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EQUITY
Mar. 08, 2022
Equity [Abstract]  
EQUITY EQUITY
Preferred Stock

In October 2019, the Company announced the issuance of a $300 million perpetual preferred equity investment in Kennedy Wilson by affiliates of Eldridge Industries (collectively, "Eldridge"). Under the terms of the agreement, Eldridge purchased $300 million in cumulative perpetual convertible preferred stock carrying a 5.75% annual dividend rate, with an initial conversion price of $25.00 per share. The preferred stock is callable by Kennedy Wilson on and after October 15, 2025.

On March 8, 2022, the Company announced the issuance of its $300 million cumulative perpetual preferred stock, in addition to approximately 13 million of its warrants to affiliates of Fairfax Financial Holdings Limited (collectively, "Fairfax"). Under the terms of the agreements, Fairfax purchased $300 million in cumulative perpetual preferred stock carrying a 4.75% annual dividend rate and approximately 13 million 7-year warrants, which are initially convertible to the same number of common shares with and an initial exercise price of $23.00 per share.

Both perpetual preferred stock issuances are treated as permanent equity.

At-the-Market Equity Offering Program
In May 2022, the Company established an at-the-market equity offering program (the “ATM Program”) pursuant to which it may issue and sell shares of the Company’s common stock having an aggregate gross sales price of up to $200.0 million in amounts as the Company may determine from time to time. During the year ended December 31, 2022, the Company did not issue any shares under its ATM Program.

The Company has no obligation to sell any of such shares under its ATM Program. Actual sales will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of its common stock, the Company's determination of the appropriate sources of funding for the Company, and potential uses of funding available.

Common Stock Repurchase Program
On March 20, 2018, the Company announced that its board of directors authorized a $250.0 million stock repurchase program. Repurchases under the program may be made in the open market, in privately negotiated transactions, through the net settlement of the Company’s restricted stock grants or otherwise, with the amount and timing of repurchases dependent on market conditions and subject to the Company’s discretion. On November 4, 2020, the Company's board of directors authorized an expansion of its existing $250 million share repurchase plan to $500 million.
During the year ended December 31, 2022, Kennedy Wilson repurchased and retired 551,162 shares for $12.6 million. During the year ended December 31, 2021, Kennedy Wilson repurchased and retired 2,824,665 shares for $62.7 million under the previous stock repurchase program.
Generally, upon vesting, the restricted stock granted to employees is net share-settled such that the Company will withhold shares with value equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes, and remit the cash to the appropriate taxing authorities. See Note 14 for more detail.
Dividend Distributions
Kennedy Wilson declared and paid the following cash dividends on its common stock:
(Dollars in millions)Year Ended December 31, 2022Year Ended December 31, 2021
DeclaredPaidDeclaredPaid
Preferred Stock$28.9 $25.9 $17.2 $17.2 
Common Stock(1)
132.3 134.6 125.8 123.5 
(1) The difference between declared and paid is the amount accrued on the consolidated balance sheets.

Taxability of Dividends

Earnings and profits, which determine the taxability of distributions to stockholders, may differ from income reported for financial reporting purposes due to the differences for federal income tax purposes in the treatment of revenue recognition, compensation expense, derivative investments and the basis of depreciable assets and estimated useful lives used to compute depreciation.

The Company's dividends related to its common stock will be classified for U.S. federal income tax purposes as follows:
Record DatePayment DateDistributions Per ShareOrdinary DividendsReturn of Capital
12/31/20211/6/2022$0.2400 $0.0908 $0.1492 
3/31/20224/7/20220.2400 0.0908 0.1492 
6/30/20227/7/20220.2400 0.0908 0.1492 
9/30/202210/6/20220.2400 0.0908 0.1492 
Totals$0.9600 $0.3632 $0.5968 
Accumulated Other Comprehensive Income (Loss)
The following table summarizes the changes in each component of accumulated other comprehensive loss ("AOCI"), net of taxes:
(Dollars in millions)Foreign Currency TranslationForeign Currency Derivative ContractsInterest Rate Swaps
Total Accumulated Other Comprehensive Loss(1)
Balance at December 31, 2021$(88.2)$58.6 $(1.6)$(31.2)
Unrealized (losses) gains, arising during the period(73.9)39.5 7.4 (27.0)
Taxes on unrealized losses (gains), arising during the period2.2 (16.1)(1.8)(15.7)
Amounts reclassified out of AOCI during the period, gross— — (1.1)(1.1)
Amounts reclassified out of AOCI during the period, taxes— — 0.3 0.3 
Noncontrolling interest3.0 — — 3.0 
Balance at December 31, 2022$(156.9)$82.0 $3.2 $(71.7)
(1) Excludes $358.4 million of inception to date accumulated other comprehensive losses associated with noncontrolling interest holders of KWE that the Company was required to record as part of the KWE Transaction in October 2017.
The local currencies for the Company's interests in foreign operations include the euro and the British pound sterling. The related amounts on our balance sheets are translated into U.S. dollars at the exchange rates at the respective financial statement date, while amounts on our statements of income are translated at the average exchange rates during the respective period. Unrealized losses on foreign currency translation is a result of the weakening of the euro and British pound sterling against the U.S. dollar during the year ended December 31, 2022.
In order to manage currency fluctuations, Kennedy Wilson entered into currency derivative contracts to manage its exposure to currency fluctuations between its functional currency (U.S. dollar) and the functional currency (Euro and GBP) of certain of its wholly-owned and consolidated subsidiaries. See Note 5 for a more detailed discussion of Kennedy Wilson's currency derivative contracts.