KKR & Co. Inc.

Press Release

KKR & Co. L.P. Announces Third Quarter 2015 Results

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10.27.15

 

KKR adopts a $500 million unit repurchase program

KKR to change distribution policy to fixed $0.16 per common unit per quarter beginning with the fourth quarter of 2015

GAAP net income (loss) attributable to KKR & Co. L.P. was $(190.6) million and $456.2 million for the quarter and nine months ended September 30, 2015, respectively, down from $89.9 million and $478.2 million in the comparable periods of 2014.

Total distributable earnings was $349.1 million and $1,357.1 million for the quarter and nine months ended September 30, 2015, respectively, down from $504.8 million and $1,652.6 million in the comparable periods of 2014.

Distribution per common unit was $0.35 and $1.23 for the quarter and nine months ended September 30, 2015, respectively, down from $0.45 and $1.55 in the comparable periods of 2014.

Economic net income (loss) ("ENI") was $(286.0) million and $1,153.3 million for the quarter and nine months ended September 30, 2015, respectively, down from $508.7 million and $1,640.6 million in the comparable periods of 2014.

ENI after taxes per adjusted unit was $(0.37) and $1.13 for the quarter and nine months ended September 30, 2015, respectively, down from $0.50 and $1.81 in the comparable periods of 2014.

Book value was $10.2 billion on a total reportable segment basis as of September 30, 2015 or $12.01 per adjusted unit.

Return on equity and cash return on equity were 9.6% and 15.8%, respectively on a trailing twelve month basis.

Assets under management ("AUM") and fee paying assets under management ("FPAUM") totaled $98.7 billion and $82.9 billion, respectively, as of September 30, 2015.

 

NEW YORK--(BUSINESS WIRE)-- KKR & Co. L.P. (NYSE:KKR) today reported its third quarter 2015 results.

KKR has adopted a repurchase program for up to $500 million in the aggregate of its outstanding common units. Under this program, units may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise.

In addition, KKR has amended its distribution policy effective beginning with the distribution anticipated to be declared in early 2016 with respect to the quarter ending December 31, 2015. Under the new distribution policy, KKR intends to make equal quarterly distributions to holders of its common units in an amount of $0.16 per common unit per quarter. The distribution declared for the quarter ended September 30, 2015 was calculated under the prior distribution policy.

On September 9, 2015, KKR announced a long-term strategic partnership with Marshall Wace LLP and its affiliates. Under the terms of the agreement and subject to customary closing conditions, KKR will acquire at closing a 24.9% interest in Marshall Wace through a combination of cash and common units. In addition, KKR and Marshall Wace have the option to grow KKR's ownership interest over time to 39.9%.

"Our announcements today, including the introductions of a fixed distribution per quarter and a share buyback program, reflect important changes to our capital management strategy," said Henry R. Kravis and George R. Roberts, Co-Chairmen and Co-Chief Executive Officers of KKR. "Our strong balance sheet, with approximately $14 billion in assets, allows us to support a meaningful fixed quarterly distribution. We will use incremental retained capital to invest behind our ideas and buy back our units. Over time, we think the market will value what we do with our balance sheet, including repurchasing our own units, more than the variable distributions we have been paying. These changes, coupled with continued investment performance, will allow us to create significant long-term equity value for our unitholders."

 
Note: Certain financial measures, including total distributable earnings, FRE, ENI, ENI after taxes, fee and yield earnings, 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 B and C for a reconciliation of such measures to financial results prepared in accordance with GAAP.
 

GAAP RESULTS

GAAP net income (loss) for the quarter and nine months ended September 30, 2015, included net income (loss) attributable to KKR & Co. L.P. of $(190.6) million and $456.2 million, respectively, and net income (loss) attributable to KKR & Co. L.P. per common unit of $(0.42) and $0.95, respectively, on a diluted basis. For the quarter and nine months ended September 30, 2014, net income (loss) attributable to KKR & Co. L.P. was $89.9 million and $478.2 million, respectively, and net income (loss) attributable to KKR & Co. L.P. per common unit was $0.20 and $1.21, respectively, on a diluted basis. The decrease in both comparable periods was primarily due to a decrease in investment income and to a lesser extent a decrease in transaction fees.

SEGMENT RESULTS

 
KEY METRICS (UNAUDITED)
(Amounts in millions, except per adjusted unit amounts)
             
             
        Quarter Ended   Nine Months Ended
        September 30, 2015   September 30, 2014   % Change   September 30, 2015   September 30, 2014   % Change

Total Distributable Earnings

                           
                             
Fees       $ 246     $ 309         $ 817     $ 891      
Realized Cash Carry       265     246         820     995      
Net Realized Investment Income       110     245         593     720      
Total Cash Revenues       $ 621     $ 800     (22 )%   $ 2,230     $ 2,606     (14 )%
Total Cash Expenses and Other       272     295         873     953      
Total Distributable Earnings       $ 349     $ 505     (31 )%   $ 1,357     $ 1,653     (18 )%
Less: Estimated Current Corporate Income Taxes       (18 )   (30 )       (73 )   (82 )    
Distributable Earnings, net of taxes       $ 331     $ 475     (30 )%   $ 1,284     $ 1,571     (18 )%
                             
Distributable Earnings, net of taxes per KKR & Co. L.P. common unit       $ 0.40     $ 0.59     (32 )%   $ 1.57     $ 2.03     (23 )%
Distribution per KKR & Co. L.P. common unit       $ 0.35     $ 0.45     (22 )%   $ 1.23     $ 1.55     (21 )%
                             
Payout ratio       88 %   76 %       79 %   76 %    
                             
                             

Economic Net Income

                           
                             
Management, Monitoring and Transaction Fees, Net       $ 245     $ 301         $ 805     $ 854      
Performance Income       (162 )   310         884     1,096      
Investment Income       (274 )   207         330     648      
Total Segment Revenues       $ (191 )   $ 818     (123 )%   $ 2,019     $ 2,598     (22 )%
Total Segment Expenses and Other       124     399         1,061     1,170      
Economic Net Income, After-Taxes       $ (315 )   $ 419     (175 )%   $ 958     $ 1,428     (33 )%
                             
Economic Net Income, After-Taxes per Adjusted Unit       $ (0.37 )   $ 0.50     (174 )%   $ 1.13     $ 1.81     (38 )%
                             
Fee and Yield Earnings       $ 139     $ 208     (33 )%   $ 487     $ 525     (7 )%
                             
                             

Other

                           
                             
Book Value per Adjusted Unit       $ 12.01     $ 12.51     (4 )%            
                             
                             
                             
        Last Twelve Months Ended                
        September 30, 2015   September 30, 2014                
Return on Equity       9.6%   24.7%                
Cash Return on Equity       15.8%   23.3%                
                             

Private Markets

AUM was $60.8 billion as of September 30, 2015, a decrease of $2.3 billion, compared to AUM of $63.1 billion as of June 30, 2015. The decrease was primarily attributable to distributions to limited partners of our private equity funds arising from realizations and to a lesser extent, a decline in the fair value of our private equity portfolio. For the three months ended September 30, 2015, the fair value of our private equity portfolio decreased 1.4%. These decreases were offset by new capital raised primarily in European Fund IV and Global Infrastructure Investors II.

FPAUM was $46.2 billion as of September 30, 2015, a decrease of $0.6 billion, compared to FPAUM of $46.8 billion as of June 30, 2015. The decrease was primarily attributable to distributions to limited partners of our private equity funds arising from realizations which were partially offset by new capital raised in European Fund IV and Global Infrastructure Investors II.

Total segment revenues were $(74.6) million for the quarter ended September 30, 2015, a decrease of $706.2 million, compared to total segment revenues of $631.6 million for the quarter ended September 30, 2014. The decrease was principally attributable to net carried interest losses reflecting a decline in the value of our private equity portfolio and to a lesser extent, net investment losses reflecting overall decreases in the value of our energy and private equity portfolios.

Total segment revenues were $1,798.3 million for the nine months ended September 30, 2015, a decrease of $206.8 million, compared to total segment revenues of $2,005.1 million for the nine months ended September 30, 2014. The decrease was largely attributable to (i) a lower level of net carried interest primarily reflecting a lower level of investment gains at carry earning funds during the current period and (ii) a lower level of investment income primarily relating to investment losses in our energy portfolio during the nine months ended September 30, 2015. For the nine months ended September 30, 2015, the fair value of our private equity portfolio increased 10.5%.

ENI was $(133.7) million for the quarter ended September 30, 2015, a decrease of $532.7 million, compared to ENI of $399.0 million for the quarter ended September 30, 2014. The decrease was primarily attributable to lower total segment revenues as described above partially offset by lower allocations to the carry pool resulting from the lower levels of net carried interest.

Public Markets

AUM was $37.9 billion as of September 30, 2015, a decrease of $0.5 billion, compared to AUM of $38.4 billion as of June 30, 2015. FPAUM was $36.7 billion as of September 30, 2015, a decrease of $0.3 billion, compared to FPAUM of $37.0 billion as of June 30, 2015. For both AUM and FPAUM, the decreases were primarily attributable to distributions and redemptions across multiple strategies, offset by new capital either raised or invested, primarily in Special Situations Fund II and our CLOs.

Total segment revenues were $(163.6) million for the quarter ended September 30, 2015, a decrease of $257.2 million, compared to total segment revenues of $93.6 million for the quarter ended September 30, 2014. The decrease in revenues was principally attributable to (i) net investment losses in the third quarter of 2015 across multiple strategies, primarily in our Special Situations platform and our domestic CLOs, and (ii) net carried interest losses in the third quarter of 2015 primarily reflecting overall decreases in the value of our carry paying vehicles, the most significant of which was our Special Situations Fund.

Total segment revenues were $74.6 million for the nine months ended September 30, 2015, a decrease of $321.8 million, compared to total segment revenues of $396.4 million for the nine months ended September 30, 2014. The decrease was principally attributable to (i) net investment losses for the nine months ended September 30, 2015 due primarily to net unrealized losses in our CLOs and certain other Public Markets related investments and (ii) lower performance income for the period. These decreases were partially offset by an increase in net interest and dividends relating primarily to the yielding assets of KFN, which was acquired on April 30, 2014 but was not contributing to our investment income for the first four months of 2014.

ENI was $(183.3) million for the quarter ended September 30, 2015, a decrease of $231.4 million, compared to ENI of $48.1 million for the quarter ended September 30, 2014. The decrease was principally attributable to the decrease in total segment revenues as described above.

ENI was $(43.9) million for the nine months ended September 30, 2015, a decrease of $295.4 million, compared to ENI of $251.5 million for the nine months ended September 30, 2014. The decrease was principally attributable to the decrease in total segment revenues as described above.

Capital Markets

Total segment revenues were $46.4 million for the quarter ended September 30, 2015, a decrease of $47.0 million, compared to total segment revenues of $93.4 million for the quarter ended September 30, 2014. The decrease in revenues primarily reflects a lower level of overall capital markets transaction activity for the quarter ended September 30, 2015.

Total segment revenues were $145.5 million for the nine months ended September 30, 2015, a decrease of $51.0 million, compared to total segment revenues of $196.5 million for the nine months ended September 30, 2014. The decrease in revenues primarily reflects a lower level of overall capital markets transaction activity for the nine months ended September 30, 2015.

ENI was $30.9 million for the quarter ended September 30, 2015, a decrease of $30.7 million, compared to ENI of $61.6 million for the quarter ended September 30, 2014. The decrease primarily reflects the decrease in total segment revenues as described above.

ENI was $96.2 million for the nine months ended September 30, 2015, a decrease of $32.3 million, compared to ENI of $128.5 million for the nine months ended September 30, 2014. The decrease primarily reflects the decrease in total segment revenues as described above.

CAPITAL AND LIQUIDITY

As of September 30, 2015, KKR had $2.1 billion of cash and short-term investments and $3.0 billion of outstanding debt and preferred share obligations on a total reportable segment basis. This includes KFN's debt obligations of $657.3 million and KFN's 7.375% Series A LLC preferred shares of $373.8 million, which are non-recourse to KKR beyond the assets of KFN. As of September 30, 2015, KKR had a $1.0 billion revolving credit facility, which was undrawn. In addition, KKR has a $500.0 million revolving credit facility for use in its capital markets business, which was undrawn as of September 30, 2015.

As of September 30, 2015, KKR's portion of total uncalled commitments to its investment funds was $1.3 billion. See Exhibit A for details.

DISTRIBUTION

A distribution of $0.35 per common unit has been declared, comprised of (i) $0.08 per common unit from after-tax FRE, (ii) $0.19 per common unit from realized cash carry, (iii) $0.03 per common unit from KKR's net realized investment income and (iv) $0.05 per common unit from KFN's net realized investment income. The distribution will be paid on November 24, 2015 to unitholders of record as of the close of business on November 6, 2015. This distribution was calculated under KKR's prior distribution policy.

The declaration and payment of any distributions including distributions made under KKR's new policy are subject to the discretion of the board of directors of the general partner of KKR, and the terms of its limited partnership agreement. There can be no assurance that distributions will be made as intended or at all, that unitholders will receive sufficient distributions to satisfy payment of their tax liabilities as limited partners of KKR or that any particular distribution policy will be maintained.

SUPPLEMENTAL INFORMATION

A slide presentation containing supplemental commentary about the Company's financial results for the fiscal quarter ended September 30, 2015 may be accessed through the KKR Investor Relations section of the KKR website at http://ir.kkr.com/kkr_ir/kkr_events.cfm. The presentation will be referenced on the conference call discussed below.

CONFERENCE CALL

A conference call to discuss KKR's financial results will be held on Tuesday, October 27, 2015 at 5:00 p.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 Investor Center 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 33603948, 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

KKR is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation at the asset level. KKR invests its own capital alongside its partners' capital and brings opportunities to others through its capital markets business. References to KKR's investments may include the activities of its sponsored funds. For additional information about KKR & Co. L.P. (NYSE: KKR), please visit KKR's website at www.kkr.com and on Twitter @KKR_Co.

FORWARD-LOOKING STATEMENTS

This release contains certain forward-looking statements, including the statements with respect to the strategic partnership with Marshall Wace LLP, the declaration and payment of distributions on common units of KKR and the timing, manner and volume of repurchases of common units pursuant to a repurchase program. 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, 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, ENI after taxes, fee and yield earnings, fee and yield EBITDA, equity invested and syndicated capital, uncalled commitments, core interest expense, cash and short-term investments, net realized 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; 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. All forward looking statements speak only as of the date hereof. 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, 2014, filed with the SEC on February 27, 2015, quarterly reports on Form 10-Q for subsequent quarters 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   Nine Months Ended
        September 30, 2015   September 30, 2014   September 30, 2015   September 30, 2014
Revenues                    
Fees and Other       $ 188,626     $ 344,768     $ 735,845     $ 897,064  
Expenses                    
Compensation and Benefits       96,959     320,423     873,649     1,010,191  
Occupancy and Related Charges       16,484     15,501     48,388     46,968  
General, Administrative and Other       163,477     168,486     424,093     505,747  
Total Expenses       276,920     504,410     1,346,130     1,562,906  
Investment Income (Loss)                    
Net Gains (Losses) from Investment Activities       (1,555,681 )   298,259     3,474,748     4,242,289  
Dividend Income       270,759     599,020     710,130     968,626  
Interest Income       299,485     260,292     898,628     638,124  
Interest Expense       (151,554 )   (96,618 )   (402,944 )   (197,346 )
Total Investment Income (Loss)       (1,136,991 )   1,060,953     4,680,562     5,651,693  
                     
Income (Loss) Before Taxes       (1,225,285 )   901,311     4,070,277     4,985,851  
                     
Income Tax (Benefit)       (7,390 )   29,267     39,295     57,145  
                     
Net Income (Loss)       (1,217,895 )   872,044     4,030,982     4,928,706  
                     
Net Income (Loss) Attributable to                    
Redeemable Noncontrolling Interests       (12,925 )   (2,462 )   (11,883 )   1,366  
Net Income (Loss) Attributable to                    
Noncontrolling Interests and Appropriated Capital       (1,014,382 )   784,568     3,586,640     4,449,146  
                     
Net Income (Loss) Attributable to KKR & Co. L.P.       $ (190,588 )   $ 89,938     $ 456,225     $ 478,194  
                     
Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit                    
Basic       $ (0.42 )   $ 0.21     $ 1.03     $ 1.31  
Diluted (a)       $ (0.42 )   $ 0.20     $ 0.95     $ 1.21  
Weighted Average Common Units Outstanding                    
Basic       452,165,697     419,961,455     444,675,159     364,127,956  
Diluted (a)       452,165,697     452,019,742     480,338,335     396,232,828  
                             
   

 

    (a)   KKR Holdings L.P. units have been excluded from the calculation of diluted earnings per common unit since the exchange of these units would not dilute KKR's respective ownership interests in the KKR Group Partnerships. For the three months ended September 30, 2015, unvested common units and other securities are excluded from the calculation of diluted earnings per common unit because inclusion of such unvested common units and other securities would be anti-dilutive (decrease the loss per common unit).
         

 

 
KKR
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
(Amounts in thousands, except unit and per unit amounts)
             
        Quarter Ended   Nine Months Ended
        September 30, 2015   June 30, 2015   September 30, 2014   September 30, 2015   September 30, 2014
Segment Revenues                        
Management, Monitoring and Transaction Fees, Net                        
Management Fees       $ 181,780     $ 181,401     $ 173,912     $ 536,961     $ 547,979  
Monitoring Fees       24,964     47,713     30,449     170,515     96,422  
Transaction Fees       61,437     92,951     158,564     257,674     406,385  
Fee Credits       (23,293 )   (56,458 )   (61,811 )   (160,245 )   (196,309 )
Total Management, Monitoring and Transaction Fees, Net       244,888     265,607     301,114     804,905     854,477  
Performance Income                        
Realized Carried Interest       265,291     252,227     246,026     819,943     995,064  
Incentive Fees       880     5,893     8,009     12,438     36,506  
Unrealized Carried Interest       (428,493 )   340,366     56,192     51,157     64,013  
Total Performance Income       (162,322 )   598,486     310,227     883,538     1,095,583  
Investment Income (Loss)                        
Net Realized Gains (Losses)       61,439     176,260     162,795     418,366     566,184  
Net Unrealized Gains (Losses)       (384,460 )   131,984     (37,833 )   (263,197 )   (72,009 )
Total Realized and Unrealized       (323,021 )   308,244     124,962     155,169     494,175  
Net Interest and Dividends       48,637     75,406     82,254     174,718     153,850  
Total Investment Income (Loss)       (274,384 )   383,650     207,216     329,887     648,025  
Total Segment Revenues       (191,818 )   1,247,743     818,557     2,018,330     2,598,085  
Segment Expenses                        
Compensation and Benefits                        
Cash Compensation and Benefits       88,033     98,871     108,790     293,931     309,149  
Realized Allocation to Carry Pool       106,116     100,891     98,411     327,977     398,026  
Unrealized Allocation to Carry Pool       (170,621 )   136,566     22,696     21,576     27,951  
Total Compensation and Benefits       23,528     336,328     229,897     643,484     735,126  
Occupancy and Related Charges       15,720     15,475     14,458     45,991     43,404  
Other Operating Expenses       52,081     51,613     60,272     164,640     167,384  
Total Segment Expenses       91,329     403,416     304,627     854,115     945,914  
Income (Loss) attributable to noncontrolling interests       2,902     4,383     5,189     10,907     11,597  
Economic Net Income (Loss) (a)       $ (286,049 )   $ 839,944     $ 508,741     $ 1,153,308     $ 1,640,574  
Provision for Income Tax (Benefit)       (19,505 )   44,836     47,361     46,566     90,272  
Equity-based Charges       48,252     48,453     42,090     148,970     122,320  
Economic Net Income (Loss), After Taxes (b)       $ (314,796 )   $ 746,655     $ 419,290     $ 957,772     $ 1,427,982  
                         
Economic Net Income (Loss), After Taxes Per Adjusted Unit       $ (0.37 )   $ 0.88     $ 0.50     $ 1.13     $ 1.81  
Weighted Average Adjusted Units (Fully Diluted Basis) (a)       851,704,303     852,128,762     835,957,683     850,644,918     787,502,790  
                         
Assets Under Management       $ 98,708,500     $ 101,569,600     $ 96,149,900     $ 98,708,500     $ 96,149,900  
Fee Paying Assets Under Management       $ 82,889,000     $ 83,732,800     $ 81,356,700     $ 82,889,000     $ 81,356,700  
Equity Invested and Syndicated Capital       $ 1,462,900     $ 2,011,100     $ 4,751,400     $ 6,419,400     $ 10,474,200  
Uncalled Commitments       $ 26,892,300     $ 25,906,300     $ 17,555,400     $ 26,892,300     $ 17,555,400  
                         

Other Information

                       
Fee Related Earnings       $ 89,934     $ 105,541     $ 125,603     $ 312,781     $ 371,046  
Plus: Net Interest and Dividends       48,637     75,406     82,254     174,718     153,850  
Fee and Yield Earnings (a)       $ 138,571     $ 180,947     $ 207,857     $ 487,499     $ 524,896  
Plus: Depreciation and Amortization       3,745     3,918     3,777     11,544     11,952  
Plus: Core Interest Expense       30,429     30,750     23,347     86,511     60,952  
Fee and Yield EBITDA (a)       $ 172,745     $ 215,615     $ 234,981     $ 585,554     $ 597,800  
                         
Total Distributable Earnings (a)       $ 349,115     $ 491,407     $ 504,817     $ 1,357,053     $ 1,652,598  
GAAP interest expense       $ 151,554     $ 139,427     $ 96,618     $ 402,944     $ 197,346  
Less: interest expense related to debt obligations                        
from investment financing arrangements and KFN       121,125     108,677     73,271     316,433     136,394  
Core Interest Expense (a)       $ 30,429     $ 30,750     $ 23,347     $ 86,511     $ 60,952  
                                             
    (a)   See definitions for economic net income (loss), adjusted units, fee and yield earnings, fee and yield EBITDA, total distributable earnings and core interest expense under "Notes to Reportable Segments."
    (b)   Represents economic net income (loss) after reductions for income taxes and equity-based charges.
         

 

 
KKR
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
PRIVATE MARKETS SEGMENT (UNAUDITED)
(Amounts in thousands)
             
        Quarter Ended   Nine Months Ended
        September 30, 2015   June 30, 2015   September 30, 2014   September 30, 2015   September 30, 2014
Segment Revenues                        
Management, Monitoring and Transaction Fees, Net                        
Management Fees       $ 118,250     $ 115,346     $ 107,443     $ 342,872     $ 342,024  
Monitoring Fees       24,964     47,713     30,449     170,515     96,422  
Transaction Fees       17,732     40,321     67,772     104,652     206,132  
Fee Credits       (20,266 )   (53,286 )   (58,810 )   (143,458 )   (182,626 )
Total Management, Monitoring and Transaction Fees, Net       140,680     150,094     146,854     474,581     461,952  
                         
Performance Income                        
Realized Carried Interest       265,291     243,274     236,126     810,990     960,414  
Incentive Fees                  

     
Unrealized Carried Interest       (394,126 )   312,379     53,776     45,190     35,988  
Total Performance Income       (128,835 )   555,653     289,902     856,180     996,402  
                         
Investment Income (Loss)                        
Net Realized Gains (Losses)       59,880     145,817     165,047     388,961     549,137  
Net Unrealized Gains (Losses)       (149,865 )   145,094     8,293     74,592     (43,763 )
Total Realized and Unrealized       (89,985 )   290,911     173,340     463,553     505,374  
Net Interest and Dividends       3,538     8,234     21,463     3,941     41,415  
Total Investment Income (Loss)       (86,447 )   299,145     194,803     467,494     546,789  
Total Segment Revenues       (74,602 )   1,004,892     631,559     1,798,255     2,005,143  
                         
Segment Expenses                        
Compensation and Benefits                        
Cash Compensation and Benefits       57,991     65,939     59,991     197,897     183,411  
Realized Allocation to Carry Pool       106,116     97,310     94,451     324,396     384,166  
Unrealized Allocation to Carry Pool       (156,874 )   125,371     21,729     19,190     16,742  
Total Compensation and Benefits       7,233     288,620     176,171     541,483     584,319  
Occupancy and Related Charges       11,937     11,832     11,460     34,785     34,784  
Other Operating Expenses       39,674     38,125     44,619     119,915     124,267  
Total Segment Expenses       58,844     338,577     232,250     696,183     743,370  
                         
Income (Loss) attributable to noncontrolling interests       250     143     342     1,112     1,192  
                         
Economic Net Income (Loss)       $ (133,696 )   $ 666,172     $ 398,967     $ 1,100,960     $ 1,260,581  
                         
Assets Under Management       $ 60,781,200     $ 63,129,200     $ 59,168,300     $ 60,781,200     $ 59,168,300  
Fee Paying Assets Under Management       $ 46,199,000     $ 46,758,800     $ 45,591,600     $ 46,199,000     $ 45,591,600  
Equity Invested       $ 867,000     $ 1,258,200     $ 2,389,200     $ 4,172,600     $ 6,395,400  
Uncalled Commitments       $ 21,610,400     $ 21,078,400     $ 14,907,300     $ 21,610,400     $ 14,907,300  
                                             

 

 
KKR
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
PUBLIC MARKETS SEGMENT (UNAUDITED)
(Amounts in thousands)
             
        Quarter Ended   Nine Months Ended
        September 30, 2015   June 30, 2015   September 30, 2014   September 30, 2015   September 30, 2014
Segment Revenues                        
Management, Monitoring and Transaction Fees, Net                        
Management Fees       $ 63,530     $ 66,055     $ 66,469     $ 194,089     $ 205,955  
Monitoring Fees                        
Transaction Fees       3,386     3,873     3,262     20,689     16,634  
Fee Credits       (3,027 )   (3,172 )   (3,001 )   (16,787 )   (13,683 )
Total Management, Monitoring and Transaction Fees, Net       63,889     66,756     66,730     197,991     208,906  
                         
Performance Income                        
Realized Carried Interest           8,953     9,900     8,953     34,650  
Incentive Fees       880     5,893     8,009     12,438     36,506  
Unrealized Carried Interest       (34,367 )   27,987     2,416     5,967     28,025  
Total Performance Income       (33,487 )   42,833     20,325     27,358     99,181  
                         
Investment Income (Loss)                        
Net Realized Gains (Losses)       1,538     31,192     (630 )   33,414     19,133  
Net Unrealized Gains (Losses)       (230,569 )   (11,988 )   (46,118 )   (330,434 )   (27,553 )
Total Realized and Unrealized       (229,031 )   19,204     (46,748 )   (297,020 )   (8,420 )
Net Interest and Dividends       34,995     59,390     53,335     146,257     96,734  
Total Investment Income (Loss)       (194,036 )   78,594     6,587     (150,763 )   88,314  
Total Segment Revenues       (163,634 )   188,183     93,642     74,586     396,401  
                         
Segment Expenses                        
Compensation and Benefits                        
Cash Compensation and Benefits       21,002     22,785     26,787     67,792     80,436  
Realized Allocation to Carry Pool           3,581     3,960     3,581     13,860  
Unrealized Allocation to Carry Pool       (13,747 )   11,195     967     2,386     11,209  
Total Compensation and Benefits       7,255     37,561     31,714     73,759     105,505  
Occupancy and Related Charges       3,096     2,977     2,518     9,195     7,234  
Other Operating Expenses       9,004     10,617     10,929     34,575     30,910  
Total Segment Expenses       19,355     51,155     45,161     117,529     143,649  
                         
Income (Loss) attributable to noncontrolling interests       305     478     335     958     1,242  
                         
Economic Net Income (Loss)       $ (183,294 )   $ 136,550     $ 48,146     $ (43,901 )   $ 251,510  
                         
Assets Under Management       $ 37,927,300     $ 38,440,400     $ 36,981,600     $ 37,927,300     $ 36,981,600  
Fee Paying Assets Under Management       $ 36,690,000     $ 36,974,000     $ 35,765,100     $ 36,690,000     $ 35,765,100  
Equity Invested       $ 583,400     $ 320,800     $ 442,200     $ 1,553,500     $ 1,900,700  
Uncalled Commitments       $ 5,281,900     $ 4,827,900     $ 2,648,100     $ 5,281,900     $ 2,648,100  
Gross Dollars Invested       $ 1,181,400     $ 1,110,100     $ 1,122,100     $ 3,502,300     $ 2,880,000  

 

 
KKR
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
CAPITAL MARKETS SEGMENT (UNAUDITED)
(Amounts in thousands)
                 
        Quarter Ended   Nine Months Ended
        September 30, 2015   June 30, 2015   September 30, 2014   September 30, 2015   September 30, 2014
Segment Revenues                        
Management, Monitoring and Transaction Fees, Net                        
Management Fees       $     $     $     $     $  
Monitoring Fees                        
Transaction Fees       40,319     48,757     87,530     132,333     183,619  
Fee Credits                        
Total Management, Monitoring and Transaction Fees, Net       40,319     48,757     87,530     132,333     183,619  
                         
Performance Income                        
Realized Carried Interest                        
Incentive Fees                        
Unrealized Carried Interest                        
Total Performance Income                        
                         
Investment Income (Loss)                        
Net Realized Gains (Losses)       21     (749 )   (1,622 )   (4,009 )   (2,086 )
Net Unrealized Gains (Losses)       (4,026 )   (1,122 )   (8 )   (7,355 )   (693 )
Total Realized and Unrealized       (4,005 )   (1,871 )   (1,630 )   (11,364 )   (2,779 )
Net Interest and Dividends       10,104     7,782     7,456     24,520     15,701  
Total Investment Income (Loss)       6,099     5,911     5,826     13,156     12,922  
Total Segment Revenues       46,418     54,668     93,356     145,489     196,541  
                         
Segment Expenses                        
Compensation and Benefits                        
Cash Compensation and Benefits       9,040     10,147     22,012     28,242     45,302  
Realized Allocation to Carry Pool                        
Unrealized Allocation to Carry Pool                        
Total Compensation and Benefits       9,040     10,147     22,012     28,242     45,302  
Occupancy and Related Charges       687     666     480     2,011     1,386  
Other Operating Expenses       3,403     2,871     4,724     10,150     12,207  
Total Segment Expenses       13,130     13,684     27,216     40,403     58,895  
                         
Income (Loss) attributable to noncontrolling interests       2,347     3,762     4,512     8,837     9,163  
                         
Economic Net Income (Loss)       $ 30,941     $ 37,222     $ 61,628     $ 96,249     $ 128,483  
                         
Syndicated Capital       $ 12,500     $ 432,100     $ 1,920,000     $ 693,300     $ 2,178,100  
                                             

 

 
KKR
BALANCE SHEET
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
(Amounts in thousands, except per unit amounts)
                     
                     
        As of       As of    
        September 30, 2015       December 31, 2014    
Cash and short-term investments       $ 2,062,633         $ 1,121,385      
Investments       9,278,102     (a)   9,807,606      
Unrealized carry (b)       1,341,473     (b)   1,283,022     (b)
Other assets       1,066,591         999,654      
Total assets       $ 13,748,799         $ 13,211,667      
                     
Debt obligations - KKR (ex-KFN)       $ 2,000,000         $ 1,527,000      
Debt obligations - KFN       657,310         657,310      
Preferred shares - KFN       373,750         373,750      
Other liabilities       361,557         413,808      
Total liabilities       3,392,617         2,971,868      
Noncontrolling interests       124,619         121,574      
Book value       $ 10,231,563         $ 10,118,225      
                     
Book value per adjusted unit       $ 12.01         $ 12.07      
                     
                     
                     
(a) See schedule of investments that follows on the next page.            
                     
        As of       As of    

(b) Unrealized Carry

      September 30, 2015       December 31, 2014    
Private Markets       $ 1,251,503         $ 1,196,633      
Public Markets       89,970         86,389      
Total       $ 1,341,473         $ 1,283,022      
                             

 

 
KKR
SCHEDULE OF INVESTMENTS
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
(Amounts in thousands, except percentage amounts)
         
        As of September 30, 2015
                 
Investments       Cost   Fair

Value

  Fair Value as a

Percentage of

Total Investments

                 
Private Equity Co-Investments       $ 2,338,853     $ 2,930,212     31.6 %
Private Equity Funds       812,983     1,045,475     11.3 %
Private Equity Total       3,151,836     3,975,687     42.9 %
Energy       950,476     636,479     6.9 %
Real Estate       754,913     801,544     8.6 %
Infrastructure       176,814     188,440     2.0 %
Real Assets Total       1,882,203     1,626,463     17.5 %
                 
Private Markets Total       5,034,039     5,602,150     60.4 %
                 
Special Situations       799,103     791,583     8.5 %
Direct Lending       116,468     112,714     1.2 %
Mezzanine       89,991     95,173     1.0 %
Alternative Credit Total       1,005,562     999,470     10.7 %
CLOs (a)       1,415,896     1,137,612     12.3 %
Liquid Credit       203,706     203,084     2.2 %
Credit Total       2,625,164     2,340,166     25.2 %
                 
Specialty Finance       277,421     236,753     2.6 %
                 
Public Markets Total       2,902,585     2,576,919     27.8 %
                 
Other       1,149,469     1,099,033     11.8 %
                 
Total Investments       $ 9,086,093     $ 9,278,102     100.0 %
                 
                 
                 
Significant Aggregate Portfolio Company Investments: (b)                
First Data Corporation       $ 1,061,332     $ 1,310,542     14.1 %
Walgreens Boots Alliance       165,776     659,487     7.1 %
HCA Inc.       29,455     193,538     2.1 %
U.S. Foodservice, Inc.       80,000     96,000     1.0 %
Zimmer Biomet Holdings Inc.       68,572     86,755     0.9 %
        1,405,135     2,346,322     25.2 %
Other Investments       7,680,958     6,931,780     74.8 %
Total Investments       $ 9,086,093     $ 9,278,102     100.0 %
                           
         
    (a)   Includes approximately $80.6 million of CLOs that are not held for investment purposes and are held at cost. For prior periods, all CLOs were held at fair value.
    (b)   The significant aggregate portfolio company investments include the top five private equity investments in portfolio companies (other than investments expected to be syndicated or transferred in connection with new fundraising) based on their fair market value as of September 30, 2015. The fair value figures include the co-investment and the limited partner and/or general partner interests held by KKR in the underlying portfolio company.
         

 

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

Markets

Segment

  Public

Markets

Segment

      Total

Reportable

Segments

Quarter Ended September 30, 2015

                     
June 30, 2015       $ 63,129,200     $ 38,440,400         $ 101,569,600  
New Capital Raised       999,500     1,897,300         2,896,800  
Distributions       (2,697,400 )   (1,559,200 )   (b)   (4,256,600

)

Change in Value       (650,100 )   (851,200 )       (1,501,300

)

September 30, 2015       $ 60,781,200     $ 37,927,300         $ 98,708,500  
                       

Nine Months Ended September 30, 2015

                     
December 31, 2014       $ 61,505,800     $ 37,106,700         $ 98,612,500  
New Capital Raised       3,733,300     6,346,900         10,080,200  
Distributions       (9,111,400 )   (4,793,100 )   (c)   (13,904,500

)

Net Changes in Fee Base of Certain Funds (a)           (238,600 )       (238,600

)

Change in Value       4,653,500     (494,600 )       4,158,900  
September 30, 2015       $ 60,781,200     $ 37,927,300         $ 98,708,500  
                       

Trailing Twelve Months Ended September 30, 2015

                     
September 30, 2014       $ 59,168,300     $ 36,981,600         $ 96,149,900  
New Capital Raised       7,340,300     8,577,900         15,918,200  
Distributions       (11,212,000 )   (6,775,700 )   (d)   (17,987,700

)

Net Changes in Fee Base of Certain Funds (a)           (238,600 )       (238,600

)

Change in Value       5,484,600     (617,900 )       4,866,700  
September 30, 2015       $ 60,781,200     $ 37,927,300         $ 98,708,500  
                       
                       
Supplemental AUM Information:                      
        Private
Markets
Segment
  Public
Markets
Segment
      Total
Reportable
Segments
 
                       
Net AUM of Strategic Partnerships (Pro-rata based on ownership interest)       $ 200,800     $ 2,772,000         $ 2,972,800  
Capital Commitments Excluded from AUM ("Shadow AUM")       5,794,600     4,938,600         10,733,200  
AUM as Reported at September 30, 2015       60,781,200     37,927,300         98,708,500  
Total at September 30, 2015       $ 66,776,600     $ 45,637,900         $ 112,414,500  
                                 
 
*Except as shown under "Supplemental AUM Information," excludes those assets managed by strategic partnerships where KKR does not hold more than a 50% ownership interest and excludes capital commitments for which KKR is entitled to management fees or carried interest upon the satisfaction of certain conditions in the future.
(a) Represents the impact of certain funds entering the post-investment period
(b) Includes $394.2 million of redemptions by fund investors.
(c) Includes $1,511.1 million of redemptions by fund investors.
(d) Includes $2,647.2 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 September 30, 2015

                   
June 30, 2015       $ 46,758,800     $ 36,974,000         $ 83,732,800  
New Capital Raised       1,028,800     1,804,900         2,833,700  
Distributions       (1,645,400 )   (1,474,000 )   (b)   (3,119,400 )
Change in Value       56,800     (614,900 )       (558,100 )
September 30, 2015       $ 46,199,000     $ 36,690,000         $ 82,889,000  
                     

Nine Months Ended September 30, 2015

                   
December 31, 2014       $ 47,262,500     $ 35,783,900         $ 83,046,400  
New Capital Raised       3,472,900     6,021,900         9,494,800  
Distributions       (4,330,100 )   (4,254,200 )   (c)   (8,584,300 )
Net Changes in Fee Base of Certain Funds (a)           (325,200 )       (325,200 )
Change in Value       (206,300 )   (536,400 )       (742,700 )
September 30, 2015       $ 46,199,000     $ 36,690,000         $ 82,889,000  
                     

Trailing Twelve Months Ended September 30, 2015

                   
September 30, 2014       $ 45,591,600     $ 35,765,100         $ 81,356,700  
New Capital Raised       6,752,100     8,078,600         14,830,700  
Distributions       (5,775,800 )   (6,101,600 )   (d)   (11,877,400 )
Net Changes in Fee Base of Certain Funds (a)           (325,200 )       (325,200 )
Change in Value       (368,900 )   (726,900 )       (1,095,800 )
September 30, 2015       $ 46,199,000     $ 36,690,000         $ 82,889,000  
                                 
 

* Excludes those assets managed by strategic partnerships where KKR does not hold more than a 50% ownership interest and excludes capital commitments for which KKR is entitled to management fees or carried interest upon the satisfaction of certain conditions in the future.

 
(a) Represents the impact of certain funds entering the post-investment period.
(b) Includes $394.2 million of redemptions by fund investors.
(c) Includes $1,511.1 million of redemptions by fund investors.
(d) Includes $2,647.2 million of redemptions by fund investors.
   

 

 
KKR
INVESTMENT VEHICLE SUMMARY (a) (UNAUDITED)
As of September 30, 2015
(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                                        
European Fund IV (b)       12/2014   12/2020   $ 3,418.6     $ 3,257.7     5.8%   $ 160.9     $     $ 160.9     $ 197.2
Asian Fund II (b)       4/2013   4/2019   5,825.0     3,839.1     1.3%   2,599.7     613.7     1,985.9     2,731.2
North America Fund XI (b)       9/2012   9/2018   8,718.4     3,981.2     2.9%   5,555.7     1,597.7     4,357.9     6,268.5
China Growth Fund       11/2010   11/2016   1,010.0     399.5     1.0%   610.5     166.6     535.0     686.9
E2 Investors (Annex Fund)       8/2009   11/2013   195.8         4.9%   195.8     195.7     18.1     48.2
European Fund III       3/2008   3/2014   6,138.5     828.8     4.6%   5,309.7     4,392.7     3,278.6     4,312.4
Asian Fund       7/2007   4/2013   3,983.3     129.5     2.5%   3,853.8     5,343.1     1,973.0     2,541.8
2006 Fund       9/2006   9/2012   17,642.2     525.7     2.1%   17,116.5     17,585.2     8,178.0     13,456.0
European Fund II       11/2005   10/2008   5,750.8         2.1%   5,750.8     6,574.3     841.1     1,859.3
Millennium Fund       12/2002   12/2008   6,000.0         2.5%   6,000.0     11,901.7     1,156.2     2,156.7
European Fund       12/1999   12/2005   3,085.4         3.2%   3,085.4     8,748.0         17.8
Total Private Equity Funds               61,768.0     12,961.5         50,238.8     57,118.7     22,484.7     34,276.0
                                         
Co-Investment Vehicles (b)       Various   Various   5,701.3     2,757.4     Various   3,038.5     1,801.7     2,183.5     3,177.9
                                         
Total Private Equity               67,469.3     15,718.9         53,277.3     58,920.4     24,668.2     37,453.9
                                         
Real Assets                                        
Energy Income and Growth Fund       9/2013   9/2018   1,974.2     1,217.7     12.8%   756.5     127.1     673.8     518.2
Natural Resources Fund       Various   Various   887.4     2.9     Various   884.5     96.6     809.9     243.6
Global Energy Opportunities (b)       Various   Various   1,026.4     807.9     Various   252.7     53.8     220.9     139.8
Global Infrastructure Investors (b)       9/2011   10/2014   1,040.1     129.8     4.8%   938.2     128.0     910.3     1,014.3
Global Infrastructure Investors II       10/2014   10/2020   3,037.5     2,842.1     4.1%   195.4         195.4     215.8
Infrastructure Co-Investments       Various   Various   1,125.0         Various   1,125.0     356.5     1,125.0     1,542.3
Real Estate Partners Americas (b)       5/2013   12/2016   1,229.1     614.1     16.3%   755.5     303.6     614.6     690.7
Real Estate Partners Europe (b)       9/2015   (d)   277.0     277.0     36.1%              
Real Assets               10,596.7     5,891.5         4,907.8     1,065.6     4,549.9     4,364.7
                                         
Private Markets Total               78,066.0     21,610.4         58,185.1     59,986.0     29,218.1     41,818.6
                                         
Public Markets                                        
Special Situations Fund       12/2012   12/2015   2,184.1     168.4     11.6%   2,015.7     184.2     2,015.7     2,230.1
Special Situations Fund II       12/2014   (c)   1,694.5     1,319.5     8.9%   375.0         375.0     268.1
Mezzanine Fund       3/2010   3/2015   1,022.8     150.6     4.4%   872.2     435.2     666.6     715.2
Lending Partners       12/2011   12/2014   460.2     91.7     15.2%   368.5     167.7     324.7     306.3
Lending Partners II       06/2014   06/2017   1,335.9     889.6     3.7%   446.3     13.0     446.3     466.7
Lending Partners Europe       03/2015   03/2018   556.6     543.2     7.3%   13.4         13.4     22.0
Other Alternative Credit Vehicles       Various   Various   4,430.9     2,118.9     Various   2,312.0     1,359.3     1,521.2     1,755.5
                                         
Public Markets Total               11,685.0     5,281.9         6,403.1     2,159.4     5,362.9     5,763.9
                                         
Grand Total               $ 89,751.0     $ 26,892.3         $ 64,588.2     $ 62,145.4     $ 34,581.0     $ 47,582.5
                                                               
         
    (a)   Reflects investment vehicles for which KKR has the ability to earn carried interest.
    (b)   The "Invested" and "Realized" columns include the amounts of any realized investments that restored the unused capital commitments of the fund investors.
    (c)   Three years from final close.
    (d)   Four years from final close.

 

 
KKR
DISTRIBUTION CALCULATION (UNAUDITED)
(Amounts in thousands, except unit and per unit amounts)
             
             
        Quarter Ended   Nine Months Ended
        September 30, 2015   June 30, 2015   September 30, 2014   September 30, 2015   September 30, 2014
Cash Revenues                        
Fees       $ 245,768     $ 271,500     $ 309,123     $ 817,343     $ 890,983  
Realized cash carry       265,291     252,227     246,026     819,943     995,064  
Net realized investment income - KKR (ex-KFN)       67,942     195,408     192,146     454,827     630,749  
Net realized investment income - KFN       42,134     56,258     52,903     138,257     89,285  
Total Cash Revenues       621,135     775,393     800,198     2,230,370     2,606,081  
                         
Cash Expenses                        
Cash compensation and benefits       88,033     98,871     108,790     293,931     309,149  
Realized cash carry allocated to carry pool       106,116     100,891     98,411     327,977     398,026  
Occupancy and related charges       15,720     15,475     14,458     45,991     43,404  
Other operating expenses       52,081     51,613     60,272     164,640     167,384  
Total Cash Expenses       261,950     266,850     281,931     832,539     917,963  
                         
Cash income (loss) before noncontrolling interests and local taxes       359,185     508,543     518,267     1,397,831     1,688,118  
                         
Less: local income taxes       (7,168 )   (12,753 )   (8,261 )   (29,871 )   (23,923 )
Less: noncontrolling interests       (2,902 )   (4,383 )   (5,189 )   (10,907 )   (11,597 )
Total Distributable Earnings       349,115     491,407     504,817     1,357,053     1,652,598  
Less: estimated current corporate income taxes       (18,005 )   (26,155 )   (29,505 )   (73,015 )   (81,975 )
Distributable Earnings, net of taxes       331,110     465,252     475,312     1,284,038     1,570,623  
Less: Undistributed net realized investment income - KKR (ex-KFN)       (40,765 )   (117,245 )   (115,288 )   (272,896 )   (378,450 )
Distributed Earnings       $ 290,345     $ 348,007     $ 360,024     $ 1,011,142     $ 1,192,173  
                         
Distributable Earnings, net of taxes per KKR & Co. L.P. common unit       $ 0.40     $ 0.57     $ 0.59     $ 1.57     $ 2.03  
                         
Distribution per KKR & Co. L.P. common unit       $ 0.35     $ 0.42     $ 0.45     $ 1.23     $ 1.55  
                         

Components of Distribution per KKR & Co. L.P. Common Unit

                       
                         
After-tax FRE       $ 0.08     $ 0.07     $ 0.10     $ 0.25     $ 0.34  
Realized Cash Carry       $ 0.19     $ 0.18     $ 0.18     $ 0.59     $ 0.76  
Distributed Net Realized Investment Income - KKR (ex-KFN)       $ 0.03     $ 0.10     $ 0.10     $ 0.22     $ 0.33  
Distributed Net Realized Investment Income - KFN       $ 0.05     $ 0.07     $ 0.07     $ 0.17     $ 0.12  
                         
Fee and yield earnings distribution per KKR & Co. L.P. common unit       $ 0.12     $ 0.15     $ 0.18     $ 0.42     $ 0.49  
                         
Adjusted Units Eligible For Distribution       820,963,035     820,963,434     808,698,012          
                         
Payout Ratio       87.7 %   74.8 %   75.7 %   78.7 %   75.9 %
                                   

KKR
Notes to Reportable Segments (Unaudited)

The segment key performance measures that follow are used by management in making operating and resource deployment decisions as well as assessing the overall performance of each of KKR's reportable business segments. The reportable segments for KKR's business are presented prior to giving effect to the allocation of income (loss) between KKR & Co. L.P. and KKR Holdings L.P. and as such represent the business in total. In addition, KKR's reportable segments are presented without giving effect to the consolidation of the funds that KKR manages.

KKR discloses the following financial measures in this earnings release that are calculated and presented using methodologies other than in accordance with GAAP. We believe that providing these performance measures on a supplemental basis to our GAAP results is helpful to unitholders in assessing the overall performance of KKR's businesses. These financial measures should not be considered as a substitute for similar financial measures calculated in accordance with GAAP. We caution readers that these non-GAAP financial measures may differ from the calculations of other investment managers, and as a result, may not be comparable to similar measures presented by other investment managers. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are included elsewhere within this earnings release.

Fee related earnings ("FRE") is comprised of (i) total management, monitoring and transaction fees, net, plus incentive fees, less (ii) cash compensation and benefits, occupancy and related charges and other operating expenses. It is a measure of the operating earnings of KKR and its business segments before carried interest and related carry pool allocations and investment income and comprises a portion of KKR's quarterly distribution under its prior distribution policy. We believe this measure is useful to unitholders as it provides additional insight into the operating profitability of our fee generating management companies and capital markets businesses. The components of FRE on a segment basis differ from the equivalent GAAP amounts on a consolidated basis as a result of: (i) the inclusion of management fees earned from consolidated funds that were eliminated in consolidation; (ii) the exclusion of fees and expenses of certain consolidated entities; (iii) the exclusion of charges relating to the amortization of intangible assets; (iv) the exclusion of charges relating to carry pool allocations; (v) the exclusion of non-cash equity-based charges and other non-cash compensation charges borne by KKR Holdings or incurred under the KKR & Co. L.P. 2010 Equity Incentive Plan ("Equity Incentive Plan"); (vi) the exclusion of certain reimbursable expenses; and (vii) the exclusion of certain non-recurring items. After tax FRE represents FRE after deductions for current corporate and local income taxes and noncontrolling interests.

Economic net income (loss) ("ENI") is a measure of profitability for KKR's reportable segments and is used by management as an alternative measurement of the operating and investment earnings of KKR and its business segments. We believe this measure is useful to unitholders as it provides additional insight into the overall profitability of KKR's businesses inclusive of carried interest and related carry pool allocations and investment income. ENI is comprised of total segment revenues less total segment expenses and certain economic interests in KKR's segments held by third parties. ENI differs from net income (loss) on a GAAP basis as a result of: (i) the inclusion of management fees earned from consolidated funds that were eliminated in consolidation; (ii) the exclusion of fees and expenses of certain consolidated entities; (iii) the exclusion of charges relating to the amortization of intangible assets; (iv) the exclusion of non-cash equity-based charges and other non-cash compensation charges borne by KKR Holdings or incurred under the Equity Incentive Plan and other securities that are exchangeable for common units of KKR & Co. L.P.; (v) the exclusion of certain non-recurring items; (vi) the exclusion of investment income (loss) relating to noncontrolling interests; and (vii) the exclusion of income taxes.

Fee and Yield Earnings is comprised of FRE and net interest and dividends from KKR's business segments. This measure is used by management as a measure of the cash earnings of KKR and its business segments' investment income. We believe this measure is useful to unitholders as it provides insight into the amount of KKR's cash earnings, significant portions of which tend to be more recurring than realized carried interest and net realized gains from quarter to quarter.

Fee and Yield EBITDA is comprised of Fee and Yield Earnings before the impact of depreciation of fixed assets and core interest expense. This is used by management as another measure of the cash earnings of KKR and its business segments investment income. We believe this measure is also useful to unitholders as it provides insight into the amount of KKR's cash earnings before the impact of interest expense, significant portions of which tend to be more recurring than realized carried interest and realized investment income from quarter to quarter.

Net realized investment income - KKR (ex-KFN) refers to net cash income from (i) realized investment gains and losses excluding certain realized investment losses to the extent unrealized losses on these investments were recognized prior to the combination with KPE on October 1, 2009, (ii) dividend income, and (iii) interest income net of interest expense in each case generated by KKR (excluding KFN). This term describes a portion of KKR's quarterly distribution under KKR's prior distribution policy and excludes net realized investment income of KFN.

Net realized investment income - KFN refers to net cash income from (i) realized investment gains and losses, (ii) dividend income and (iii) interest income net of interest expense less certain general and administrative expenses incurred in the generation of net realized investment income in each case generated by KFN. This term describes a portion of KKR's quarterly distribution under KKR's prior distribution policy.

Investments is a term used solely for purposes of financial presentation of a portion of KKR's balance sheet and includes majority investments in subsidiaries that operate KKR's asset management and broker-dealer businesses, including the general partner interests of KKR's investment funds.

Total distributable earnings is the sum of (i) FRE, (ii) carry distributions received from KKR's investment funds which have not been allocated as part of its carry pool, (iii) net realized investment income — KKR (ex-KFN) and (iv) net realized investment income — KFN; less (i) applicable local income taxes, if any, and (ii) noncontrolling interests. We believe this measure is useful to unitholders as it provides a supplemental measure to assess performance, excluding the impact of mark-to-market gains (losses), and amounts available for distribution to KKR unitholders. However, total distributable earnings is not a measure that calculates actual distributions under KKR's prior or current distribution policy.

Assets under management ("AUM") represent the assets from which KKR is entitled to receive fees or a carried interest and general partner capital. We believe this measure is useful to unitholders as it provides additional insight into KKR's capital raising activities and the overall activity in its investment funds. KKR calculates the amount of AUM as of any date as the sum of: (i) the fair value of the investments of KKR's investment funds plus uncalled capital commitments from these funds; (ii) the fair value of investments in KKR's co-investment vehicles; (iii) the net asset value of certain of KKR's fixed income products; (iv) the value of outstanding CLOs (excluding CLOs wholly-owned by KKR); and (v) the fair value of other assets managed by KKR. AUM excludes those assets managed by entities where KKR does not hold more than a 50% ownership interest. KKR's definition of AUM is not based on any definition of AUM that may be set forth in the agreements governing the investment funds, vehicles or accounts that it manages or calculated pursuant to any regulatory definitions.

Fee paying AUM ("FPAUM") represents only those assets under management from which KKR receives management fees. We believe this measure is useful to unitholders as it provides additional insight into the capital base upon which KKR earns management fees. This relates to KKR's capital raising activities and the overall activity in its investment funds or CLOs, for only those funds or CLOs where KKR receives fees (i.e., excluding vehicles that receive only carried interest or general partner capital). FPAUM is the sum of all of the individual fee bases that are used to calculate KKR's fees and differs from AUM in the following respects: (i) assets from which KKR does not receive a fee are excluded (i.e., assets with respect to which it receives only carried interest) and (ii) certain assets, primarily in its private equity funds, are reflected based on capital commitments and invested capital as opposed to fair value because fees are not impacted by changes in the fair value of underlying investments.

Equity invested is the aggregate amount of equity capital that has been invested by KKR's investment funds and carry-yielding co-investment vehicles and is used as a measure of investment activity for KKR and its business segments during a given period. We believe this measure is useful to unitholders as it provides additional insight into KKR's investments among its investment funds and carry-yielding co-investment vehicles and replaces committed dollars invested. Such amounts include: (i) capital invested by fund investors and co-investors with respect to which KKR is entitled to a carried interest and (ii) capital invested by KKR's investment funds, including investments made using investment financing arrangements.

Gross dollars invested is the aggregate amount of capital that has been invested by all of KKR's Public Markets investment vehicles in our private credit non-liquid strategies and is used as a measure of investment activity for a portion of KKR's Public Markets segment in a given period. We believe this measure is useful to unitholders as it provides additional insight into KKR's investment of capital across private credit non-liquid strategies for all the investment vehicles in the Public Markets segment. Such amounts include capital invested by fund investors and co-investors with respect to which KKR's Public Markets business is entitled to a fee or carried interest.

Syndicated capital is generally the aggregate amount of capital in transactions originated by KKR and its investment funds and carry-yielding co-investment vehicles, which has been distributed to third parties in exchange for a fee. It does not include (i) capital invested in such transactions by KKR investment funds and carry-yielding co-investment vehicles, which is instead reported in equity invested and (ii) debt capital that is arranged as part of the acquisition financing of transactions originated by KKR investment funds. Syndicated capital is used as a measure of investment activity for KKR and its business segments during a given period, and we believe that this measure is useful to unitholders as it provides additional insight into levels of syndication activity in KKR's Capital Markets segment and across its investment platform.

Uncalled commitments are used as a measure of unfunded capital commitments that KKR's investment funds and carry-paying co-investment vehicles have received from partners to contribute capital to fund future investments. We believe this measure is useful to unitholders as it provides additional insight into the amount of capital that is available to KKR's investment funds to make future investments. Uncalled commitments are not reduced for investments completed using fund-level investment financing arrangements.

Adjusted units are used as a measure of the total equity ownership of KKR that is held by KKR & Co. L.P. (including equity awards issued under the Equity Incentive Plan), KKR Holdings and other holders of securities exchangeable into common units of KKR & Co. L.P. and represent the fully diluted unit count using the if-converted method. We believe this measure is useful to unitholders as it provides an indication of the total equity ownership of KKR as if all outstanding KKR Holdings units, equity awards issued under the Equity Incentive Plan and other exchangeable securities had been exchanged for common units of KKR & Co. L.P.

Core interest expense is used by management as an alternative measurement of interest expense incurred by KKR on a segment basis and excludes interest expense related to debt obligations from investment financing arrangements related to certain of KKR's investment funds, investment vehicles and principal investments and also excludes interest expense incurred by KFN. The financing arrangements excluded from core interest expense are not direct obligations of the general partners of KKR's private equity funds or its management companies, and in the case of debt obligations of KFN are non-recourse to KKR beyond the assets of KFN. On a segment basis, interest expense is included in net interest and dividends within total investment income. We believe this measure is useful to unitholders as it provides an indication of the amount of interest expense borne by KKR excluding interest expense that is allocated to KKR's investment funds, other noncontrolling interest holders and KFN. Additionally, we believe this measure is useful for analyzing KKR's ability to service its debt obligations other than the debt obligations of KFN.

Book value is a measure of the net assets of KKR's reportable segments and is used by management primarily in assessing the unrealized value of KKR's investment portfolio, including carried interest, as well as KKR's overall liquidity position. We believe this measure is useful to unitholders as it provides additional insight into the assets and liabilities of KKR excluding the assets and liabilities that are allocated to noncontrolling interest holders. Book value differs from KKR & Co. L.P. partners' capital on a GAAP basis primarily as a result of the exclusion of ownership interests attributable to KKR Holdings.

Cash and short-term investments represent cash and liquid short-term investments in high-grade, short-duration cash management strategies used by KKR to generate additional yield on our excess liquidity and is used by management in evaluating KKR's liquidity position. We believe this measure is useful to unitholders as it provides additional insight into KKR's available liquidity. Cash and short-term investments differ from cash and cash equivalents on a GAAP basis as a result of the inclusion of liquid short-term investments in cash and short-term investments.

Return on equity measures the amount of net income generated as a percentage of capital invested in KKR's business. Return on equity is calculated by dividing Economic Net Income (Loss), After Taxes on a trailing twelve-month basis by the average book value during the period.

Cash return on equity measures the amount of cash income generated as a percentage of capital invested in KKR's business. Cash return on equity is calculated by dividing Distributable Earnings, net of taxes on a trailing twelve-month basis by the average book value during the period.

 
KKR

EXHIBIT A

KKR'S PORTION OF TOTAL UNCALLED COMMITMENTS TO ITS INVESTMENT FUNDS
(Amounts in thousands)
     
     
    Uncalled

Commitments

Private Markets

   
European Fund IV   $ 184,700
Energy Income and Growth Fund   157,300
North America Fund XI   129,700
Global Infrastructure Investors II   116,900
Real Estate Partners Europe   100,000
Real Estate Partners Americas   99,900
European Fund III   66,300
Asian Fund II   49,100
2006 Fund   22,700
Co-Investment Vehicles   69,500
Other Private Markets Funds   12,500
Total Private Markets Commitments   1,008,600
     

Public Markets

   
Special Situations Fund   19,600
Special Situations Fund II   117,200
Mezzanine Fund   6,500
Lending Partners   14,000
Lending Partners II   33,300
Lending Partners Europe   39,500
Other Alternative Credit Vehicles   78,800
Total Public Markets Commitments   308,900
     
Total Uncalled Commitments   $ 1,317,500
       

 

 
KKR

EXHIBIT B

RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. PER COMMON UNIT - BASIC (GAAP BASIS)
TO ENI AFTER TAXES PER ADJUSTED UNIT (UNAUDITED)
(Amounts in thousands, except common unit and per common unit amounts)
         
        Quarter Ended
        September 30, 2015   June 30, 2015   September 30, 2014
                 
Net income (loss) attributable to KKR & Co. L.P. per common unit - Basic       $ (0.42 )   $ 0.84   $ 0.21
Weighted Average Common Units Outstanding - Basic       452,165,697     446,794,950   419,961,455
Net income (loss) attributable to KKR & Co. L.P.       (190,588 )   376,306   89,938
Plus: Net income (loss) attributable to noncontrolling

interests held by KKR Holdings L.P.

      (166,078 )   325,703   100,910
Plus: Non-cash equity-based charges       67,821     69,478   83,950
Plus: Amortization of intangibles and other, net       10,186     37,910   204,676
Plus: Income tax (benefit)       (7,390 )   30,547   29,267
Economic net income (loss)       (286,049 )   839,944   508,741
Less: Provision for income tax (benefit)       (19,505 )   44,836   47,361
Less: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan       48,252     48,453   42,090
Economic net income (loss) after taxes       (314,796 )   746,655   419,290
Weighted Average Adjusted Units       851,704,303     852,128,762   835,957,683
Economic net income (loss) after taxes per adjusted unit       $ (0.37 )   $ 0.88   $ 0.50
                 
                 
        Nine Months Ended    
        September 30, 2015   September 30, 2014    
                 
Net income (loss) attributable to KKR & Co. L.P. per common unit - Basic       $ 1.03     $ 1.31    
Weighted Average Common Units Outstanding - Basic       444,675,159     364,127,956    
Net income (loss) attributable to KKR & Co. L.P.       456,225     478,194    
Plus: Net income (loss) attributable to noncontrolling

interests held by KKR Holdings L.P.

      398,633     588,500    
Plus: Non-cash equity-based charges       213,849     254,435    
Plus: Amortization of intangibles and other, net       45,306     262,300    
Plus: Income tax (benefit)       39,295     57,145    
Economic net income (loss)       1,153,308     1,640,574    
Less: Provision for income tax (benefit)       46,566     90,272    
Less: Equity-based charges associated with the KKR & Co. L.P. 2010 equity incentive plan       148,970     122,320    
Economic net income (loss) after taxes       957,772     1,427,982    
Weighted Average Adjusted Units       850,644,918     787,502,790    
Economic net income (loss) after taxes per adjusted unit       $ 1.13     $ 1.81    
                       

 

 
KKR

EXHIBIT B (CONTINUED)

RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. L.P. (GAAP BASIS)
TO ECONOMIC NET INCOME (LOSS), FEE RELATED EARNINGS, FEE AND YIELD EARNINGS, FEE AND YIELD EBITDA, TOTAL DISTRIBUTABLE EARNINGS, AND TOTAL EBITDA (UNAUDITED)
(Amounts in thousands)
         
        Quarter Ended
        September 30, 2015   June 30, 2015   September 30, 2014
                 
Net income (loss) attributable to KKR & Co. L.P.       $ (190,588 )   $ 376,306     $ 89,938
Plus: Net income (loss) attributable to noncontrolling

interests held by KKR Holdings L.P.

      (166,078 )   325,703     100,910
Plus: Non-cash equity-based charges       67,821     69,478     83,950
Plus: Amortization of intangibles and other, net       10,186     37,910     204,676
Plus: Income tax (benefit)       (7,390 )   30,547     29,267
Economic net income (loss)       (286,049 )   839,944     508,741
Plus: Income attributable to segment noncontrolling interests       2,902     4,383     5,189
Less: Total investment income (loss)       (274,384 )   383,650     207,216
Less: Net carried interest       (98,697 )   355,136     181,111
Fee related earnings       89,934     105,541     125,603
Plus: Net interest and dividends       48,637     75,406     82,254
Fee and yield earnings       138,571     180,947     207,857
Plus: Depreciation and amortization       3,745     3,918     3,777
Plus: Core interest expense       30,429     30,750     23,347
Fee and yield EBITDA       172,745     215,615     234,981
Less: Depreciation and amortization       3,745     3,918     3,777
Less: Core interest expense       30,429     30,750     23,347
Less: Net interest and dividends       48,637     75,406     82,254
Plus: Realized cash carry, net of realized cash carry allocated to carry pool       159,175     151,336     147,615
Plus: Net realized investment income - KKR (ex-KFN)       67,942     195,408     192,146
Plus: Net realized investment income - KFN       42,134     56,258     52,903
Less: Local income taxes and noncontrolling interests       10,070     17,136     13,450
Total distributable earnings       349,115     491,407     504,817
Plus: Depreciation and amortization       3,745     3,918     3,777
Plus: Core interest expense       30,429     30,750     23,347
Plus: Local income taxes and noncontrolling interests       10,070     17,136     13,450
Total EBITDA       $ 393,359     $ 543,211     $ 545,391
                 
                 
        Nine Months Ended    
        September 30, 2015   September 30, 2014    
                 
Net income (loss) attributable to KKR & Co. L.P.       $ 456,225     $ 478,194      
Plus: Net income (loss) attributable to noncontrolling

interests held by KKR Holdings L.P.

      398,633     588,500      
Plus: Non-cash equity-based charges       213,849     254,435      
Plus: Amortization of intangibles and other, net       45,306     262,300      
Plus: Income tax (benefit)       39,295     57,145      
Economic net income (loss)       1,153,308     1,640,574      
Plus: Income attributable to segment noncontrolling interests       10,907     11,597      
Less: Total investment income (loss)       329,887     648,025      
Less: Net carried interest       521,547     633,100      
Fee related earnings       312,781     371,046      
Plus: Net interest and dividends       174,718     153,850      
Fee and yield earnings       487,499     524,896      
Plus: Depreciation and amortization       11,544     11,952      
Plus: Core interest expense       86,511     60,952      
Fee and yield EBITDA       585,554     597,800      
Less: Depreciation and amortization       11,544     11,952      
Less: Core interest expense       86,511     60,952      
Less: Net interest and dividends       174,718     153,850      
Plus: Realized cash carry, net of realized cash carry allocated to carry pool       491,966     597,038      
Plus: Net realized investment income - KKR (ex-KFN)       454,827     630,749      
Plus: Net realized investment income - KFN       138,257     89,285      
Less: Local income taxes and noncontrolling interests       40,778     35,520      
Total distributable earnings       1,357,053     1,652,598      
Plus: Depreciation and amortization       11,544     11,952      
Plus: Core interest expense       86,511     60,952      
Plus: Local income taxes and noncontrolling interests       40,778     35,520      
Total EBITDA       $ 1,495,886     $ 1,761,022      
                         

 

 
KKR

EXHIBIT B (CONTINUED)

RECONCILIATION OF KKR & CO. L.P. PARTNERS' CAPITAL (GAAP BASIS)
TO BOOK VALUE AND BOOK VALUE PER ADJUSTED UNIT (UNAUDITED)
(Amounts in thousands, except common unit and per common unit amounts)
             
        As of   As of
        September 30, 2015   December 31, 2014
             
KKR & Co. L.P. partners' capital       $ 5,658,646     $ 5,382,691
Noncontrolling interests held by KKR Holdings L.P.       4,482,900     4,661,679
Equity impact of KKR Management Holdings Corp. and other       90,017     73,855
             
Book value       10,231,563     10,118,225
Adjusted units       851,670,762     838,020,974
Book value per adjusted unit       $ 12.01     $ 12.07
             
             
             
             
RECONCILIATION OF CASH AND CASH EQUIVALENTS (GAAP BASIS)
TO CASH AND SHORT-TERM INVESTMENTS (UNAUDITED)
(Amounts in thousands)
 
        As of   As of
        September 30, 2015   December 31, 2014
             
Cash and cash equivalents       $ 1,756,918     $ 918,080
Liquid short-term investments       305,715     203,305
Cash and short-term investments       $ 2,062,633     $ 1,121,385
                   

 

 
KKR

EXHIBIT C

RECONCILIATION OF WEIGHTED AVERAGE GAAP COMMON UNITS OUTSTANDING - BASIC

TO WEIGHTED AVERAGE ADJUSTED UNITS (UNAUDITED)

 
The following table provides a reconciliation of KKR's Weighted Average GAAP Common Units Outstanding to Weighted Average Adjusted Units.
         
        Quarter Ended
        September 30, 2015       June 30, 2015   September 30, 2014
Weighted Average GAAP Common Units Outstanding - Basic       452,165,697         446,794,950     419,961,455
Adjustments:                    
Weighted Average Unvested Common Units and Other Securities (a)           (c)   35,856,541     32,058,287
Weighted Average GAAP Common Units Outstanding - Diluted       452,165,697         482,651,491     452,019,742
Adjustments:                    
Weighted Average KKR Holdings Units (b)       365,717,358         369,477,271     383,937,941
Weighted Average Unvested Common Units and Other Securities (a)       33,821,248     (c)      
Weighted Average Adjusted Units       851,704,303         852,128,762     835,957,683
                     
                     
        Nine Months Ended    
        September 30, 2015       September 30, 2014    
Weighted Average GAAP Common Units Outstanding - Basic       444,675,159         364,127,956      
Adjustments:                    
Weighted Average Unvested Common Units and Other Securities (a)       35,663,176         32,104,872      
Weighted Average GAAP Common Units Outstanding - Diluted       480,338,335         396,232,828      
Adjustments:                    
Weighted Average KKR Holdings Units (b)       370,306,583         391,269,962      
Weighted Average Adjusted Units       850,644,918         787,502,790      
                     
                     
                     
RECONCILIATION OF GAAP COMMON UNITS OUTSTANDING - BASIC TO ADJUSTED UNITS AND ADJUSTED UNITS ELIGIBLE FOR DISTRIBUTION (UNAUDITED)
 
The following table provides a reconciliation of KKR's GAAP Common Units Outstanding to Adjusted Units and Adjusted Units Eligible for Distribution.
                     
        As of       As of    
        September 30, 2015       December 31, 2014    
GAAP Common Units Outstanding - Basic       453,251,950         433,330,540      
Unvested Common Units and Other Securities (a)       33,787,971         27,493,685      
GAAP Common Units Outstanding - Diluted       487,039,921         460,824,225      
Adjustments:                    
KKR Holdings Units (b)       364,630,841         377,196,749      
Adjusted Units       851,670,762         838,020,974      
Adjustments:                    
Unvested Common Units and Unvested Other Securities (a)       (30,707,727 )       (24,373,441 )    
Adjusted Units Eligible For Distribution       820,963,035         813,647,533      
                         
         
    (a)   Represents equity awards granted under the KKR & Co. L.P. 2010 Equity Incentive Plan and other securities that are exchangeable into KKR & Co. L.P common units. The issuance of common units of KKR & Co. L.P. pursuant to such equity awards or other securities dilutes KKR common unitholders and KKR Holdings pro rata in accordance with their respective percentage interests in the KKR business.
    (b)   Common units that may be issued by KKR & Co. L.P. upon exchange of units in KKR Holdings L.P. for KKR common units.
    (c)   Unvested common units and other securities are excluded from the calculation of diluted earnings per common unit on a GAAP basis because inclusion of such unvested common units and other securities would be anti-dilutive (decrease the loss per common unit).

 

Investor Relations:
Kohlberg Kravis Roberts & Co. L.P.
Craig Larson, +1-877-610-4910 (U.S.) / +1-212-230-9410
investor-relations@kkr.com
or
Media:
Kohlberg Kravis Roberts & Co. L.P.
Kristi Huller, +1-212-750-8300
media@kkr.com

Source: KKR & Co. L.P.

 

 

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