KFN Kkr Financial Holdings Llc

SAN FRANCISCO, Feb. 1 /PRNewswire-FirstCall/ -- KKR Financial Corp. (NYSE:KFN) announced today that the Company has posted to the Investor Relations section of the Company's website (http://www.kkrfinancial.com/) a schedule of the quarterly record dates, payment dates and tax information for the dividends that the Company paid in 2005. Tax Information For tax reporting purposes, dividends declared and paid in 2005 on the Company's common stock total $0.97 per share. No portion of the dividends is considered a return of capital or long term capital gain. All dividends are fully (100%) taxable at ordinary rates to shareholders and no portion of the dividends are eligible for the 15% dividend tax rate or the corporate dividends received deduction. Shareholders should check their 2005 tax statements received from the transfer agent or from brokerage firms in order to ensure that the dividend tax information for the Company reported on such statements conforms to the information reported herein. Excess Inclusion Income For shareholders that are tax-exempt, or non-U.S. corporations or residents, or U.S. taxpayers, you may be required to report a portion of the Company's dividends to the IRS as "Excess Inclusion Income." - Tax-exempt shareholders will be required to treat excess inclusion income as unrelated business taxable income (commonly referred to as UBTI); - Non-U.S. shareholders will be subject to the 30 percent U.S. federal withholding tax on this excess inclusion income without reduction under any otherwise applicable income tax treaty; and - U.S. shareholders, including taxpaying entities, must report taxable income that in no event will be less than the amount of excess inclusion income. The Company expects that a portion of the 2005 dividends will include Excess Inclusion Income, and the Company will provide this information on its website when it is available. AMT Adjustments and Tax Preference Items There are special rules regarding the applicability of the alternative minimum tax (AMT) to REITs. Under these rules, items that are treated differently for regular tax and AMT purposes, namely the "AMT Adjustments and Tax Preference Items", should be apportioned between the REIT and its shareholders. As a result of these special rules, the Company expects that a portion of the 2005 dividends will include AMT Adjustments and Tax Preference Items, and the Company will provide this information on its website when it is available. Tax Disclaimer The sections entitled "Tax Information", "Excess Inclusion Income", and "AMT Adjustments and Tax Preference Items" above should not be construed as tax advice and are not a substitute for careful tax planning. You should consult your own tax advisor regarding the specific federal, state, local, foreign and other tax consequences to you regarding your ownership of shares of the Company's common stock. About KKR Financial Corp. Additional information regarding KKR Financial Corp. is available at the Company's website, http://www.kkrfinancial.com/. KKR Financial Corp. is a specialty finance company that invests in multiple asset classes and uses leverage to generate competitive leveraged risk-adjusted returns. The Company currently makes investments in the following asset classes: (i) residential mortgage loans and mortgage-backed securities; (ii) corporate loans and debt securities; (iii) commercial real estate loans and debt securities; (iv) asset-backed securities; and (v) equity securities. The Company also makes opportunistic investments in other asset classes from time to time. The Company was organized as a Maryland corporation on July 7, 2004, and commenced operations on August 12, 2004. The Company is structured as a real estate investment trust and KKR Financial Advisors LLC manages the Company pursuant to a management agreement. KKR Financial Corp. and KKR Financial Advisors LLC are affiliates of Kohlberg Kravis Roberts & Co. L.P. Statements in this press release which are not historical fact may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although KKR Financial Corp. believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company's expectations include completion of pending investments, continued ability to originate new investments, the mix of originations and prepayment levels, the availability and cost of capital for future investments, competition within the specialty finance sector, economic conditions, credit loss experience, and other risks disclosed from time to time in the Company's filings with the Securities and Exchange Commission. CONTACT: Investors Laurie Poggi KKR Financial LLC 415-315-3718 Media Roanne Kulakoff/Joseph Kuo Kekst and Company 212-521-4837/4863 First Call Analyst: FCMN Contact: laurie.poggi@kkr.com DATASOURCE: KKR Financial Corp. CONTACT: Investors, Laurie Poggi of KKR Financial, +1-415-315-3718; or Media, Roanne Kulakoff, +1-212-521-4837, or Joseph Kuo, +1-212-521-4863, both of Kekst and Company, for KKR Financial Corp. Web site: http://www.kkrfinancial.com/

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