[100](index=100&type=chunk) [Risks Related to Our Company](index=22&type=section&id=Risks%20Related%20to%20Our%20Company) Company-specific risks include reliance on capital markets, loss of key personnel, foreign currency fluctuations, significant debt obligations, and tax law impacts - The company depends on capital markets to fund growth, and an inability to raise additional debt and equity could impede future prospects[138](index=138&type=chunk) - The loss of key personnel, particularly the CEO, could materially harm operations and relationships with lenders, partners, and clients[139](index=139&type=chunk) - Significant debt obligations impose operating and financial restrictions, including covenants for maximum leverage and fixed charge coverage ratios, which could limit the pursuit of business opportunities[147](index=147&type=chunk)[149](index=149&type=chunk) - The ability to use significant net operating loss carryforwards (**$60.7 million** federal, **$71.9 million** California, **$224.8 million** foreign) may be limited by ownership changes under tax laws[152](index=152&type=chunk) [Risks Related to Ownership of Our Common Stock](index=25&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Stock ownership risks include significant influence by directors and officers, potential dilution, stock price volatility, and anti-takeover provisions - As of December 31, 2018, directors, executive officers, and their affiliates owned approximately **14%** of the common stock, giving them significant influence over stockholder matters[158](index=158&type=chunk) - The company's staggered board and other anti-takeover provisions may entrench management and discourage takeover attempts that could be in the best interests of stockholders[161](index=161&type=chunk) - The company's dividend policy is subject to change at the discretion of the board of directors, and there is no assurance that the current dividend level will be maintained[164](index=164&type=chunk) [Properties](index=26&type=section&id=Item%202.%20Properties) The company's consolidated portfolio includes **10.3 million** sq. ft. commercial and **10,404** multifamily units, mainly in the Western U.S. and Europe Consolidated Properties by Region (as of Dec 31, 2018) | Property Type | Region | Sq. Feet / Units | Occupancy/Leased % | KW Ownership % | of Assets | | :--- | :--- | :--- | :--- | :--- | :--- | | **Commercial** | Western U.S. | 1.9M sq. ft. | 96% | 84% | 15 | | | Europe | 8.4M sq. ft. | 97% | 94% | 138 | | **Total Commercial** | | **10.3M sq. ft.** | **97%** | **92%** | **153** | | **Multifamily** | Western U.S. | 9,642 units | 94% | 99% | 30 | | | Europe | 762 units | 97% | 100% | 3 | | **Total Multifamily** | | **10,404 units** | **94%** | **99%** | **33** | Commercial Lease Expiration Schedule (as of Dec 31, 2018) | Year of Expiration | Rentable Square Feet (M) | Annualized Base Rent (M) | % of Total Rent | | :--- | :--- | :--- | :--- | | 2019 | 1.4 | $26.4 | 12% | | 2020 | 1.0 | $15.6 | 7% | | 2021 | 0.6 | $21.9 | 10% | | 2022 | 1.4 | $28.2 | 13% | | 2023 | 1.1 | $23.0 | 11% | | Thereafter | 4.4 | $80.5 | 36% | [Legal Proceedings](index=28&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine legal proceedings arising from ordinary business, none of which are currently considered material - The company is involved in routine legal proceedings arising from the ordinary course of business, none of which are expected to be material[173](index=173&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=29&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NYSE, with **$0.78** per share dividends paid and an active **$250 million** share repurchase program in 2018 - In 2018, the company declared and paid total dividends of **$0.78** per share[177](index=177&type=chunk) - On March 20, 2018, the board authorized a new share repurchase program for up to **$250 million** of common stock[181](index=181&type=chunk) - During the year ended December 31, 2018, the company repurchased and retired **9.7 million** shares of its common stock at a weighted average price of **$17.94** per share[182](index=182&type=chunk) [Selected Financial Data](index=30&type=section&id=Item%206.%20Selected%20Financial%20Data) This section summarizes five-year historical financial data (2014-2018), highlighting revenue growth, increased net income, and strong Adjusted EBITDA Selected Historical Financial Data (2014-2018) | (In millions, except per share amounts) | 2018 | 2017 | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $773.5 | $801.8 | $690.4 | $583.8 | $384.9 | | **Net income to common shareholders** | $150.0 | $100.5 | $2.8 | $71.1 | $13.8 | | **Adjusted EBITDA** | $712.7 | $455.7 | $349.9 | $371.2 | $317.8 | | **Total assets** | $7,357.1 | $7,724.8 | $7,656.6 | $7,595.6 | $6,297.6 | | **Total equity** | $1,431.2 | $1,577.5 | $2,343.1 | $2,865.1 | $3,043.9 | - Investment Management and Real Estate Services Assets under Management (IMRES AUM) increased by **4%** from **$15.7 billion** at year-end 2017 to **$16.3 billion** at year-end 2018, driven by new acquisitions and value appreciation[189](index=189&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses 2018 financial condition and operations, highlighting increased net income and Adjusted EBITDA, robust liquidity, and a significant development pipeline [Results of Operations](index=36&type=section&id=Results%20of%20Operations) In 2018, GAAP net income increased to **$150.0 million** and Adjusted EBITDA rose **56%** to **$712.7 million**, driven by real estate and business sales Financial Results Comparison (2018 vs. 2017) | Metric (in millions) | 2018 | 2017 | Change | | :--- | :--- | :--- | :--- | | **GAAP Net Income to Common Shareholders** | $150.0 | $100.5 | +49.3% | | **Adjusted EBITDA** | $712.7 | $455.7 | +56.4% | | **Total Revenue** | $773.5 | $801.8 | -3.5% | | **Gain on sale of real estate, net** | $371.8 | $226.7 | +64.0% | | **Gain on sale of business** | $40.4 | $0.0 | N/A | - Adjusted Fees remained flat year-over-year at **$86.3 million** in 2018 compared to **$86.6 million** in 2017. A significant increase in performance fees (**$36.6 million** vs **$8.7 million**) was offset by a decrease in base management fees, primarily because the company no longer receives fees from KWE after its full acquisition[242](index=242&type=chunk)[244](index=244&type=chunk)[245](index=245&type=chunk) - For 2017 vs. 2016, Adjusted EBITDA increased **30%** to **$455.7 million**, driven by higher realized gains on investments and an increased ownership stake in KWE[269](index=269&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$988.0 million** available, a **$1.1 billion** development pipeline, and positive cash flow from operations - As of December 31, 2018, the company had potential liquidity of approximately **$988.0 million**, consisting of **$488.0 million** in cash and **$500.0 million** available under its lines of credit[310](index=310&type=chunk) - The company has a development and redevelopment pipeline with an estimated total cost for its share of **$1.1 billion**. As of year-end 2018, **$321.0 million** had been incurred, with an estimated **$730 million** remaining to complete the projects[312](index=312&type=chunk) Cash Flow Summary (2016-2018) | (In millions) | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | **Net cash provided by operating activities** | $93.1 | $73.0 | $102.9 | | **Net cash provided by (used in) investing activities** | $593.1 | $(70.2) | $(286.7) | | **Net cash (used in) provided by financing activities** | $(528.8) | $(565.3) | $419.8 | - As of December 31, 2018, the company has unfulfilled capital commitments totaling **$99.3 million** to its unconsolidated investments[323](index=323&type=chunk) [Indebtedness and Related Covenants](index=52&type=section&id=Indebtedness%20and%20Related%20Covenants) Total borrowings were **$5.5 billion** as of year-end 2018, comprising mortgage debt, senior unsecured notes, and KWE bonds, all in compliance with covenants Contractual Cash Obligations (as of Dec 31, 2018) | (In millions) | Total | Less than 1 year | 1 - 3 years | 4 - 5 years | After 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total borrowings** | $5,458.8 | $266.2 | $1,280.0 | $1,720.8 | $2,191.8 | | **Operating leases** | $6.9 | $2.2 | $4.0 | $0.6 | $0.1 | | **Ground leases** | $106.8 | $1.2 | $3.5 | $2.3 | $99.8 | | **Total** | **$5,572.5** | **$269.6** | **$1,287.5** | **$1,723.7** | **$2,291.7** | - The company has **$1.15 billion** in aggregate principal of **5.875%** Senior Notes due 2024[342](index=342&type=chunk) - The company's **$700 million** credit facility includes a **$500 million** revolving line of credit and a **$200 million** term loan. As of year-end 2018, the revolver was fully available and **$75.0 million** was outstanding on the term loan[349](index=349&type=chunk)[350](index=350&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks are interest rate and foreign currency fluctuations, with **84%** fixed-rate debt and significant foreign investment account hedging - As of December 31, 2018, **84%** of the company's consolidated debt is fixed rate, mitigating exposure to interest rate volatility[365](index=365&type=chunk) - A hypothetical **100-basis point** increase in interest rates would lead to a **$5.5 million** increase in annual interest expense on current consolidated mortgages[366](index=366&type=chunk) - Approximately **49%** of the company's investment account is invested in foreign currencies. The company hedges its book equity exposure, with **92%** of euro and **100%** of GBP gross asset carrying value hedged as of year-end 2018[371](index=371&type=chunk) - A **5%** adverse movement in foreign exchange rates against the U.S. Dollar would decrease the company's net asset value by approximately **$13.3 million**[374](index=374&type=chunk) [Financial Statements and Supplementary Data](index=59&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for 2018, including balance sheets, income statements, cash flows, and detailed notes [Consolidated Financial Statements](index=63&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show **$7.36 billion** in total assets, **$773.5 million** in revenue, and **$150.0 million** net income for 2018 Consolidated Balance Sheet Summary (as of Dec 31, 2018) | (In millions) | Amount | | :--- | :--- | | **Total Assets** | **$7,357.1** | | Cash and cash equivalents | $488.0 | | Real estate, net | $5,702.5 | | Unconsolidated investments | $859.9 | | **Total Liabilities** | **$5,925.9** | | Mortgage debt | $2,950.3 | | KW unsecured debt | $1,202.0 | | KWE unsecured bonds | $1,260.5 | | **Total Equity** | **$1,431.2** | Consolidated Statement of Income Summary (Year Ended Dec 31, 2018) | (In millions, except per share data) | Amount | | :--- | :--- | | **Total Revenue** | **$773.5** | | Rental | $514.6 | | Hotel | $155.7 | | **Total Expenses** | **$766.4** | | Gain on sale of real estate, net | $371.8 | | **Net Income** | **$212.1** | | Net income attributable to common shareholders | $150.0 | | **Diluted Earnings per share** | **$1.04** | [Notes to Consolidated Financial Statements](index=69&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, 2018 acquisitions, unconsolidated investments, and specifics on mortgage debt and unsecured bonds - The company adopted ASC 606 (Revenue from Contracts with Customers) on January 1, 2018. The adoption resulted in performance fees being reclassified from revenue to 'Income from unconsolidated investments' on a retrospective basis[436](index=436&type=chunk)[441](index=441&type=chunk) - During 2018, the company acquired consolidated properties with a total purchase price allocation of **$354.2 million**, primarily in multifamily and commercial assets in the Western U.S. and Ireland[502](index=502&type=chunk) - The company's investment in unconsolidated joint ventures increased from **$519.3 million** in 2017 to **$859.9 million** in 2018, primarily due to the formation of the AXA joint venture for Irish multifamily assets[520](index=520&type=chunk)[523](index=523&type=chunk) - As of December 31, 2018, the company had **$2.95 billion** in mortgage debt with a weighted average interest rate of **3.40%**[569](index=569&type=chunk)[572](index=572&type=chunk) [Controls and Procedures](index=120&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2018, with an unqualified audit opinion - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2018[704](index=704&type=chunk) - Based on an evaluation using the COSO framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2018[706](index=706&type=chunk) PART III [Directors, Executive Compensation, and Corporate Governance](index=121&type=section&id=Items%2010-14) Information for Items 10-14, including directors, executive compensation, and corporate governance, is incorporated by reference from the forthcoming proxy statement - Information regarding Directors, Executive Officers, Corporate Governance, Executive Compensation, Security Ownership, and Principal Accounting Fees is incorporated by reference from the company's forthcoming definitive proxy statement[712](index=712&type=chunk)[713](index=713&type=chunk)[714](index=714&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=122&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the annual report, including corporate governance documents and certifications - This section contains the index of all financial statements, schedules, and exhibits filed with the annual report, including consents and certifications[719](index=719&type=chunk)[720](index=720&type=chunk)

Financial Data and Key Metrics Changes - For Q4 2018, GAAP EPS was $0.21 per share, down from $0.69 a year ago. For the full year, GAAP EPS reached a record $1.04, a 25% increase from $0.83 in 2017 [9] - The company achieved a record annual adjusted EBITDA of $713 million, which is 56% higher than the $456 million produced in 2017. Adjusted net income totaled a record $397 million in 2018, compared to $243 million last year, marking a 63% increase [10] Business Line Data and Key Metrics Changes - Same property revenue grew by 4% and NOI increased by 7% across the global same property portfolio for the quarter. For the year, same property revenue and NOI grew by 5% [11] - The market rate multi-family portfolio saw same property revenue up 5% and NOI growth of 6%, outperforming other public real estate companies that averaged 2.5% NOI growth for the quarter [11] - The Mountain State portfolio, which includes properties in Salt Lake City, Boise, Seattle, and Reno, experienced same property revenue and NOI growth of over 7% each [12] Market Data and Key Metrics Changes - The stabilized assets had an estimated annual NOI of $407 million, with 48% from the Western U.S. and 52% from Europe, primarily in Ireland and the UK [10] - In Europe, the company completed 195 commercial leasing transactions across 3.1 million square feet, adding $13 million of annual rent, representing a 12% increase on previous rents [18] Company Strategy and Development Direction - The company focuses on three key strategic initiatives: growing property NOI, expanding investment management and fee business, and executing capital recycling and asset sale programs [19] - The development pipeline includes over 4,100 market rate and affordable multifamily units, 2.9 million square feet of commercial property, and a 150-room hotel, expected to add $100 million to annual NOI by the end of 2023 [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in raising significant new fee-bearing capital in 2019 without meaningful changes in overhead, resulting in high-margin growth [48] - The Irish economy is performing strongly with an estimated GDP growth of almost 9% for 2018 and a forecast of 4.5% for 2019, supporting sustained job creation [43] Other Important Information - The company sold $313 million of assets in the quarter, with its share being $264 million. Europe accounted for 86% of asset sales [50] - The company returned a record $290 million of capital to shareholders in 2018 through dividends and share repurchases, equating to approximately $2 per share [52] Q&A Session Summary Question: Will rent controls in London impact the business? - Management does not expect rent controls to impact their single asset in London, as the multifamily market is undersupplied [60][61] Question: Will asset sales reduce leverage? - Management indicated that asset sales will not increase leverage points, as they plan to pay down existing debt [68] Question: Is the strong apartment same-store growth sustainable? - Management aims to outperform the market, targeting 4% revenue growth assuming market growth remains around 2% [75] Question: How is cost inflation affecting development in Dublin? - Management noted that they have fixed-price contracts with contractors, mitigating risks of cost overruns [80] Question: What is the outlook for cap rate spreads in different regions? - Management highlighted attractive cap rate spreads in the U.S., Ireland, and the UK, with strong job growth supporting real estate investments [98]