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):
July 24, 2014
KKR & CO.
L.P.
KKR FINANCIAL
HOLDINGS LLC
(Exact
name of registrant as specified in its charter)
Delaware
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001-34820
001-33437
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26-0426107
11-3801844
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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9 West 57th Street, Suite 4200, New York, New York
555 California Street, 50th Floor, San Francisco, CA
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10019
94104
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(Address
of principal executive offices)
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(Zip
Code)
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(212)
750-8300
(415) 315-3620
(Registrant’s
telephone number, including area code)
NOT
APPLICABLE
(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):
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
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 July 24, 2014, KKR & Co. L.P. issued a press release announcing its
financial results for the quarter ended June 30, 2014. While the
release may contain certain information regarding KKR Financial Holdings
LLC (“KFN”), KFN will be separately reporting its financial results for
the quarter ended June 30, 2014 in its quarterly report on Form 10-Q.
The press release is furnished as Exhibit 99.1 to this Report.
As provided in General Instruction B.2 of Form 8-K, the information in
this Item 2.02 and the exhibit furnished by this Form 8-K shall not be
deemed to be “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, nor shall they be deemed to be
incorporated by reference in any filing under the Securities Act of
1933, as amended, except as shall be expressly set forth by specific
reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No.
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Description
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Exhibit 99.1
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Press release of KKR & Co. L.P., dated July 24, 2014, announcing
its results for the quarter ended June 30, 2014 (This exhibit is
furnished and not filed)
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SIGNATURES
Pursuant to
the requirements of the Securities Exchange Act of 1934, each of the
registrants has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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KKR & CO. L.P.
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By: KKR Management LLC, its general partner
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By:
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/s/ William J. Janetschek
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Name:
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William J. Janetschek
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Title:
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Chief Financial Officer
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KKR FINANCIAL HOLDINGS LLC
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By:
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/s/ Michael R. McFerran
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Name:
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Michael R. McFerran
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Date:
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July 24, 2014
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Title:
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Chief Financial Officer
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EXHIBIT INDEX
Exhibit No.
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Description
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Exhibit 99.1
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Press release of KKR & Co. L.P., dated July 24, 2014, announcing
its results for the quarter ended June 30, 2014 (This exhibit is
furnished and not filed)
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Exhibit 99.1
KKR & Co.
L.P. Announces Second Quarter 2014 Results
Exit
Activity Drives Record Total Distributable Earnings
GAAP net
income (loss) attributable to KKR & Co. L.P. was $178.2 million and
$388.3 million for the quarter and six months ended June 30, 2014,
respectively, up from $15.1 million and $208.6 million in the comparable
periods of 2013.
Total
distributable earnings was $701.0 million and $1,147.8 million for the
quarter and six months ended June 30, 2014, respectively, up from $403.8
million and $694.4 million in the comparable periods of 2013.
Distribution
per common unit was $0.67 and $1.10 for the quarter and six months ended
June 30, 2014, respectively, up from $0.42 and $0.69 in the comparable
periods of 2013.
Economic
net income (“ENI”) was $501.6 million and $1,131.8 million for the
quarter and six months ended June 30, 2014, respectively, up from $144.4
million and $792.2 million in the comparable periods of 2013.
ENI after
taxes per adjusted unit was $0.62 and $1.43 for the quarter and six
months ended June 30, 2014, respectively, up from $0.18 and $1.06 in the
comparable periods of 2013.
(1)
ENI after
taxes and equity-based charges per adjusted unit was $0.57 and $1.32 for
the quarter and six months ended June 30, 2014, respectively, up from
$0.15 and $0.99 for the quarter and six months ended June 30, 2013. (1)
Fee and
yield earnings were $154.2 million and $317.0 million for the quarter
and six months ended June 30, 2014, respectively, up from $101.0 million
and $188.5 million in the comparable periods of 2013.
Book
value was $10.4 billion on a total reportable segment basis as of June
30, 2014 or $12.52 per adjusted unit.
Return on
equity and cash return on equity were 28.7% and 22.2%, respectively, on
a trailing twelve month basis.
Assets
under management (“AUM”) and fee paying assets under management
(“FPAUM”) totaled $98.0 billion and $79.7 billion as of June 30, 2014,
respectively.
Previously
announced acquisition of KFN has closed.
NEW YORK--(BUSINESS WIRE)--July 24, 2014--KKR & Co. L.P. (NYSE:KKR)
today reported its second quarter 2014 results.
On April 30, 2014, KKR completed its acquisition of KKR Financial
Holdings LLC (“KFN”). Through the acquisition, KKR increased the scale,
liquidity, and yield profile of its balance sheet and added over $2
billion of net assets to support the continued growth of its business.
For the three, six and trailing twelve months ended June 30, 2014, the
carrying value of our private equity portfolio appreciated 5.0%, 9.3%,
and 23.7%, respectively.
KKR declares a distribution of $0.67 per common unit, which includes
$0.41 of realized cash carry, the 17th consecutive quarter
that realized cash carry has been a component of the distribution.
“Our realization activity in the second quarter drove the highest cash
carry and total distributable earnings we’ve reported since going
public, contributing to a quarterly distribution of $0.67. Additionally,
our cash flow generation, investment performance, and balance sheet
income resulted in a 29% return on equity and 22% cash return on equity
over the last twelve months,” said Henry R. Kravis and George R.
Roberts, Co-Chairmen and Co-Chief Executive Officers of KKR. “We also
closed the KFN acquisition in the second quarter, bringing us recurring
cash earnings and more permanent capital to grow the firm.”
_________________________________________________________________________________________________
Note: Certain financial measures, including FRE, ENI, after-tax ENI, ENI
after taxes and equity-based charges, 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 A and B for a
reconciliation of such measures to financial results prepared in
accordance with GAAP.
(1) Prospectively, KKR plans to only report ENI after taxes and
equity-based charges per adjusted unit
GAAP RESULTS
GAAP results for the quarter and six months ended June 30, 2014,
included net income attributable to KKR & Co. L.P. of $178.2 million and
$388.3 million, respectively, and net income attributable to KKR & Co.
L.P. per common unit of $0.43 and $1.06, respectively, on a diluted
basis. For the quarter and six months ended June 30, 2013, net income
attributable to KKR & Co. L.P. was $15.1 million and $208.6 million,
respectively, and net income attributable to KKR & Co. L.P. per common
unit was $0.05 and $0.72, respectively, on a diluted basis. The
increases in both comparable periods were primarily due to (i) an
increase in investment income; (ii) higher transaction fees; and (iii)
an increase in KKR & Co. L.P.’s ownership percentage in the KKR business.
SEGMENT RESULTS*
Private Markets
AUM was $59.4 billion as of June 30, 2014, a decrease of $1.1 billion,
or 1.8%, compared to AUM of $60.5 billion as of March 31, 2014. The
decrease was primarily attributable to distributions to the limited
partners of our private equity funds arising from realizations which
were partially offset by appreciation in the fair value of our private
equity portfolio and new capital raised.
FPAUM was $46.2 billion as of June 30, 2014, a decrease of $2.0 billion,
or 4.1%, compared to FPAUM of $48.2 billion as of March 31, 2014. The
decrease was primarily attributable to the bankruptcy filing of Energy
Future Holdings during the second quarter, and to a lesser extent,
distributions to the limited partners of our private equity funds
arising from realizations. These decreases were partially offset by new
capital raised.
Total segment revenues were $642.9 million for the quarter ended June
30, 2014, an increase of $445.1 million compared to total segment
revenues of $197.8 million for the quarter ended June 30, 2013. Total
segment revenues were $1,373.6 million for the six months ended June 30,
2014, an increase of $354.7 million compared to total segment revenues
of $1,018.9 million for the six months ended June 30, 2013. The increase
in both comparable periods was principally attributable to a higher
level of net carried interest and total investment income reflecting a
higher level of appreciation in our private equity portfolio.
ENI was $376.2 million for the quarter ended June 30, 2014, an increase
of $297.7 million compared to ENI of $78.5 million for the quarter ended
June 30, 2013. ENI was $861.6 million for the six months ended June 30,
2014, an increase of $217.1 million compared to ENI of $644.5 million
for the six months ended June 30, 2013. The increase in both comparable
periods was principally attributable to a higher level of net carried
interest and total investment income reflecting a higher level of
appreciation in our private equity portfolio. The increased total
segment revenues were partially offset by higher total segment expenses
reflecting an increase in allocations to the carry pool driven by a
higher level of carried interest recognized during the 2014 periods.
Public Markets
AUM was $38.5 billion as of June 30, 2014, a decrease of $3.3 billion,
or 7.9%, compared to AUM of $41.8 billion as of March 31, 2014. FPAUM
was $33.5 billion as of June 30, 2014, a decrease of $1.9 billion, or
5.4%, compared to FPAUM of $35.4 billion as of March 31, 2014. For both
AUM and FPAUM, the decreases were primarily attributable to the
acquisition of KFN which decreased AUM by approximately $4.5 billion and
FPAUM by approximately $2.7 billion, partially offset by new capital
raised and appreciation in net asset values in our public markets
strategies.
Total segment revenues were $157.2 million for the quarter ended June
30, 2014, an increase of $76.6 million compared to total segment
revenues of $80.6 million for the quarter ended June 30, 2013. Total
segment revenues were $302.8 million for the six months ended June 30,
2014, an increase of $117.0 million compared to total segment revenues
of $185.8 million for the six months ended June 30, 2013. The increase
in both comparable periods was principally attributable to higher total
investment income primarily relating to the inclusion of KFN during the
2014 periods beginning on May 1, 2014 and to a lesser extent higher
management fees reflecting new capital raised.
ENI was $105.6 million for the quarter ended June 30, 2014, an increase
of $62.4 million compared to ENI of $43.2 million for the quarter ended
June 30, 2013. ENI was $203.4 million for the six months ended June 30,
2014, an increase of $92.7 million compared to ENI of $110.7 million for
the six months ended June 30, 2013. The increase in both comparable
periods was principally attributable to higher total investment income
primarily due to the income generated by KFN’s operations during the
2014 periods beginning on May 1, 2014 and to a lesser extent higher
management fees reflecting new capital raised. These increases were
partially offset by higher compensation expense.
Capital Markets and Other
Total segment revenues were $34.0 million for the quarter ended June 30,
2014, up slightly when compared to total segment revenues of $32.5
million for the quarter ended June 30, 2013. Total segment revenues were
$103.2 million for the six months ended June 30, 2014, an increase of
$45.6 million compared to total segment revenues of $57.6 million for
the quarter ended June 30, 2013. The increase in total segment revenues
in both comparable periods was primarily driven by higher overall
capital markets transaction activity.
ENI was $19.8 million for the quarter ended June 30, 2014, a decrease of
$3.0 million compared to ENI of $22.8 million for the quarter ended June
30, 2013. The decrease was principally attributable to higher
compensation expense. ENI was $66.9 million for the six months ended
June 30, 2014, an increase of $30.0 million compared to ENI of $36.9
million for the six months ended June 30, 2013. The increase was
principally attributable to higher transaction fees driven by higher
overall capital markets transaction activity, partially offset by higher
compensation expense.
___________________________________________________________________________________________
* All segment financial information presented in this release reflect a
new presentation as of the second quarter of 2014. For example, certain
investment income previously reported in our Capital Markets and
Principal Activities segment (which is now named Capital Markets and
Other) is now reported in either our Private Markets or Public Markets
segment, depending upon the nature of such income, and economic net
income is presented as total segment revenue less total segment
expenses. As a result of the revised presentation, segment information
for historical periods has been restated from previously published
results and, consequently, is not consistent with such previously
reported information. The Investor Center for KKR & Co. L.P. at http://ir.kkr.com/kkr_ir/kkr_events.cfm
contains historical segment financial information for the quarter ended
March 31, 2014 and each of the quarterly periods in the fiscal year
ended December 31, 2013, as revised to give effect to the new
presentation.
CAPITAL AND LIQUIDITY
As of June 30, 2014, KKR had $3.4 billion of cash and short-term
investments and $2.5 billion of outstanding debt obligations on a total
reportable segment basis. In addition, with the acquisition of KFN, KKR
reports KFN’s debt obligations of $657.3 million and KFN’s 7.375% Series
A LLC preferred shares of $373.8 million. KFN’s debt obligations and
preferred shares are non-recourse to KKR beyond the assets of KFN. KKR’s
availability for borrowings was $750.0 million (which is reduced by an
outstanding letter of credit), which does not include a $500.0 million
revolving credit facility for use in its capital markets business that
was undrawn as of June 30, 2014.
As of June 30, 2014, KKR’s portion of total uncalled commitments to its
investment funds was $976.9 million, consisting of the following
(amounts in thousands):
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Uncalled
Commitments
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Private Markets
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Energy Income and Growth Fund
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$
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208,600
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North America Fund XI
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178,200
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Real Estate Partners Americas
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141,300
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Asian Fund II
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62,600
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European Fund III
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59,800
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2006 Fund
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57,900
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Infrastructure
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15,000
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Natural Resources
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11,600
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Other Private Equity Funds
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7,700
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Co-Investment Vehicles
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32,200
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Total Private Markets Commitments
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774,900
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Public Markets
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Special Situations Vehicles
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120,300
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Direct Lending Vehicles
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66,300
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Mezzanine Fund
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13,100
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Other Credit Vehicles
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2,300
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Total Public Markets Commitments
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202,000
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Total Uncalled Commitments
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$
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976,900
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DISTRIBUTION
A distribution of $0.67 per common unit has been declared, comprised of
(i) $0.09 per common unit from after-tax FRE, (ii) $0.41 per common unit
from realized cash carry, (iii) $0.12 per common unit from KKR’s net
realized investment income and (iv) $0.05 per common unit from KFN’s net
realized investment income earned for the two months ended June 30,
2014. The distribution will be paid on August 19, 2014 to unitholders of
record as of the close of business on August 4, 2014. Please refer to
the distribution policy presented later in this release.
CONFERENCE CALL
A conference call to discuss KKR's financial results will be held
on Thursday, July 24, 2014 at 10:00 a.m. EDT. The conference call may be
accessed by dialing (877) 303-2917 (U.S. callers) or +1 (253) 237-1135
(non-U.S. callers); a pass code is not required. Additionally, the
conference call will be broadcast live over the Internet and may be
accessed through the 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 71626990, 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.
FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements.
Forward-looking statements relate to expectations, beliefs, projections,
future plans and strategies, anticipated events or trends and similar
expressions concerning matters that are not historical facts. The
forward-looking statements are based on KKR’s beliefs, assumptions and
expectations of its future performance, taking into account all
information currently available to it. These beliefs, assumptions and
expectations can change as a result of many possible events or factors,
not all of which are known to KKR or are within its control. If a change
occurs, KKR’s business, financial condition, liquidity and results of
operations, including but not limited to AUM, FPAUM, FRE, total
distributable earnings, ENI, after-tax ENI, ENI after taxes and
equity-based charges, fee and yield earnings, fee and yield EBITDA,
committed dollars invested and syndicated capital, uncalled commitments,
core interest expense, cash and short-term investments, net realized
principal investment income and book value, may vary materially from
those expressed in the forward-looking statements. The following
factors, among others, could cause actual results to vary from the
forward-looking statements: the general volatility of the capital
markets; failure to realize the benefits of or changes in KKR’s business
strategies including the ability to realize the anticipated synergies
from acquisitions or strategic partnerships such as Prisma, Nephila,
Avoca or KFN; availability, terms and deployment of capital;
availability of qualified personnel and expense of recruiting and
retaining such personnel; changes in the asset management industry,
interest rates or the general economy; underperformance of KKR's
investments and decreased ability to raise funds; and the degree and
nature of KKR’s competition. KKR does not undertake any obligation to
update any forward-looking statements to reflect circumstances or events
that occur after the date on which such statements were made except as
required by law. In addition, KKR’s business strategy is focused on the
long term and financial results are subject to significant volatility.
Additional information about factors affecting KKR is available in KKR &
Co. L.P.’s Annual Report on Form 10-K for the fiscal year ended December
31, 2013, filed with the SEC on February 24, 2014, Quarterly Report on
Form 10-Q for the quarter ended March 31, 2014 filed with the SEC on May
7, 2014 and other filings with the SEC, which are available at www.sec.gov.
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KKR
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP BASIS -
UNAUDITED)
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(Amounts in thousands, except common unit and per common unit
amounts)
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Quarter Ended
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Six Months Ended
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June 30, 2014
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June 30, 2013
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June 30, 2014
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June 30, 2013
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Revenues
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Fees
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$
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249,370
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$
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166,376
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$
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552,296
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$
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317,616
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Expenses
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Compensation and Benefits
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358,730
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200,602
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689,768
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531,723
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Occupancy and Related Charges
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16,059
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13,878
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31,467
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28,399
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General, Administrative and Other
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210,536
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77,542
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337,261
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171,230
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Total Expenses
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585,325
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292,022
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1,058,496
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731,352
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Investment Income (Loss)
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Net Gains (Losses) from Investment Activities
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1,971,850
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98,537
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3,944,030
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2,368,354
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Dividend Income
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272,902
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209,486
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369,606
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248,955
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Interest Income
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215,872
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128,020
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377,832
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237,389
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Interest Expense
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(65,997
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)
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(24,614
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)
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(100,728
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)
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(47,637
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)
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Total Investment Income (Loss)
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2,394,627
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411,429
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4,590,740
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2,807,061
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Income (Loss) Before Taxes
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2,058,672
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285,783
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4,084,540
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2,393,325
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Income Taxes
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6,176
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8,525
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27,878
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17,881
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Net Income (Loss)
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2,052,496
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277,258
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4,056,662
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2,375,444
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Net Income (Loss) Attributable to
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Redeemable Noncontrolling Interests
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(6,809
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)
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(7,800
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)
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3,828
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16,823
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Net Income (Loss) Attributable to
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Noncontrolling Interests
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1,881,090
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269,924
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3,664,578
|
|
|
|
2,150,048
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Attributable to KKR & Co. L.P.
|
|
$
|
178,215
|
|
|
$
|
15,134
|
|
|
$
|
388,256
|
|
|
$
|
208,573
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Attributable to KKR & Co. L.P. Per Common Unit
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.47
|
|
|
$
|
0.06
|
|
|
$
|
1.16
|
|
|
$
|
0.79
|
|
Diluted (a)
|
|
$
|
0.43
|
|
|
$
|
0.05
|
|
|
$
|
1.06
|
|
|
$
|
0.72
|
|
Weighted Average Common Units Outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
|
377,542,161
|
|
|
|
271,983,811
|
|
|
|
335,748,498
|
|
|
|
264,555,267
|
|
Diluted (a)
|
|
|
410,179,838
|
|
|
|
298,078,764
|
|
|
|
367,877,049
|
|
|
|
290,104,942
|
|
|
|
|
|
|
|
|
|
|
___________________________________________________________________________________________
(a)
|
|
|
KKR Holdings L.P. units have been excluded from the calculation of
diluted earnings per common unit given that the exchange of these
units would proportionally increase KKR & Co. L.P.’s interests in
KKR’s business and would have an anti-dilutive effect on earnings
per common unit as a result of certain tax benefits KKR & Co. L.P.
is assumed to receive upon the exchange.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KKR
|
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
|
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
|
(Amounts in thousands, except unit and per unit amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Six Months Ended
|
|
|
June 30, 2014
|
|
March 31, 2014
|
|
June 30, 2013
|
|
June 30, 2014
|
|
June 30, 2013
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
Management, Monitoring and Transaction Fees, Net
|
|
|
|
|
|
|
|
|
|
|
Management Fees
|
|
$
|
178,674
|
|
|
$
|
195,393
|
|
|
$
|
164,176
|
|
|
$
|
374,067
|
|
|
$
|
317,139
|
|
Monitoring Fees
|
|
|
29,610
|
|
|
|
36,363
|
|
|
|
28,907
|
|
|
|
65,973
|
|
|
|
60,975
|
|
Transaction Fees
|
|
|
84,305
|
|
|
|
163,516
|
|
|
|
62,785
|
|
|
|
247,821
|
|
|
|
103,084
|
|
Fee Credits
|
|
|
(49,830
|
)
|
|
|
(84,668
|
)
|
|
|
(34,751
|
)
|
|
|
(134,498
|
)
|
|
|
(57,816
|
)
|
Total Management, Monitoring and Transaction Fees, Net
|
|
|
242,759
|
|
|
|
310,604
|
|
|
|
221,117
|
|
|
|
553,363
|
|
|
|
423,382
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Fees
|
|
|
|
|
|
|
|
|
|
|
Realized Carried Interest
|
|
|
555,488
|
|
|
|
193,550
|
|
|
|
269,828
|
|
|
|
749,038
|
|
|
|
357,995
|
|
Incentive Fees
|
|
|
11,478
|
|
|
|
17,019
|
|
|
|
15,590
|
|
|
|
28,497
|
|
|
|
34,439
|
|
Unrealized Carried Interest
|
|
|
(137,826
|
)
|
|
|
145,647
|
|
|
|
(206,753
|
)
|
|
|
7,821
|
|
|
|
115,229
|
|
Total Performance Fees
|
|
|
429,140
|
|
|
|
356,216
|
|
|
|
78,665
|
|
|
|
785,356
|
|
|
|
507,663
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
Net Realized Gains (Losses)
|
|
|
221,661
|
|
|
|
181,728
|
|
|
|
147,579
|
|
|
|
403,389
|
|
|
|
301,206
|
|
Net Unrealized Gains (Losses)
|
|
|
(119,935
|
)
|
|
|
85,759
|
|
|
|
(139,311
|
)
|
|
|
(34,176
|
)
|
|
|
27,731
|
|
Total Realized and Unrealized
|
|
|
101,726
|
|
|
|
267,487
|
|
|
|
8,268
|
|
|
|
369,213
|
|
|
|
328,937
|
|
Net Interest and Dividends
|
|
|
60,432
|
|
|
|
11,164
|
|
|
|
2,782
|
|
|
|
71,596
|
|
|
|
2,311
|
|
Total Investment Income (Loss)
|
|
|
162,158
|
|
|
|
278,651
|
|
|
|
11,050
|
|
|
|
440,809
|
|
|
|
331,248
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Revenues
|
|
|
834,057
|
|
|
|
945,471
|
|
|
|
310,832
|
|
|
|
1,779,528
|
|
|
|
1,262,293
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
Compensation and Benefits
|
|
|
|
|
|
|
|
|
|
|
Cash Compensation and Benefits
|
|
|
91,444
|
|
|
|
108,915
|
|
|
|
80,436
|
|
|
|
200,359
|
|
|
|
155,598
|
|
Realized Allocation to Carry Pool
|
|
|
222,195
|
|
|
|
77,420
|
|
|
|
107,931
|
|
|
|
299,615
|
|
|
|
143,198
|
|
Unrealized Allocation to Carry Pool
|
|
|
(53,435
|
)
|
|
|
58,690
|
|
|
|
(81,395
|
)
|
|
|
5,255
|
|
|
|
52,842
|
|
Total Compensation and Benefits
|
|
|
260,204
|
|
|
|
245,025
|
|
|
|
106,972
|
|
|
|
505,229
|
|
|
|
351,638
|
|
Occupancy and related charges
|
|
|
14,757
|
|
|
|
14,189
|
|
|
|
13,067
|
|
|
|
28,946
|
|
|
|
26,389
|
|
Other operating expenses
|
|
|
54,311
|
|
|
|
52,801
|
|
|
|
45,027
|
|
|
|
107,112
|
|
|
|
89,657
|
|
Total Segment Expenses
|
|
|
329,272
|
|
|
|
312,015
|
|
|
|
165,066
|
|
|
|
641,287
|
|
|
|
467,684
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) attributable to noncontrolling interests
|
|
|
3,206
|
|
|
|
3,202
|
|
|
|
1,323
|
|
|
|
6,408
|
|
|
|
2,424
|
|
|
|
|
|
|
|
|
|
|
|
|
Economic Net Income (Loss)
|
|
$
|
501,579
|
|
|
$
|
630,254
|
|
|
$
|
144,443
|
|
|
$
|
1,131,833
|
|
|
$
|
792,185
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Income Taxes
|
|
|
6,330
|
|
|
|
36,581
|
|
|
|
13,486
|
|
|
|
42,911
|
|
|
|
33,603
|
|
|
|
|
|
|
|
|
|
|
|
|
Economic Net Income (Loss), After Taxes (a)
|
|
$
|
495,249
|
|
|
$
|
593,673
|
|
|
$
|
130,957
|
|
|
$
|
1,088,922
|
|
|
$
|
758,582
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity-based Charges
|
|
|
40,877
|
|
|
|
39,353
|
|
|
|
25,936
|
|
|
|
80,230
|
|
|
|
53,354
|
|
|
|
|
|
|
|
|
|
|
|
|
Economic Net Income (Loss), After Taxes and Equity-based Charges
|
|
$
|
454,372
|
|
|
$
|
554,320
|
|
|
$
|
105,021
|
|
|
$
|
1,008,692
|
|
|
$
|
705,228
|
|
|
|
|
|
|
|
|
|
|
|
|
Economic Net Income (Loss), After Taxes and Equity-based Charges
Per Adjusted Unit
|
|
$
|
0.57
|
|
|
$
|
0.77
|
|
|
$
|
0.15
|
|
|
$
|
1.32
|
|
|
$
|
0.99
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Adjusted Units (Fully Diluted Basis) (a)
|
|
|
800,747,528
|
|
|
|
724,579,220
|
|
|
|
715,453,358
|
|
|
|
762,873,784
|
|
|
|
713,353,287
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
$
|
97,957,900
|
|
|
$
|
102,277,500
|
|
|
$
|
83,500,900
|
|
|
$
|
97,957,900
|
|
|
$
|
83,500,900
|
|
Fee Paying Assets Under Management
|
|
$
|
79,656,300
|
|
|
$
|
83,611,600
|
|
|
$
|
67,956,400
|
|
|
$
|
79,656,300
|
|
|
$
|
67,956,400
|
|
Committed Dollars Invested and Syndicated Capital
|
|
$
|
2,345,500
|
|
|
$
|
3,377,300
|
|
|
$
|
1,889,400
|
|
|
$
|
5,722,800
|
|
|
$
|
2,713,800
|
|
Uncalled Commitments
|
|
$
|
19,784,200
|
|
|
$
|
19,985,100
|
|
|
$
|
21,364,400
|
|
|
$
|
19,784,200
|
|
|
$
|
21,364,400
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Information
|
|
|
|
|
|
|
|
|
|
|
Fee Related Earnings
|
|
$
|
93,725
|
|
|
$
|
151,718
|
|
|
$
|
98,177
|
|
|
$
|
245,443
|
|
|
$
|
186,177
|
|
Plus: Net interest and dividends
|
|
|
60,432
|
|
|
|
11,164
|
|
|
|
2,782
|
|
|
|
71,596
|
|
|
|
2,311
|
|
Fee and Yield Earnings (a)
|
|
$
|
154,157
|
|
|
$
|
162,882
|
|
|
$
|
100,959
|
|
|
$
|
317,039
|
|
|
$
|
188,488
|
|
Plus: Depreciation and amortization
|
|
|
4,140
|
|
|
|
4,035
|
|
|
|
3,708
|
|
|
|
8,175
|
|
|
|
7,389
|
|
Plus: Core Interest Expense
|
|
|
19,205
|
|
|
|
18,400
|
|
|
|
16,210
|
|
|
|
37,605
|
|
|
|
32,443
|
|
Fee and Yield EBITDA (a)
|
|
$
|
177,502
|
|
|
$
|
185,317
|
|
|
$
|
120,877
|
|
|
$
|
362,819
|
|
|
$
|
228,320
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Distributable Earnings (a)
|
|
$
|
700,973
|
|
|
$
|
446,808
|
|
|
$
|
403,776
|
|
|
$
|
1,147,781
|
|
|
$
|
694,390
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP interest expense
|
|
$
|
65,997
|
|
|
$
|
34,731
|
|
|
$
|
24,614
|
|
|
$
|
100,728
|
|
|
$
|
47,637
|
|
Less: interest expense related to debt obligations
|
|
|
|
|
|
|
|
|
|
|
from investment financing arrangements and KFN
|
|
|
46,792
|
|
|
|
16,331
|
|
|
|
8,404
|
|
|
|
63,123
|
|
|
|
15,194
|
|
Core Interest Expense (a)
|
|
$
|
19,205
|
|
|
$
|
18,400
|
|
|
$
|
16,210
|
|
|
$
|
37,605
|
|
|
$
|
32,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_____________________________________________________________________________________________
(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.”
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KKR
|
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
|
PRIVATE MARKETS SEGMENT (UNAUDITED)
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Six Months Ended
|
|
|
June 30, 2014
|
|
March 31, 2014
|
|
June 30, 2013
|
|
June 30, 2014
|
|
June 30, 2013
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
Management, Monitoring and Transaction Fees, Net
|
|
|
|
|
|
|
|
|
|
|
Management Fees
|
|
$
|
111,542
|
|
|
$
|
123,039
|
|
|
$
|
114,700
|
|
|
$
|
234,581
|
|
|
$
|
221,305
|
|
Monitoring Fees
|
|
|
29,610
|
|
|
|
36,363
|
|
|
|
28,907
|
|
|
|
65,973
|
|
|
|
60,975
|
|
Transaction Fees
|
|
|
45,340
|
|
|
|
93,020
|
|
|
|
25,231
|
|
|
|
138,360
|
|
|
|
41,643
|
|
Fee Credits
|
|
|
(43,478
|
)
|
|
|
(80,338
|
)
|
|
|
(29,547
|
)
|
|
|
(123,816
|
)
|
|
|
(50,556
|
)
|
Total Management, Monitoring and Transaction Fees, Net
|
|
|
143,014
|
|
|
|
172,084
|
|
|
|
139,291
|
|
|
|
315,098
|
|
|
|
273,367
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Fees
|
|
|
|
|
|
|
|
|
|
|
Realized Carried Interest
|
|
|
555,488
|
|
|
|
168,800
|
|
|
|
269,828
|
|
|
|
724,288
|
|
|
|
357,995
|
|
Incentive Fees
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Unrealized Carried Interest
|
|
|
(163,564
|
)
|
|
|
145,776
|
|
|
|
(217,544
|
)
|
|
|
(17,788
|
)
|
|
|
84,039
|
|
Total Performance Fees
|
|
|
391,924
|
|
|
|
314,576
|
|
|
|
52,284
|
|
|
|
706,500
|
|
|
|
442,034
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
Net Realized Gains (Losses)
|
|
|
207,892
|
|
|
|
176,198
|
|
|
|
148,827
|
|
|
|
384,090
|
|
|
|
297,689
|
|
Net Unrealized Gains (Losses)
|
|
|
(122,729
|
)
|
|
|
70,673
|
|
|
|
(138,758
|
)
|
|
|
(52,056
|
)
|
|
|
15,884
|
|
Total Realized and Unrealized
|
|
|
85,163
|
|
|
|
246,871
|
|
|
|
10,069
|
|
|
|
332,034
|
|
|
|
313,573
|
|
Net Interest and Dividends
|
|
|
22,760
|
|
|
|
(2,808
|
)
|
|
|
(3,868
|
)
|
|
|
19,952
|
|
|
|
(10,066
|
)
|
Total Investment Income (Loss)
|
|
|
107,923
|
|
|
|
244,063
|
|
|
|
6,201
|
|
|
|
351,986
|
|
|
|
303,507
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Revenues
|
|
|
642,861
|
|
|
|
730,723
|
|
|
|
197,776
|
|
|
|
1,373,584
|
|
|
|
1,018,908
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
Compensation and Benefits
|
|
|
|
|
|
|
|
|
|
|
Cash Compensation and Benefits
|
|
|
56,522
|
|
|
|
66,898
|
|
|
|
51,516
|
|
|
|
123,420
|
|
|
|
99,517
|
|
Realized Allocation to Carry Pool
|
|
|
222,195
|
|
|
|
67,520
|
|
|
|
107,931
|
|
|
|
289,715
|
|
|
|
143,198
|
|
Unrealized Allocation to Carry Pool
|
|
|
(63,730
|
)
|
|
|
58,743
|
|
|
|
(85,711
|
)
|
|
|
(4,987
|
)
|
|
|
40,366
|
|
Total Compensation and Benefits
|
|
|
214,987
|
|
|
|
193,161
|
|
|
|
73,736
|
|
|
|
408,148
|
|
|
|
283,081
|
|
Occupancy and related charges
|
|
|
11,764
|
|
|
|
11,560
|
|
|
|
11,143
|
|
|
|
23,324
|
|
|
|
22,568
|
|
Other operating expenses
|
|
|
39,589
|
|
|
|
40,059
|
|
|
|
33,988
|
|
|
|
79,648
|
|
|
|
67,930
|
|
Total Segment Expenses
|
|
|
266,340
|
|
|
|
244,780
|
|
|
|
118,867
|
|
|
|
511,120
|
|
|
|
373,579
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) attributable to noncontrolling interests
|
|
|
335
|
|
|
|
515
|
|
|
|
411
|
|
|
|
850
|
|
|
|
809
|
|
|
|
|
|
|
|
|
|
|
|
|
Economic Net Income (Loss)
|
|
$
|
376,186
|
|
|
$
|
485,428
|
|
|
$
|
78,498
|
|
|
$
|
861,614
|
|
|
$
|
644,520
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
$
|
59,417,000
|
|
|
$
|
60,520,300
|
|
|
$
|
54,452,400
|
|
|
$
|
59,417,000
|
|
|
$
|
54,452,400
|
|
Fee Paying Assets Under Management
|
|
$
|
46,167,300
|
|
|
$
|
48,211,000
|
|
|
$
|
45,907,500
|
|
|
$
|
46,167,300
|
|
|
$
|
45,907,500
|
|
Committed Dollars Invested
|
|
$
|
1,454,400
|
|
|
$
|
2,551,800
|
|
|
$
|
1,314,000
|
|
|
$
|
4,006,200
|
|
|
$
|
1,912,500
|
|
Uncalled Commitments
|
|
$
|
17,109,800
|
|
|
$
|
18,256,800
|
|
|
$
|
19,972,800
|
|
|
$
|
17,109,800
|
|
|
$
|
19,972,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KKR
|
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
|
PUBLIC MARKETS SEGMENT (UNAUDITED)
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Six Months Ended
|
|
|
June 30, 2014
|
|
March 31, 2014
|
|
June 30, 2013
|
|
June 30, 2014
|
|
June 30, 2013
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
Management, Monitoring and Transaction Fees, Net
|
|
|
|
|
|
|
|
|
|
|
Management Fees
|
|
$
|
67,132
|
|
|
$
|
72,354
|
|
|
$
|
49,476
|
|
|
$
|
139,486
|
|
|
$
|
95,834
|
|
Monitoring Fees
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Transaction Fees
|
|
|
7,350
|
|
|
|
6,022
|
|
|
|
7,243
|
|
|
|
13,372
|
|
|
|
10,349
|
|
Fee Credits
|
|
|
(6,352
|
)
|
|
|
(4,330
|
)
|
|
|
(5,204
|
)
|
|
|
(10,682
|
)
|
|
|
(7,260
|
)
|
Total Management, Monitoring and Transaction Fees, Net
|
|
|
68,130
|
|
|
|
74,046
|
|
|
|
51,515
|
|
|
|
142,176
|
|
|
|
98,923
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Fees
|
|
|
|
|
|
|
|
|
|
|
Realized Carried Interest
|
|
|
-
|
|
|
|
24,750
|
|
|
|
-
|
|
|
|
24,750
|
|
|
|
-
|
|
Incentive Fees
|
|
|
11,478
|
|
|
|
17,019
|
|
|
|
15,590
|
|
|
|
28,497
|
|
|
|
34,439
|
|
Unrealized Carried Interest
|
|
|
25,738
|
|
|
|
(129
|
)
|
|
|
10,791
|
|
|
|
25,609
|
|
|
|
31,190
|
|
Total Performance Fees
|
|
|
37,216
|
|
|
|
41,640
|
|
|
|
26,381
|
|
|
|
78,856
|
|
|
|
65,629
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
Net Realized Gains (Losses)
|
|
|
14,284
|
|
|
|
5,479
|
|
|
|
(64
|
)
|
|
|
19,763
|
|
|
|
5,149
|
|
Net Unrealized Gains (Losses)
|
|
|
3,751
|
|
|
|
14,814
|
|
|
|
(741
|
)
|
|
|
18,565
|
|
|
|
9,328
|
|
Total Realized and Unrealized
|
|
|
18,035
|
|
|
|
20,293
|
|
|
|
(805
|
)
|
|
|
38,328
|
|
|
|
14,477
|
|
Net Interest and Dividends
|
|
|
33,822
|
|
|
|
9,577
|
|
|
|
3,508
|
|
|
|
43,399
|
|
|
|
6,748
|
|
Total Investment Income (Loss)
|
|
|
51,857
|
|
|
|
29,870
|
|
|
|
2,703
|
|
|
|
81,727
|
|
|
|
21,225
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Revenues
|
|
|
157,203
|
|
|
|
145,556
|
|
|
|
80,599
|
|
|
|
302,759
|
|
|
|
185,777
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
Compensation and Benefits
|
|
|
|
|
|
|
|
|
|
|
Cash Compensation and Benefits
|
|
|
26,904
|
|
|
|
26,745
|
|
|
|
21,990
|
|
|
|
53,649
|
|
|
|
41,690
|
|
Realized Allocation to Carry Pool
|
|
|
-
|
|
|
|
9,900
|
|
|
|
-
|
|
|
|
9,900
|
|
|
|
-
|
|
Unrealized Allocation to Carry Pool
|
|
|
10,295
|
|
|
|
(53
|
)
|
|
|
4,316
|
|
|
|
10,242
|
|
|
|
12,476
|
|
Total Compensation and Benefits
|
|
|
37,199
|
|
|
|
36,592
|
|
|
|
26,306
|
|
|
|
73,791
|
|
|
|
54,166
|
|
Occupancy and related charges
|
|
|
2,544
|
|
|
|
2,172
|
|
|
|
1,615
|
|
|
|
4,716
|
|
|
|
3,157
|
|
Other operating expenses
|
|
|
11,474
|
|
|
|
8,507
|
|
|
|
9,147
|
|
|
|
19,981
|
|
|
|
16,973
|
|
Total Segment Expenses
|
|
|
51,217
|
|
|
|
47,271
|
|
|
|
37,068
|
|
|
|
98,488
|
|
|
|
74,296
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) attributable to noncontrolling interests
|
|
|
385
|
|
|
|
522
|
|
|
|
378
|
|
|
|
907
|
|
|
|
733
|
|
|
|
|
|
|
|
|
|
|
|
|
Economic Net Income (Loss)
|
|
$
|
105,601
|
|
|
$
|
97,763
|
|
|
$
|
43,153
|
|
|
$
|
203,364
|
|
|
$
|
110,748
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
$
|
38,540,900
|
|
|
$
|
41,757,200
|
|
|
$
|
29,048,500
|
|
|
$
|
38,540,900
|
|
|
$
|
29,048,500
|
|
Fee Paying Assets Under Management
|
|
$
|
33,489,000
|
|
|
$
|
35,400,600
|
|
|
$
|
22,048,900
|
|
|
$
|
33,489,000
|
|
|
$
|
22,048,900
|
|
Committed Dollars Invested
|
|
$
|
724,400
|
|
|
$
|
734,100
|
|
|
$
|
370,800
|
|
|
$
|
1,458,500
|
|
|
$
|
535,700
|
|
Uncalled Commitments
|
|
$
|
2,674,400
|
|
|
$
|
1,728,300
|
|
|
$
|
1,391,600
|
|
|
$
|
2,674,400
|
|
|
$
|
1,391,600
|
|
Gross Dollars Invested
|
|
$
|
768,200
|
|
|
$
|
989,700
|
|
|
$
|
847,300
|
|
|
$
|
1,757,900
|
|
|
$
|
1,225,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KKR
|
STATEMENTS OF OPERATIONS AND OTHER SELECTED FINANCIAL INFORMATION
|
CAPITAL MARKETS AND OTHER SEGMENT (UNAUDITED)
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Six Months Ended
|
|
|
June 30, 2014
|
|
March 31, 2014
|
|
June 30, 2013
|
|
June 30, 2014
|
|
June 30, 2013
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
Management, Monitoring and Transaction Fees, Net
|
|
|
|
|
|
|
|
|
|
|
Management Fees
|
|
$
|
-
|
|
|
$
|
-
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Monitoring Fees
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Transaction Fees
|
|
|
31,615
|
|
|
|
64,474
|
|
|
30,311
|
|
|
|
96,089
|
|
|
|
51,092
|
|
Fee Credits
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total Management, Monitoring and Transaction Fees, Net
|
|
|
31,615
|
|
|
|
64,474
|
|
|
30,311
|
|
|
|
96,089
|
|
|
|
51,092
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Fees
|
|
|
|
|
|
|
|
|
|
|
Realized Carried Interest
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Incentive Fees
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Unrealized Carried Interest
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total Performance Fees
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
Net Realized Gains (Losses)
|
|
|
(515
|
)
|
|
|
51
|
|
|
(1,184
|
)
|
|
|
(464
|
)
|
|
|
(1,632
|
)
|
Net Unrealized Gains (Losses)
|
|
|
(957
|
)
|
|
|
272
|
|
|
188
|
|
|
|
(685
|
)
|
|
|
2,519
|
|
Total Realized and Unrealized
|
|
|
(1,472
|
)
|
|
|
323
|
|
|
(996
|
)
|
|
|
(1,149
|
)
|
|
|
887
|
|
Net Interest and Dividends
|
|
|
3,850
|
|
|
|
4,395
|
|
|
3,142
|
|
|
|
8,245
|
|
|
|
5,629
|
|
Total Investment Income (Loss)
|
|
|
2,378
|
|
|
|
4,718
|
|
|
2,146
|
|
|
|
7,096
|
|
|
|
6,516
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Revenues
|
|
|
33,993
|
|
|
|
69,192
|
|
|
32,457
|
|
|
|
103,185
|
|
|
|
57,608
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
Compensation and Benefits
|
|
|
|
|
|
|
|
|
|
|
Cash Compensation and Benefits
|
|
|
8,018
|
|
|
|
15,272
|
|
|
6,930
|
|
|
|
23,290
|
|
|
|
14,391
|
|
Realized Allocation to Carry Pool
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Unrealized Allocation to Carry Pool
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total Compensation and Benefits
|
|
|
8,018
|
|
|
|
15,272
|
|
|
6,930
|
|
|
|
23,290
|
|
|
|
14,391
|
|
Occupancy and related charges
|
|
|
449
|
|
|
|
457
|
|
|
309
|
|
|
|
906
|
|
|
|
664
|
|
Other operating expenses
|
|
|
3,248
|
|
|
|
4,235
|
|
|
1,892
|
|
|
|
7,483
|
|
|
|
4,754
|
|
Total Segment Expenses
|
|
|
11,715
|
|
|
|
19,964
|
|
|
9,131
|
|
|
|
31,679
|
|
|
|
19,809
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) attributable to noncontrolling interests
|
|
|
2,486
|
|
|
|
2,165
|
|
|
534
|
|
|
|
4,651
|
|
|
|
882
|
|
|
|
|
|
|
|
|
|
|
|
|
Economic Net Income (Loss)
|
|
$
|
19,792
|
|
|
$
|
47,063
|
|
$
|
22,792
|
|
|
$
|
66,855
|
|
|
$
|
36,917
|
|
|
|
|
|
|
|
|
|
|
|
|
Syndicated Capital
|
|
$
|
166,700
|
|
|
$
|
91,400
|
|
$
|
204,600
|
|
|
$
|
258,100
|
|
|
$
|
265,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KKR
|
BALANCE SHEET
|
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
|
(Amounts in thousands, except per unit amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
June 30, 2014
|
|
|
|
|
As of
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and short-term investments
|
|
$
|
3,375,164
|
|
|
|
|
$
|
2,161,097
|
|
|
Investments
|
|
|
8,125,042
|
|
(a)
|
|
|
|
4,980,265
|
|
|
Unrealized carry
|
|
|
1,207,172
|
|
(b)
|
|
|
|
1,179,338
|
|
(b)
|
Other assets
|
|
|
746,828
|
|
|
|
|
|
662,357
|
|
|
Total assets
|
|
$
|
13,454,206
|
|
|
|
|
$
|
8,983,057
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt obligations - KKR
|
|
$
|
1,500,000
|
|
|
|
|
$
|
1,000,000
|
|
|
Debt obligations - KFN
|
|
|
657,310
|
|
|
|
|
|
-
|
|
|
Preferred shares - KFN
|
|
|
373,750
|
|
|
|
|
|
-
|
|
|
Other liabilities
|
|
|
356,874
|
|
|
|
|
|
149,196
|
|
|
Total liabilities
|
|
|
2,887,934
|
|
|
|
|
|
1,149,196
|
|
|
Noncontrolling interests
|
|
|
122,686
|
|
|
|
|
|
71,261
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value
|
|
$
|
10,443,586
|
|
|
|
|
$
|
7,762,600
|
|
|
Book value per adjusted unit
|
|
$
|
12.52
|
|
|
|
|
$
|
10.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) See schedule of investments that follows on the next page.
|
|
|
|
|
|
|
|
|
|
|
(b) Unrealized Carry
|
|
As of
June 30, 2014
|
|
|
|
|
As of
December 31, 2013
|
|
|
Private Markets
|
|
$
|
1,129,463
|
|
|
|
|
$
|
1,116,996
|
|
|
Public Markets
|
|
|
77,709
|
|
|
|
|
|
62,342
|
|
|
Total
|
|
$
|
1,207,172
|
|
|
|
|
$
|
1,179,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KKR
|
SCHEDULE OF INVESTMENTS
|
TOTAL REPORTABLE SEGMENTS (UNAUDITED)
|
(Amounts in thousands, except percentage amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2014
|
Investments
|
|
|
|
Cost
|
|
Fair
Value
|
|
Fair Value as a Percentage of Investments
|
|
|
|
|
|
|
|
|
|
Private Equity Co-Investments
|
|
|
|
$
|
1,522,326
|
|
$
|
2,032,431
|
|
25
|
%
|
Private Equity Funds
|
|
|
|
|
970,662
|
|
|
1,190,723
|
|
15
|
%
|
Private Equity Total
|
|
|
|
|
2,492,988
|
|
|
3,223,154
|
|
40
|
%
|
|
|
|
|
|
|
|
|
|
Energy
|
|
|
|
|
794,981
|
|
|
787,389
|
|
10
|
%
|
Real Estate
|
|
|
|
|
280,432
|
|
|
293,896
|
|
3
|
%
|
Infrastructure
|
|
|
|
|
49,545
|
|
|
53,916
|
|
1
|
%
|
Real Assets Total
|
|
|
|
|
1,124,958
|
|
|
1,135,201
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
137,000
|
|
|
145,346
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
Private Markets Total
|
|
|
|
|
3,754,946
|
|
|
4,503,701
|
|
56
|
%
|
|
|
|
|
|
|
|
|
|
Special Situations
|
|
|
|
|
575,752
|
|
|
625,272
|
|
8
|
%
|
Mezzanine
|
|
|
|
|
123,455
|
|
|
129,458
|
|
1
|
%
|
Direct Lending
|
|
|
|
|
52,920
|
|
|
58,883
|
|
1
|
%
|
Alternative Credit
|
|
|
|
|
752,127
|
|
|
813,613
|
|
10
|
%
|
CLOs
|
|
|
|
|
1,590,350
|
|
|
1,595,038
|
|
20
|
%
|
Liquid Credit
|
|
|
|
|
307,869
|
|
|
339,196
|
|
3
|
%
|
Credit Total
|
|
|
|
|
2,650,346
|
|
|
2,747,847
|
|
33
|
%
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
58,623
|
|
|
59,242
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
Public Markets Total
|
|
|
|
|
2,708,969
|
|
|
2,807,089
|
|
34
|
%
|
|
|
|
|
|
|
|
|
|
Specialty Finance
|
|
|
|
|
256,219
|
|
|
260,790
|
|
3
|
%
|
Other
|
|
|
|
|
513,793
|
|
|
553,462
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
Capital Markets and Other Total
|
|
|
|
|
770,012
|
|
|
814,252
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
Total Investments
|
|
|
|
$
|
7,233,927
|
|
$
|
8,125,042
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant Aggregate Portfolio Company Investments: (a)
|
|
|
|
|
|
|
|
|
Alliance Boots GmbH
|
|
|
|
$
|
228,769
|
|
$
|
743,446
|
|
9
|
%
|
First Data Corporation
|
|
|
|
|
327,212
|
|
|
265,062
|
|
3
|
%
|
Biomet, Inc.
|
|
|
|
|
164,644
|
|
|
213,245
|
|
3
|
%
|
HCA Inc.
|
|
|
|
|
35,583
|
|
|
172,072
|
|
2
|
%
|
The Nielsen Company B.V.
|
|
|
|
|
52,900
|
|
|
171,818
|
|
2
|
%
|
|
|
|
|
|
809,108
|
|
|
1,565,643
|
|
19
|
%
|
Other Investments
|
|
|
|
|
6,424,819
|
|
|
6,559,399
|
|
81
|
%
|
Total Investments
|
|
|
|
$
|
7,233,927
|
|
$
|
8,125,042
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
____________________________________________________________________________________________
(a)
|
|
|
The significant aggregate portfolio company investments include
the top five investments in portfolio companies based on their
fair market value as of June 30, 2014. The fair value figures
include the co-investment and the limited partner and/or general
partner interests in the underlying portfolio company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KKR
|
ASSETS UNDER MANAGEMENT* (UNAUDITED)
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Markets Segment
|
|
|
|
Public Markets Segment
|
|
|
Total Reportable Segments
|
Quarter Ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2014
|
$
|
60,520,300
|
|
|
|
|
$
|
41,757,200
|
|
|
|
$
|
102,277,500
|
|
New Capital Raised
|
|
1,114,200
|
|
|
|
|
|
1,945,800
|
|
|
|
|
3,060,000
|
|
KFN Acquisition (a)
|
|
-
|
|
|
|
|
|
(4,511,900
|
)
|
|
|
|
(4,511,900
|
)
|
Distributions
|
|
(4,445,200
|
)
|
|
|
|
|
(1,061,300
|
)
|
|
(d)
|
|
(5,506,500
|
)
|
Change in Value
|
|
2,227,700
|
|
|
|
|
|
411,100
|
|
|
|
|
2,638,800
|
|
June 30, 2014
|
$
|
59,417,000
|
|
|
|
|
$
|
38,540,900
|
|
|
|
$
|
97,957,900
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013
|
$
|
61,242,900
|
|
|
|
|
$
|
33,077,400
|
|
|
|
$
|
94,320,300
|
|
New Capital Raised
|
|
1,703,100
|
|
|
|
|
|
3,066,800
|
|
|
|
|
4,769,900
|
|
Acquisitions (b)
|
|
-
|
|
|
|
|
|
8,423,000
|
|
|
|
|
8,423,000
|
|
KFN Acquisition (a)
|
|
-
|
|
|
|
|
|
(4,511,900
|
)
|
|
|
|
(4,511,900
|
)
|
Distributions
|
|
(6,634,800
|
)
|
|
|
|
|
(2,387,600
|
)
|
|
(e)
|
|
(9,022,400
|
)
|
Net Changes in Fee Base of Certain Funds (c)
|
|
(933,800
|
)
|
|
|
|
|
-
|
|
|
|
|
(933,800
|
)
|
Change in Value
|
|
4,039,600
|
|
|
|
|
|
873,200
|
|
|
|
|
4,912,800
|
|
June 30, 2014
|
$
|
59,417,000
|
|
|
|
|
$
|
38,540,900
|
|
|
|
$
|
97,957,900
|
|
|
|
|
|
|
|
|
|
|
Trailing Twelve Months Ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2013
|
$
|
54,452,400
|
|
|
|
|
$
|
29,048,500
|
|
|
|
$
|
83,500,900
|
|
New Capital Raised
|
|
7,668,000
|
|
|
|
|
|
7,412,300
|
|
|
|
|
15,080,300
|
|
Acquisitions (b)
|
|
-
|
|
|
|
|
|
8,423,000
|
|
|
|
|
8,423,000
|
|
KFN Acquisition (a)
|
|
-
|
|
|
|
|
|
(4,511,900
|
)
|
|
|
|
(4,511,900
|
)
|
Distributions
|
|
(11,315,300
|
)
|
|
|
|
|
(3,675,000
|
)
|
|
(f)
|
|
(14,990,300
|
)
|
Net Changes in Fee Base of Certain Funds (c)
|
|
(933,800
|
)
|
|
|
|
|
-
|
|
|
|
|
(933,800
|
)
|
Change in Value
|
|
9,545,700
|
|
|
|
|
|
1,844,000
|
|
|
|
|
11,389,700
|
|
June 30, 2014
|
$
|
59,417,000
|
|
|
|
|
$
|
38,540,900
|
|
|
|
$
|
97,957,900
|
|
|
|
|
|
|
|
|
|
|
______________________________________________________________________________________________
*
|
|
|
Exclude those assets managed by entities where KKR holds less than
a 50% ownership interest.
|
|
|
|
|
(a)
|
|
|
Certain assets that were externally managed prior to the
acquisition of KFN are now reported on the balance sheet and
excluded from AUM.
|
(b)
|
|
|
Represents the AUM of Avoca.
|
(c)
|
|
|
Represents the impact of certain funds entering the
post-investment period.
|
(d)
|
|
|
Includes $745.9 million of redemptions by fund investors.
|
(e)
|
|
|
Includes $1,288.4 million of redemptions by fund investors.
|
(f)
|
|
|
Includes $1,771.0 million of redemptions by fund investors.
|
|
|
KKR
|
FEE PAYING ASSETS UNDER MANAGEMENT* (UNAUDITED)
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Markets Segment
|
|
|
|
Public Markets Segment
|
|
|
|
Total Reportable Segments
|
Quarter Ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2014
|
|
$
|
48,211,000
|
|
|
|
|
$
|
35,400,600
|
|
|
|
|
$
|
83,611,600
|
|
New Capital Raised
|
|
|
921,700
|
|
|
|
|
|
1,649,100
|
|
|
|
|
|
2,570,800
|
|
KFN Acquisition (a)
|
|
|
-
|
|
|
|
|
|
(2,684,700
|
)
|
|
|
|
|
(2,684,700
|
)
|
Distributions
|
|
|
(2,940,400
|
)
|
|
(b)
|
|
|
(1,094,600
|
)
|
|
(e)
|
|
|
(4,035,000
|
)
|
Change in Value
|
|
|
(25,000
|
)
|
|
|
|
|
218,600
|
|
|
|
|
|
193,600
|
|
June 30, 2014
|
|
$
|
46,167,300
|
|
|
|
|
$
|
33,489,000
|
|
|
|
|
$
|
79,656,300
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013
|
|
$
|
50,156,300
|
|
|
|
|
$
|
27,241,200
|
|
|
|
|
$
|
77,397,500
|
|
New Capital Raised
|
|
|
1,357,000
|
|
|
|
|
|
2,759,300
|
|
|
|
|
|
4,116,300
|
|
Acquisitions (c)
|
|
|
-
|
|
|
|
|
|
7,971,000
|
|
|
|
|
|
7,971,000
|
|
KFN Acquisition (a)
|
|
|
-
|
|
|
|
|
|
(2,684,700
|
)
|
|
|
|
|
(2,684,700
|
)
|
Distributions
|
|
|
(4,366,900
|
)
|
|
(b)
|
|
|
(2,330,100
|
)
|
|
(f)
|
|
|
(6,697,000
|
)
|
Net Changes in Fee Base of Certain Funds (d)
|
|
|
(964,700
|
)
|
|
|
|
|
-
|
|
|
|
|
|
(964,700
|
)
|
Change in Value
|
|
|
(14,400
|
)
|
|
|
|
|
532,300
|
|
|
|
|
|
517,900
|
|
June 30, 2014
|
|
$
|
46,167,300
|
|
|
|
|
$
|
33,489,000
|
|
|
|
|
$
|
79,656,300
|
|
|
|
|
|
|
|
|
|
|
|
|
Trailing Twelve Months Ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2013
|
|
$
|
45,907,500
|
|
|
|
|
$
|
22,048,900
|
|
|
|
|
$
|
67,956,400
|
|
New Capital Raised
|
|
|
7,193,700
|
|
|
|
|
|
7,952,500
|
|
|
|
|
|
15,146,200
|
|
Acquisitions (c)
|
|
|
-
|
|
|
|
|
|
7,971,000
|
|
|
|
|
|
7,971,000
|
|
KFN Acquisition (a)
|
|
|
-
|
|
|
|
|
|
(2,684,700
|
)
|
|
|
|
|
(2,684,700
|
)
|
Distributions
|
|
|
(6,276,700
|
)
|
|
(b)
|
|
|
(3,232,300
|
)
|
|
(g)
|
|
|
(9,509,000
|
)
|
Net Changes in Fee Base of Certain Funds (d)
|
|
|
(964,700
|
)
|
|
|
|
|
-
|
|
|
|
|
|
(964,700
|
)
|
Change in Value
|
|
|
307,500
|
|
|
|
|
|
1,433,600
|
|
|
|
|
|
1,741,100
|
|
June 30, 2014
|
|
$
|
46,167,300
|
|
|
|
|
$
|
33,489,000
|
|
|
|
|
$
|
79,656,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
______________________________________________________________________________________________
*
|
|
|
Exclude those assets managed by entities where KKR holds less than
a 50% ownership interest.
|
(a)
|
|
|
Certain assets that were externally managed prior to the
acquisition of KFN are now reported on the balance sheet and
excluded from AUM.
|
(b)
|
|
|
Includes the reduction in FPAUM attributed to the invested capital
of Energy Future Holdings due to its bankruptcy.
|
(c)
|
|
|
Represents the FPAUM of Avoca.
|
(d)
|
|
|
Represents the impact of certain funds entering the
post-investment period.
|
(e)
|
|
|
Includes $745.9 million of redemptions by fund investors.
|
(f)
|
|
|
Includes $1,288.4 million of redemptions by fund investors.
|
(g)
|
|
|
Includes $1,771.0 million of redemptions by fund investors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KKR
|
INVESTMENT VEHICLE SUMMARY (a) (UNAUDITED)
|
As of June 30, 2014
|
(Amounts in millions, except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Period
|
|
|
Amount
|
|
|
Commencement Date
|
|
End Date
|
|
|
Commitment
|
|
Uncalled Commitments
|
|
Percentage Committed by General Partner
|
|
Invested
|
|
Realized
|
|
Remaining Cost
|
|
Remaining Fair Value
|
Private Markets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Equity Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asian Fund II
|
|
4/2013
|
|
4/2019
|
|
|
$
|
5,825.0
|
|
$
|
4,889.8
|
|
1.3
|
%
|
|
$
|
935.2
|
|
$
|
-
|
|
$
|
935.2
|
|
$
|
1,012.1
|
North America Fund XI
|
|
9/2012
|
|
9/2018
|
|
|
|
8,718.4
|
|
|
4,712.4
|
|
2.9
|
%
|
|
|
4,006.0
|
|
|
95.4
|
|
|
4,006.0
|
|
|
4,583.7
|
China Growth Fund
|
|
11/2010
|
|
11/2016
|
|
|
|
1,010.0
|
|
|
560.2
|
|
1.0
|
%
|
|
|
449.8
|
|
|
32.6
|
|
|
432.4
|
|
|
512.9
|
E2 Investors (Annex Fund)
|
|
8/2009
|
|
11/2013
|
|
|
|
209.4
|
|
|
13.6
|
|
4.5
|
%
|
|
|
195.8
|
|
|
144.4
|
|
|
54.5
|
|
|
302.6
|
European Fund III
|
|
3/2008
|
|
3/2014
|
|
|
|
6,229.8
|
|
|
816.3
|
|
4.6
|
%
|
|
|
5,413.5
|
|
|
1,494.3
|
|
|
4,620.7
|
|
|
6,601.4
|
Asian Fund
|
|
7/2007
|
|
4/2013
|
|
|
|
3,983.3
|
|
|
57.5
|
|
2.5
|
%
|
|
|
3,925.8
|
|
|
3,864.7
|
|
|
2,585.1
|
|
|
3,618.5
|
2006 Fund
|
|
9/2006
|
|
9/2012
|
|
|
|
17,642.2
|
|
|
1,067.9
|
|
2.1
|
%
|
|
|
16,574.3
|
|
|
12,881.7
|
|
|
9,538.5
|
|
|
15,500.0
|
European Fund II
|
|
11/2005
|
|
10/2008
|
|
|
|
5,750.8
|
|
|
-
|
|
2.1
|
%
|
|
|
5,750.8
|
|
|
5,352.4
|
|
|
1,655.9
|
|
|
3,207.1
|
Millennium Fund
|
|
12/2002
|
|
12/2008
|
|
|
|
6,000.0
|
|
|
-
|
|
2.5
|
%
|
|
|
6,000.0
|
|
|
11,246.2
|
|
|
1,320.8
|
|
|
2,265.5
|
European Fund
|
|
12/1999
|
|
12/2005
|
|
|
|
3,085.4
|
|
|
-
|
|
3.2
|
%
|
|
|
3,085.4
|
|
|
8,736.6
|
|
|
-
|
|
|
40.8
|
Total Private Equity Funds
|
|
|
|
|
|
|
|
58,454.3
|
|
|
12,117.7
|
|
|
|
|
46,336.6
|
|
|
43,848.3
|
|
|
25,149.1
|
|
|
37,644.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-Investment Vehicles
|
|
Various
|
|
Various
|
|
|
|
2,903.9
|
|
|
780.3
|
|
Various
|
|
|
2,123.6
|
|
|
1,005.1
|
|
|
1,814.0
|
|
|
2,393.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Private Equity
|
|
|
|
|
|
|
|
61,358.2
|
|
|
12,898.0
|
|
|
|
|
48,460.2
|
|
|
44,853.4
|
|
|
26,963.1
|
|
|
40,038.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy Income and Growth Fund
|
|
9/2013
|
|
9/2018
|
|
|
|
1,974.2
|
|
|
1,617.7
|
|
12.8
|
%
|
|
|
356.5
|
|
|
22.2
|
|
|
339.1
|
|
|
351.2
|
Natural Resources Fund
|
|
Various
|
|
Various
|
|
|
|
893.8
|
|
|
320.9
|
|
Various
|
|
|
572.9
|
|
|
95.1
|
|
|
496.4
|
|
|
312.8
|
Global Energy Opportunities
|
|
Various
|
|
Various
|
|
|
|
1,028.4
|
|
|
894.2
|
|
Various
|
|
|
134.2
|
|
|
6.1
|
|
|
134.2
|
|
|
108.5
|
Infrastructure Fund
|
|
Various
|
|
Various
|
|
|
|
1,042.2
|
|
|
259.9
|
|
4.8
|
%
|
|
|
782.3
|
|
|
34.1
|
|
|
782.3
|
|
|
819.7
|
Infrastructure Co-Investments
|
|
Various
|
|
Various
|
|
|
|
1,355.3
|
|
|
250.8
|
|
Various
|
|
|
1,104.5
|
|
|
261.6
|
|
|
1,104.5
|
|
|
1,395.2
|
Real Estate Partners Americas
|
|
5/2013
|
|
12/2016
|
|
|
|
1,229.1
|
|
|
868.3
|
|
16.0
|
%
|
|
|
360.8
|
|
|
129.2
|
|
|
360.4
|
|
|
402.2
|
Real Assets
|
|
|
|
|
|
|
|
7,523.0
|
|
|
4,211.8
|
|
|
|
|
3,311.2
|
|
|
548.2
|
|
|
3,216.9
|
|
|
3,389.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Markets Total
|
|
|
|
|
|
|
|
68,881.2
|
|
|
17,109.8
|
|
|
|
|
51,771.4
|
|
|
45,401.6
|
|
|
30,180.0
|
|
|
43,427.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Public Markets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special Situations Vehicles
|
|
Various
|
|
Various
|
|
|
|
4,713.8
|
|
|
1,939.7
|
|
Various
|
|
|
2,774.1
|
|
|
981.4
|
|
|
2,231.4
|
|
|
2,660.6
|
Mezzanine Fund
|
|
3/2010
|
|
8/2015
|
|
|
|
987.0
|
|
|
287.3
|
|
4.6
|
%
|
|
|
699.7
|
|
|
198.5
|
|
|
611.1
|
|
|
721.7
|
Direct Lending Vehicles
|
|
Various
|
|
Various
|
|
|
|
1,001.9
|
|
|
447.4
|
|
Various
|
|
|
554.5
|
|
|
51.0
|
|
|
554.5
|
|
|
604.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Public Markets Total
|
|
|
|
|
|
|
|
6,702.7
|
|
|
2,674.4
|
|
|
|
|
4,028.3
|
|
|
1,230.9
|
|
|
3,397.0
|
|
|
3,986.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total
|
|
|
|
|
|
|
$
|
75,583.9
|
|
$
|
19,784.2
|
|
|
|
$
|
55,799.7
|
|
$
|
46,632.5
|
|
$
|
33,577.0
|
|
$
|
47,414.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_____________________________________________________________________________________________
(a)
|
|
|
Reflects investment vehicles for which KKR has the ability to earn
carried interest.
|
|
|
KKR
|
DISTRIBUTION CALCULATION (UNAUDITED)
|
(Amounts in thousands, except unit and per unit amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Six Months Ended
|
|
|
June 30, 2014
|
|
March 31, 2014
|
|
June 30, 2013
|
|
June 30, 2014
|
|
June 30, 2013
|
Cash Revenues
|
|
|
|
|
|
|
|
|
|
|
Fees
|
|
$
|
254,237
|
|
|
$
|
327,623
|
|
|
$
|
236,707
|
|
|
$
|
581,860
|
|
|
$
|
457,821
|
|
Realized cash carry
|
|
|
555,488
|
|
|
|
193,550
|
|
|
|
269,828
|
|
|
|
749,038
|
|
|
|
357,995
|
|
Net realized investment income - KKR
|
|
|
245,711
|
|
|
|
192,892
|
|
|
|
150,361
|
|
|
|
438,603
|
|
|
|
303,517
|
|
Net realized investment income - KFN
|
|
|
36,382
|
|
|
|
-
|
|
|
|
-
|
|
|
|
36,382
|
|
|
|
-
|
|
Total Cash Revenue
|
|
|
1,091,818
|
|
|
|
714,065
|
|
|
|
656,896
|
|
|
|
1,805,883
|
|
|
|
1,119,333
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Expenses
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
|
91,444
|
|
|
|
108,915
|
|
|
|
80,436
|
|
|
|
200,359
|
|
|
|
155,598
|
|
Realized cash carry allocated to carry pool
|
|
|
222,195
|
|
|
|
77,420
|
|
|
|
107,931
|
|
|
|
299,615
|
|
|
|
143,198
|
|
Occupancy and related charges
|
|
|
14,757
|
|
|
|
14,189
|
|
|
|
13,067
|
|
|
|
28,946
|
|
|
|
26,389
|
|
Other operating expenses
|
|
|
54,311
|
|
|
|
52,801
|
|
|
|
45,027
|
|
|
|
107,112
|
|
|
|
89,657
|
|
Total Cash Expenses
|
|
|
382,707
|
|
|
|
253,325
|
|
|
|
246,461
|
|
|
|
636,032
|
|
|
|
414,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash income (loss) before noncontrolling interests and local taxes
|
|
|
709,111
|
|
|
|
460,740
|
|
|
|
410,435
|
|
|
|
1,169,851
|
|
|
|
704,491
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: local income taxes
|
|
|
(4,932
|
)
|
|
|
(10,730
|
)
|
|
|
(5,336
|
)
|
|
|
(15,662
|
)
|
|
|
(7,677
|
)
|
Less: noncontrolling interests
|
|
|
(3,206
|
)
|
|
|
(3,202
|
)
|
|
|
(1,323
|
)
|
|
|
(6,408
|
)
|
|
|
(2,424
|
)
|
Total Distributable Earnings
|
|
|
700,973
|
|
|
|
446,808
|
|
|
|
403,776
|
|
|
|
1,147,781
|
|
|
|
694,390
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: estimated current corporate income taxes
|
|
|
(19,025
|
)
|
|
|
(33,445
|
)
|
|
|
(25,138
|
)
|
|
|
(52,470
|
)
|
|
|
(41,865
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Distributable Earnings, net of taxes
|
|
|
681,948
|
|
|
|
413,363
|
|
|
|
378,638
|
|
|
|
1,095,311
|
|
|
|
652,525
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Undistributed net realized investment income - KKR
|
|
|
(147,427
|
)
|
|
|
(115,735
|
)
|
|
|
(90,217
|
)
|
|
|
(263,162
|
)
|
|
|
(182,110
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Distributed Earnings
|
|
$
|
534,521
|
|
|
$
|
297,628
|
|
|
$
|
288,421
|
|
|
$
|
832,149
|
|
|
$
|
470,415
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributable Earnings, net of taxes per KKR & Co. L.P. common
unit
|
|
$
|
0.85
|
|
|
$
|
0.59
|
|
|
$
|
0.55
|
|
|
$
|
1.44
|
|
|
$
|
0.95
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution per KKR & Co. L.P. common unit
|
|
$
|
0.67
|
|
|
$
|
0.43
|
|
|
$
|
0.42
|
|
|
$
|
1.10
|
|
|
$
|
0.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Distribution per KKR & Co. L.P. Common unit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax FRE
|
|
$
|
0.09
|
|
|
$
|
0.15
|
|
|
$
|
0.10
|
|
|
$
|
0.24
|
|
|
$
|
0.20
|
|
Realized Cash Carry
|
|
$
|
0.41
|
|
|
$
|
0.17
|
|
|
$
|
0.23
|
|
|
$
|
0.58
|
|
|
$
|
0.31
|
|
Distributed Net Realized Investment Income - KKR
|
|
$
|
0.12
|
|
|
$
|
0.11
|
|
|
$
|
0.09
|
|
|
$
|
0.23
|
|
|
$
|
0.18
|
|
Distributed Net Realized Investment Income - KFN
|
|
$
|
0.05
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
0.05
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee and yield earnings distribution per KKR & Co. L.P. common unit
|
|
$
|
0.15
|
|
|
$
|
0.16
|
|
|
$
|
0.10
|
|
|
$
|
0.31
|
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Units Eligible For Distribution
|
|
|
803,719,050
|
|
|
|
696,070,615
|
|
|
|
689,795,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payout Ratio
|
|
|
78.4
|
%
|
|
|
72.0
|
%
|
|
|
76.2
|
%
|
|
|
76.0
|
%
|
|
|
72.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
DISTRIBUTION POLICY
KKR intends to make quarterly cash distributions in amounts that in the
aggregate are expected to constitute substantially all of the cash
earnings of the KKR’s investment management business, 40% of the net
realized investment income of KKR (other than KFN), and 100% of the net
realized investment income of KFN, in each case in excess of amounts
determined by KKR to be necessary or appropriate to provide for the
conduct of its business, to make appropriate investments in its business
and its investment funds and to comply with applicable law and any of
its debt instruments or other obligations. For purposes of KKR’s
distribution policy, its distributions are expected to consist of (i)
FRE, (ii) carry distributions received from KKR’s investment funds which
have not been allocated as part of its carry pool, (iii) 40% of the net
realized investment income from KKR (other than KFN) and (iv) 100% of
the net realized investment income from KFN. This amount is expected to
be reduced by (i) corporate and applicable local taxes, if any, (ii)
non-controlling interests, and (iii) amounts determined by KKR to be
necessary or appropriate for the conduct of its business and other
matters as discussed above.
The declaration and payment of any distributions are subject to the
discretion of the board of directors of the general partner of KKR & Co.
L.P., which may change the distribution policy at any time, and the
terms of its limited partnership agreement. There can be no assurance
that distributions will be made as intended or at all or that
unitholders will receive sufficient distributions to satisfy payment of
their tax liabilities as limited partners of KKR & Co. L.P. When KKR &
Co. L.P. receives distributions from the KKR Group Partnerships (the
holding companies of the KKR business), KKR Holdings receives its pro
rata share of such distributions from the KKR Group Partnerships.
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 (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. This measure is used by management as an
alternative measurement of the operating earnings of KKR and its
business segments before carried interest and related carry pool
allocations and investment income. 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; (vi) the exclusion of certain
reimbursable expenses; and (vii) the exclusion of certain non-recurring
items.
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 exclusion
of the items referred to in FRE above; (ii) the exclusion of investment
income (loss) relating to noncontrolling interests; and (iii) 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 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 less certain compensation and general and administrative
expenses incurred in the generation of net realized investment income in
each case generated by KKR (excluding KFN). This term describes a
portion of KKR’s quarterly distribution 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 and excludes net
realized investment income of KKR.
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 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 also assess amounts
available for distribution to KKR unitholders. However, total
distributable earnings is not a measure that calculates actual
distributions under KKR’s 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. 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 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, for only those funds, 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.
Committed dollars invested is the aggregate amount of capital
commitments that have 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 investment of committed capital. 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.
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 KKR’s Public Markets in a given period. We
believe this measure is useful to unitholders as it provides additional
insight into KAM’s investment of capital across its private credit
non-liquid strategies for all the investment vehicles which it manages.
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 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 committed dollars 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 and Other 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.
Adjusted units are used as a measure of the total equity
ownership of KKR that is held primarily by KKR & Co. L.P. and KKR
Holdings 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 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 private equity 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 and
Equity-based Charges 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 Total Distributable Earnings
on a trailing twelve-month basis by the average book value during the
period.
|
|
|
|
|
|
|
KKR
|
EXHIBIT A
|
RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO.
L.P. PER COMMON UNIT (GAAP BASIS)
|
TO ENI AFTER TAXES AND EQUITY-BASED CHARGES PER ADJUSTED UNIT
(UNAUDITED)
|
(Amounts in thousands, except common unit and per common unit
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
June 30, 2014
|
|
March 31, 2014
|
|
June 30, 2013
|
|
|
|
|
|
|
|
Net income (loss) attributable to KKR & Co. L.P. per common unit
- Basic
|
|
$
|
0.47
|
|
$
|
0.72
|
|
$
|
0.06
|
Weighted Average Common Units Outstanding - Basic
|
|
|
377,542,161
|
|
|
293,490,461
|
|
|
271,983,811
|
Net income (loss) attributable to KKR & Co. L.P.
|
|
|
178,215
|
|
|
210,041
|
|
|
15,134
|
Plus: Net income (loss) attributable to noncontrolling
|
|
|
|
|
|
|
interests held by KKR Holdings L.P.
|
|
|
186,776
|
|
|
300,814
|
|
|
28,106
|
Plus: Non-cash equity based charges
|
|
|
92,957
|
|
|
77,528
|
|
|
80,318
|
Plus: Amortization of intangibles and other, net
|
|
|
37,455
|
|
|
20,169
|
|
|
12,360
|
Plus: Income taxes
|
|
|
6,176
|
|
|
21,702
|
|
|
8,525
|
Economic net income (loss)
|
|
|
501,579
|
|
|
630,254
|
|
|
144,443
|
Less: Provision for income taxes
|
|
|
6,330
|
|
|
36,581
|
|
|
13,486
|
Economic net income (loss) after taxes
|
|
|
495,249
|
|
|
593,673
|
|
|
130,957
|
Less: Equity-based charges associated with the KKR & Co. L.P. 2010
equity incentive plan
|
|
|
40,877
|
|
|
39,353
|
|
|
25,936
|
Economic net income (loss) after taxes and equity-based charges
|
|
|
454,372
|
|
|
554,320
|
|
|
105,021
|
Weighted Average Adjusted Units
|
|
|
800,747,528
|
|
|
724,579,220
|
|
|
715,453,358
|
Economic net income (loss) after taxes and equity-based charges
per adjusted unit
|
|
$
|
0.57
|
|
$
|
0.77
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
June 30, 2014
|
|
June 30, 2013
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to KKR & Co. L.P. per common unit
- Basic
|
|
$
|
1.16
|
|
$
|
0.79
|
|
|
Weighted Average Common Units Outstanding - Basic
|
|
|
335,748,498
|
|
|
264,555,267
|
|
|
Net income (loss) attributable to KKR & Co. L.P.
|
|
|
388,256
|
|
|
208,573
|
|
|
Plus: Net income (loss) attributable to noncontrolling
|
|
|
|
|
|
|
interests held by KKR Holdings L.P.
|
|
|
487,590
|
|
|
362,218
|
|
|
Plus: Non-cash equity based charges
|
|
|
170,485
|
|
|
161,968
|
|
|
Plus: Amortization of intangibles and other, net
|
|
|
57,624
|
|
|
41,545
|
|
|
Plus: Income taxes
|
|
|
27,878
|
|
|
17,881
|
|
|
Economic net income (loss)
|
|
|
1,131,833
|
|
|
792,185
|
|
|
Less: Provision for income taxes
|
|
|
42,911
|
|
|
33,603
|
|
|
Economic net income (loss) after taxes
|
|
|
1,088,922
|
|
|
758,582
|
|
|
Less: Equity-based charges associated with the KKR & Co. L.P. 2010
equity incentive plan
|
|
|
80,230
|
|
|
53,354
|
|
|
Economic net income (loss) after taxes and equity-based charges
|
|
|
1,008,692
|
|
|
705,228
|
|
|
Weighted Average Adjusted Units
|
|
|
762,873,784
|
|
|
713,353,287
|
|
|
Economic net income (loss) after taxes and equity-based charges
per adjusted unit
|
|
$
|
1.32
|
|
$
|
0.99
|
|
|
|
KKR
|
EXHIBIT A (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, AND TOTAL DISTRIBUTABLE
EARNINGS (UNAUDITED)
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
June 30, 2014
|
|
March 31, 2014
|
|
June 30, 2013
|
|
|
|
|
|
|
|
Net income (loss) attributable to KKR & Co. L.P.
|
|
$
|
178,215
|
|
$
|
210,041
|
|
$
|
15,134
|
Plus: Net income (loss) attributable to noncontrolling
|
|
|
|
|
|
|
interests held by KKR Holdings L.P.
|
|
|
186,776
|
|
|
300,814
|
|
|
28,106
|
Plus: Non-cash equity based charges
|
|
|
92,957
|
|
|
77,528
|
|
|
80,318
|
Plus: Amortization of intangibles and other, net
|
|
|
37,455
|
|
|
20,169
|
|
|
12,360
|
Plus: Income taxes
|
|
|
6,176
|
|
|
21,702
|
|
|
8,525
|
Economic net income (loss)
|
|
|
501,579
|
|
|
630,254
|
|
|
144,443
|
Plus: Income attributable to segment noncontrolling interests
|
|
|
3,206
|
|
|
3,202
|
|
|
1,323
|
Less: Total investment income (loss)
|
|
|
162,158
|
|
|
278,651
|
|
|
11,050
|
Less: Net carried interest
|
|
|
248,902
|
|
|
203,087
|
|
|
36,539
|
Fee related earnings
|
|
|
93,725
|
|
|
151,718
|
|
|
98,177
|
Plus: Net interests and dividends
|
|
|
60,432
|
|
|
11,164
|
|
|
2,782
|
Fee and yield earnings
|
|
$
|
154,157
|
|
$
|
162,882
|
|
$
|
100,959
|
Plus: Depreciation and amortization
|
|
|
4,140
|
|
|
4,035
|
|
|
3,708
|
Plus: Core interest expense
|
|
|
19,205
|
|
|
18,400
|
|
|
16,210
|
Fee and yield EBITDA
|
|
$
|
177,502
|
|
$
|
185,317
|
|
$
|
120,877
|
Less: Depreciation and amortization
|
|
|
4,140
|
|
|
4,035
|
|
|
3,708
|
Less: Core interest expense
|
|
|
19,205
|
|
|
18,400
|
|
|
16,210
|
Less: Net interests and dividends
|
|
|
60,432
|
|
|
11,164
|
|
|
2,782
|
Plus: Realized cash carry, net of realized cash carry allocated to
carry pool
|
|
|
333,293
|
|
|
116,130
|
|
|
161,897
|
Plus: Net realized investment income - KKR
|
|
|
245,711
|
|
|
192,892
|
|
|
150,361
|
Plus: Net realized investment income - KFN
|
|
|
36,382
|
|
|
-
|
|
|
-
|
Less: Local income taxes and noncontrolling interests
|
|
|
8,138
|
|
|
13,932
|
|
|
6,659
|
Total distributable earnings
|
|
$
|
700,973
|
|
$
|
446,808
|
|
$
|
403,776
|
Plus: Depreciation and amortization
|
|
|
4,140
|
|
|
4,035
|
|
|
3,708
|
Plus: Core interest expense
|
|
|
19,205
|
|
|
18,400
|
|
|
16,210
|
Plus: Local income taxes and noncontrolling interests
|
|
|
8,138
|
|
|
13,932
|
|
|
6,659
|
Total EBITDA
|
|
$
|
732,456
|
|
$
|
483,175
|
|
$
|
430,353
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
June 30, 2014
|
|
June 30, 2013
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to KKR & Co. L.P.
|
|
$
|
388,256
|
|
$
|
208,573
|
|
|
Plus: Net income (loss) attributable to noncontrolling
|
|
|
|
|
|
|
interests held by KKR Holdings L.P.
|
|
|
487,590
|
|
|
362,218
|
|
|
Plus: Non-cash equity based charges
|
|
|
170,485
|
|
|
161,968
|
|
|
Plus: Amortization of intangibles and other, net
|
|
|
57,624
|
|
|
41,545
|
|
|
Plus: Income taxes
|
|
|
27,878
|
|
|
17,881
|
|
|
Economic net income (loss)
|
|
|
1,131,833
|
|
|
792,185
|
|
|
Plus: Income attributable to segment noncontrolling interests
|
|
|
6,408
|
|
|
2,424
|
|
|
Less: Total investment income (loss)
|
|
|
440,809
|
|
|
331,248
|
|
|
Less: Net carried interest
|
|
|
451,989
|
|
|
277,184
|
|
|
Fee related earnings
|
|
|
245,443
|
|
|
186,177
|
|
|
Plus: Net interests and dividends
|
|
|
71,596
|
|
|
2,311
|
|
|
Fee and yield earnings
|
|
$
|
317,039
|
|
$
|
188,488
|
|
|
Plus: Depreciation and amortization
|
|
|
8,175
|
|
|
7,389
|
|
|
Plus: Core interest expense
|
|
|
37,605
|
|
|
32,443
|
|
|
Fee and yield EBITDA
|
|
$
|
362,819
|
|
$
|
228,320
|
|
|
Less: Depreciation and amortization
|
|
|
8,175
|
|
|
7,389
|
|
|
Less: Core interest expense
|
|
|
37,605
|
|
|
32,443
|
|
|
Less: Net interests and dividends
|
|
|
71,596
|
|
|
2,311
|
|
|
Plus: Realized cash carry, net of realized cash carry allocated to
carry pool
|
|
|
449,423
|
|
|
214,797
|
|
|
Plus: Net realized investment income - KKR
|
|
|
438,603
|
|
|
303,517
|
|
|
Plus: Net realized investment income - KFN
|
|
|
36,382
|
|
|
-
|
|
|
Less: Local income taxes and noncontrolling interests
|
|
|
22,070
|
|
|
10,101
|
|
|
Total distributable earnings
|
|
$
|
1,147,781
|
|
$
|
694,390
|
|
|
Plus: Depreciation and amortization
|
|
|
8,175
|
|
|
7,389
|
|
|
Plus: Core interest expense
|
|
|
37,605
|
|
|
32,443
|
|
|
Plus: Local income taxes and noncontrolling interests
|
|
|
22,070
|
|
|
10,101
|
|
|
Total EBITDA
|
|
$
|
1,215,631
|
|
$
|
744,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KKR
|
EXHIBIT A (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
|
|
|
June 30, 2014
|
|
December 31, 2013
|
|
|
|
|
|
KKR & Co. L.P. partners’ capital
|
|
$
|
5,491,877
|
|
|
$
|
2,722,010
|
|
|
|
|
|
|
Noncontrolling interests held by KKR Holdings L.P.
|
|
|
5,082,655
|
|
|
|
5,116,761
|
|
|
|
|
|
|
Equity impact of KKR Management Holdings Corp. and other
|
|
|
(130,946
|
)
|
|
|
(76,171
|
)
|
|
|
|
|
|
Book value
|
|
|
10,443,586
|
|
|
|
7,762,600
|
|
|
|
|
|
|
Adjusted units
|
|
|
833,951,053
|
|
|
|
716,676,699
|
|
|
|
|
|
|
Book value per adjusted unit
|
|
$
|
12.52
|
|
|
$
|
10.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF CASH AND CASH EQUIVALENTS (GAAP BASIS)
|
TO CASH AND SHORT-TERM INVESTMENTS (SEGMENT BASIS) (UNAUDITED)
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
As of
|
|
As of
|
|
|
June 30, 2014
|
|
December 31, 2013
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,504,205
|
|
|
$
|
1,306,383
|
|
|
|
|
|
|
Liquid short-term investments
|
|
|
870,959
|
|
|
|
854,714
|
|
|
|
|
|
|
Cash and short-term investments
|
|
$
|
3,375,164
|
|
|
$
|
2,161,097
|
|
|
KKR
|
EXHIBIT B
|
|
RECONCILIATION OF WEIGHTED AVERAGE GAAP COMMON UNITS OUTSTANDING
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
|
|
June 30, 2014
|
|
March 31, 2014
|
|
June 30, 2013
|
Weighted Average GAAP Common Units Outstanding - Basic
|
377,542,161
|
|
|
293,490,461
|
|
|
271,983,811
|
Adjustments:
|
|
|
|
|
|
Weighted Average Unvested Common Units(a)
|
27,536,748
|
|
|
29,379,509
|
|
|
26,094,953
|
Weighted Average Other Exchangeable Securities
|
5,100,929
|
|
|
2,234,259
|
|
|
-
|
Weighted Average GAAP Common Units Outstanding - Diluted
|
410,179,838
|
|
|
325,104,229
|
|
|
298,078,764
|
Adjustments:
|
|
|
|
|
|
Weighted Average KKR Holdings Units (b)
|
390,567,690
|
|
|
399,474,991
|
|
|
417,374,594
|
Weighted Average Adjusted Units
|
800,747,528
|
|
|
724,579,220
|
|
|
715,453,358
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
June 30, 2014
|
|
June 30, 2013
|
|
|
Weighted Average GAAP Common Units Outstanding - Basic
|
335,748,498
|
|
|
264,555,267
|
|
|
|
Adjustments:
|
|
|
|
|
|
Weighted Average Unvested Common Units(a)
|
28,453,038
|
|
|
25,549,675
|
|
|
|
Weighted Average Other Exchangeable Securities
|
3,675,513
|
|
|
-
|
|
|
|
Weighted Average GAAP Common Units Outstanding - Diluted
|
367,877,049
|
|
|
290,104,942
|
|
|
|
Adjustments:
|
|
|
|
|
|
Weighted Average KKR Holdings Units (b)
|
394,996,735
|
|
|
423,248,345
|
|
|
|
Weighted Average Adjusted Units
|
762,873,784
|
|
|
713,353,287
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP COMMON UNITS OUTSTANDING TO ADJUSTED UNITS
(UNAUDITED)
|
|
|
|
|
|
|
|
|
The following table provides a reconciliation of KKR's GAAP Common
Units Outstanding to Adjusted Units.
|
|
|
|
|
|
|
|
|
|
As of
|
|
As of
|
|
|
|
June 30, 2014
|
|
December 31, 2013
|
|
|
GAAP Common Units Outstanding - Basic
|
415,469,452
|
|
|
288,143,327
|
|
|
|
Unvested Common Units(a)
|
27,395,289
|
|
|
24,164,354
|
|
|
|
Other Exchangeable Securities
|
5,195,584
|
|
|
-
|
|
|
|
GAAP Common Units Outstanding - Diluted
|
448,060,325
|
|
|
312,307,681
|
|
|
|
Adjustments:
|
|
|
|
|
|
KKR Holdings Units (b)
|
385,890,728
|
|
|
404,369,018
|
|
|
|
Adjusted Units
|
833,951,053
|
|
|
716,676,699
|
|
|
|
Adjustments:
|
|
|
|
|
|
Unvested Common Units
|
(27,395,289
|
)
|
|
(24,164,354
|
)
|
|
|
Unvested Other Exchangeable Securities
|
(2,836,714
|
)
|
|
-
|
|
|
|
Adjusted Units Eligible For Distribution
|
803,719,050
|
|
|
692,512,345
|
|
|
|
|
|
|
|
|
|
________________________________________________________________________________________________
(a)
|
|
|
Represents equity awards granted under the KKR & Co. L.P. 2010
Equity Incentive Plan. The issuance of common units of KKR & Co.
L.P. pursuant to awards under its equity incentive plan 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.
|
CONTACT:
Kohlberg Kravis Roberts & Co. L.P.
Investor
Relations:
Craig Larson
+1 877-610-4910 (U.S.) / +1
212-230-9410
investor-relations@kkr.com
or
Media:
Kristi
Huller, +1 212-750-8300
media@kkr.com
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