Media Center

July 26, 2013

KKR & Co. L.P. Announces Second Quarter 2013 Results

Realization activity drives record cash carry and $0.42 distribution per common unit

GAAP net income (loss) attributable to KKR & Co. L.P. was $15.1 million and $208.6 million for the quarter and six months ended June 30, 2013, respectively, down from $146.3 million and $336.7 million in the comparable periods of 2012.

Assets under management ("AUM") totaled $83.5 billion as of June 30, 2013, up from $78.3 billion as of March 31, 2013.

Fee related earnings ("FRE") were $98.2 million and $186.2 million for the quarter and six months ended June 30, 2013, respectively, up from $69.8 million and $143.1 million in the comparable periods of 2012.

Total distributable earnings were $403.8 million for the quarter ended June 30, 2013, down from $406.1 million for the quarter ended June 30, 2012. Total distributable earnings were $694.4 million for the six months ended June 30, 2013, up from $570.2 million in the comparable period of 2012.

Economic net income ("ENI") was $144.4 million and $792.2 million for the quarter and six months ended June 30, 2013, respectively, down from $546.1 million and $1,273.3 million in the comparable periods of 2012.

After-tax ENI was $0.18 and $1.06 per adjusted unit for the quarter and six months ended June 30, 2013, respectively, down from $0.74 and $1.73 per adjusted unit in the comparable periods of 2012.

Book value was $6.9 billion on a total reportable segment basis as of June 30, 2013 or $9.65 per adjusted unit.

KKR & Co. L.P. declares a second quarter distribution of $0.42 per common unit, which includes $0.23 per common unit of cash carry and $0.09 per common unit of net realized principal investment income.

NEW YORK--(BUSINESS WIRE)-- KKR & Co. L.P. (NYSE: KKR) today reported its second quarter 2013 results.

AUM and fee paying assets under management ("FPAUM") were $83.5 billion and $68.0 billion, respectively as of June 30, 2013, both up from March 31, 2013. The increases in both AUM and FPAUM were primarily attributable to new capital raised relating to the Asian Fund II. The increases were partially offset by distributions to fund limited partners and to a lesser extent the impact of the Asian Fund entering its post-investment period.

For the quarter and six months ended June 30, 2013, FRE was $98.2 million and $186.2 million, respectively, up from $69.8 million and $143.1 million in the comparable periods of 2012. The increase in both comparable periods was primarily driven by new capital raised over the past twelve months and the acquisition of Prisma.

For the quarter and six months ended June 30, 2013, the carrying value of our private equity investment portfolio appreciated 0.9% and 6.6%, respectively. ENI was $144.4 million and $792.2 million for the quarter and six months ended June 30, 2013, respectively, down from $546.1 million and $1,273.3 million in the comparable periods of 2012. The decrease in both comparable periods was primarily due to lower investment income earned from our principal investments as well as a lower level of net carried interest earned from our private equity funds. While the fair value of our principal investments increased during the quarter and six months ended June 30, 2013, the level of appreciation was lower than in the comparable periods of 2012.

"Over the past year, organic fee-paying AUM inflows have exceeded $19 billion, supporting the continued growth of our Private Markets business as well as the scaling of our newer strategies in Public Markets," said Henry R. Kravis and George R. Roberts, Co-Chairmen and Co-Chief Executive Officers of KKR. "In addition, our realization activity in the second quarter drove the highest cash carry we've reported since going public, contributing to a quarterly distribution of $0.42 per unit."

 
Note: Certain financial measures, including FRE, ENI, after-tax ENI, ENI after taxes and equity-based charges, fee related EBITDA, book value, cash and short-term investments and adjusted units, are not presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). See Exhibits A and B for a reconciliation of such measures to financial results prepared in accordance with GAAP.

GAAP RESULTS

GAAP results for the quarter and six months ended June 30, 2013 included net income attributable to KKR & Co. L.P. of $15.1 million and $208.6 million, respectively, and net income attributable to KKR & Co. L.P. per common unit of $0.05 and $0.72, respectively, on a diluted basis. For the quarter and six months ended June 30, 2012, net income attributable to KKR & Co. L.P. was $146.3 million and $336.7 million, respectively, and net income attributable to KKR & Co. L.P. per common unit was $0.58 and $1.37, respectively, on a diluted basis. The decrease in both comparable periods was primarily due to a lower level of investment appreciation recorded in net gains (losses) from investment activities. The decrease in net gains (losses) from investment activities was partially offset by increases in fees primarily attributable to the acquisition of Prisma and higher transaction fees. The decrease in compensation and benefits expense was primarily attributable to lower carry pool allocations as a result of the recognition of lower carried interest during the quarter and six months ended June 30, 2013 compared to the comparable periods in 2012.

SEGMENT RESULTS

Private Markets

AUM was $54.5 billion as of June 30, 2013, an increase of $4.2 billion, or 8.3%, compared to AUM of $50.3 billion as of March 31, 2013. The increase was primarily attributable to new capital raised from the Asian Fund II and to a lesser extent appreciation in the fair value of our private equity portfolio. These increases were partially offset by distributions to the limited partners of our private equity funds arising from realizations and a reduction in AUM as a result of the Asian Fund entering its post-investment period.

FPAUM was $45.9 billion as of June 30, 2013, an increase of $4.7 billion, or 11.4%, compared to FPAUM of $41.2 billion as of March 31, 2013. The increase was primarily attributable to new capital raised from the Asian Fund II partially offset by distributions to the limited partners of our private equity funds arising from realizations and the reduction in the fee base of the Asian Fund as a result of the fund entering the post-investment period.

FRE was $42.6 million for the quarter ended June 30, 2013, an increase of $6.4 million, or 17.6%, compared to FRE of $36.2 million for the quarter ended June 30, 2012. FRE was $83.4 million for the six months ended June 30, 2013, an increase of $9.4 million, or 12.7%, compared to FRE of $74.0 million for the six months ended June 30, 2012. The increase in both comparable periods was primarily driven by higher management fees resulting from new capital raised and higher transaction fees. These increases were partially offset by higher compensation expense due to additional headcount.

ENI was $72.0 million for the quarter ended June 30, 2013, a decrease of $102.7 million, or 58.7%, compared to ENI of $174.7 million for the quarter ended June 30, 2012. ENI was $338.7 million for the six months ended June 30, 2013, a decrease of $101.4 million, or 23.0%, compared to ENI of $440.1 million for the six months ended June 30, 2012. The decrease in both comparable periods was primarily attributable to lower net carried interest resulting from a lower level of appreciation in our private equity portfolio, partially offset by the increase in FRE discussed above.

Public Markets

AUM was $29.0 billion as of June 30, 2013, an increase of $1.1 billion, or 3.9%, compared to AUM of $27.9 billion as of March 31, 2013. FPAUM was $22.0 billion as of June 30, 2013, an increase of $0.8 billion, or 3.7%, compared to FPAUM of $21.2 billion as of March 31, 2013. For both AUM and FPAUM, the increases were primarily attributable to net new capital raised and to a lesser extent appreciation in the net asset values of certain credit investment vehicles.

FRE was $34.4 million for the quarter ended June 30, 2013, an increase of $22.1 million compared to FRE of $12.3 million for the quarter ended June 30, 2012. FRE was $71.5 million for the six months ended June 30, 2013, an increase of $43.8 million compared to FRE of $27.7 million for the six months ended June 30, 2012. The increase in both comparable periods was principally attributable to (i) higher management fees related to new capital raised, (ii) the acquisition of Prisma and (iii) higher incentive fees earned.

ENI was $40.5 million for the three months ended June 30, 2013, an increase of $33.7 million compared to ENI of $6.8 million for the three months ended June 30, 2012. ENI was $89.6 million for the six months ended June 30, 2013, an increase of $58.9 million compared to ENI of $30.7 million for the six months ended June 30, 2012. The increase in both comparable periods was primarily driven by the increase in FRE discussed above and to a lesser extent higher net carried interest due to investment appreciation of certain carry-earning investment vehicles.

Capital Markets and Principal Activities

FRE was $21.2 million for the quarter ended June 30, 2013, which was the same as in the quarter ended June 30, 2012.

FRE was $31.3 million for the six months ended June 30, 2013, a decrease of $10.2 million, or 24.5%, compared to FRE of $41.5 million for the six months ended June 30, 2012. The decrease was primarily driven by a lower level of overall capital markets transaction activity.

ENI was $31.9 million for the quarter ended June 30, 2013, a decrease of $332.6 million compared to ENI of $364.5 million for the quarter ended June 30, 2012. ENI was $363.8 million for the six months ended June 30, 2013, a decrease of $438.8 million compared to ENI of $802.6 million for the six months ended June 30, 2012. The decrease in both comparative periods was primarily due to a lower level of investment income from our principal investments. While the fair value of our principal investments increased during the quarter and six months ended June 30, 2013, the level of appreciation was lower than in the comparable periods of 2012.

CAPITAL AND LIQUIDITY

As of June 30, 2013, KKR had $2.0 billion of cash and short-term investments on a total reportable segment basis and $1.0 billion of outstanding debt obligations. KKR's availability for borrowings was $750.0 million (reduced for an outstanding letter of credit), which does not include a $500.0 million revolving credit facility for use in its capital markets business that was undrawn as of June 30, 2013.

As of June 30, 2013, KKR's portion of total uncalled commitments to its investment funds was $786.6 million, consisting of the following (amounts in thousands):

     
Uncalled

Commitments

Private Markets

North America Fund XI $ 229,600
Real Estate Fund 135,100
European Fund III 125,100
Asian Fund II 75,000
2006 Fund 63,800
Infrastructure 28,900
E2 Investors (Annex Fund) 14,000
Asian Fund 10,900
Natural Resources 10,300
China Growth Fund 6,500
Other   11,300
Total Private Markets Commitments   710,500
 

Public Markets

Direct Lending Vehicles 30,100
Mezzanine Fund 29,600
Special Situations Vehicles   16,400
Total Public Markets Commitments   76,100
 
Total Uncalled Commitments $ 786,600
 

DISTRIBUTION

A distribution of $0.42 per common unit has been declared, comprised of (i) $0.10 per common unit from after-tax FRE, (ii) $0.23 per common unit from realized cash carry, and (iii) $0.09 per common unit from net realized principal investment income. The distribution will be paid on August 20, 2013 to unitholders of record as of the close of business on August 5, 2013. Please refer to the distribution policy presented later in this release.

CONFERENCE CALL

A conference call to discuss KKR's financial results will be held on Friday, July 26, 2013 at 10:00 a.m. EDT. The conference call may be accessed by dialing (877) 303-2917 (U.S. callers) or +1 (253) 237-1135 (non-U.S. callers); a pass code is not required. Additionally, the conference call will be broadcast live over the Internet and may be accessed through the Public Investors section of KKR's website at http://ir.kkr.com/kkr_ir/kkr_events.cfm. A replay of the live broadcast will be available on KKR's website or by dialing (855) 859-2056 (U.S. callers) or +1 (404) 537-3406 (non-U.S. callers), pass code 14885175, beginning approximately two hours after the broadcast.

From time to time, KKR may use its website as a channel of distribution of material company information. Financial and other important information regarding KKR is routinely posted and accessible on the Investor Center for KKR & Co. L.P. at http://ir.kkr.com/kkr_ir/kkr_events.cfm. In addition, you may automatically receive email alerts and other information about KKR by enrolling your email address at the "Email Alerts" area of the Investor Center on the website.

ABOUT KKR

Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading global investment firm with $83.5 billion in assets under management as of June 30, 2013. With offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. KKR complements its investment expertise and strengthens interactions with fund investors through its client relationships and capital markets platform. KKR & Co. L.P. is publicly traded on the New York Stock Exchange (NYSE: KKR) and "KKR", as used in this release, includes its subsidiaries, their managed investment funds and accounts, and/or their affiliated investment vehicles, as appropriate. For additional information, please visit KKR's website at www.kkr.com.

FORWARD-LOOKING STATEMENTS

This release contains certain forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. The forward-looking statements are based on KKR's beliefs, assumptions and expectations of its future performance, taking into account all information currently available to it. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to KKR or are within its control. If a change occurs, KKR's business, financial condition, liquidity and results of operations, including but not limited to AUM, FPAUM, FRE, total distributable earnings, ENI, after-tax ENI, ENI after taxes and equity-based charges, fee related EBITDA, committed dollars invested and syndicated capital, uncalled commitments, core interest expense, cash and short-term investments, net realized principal investment income and book value, may vary materially from those expressed in the forward-looking statements. The following factors, among others, could cause actual results to vary from the forward-looking statements: the general volatility of the capital markets; failure to realize the benefits of or changes in KKR's business strategies including the ability to realize the anticipated synergies from acquisitions or strategic partnerships such as Prisma or Nephila; availability, terms and deployment of capital; availability of qualified personnel and expense of recruiting and retaining such personnel; changes in the asset management industry, interest rates or the general economy; underperformance of KKR's investments and decreased ability to raise funds; and the degree and nature of KKR's competition. KKR does not undertake any obligation to update any forward-looking statements to reflect circumstances or events that occur after the date on which such statements were made except as required by law. In addition, KKR's business strategy is focused on the long term and financial results are subject to significant volatility. Additional information about factors affecting KKR is available in KKR & Co. L.P.'s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, filed with the SEC on February 22, 2013, and other filings with the SEC, which are available at www.sec.gov.

           
KKR
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP BASIS - UNAUDITED)
(Amounts in thousands, except common unit and per common unit amounts)
 
 
Quarter Ended Six Months Ended
June 30, 2013 June 30, 2012 June 30, 2013 June 30, 2012
Revenues
Fees $ 166,376   $ 112,360   $ 317,616   $ 228,667  
 
Expenses
Compensation and Benefits 200,602 280,640 531,723 653,050
Occupancy and Related Charges 13,878 14,095 28,399 29,292
General, Administrative and Other   77,542     54,004     171,230     111,655  
Total Expenses   292,022     348,739     731,352     793,997  
 
Investment Income (Loss)
Net Gains (Losses) from Investment Activities 98,537 1,601,688 2,368,354 4,688,553
Dividend Income

 

209,486 79,919 248,955 252,858
Interest Income 128,020 87,892 237,389 164,091
Interest Expense   (24,614 )   (16,884 )   (47,637 )   (34,889 )
Total Investment Income (Loss)   411,429     1,752,615     2,807,061     5,070,613  
 
Income (Loss) Before Taxes 285,783 1,516,236 2,393,325 4,505,283
 
Income Taxes   8,525     11,093     17,881     28,165  
 
Net Income (Loss) 277,258 1,505,143 2,375,444 4,477,118
 
Net Income (Loss) Attributable to
Redeemable Noncontrolling Interests (7,800 ) 3,285 16,823 8,557
Net Income (Loss) Attributable to
Noncontrolling Interests 269,924 1,355,597 2,150,048 4,131,864
       
Net Income (Loss) Attributable to KKR & Co. L.P. $ 15,134   $ 146,261   $ 208,573   $ 336,697  
 
Distributions Declared per KKR & Co. L.P. Common Unit $ 0.42 $ 0.13 $ 0.69 $ 0.28
 
Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit
Basic $ 0.06 $ 0.62 $ 0.79 $ 1.45
Diluted (a) $ 0.05 $ 0.58 $ 0.72 $ 1.37
Weighted Average Common Units Outstanding
Basic 271,983,811 235,781,983 264,555,267 232,440,659
Diluted (a) 298,078,764 252,507,802 290,104,942 245,169,954
 
     
(a)   KKR Holdings L.P. units have been excluded from the calculation of diluted earnings per common unit given that the exchange of these units would proportionally increase KKR & Co. L.P.'s interests in KKR's business and would have an anti-dilutive effect on earnings per common unit as a result of certain tax benefits KKR & Co. L.P. is assumed to receive upon the exchange.

             

KKR

STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
(Amounts in thousands, except unit and per unit amounts)
 
Quarter Ended Six Months Ended
June 30, 2013 March 31, 2013 June 30, 2012 June 30, 2013 June 30, 2012
Fees
Management and incentive fees:
Management fees $ 164,176 $ 152,963 $ 129,626 $ 317,139 $ 258,269
Incentive fees   15,590     18,849     4,057     34,439     13,727  
Management and incentive fees   179,766     171,812     133,683     351,578     271,996  
 
Monitoring and transaction fees:
Monitoring fees 28,907 32,068 27,786 60,975 53,608
Transaction fees 62,785 40,299 43,706 103,084 88,004
Fee credits   (34,751 )   (23,065 )   (16,689 )   (57,816 )   (36,032 )
Net monitoring and transaction fees   56,941     49,302     54,803     106,243     105,580  
 
Total fees   236,707     221,114     188,486     457,821     377,576  
 
Expenses
Compensation and benefits 80,436 75,162 62,746 155,598 125,470
Occupancy and related charges 13,067 13,322 13,239 26,389 27,700
Other operating expenses   45,027     44,630     42,729     89,657     81,278  
Total expenses   138,530     133,114     118,714     271,644     234,448  
 
Fee Related Earnings   98,177     88,000     69,772     186,177     143,128  
 
Investment income (loss)
Realized carried interest 269,828 88,167 65,600 357,995 140,478
Unrealized carried interest   (202,018 )   331,198     217,274     129,180     611,760  
Gross carried interest 67,810 419,365 282,874 487,175 752,238
Less: allocation to KKR carry pool (26,536 ) (169,504 ) (112,553 ) (196,040 ) (304,059 )
Less: management fee refunds (a)   (4,735 )   (9,216 )   (32,804 )   (13,951 )   (73,512 )
Net carried interest 36,539 240,645 137,517 277,184 374,667
Other investment income (loss)   11,050     320,198     340,103     331,248     760,010  
Total investment income (loss)   47,589     560,843     477,620     608,432     1,134,677  
 
Income (Loss) before noncontrolling interests
in Income of consolidated entities 145,766 648,843 547,392 794,609 1,277,805
Income (Loss) attributable to
noncontrolling interests   1,323     1,101     1,277     2,424     4,488  
 
Economic Net Income (Loss) $ 144,443   $ 647,742   $ 546,115   $ 792,185   $ 1,273,317  
 
Provision for Income Taxes 13,486 20,117 25,857 33,603 69,240
 
Economic Net Income (Loss), After Taxes (b) $ 130,957   $ 627,625   $ 520,258   $ 758,582   $ 1,204,077  
 
Economic Net Income (Loss), After Taxes per Adjusted Unit (b) $ 0.18 $ 0.88 $ 0.74 $ 1.06 $ 1.73
                         
Assets Under Management $ 83,500,900 $ 78,253,400 $ 61,488,900 $ 83,500,900 $ 61,488,900
Fee Paying Assets Under Management $ 67,956,400 $ 62,454,100 $ 47,200,500 $ 67,956,400 $ 47,200,500
Committed Dollars Invested and Syndicated Capital $ 1,889,400 $ 824,400 $ 680,200 $ 2,713,800 $ 1,713,200
Uncalled Commitments       $ 21,364,400     $ 16,207,300     $ 10,610,300     $ 21,364,400     $ 10,610,300  
                         

Other Information

Fee Related Earnings $ 98,177 $ 88,000 $ 69,772 $ 186,177 $ 143,128
Plus: depreciation and amortization   3,708     3,681     3,093     7,389     5,646  
Fee Related EBITDA $ 101,885   $ 91,681   $ 72,865   $ 193,566   $ 148,774  
 
Distributed Earnings $ 313,559 $ 198,720 $ 104,548 $ 512,279 $ 216,034
Plus: Undistributed net realized principal investment income   90,217     91,894     301,580     182,111     354,198  
Total Distributable Earnings (b) $ 403,776   $ 290,614   $ 406,128   $ 694,390   $ 570,232  
 
GAAP interest expense $ 24,614 $ 23,023 $ 16,884 $ 47,637 $ 34,889
Less: interest expense related to debt obligations
from investment financing arrangements   8,404     6,790     7,461     15,194     15,534  
Core Interest Expense (b) $ 16,210   $ 16,233   $ 9,423   $ 32,443   $ 19,355  
 
Economic Net Income (Loss), After Taxes and Equity-based Charges (b) $ 105,021 $ 600,207 $ 506,208 $ 705,228 $ 1,173,763
                         
     
(a)   As of June 30, 2013, there is no carried interest subject to management fee refunds, which may reduce carried interest in future periods.
 
(b) See definitions for economic net income (loss), after taxes, adjusted units, total distributable earnings, core interest expense and economic net income (loss), after taxes and equity-based charges under "Notes to Reportable Segments."

 
KKR
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
PRIVATE MARKETS SEGMENTS (UNAUDITED)
(Amounts in thousands)
             
Quarter Ended Six Months Ended
June 30, 2013 March 31, 2013 June 30, 2012 June 30, 2013 June 30, 2012
Fees
Management and incentive fees:
Management fees $ 114,700 $ 106,605 $ 107,170 $ 221,305 $ 214,082
Incentive fees   -     -     -     -     -  
Management and incentive fees   114,700     106,605     107,170     221,305     214,082  
 
Monitoring and transaction fees:
Monitoring fees 28,907 32,068 27,786 60,975 53,608
Transaction fees 25,231 16,412 10,768 41,643 22,435
Fee credits   (29,547 )   (21,009 )   (15,642 )   (50,556 )   (33,348 )
Net monitoring and transaction fees   24,591     27,471     22,912     52,062     42,695  
 
Total fees   139,291     134,076     130,082     273,367     256,777  
 
Expenses
Compensation and benefits 51,516 48,001 45,991 99,517 90,477
Occupancy and related charges 11,143 11,425 11,633 22,568 24,438
Other operating expenses   33,988     33,942     36,230     67,930     67,905  
Total expenses   96,647     93,368     93,854     190,015     182,820  
 
Fee Related Earnings   42,644     40,708     36,228     83,352     73,957  
 
Investment income (loss)
Realized carried interest 269,828 88,167 65,600 357,995 140,478
Unrealized carried interest   (212,809 )   310,799     226,186     97,990     605,813  
Gross carried interest 57,019 398,966 291,786 455,985 746,291
Less: allocation to KKR carry pool (22,220 ) (161,344 ) (116,118 ) (183,564 ) (301,680 )
Less: management fee refunds   (4,735 )   (9,216 )   (32,804 )   (13,951 )   (73,512 )
Net carried interest 30,064 228,406 142,864 258,470 371,099
Other investment income (loss)   (249 )   (2,035 )   (3,990 )   (2,284 )   (2,338 )
Total investment income (loss)   29,815     226,371     138,874     256,186     368,761  
 
Income (Loss) before noncontrolling interests
in Income of consolidated entities 72,459 267,079 175,102 339,538 442,718
Income (Loss) attributable to
noncontrolling interests   411     398     358     809     2,654  
 
Economic Net Income (Loss) $ 72,048   $ 266,681   $ 174,744   $ 338,729   $ 440,064  
                         
Assets Under Management $ 54,452,400 $ 50,340,400 $ 45,528,100 $ 54,452,400 $ 45,528,100
Fee Paying Assets Under Management $ 45,907,500 $ 41,218,000 $ 37,858,300 $ 45,907,500 $ 37,858,300
Committed Dollars Invested $ 1,314,000 $ 598,500 $ 606,300 $ 1,912,500 $ 1,182,500
Uncalled Commitments       $ 19,972,800     $ 14,560,900     $ 9,304,500     $ 19,972,800     $ 9,304,500  
 

             
KKR
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
PUBLIC MARKETS SEGMENTS (UNAUDITED)
(Amounts in thousands)
 
Quarter Ended Six Months Ended
June 30, 2013 March 31, 2013 June 30, 2012 June 30, 2013 June 30, 2012
Fees
Management and incentive fees:
Management fees $ 49,476 $ 46,358 $ 22,456 $ 95,834 $ 44,187
Incentive fees   15,590     18,849     4,057  

 

34,439     13,727  
Management and incentive fees   65,066     65,207     26,513     130,273     57,914  
 
Monitoring and transaction fees:
Monitoring fees - - - - -
Transaction fees 7,243 3,106 1,319 10,349 3,741
Fee credits   (5,204 )   (2,056 )   (1,047 )   (7,260 )   (2,684 )
Net monitoring and transaction fees   2,039     1,050     272     3,089     1,057  
 
Total fees   67,105     66,257     26,785     133,362     58,971  
 
Expenses
Compensation and benefits 21,990 19,700 9,229 41,690 20,611
Occupancy and related charges 1,615 1,542 1,366 3,157 2,784
Other operating expenses   9,147     7,826     3,880     16,973     7,857  
Total expenses   32,752     29,068     14,475     61,820     31,252  
 
Fee Related Earnings   34,353     37,189     12,310     71,542     27,719  
 
Investment income (loss)
Realized carried interest - - - - -
Unrealized carried interest   10,791     20,399     (8,912 )   31,190     5,947  
Gross carried interest 10,791 20,399 (8,912 ) 31,190 5,947
Less: allocation to KKR carry pool (4,316 ) (8,160 ) 3,565 (12,476 ) (2,379 )
Less: management fee refunds   -     -     -     -     -  
Net carried interest 6,475 12,239 (5,347 ) 18,714 3,568
Other investment income (loss)   22     62     (12 )   84     (35 )
Total investment income (loss)   6,497     12,301     (5,359 )   18,798     3,533  
 
Income (Loss) before noncontrolling interests
in Income of consolidated entities 40,850 49,490 6,951 90,340 31,252
Income (Loss) attributable to
noncontrolling interests   378     355     123     733     554  
 
Economic Net Income (Loss) $ 40,472   $ 49,135   $ 6,828   $ 89,607   $ 30,698  
                         
Assets Under Management $ 29,048,500 $ 27,913,000 $ 15,960,800 $ 29,048,500 $ 15,960,800
Fee Paying Assets Under Management $ 22,048,900 $ 21,236,100 $ 9,342,200 $ 22,048,900 $ 9,342,200
Committed Dollars Invested $ 370,800 $ 164,900 $ 73,900 $ 535,700 $ 280,100
Uncalled Commitments       $ 1,391,600     $ 1,646,400     $ 1,305,800     $ 1,391,600     $ 1,305,800  
 

 
KKR
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
CAPITAL MARKETS AND PRINCIPAL ACTIVITIES SEGMENTS (UNAUDITED)
(Amounts in thousands)
             
Quarter Ended Six Months Ended
June 30, 2013 March 31, 2013 June 30, 2012 June 30, 2013 June 30, 2012
Fees
Management and incentive fees:
Management fees $ - $ - $ - $ - $ -
Incentive fees   -   -   -   -   -
Management and incentive fees   -   -   -   -   -
 
Monitoring and transaction fees:
Monitoring fees - - - - -
Transaction fees 30,311 20,781 31,619 51,092 61,828
Fee credits   -   -   -   -   -
Net monitoring and transaction fees   30,311   20,781   31,619   51,092   61,828
 
Total fees   30,311   20,781   31,619   51,092   61,828
 
Expenses
Compensation and benefits 6,930 7,461 7,526 14,391 14,382
Occupancy and related charges 309 355 240 664 478
Other operating expenses   1,892   2,862   2,619   4,754   5,516
Total expenses   9,131   10,678   10,385   19,809   20,376
 
Fee Related Earnings   21,180   10,103   21,234   31,283   41,452
 
Investment income (loss)
Realized carried interest - - - - -
Unrealized carried interest   -   -   -   -   -
Gross carried interest - - - - -
Less: allocation to KKR carry pool - - - - -
Less: management fee refunds   -   -   -   -   -
Net carried interest - - - - -
Other investment income (loss) (a)   11,277   322,171   344,105   333,448   762,383
Total investment income (loss)   11,277   322,171   344,105   333,448   762,383
 
Income (Loss) before noncontrolling interests
in Income of consolidated entities 32,457 332,274 365,339 364,731 803,835
Income (Loss) attributable to
noncontrolling interests   534   348   796   882   1,280
 
Economic Net Income (Loss) $ 31,923 $ 331,926 $ 364,543 $ 363,849 $ 802,555
                         
Syndicated Capital       $ 204,600   $ 61,000   $ -   $ 265,600   $ 250,600
 
     

 

 

 

      (a)   Amount is net of (i) interest expense and (ii) certain compensation and general and administrative expenses incurred in the generation of net realized principal investment income that is not included in "Compensation and benefits" and "Other operating expenses" above and on page 6.

           
KKR
STATEMENTS OF OPERATIONS
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
Quarter Ended June 30, 2013
(Amounts in thousands)
 
Capital Markets Total
Private Markets Public Markets and Principal Reportable
Segment Segment Activities Segment Segments
 
Fees
Management and incentive fees:
Management fees $ 114,700 $ 49,476 $ - $ 164,176
Incentive fees   -     15,590     -   15,590  
Management and incentive fees   114,700     65,066     -   179,766  
 
Monitoring and transaction fees:
Monitoring fees 28,907 - - 28,907
Transaction fees 25,231 7,243 30,311 62,785
Fee credits   (29,547 )   (5,204 )   -   (34,751 )
Net monitoring and transaction fees   24,591     2,039     30,311   56,941  
 
Total fees   139,291     67,105     30,311   236,707  
 
Expenses
Compensation and benefits 51,516 21,990 6,930 80,436
Occupancy and related charges 11,143 1,615 309 13,067
Other operating expenses   33,988     9,147     1,892   45,027  
Total expenses   96,647     32,752     9,131   138,530  
 
Fee Related Earnings   42,644     34,353     21,180   98,177  
 
Investment income (loss)
Realized carried interest 269,828 - - 269,828
Unrealized carried interest   (212,809 )   10,791     -   (202,018 )
Gross carried interest 57,019 10,791 - 67,810
Less: allocation to KKR carry pool (22,220 ) (4,316 ) - (26,536 )
Less: management fee refunds   (4,735 )   -     -   (4,735 )
Net carried interest 30,064 6,475 - 36,539
Other investment income (loss)   (249 )   22     11,277   11,050  
Total investment income (loss)   29,815     6,497     11,277   47,589  
 
Income (Loss) before noncontrolling interests
in Income of consolidated entities 72,459 40,850 32,457 145,766
Income (Loss) attributable to
noncontrolling interests 411 378 534 1,323
       
Economic Net Income (Loss) $ 72,048   $ 40,472   $ 31,923 $ 144,443  
 

 
KKR
STATEMENTS OF OPERATIONS
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
Quarter Ended March 31, 2013
(Amounts in thousands)
           
 
Capital Markets Total
Private Markets Public Markets and Principal Reportable
Segment Segment Activities Segment Segments
 
Fees
Management and incentive fees:
Management fees $ 106,605 $ 46,358 $ - $ 152,963
Incentive fees   -     18,849     -   18,849  
Management and incentive fees   106,605     65,207     -   171,812  
 
Monitoring and transaction fees:
Monitoring fees 32,068 - - 32,068
Transaction fees 16,412 3,106 20,781 40,299
Fee credits   (21,009 )   (2,056 )   -   (23,065 )
Net monitoring and transaction fees   27,471     1,050     20,781   49,302  
 
Total fees   134,076     66,257     20,781   221,114  
 
Expenses
Compensation and benefits 48,001 19,700 7,461 75,162
Occupancy and related charges 11,425 1,542 355 13,322
Other operating expenses   33,942     7,826     2,862   44,630  
Total expenses   93,368     29,068     10,678   133,114  
 
Fee Related Earnings   40,708     37,189     10,103   88,000  
 
Investment income (loss)
Realized carried interest 88,167 - - 88,167
Unrealized carried interest   310,799     20,399     -   331,198  
Gross carried interest 398,966 20,399 - 419,365
Less: allocation to KKR carry pool (161,344 ) (8,160 ) - (169,504 )
Less: management fee refunds   (9,216 )   -     -   (9,216 )
Net carried interest 228,406 12,239 - 240,645
Other investment income (loss)   (2,035 )   62     322,171   320,198  
Total investment income (loss)   226,371     12,301     322,171   560,843  
 
Income (Loss) before noncontrolling interests
in Income of consolidated entities 267,079 49,490 332,274 648,843
Income (Loss) attributable to
noncontrolling interests 398 355 348 1,101
       
Economic Net Income (Loss) $ 266,681   $ 49,135   $ 331,926 $ 647,742  
 

           
KKR
STATEMENTS OF OPERATIONS
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
Quarter Ended June 30, 2012
(Amounts in thousands)
 
Capital Markets Total
Private Markets Public Markets

and Principal

Reportable
Segment Segment Activities Segment Segments
 
Fees
Management and incentive fees:
Management fees $ 107,170 $ 22,456 $ - $ 129,626
Incentive fees   -     4,057     -   4,057  
Management and incentive fees   107,170     26,513     -   133,683  
 
Monitoring and transaction fees:
Monitoring fees 27,786 - - 27,786
Transaction fees 10,768 1,319 31,619 43,706
Fee credits   (15,642 )   (1,047 )   -   (16,689 )
Net monitoring and transaction fees   22,912     272     31,619   54,803  
 
Total fees   130,082     26,785     31,619   188,486  
 
Expenses
Compensation and benefits 45,991 9,229 7,526 62,746
Occupancy and related charges 11,633 1,366 240 13,239
Other operating expenses   36,230     3,880     2,619   42,729  
Total expenses   93,854     14,475     10,385   118,714  
 
Fee Related Earnings   36,228     12,310     21,234   69,772  
 
Investment income (loss)
Realized carried interest 65,600 - - 65,600
Unrealized carried interest   226,186     (8,912 )   -   217,274  
Gross carried interest 291,786 (8,912 ) - 282,874
Less: allocation to KKR carry pool (116,118 ) 3,565 - (112,553 )
Less: management fee refunds   (32,804 )   -     -   (32,804 )
Net carried interest 142,864 (5,347 ) - 137,517
Other investment income (loss)   (3,990 )   (12 )   344,105   340,103  
Total investment income (loss)   138,874     (5,359 )   344,105   477,620  
 
Income (Loss) before noncontrolling interests
in Income of consolidated entities 175,102 6,951 365,339 547,392
Income (Loss) attributable to
noncontrolling interests 358 123 796 1,277
       
Economic Net Income (Loss) $ 174,744   $ 6,828   $ 364,543 $ 546,115  
 

           
KKR
STATEMENTS OF OPERATIONS
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
Six Months Ended June 30, 2013
(Amounts in thousands)
 
Capital Markets Total
Private Markets Public Markets and Principal Reportable
Segment Segment Activities Segment Segments
 
Fees
Management and incentive fees:
Management fees $ 221,305 $ 95,834 $ - $ 317,139
Incentive fees   -     34,439     -   34,439  
Management and incentive fees   221,305     130,273     -   351,578  
 
Monitoring and transaction fees:
Monitoring fees 60,975 - - 60,975
Transaction fees 41,643 10,349 51,092 103,084
Fee credits   (50,556 )   (7,260 )   -   (57,816 )
Net monitoring and transaction fees   52,062     3,089     51,092   106,243  
 
Total fees   273,367     133,362     51,092   457,821  
 
Expenses
Compensation and benefits 99,517 41,690 14,391 155,598
Occupancy and related charges 22,568 3,157 664 26,389
Other operating expenses   67,930     16,973     4,754   89,657  
Total expenses   190,015     61,820     19,809   271,644  
 
Fee Related Earnings   83,352     71,542     31,283   186,177  
 
Investment income (loss)
Realized carried interest 357,995 - - 357,995
Unrealized carried interest   97,990     31,190     -   129,180  
Gross carried interest 455,985 31,190 - 487,175
Less: allocation to KKR carry pool (183,564 ) (12,476 ) - (196,040 )
Less: management fee refunds   (13,951 )   -     -   (13,951 )
Net carried interest 258,470 18,714 - 277,184
Other investment income (loss)   (2,284 )   84     333,448   331,248  
Total investment income (loss)   256,186     18,798     333,448   608,432  
 
Income (Loss) before noncontrolling interests
in Income of consolidated entities 339,538 90,340 364,731 794,609
Income (Loss) attributable to
noncontrolling interests 809 733 882 2,424
       
Economic Net Income (Loss) $ 338,729   $ 89,607   $ 363,849 $ 792,185  
 

           
KKR
STATEMENTS OF OPERATIONS
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
Six Months Ended June 30, 2012
(Amounts in thousands)
 
Capital Markets Total
Private Markets Public Markets and Principal Reportable
Segment Segment Activities Segment Segments
 
Fees
Management and incentive fees:
Management fees $ 214,082 $ 44,187 $ - $ 258,269
Incentive fees   -     13,727     -   13,727  
Management and incentive fees   214,082     57,914     -   271,996  
 
Monitoring and transaction fees:
Monitoring fees 53,608 - - 53,608
Transaction fees 22,435 3,741 61,828 88,004
Fee credits   (33,348 )   (2,684 )   -   (36,032 )
Net monitoring and transaction fees   42,695     1,057     61,828   105,580  
 
Total fees   256,777     58,971     61,828   377,576  
 
Expenses
Compensation and benefits 90,477 20,611 14,382 125,470
Occupancy and related charges 24,438 2,784 478 27,700
Other operating expenses   67,905     7,857     5,516   81,278  
Total expenses   182,820     31,252     20,376   234,448  
 
Fee Related Earnings   73,957     27,719     41,452   143,128  
 
Investment income (loss)
Realized carried interest 140,478 - - 140,478
Unrealized carried interest   605,813     5,947     -   611,760  
Gross carried interest 746,291 5,947 - 752,238
Less: allocation to KKR carry pool (301,680 ) (2,379 ) - (304,059 )
Less: management fee refunds   (73,512 )   -     -   (73,512 )
Net carried interest 371,099 3,568 - 374,667
Other investment income (loss)   (2,338 )   (35 )   762,383   760,010  
Total investment income (loss)   368,761     3,533     762,383   1,134,677  
 
Income (Loss) before noncontrolling interests
in Income of consolidated entities 442,718 31,252 803,835 1,277,805
Income (Loss) attributable to
noncontrolling interests 2,654 554 1,280 4,488
       
Economic Net Income (Loss) $ 440,064   $ 30,698   $ 802,555 $ 1,273,317  
 

             
KKR
BALANCE SHEETS
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
(Amounts in thousands, except per unit amounts)
 
 
As of June 30, 2013

Private
Markets
Segment

Public
Markets
Segment

Capital
Markets and
Principal
Activities
Segment

Total
Reportable
Segments

 
Cash and short-term investments $ 322,639 $ 35,229 $ 1,636,977 $ 1,994,845
Investments - - 4,607,196 (a) 4,607,196
Unrealized carry 770,245 43,653 - 813,898
Other assets   316,317   308,837   68,028   693,182
Total assets $ 1,409,201 $ 387,719 $ 6,312,201 $ 8,109,121
 
Debt obligations $ - $ - $ 1,000,000 $ 1,000,000
Other liabilities   111,550   38,181   39,356   189,087
Total liabilities   111,550   38,181   1,039,356   1,189,087
 
Noncontrolling interests 1,457 825 18,695 20,977
       
Book value $ 1,296,194 $ 348,713 $ 5,254,150 $ 6,899,057
 
Book value per adjusted unit $ 1.81 $ 0.49 $ 7.35 $ 9.65
 
 
As of December 31, 2012

Private
Markets
Segment

Public

Markets
Segment

Capital
Markets and
Principal
Activities
Segment

Total
Reportable
Segments

 
Cash and short-term investments $ 358,237 $ 28,690 $ 1,147,360 $ 1,534,287
Investments - - 4,758,157 4,758,157
Unrealized carry 730,292 24,939 - 755,231
Other assets   207,047   280,472   62,119   549,638
Total assets $ 1,295,576 $ 334,101 $ 5,967,636 $ 7,597,313
 
Debt obligations $ - $ - $ 500,000 $ 500,000
Other liabilities   78,724   16,433   24,275   119,432
Total liabilities   78,724   16,433   524,275   619,432
 
Noncontrolling interests 1,339 739 18,619 20,697
       
Book value $ 1,215,513 $ 316,929 $ 5,424,742 $ 6,957,184
 
Book value per adjusted unit $ 1.72 $ 0.45 $ 7.70 $ 9.87
 
           
      (a)   See Capital Markets and Principal Activities segment schedule of investments that follows.

         
KKR
CAPITAL MARKETS AND PRINCIPAL ACTIVITIES SEGMENT SCHEDULE OF INVESTMENTS (UNAUDITED)
(Amounts in thousands, except percentage amounts)
 
 
As of June 30, 2013
Investment

 

Fair Value as
Fair a Percentage of

Cost

Value

 

Total Investments
 
Co-Investments in Portfolio Companies of
Private Equity Investment Vehicles:
Alliance Boots GmbH 195,640 473,795 10.3 %
HCA Inc. 96,289 306,709 6.6 %
The Nielsen Company B.V. 87,657 196,662 4.3 %
NXP B.V. 167,276 196,601 4.3 %
Samson Resources Corporation 237,514 190,012 4.1 %
ProSiebenSat.1 Media AG 226,913 183,483 4.0 %
KION Group GmbH 128,058 162,598 3.5 %
US Foods, Inc. 100,000 130,000 2.8 %
Biomet, Inc. 151,444 121,155 2.6 %
First Data Corporation 135,258 94,681 2.1 %
Dollar General Corporation 14,043 78,796 1.7 %
Energy Future Holdings Corp.   200,000   10,000 0.2 %
  1,740,092   2,144,492 46.5 %
 
Private Equity Investment Vehicles
KKR 2006 Fund L.P. 346,036 394,058 8.5 %
KKR European Fund III L.P. 233,706 261,169 5.7 %
KKR Asian Fund L.P. 82,542 92,554 2.0 %
KKR European Fund II L.P. 54,546 57,806 1.2 %
KKR Millennium Fund L.P. 53,844 44,969 1.0 %
KKR North America Fund XI L.P. 20,177 21,510 0.5 %
KKR E2 Investors, L.P. 10,418 20,568 0.4 %
KKR European Fund L.P. 47,664 4,318 0.1 %
KKR China Growth Fund L.P. 3,286 3,314 0.1 %
Co-Investment Vehicles   546   653 0.0 %
  852,765   900,919 19.5 %
 
Private Equity Total   2,592,857   3,045,411 66.0 %
 
Real Assets
Royalties and Drilling 142,272 157,062 3.4 %
Real Estate Fund 83,920 100,355 2.2 %
Infrastructure Fund 25,825 26,570 0.6 %
Co-Investments 10,835 12,988 0.3 %
Natural Resources   13,172   8,836 0.2 %
Real Assets Total   276,024   305,811 6.7 %
 
Private Markets Total   2,868,881   3,351,222 72.7 %
 
Public Markets Investment Strategies
Liquid Credit 187,263 195,094 4.2 %
Long/Short Equities 100,000 109,906 2.4 %
Credit Relative Value 82,000 88,775 1.9 %
Direct Lending 39,069 44,006 1.0 %
Special Situations 27,297 30,661 0.7 %
Mezzanine Fund   14,564   17,937 0.4 %
Public Markets Total   450,193   486,379 10.6 %
 
Other   760,606   769,595 16.7 %
 
Total Investments $ 4,079,680 $ 4,607,196 100.0 %
 

         
KKR
CAPITAL MARKETS AND PRINCIPAL ACTIVITIES SEGMENT SCHEDULE OF INVESTMENTS, CONTINUED (UNAUDITED)
(Amounts in thousands, except percentage amounts)
 
 
As of June 30, 2013

 

 

Fair Value as
a Percentage

Investment

Cost

Fair

Value

of Total

Investments

 
Significant Aggregate Investments: (a)
Alliance Boots GmbH $ 228,769 $ 545,895 11.9 %
HCA Inc.   117,624   365,344 7.9 %
  346,393   911,239 19.8 %
 
Other investments   3,733,287   3,695,957 80.2 %
Total Investments $ 4,079,680 $ 4,607,196 100.0 %
 
     

(a)

 

The significant aggregate investments include investments in portfolio companies with individual fair values of 5% or more of the Capital Markets and Principal Activities segment investments balance as of June 30, 2013. The fair value figures include the co-investment and the limited partner and/or general partner interests in the underlying portfolio company.

 
KKR
ASSETS UNDER MANAGEMENT* (UNAUDITED)
(Amounts in thousands)
                 
 

Private
Markets
Segment

Public

Markets

Segment

Total
Reportable
Segments

Quarter Ended June 30, 2013

 
March 31, 2013 $ 50,340,400 $ 27,913,000 $ 78,253,400
New Capital Raised 6,681,000 1,703,300 8,384,300
Distributions (2,685,400 ) (720,500 ) (c) (3,405,900 )
Net Changes in Fee Base of Certain Funds (a) (272,300 ) - (272,300 )
Foreign Exchange 12,600 - 12,600
Change in Value   376,100     152,700     528,800  
June 30, 2013 $ 54,452,400   $ 29,048,500   $ 83,500,900  
 
 

Six Months Ended June 30, 2013

 
December 31, 2012 $ 49,127,600 $ 26,399,900 $ 75,527,500
New Capital Raised 7,648,200 3,234,800 10,883,000
Distributions (4,517,400 ) (1,400,200 ) (d) (5,917,600 )
Net Changes in Fee Base of Certain Funds (a) (272,300 ) - (272,300 )
Foreign Exchange (11,000 ) - (11,000 )
Change in Value   2,477,300     814,000     3,291,300  
June 30, 2013 $ 54,452,400   $ 29,048,500   $ 83,500,900  
 
 

Trailing Twelve Months Ended June 30, 2013

 
June 30, 2012 $ 45,528,100 $ 15,960,800 $ 61,488,900
New Capital Raised 14,551,400 5,464,000 20,015,400
Acquisitions (b) - 8,086,900 8,086,900
Distributions (10,254,300 ) (2,091,500 ) (e) (12,345,800 )
Net Changes in Fee Base of Certain Funds (a) (1,600,200 ) - (1,600,200 )
Foreign Exchange 68,200 - 68,200
Change in Value   6,159,200     1,628,300     7,787,500  
June 30, 2013 $ 54,452,400   $ 29,048,500   $ 83,500,900  
 
     
*   Assets Under Management exclude those assets managed by entities where KKR holds less than a 50% ownership interest.
 
(a) Represents the impact of including certain funds entering the post-investment period.
(b) Represents AUM of Prisma as of October 1, 2012, the date of acquisition. This figure excludes new capital raised and distributions since the acquisition.
(c) Includes $193.5 million of redemptions by fund investors.
(d) Includes $539.2 million of redemptions by fund investors.
(e) Includes $709.1 million of redemptions by fund investors.

 
KKR
FEE PAYING ASSETS UNDER MANAGEMENT* (UNAUDITED)
(Amounts in thousands)
               
 

Private
Markets
Segment

Public
Markets
Segment

Total
Reportable
Segments

Quarter Ended June 30, 2013

 
March 31, 2013 $ 41,218,000 $ 21,236,100 $ 62,454,100
New Capital Raised 6,402,100 1,203,000 7,605,100
Distributions (1,109,900 ) (437,200 ) (c) (1,547,100 )
Net Changes in Fee Base of Certain Funds (a) (654,700 ) - (654,700 )
Foreign Exchange 48,300 - 48,300
Change in Value   3,700     47,000     50,700  
June 30, 2013 $ 45,907,500   $ 22,048,900   $ 67,956,400  
 
 

Six Months Ended June 30, 2013

 
December 31, 2012 $ 41,173,000 $ 19,673,000 $ 60,846,000
New Capital Raised 7,363,900 2,734,300 10,098,200
Distributions (1,951,000 ) (973,700 ) (d) (2,924,700 )
Net Changes in Fee Base of Certain Funds (a) (654,700 ) - (654,700 )
Foreign Exchange (55,400 ) - (55,400 )
Change in Value   31,700     615,300     647,000  
June 30, 2013 $ 45,907,500   $ 22,048,900   $ 67,956,400  
 
 

Trailing Twelve Months Ended June 30, 2013

 
June 30, 2012 $ 37,858,300 $ 9,342,200 $ 47,200,500
New Capital Raised 14,361,000 4,727,500 19,088,500
Acquisitions (b) - 8,078,400 8,078,400
Distributions (2,757,200 ) (1,322,300 ) (e) (4,079,500 )
Net Changes in Fee Base of Certain Funds (a) (3,860,100 ) - (3,860,100 )
Foreign Exchange 238,300 - 238,300
Change in Value   67,200     1,223,100     1,290,300  
June 30, 2013 $ 45,907,500   $ 22,048,900   $ 67,956,400  
 
     
*   Fee Paying Assets Under Management exclude those assets managed by entities where KKR holds less than a 50% ownership interest.
 
(a) Represents the impact of including certain funds entering the post-investment period.
(b) Represents FPAUM of Prisma as of October 1, 2012, the date of acquisition. This figure excludes new capital raised and distributions since the acquisition.
(c) Includes $193.5 million of redemptions by fund investors.
(d) Includes $539.2 million of redemptions by fund investors.
(e) Includes $709.1 million of redemptions by fund investors.

 
KKR
INVESTMENT VEHICLE SUMMARY (a) (UNAUDITED)
As of June 30, 2013
(Amounts in millions, except percentages)
                     
Investment Period Amount

Commencement
Date

End Date Commitment

Uncalled
Commitments

Percentage
Committed
by General
Partner

Invested Realized

Remaining
Cost

Remaining
Fair Value

Private Markets

 
Private Equity Funds
Asian Fund II 4/2013 4/2019 $ 5,825.0 $ 5,825.0 1.3% $ - $ - $ - $ -
North America Fund XI 9/2012 9/2018 7,230.7 6,740.2 3.5% 490.5 3.9 490.5 524.5
China Growth Fund 11/2010 11/2016 1,010.0 692.4 1.0% 317.6 28.5 300.1 305.4
E2 Investors (Annex Fund) 8/2009 11/2013 345.9 191.6 4.3% 154.3 - 154.2 325.2
European Fund III 3/2008 3/2014 6,077.2 1,729.2 4.6% 4,348.0 549.5 3,990.6 4,697.2
Asian Fund 7/2007 4/2013 3,983.2 273.9 2.5% 3,709.3 1,623.7 2,864.8 4,737.9
2006 Fund 9/2006 9/2012 17,642.2 1,269.1 2.1% 16,373.1 10,509.6 10,021.7 14,378.1
European Fund II 11/2005 10/2008 5,750.8 - 2.1% 5,750.8 2,442.6 3,922.9 4,926.6
Millennium Fund 12/2002 12/2008 6,000.0 - 2.5% 6,000.0 9,320.5 2,218.9 3,335.2
European Fund 12/1999 12/2005   3,085.4     - 3.2%   3,085.4     8,720.0     -     51.7
Total Private Equity Funds 56,950.4 16,721.4 40,229.0 33,198.3 23,963.7 33,281.8
 
Co-Investment Vehicles Various Various   2,434.1     504.1 Various   1,930.0     2,318.9   1,309.7   1,752.0
Total Private Equity   59,384.5     17,225.5   42,159.0     35,517.2   25,273.4   35,033.8

 

Real Assets
Natural Resources Fund Various Various 1,232.0 658.9 Various 573.1 46.9 547.0 370.1
Global Energy Opportunities Various Various 1,011.0 884.4 Various 126.6 - 126.6 113.4
Infrastructure Fund Various Various 1,041.5 614.2 4.8% 427.3 9.0 427.3 437.9
Infrastructure Co-Investments Various Various 1,356.7 252.2 Various 1,104.5 190.5 1,104.5 1,355.8
Real Estate Fund 5/2013 (b)   500.0     337.6 40%   162.4     -   162.4   203.8
Real Assets   5,141.2     2,747.3   2,393.9     246.4   2,367.8   2,481.0
 
Private Markets Total   64,525.7     19,972.8   44,552.9     35,763.6     27,641.2   37,514.8
 

Public Markets

 
Special Situations Vehicles Various Various 2,131.9 407.5 Various 1,724.4 417.9 1,562.4 1,904.3
Mezzanine Fund 3/2010 8/2015 987.0 650.7 4.6% 336.3 52.3 336.3 394.6
Direct Lending Vehicles Various Various 668.5 333.4 Various 335.1 9.4 335.1 359.4
               
Public Markets Total   3,787.4     1,391.6   2,395.8     479.6   2,233.8   2,658.3
 
Grand Total $ 68,313.1   $ 21,364.4 $ 46,948.7   $ 36,243.2 $ 29,875.0 $ 40,173.1
 
           
      (a)   Reflects investment vehicles for which KKR has the ability to earn carried interest.
(b) Third anniversary of final close.

             
KKR
DISTRIBUTION CALCULATION (UNAUDITED)
(Amounts in thousands, except unit and per unit amounts)
 
 
Quarter Ended Six Months Ended
June 30, 2013 March 31, 2013 June 30, 2012 June 30, 2013 June 30, 2012
 
FRE (a) $ 98,177 $ 88,000 $ 69,772 $ 186,177 $ 143,128
Realized cash carry 161,897 52,900 39,360 214,797 84,287
Net realized principal investment income 150,361 153,156 301,580 303,517 354,198
Less: local income taxes (5,336 ) (2,341 ) (3,307 ) (7,677 ) (6,893 )
Less: noncontrolling interests   (1,323 )   (1,101 )   (1,277 )   (2,424 )   (4,488 )
Total Distributable Earnings   403,776     290,614     406,128     694,390     570,232  
 
Less: Undistributed net realized principal investment income (90,217 ) (91,894 ) (301,580 ) (182,111 ) (354,198 )
         
Distributed Earnings   313,559     198,720     104,548     512,279     216,034  
 
Distributed Earnings to KKR & Co. L.P. (b) 126,295 75,749 36,401 202,044 74,201
 
Less: estimated current corporate income taxes   (10,125 )   (6,376 )   (4,268 )   (16,501 )   (8,290 )
 
Distributed Earnings to KKR & Co. L.P., After Taxes   116,170     69,373     32,133     185,543     65,911  
 
 
Distribution per KKR & Co. L.P. common unit $ 0.42 $ 0.27 $ 0.13 $ 0.69 $ 0.28
                         

Components of Distribution per KKR & Co. L.P. common unit

 
After-tax FRE $ 0.10 $ 0.10 $ 0.07 $ 0.20 $ 0.15
Realized Cash Carry $ 0.23 $ 0.08 $ 0.06 $ 0.31