Kkr Financial Holdings Llc - Current report filing (8-K)
May 01 2008 - 4:34PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 1,
2008
KKR
Financial Holdings LLC
(Exact name of registrant as specified in its charter)
Delaware
|
|
001-33437
|
|
11-3801844
|
(State or other jurisdiction of incorporation)
|
|
(Commission File Number)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
|
|
555 California Street, 50th Floor
|
|
|
San Francisco, California
|
|
94104
|
(Address of principal executive offices)
|
|
(Zip Code)
|
415-315-3620
(Registrants telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (see General Instruction A.2.
below):
o
Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
ITEM
2.02 Results of Operations and Financial
Condition.
On
May 1, 2008, KKR Financial Holdings LLC (the Company) issued an earnings
release announcing its financial results for the first quarter ended March 31,
2008. A copy of the earnings release is attached as Exhibit 99.1.
Non-GAAP
Financial Information
In
the attached earnings release, in addition to the consolidated balance sheet
and statements of operations presented in accordance with accounting principles
generally accepted in the U.S. (GAAP), the Company discloses certain
information on an economic (Economic) basis. The Companys Economic basis of
presenting financial information differs from GAAP presentation due to the
following three items:
Joint Structured Finance Transactions
The
Company consolidates five collateralized loan obligation entities (collectively,
the Joint CLOs) because it is the primary beneficiary of these entities as
defined by Financial Accounting Standards Board Interpretation No. 46R,
Consolidation of Variable Interest Entities
. Because these
entities are structured finance vehicles with no economic equity interests,
subordinated noteholders receive the net income from these entities. The
Company holds the majority of the subordinated notes while the KKR Strategic
Capital Funds, affiliates of the Companys manager, hold the remaining minority
percentage of the subordinated notes. In accordance with GAAP, the Company
consolidates the Joint CLOs on its consolidated financial statements with the
minority interest in the Joint CLOs reflected as debt on the Companys
consolidated balance sheet. The net income or loss of the Joint CLOs is
reflected on the Companys consolidated statements of operations presented in
accordance with GAAP through the consolidated income and expense accounts of
the Joint CLOs. The net income or loss allocable to the minority interest
holders of the subordinated notes is included as interest expense on the
Companys consolidated statements of operations presented in accordance with
GAAP. Adjustments to the Companys consolidated statements of operations
presented under GAAP to arrive at the Economic consolidated statements of
operations due to the Joint CLOs do not change net income (loss), rather they
reflect the Companys proportionate share of income and expenses from the Joint
CLOs based on the Companys percentage of the subordinated notes in the Joint
CLOs. Similarly, the Companys consolidated balance sheet presented in
accordance with GAAP reflects the assets and liabilities of the Joint CLOs and
the unrealized gains (losses) on investments classified as available-for-sale
are included in accumulated other comprehensive income (loss), a component of
shareholders equity. The Economic consolidated balance sheet reflects the
Companys proportionate share of the assets and liabilities of the Joint CLOs
and the Companys proportionate share of the unrealized gains (losses) from
securities classified as available-for-sale in accumulated other comprehensive
income (loss).
Presentation
of Joint CLOs on an Economic basis is consistent with managements internal
reporting used to evaluate the Companys portfolio, liquidity and leverage, and
to measure its results against forecasted yield and other benchmark portfolio
measures.
2
Share-Based Compensation
Included
in the Companys non-investment expenses on its consolidated statements of
operations presented in accordance with GAAP is share-based compensation
expense, or benefit, that is recognized by the Company in accordance with Statement
of Financial Accounting Standards No. 123R,
Share-Based
Payment
, for common share options and restricted common shares
granted by the Company to its manager and to members of its Board of Directors.
The Companys Economic consolidated statements of operations exclude
share-based compensation expense or benefit.
Presentation
of the Companys results of operations excluding share-based compensation
expense or benefit is consistent with how the Company evaluates its periodic
results for purposes of determining shareholder distributions, because
share-based compensation expense or benefit is a non-cash item for the Company.
Discontinued Operations
The
Companys Economic balance sheet presents the net assets of discontinued
operations. Presentation of the
Companys discontinued operations on a net asset basis is consistent with how
the Company evaluates its discontinued operations.
The
Company presents the following non-GAAP financial measures in the attached
earnings release that incorporate the adjustments described above:
·
Economic net income (loss): This is the
Companys net income (loss) adjusted to exclude share-based compensation
expense or benefit.
·
Adjusted economic earnings per diluted common
share: This is the Companys economic
net income (loss) per diluted common share adjusted to exclude unrealized gains
and losses from investments and derivatives.
·
Economic balance sheet: This is the Companys
consolidated balance sheet presented in accordance with GAAP adjusted to
reflect the aforementioned adjustments for Joint CLOs and share-based
compensation expense or benefit.
·
Economic statements of operations: This is
the Companys statements of operations for the stated periods presented in
accordance with GAAP adjusted to reflect the aforementioned adjustments for
Joint CLOs and share-based compensation expense or benefit.
The
Company believes that these non-GAAP financial measures provide useful
information to investors by providing an understanding of the Companys
financial condition and operating performance by which liquidity and periodic
financial results, for purposes of evaluating the net income available for
distributions to shareholders, can be assessed.
The
non-GAAP financial measures are provided as supplemental information and should
not be relied upon as an alternative to GAAP. Reconciliations of these non-GAAP
financial measures to GAAP measures are provided in the attached.
The
information in this Current Report, including the exhibit hereto, is being
furnished and shall not be deemed filed for the purpose of Section 18 of
the Securities Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that Section. The information in this Current Report shall not
be incorporated by reference into any registration statement or other document
pursuant to the Securities Act of 1933, as amended.
ITEM
9.01 Financial Statements and Exhibits.
Exhibit 99.1 Earnings release regarding the financial
results for the first quarter ended March 31, 2008.
3
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
|
|
KKR
Financial Holdings LLC
|
|
|
(Registrant)
|
Date:
May 1, 2008
|
|
/s/
JEFFREY B. VAN HORN
|
|
By:
|
Jeffrey
B. Van Horn
|
|
|
Chief
Financial Officer
|
|
|
(Principal
Financial and Accounting Officer)
|
4
EXHIBIT INDEX
Exhibit
Number
|
|
Description
|
99.1
|
|
Earnings
release regarding the financial results for the first quarter ended March 31,
2008.
|
5
Kkr Financial (NYSE:KFN)
Historical Stock Chart
From Sep 2024 to Oct 2024
Kkr Financial (NYSE:KFN)
Historical Stock Chart
From Oct 2023 to Oct 2024